Avantor, Inc 10-Q for FY2024 Q1
Avantor, Inc. (AVTR)
10-Q
2024-04-26
For: 2024-03-31
View Original
Added on
April 07, 2026
About this 10-Q
Avantor, Inc filed this 10-Q on April 26, 2024, covering the quarter ended March 31, 2024 (FY2024 Q1).
Headline figures
Quarter ended March 31, 2024, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $1.68B
- down 5.6% from $1.78B a year earlier
- Net income
- $60.4M
- down 50.3% from net income of $121.5M a year earlier
- Diluted EPS
- $0.09
- down 50.0% from $0.18 a year earlier
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
━━━━━━━━━
FORM 10-Q
━━━━━━━━━
For the quarterly period ended March 31, 2024
For the transition period from __________ to __________
Commission file number: 001-38912
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||
(Address of principal executive offices) (zip code)
(610 ) 386-1700
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol | Exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. ☒ Large Accelerated Filer ☐ Accelerated Filer ☐ Non-accelerated Filer ☐ Smaller reporting company ☐ Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No
On April 22, 2024, 679,266,323 shares of common stock, $0.01 par value per share, were outstanding.
Avantor, Inc. and subsidiaries
Form 10-Q for the quarterly period ended March 31, 2024
Table of contents
| Page | |||||
i
Glossary
Description | |||||
| we, us, our | Avantor, Inc. and its subsidiaries | ||||
| Adjusted EBITDA | our earnings or loss before interest, taxes, depreciation, amortization and certain other adjustments | ||||
| Adjusted Operating Income | our earnings or loss before interest, taxes, amortization and certain other adjustments | ||||
| Annual Report | our annual report on Form 10-K for the year ended December 31, 2023 | ||||
| AOCI | accumulated other comprehensive income or loss | ||||
| EURIBOR | the basic rate of interest used in lending between banks on the European Union interbank market | ||||
| FASB | the Financial Accounting Standards Board of the United States | ||||
| GAAP | United States generally accepted accounting principles | ||||
| long-term | period other than short-term | ||||
| M&A | Mergers and Acquisitions | ||||
| OCI | other comprehensive income or loss | ||||
| Ritter | Ritter GmbH and affiliates, a company we acquired in June 2021 | ||||
| RSU | restricted stock units represent awards that will vest annually and awards that contain performance and market conditions | ||||
| SEC | the United States Securities and Exchange Commission | ||||
| SG&A expenses | selling, general and administrative expenses | ||||
| SOFR | secured overnight financing rate | ||||
| VWR | VWR Corporation and its subsidiaries, a company we acquired in November 2017 | ||||
ii
Cautionary factors regarding forward-looking statements
This report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, and are subject to the safe harbor created thereby under the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact included in this report are forward-looking statements. Forward-looking statements discuss our current expectations and projections relating to our financial condition, results of operations, plans, objectives, future performance and business. These statements may be preceded by, followed by or include the words “aim,” “anticipate,” “believe,” “estimate,” “expect,” “forecast,” “intend,” “likely,” “outlook,” “plan,” “potential,” “projection,” “prospects,” “continue,” “goal,” “objective,” “opportunity,” “near-term,” “long-term,” “assumption,” “project,” “guidance,” “target,” “trend,” “seek,” “can,” “could,” “may,” “should,” “would,” “will,” the negatives thereof and other words and terms of similar meaning.
Forward-looking statements are inherently subject to risks, uncertainties and assumptions; they are not guarantees of performance. You should not place undue reliance on these statements. We have based these forward-looking statements on our current expectations and projections about future events. Although we believe that our assumptions made in connection with the forward-looking statements are reasonable, we cannot assure you that the assumptions and expectations will prove to be correct.
You should understand that the following important factors, in addition to those discussed under Part I, Item 1A “Risk Factors” in our Annual Report, as such risk factors may be updated from time to time in our periodic filings with the SEC and in this report, could affect our future results and could cause those results or other outcomes to differ materially from those expressed or implied in our forward-looking statements:
•disruptions to our operations;
•competition from other industry providers;
•our ability to implement our strategies for improving growth and optimizing costs;
•our ability to anticipate and respond to changing industry trends;
•adverse trends in consumer, business, and government spending;
•our dependence on sole or limited sources for some essential materials and components;
•our ability to successfully value and integrate acquired businesses;
•our products’ satisfaction of applicable quality criteria, specifications and performance standards;
•our ability to maintain our relationships with key customers;
•our ability to maintain our relationships with distributors;
•our ability to maintain our customer base and our expected volume of customer orders;
•our ability to maintain and develop relationships with drug manufacturers and contract manufacturing organizations;
iii
•the impact of new laws, regulations, or other industry standards;
•changes in the interest rate environment that increase interest on our borrowings;
•adverse impacts from currency exchange rates or currency controls imposed by any government in major areas where we operate or otherwise;
•our ability to implement and improve processing systems and prevent a compromise of our information systems or personal data;
•our ability to protect our intellectual property and avoid third-party infringement claims;
•exposure to product liability and other claims in the ordinary course of business;
•our ability to develop new products responsive to the markets we serve;
•supply chain constraints and the availability of raw materials;
•our ability to source certain of our products from certain suppliers;
•our ability to contain costs in an inflationary environment;
•our ability to avoid negative outcomes related to the use of chemicals;
•our ability to maintain highly skilled employees;
•our ability to maintain a competitive workforce;
•adverse impact of impairment charges on our goodwill and other intangible assets;
•currency fluctuations and uncertainties related to doing business outside the United States;
•our ability to obtain and maintain required regulatory clearances or approvals, which may constrain the commercialization of submitted products;
•our ability to comply with environmental, health and safety laws and regulations, or the impact of any liability or obligation imposed under such laws or regulations;
•our indebtedness, which could adversely affect our financial condition or prevent us from fulfilling our debt or contractual obligations;
•our ability to generate sufficient cash flows or access sufficient additional capital to meet our debt obligations or to fund our other liquidity needs; and
•our ability to maintain an effective system of internal control over financial reporting.
All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the foregoing cautionary statements. In addition, all forward-looking statements speak only as of the date of this report. We undertake no obligations to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise other than as required under the federal securities laws.
iv
PART I — FINANCIAL INFORMATION
Item 1. Financial statements
Avantor, Inc. and subsidiaries
Index to unaudited condensed consolidated financial statements
| Page | |||||
1
Avantor, Inc. and subsidiaries
Unaudited condensed consolidated balance sheets
(in millions) | March 31, 2024 | December 31, 2023 | |||||||||
| Assets | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
Accounts receivable, net of allowances of $ | |||||||||||
| Inventory | |||||||||||
| Other current assets | |||||||||||
| Total current assets | |||||||||||
Property, plant and equipment, net of accumulated depreciation and impairment charges of $ | |||||||||||
Other intangible assets, net (see note 7) | |||||||||||
Goodwill, net of accumulated impairment losses of $ | |||||||||||
| Other assets | |||||||||||
| Total assets | $ | $ | |||||||||
| Liabilities and stockholders’ equity | |||||||||||
| Current liabilities: | |||||||||||
| Current portion of debt | $ | $ | |||||||||
| Accounts payable | |||||||||||
| Employee-related liabilities | |||||||||||
| Accrued interest | |||||||||||
| Other current liabilities | |||||||||||
| Total current liabilities | |||||||||||
| Debt, net of current portion | |||||||||||
| Deferred income tax liabilities | |||||||||||
| Other liabilities | |||||||||||
| Total liabilities | |||||||||||
Commitments and contingencies (see note 8) | |||||||||||
| Stockholders’ equity: | |||||||||||
Common stock including paid-in capital, | |||||||||||
Accumulated earnings | |||||||||||
Accumulated other comprehensive loss | ( | ( | |||||||||
| Total stockholders’ equity | |||||||||||
| Total liabilities and stockholders’ equity | $ | $ | |||||||||
See accompanying notes to the unaudited condensed consolidated financial statements.
2
Avantor, Inc. and subsidiaries
Unaudited condensed consolidated statements of operations
(in millions, except per share data) | Three months ended March 31, | ||||||||||||||||||||||
2024 | 2023 | ||||||||||||||||||||||
| Net sales | $ | $ | |||||||||||||||||||||
| Cost of sales | |||||||||||||||||||||||
| Gross profit | |||||||||||||||||||||||
| Selling, general and administrative expenses | |||||||||||||||||||||||
Operating income | |||||||||||||||||||||||
| Interest expense, net | ( | ( | |||||||||||||||||||||
| Loss on extinguishment of debt | ( | ( | |||||||||||||||||||||
Other income, net | |||||||||||||||||||||||
Income before income taxes | |||||||||||||||||||||||
Income tax expense | ( | ( | |||||||||||||||||||||
Net income | $ | $ | |||||||||||||||||||||
Earnings per share: | |||||||||||||||||||||||
| Basic | $ | $ | |||||||||||||||||||||
| Diluted | $ | $ | |||||||||||||||||||||
| Weighted average shares outstanding: | |||||||||||||||||||||||
| Basic | |||||||||||||||||||||||
| Diluted | |||||||||||||||||||||||
See accompanying notes to the unaudited condensed consolidated financial statements.
3
Avantor, Inc. and subsidiaries
Unaudited condensed consolidated statements of comprehensive income or loss
(in millions) | Three months ended March 31, | ||||||||||||||||||||||
2024 | 2023 | ||||||||||||||||||||||
Net income | $ | $ | |||||||||||||||||||||
Other comprehensive (loss) income: | |||||||||||||||||||||||
Foreign currency translation — unrealized (loss) gain | ( | ||||||||||||||||||||||
| Derivative instruments: | |||||||||||||||||||||||
Unrealized gain (loss) | ( | ||||||||||||||||||||||
Reclassification of gain into earnings | ( | ( | |||||||||||||||||||||
| Activity related to defined benefit plans | ( | ( | |||||||||||||||||||||
Other comprehensive (loss) income before income taxes | ( | ||||||||||||||||||||||
| Income tax effect | ( | ||||||||||||||||||||||
Other comprehensive (loss) income | ( | ||||||||||||||||||||||
| Comprehensive income | $ | $ | |||||||||||||||||||||
See accompanying notes to the unaudited condensed consolidated financial statements.
4
Avantor, Inc. and subsidiaries
Unaudited condensed consolidated statements of stockholders’ equity
(in millions) | Stockholders’ equity | ||||||||||||||||||||||||||||||||||||||||
| Common stock including paid-in capital | Accumulated earnings | AOCI | Total | ||||||||||||||||||||||||||||||||||||||
| Shares | Amount | ||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2023 | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||
Comprehensive income (loss) | — | — | ( | ||||||||||||||||||||||||||||||||||||||
| Stock-based compensation expense | — | — | — | ||||||||||||||||||||||||||||||||||||||
| Stock option exercises and other common stock transactions | — | — | |||||||||||||||||||||||||||||||||||||||
Balance at March 31, 2024 | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||
Balance at December 31, 2022 | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||
Comprehensive income | — | — | |||||||||||||||||||||||||||||||||||||||
| Stock-based compensation expense | — | — | — | ||||||||||||||||||||||||||||||||||||||
| Stock option exercises and other common stock transactions | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||
Balance at March 31, 2023 | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||
See accompanying notes to the unaudited condensed consolidated financial statements.
5
Avantor, Inc. and subsidiaries
Unaudited condensed consolidated statements of cash flows
(in millions) | Three months ended March 31, | ||||||||||
2024 | 2023 | ||||||||||
| Cash flows from operating activities: | |||||||||||
Net income | $ | $ | |||||||||
| Reconciling adjustments: | |||||||||||
| Depreciation and amortization | |||||||||||
Stock-based compensation expense | |||||||||||
| Provision for accounts receivable and inventory | |||||||||||
Deferred income tax benefit | ( | ( | |||||||||
| Amortization of deferred financing costs | |||||||||||
| Loss on extinguishment of debt | |||||||||||
Foreign currency remeasurement loss | |||||||||||
| Changes in assets and liabilities: | |||||||||||
| Accounts receivable | ( | ||||||||||
| Inventory | ( | ||||||||||
| Accounts payable | ( | ||||||||||
| Accrued interest | ( | ( | |||||||||
| Other assets and liabilities | |||||||||||
| Other | |||||||||||
Net cash provided by operating activities | |||||||||||
| Cash flows from investing activities: | |||||||||||
| Capital expenditures | ( | ( | |||||||||
| Other | |||||||||||
Net cash used in investing activities | ( | ( | |||||||||
| Cash flows from financing activities: | |||||||||||
| Debt borrowings | |||||||||||
| Debt repayments | ( | ( | |||||||||
| Proceeds received from exercise of stock options | |||||||||||
| Shares repurchased to satisfy employee tax obligations for vested stock-based awards | ( | ( | |||||||||
Net cash used in financing activities | ( | ( | |||||||||
| Effect of currency rate changes on cash and cash equivalents | ( | ||||||||||
| Net change in cash, cash equivalents and restricted cash | ( | ( | |||||||||
| Cash, cash equivalents and restricted cash, beginning of period | |||||||||||
| Cash, cash equivalents and restricted cash, end of period | $ | $ | |||||||||
See accompanying notes to the unaudited condensed consolidated financial statements.
6
Avantor, Inc. and subsidiaries
Notes to unaudited condensed consolidated financial statements
1. Nature of operations and presentation of financial statements
We are a global manufacturer and distributor that provides products and services to customers in the biopharmaceutical, healthcare, education & government and advanced technologies & applied materials industries.
Basis of presentation
The accompanying condensed consolidated financial statements have been prepared pursuant to SEC regulations whereby certain information normally included in GAAP financial statements has been condensed or omitted. The financial information presented herein reflects all adjustments (consisting only of normal, recurring adjustments) that are, in the opinion of management, necessary for a fair presentation of the results for the interim periods presented. The results for interim periods are not necessarily indicative of the results to be expected for the full year.
We believe that the disclosures included herein are adequate to make the information presented not misleading in any material respect when read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report. Those audited consolidated financial statements include a summary of our significant accounting policies.
Principles of consolidation
All intercompany balances and transactions have been eliminated from the financial statements.
Use of estimates
The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the amounts reported throughout the financial statements. Actual results could differ from those estimates.
Segment Reporting
Effective January 1, 2024, we changed our operating model and reporting segment structure from three reportable segments to two reportable segments: Laboratory Solutions and Bioscience Production. This structure aligns with how our Chief Executive Officer, who is our chief operating decision maker, measures segment operating performance and allocates resources across our operating segments.
2. New accounting standards and climate change related update by SEC
Segment Reporting
In November 2023, the FASB issued Accounting Standards Update 2023-07, Improvements to Reportable Segment Disclosures, which amends the existing segment reporting guidance (ASC Topic 280) to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss, an amount for other segment items by reportable segment and a description of its composition, the title and position of the chief operating decision maker and an explanation of how the chief operating decision maker uses the reported
7
measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources.
The amendments in this update are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. We are currently evaluating the impact of our pending adoption of this standard on our financial statement disclosures.
Income Taxes
In December 2023, the FASB issued Accounting Standards Update 2023-09, Improvements to Income Tax Disclosures, which amends the existing income taxes guidance (ASC Topic 740) to require additional disclosures surrounding annual rate reconciliation, income taxes paid and other income tax related disclosures.
The amendments in this update are effective for annual periods beginning after December 15, 2024. Early adoption is permitted. We are currently evaluating the impact of our pending adoption of this standard on our financial statement disclosures.
Other
There were no new accounting standards that we expect to have a material impact on our financial position or results of operations upon adoption.
Adoption of rules to enhance and standardize climate-related disclosures for Investors
On March 6, 2024, the SEC adopted final rules to require registrants to disclose certain climate-related information in registration statements and annual reports.
On April 4, 2024, the SEC issued an order staying the final rules pending completion of judicial review of the petitions challenging the final rules. The order does not amend the compliance dates contemplated by the final rules, which are applicable to the Company for fiscal years beginning with the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2025. We are currently evaluating the impact of our pending adoption of these requirements on our financial statement disclosures.
8
3. Earnings per share
The following table presents the reconciliation of basic and diluted earnings per share for the three months ended March 31, 2024:
(in millions, except per share data) | Three months ended March 31, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings (numerator) | Weighted average shares outstanding (denominator) | Earnings per share | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Basic | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Dilutive effect of stock-based awards | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Diluted | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||
The following table presents the reconciliation of basic and diluted earnings per share for the three months ended March 31, 2023:
(in millions, except per share data) | Three months ended March 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Earnings (numerator) | Weighted average shares outstanding (denominator) | Earnings per share | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Basic | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Dilutive effect of stock-based awards | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Diluted | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||
4. Segment financial information
As described in note 1, effective January 1, 2024, we changed our operating model and reporting segment structure into two reportable business segments: Laboratory Solutions and Bioscience Production. Corporate costs are managed on a standalone basis, certain of which are allocated to our reportable segments.
In connection with this change, our chief operating decision maker changed the measure used to evaluate segment profitability from Adjusted EBITDA to Adjusted Operating Income. All disclosures relating to segment profitability, including those for comparative periods, have been revised as a result of this change.
9
The following table presents information by reportable segment:
(in millions) | Three months ended March 31, | ||||||||||||||||||||||
2024 | 2023 | ||||||||||||||||||||||
| Net sales: | |||||||||||||||||||||||
| Laboratory Solutions | $ | $ | |||||||||||||||||||||
| Bioscience Production | |||||||||||||||||||||||
| Total | $ | $ | |||||||||||||||||||||
| Adjusted Operating Income: | |||||||||||||||||||||||
| Laboratory Solutions | $ | $ | |||||||||||||||||||||
| Bioscience Production | |||||||||||||||||||||||
| Corporate | ( | ( | |||||||||||||||||||||
| Total | $ | $ | |||||||||||||||||||||
The amounts above exclude inter-segment activity because it is not material. All of the net sales for each segment are from external customers.
The following table presents the reconciliation of net income, the nearest measurement under GAAP, to Adjusted Operating Income :
(in millions) | Three months ended March 31, | ||||||||||||||||||||||
2024 | 2023 | ||||||||||||||||||||||
Net income | $ | $ | |||||||||||||||||||||
| Interest expense, net | |||||||||||||||||||||||
Income tax expense | |||||||||||||||||||||||
| Loss on extinguishment of debt | |||||||||||||||||||||||
Other income, net | ( | ( | |||||||||||||||||||||
Operating income | |||||||||||||||||||||||
| Amortization | |||||||||||||||||||||||
Other stock-based compensation expense | |||||||||||||||||||||||
Integration-related expenses1 | |||||||||||||||||||||||
Restructuring and severance charges2 | |||||||||||||||||||||||
Transformation expenses3 | |||||||||||||||||||||||
| Adjusted Operating Income | $ | $ | |||||||||||||||||||||
━━━━━━━━━
1.Represents direct costs incurred with third parties and the accrual of a long-term retention incentive to integrate acquired companies. These expenses represent incremental costs and are unrelated to normal operations of our business. Integration expenses are incurred over a pre-defined integration period specific to each acquisition.
2.Reflects the incremental expenses incurred in the period related to restructuring initiatives to increase profitability and productivity. Costs included in this caption are specific to employee severance, site-related
10
exit costs, and contract termination costs. The expenses recognized in 2024 represent costs incurred to achieve the Company’s publicly-announced cost transformation initiative.
3.Represents incremental expenses directly associated with the Company’s publicly-announced cost transformation initiative, primarily related to the cost of external advisors.
The following table presents net sales by product category:
(in millions) | Three months ended March 31, | ||||||||||||||||||||||
2024 | 2023 | ||||||||||||||||||||||
| Proprietary | $ | $ | |||||||||||||||||||||
| Third-party | |||||||||||||||||||||||
| Total | $ | $ | |||||||||||||||||||||
5. Supplemental disclosures of cash flow information
The following table presents supplemental disclosures of cash flow information:
(in millions) | March 31, 2024 | December 31, 2023 | |||||||||
| Cash and cash equivalents | $ | $ | |||||||||
| Restricted cash classified as other assets | |||||||||||
| Total | $ | $ | |||||||||
At March 31, 2024 and December 31, 2023, amounts included in restricted cash primarily represent funds held in escrow to satisfy a long-term retention incentive related to the acquisition of Ritter.
(in millions) | Three months ended March 31, | ||||||||||
2024 | 2023 | ||||||||||
| Cash flows from operating activities: | |||||||||||
| Cash paid for income taxes, net | $ | $ | |||||||||
| Cash paid for interest, net, excluding financing leases | |||||||||||
| Cash paid for interest on finance leases | |||||||||||
| Cash paid under operating leases | |||||||||||
| Cash flows from financing activities: | |||||||||||
| Cash paid under finance leases | |||||||||||
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6. Inventory
The following table presents the components of inventory:
(in millions) | March 31, 2024 | December 31, 2023 | |||||||||
| Merchandise inventory | $ | $ | |||||||||
| Finished goods | |||||||||||
| Raw materials | |||||||||||
| Work in process | |||||||||||
| Total | $ | $ | |||||||||
7. Goodwill and other intangible assets
Goodwill
As described in note 1, we reorganized our segment reporting structure effective January 1, 2024. The segment reporting reorganization also resulted in a change to our reporting units for the purpose of goodwill impairment testing. Our new reporting units are Manufactured Products, Buy Sell Production, NuSil, Buy Sell Lab, Proprietary Lab and Services. As a result of the reorganization, our goodwill was reassigned to the new reporting units making up our Laboratory Solutions and Bioscience Production reporting segments.
We have reassigned goodwill as of January 1, 2024 to align to our new segment structure by using a relative fair value approach. We tested goodwill for impairment immediately before and after the realignment; no impairment was identified.
The following table presents goodwill by our reportable segments, on the effective date of the change:
| Laboratory Solutions | Bioscience Production | Total | |||||||||||||||
| Goodwill, gross | $ | $ | $ | ||||||||||||||
| Accumulated impairment losses | ( | ( | ( | ||||||||||||||
| Goodwill, net | $ | $ | $ | ||||||||||||||
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Other intangible assets
The following table presents the components of other intangible assets:
(in millions) | March 31, 2024 | December 31, 2023 | |||||||||||||||||||||||||||||||||
| Gross value | Accumulated amortization and impairment1 | Carrying value | Gross value | Accumulated amortization and impairment1 | Carrying value | ||||||||||||||||||||||||||||||
| Customer relationships | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Trade names | |||||||||||||||||||||||||||||||||||
| Other | |||||||||||||||||||||||||||||||||||
| Total finite-lived | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
| Indefinite-lived | |||||||||||||||||||||||||||||||||||
| Total | $ | $ | |||||||||||||||||||||||||||||||||
━━━━━━━━━
1.As of March 31, 2024 and December 31, 2023, accumulated impairment losses on Customer relationships were $65.9 million and on Other were $40.5 million totaling $106.4 million.
8. Commitments and contingencies
Our business involves commitments and contingencies related to compliance with environmental laws and regulations, the manufacture and sale of products and litigation. The ultimate resolution of contingencies is subject to significant uncertainty, and it is reasonably possible that contingencies could be decided unfavorably against us.
Environmental laws and regulations
Our environmental liabilities are subject to changing governmental policy and regulations, discovery of unknown conditions, judicial proceedings, method and extent of remediation, existence of other potentially responsible parties and future changes in technology. We believe that known and unknown environmental matters, if not resolved favorably, could have a material effect on our financial position, liquidity and profitability. Matters to be disclosed are as follows:
The New Jersey Department of Environmental Protection has ordered us to remediate groundwater conditions near our plant in Phillipsburg, New Jersey. At March 31, 2024, our accrued obligation under this order is $2.4 million, which is calculated based on expected cash payments discounted at rates ranging from 4.2 % to 5.1 % between 2024 and 2046. The undiscounted amount of that obligation is $3.8 million. We are indemnified against any losses incurred in this matter as stipulated through the agreement and guaranty referenced in our Annual Report.
In 2016, we assessed the environmental condition of our chemical manufacturing site in Gliwice, Poland. Our assessment revealed specific types of soil and groundwater contamination throughout the site. We are also monitoring the condition of a closed landfill on that site. These matters are not covered by our indemnification arrangement because they relate to an operation we subsequently acquired. At March 31, 2024, our balance sheet includes a liability of $1.1 million for remediation and monitoring costs. That liability is estimated primarily on discounted expected remediation payments and is not materially different from its undiscounted amount.
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Manufacture and sale of products
Our business involves risk of product liability, patent infringement and other claims in the ordinary course of business arising from the products that we produce ourselves or obtain from our suppliers, as well as from the services we provide. Our exposure to such claims may increase to the extent that we expand our manufacturing operations or service offerings.
We maintain insurance policies to protect us against these risks, including product liability insurance. In many cases the suppliers of products we distribute have indemnified us against such claims. Our insurance coverage or indemnification agreements with suppliers may not be adequate in all pending or any future cases brought against us. Furthermore, our ability to recover under any insurance or indemnification arrangements is subject to the financial viability of our insurers, our suppliers and our suppliers’ insurers, as well as legal enforcement under the local laws governing the arrangements.
We have entered into indemnification agreements with customers of our self-manufactured products to protect them from liabilities and losses arising from our negligence, willful misconduct or sale of defective products. To date, we have not incurred material costs to defend lawsuits or settle claims related to these indemnification provisions.
Litigation
At March 31, 2024, there was no outstanding litigation that we believe would result in material losses if decided against us, and we do not believe that there are any unasserted matters that are reasonably possible to result in a material loss.
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9. Debt
The following table presents information about our debt:
(dollars in millions) | March 31, 2024 | December 31, 2023 | |||||||||||||||||||||
| Interest terms | Rate | Amount | |||||||||||||||||||||
| Receivables facility | SOFR1 plus | $ | $ | ||||||||||||||||||||
| Senior secured credit facilities: | |||||||||||||||||||||||
| Euro term loans B-4 | EURIBOR plus | ||||||||||||||||||||||
| Euro term loans B-5 | EURIBOR plus | ||||||||||||||||||||||
| U.S. dollar term loans B-5 | SOFR1 plus | ||||||||||||||||||||||
| 2.625% secured notes | fixed rate | ||||||||||||||||||||||
| 3.875% unsecured notes | fixed rate | ||||||||||||||||||||||
| 3.875% unsecured notes | fixed rate | ||||||||||||||||||||||
| 4.625% unsecured notes | fixed rate | ||||||||||||||||||||||
| Finance lease liabilities | |||||||||||||||||||||||
| Other | |||||||||||||||||||||||
| Total debt, gross | |||||||||||||||||||||||
| Less: unamortized deferred financing costs | ( | ( | |||||||||||||||||||||
| Total debt | $ | $ | |||||||||||||||||||||
| Classification on balance sheets: | |||||||||||||||||||||||
| Current portion of debt | $ | $ | |||||||||||||||||||||
| Debt, net of current portion | |||||||||||||||||||||||
━━━━━━━━━
1.SOFR includes credit spread adjustment.
Interest expense, net includes interest income of $17.9 million and $14.5 million for the three months ended March 31, 2024 and March 31, 2023, respectively. The interest income primarily relates to income on our interest rate swaps and cross currency swaps. Refer to note 14 to the unaudited consolidated financial statements for more information.
Credit facilities
The following table presents availability under our credit facilities:
(in millions) | March 31, 2024 | ||||||||||||||||
| Receivables facility | Revolving credit facility | Total | |||||||||||||||
| Capacity | $ | $ | $ | ||||||||||||||
| Undrawn letters of credit outstanding | ( | ( | |||||||||||||||
| Outstanding borrowings | ( | ( | |||||||||||||||
| Unused availability | $ | $ | $ | ||||||||||||||
Capacity under the receivables facility is calculated as the lower of eligible borrowing base or facility limit of $400.0 million. Eligible borrowing base is determined as total available accounts receivable less
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ineligible accounts receivable and other adjustments. At March 31, 2024, total available accounts receivable under the receivables facility were $538.3 million.
Senior secured credit facilities
On April 2, 2024, we amended the credit agreement to reprice the U.S. Dollar term loan under our senior secured credit facilities. Pursuant to the agreement, the interest rate applicable to the U.S. Dollar term loan reduced from SOFR plus a spread of 2.25 % per annum to SOFR plus a spread of 2.00 % per annum. The principal amount of U.S. Dollar term loan outstanding immediately prior to the amendment and the outstanding principal amount of U.S. Dollar term loan immediately following the amendment each totaled $772.4 million. The final stated maturity of the U.S. Dollar term loan remains November 6, 2027. The costs to complete the amendment were not material.
During the quarter ended March 31, 2024, we made prepayments of $10.0 million on our U.S. dollar term loan B-5 that matures on November 6, 2027 and prepayments of $190.6 million on our Euro term loan B-4 that matures on June 10, 2028. In connection with these prepayments, we expensed $2.5 million of previously unamortized deferred financing costs as a loss on extinguishment of debt.
Debt covenants
Our debt agreements include representations and covenants that we consider usual and customary, and our receivables facility and senior secured credit facilities include a financial covenant that becomes applicable for periods in which we have drawn more than 35 % of our revolving credit facility under the senior secured credit facilities. In this circumstance, we are not permitted to have combined borrowings on our senior secured credit facilities and secured notes in excess of a pro forma net leverage ratio, as defined in our credit agreements. As we had not drawn more than 35 % of our revolving credit facility in this period, this covenant was not applicable at March 31, 2024.
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The following table presents changes in the components of AOCI:
(in millions) | Foreign currency translation | Derivative instruments | Defined benefit plans | Total | |||||||||||||||||||
Balance at December 31, 2023 | $ | ( | $ | $ | $ | ( | |||||||||||||||||
Unrealized (loss) gain | ( | ( | ( | ||||||||||||||||||||
Reclassification of gain into earnings | ( | ( | |||||||||||||||||||||
| Change due to income taxes | ( | ( | ( | ||||||||||||||||||||
Balance at March 31, 2024 | $ | ( | $ | $ | $ | ( | |||||||||||||||||
Balance at December 31, 2022 | $ | ( | $ | $ | $ | ( | |||||||||||||||||
Unrealized gain (loss) | ( | ( | |||||||||||||||||||||
Reclassification of gain into earnings | ( | ( | |||||||||||||||||||||
| Change due to income taxes | |||||||||||||||||||||||
Balance at March 31, 2023 | $ | ( | $ | $ | $ | ( | |||||||||||||||||
The reclassifications effects shown above were immaterial to the financial statements and were made to either cost of sales, SG&A expense or interest expense depending upon the nature of the underlying transaction. The income tax effects in the three months ended March 31, 2024 on foreign currency translation were due to our net investment hedge and cross-currency swap discussed in note 14.
11. Stock-based compensation
The following table presents the components of stock-based compensation expense:
(in millions) | Award Classification | Three months ended March 31, | |||||||||||||||||||||||||||
2024 | 2023 | ||||||||||||||||||||||||||||
| Stock options | Equity | $ | $ | ||||||||||||||||||||||||||
| RSUs | Equity | ||||||||||||||||||||||||||||
| Other | Both | ||||||||||||||||||||||||||||
| Total | $ | $ | |||||||||||||||||||||||||||
| Award classification: | |||||||||||||||||||||||||||||
| Equity | $ | $ | |||||||||||||||||||||||||||
| Liability | |||||||||||||||||||||||||||||
At March 31, 2024, unvested awards under our plans have remaining stock-based compensation expense of $116.4 million to be recognized over a weighted average period of 1.9 years.
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Stock options
The following table presents information about outstanding stock options:
(options and intrinsic value in millions) | Number of options | Weighted average exercise price per option | Aggregate intrinsic value | Weighted average remaining term | |||||||||||||||||||
Balance at December 31, 2023 | $ | ||||||||||||||||||||||
| Granted | |||||||||||||||||||||||
| Exercised | ( | ||||||||||||||||||||||
| Forfeited | ( | ||||||||||||||||||||||
Balance at March 31, 2024 | $ | $ | |||||||||||||||||||||
| Expected to vest | |||||||||||||||||||||||
| Vested | |||||||||||||||||||||||
During the three months ended March 31, 2024, we granted stock options that have a contractual life of ten years and will vest annually over three years , subject to the recipient continuously providing service to us through such date.
RSUs
The following table presents information about unvested RSUs:
(awards in millions) | Number of awards | Weighted average grant date fair value per award | |||||||||
Balance at December 31, 2023 | $ | ||||||||||
| Granted | |||||||||||
| Vested | ( | ||||||||||
| Forfeited | ( | ||||||||||
Balance at March 31, 2024 | $ | ||||||||||
During the three months ended March 31, 2024, we granted RSUs that will vest annually over three years, subject to the recipient continuously providing service to us throughout the vesting period. Certain of those awards contain performance and market conditions that impact the number of shares that will ultimately vest. We recorded expense on such awards of $2.1 million and $2.3 million for the three months ended March 31, 2024 and March 31, 2023, respectively.
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12. Other income or expense, net
The following table presents the components of other income or expense, net:
(in millions) | Three months ended March 31, | ||||||||||||||||||||||
2024 | 2023 | ||||||||||||||||||||||
Net foreign currency gain from financing activities | $ | $ | |||||||||||||||||||||
Income related to defined benefit plans | |||||||||||||||||||||||
Other income, net | $ | $ | |||||||||||||||||||||
13. Income taxes
The following table presents the relationship between income tax expense and income before income taxes:
(in millions) | Three months ended March 31, | ||||||||||||||||||||||
2024 | 2023 | ||||||||||||||||||||||
Income before income taxes | $ | $ | |||||||||||||||||||||
Income tax expense | ( | ( | |||||||||||||||||||||
| Effective income tax rate | % | % | |||||||||||||||||||||
Income tax expense in the quarter is based upon the estimated income for the full year. The composition of the income in different countries and adjustments, if any, in the applicable quarterly periods influences our expense.
The relationship between pre-tax income and income tax expense is affected by the impact of losses for which we cannot claim a tax benefit, non-deductible expenses, and other items that increase tax expense without a relationship to income, such as withholding taxes and changes with respect to uncertain tax positions.
14. Derivative and hedging activities
Hedging instruments:
We engage in hedging activities to reduce our exposure to foreign currency exchange rates and interest rates. Our hedging activities are designed to manage specific risks according to our strategies, as summarized below, which may change from time to time. Our hedging activities consist of the following:
•Economic hedges — We are exposed to changes in foreign currency exchange rates on certain of our euro-denominated term loans and notes that move inversely from our portfolio of euro-denominated intercompany loans. The currency effects for these non-derivative instruments are recorded through earnings in the period of change and substantially offset one another;
•Other hedging activities — Certain of our subsidiaries hedge short-term foreign currency denominated business transactions, external debt and intercompany financing transactions using
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foreign currency forward contracts. These activities were not material to our consolidated financial statements.
Cash flow hedges of interest rate risk
Our objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount.
For derivatives designated and that qualify as cash flow hedges of interest rate risk, the gain or loss on the derivative is recorded in AOCI and subsequently reclassified into interest expense in the same period(s) during which the hedged transaction affects earnings. Amounts reported in AOCI related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s variable-rate debt. During the next twelve months, the Company estimates that an additional $17.0 million will be reclassified as a reduction to interest expense.
As of March 31, 2024, the Company had the following outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk:
| (dollars in millions) | ||||||||||||||
| Interest rate derivative | Number of instruments | Notional | ||||||||||||
| Interest rate swaps | $ | |||||||||||||
Effect of cash flow hedge accounting on AOCI
The table below presents the effect of cash flow hedge accounting on AOCI for the three months ended March 31, 2024 and March 31, 2023.
| (in millions) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Hedging relationships | Amount of gain or (loss) recognized in OCI on Derivative | Location of gain or (loss) reclassified from AOCI into income | Amount of gain or (loss) reclassified from AOCI into income | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Three months ended March 31, | Three months ended March 31, | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
2024 | 2023 | 2024 | 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest rate products | $ | $ | ( | Interest expense, net | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Total | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||
Effect of cash flow hedge accounting on the income statement
The table below presents the effect of our derivative financial instruments on the statement of operations for the three months ended March 31, 2024 and March 31, 2023.
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Three months ended March 31, | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2024 | 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (in millions) | Interest expense, net | Interest expense, net | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total amounts of line items presented in the statements of operations where the effects of cash flow hedges are recorded | $ | ( | $ | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Amount of gain reclassified from AOCI into income | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment hedges
We are exposed to fluctuations in foreign exchange rates on investments we hold in foreign entities, specifically our net investment in Avantor Holdings B.V., a EUR-functional-currency consolidated subsidiary, against the risk of changes in the EUR-USD exchange rate.
For derivatives designated as net investment hedges, the gain or loss on the derivative is reported in AOCI as part of the cumulative translation adjustment. Amounts are reclassified out of AOCI into earnings when the hedged net investment is either sold or substantially liquidated.
As of March 31, 2024, we had the following outstanding foreign currency derivatives that were used to hedge net investments in foreign operations:
| (value in millions) | ||||||||||||||||||||
Foreign currency derivative | Number of instruments | Notional sold | Notional purchased | |||||||||||||||||
Cross-currency swaps | € | $ | ||||||||||||||||||
Effect of net investment hedges on AOCI and the income statement
The table below presents the effect of our net investment hedges on AOCI and the statement of operations for the three months ended March 31, 2024 and March 31, 2023.
| (in millions) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Hedging relationships | Amount of gain or (loss) recognized in OCI on Derivative | Location of gain or (loss) recognized in income on Derivative (amount excluded from effectiveness testing) | Amount of gain or (loss) recognized in income on Derivative (amount excluded from effectiveness testing) | |||||||||||||||||||||||||||||||||||||||||||||||
Three months ended March 31, | Three months ended March 31, | |||||||||||||||||||||||||||||||||||||||||||||||||
2024 | 2023 | 2024 | 2023 | |||||||||||||||||||||||||||||||||||||||||||||||
Cross currency swaps | $ | $ | ( | Interest expense, net | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
| Total | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||
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The Company did not reclassify any other deferred gains or losses related to cash flow hedges from accumulated other comprehensive income (loss) to earnings for the three months ended March 31, 2024 and March 31, 2023.
The table below presents the fair value of our derivative financial instruments as well as their classification on the Balance Sheet as of March 31, 2024 and December 31, 2023:
Derivative assets | Derivative liabilities | ||||||||||||||||||||||||||||||||||||||||||||||
March 31, 2024 | December 31, 2023 | March 31, 2024 | December 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||
| (in millions) | Balance sheet location | Fair value | Balance sheet location | Fair value | Balance sheet location | Fair value | Balance sheet location | Fair value | |||||||||||||||||||||||||||||||||||||||
Derivatives designated as hedging instruments: | |||||||||||||||||||||||||||||||||||||||||||||||
Interest rate products | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
Foreign exchange products | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | ( | $ | ( | |||||||||||||||||||||||||||||||||||||||||
Non-derivative financial instruments which are designated as hedging instruments:
We designated all of our outstanding €400.0 million 3.875 % senior unsecured notes, issued on July 17, 2020, and maturing on July 15, 2028, as a hedge of our net investment in certain of our European operations. For instruments that are designated and qualify as net investment hedges, the foreign currency transactional gains or losses are reported as a component of AOCI. The gains or losses would be reclassified into earnings upon a liquidation event or deconsolidation of a hedged foreign subsidiary.
Net investment hedge effectiveness is assessed based upon the change in the spot rate of the foreign currency denominated debt. The critical terms of the foreign currency notes match the portion of the net investments designated as being hedged. At March 31, 2024, the net investment hedge was equal to the designated portion of the European operations and was considered to be perfectly effective.
The accumulated gain related to the foreign currency denominated debt designated as net investment hedges classified in the foreign currency translation adjustment component of AOCI was $20.0 million and $9.3 million as of March 31, 2024 and December 31, 2023, respectively.
The amount of (gain) loss related to the foreign currency denominated debt designated as net investment hedges classified in the foreign currency translation adjustment component of other comprehensive
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income or loss for the three months ended March 31, 2024 and March 31, 2023 are presented below:
| (in millions) | Three months ended March 31, | ||||||||||||||||||||||
2024 | 2023 | ||||||||||||||||||||||
| Net investment hedges | $ | ( | $ | ||||||||||||||||||||
15. Financial instruments and fair value measurements
Our financial instruments include cash and cash equivalents, accounts receivable, accounts payable and debt.
Assets and liabilities for which fair value is only disclosed
The carrying amount of cash and cash equivalents was the same as its fair value and is a Level 1 measurement. The carrying amounts for trade accounts receivable and accounts payable approximated fair value due to their short-term nature and are Level 2 measurements.
The following table presents the gross amounts, which exclude unamortized deferred financing costs, and the fair values of debt instruments:
(in millions) | March 31, 2024 | December 31, 2023 | |||||||||||||||||||||
| Gross amount | Fair value | Gross amount | Fair value | ||||||||||||||||||||
| Receivables facility | $ | $ | $ | $ | |||||||||||||||||||
| Senior secured credit facilities: | |||||||||||||||||||||||
| Euro term loans B-4 | |||||||||||||||||||||||
| Euro term loans B-5 | |||||||||||||||||||||||
| U.S. dollar term loans B-5 | |||||||||||||||||||||||
| 2.625% secured notes | |||||||||||||||||||||||
| 3.875% unsecured notes | |||||||||||||||||||||||
| 3.875% unsecured notes | |||||||||||||||||||||||
| 4.625 % unsecured notes | |||||||||||||||||||||||
| Finance lease liabilities | |||||||||||||||||||||||
| Other | |||||||||||||||||||||||
| Total | $ | $ | $ | $ | |||||||||||||||||||
The fair values of debt instruments are based on standard pricing models that take into account the present value of future cash flows, and in some cases private trading data, which are level 2 measurements.
Item 2. Management’s discussion and analysis of financial condition and results of operations
This discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results may differ materially from those contained in or implied by any forward-looking statements. See “Cautionary factors regarding forward-looking statements.”
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Basis of presentation
This discussion should be read in conjunction with the accompanying condensed consolidated financial statements and notes. Pursuant to SEC rules for reports covering interim periods, we have prepared this discussion and analysis to enable you to assess material changes in our financial condition and results of operations since December 31, 2023, the date of our Annual Report. Therefore, we encourage you to read this discussion and analysis in conjunction with the Annual Report.
Overview
During the three months ended March 31, 2024, we recorded net sales of $1,679.8 million, net income of $60.4 million, Adjusted EBITDA of $283.0 million and Adjusted Operating Income of $258.4 million. Net sales decreased by 5.6%, which included a 6.3% decline in organic sales compared to the same period in 2023. See “Reconciliations of non-GAAP measures” for reconciliations of net income to Adjusted EBITDA and Adjusted Operating Income, and net income margin to Adjusted EBITDA margin and Adjusted Operating Income margin. See “Results of operations” for a reconciliation of net sales growth (decline) to organic net sales growth (decline).
Segment Change
Effective January 1, 2024, we changed our operating model and reporting segment structure from three
reportable segments to two reportable segments, Laboratory Solutions and Bioscience Production. This structure aligns with how our Chief Executive Officer, who is our chief operating decision maker, intends to measure segment operating performance and allocate resources across our operating segments. This reportable segment change has no impact on our consolidated operating results.
In connection with the operating model and reporting structure change, our chief operating decision
maker changed the measure used to evaluate segment profitability from Adjusted EBITDA to Adjusted Operating Income. All disclosures relating to segment profitability, including those for comparative periods, have been revised as a result of this change.
Factors and current trends affecting our business and results of operations
The following updates the factors and current trends disclosed in the Annual Report. These updates may affect our performance and financial condition in future periods.
Our business continues to be impacted by the transition from the global coronavirus pandemic
Customer demand and required inventory levels continue to normalize in the transition from the COVID-19 pandemic. For a discussion of this trend and associated economic disruptions, and the actual operational and financial impacts that we experienced through December 31, 2023, see “Part II—Item 7—Management's discussion and analysis of financial condition and results of operations” in the Annual Report.
We have been impacted by supply chain constraints and inflationary pressures
We have experienced inventory fluctuations and build up at customers as a result of global supply chain disruptions and have experienced inflationary pressures across all of our cost categories. While we have implemented pricing and productivity measures to combat these pressures, they may continue to adversely impact our results.
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Fluctuations in foreign currency rates impact our results
Our consolidated results of operations are comprised of many different functional currencies that translate into our U.S. Dollar reporting currency. The movement of the U.S. Dollar against those functional currencies, particularly the Euro, has caused significant variability in our results and may continue to do so in the future.
Key indicators of performance and financial condition
To evaluate our performance, we monitor a number of key indicators. As appropriate, we supplement our results of operations determined in accordance with U.S. generally accepted accounting principles (“GAAP”) with certain non-GAAP financial measurements that we believe are useful to investors, creditors and others in assessing our performance. These measures should not be considered in isolation or as a substitute for reported GAAP results because they may include or exclude certain items as compared to similar GAAP-based measures, and such measures may not be comparable to similarly titled measures reported by other companies. Rather, these measures should be considered as an additional way of viewing aspects of our operations that provide a more complete understanding of our business.
The key indicators that we monitor are as follows:
•Net sales, gross margin, operating income, operating income margin, net income or loss and net income or loss margin. These measures are discussed in the section entitled “Results of operations”;
•Organic net sales growth, which is a non-GAAP measure discussed in the section entitled “Results of operations.” Organic net sales growth (decline) eliminates from our reported net sales change the impacts of revenues from any acquired businesses that have been owned for less than one year and changes in foreign currency exchange rates. We believe that this measurement is useful to investors as a way to measure and evaluate our underlying commercial operating performance consistently across our segments and the periods presented. This measurement is used by our management for the same reason. Reconciliations to the change in reported net sales, the most directly comparable GAAP financial measure, are included in the section entitled “Results of operations”;
•Adjusted EBITDA and Adjusted EBITDA margin,, which are non-GAAP measures discussed in the section entitled “Results of operations.” Adjusted EBITDA is our net income or loss adjusted for the following items: (i) interest expense, (ii) income tax expense, (iii) amortization of acquired intangible assets, (iv) depreciation expense, (v) losses on extinguishment of debt, (vi) charges associated with the impairment of certain assets, (vii) and certain other adjustments. Adjusted EBITDA margin is Adjusted EBITDA divided by net sales as determined under GAAP. We believe that these measurements are useful as a way to analyze the underlying trends in our business consistently across the periods presented. These measurements are used by our management for the same reason. A reconciliation of net income or loss and net income or loss margin, the most directly comparable GAAP financial measures, to Adjusted EBITDA and Adjusted EBITDA margin, respectively, are included in the section entitled “Reconciliations of non-GAAP measures”;
•Adjusted Operating Income and Adjusted Operating Income margin, which are non-GAAP measures discussed in the section entitled “Results of operations.” Adjusted operating income is our net income or loss adjusted for the following items: (i) interest expense, (ii) income tax expense, (iii) amortization of acquired intangible assets, (iv) losses on extinguishment of debt, (v) charges associated with the impairment of certain assets, (vi) and certain other adjustments. This
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measurement is our segment reporting profitability measure under generally accepted accounting principles. Adjusted Operating Income margin is Adjusted Operating Income divided by net sales as determined under GAAP. We believe that these measurements are useful to investors as a way to analyze the underlying trends in our business consistently across the periods presented. These measurements are used by our management for the same reason. A reconciliation of net income or loss and net income or loss margin, the most directly comparable GAAP financial measures, to Adjusted Operating Income and Adjusted Operating Income margin, respectively, are included in the section entitled “Reconciliations of non-GAAP measures”;
•Cash flows from operating activities, which we discuss in the section entitled “Liquidity and capital resources—Historical cash flows”;
•Free cash flow, which is a non-GAAP measure, is equal to our cash flows from operating activities, plus acquisition-related costs paid in the period, less capital expenditures. We believe that this measurement is useful to investors as it provides a view on the Company’s ability to generate cash for use in financing or investing activities. This measurement is used by management for the same reason. A reconciliation of cash flows from operating activities, the most directly comparable GAAP financial measure, to free cash flow, is included in the section entitled “Liquidity and capital resources—Historical cash flows.”
Results of operations
We present results of operations in the same way that we manage our business, evaluate our performance and allocate our resources. We also provide discussion of net sales and Adjusted Operating Income by segment: Laboratory Solutions and Bioscience Production. Corporate costs are managed on a standalone basis, certain of which are allocated to our reportable segments.
Executive summary
(dollars in millions) | Three months ended March 31, | Change | |||||||||||||||
| 2024 | 2023 | ||||||||||||||||
| Net sales | $ | 1,679.8 | $ | 1,780.3 | $ | (100.5) | |||||||||||
| Gross margin | 34.0 | % | 35.1 | % | (110) bps | ||||||||||||
| Operating income | $ | 146.3 | $ | 231.2 | $ | (84.9) | |||||||||||
| Operating income margin | 8.7 | % | 13.0 | % | (430) bps | ||||||||||||
Net income | $ | 60.4 | $ | 121.5 | $ | (61.1) | |||||||||||
| Net income margin | 3.6 | % | 6.8 | % | (320) bps | ||||||||||||
| Adjusted EBITDA | $ | 283.0 | $ | 346.2 | $ | (63.2) | |||||||||||
| Adjusted EBITDA margin | 16.8 | % | 19.4 | % | (260) bps | ||||||||||||
| Adjusted Operating Income | $ | 258.4 | $ | 323.1 | $ | (64.7) | |||||||||||
| Adjusted Operating Income margin | 15.4 | % | 18.1 | % | (270) bps | ||||||||||||
The first quarter net sales decline was driven by decreases in both segments primarily due to reduced customer demand. Unfavorable product mix contributed to contraction in gross margin. Softness in sales volume and unfavorable product mix drove Adjusted EBITDA and Adjusted Operating Income margin contraction.
26
Net Sales
Three months ended
| (in millions) | Three months ended March 31, | Reconciliation of net sales growth (decline) to organic net sales growth (decline) | |||||||||||||||||||||||||||||||||
| Net sales growth (decline) | Foreign currency impact | Organic net sales growth (decline) | |||||||||||||||||||||||||||||||||
2024 | 2023 | ||||||||||||||||||||||||||||||||||
| Laboratory Solutions | $ | 1,157.1 | $ | 1,203.0 | $ | (45.9) | $ | 9.0 | $ | (54.9) | |||||||||||||||||||||||||
| Bioscience Production | 522.7 | 577.3 | (54.6) | 3.0 | (57.6) | ||||||||||||||||||||||||||||||
| Total | $ | 1,679.8 | $ | 1,780.3 | $ | (100.5) | $ | 12.0 | $ | (112.5) | |||||||||||||||||||||||||
Net sales decreased $100.5 million or 5.6%, which included $12.0 million or 0.7% of favorable foreign currency impact. Organic net sales decreased by $112.5 million or 6.3%.
In the Laboratory Solutions segment, net sales decreased $45.9 million or 3.8%, which included $9.0 million or 0.7% of favorable foreign currency impact. Organic net sales decreased $54.9 million or 4.5%. Sales decline was primarily driven by decreased demand in biopharma and healthcare end markets.
In the Bioscience Production segment, net sales decreased $54.6 million or 9.5%, which included $3.0 million or 0.5% of favorable foreign currency impact. Organic net sales decreased by $57.6 million or 10.0%. Sales decline was primarily driven by decreased demand in biopharma and healthcare end markets.
Gross margin
Three months ended March 31, | Change | ||||||||||||||||||||||||||||||||||
2024 | 2023 | ||||||||||||||||||||||||||||||||||
| Gross margin | 34.0 | % | 35.1 | % | (110) bps | ||||||||||||||||||||||||||||||
Three months ended
Gross margin for the three months ended March 31, 2024 contracted by 110 basis points resulting primarily from unfavorable product mix.
Operating income
(in millions) | Three months ended March 31, | Change | |||||||||||||||||||||||||||||||||
2024 | 2023 | ||||||||||||||||||||||||||||||||||
| Gross profit | $ | 570.5 | $ | 624.8 | $ | (54.3) | |||||||||||||||||||||||||||||
| Operating expenses | 424.2 | 393.6 | 30.6 | ||||||||||||||||||||||||||||||||
Operating income | $ | 146.3 | $ | 231.2 | $ | (84.9) | |||||||||||||||||||||||||||||
Three months ended
Operating income decreased primarily from lower gross profit, as previously discussed and higher operating expenses driven by restructuring and severance charges, transformation expenses and inflationary pressures on salary expenses.
27
Net income
(in millions) | Three months ended March 31, | Change | |||||||||||||||||||||||||||||||||
2024 | 2023 | ||||||||||||||||||||||||||||||||||
Operating income | $ | 146.3 | $ | 231.2 | $ | (84.9) | |||||||||||||||||||||||||||||
| Interest expense, net | (64.3) | (73.7) | 9.4 | ||||||||||||||||||||||||||||||||
| Loss on extinguishment of debt | (2.5) | (2.3) | (0.2) | ||||||||||||||||||||||||||||||||
Other income, net | 1.1 | 0.6 | 0.5 | ||||||||||||||||||||||||||||||||
Income tax expense | (20.2) | (34.3) | 14.1 | ||||||||||||||||||||||||||||||||
Net income | $ | 60.4 | $ | 121.5 | $ | (61.1) | |||||||||||||||||||||||||||||
Three months ended
Net income decreased primarily due to lower operating income, as previously discussed, partially offset by lower interest expense on account of debt repayments made over the last twelve months and lower income tax expense due to lower income before income taxes.
Adjusted EBITDA and Adjusted EBITDA margin
For a reconciliation of Adjusted EBITDA and Adjusted EBITDA margin to net income and net income margin, respectively, the most directly comparable measures under GAAP, see “Reconciliations of non-GAAP financial measures.”
| (dollars in millions) | Three months ended March 31, | Change | |||||||||||||||||||||||||||||||||
2024 | 2023 | ||||||||||||||||||||||||||||||||||
Adjusted EBITDA | 283.0 | 346.2 | (63.2) | ||||||||||||||||||||||||||||||||
| Adjusted EBITDA margin | 16.8 | % | 19.4 | % | (260) bps | ||||||||||||||||||||||||||||||
Three months ended
Adjusted EBITDA decreased by $63.2 million or 18.3%, which included a favorable foreign currency translation impact of $1.0 million or 0.3%.The remaining decline was $64.2 million or 18.6% primarily driven by lower sales volume and unfavorable product mix.
28
Adjusted Operating Income and Adjusted Operating Income margin
For a reconciliation of Adjusted Operating Income and Adjusted Operating Income margin to net income and net income margin, respectively, the most directly comparable measures under GAAP, see “Reconciliations of non-GAAP financial measures.”
| (dollars in millions) | Three months ended March 31, | Change | |||||||||||||||||||||||||||||||||
2024 | 2023 | ||||||||||||||||||||||||||||||||||
Adjusted Operating Income: | |||||||||||||||||||||||||||||||||||
| Laboratory Solutions | $ | 148.2 | $ | 172.2 | $ | (24.0) | |||||||||||||||||||||||||||||
| Bioscience Production | 126.9 | 167.5 | (40.6) | ||||||||||||||||||||||||||||||||
| Corporate | (16.7) | (16.6) | (0.1) | ||||||||||||||||||||||||||||||||
| Total | $ | 258.4 | $ | 323.1 | $ | (64.7) | |||||||||||||||||||||||||||||
| Adjusted Operating Income margin | 15.4 | % | 18.1 | % | (270) bps | ||||||||||||||||||||||||||||||
Adjusted Operating Income decreased $64.7 million or 20.0%, which included a favorable foreign currency translation impact of $0.9 million or 0.3%. The remaining decline was $65.6 million or 20.3% which is further discussed below.
In the Laboratory Solutions segment, Adjusted Operating Income declined $24.0 million or 13.9%, or 13.7% when adjusted for unfavorable foreign currency translation impact. The decrease was due to lower sales volume.
In the Bioscience Production segment, Adjusted Operating Income declined $40.6 million or 24.2%, or 24.3% when adjusted for favorable foreign currency translation impact. The decrease was driven primarily by lower sales volume.
In Corporate, Adjusted Operating Income decreased $0.1 million or 0.6%, due to immaterial offsetting factors.
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Reconciliations of non-GAAP financial measures
The following table presents the reconciliation of net income and net income margin to Adjusted EBITDA and Adjusted EBITDA margin, respectively:
| (dollars in millions) | Three months ended March 31, | ||||||||||||||||||||||||||||||||||
2024 | 2023 | ||||||||||||||||||||||||||||||||||
| $ | % | $ | % | ||||||||||||||||||||||||||||||||
Net income | $ | 60.4 | 3.6 | % | $ | 121.5 | 6.8 | % | |||||||||||||||||||||||||||
| Interest expense, net | 64.3 | 3.8 | % | 73.7 | 4.1 | % | |||||||||||||||||||||||||||||
Income tax expense | 20.2 | 1.2 | % | 34.3 | 2.0 | % | |||||||||||||||||||||||||||||
| Depreciation and amortization | 99.6 | 5.9 | % | 101.1 | 5.6 | % | |||||||||||||||||||||||||||||
| Loss on extinguishment of debt | 2.5 | 0.1 | % | 2.3 | 0.1 | % | |||||||||||||||||||||||||||||
Net foreign currency gain from financing activities | (0.8) | — | % | (0.2) | — | % | |||||||||||||||||||||||||||||
Other stock-based compensation expense | 0.3 | — | % | 0.1 | — | % | |||||||||||||||||||||||||||||
Integration-related expenses1 | — | — | % | 8.7 | 0.5 | % | |||||||||||||||||||||||||||||
Restructuring and severance charges2 | 23.2 | 1.4 | % | 4.7 | 0.3 | % | |||||||||||||||||||||||||||||
Transformation expenses3 | 13.3 | 0.8 | % | — | — | % | |||||||||||||||||||||||||||||
| Adjusted EBITDA | $ | 283.0 | 16.8 | % | $ | 346.2 | 19.4 | % | |||||||||||||||||||||||||||
━━━━━━━━━
1.Represents direct costs incurred with third parties and the accrual of a long-term retention incentive to integrate acquired companies. These expenses represent incremental costs and are unrelated to normal operations of our business. Integration expenses are incurred over a pre-defined integration period specific to each acquisition.
2.Reflects the incremental expenses incurred in the period related to restructuring initiatives to increase profitability and productivity. Costs included in this caption are specific to employee severance, site-related exit costs, and contract termination costs. The expenses recognized in 2024 represent costs incurred to achieve the Company’s publicly-announced cost transformation initiative.
3.Represents incremental expenses directly associated with the Company’s publicly-announced cost transformation initiative, primarily related to the cost of external advisors.
30
The following table presents the reconciliation of net income and net income margin to Adjusted Operating Income and Adjusted Operating Income margin, respectively:
| (dollars in millions) | Three months ended March 31, | ||||||||||||||||||||||||||||||||||
2024 | 2023 | ||||||||||||||||||||||||||||||||||
| $ | % | $ | % | ||||||||||||||||||||||||||||||||
Net income | $ | 60.4 | 3.6 | % | $ | 121.5 | 6.8 | % | |||||||||||||||||||||||||||
| Interest expense, net | 64.3 | 3.8 | % | 73.7 | 4.1 | % | |||||||||||||||||||||||||||||
Income tax expense | 20.2 | 1.2 | % | 34.3 | 2.0 | % | |||||||||||||||||||||||||||||
| Loss on extinguishment of debt | 2.5 | 0.1 | % | 2.3 | 0.1 | % | |||||||||||||||||||||||||||||
Other income, net | (1.1) | — | % | (0.6) | — | % | |||||||||||||||||||||||||||||
Operating income | 146.3 | 8.7 | % | 231.2 | 13.0 | % | |||||||||||||||||||||||||||||
| Amortization | 75.3 | 4.5 | % | 78.4 | 4.3 | % | |||||||||||||||||||||||||||||
Other stock-based compensation expense | 0.3 | — | % | 0.1 | — | % | |||||||||||||||||||||||||||||
Integration-related expenses1 | — | — | % | 8.7 | 0.5 | % | |||||||||||||||||||||||||||||
Restructuring and severance charges2 | 23.2 | 1.4 | % | 4.7 | 0.3 | % | |||||||||||||||||||||||||||||
Transformation expenses3 | 13.3 | 0.8 | % | — | — | % | |||||||||||||||||||||||||||||
| Adjusted Operating Income | $ | 258.4 | 15.4 | % | $ | 323.1 | 18.1 | % | |||||||||||||||||||||||||||
━━━━━━━━━
1.Represents direct costs incurred with third parties and the accrual of a long-term retention incentive to integrate acquired companies. These expenses represent incremental costs and are unrelated to normal operations of our business. Integration expenses are incurred over a pre-defined integration period specific to each acquisition.
2.Reflects the incremental expenses incurred in the period related to restructuring initiatives to increase profitability and productivity. Costs included in this caption are specific to employee severance, site-related exit costs, and contract termination costs. The expenses recognized in 2024 represent costs incurred to achieve the Company’s publicly-announced cost transformation initiative.
3.Represents incremental expenses directly associated with the Company’s publicly-announced cost transformation initiative, primarily related to the cost of external advisors.
Liquidity and capital resources
We fund short-term cash requirements primarily from operating cash flows and credit facilities. Most of our long-term financing is from indebtedness. For the three months ended March 31, 2024, we generated $141.6 million of cash from operating activities, ended the quarter with $234.9 million of cash and cash equivalents and our availability under our credit facilities was $1,018.4 million. We have no debt repayments due in the next twelve months other than required term loan payments of $18.6 million considering the effect of repricing of the U.S. Dollar term loan as described in note 9 to our unaudited consolidated financial statements and receivables facility borrowing of $262.2 million.
31
Liquidity
The following table presents our primary sources of liquidity:
(in millions) | March 31, 2024 | ||||||||||||||||
| Receivables facility | Revolving credit facility | Total | |||||||||||||||
| Unused availability under credit facilities: | |||||||||||||||||
| Capacity | $ | 320.5 | $ | 975.0 | $ | 1,295.5 | |||||||||||
| Undrawn letters of credit outstanding | (14.9) | — | (14.9) | ||||||||||||||
| Outstanding borrowings | (262.2) | — | (262.2) | ||||||||||||||
| Unused availability | $ | 43.4 | $ | 975.0 | $ | 1,018.4 | |||||||||||
| Cash and cash equivalents | 234.9 | ||||||||||||||||
| Total liquidity | $ | 1,253.3 | |||||||||||||||
Some of our credit line availability depends upon maintaining a sufficient borrowing base of eligible accounts receivable. We believe that we have sufficient capital resources to meet our liquidity needs.
Our debt agreements include representations and covenants that we consider usual and customary, and our receivables facility and senior secured credit facilities include a financial covenant that becomes applicable for periods in which we have drawn more than 35% of our revolving credit facility under the senior secured credit facilities. In this circumstance, we are not permitted to have combined borrowings on our senior secured credit facilities and secured notes in excess of a pro forma net leverage ratio, as defined in our credit agreements. As we had not drawn more than 35% of our revolving credit facility in this period, this covenant was not applicable at March 31, 2024.
At March 31, 2024, $222.7 million or 94.8% of our $234.9 million in cash and cash equivalents was held by our non-U.S. subsidiaries and may be subject to certain taxes upon repatriation, primarily where foreign withholding taxes apply.
32
Historical cash flows
The following table presents a summary of cash provided by (used in) various activities:
(in millions) | Three months ended March 31, | Change | |||||||||||||||
| 2024 | 2023 | ||||||||||||||||
| Operating activities: | |||||||||||||||||
| Net income | $ | 60.4 | $ | 121.5 | (61.1) | ||||||||||||
Non-cash items1 | 129.2 | 107.4 | 21.8 | ||||||||||||||
Working capital changes2 | (50.0) | (39.8) | (10.2) | ||||||||||||||
| All other | 2.0 | 30.4 | (28.4) | ||||||||||||||
| Total | $ | 141.6 | $ | 219.5 | $ | (77.9) | |||||||||||
| Investing activities | $ | (34.2) | $ | (27.3) | $ | (6.9) | |||||||||||
| Capital expenditures | (34.7) | (28.0) | (6.7) | ||||||||||||||
| Financing activities | (130.2) | (275.0) | 144.8 | ||||||||||||||
━━━━━━━━━
1.Consists of typical non-cash charges including depreciation and amortization, stock based compensation expense, deferred income tax expense and others.
2.Includes changes to our accounts receivable, inventory, contract assets and accounts payable.
Cash flows from operating activities provided $77.9 million less cash in 2024 primarily due to lower income before income taxes.
Investing activities used $6.9 million more cash in 2024. The change was primarily attributable to an increase in capital expenditures compared to the prior year.
Financing activities used $144.8 million less cash in 2024 primarily due to the net borrowings made on the receivables facility in 2024 compared to having net repayments in 2023 and higher proceeds received from stock options exercises in 2024 compared to the prior year.
Free cash flow
| (in millions) | Three months ended March 31, | Change | |||||||||||||||
| 2024 | 2023 | ||||||||||||||||
| Net cash provided by operating activities | $ | 141.6 | $ | 219.5 | $ | (77.9) | |||||||||||
| Capital expenditures | (34.7) | (28.0) | (6.7) | ||||||||||||||
| Free cash flow | $ | 106.9 | $ | 191.5 | $ | (84.6) | |||||||||||
Free cash flow was $84.6 million lower in 2024 primarily due to lower income before income taxes and an increase in capital spending across the Company in 2024 as noted above.
33
Indebtedness
For information about our indebtedness, refer to the section entitled “Liquidity” and note 9 to our unaudited condensed consolidated financial statements included in Part I, Item 1 — “Financial statements.”
Item 3. Quantitative and qualitative disclosures about market risk
Quantitative and qualitative disclosures about market risk appear in Item 7A in the Company’s 2023 Annual Report. There were no material changes during the quarter ended March 31, 2024 to this information as reported in the Company’s 2023 Annual Report.
Item 4. Controls and procedures
Management’s evaluation of disclosure controls and procedures
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)), as of the end of the period covered by this report. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of March 31, 2024, the design and operation of our disclosure controls and procedures were effective to accomplish their objectives at the reasonable assurance level.
Changes in internal control over financial reporting
There have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934) during the fiscal quarter ended March 31, 2024, that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.
PART II — OTHER INFORMATION
Item 1. Legal proceedings
For additional information regarding legal proceedings and matters, see note 8 to our unaudited condensed consolidated financial statements included in Part I, Item 1 — “Financial Statements,” which information is incorporated into this item by reference.
Item 1A. Risk factors
For information regarding factors that could affect the Company's results of operations, financial condition and liquidity, see the risk factors discussed in Part I, Item 1A “Risk Factors” in our Annual Report. There have been no material changes to the risk factors disclosed in Part I—Item 1A of the Annual Report.
Item 2. Unregistered sales of equity securities and use of proceeds
None.
34
Item 3. Defaults upon senior securities
None.
Item 4. Mine safety disclosures
Not applicable.
Item 5. Other information
Securities Trading Plans of Directors and Executive Officers
Our directors and officers (as defined in Exchange Act Rule 16a-1(f)) may from time to time enter into plans or other arrangements for the purchase or sale of our shares that are intended to satisfy the affirmative defense conditions of Rule 10b5–1(c) of the Exchange Act. During the quarter ended March 31, 2024, the following plans or arrangements were adopted:
On March 7, 2024 , Christophe Couturier , Executive Vice President, AMEA adopted a Rule 10b5-1 trading plan (a “Plan”) pursuant to which he may sell up to (i) 265,605 shares of the Company's common stock through the exercise of stock options and (ii) 20,000 shares of the Company’s common stock, in each case, in amounts and at prices as determined in accordance with the plan terms. The Plan will terminate on the earlier of April 30, 2025, or the execution of all trades contemplated by the Plan.
On March 8, 2024 , James Bramwell , Executive Vice President, Sales and Customer Excellence , adopted a Plan pursuant to which he may sell up to (i) 207,415 shares of the Company's common stock through the exercise of stock options and (ii) 43,867 shares of the Company’s common stock, in each case, in amounts and at prices as determined in accordance with the plan terms. The Plan will terminate on the earlier of March 14, 2025, or the execution of all trades contemplated by the Plan.
No other directors or officers, as defined in Rule 16a-1(f) of the Securities Exchange Act of 1934, of the Company adopted terminated
35
Item 6. Exhibits
| Location of exhibits | ||||||||||||||||||||||||||
| Exhibit no. | Exhibit description | Form | Exhibit no. | Filling date | ||||||||||||||||||||||
| 8-K | 10.1 | 4/5/2024 | ||||||||||||||||||||||||
| * | ||||||||||||||||||||||||||
| * | ||||||||||||||||||||||||||
| * | ||||||||||||||||||||||||||
| * | ||||||||||||||||||||||||||
| * | ||||||||||||||||||||||||||
| * | ||||||||||||||||||||||||||
36
| Location of exhibits | ||||||||||||||||||||||||||
| ** | ||||||||||||||||||||||||||
| ** | ||||||||||||||||||||||||||
| 101 | XBRL exhibits | * | ||||||||||||||||||||||||
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) | * | ||||||||||||||||||||||||
━━━━━━━━━
* Filled herewith
** Furnished herewith
^ Indicates management contract or compensatory plan, contract or arrangement.
37
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| Avantor, Inc. | |||||||||||
| Date: April 26, 2024 | By: | /s/ Steven Eck | |||||||||
| Name: | Steven Eck | ||||||||||
| Title: | Senior Vice President, Chief Accounting Officer (Principal Accounting Officer) | ||||||||||
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CONSULTING AGREEMENT THIS CONSULTING AGREEMENT (this “Agreement”) is made effective as of the 1st day of March 2024 (the “Effective Date”) by and between VWR International, LLC, a Delaware limited liability company (with its various subsidiaries and affiliates, “Avantor” or the “Company”), and BrophyBio, LLC, a New Jersey limited liability company (“Consultant”). WHEREAS, Gerard Brophy, the sole member of Consultant (“Dr. Brophy”), served as Avantor’s Executive Vice President, Biopharma Production until October 2023; WHEREAS, the Company desires to continue to benefit from Consultant’s industry experience, expertise and relationships; and WHEREAS, Consultant is willing to provide consulting services to the Company on the terms and conditions set forth herein; NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, agree as follows: 1. SERVICES. 1.1 The Company hereby engages Consultant, and Consultant hereby accept such engagement, as an independent contractor to provide certain services to the Company on the terms and conditions set forth in this Agreement. 1.2 Consultant shall provide to the Company the services set forth on Schedule 1 (the “Services”). 1.3 The Company shall not control the manner or means by which Consultant performs the Services, including but not limited to the time and place Consultant performs the Services; provided that Consultant agrees to be available to render the Services for not less than nine (9) months per year. 1.4 Unless otherwise set forth in Schedule 1, Consultant shall furnish, at his own expense, the equipment, supplies, and other materials used to perform the Services. The Company shall provide Consultant with access to its premises and equipment to the extent necessary for the performance of the Services. 1.5 To the extent Consultant performs any Services on the Company’s premises or using the Company’s equipment, Consultant shall comply with all applicable policies of the Company relating to business and office conduct, health and safety, and use of the Company’s facilities, supplies, information technology, equipment, networks, and other resources.
2 2. TERM. The term of this Agreement shall commence on March 1, 2024 and shall continue until February 28, 2027, unless earlier terminated in accordance with Section 9 (the “Term”). Any extension of the Term will be subject to mutual written agreement between the parties. 3. FEES AND EXPENSES. 3.1 As compensation for the Services rendered pursuant to Schedule 1 and the rights granted to the Company in this Agreement, the Company shall pay Consultant a fee of $15,000 per month (the “Fees”) beginning in March 2024, in each case payable in accordance with Section 3.3 hereof. Consultant agrees to be available to provide such Services at the rate of at least five days per month. Consultant acknowledges that he will receive an IRS Form 1099-MISC from the Company, and that Consultant shall be solely responsible for all federal, state and local taxes, as set out in Section 4.2. 3.2 The Company will reimburse Consultant for any travel or other costs or expenses incurred by Consultant in connection with the performance of the Services within thirty (30) days after Company’s receipt of a reimbursement request accompanied by reasonable supporting documentation. 3.3 Consultant will submit monthly statements setting forth time spent and services rendered, and the Company will pay Consultant all undisputed Fees within forty- five (45) days after the Company’s receipt of each statement submitted by Consultant. 4. RELATIONSHIP OF THE PARTIES. 4.1 Consultant is an independent contractor of the Company, and this Agreement shall not be construed to create any association, partnership, joint venture, employee, or agency relationship between Consultant and the Company for any purpose. Consultant has no authority (and shall not hold itself out as having authority) to bind the Company and Consultant shall not make any agreements or representations on the Company’s behalf without the Company’s prior written consent. 4.2 Without limiting Section 4.1, Consultant will not be eligible to participate in any vacation, group medical or life insurance, disability, profit sharing or retirement benefits, or any other fringe benefits or benefit plans offered by the Company to its employees, and the Company will not be responsible for withholding or paying any income, payroll, Social Security, or other federal, state, or local taxes, making any insurance contributions, including for unemployment or disability, or obtaining worker’s compensation insurance on Consultant’s behalf. Consultant shall be responsible for all such taxes or contributions, including penalties and interest. In the event that the Company determines it is necessary to withhold against any amounts otherwise payable to Consultant hereunder, the amount payable shall be grossed up so that, after giving effect to such withholding, the amount Consultant actually receive shall be the full original amount of such payment. Any persons employed or engaged by Consultant in connection with the performance of the Services shall be Consultant’s employees or contractors and Consultant
3 shall be fully responsible for them and indemnify the Company against any claims made by or on behalf of any such employee or contractor. 5. INTELLECTUAL PROPERTY RIGHTS. 5.1 The Company is and shall be, the sole and exclusive owner of all right, title, and interest throughout the world in and to all the results and proceeds of the Services performed under this Agreement (collectively, the “Deliverables”), including all patents, copyrights, trademarks, trade secrets, and other intellectual property rights (collectively “Intellectual Property Rights”) therein. Consultant agrees that the Deliverables are hereby deemed a “work made for hire” as defined in 17 U.S.C. § 101 for the Company. If, for any reason, any of the Deliverables do not constitute a “work made for hire,” Consultant hereby irrevocably assign to the Company, in each case without additional consideration, all right, title, and interest throughout the world in and to the Deliverables, including all Intellectual Property Rights therein. 5.2 Any assignment of copyrights under this Agreement includes all rights of paternity, integrity, disclosure, and withdrawal and any other rights that may be known as “moral rights” (collectively, “Moral Rights”). Consultant hereby irrevocably waive, to the extent permitted by applicable law, any and all claims Consultant may now or hereafter have in any jurisdiction to any Moral Rights with respect to the Deliverables. 5.3 Consultant shall make full and prompt disclosure to the Company of any inventions or processes, as such terms are defined in 35 U.S.C. § 100 (the “Patent Act”), made or conceived by Consultant alone or with others during the Term, related in any way to the Services performed for the Company under this Agreement, whether or not such inventions or processes are patentable or protected as trade secrets and whether or not such inventions or processes are made or conceived during normal working hours or on the premises of the Company. Consultant shall not disclose to any third party the nature or details of any such inventions or processes without the prior written consent of the Company. Any patent or copyright applications relating to the Services, related to trade secrets of the Company or which relate to tasks assigned to Consultant by the Company, that Consultant may file within one year after expiration or termination of this Agreement, shall belong to the Company, and Consultant hereby assign same to the Company, as having been conceived or reduced to practice during the Term of this Agreement. 5.4 Upon the reasonable request of the Company, Consultant shall promptly take such further actions, including execution and delivery of all appropriate instruments of conveyance, as may be necessary to assist the Company to prosecute, register, perfect, record, or enforce its rights in any Deliverables. In the event the Company is unable, after reasonable effort, to obtain Consultant’s signature on any such documents, Consultant hereby irrevocably designate and appoint the Company as Consultant’s agent and attorney- in-fact, to act for and on Consultant’s behalf solely to execute and file any such application or other document and do all other lawfully permitted acts to further the prosecution and issuance of patents, copyrights, or other intellectual property protection related to the Deliverables with the same legal force and effect as if Consultant had executed them. Consultant agrees that this power of attorney is coupled with an interest.
4 5.5 Notwithstanding Section 5.1, to the extent that any of Consultant’s pre-existing materials or intellectual property are contained in or otherwise necessary to utilize the Deliverables, Consultant retains ownership of such preexisting materials and hereby grant to the Company an irrevocable, worldwide, unlimited, royalty-free license to use, publish, reproduce, display, distribute copies of, modify and prepare derivative works based upon, make, have made, export, import, offer for sale and otherwise use such preexisting materials and intellectual property in connection with the Deliverables and updates, improvements or new versions thereof. The Company may assign, transfer, and sublicense such rights to others without Consultant’s approval. 5.6 Except for such pre-existing materials, Consultant has no right or license to use, publish, reproduce, prepare derivative works based upon, distribute, perform, or display any Deliverables. Consultant has no right or license to use the Company’s trademarks, service marks, trade names, trade names, logos, symbols, or brand names. 5.7 Consultant shall not incorporate any of Consultant’s pre-existing materials or intellectual property, or any pre-existing third party materials (including, without limitation, so-called “open source” or “public domain” materials), into the Deliverables without the Company’s prior written consent. 6. CONFIDENTIALITY. 6.1 During the period this Agreement remains in effect and for a period of two (2) years following termination hereof, Consultant (except as is explicitly otherwise required hereby) shall keep confidential, shall not use for itself or for the benefit of others and shall not copy or allow to be copied in whole or in part any Confidential Information disclosed to such party by the other. For the purposes of this Agreement, the term “Confidential Information” shall mean any and all information proprietary or confidential to the Company, including, but not limited to, financial data, product price data, stock and equity data, patent, copyright, and trade secret information, techniques, apparatus, equipment, drawings, models, inventions, know-how, processes, source documents, the terms and conditions of this Agreement and formulae related to the current, future and proposed products and services of the Company disclosed during the term of this Agreement. 6.2 In furtherance of the provisions of Section 6.1, Consultant hereby further acknowledge that all Confidential Information, regardless of medium, is the sole and exclusive property of the Company. Consultant shall notify the Company immediately in the event Consultant becomes aware of any loss or disclosure of any Confidential Information, and, immediately upon the termination of this Agreement or at such earlier time as the Company may request, Consultant shall deliver to the Company, without further demand therefore, all of the foregoing, and all copies thereof, which are then in Consultant’s possession or under Consultant’s control. 6.3 Confidential Information shall not include information that: (a) is or becomes generally available to the public other than through Consultant’s breach of this Agreement; or
5 (b) is communicated to Consultant by a third party that had no confidentiality obligations with respect to such information. 6.4 Nothing herein shall be construed to prevent disclosure of Confidential Information as may be required by applicable law or regulation, or pursuant to the valid order of a court of competent jurisdiction or an authorized government agency, provided that the disclosure does not exceed the extent of disclosure required by such law, regulation, or order. Consultant agrees to provide written notice of any such order to an authorized officer of the Company promptly following receipt of such order, but in any event sufficiently in advance of making any disclosure to permit the Company to contest the order or seek confidentiality protections, as determined in the Company’s sole discretion. 6.5 Notice of Immunity Under the Economic Espionage Act of 1996, as amended by the Defend Trade Secrets Act of 2016 (“DTSA”). Notwithstanding any other provision of this Agreement: (a) Consultant will not be held criminally or civilly liable under any federal or state trade secret law for any disclosure of a trade secret that: (i) is made: (A) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney; and (B) solely for the purpose of reporting or investigating a suspected violation of law; or (ii) is made in a complaint or other document that is filed under seal in a lawsuit or other proceeding. (b) If Consultant files a lawsuit for retaliation by the Company for reporting a suspected violation of law, Consultant may disclose the Company’s trade secrets to Consultant’s attorney and use the trade secret information in the court proceeding if Consultant: (i) file any document containing the trade secret under seal; and (ii) do not disclose the trade secret, except pursuant to court order. 7. NONCOMPETITION AND NONSOLICITATION. 7.1 Noncompetition. During the four-year period commencing on the Effective Date (the “Restricted Period”), Consultant shall not directly or indirectly, anywhere in the world, own, manage, control, participate in, consult with, render services for or enter into employment with any business or organization that competes with Avantor’s bioscience production business (the “Business”). Nothing herein shall prohibit Consultant from being a passive owner of not more than 2% of the outstanding stock of any class of a corporation that is publicly traded, so long as Consultant has no active participation in the business of such corporation.
6 7.2 Nonsolicitation. During the Term and for a period of twelve (12) months thereafter, Consultant shall not directly or indirectly (i) induce or attempt to induce any employee of Avantor to leave the employ of Avantor or any such subsidiary or affiliate, or in any way interfere with the relationship between Avantor and any employee thereof or (ii) induce or attempt to induce any customer, supplier, licensee or other business relation of Avantor to cease doing business with Avantor or in any way interfere with the relationship between any such customer, supplier, licensee or business relation and Avantor. 8. REPRESENTATIONS AND WARRANTIES. 8.1 Consultant represents and warrants to the Company that: (a) Consultant has the right to enter into this Agreement, to grant the rights granted herein and to perform fully all of Consultant’s obligations in this Agreement; (b) Consultant’s entering into this Agreement with the Company and Consultant’s performance of the Services do not and will not conflict with or result in any breach or default under any other agreement to which Consultant is subject; (c) Consultant has the required skill, experience, and qualifications to perform the Services, Consultant shall perform the Services in a professional and workmanlike manner in accordance with best industry standards for similar services and Consultant shall devote sufficient resources to ensure that the Services are performed in a timely and reliable manner; (d) Consultant shall perform the Services in compliance with all applicable federal, state, and local laws and regulations; (e) the Company will receive good and valid title to all Deliverables, free and clear of all encumbrances and liens of any kind; (f) all Deliverables are and shall be Consultant’s original work (except for material in the public domain or provided by the Company) and do not and will not violate or infringe upon the intellectual property right or any other right whatsoever of any person, firm, corporation, or other entity. 8.2 The Company hereby represents and warrants to Consultant that: (a) it has the full right, power, and authority to enter into this Agreement and to perform its obligations hereunder; and (b) the execution of this Agreement by its representative whose signature is set forth at the end hereof has been duly authorized by all necessary corporate action. 9. TERMINATION. 9.1 On or after the Effective Date, the Company may terminate this Agreement if Consultant refuses to or is unable to perform the contemplated services or is in breach of any
7 material provision of this Agreement, provided Consultant will have 30 days after a notice from the Company to cure such default. In addition: (a) This Agreement and Consultant’s service to the Company hereunder may be terminated by Company at any time on the mutual agreement of the Company and Consultant. (b) This Agreement and Consultant’s service to the Company hereunder may be terminated: (i) By Consultant immediately in the event of any default on the part of the Company in payment of any amount due Consultant hereunder when due, provided that the Company will have 30 days after a notice from Consultant to cure such default; (ii) Following the first 18 months of the Term, by either party at any time on 30 days prior written notice to the other party; or (iii) Automatically upon Consultant’s death or disability. 9.2 Notwithstanding the foregoing, in the event of any termination of this Agreement as provided in Section 9.1, the Company will compensate Consultant for all services performed through the effective date of such termination, and reimburse Consultant for all reimbursable expenses incurred, through the effective date of such termination. 9.3 Upon expiration or termination of this Agreement for any reason, or at any other time upon the Company’s written request, Consultant shall promptly after such expiration or termination: (a) deliver to the Company all Deliverables (whether complete or incomplete) and all hardware, software, tools, equipment, or other materials provided for Consultant’s use by the Company; (b) deliver to the Company all tangible documents and materials (and any copies) containing, reflecting, incorporating, or based on the Confidential Information developed hereunder; (c) permanently erase all of the Confidential Information developed hereunder from Consultant’s computer systems; and (d) certify in writing to the Company that Consultant have complied with the requirements of this clause. 9.4 The terms and conditions of this section and Section 4, Section 5, Section 6, Section 7, Section 8 and Section 12 shall survive the expiration or termination of this Agreement.
8 10. ASSIGNMENT. Consultant shall not assign any rights, or delegate or subcontract any obligations, under this Agreement without the Company’s prior written consent. Any assignment in violation of the foregoing shall be deemed null and void. The Company may freely assign its rights and obligations under this Agreement at any time. Subject to the limits on assignment stated above, this Agreement will inure to the benefit of, be binding on, and be enforceable against each of the parties hereto and their respective successors and assigns. 11. RELEASE. Dr. Brophy hereby acknowledges that the Company’s obligations under Section 3 hereof are in excess of any payments or benefits to which Dr. Brophy would otherwise be entitled to as an employee of the Company under law, contract or otherwise and are contingent upon Dr. Brophy’s timely execution of, and failure to revoke a release of claims at or within 30 days after the commencement of the Term of this Agreement substantially in the form set forth in Exhibit A to this Agreement (the “Release”). 12. INDEMNIFICATION. Consultant will indemnify, defend and hold harmless the Company and its affiliates and subsidiaries, and each of their respective officers, directors, members, managers, employees and agents (each, a “Company Indemnitee”) from and against any claim, suit or proceeding brought by a third party against a Company Indemnitee to the extent that it is based on or arises from: (a) willful act or omission of Consultant in providing the Services; (b) any assertion that any Services provided by Consultant in connection with this Agreement infringes or misappropriates any Intellectual Property Right of any third party; (c) a breach of the confidentiality obligations and/or (d) any breach of the representations and warranties set forth above, except to the extent said claim arises from the negligent act or omission of Company. Company will indemnify, defend and hold harmless Consultant (“Consultant Indemnitee”) from and against any claim, suit or proceeding brought by a third party against a Consultant Indemnitee to the extent that it is based on or arises from Services provided by Consultant except to the extent that such claim is based on Section 12(a)-(d) above. The indemnifying party shall pay all costs incurred by (including reasonable attorney's fees and disbursements) and damages awarded against the Indemnitee. The Indemnitee shall promptly notify Indemnifying Party in writing of any claim, suit or proceeding for which Indemnifying Party may have obligations under this Section 12; provided, however, that any failure of the Indemnitee to provide prompt written notice pursuant to this Section 12 shall excuse Indemnifying Party only to the extent that it is prejudiced thereby. The Indemnitee seeking indemnification hereunder shall reasonably cooperate with Indemnifying Party with regard to the defense of any claim, proceeding, suit or threatened suit. Indemnifying Party shall have full control of any such claim, proceeding or suit and the authority to settle or otherwise dispose of any suit or threatened suit. In no event, however, may Indemnifying Party agree to any settlement of any claim, suit or proceeding for which it has agreed to provide indemnification under this Agreement if such settlement would impose any liability or obligation upon the Indemnitee, without the Indemnitee’s prior, written consent. 13. INSIDER TRADING. Consultant hereby acknowledges that in the ordinary course of providing the Services that Consultant may become aware of material nonpublic information (as such term is defined in the Company’s Insider Trading Policy (as may be amended from time to time, the “Insider Trading Policy”). As such, Consultant agrees to comply with all terms of the Insider Trading Policy and seek pre-clearance from the Company’s Insider Trading Compliance
9 Officer (as defined in the Insider Trading Policy) before executing any trades of Company securities. 14. MISCELLANEOUS. 14.1 Consultant shall not export, directly or indirectly, any technical data acquired from the Company, or any products utilizing any such data, to any country in violation of any applicable export laws or regulations. 14.2 Consultant hereby acknowledges and agrees that the type and periods of restrictions imposed in this Agreement are fair and reasonable in light of the provision of Consultant’s Services and are reasonably required for the protection of the Company and of the goodwill associated with the business of the Company. 14.3 All notices, requests, consents, claims, demands, waivers, and other communications hereunder (each, a “Notice”) shall be in writing and addressed to the parties at the addresses set forth on the first page of this Agreement (or to such other address that may be designated by the receiving party from time to time in accordance with this Section). All Notices shall be delivered by personal delivery, nationally recognized overnight courier (with all fees prepaid), facsimile or email (with confirmation of transmission), or certified or registered mail (in each case, return receipt requested, postage prepaid). Except as otherwise provided in this Agreement, a Notice is effective only if (a) the receiving party has received the Notice and (b) the party giving the Notice has complied with the requirements of this Section. 14.4 This Agreement constitutes the sole and entire agreement of the parties to this Agreement with respect to the subject matter contained herein, and supersedes all prior and contemporaneous understandings, agreements, representations, and warranties, both written and oral, with respect to such subject matter. 14.5 This Agreement may only be amended, modified, or supplemented by an agreement in writing signed by each party hereto, and any of the terms thereof may be waived, only by a written document signed by each party to this Agreement or, in the case of waiver, by the party or parties waiving compliance. 14.6 Consultant acknowledges and agrees that, in the event of a breach of Consultant’s covenants contained herein, damages alone would not be an adequate remedy for the Company. Accordingly, Consultant acknowledges and agrees that, in addition to any other remedies that the Company may have, the Company shall be entitled to injunctive or other equitable relief in any court of competent jurisdiction for any breach or threatened breach of any such covenants by Consultant, without the obligation to post a bond or other security therefor, and nothing contained herein shall prevent or delay the Company from seeking, in any court of competent jurisdiction, specific performance or other equitable remedies in the event of any breach or threatened breach by Consultant of any of Consultant’s obligations hereunder. In furtherance and not in limitation of the foregoing, in the event of any breach by Consultant of Consultant’s covenants set forth in this Agreement,
10 the duration of such covenants shall be extended by a period of time equal to the number of days during which Consultant are in violation of the provisions thereof. 14.7 This Agreement shall be governed by and construed in accordance with the internal laws of the Commonwealth of Pennsylvania without giving effect to any choice or conflict of law provision or rule. Each party irrevocably submits to the exclusive jurisdiction and venue of the federal and state courts located in the Commonwealth of Pennsylvania in any legal suit, action, or proceeding arising out of or based upon this Agreement or the Services provided hereunder. Each party also irrevocably and unconditionally waives any right to a trial by jury in respect of any legal action arising out of or relating to this Agreement or Consultant’s provision of the Services. 14.8 If any term or provision of this Agreement is invalid, illegal, or unenforceable in any jurisdiction, such invalidity, illegality, or unenforceability shall not affect any other term or provision of this Agreement or invalidate or render unenforceable such term or provision in any other jurisdiction. 14.9 This Agreement may be executed in multiple counterparts and by facsimile signature, each of which shall be deemed an original and all of which together shall constitute one instrument.
11 IN WITNESS WHEREOF, the Company and Consultant have executed this Agreement on the respective dates set forth below, to be effective as of the Effective Date. VWR International, LLC BY: /s/ Scott Baker________ Name: Scott Baker Title: Secretary Date: April 3, 2024 ACCEPTED AND AGREED: BrophyBio, LLC BY: /s/ Gerard Brophy_______ Name: Gerard Brophy Title: Sole Member Date:
12 SCHEDULE 1 Support Innovation Council Advise on acquisitions and divestitures Advise on industry trends Provide support for investor & analyst meetings Advise BioScience Production leaders on new product innovations Advise on the development and construction of the new innovation center Strategy consultation Provide support for customer sales meetings
13 EXHIBIT A FORM OF RELEASE I, Gerald Brophy, in consideration of and subject to the performance by VWR Management Services, LLC, a Delaware limited liability company (together with its affiliates, the “Company”), of its obligations under the Employment Letter Agreement, dated as of April 2, 2019 (the “Agreement”), do hereby release and forever discharge as of the date hereof the Company and all present and former directors, officers, agents, representatives, employees, successors and assigns of the Company and the Company’s direct or indirect owners (collectively, the “Released Parties”) to the extent provided below. 1. I understand that any payments or benefits paid or granted to me under the “Severance/Restrictive Covenants” section of the Agreement represent, in part, consideration for signing this General Release and are not salary, wages or benefits to which I was already entitled. I understand and agree that I will not receive the payments and benefits specified in the “Severance/Restrictive Covenants” section of the Agreement unless I execute this General Release and do not revoke this General Release within the time period permitted hereafter or breach this General Release. I also acknowledge and represent that I have received all payments and benefits that I am entitled to receive (as of the date hereof) by virtue of any employment by the Company. 2. Except as provided in paragraph 4 below and except for the provisions of the Agreement which expressly survive the termination of my employment with the Company, I knowingly and voluntarily (for myself, my heirs, executors, administrators and assigns) release and forever discharge the Company and the other Released Parties from any and all claims, suits, controversies, actions, causes of action, cross-claims, counter-claims, demands, debts, compensatory damages, liquidated damages, punitive or exemplary damages, other damages, claims for costs and attorneys’ fees, or liabilities of any nature whatsoever in law and in equity, both past and present (through the date this General Release becomes effective and enforceable) and whether known or unknown, suspected, or claimed against the Company or any of the Released Parties which I, my spouse, or any of my heirs, executors, administrators or assigns, may have, which arise out of or are connected with my employment with, or my separation or termination from, the Company (including, but not limited to, any allegation, claim or violation, arising under: Title VII of the Civil Rights Act of 1964, as amended; the Civil Rights Act of 1991; the Age Discrimination in Employment Act of 1967, as amended (including the Older Workers Benefit Protection Act); the Equal Pay Act of 1963, as amended; the Americans with Disabilities Act of 1990; the Family and Medical Leave Act of 1993; the Worker Adjustment Retraining and Notification Act; the Employee Retirement Income Security Act of 1974; any applicable Executive Order Programs; the Fair Labor Standards Act; or their state or local counterparts; or under any other federal, state or local civil or human rights law, or under any other local, state, or federal law, regulation or ordinance; or under any public policy, contract or tort, or under common law; or arising under any policies, practices or procedures of the Company; or any claim for wrongful discharge, breach of contract, infliction of emotional distress, defamation; or any claim for
14 costs, fees, or other expenses, including attorneys’ fees incurred in these matters) (all of the foregoing collectively referred to herein as the “Claims”). 3. I represent that I have made no assignment or transfer of any right, claim, demand, cause of action, or other matter covered by paragraph 2 above. 4. I agree that this General Release does not waive or release any rights or claims that I may have under the Age Discrimination in Employment Act of 1967 which arise after the date I execute this General Release. I acknowledge and agree that my separation from employment with the Company in compliance with the terms of the Agreement shall not serve as the basis for any claim or action (including, without limitation, any claim under the Age Discrimination in Employment Act of 1967). 5. In signing this General Release, I acknowledge and intend that it shall be effective as a bar to each and every one of the Claims hereinabove mentioned or implied. I expressly consent that this General Release shall be given full force and effect according to each and all of its express terms and provisions, including those relating to unknown and unsuspected Claims (notwithstanding any state statute that expressly limits the effectiveness of a general release of unknown, unsuspected and unanticipated Claims), if any, as well as those relating to any other Claims hereinabove mentioned or implied. I acknowledge and agree that this waiver is an essential and material term of this General Release and that without such waiver the Company would not have agreed to the terms of the Agreement. I further agree that in the event I should bring a Claim seeking damages against the Company, or in the event I should seek to recover against the Company in any Claim brought by a governmental agency on my behalf, this General Release shall serve as a complete defense to such Claims. I further agree that I am not aware of any pending claim of the type described in paragraph 2 as of the execution of this General Release. 6. I agree that neither this General Release, nor the furnishing of the consideration for this General Release, shall be deemed or construed at any time to be an admission by the Company, any Released Party or myself of any improper or unlawful conduct. 7. I agree that this General Release and the Agreement are confidential and agree not to disclose any information regarding the terms of this General Release or this Agreement, except to my immediate family and any tax, legal or other counsel I have consulted regarding the meaning or effect hereof or as required by law, and I will instruct each of the foregoing not to disclose the same to anyone. Notwithstanding anything herein to the contrary, each of the parties (and each affiliate and person acting on behalf of any such party) agree that each party (and each employee, representative, and other agent of such party) may disclose to any and all persons, without limitation of any kind, the tax treatment and tax structure of this transaction contemplated in the Agreement and all materials of any kind (including opinions or other tax analyses) that are provided to such party or such person relating to such tax treatment and tax structure, except to the extent necessary to comply with any applicable federal or state securities laws. This authorization is not intended to permit disclosure of any other information including (without limitation) (i) any portion of any materials to the extent not related to the tax treatment or tax structure of this transaction, (ii) the identities of participants or potential participants in the Agreement, (iii) any financial information (except
15 to the extent such information is related to the tax treatment or tax structure of this transaction), or (iv) any other term or detail not relevant to the tax treatment or the tax structure of this transaction. 8. Any non-disclosure provision in this General Release does not prohibit or restrict me (or my attorney) from responding to any inquiry about this General Release or its underlying facts and circumstances by the Securities and Exchange Commission (SEC), the National Association of Securities Dealers, Inc. (NASD), any other self-regulatory organization or governmental entity. Furthermore, nothing in this Agreement shall prohibit or impede you from communicating, cooperating or filing a complaint with any U.S. federal, state or local governmental or law enforcement branch, agency or entity (collectively, a “Governmental Entity”) with respect to possible violations of any U.S. federal, state or local law or regulation, or otherwise making disclosures to any Governmental Entity, in each case, that are protected under the whistleblower provisions of any such law or regulation, provided that in each case such communications and disclosures are consistent with applicable law. You understand and acknowledge that an individual shall not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of a trade secret that is made (i) in confidence to a Federal, State, or local government official or to an attorney solely for the purpose of reporting or investigating a suspected violation of law, or (ii) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. You understand and acknowledge further that an individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual files any document containing the trade secret under seal; and does not disclose the trade secret, except pursuant to court order. Except as provided in this paragraph or under applicable law, under no circumstance are you authorized to disclose any information covered by the Company’s attorney-client privilege or attorney work product, or trade secrets, without prior written consent of the Company. 9. Notwithstanding anything in this General Release to the contrary, this General Release shall not relinquish, diminish, or in any way affect any rights or claims arising out of any breach by the Company or by any Released Party of the Agreement after the date hereof. 10. Whenever possible, each provision of this General Release shall be interpreted in, such manner as to be effective and valid under applicable law, but if any provision of this General Release is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision or any other jurisdiction, but this General Release shall be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision had never been contained herein. BY SIGNING THIS GENERAL RELEASE, I REPRESENT AND AGREE THAT: 1. I HAVE READ IT CAREFULLY; 2. I UNDERSTAND ALL OF ITS TERMS AND KNOW THAT I AM GIVING UP IMPORTANT RIGHTS, INCLUDING BUT NOT LIMITED TO, RIGHTS
16 UNDER THE AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967, AS AMENDED, TITLE VII OF THE CIVIL RIGHTS ACT OF 1964, AS AMENDED; THE EQUAL PAY ACT OF 1963, THE AMERICANS WITH DISABILITIES ACT OF 1990; AND THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED; 3. I VOLUNTARILY CONSENT TO EVERYTHING IN IT; 4. I HAVE BEEN ADVISED TO CONSULT WITH AN ATTORNEY BEFORE EXECUTING IT AND I HAVE DONE SO OR, AFTER CAREFUL READING AND CONSIDERATION I HAVE CHOSEN NOT TO DO SO OF MY OWN VOLITION; 5. I HAVE HAD AT LEAST 21 DAYS FROM THE DATE OF MY RECEIPT OF THIS RELEASE SUBSTANTIALLY IN ITS FINAL FORM ON MARCH 1, 2024 TO CONSIDER IT AND THE CHANGES MADE SINCE THE MARCH 1, 2024 VERSION OF THIS RELEASE ARE NOT MATERIAL AND WILL NOT RESTART THE REQUIRED 21-DAY PERIOD; 6. THE CHANGES TO THE AGREEMENT SINCE APRIL 2, 2019 EITHER ARE NOT MATERIAL OR WERE MADE AT MY REQUEST. 7. I UNDERSTAND THAT I HAVE SEVEN DAYS AFTER THE EXECUTION OF THIS RELEASE TO REVOKE IT AND THAT THIS RELEASE SHALL NOT BECOME EFFECTIVE OR ENFORCEABLE UNTIL THE REVOCATION PERIOD HAS EXPIRED; 8. I HAVE SIGNED THIS GENERAL RELEASE KNOWINGLY AND VOLUNTARILY AND WITH THE ADVICE OF ANY COUNSEL RETAINED TO ADVISE ME WITH RESPECT TO IT; AND 9. I AGREE THAT THE PROVISIONS OF THIS GENERAL RELEASE MAY NOT BE AMENDED, WAIVED, CHANGED OR MODIFIED EXCEPT BY AN INSTRUMENT IN WRITING SIGNED BY AN AUTHORIZED REPRESENTATIVE OF AVANTOR AND BY ME. DATE: _____________ _________________________________
SCIENTIFIC ADVISORY BOARD CONSULTING AGREEMENT THIS SCIENTIFIC ADVISORY BOARD CONSULTING AGREEMENT (the “Agreement”) is effective 1 March, 2024 (the “Effective Date”), by and between AVANTOR, INC., a Delaware corporation with a principal place of business at Building One, Suite 200, 100 Matsonford Road, Radnor, PA 19087, and its affiliates (collectively, the “Company”), and Gerard Brophy, an individual with an address at 94 Allison Road, Princeton, NJ 08540 (the “Advisor”). The Company and the Advisor may be referenced herein individually as “Party” or collectively, as “Parties.” RECITAL As part of its ongoing program of research and development, the Company desires to retain distinguished scientists and other qualified individuals to advise the Company with respect to its technology strategy and to assist it in the research, development and analysis of the Company’s technology. In furtherance thereof, the Company desires to retain Advisor as a consultant and member of the Company’s Scientific Advisory Board, and the Company and Advisor desire to enter into this Agreement. AGREEMENT In consideration of the mutual covenants set forth below, the Parties hereby agree as follows: 1. Scientific Advisory Board and Consulting Services . Commencing on the Effective Date, the Company hereby retains Advisor, and Advisor hereby agrees to serve, as the Chair of the Company’s Scientific Advisory Board (the “SAB”) and as a consultant to the Company. As consultant and Chair of the SAB, Advisor agrees to provide the services as follows: (a) attending quarterly teleconference meetings of the Company’s SAB. (b) attending one annual in person meeting of the Company’s SAB. (c) performing the duties of an SAB member at such meetings, as established from time to time by the mutual agreement of the Company and the SAB members, including without limitation meeting with Company employees, consultants and other SAB members, reviewing goals of the Company and assisting in developing strategy proposals for achieving such goals, and providing advice, support, theories, techniques and improvements to the Company’s scientific research and product development activities; and (d) providing consulting services to the Company at its request, including a reasonable amount of informal consultation over the telephone or otherwise as requested by the Company. The services to be provided by Advisor hereunder are referred to collectively herein as the “Services.” Advisor shall provide on average at least 4 hours per month of Services to the Company. Advisor’s consultation with the Company will involve the specialized field of Biopharmaceutical- Bioprocess/Bioproduction including, but not limited to the areas described on Exhibit A (the “Field”) and requires the application of unique, special and extraordinary skills and knowledge that Advisor possesses in the Field.
2 2. Compensation. As full and complete compensation for performing the Services, the Advisor will be compensated $75,000 annually, of which one-third will be paid in US dollars within sixty (60) days of the start of each year of service starting with the Effective Date, and two-thirds will be granted in Restricted Stock Units (“RSUs”). The number of RSUs to be awarded each year will be calculated based on the closing price of a share of Avantor common stock on the Effective Date and shall vest at the completion of the applicable year of service. Such RSUs shall be subject to the Company’s standard form of restricted stock unit agreement. In addition, the Company will also reimburse the Advisor for pre-approved in writing reasonable out-of-pocket expenses incurred by the Advisor in providing Services at the Company’s request from time to time, including Travel Expenses for scheduled in-person meetings pursuant to Avantor Travel Policy attached hereto as Exhibit B. 3. Independent Contractor. The Parties understand and agree that Advisor is an independent contractor and not an employee of the Company. Advisor has no authority to obligate the Company by contract or otherwise. Advisor will not be eligible for any employee benefits, nor will the Company make deductions from Advisor’s fees for taxes (except as otherwise required by applicable law or regulation). Any taxes imposed on Advisor due to activities performed hereunder will be the sole responsibility of Advisor. 4. Institutional Agreement for SAB members with academic affiliations [Intentionally omitted] 5. Recognition of Company’s Rights; Nondisclosure. Advisor recognizes that the Company is engaged in a continuous program of research and development respecting its present and future business activities. Advisor agrees as follows: (a) At all times during the term of Advisor’s association with the Company and thereafter, Advisor will comply with the Personal Services, Confidentiality and Inventions Agreement between the Parties executed on July 9, 2018, and Advisor will hold in strictest confidence and shall not disclose, use, lecture upon or publish any of the Company’s Proprietary Information (defined below), except to the extent such disclosure, use or publication may be required in direct connection with Advisor’s performing Services for the Company requested in advance in writing by the Company and/or is otherwise expressly authorized in writing in advance by an officer of the Company. (b) The term “Proprietary Information” shall mean any and all trade secrets, confidential knowledge, know-how, data or other proprietary information or materials of the Company. By way of illustration but not limitation, Proprietary Information includes: (i) inventions, ideas, samples, processes, formulas, data, know-how, improvements, discoveries, developments, designs and techniques; and (ii) information regarding plans for research, development, new products, marketing and selling, business plans, budgets and unpublished financial statements, licenses, prices and costs, suppliers and customers; and (iii) information regarding the skills and compensation of employees or other consultants of the Company. (c) In addition, Advisor understands that the Company has received and, in the future, shall receive from third parties confidential or proprietary information (“Third Party Information”) subject to a duty on the Company’s part to maintain the confidentiality of such information and to use it only for certain limited purposes. During the term of Advisor’s association and thereafter, Advisor shall hold
3 Third Party Information in the strictest confidence and shall not disclose or use Third Party Information, except in connection with Advisor’s performing requested Services for the Company, or as expressly authorized in writing in advance by an officer of the Company. 6. Intellectual Property Rights. (a) Advisor agrees that any and all ideas, inventions, discoveries, improvements, know-how and techniques that the Advisor conceives, reduces to practice or develops during the term of the Agreement, alone or in conjunction with others, arising from the performance of the Services for the Company under this Agreement (collectively, the “Inventions”) and all patents, patent applications, copyrights, mask works, trade secrets and other intellectual property rights, worldwide (collectively, "Intellectual Property Rights") shall be the sole and exclusive property of the Company. Advisor agrees that he shall not use any facilities or resources his/her current or former employer(s) to perform the Services. Advisor will not have any ownership, license or other interest in any Intellectual Property Rights. Advisor agrees and acknowledges that, to the extent allowed under applicable law, all works created hereunder shall be considered to be "works made for hire" as that phrase is defined in the U.S. Copyright Act of 1976, as amended. To the extent any Intellectual Property Rights to such works or that are otherwise included in the Intellectual Property Rights would otherwise vest in Advisor, Advisor hereby assigns to Company all right, title and interest in and to such Intellectual Property Rights. Title to each Invention, and to all Intellectual Property Rights with respect thereto, shall vest in Company automatically at the time the Invention is created. (b) Advisor hereby assigns and agrees to assign to the Company his/her entire right, title and interest in and to all Inventions, including any goodwill associated with any mark and any moral rights of attribution associated with any copyright deriving from information shared pursuant to SAB performance. Advisor hereby designates the Company as his/her agent for, and grants to the Company a power of attorney with full power of substitution, which power of attorney shall be deemed coupled with an interest, solely for the purpose of effecting the foregoing assignments from the Advisor to the Company. (c) Advisor further agrees to cooperate and provide reasonable assistance to the Company to obtain and from time to time enforce United States and foreign patents, copyrights, and other rights and protections claiming, covering or relating to the Inventions in any and all countries. (d) Advisor agrees to submit to the Company any proposed publication that contains any discussion relating to the Company, Proprietary Information, Inventions or work performed by Advisor for the Company hereunder. Advisor further agrees that no such publication shall be made without the prior written consent of the Company, which consent shall not be unreasonably withheld. Any such consent shall be given within sixty (60) days. 7. Noncompetition and No solicitation of Employees. (a) During the term of this Agreement, Advisor shall not, without the prior written consent of an officer of the Company, engage in any commercial business activity that competes in any way with any business then being conducted or planned by the Company in the Field. In addition, but without limiting the generality of the foregoing, Advisor covenants and agrees during the term of this Agreement and for one year thereafter not to enter into any consulting or advisory relationship in the Field with any third-party commercial entity. The foregoing shall not prevent Advisor from continuing with his/her current employment.
4 (b) During the term of this Agreement and for two (2) years after its termination or expiration, Advisor shall not personally or through others recruit, solicit or induce any employee of the Company to terminate his or her employment with the Company. (c) If any restriction set forth in Sections 7(a) and 7(b) above is found by any court of competent jurisdiction to be unenforceable because it extends for too long a period of time or over too great a range of activities or in too broad a geographic area, it shall be interpreted to extend only over the maximum period of time, range of activities or geographic area as to which it may be enforceable. 8. No Conflicting Obligation. (a) Advisor represents and warrants that Advisor’s performance of all of the terms of this Agreement and the performing of the Services for the Company do not and shall not breach or conflict with any agreement with a third party, including an agreement to keep in confidence any proprietary information of another entity acquired by Advisor in confidence or in trust prior to the date of this Agreement. (b) Advisor hereby agrees not to enter into any agreement that conflicts with this Agreement. Prior to Advisor entering any consultancy arrangement in the Field, the Parties must mutually agree to such addition, such agreement not to be unreasonably withheld. 9. No Improper Use of Materials. Advisor represents and warrants that it will not bring to the Company or to use in the performance of Services for the Company any materials or documents of a present or former employer or client of Advisor, or any materials or documents obtained by Advisor from a third party under a binder of confidentiality, unless such materials or documents are generally available to the public or Advisor has written advance authorization from such present or former employer, client, or third party for the possession and unrestricted use of such materials. Advisor represents and warrants that Advisor will not breach any obligation of confidentiality that Advisor has, including but not limited to present or former employers or clients or applicable third parties, and agrees to fulfill all such obligations during the term of this Agreement. 10. Compliance with Avantor’s Code of Ethics and Conduct and Applicable Laws. Advisor represents and warrants that he/she shall at all times: (a) comply with Avantor’s Code of Ethics and Conduct; and (b) comply with all applicable laws, rules and regulations including, without limitation, anti- bribery law, including the US Foreign Corrupt Practices Act and import/export laws and regulations. 11. Term and Termination. (a) This Agreement, and Advisor’s Services hereunder, shall commence on the Effective Date and shall continue for an initial term of three (3) years after the Effective Date, unless earlier terminated as provided below. (b) Advisor or the Company may terminate the Agreement at any time by giving no less than thirty (30) days’ prior written notice to the other Party.
5 (c) Company may terminate this Agreement immediately if Advisor misses more than one pre-scheduled quarterly meeting in any twelve-month period or misses any annual in-person meeting, in the event of Advisor’s breach of this Agreement, in the event of Advisor’s misconduct, and/or breach of Company’s policies. (d) The obligations set forth in Articles 5, 6, 7, 11, 13, 14, 15, 16, 17 and 18 shall survive any termination or expiration of this Agreement. Upon termination of this Agreement, Advisor shall promptly deliver to the Company all documents and other materials of any nature pertaining to the Services, together with all documents and other items containing or pertaining to any Proprietary Information. 12. Publicity. Advisor agrees not to originate or use the name of Avantor or any of its employees, affiliates or subsidiaries, in any publicity, news release or other public announcement, written or oral, whether to the public, press or otherwise, relating to this Agreement, to any amendment hereto, or to the performance hereunder, without the prior written consent of Company. 13. Assignment. The rights and liabilities of the Parties hereto shall bind and inure to the benefit of their respective successors, heirs, executors and administrators, as the case may be; provided that, as the Company has specifically contracted for Advisor’s Services, Advisor may not assign or delegate Advisor’s obligations under this Agreement either in whole or in part without the prior written consent of the Company. The Company may assign its rights and obligations hereunder to any affiliate or to any person or entity who succeeds to all or substantially all of the Company’s business.
6 14. Legal and Equitable Remedies. Because Advisor’s Services are personal and unique and because Advisor may have access to and become acquainted with the Proprietary Information of the Company, the Company shall have the right to enforce this Agreement and any of its provisions by injunction, specific performance or other equitable relief without prejudice to any other rights and remedies that the Company may have for a breach of this Agreement. 15. Indemnification. Advisor will indemnify, defend and hold harmless Company and its affiliates and subsidiaries, and each of their respective officers, directors, members, managers, employees and agents (each, a "Company Indemnitee") from and against any claim, suit or proceeding brought by a third party against a Company Indemnitee to the extent that it is based on or arises from: (i) willful act or omission of Advisor in providing Services; (ii) any assertion that any Services provided by Advisor in connection with this Agreement infringes or misappropriates any Intellectual Property Right of any third party; (iii) a breach of the confidentiality obligations and/or (iv) any breach of the representations and warranties set forth above, except to the extent said claim arises from the negligent act or omission of Company. Company will indemnify, defend and hold harmless Advisor (“Advisor Indemnitee”) from and against any claim, suit or proceeding brought by a third party against an Advisor Indemnitee to the extent that it is based on or arises from Services provided by Advisor except to the extent that such claim is based on 15(i)-(iv) above. The indemnifying party shall pay all costs incurred by (including reasonable attorney's fees and disbursements) and damages awarded against the Indemnitee. The Indemnitee shall promptly notify Indemnifying Party in writing of any claim, suit or proceeding for which Indemnifying Party may have obligations under this Section 15; provided, however, that any failure of the Indemnitee to provide prompt written notice pursuant to this Section 15 shall excuse Indemnifying Party only to the extent that it is prejudiced thereby. The Indemnitee seeking indemnification hereunder shall reasonably cooperate with Indemnifying Party with regard to the defense of any claim, proceeding, suit or threatened suit. Indemnifying Party shall have full control of any such claim, proceeding or suit and the authority to settle or otherwise dispose of any suit or threatened suit. In no event, however, may Indemnifying Party agree to any settlement of any claim, suit or proceeding for which it has agreed to provide indemnification under this Agreement if such settlement would impose any liability or obligation upon the Indemnitee, without the Indemnitee's prior, written consent. 16. Governing Law; Severability. This Agreement shall be governed by and construed according to the laws of the State of Delaware, without regard to conflicts of laws rules. If any provision of this Agreement is found by a court of competent jurisdiction to be unenforceable, that provision shall be severed, and the remainder of this Agreement shall continue in full force and effect. 17. Complete Understanding; Modification. This Agreement, and all other documents mentioned herein, constitute the final, exclusive and complete understanding and agreement of the Parties hereto and supersedes all prior understandings and agreements. Any waiver, modification or amendment of any provision of this Agreement shall be effective only if in writing and signed by the Parties hereto.
7 18. Notices. Any notices required or permitted hereunder shall be given to the appropriate Party at the address listed on the first page of the Agreement, or such other address as the Party shall specify in writing pursuant to this notice provision. Such notice shall be deemed given upon personal delivery to the appropriate address or upon delivery by any trackable reputable overnight courier service. 19. Counterparts. This Agreement may be executed in one or more counterparts each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
8 IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on the respective dates set forth below, to be effective as of the Effective Date. AVANTOR, INC. GERARD BROPHY /s/ Scott Baker /s/ Gerard Brophy Scott Baker SVP, Assistant General Counsel and Assistant Secretary Dated: April 3. 2024
9 EXHIBIT A FIELD DEFINED Biopharmaceutical- Bioprocess/Bioproduction to include: Biologic process workflow development: recombinant protein, monoclonal antibodies, viral vectors, vaccines, and cell therapy products. Nucleic acid workflow development: mRNA, Oligo nucleotide Novel approach to increase safety and efficacy of biologic and nucleic acid drugs Development of new chemistry and material process technology to develop and manufacture reagent and excipients. Novel approach to biologic drug delivery and formulations Cell and protein engineering Alternative approaches to biologic manufacturing to improve current or new processes. Biologic drug substance and drug product testing and evaluation In-process testing of Biologic drug products Equipment, reagents and consumables used in testing or biologic manufacturing.
10 EXHIBIT B AVANTOR TRAVEL POLICIES If travel is required and pre-approved in writing by Company, the Advisor is responsible for arranging his or her own travel and lodging. Advisor must submit itemized expense reports detailing all travel expenses with attached receipts for all lodging, meals, entertainment and other expenses. The following guidelines are used when making travel arrangements. Lodging If away from home on Company related business Advisor is expected to have comfortable, private rooms at rates which are reasonable for the community in which they stay. Air Travel Advisor should always request the lowest available refundable, non-restricted fare when making reservations, noting that it varies depending on airline carrier, type of fare, advance purchase, and Saturday-night stay-over. There are no restrictions on the airlines used. Advisor selects the air carrier providing the best schedule in order to maximize available time at the site. All domestic air travel and international travel under 6 hours for any leg will be reimbursed at coach class rates only. International travel over 6 hours for any leg will be reimbursed at the lowest business class rate. Rental Car Advisor should request the lowest cost available mid-size vehicle when making reservations, noting that rates vary depending on the rental company, daily vs. weekly rate and area of the country. Larger vehicles will be requested if it is necessary to transport clients, or if three or more individuals are traveling together on Company related business. Advisor selects the car rental company to be used considering rental rates and area of the country. Taxi/Tolls Advisor determines the best means of ground transportation. This decision is based on safety, geographic location, weather conditions, distance to be traveled, and number of days for which ground transportation is required. Taxi receipts must list total fare, including tolls and tip. Advisor must only include necessary fares directly related to business purposes.
VWR INTERNATIONAL, LLC Radnor Corporate Center Building One, Suite 200 100 Matsonford Road, Radnor, PA 19087 April 2, 2019 Jim Bramwell 4835 La Puma Court Camarillo, CA 93012 RE: Amended and Restated Employment Letter Agreement Dear Jim: The following are the amended and restated terms of your employment with VWR International, LLC, effective as of the date hereof, under which you will provide services to Avantor, Inc. and its various affiliates. As used herein, “Avantor” shall collectively refer to VWR International, LLC, Avantor, Inc. and all of their various affiliates. Position: Executive Vice President, Strategic Partners Base Salary: $300,000 per year, payable in installments on Avantor’s regular payroll dates. Duties: The duties performed by you as of immediately prior to the date of this Agreement. Reporting: You will report solely and directly to the Chief Executive Officer of Avantor. Office Location: Your office will be located in Camarillo, CA. Annual Bonus: You will be eligible to participate in Avantor’s Management Incentive Program (MIP) with a target bonus of 75% of base salary. Benefits: You will be entitled to participate in all vacation, health, welfare and other similar benefits available to similarly situated employees of Avantor. You will be entitled to four weeks of vacation annually. Severance/Restrictive Covenants: If your employment with Avantor is terminated by Avantor without Cause, other than within a two year period following a Change in Control (each as defined on Annex 1), you will be entitled to receive (A) an amount equal to your annual base salary then in effect, payable in equal installments on Avantor’s regular payroll dates
2 during a period of twelve months after such termination, (B) your target bonus, prorated for the year of such termination, payable in equal installments on Avantor’s regular payroll dates during a period of twelve months after such termination and (C) continued health benefits for a period ending on the earlier of (x) your becoming eligible to receive health benefits from a new employer and (y) twelve months after such termination. The payments (and benefits) described in the immediately preceding sentence that are due to be paid (or provided) more than sixty (60) days after your termination are subject to your execution and non-revocation of a general release in the form attached to this Letter Agreement as Annex 2 no later than fifty (50) days after your termination. If your employment with Avantor or its successor, as applicable, is terminated by you for Good Reason (as defined on Annex 1) or by Avantor without Cause within a two year period following a Change in Control, you will be entitled to receive (A) an aggregate amount equal to 1.5 times the sum of (x) your base salary then in effect, plus (y) your target bonus for the year of such termination, payable in equal installments on Avantor’s regular payroll dates during a period of twelve months after such termination and (B) continued health benefits for a period ending on the earlier of (x) your becoming eligible to receive health benefits from a new employer and (y) eighteen months after such termination. The payments (and benefits) described in the immediately preceding sentence that are due to be paid (or provided) more than sixty (60) days after your termination are subject to your execution and non-revocation of a general release in the form attached to this Letter Agreement as Annex 2 no later than fifty (50) days after your termination. If your employment is terminated by Avantor by reason of your Disability (as defined on Annex 1), you will be entitled to any compensation and benefits accrued prior to the termination date, including Avantor’s standard applicable disability insurance benefits. If your employment with Avantor is terminated by reason of your death, your beneficiary or estate, as applicable, will be entitled to any compensation and benefits accrued prior to the termination date, including Avantor’s standard applicable life insurance benefits. If your employment is terminated by you without Good Reason, you will only be entitled to any compensation and benefits accrued prior to the termination date. Any such resignation shall require that written notice be delivered by you to Avantor at least 90 days prior to your termination and any failure by you to provide such written notice shall be considered a material breach of this Agreement by you.
3 If your employment is terminated by Avantor for Cause, you will only be entitled to any compensation and benefits accrued prior to the termination date. In the event of a termination of your employment for any reason, you agree to be subject to those restrictions set forth on Annex 1 attached hereto, which are a part of this Letter Agreement (the “Employee Covenants”). You shall be under no obligation to seek other employment for any reason or to mitigate any severance payments following a termination of your employment with Avantor for any reason. In addition, there shall be no offset against amounts due to you upon termination of your employment with Avantor on account of any compensation attributable to any employment subsequent to your employment with Avantor. Subject to the notice requirement as set forth above, either you or Avantor may terminate your employment with Avantor at any time. Except as provided above in this Severance/Restrictive Covenants section, you shall not be entitled to any other salary, compensation or benefits from Avantor after termination of your employment with Avantor, except as otherwise specifically provided for in Avantor’s employee benefit plans or as otherwise expressly required by applicable law. Notwithstanding anything herein to the contrary, if any payments due hereunder would subject you to any tax imposed under Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), as a result of your characterization as a “specified employee” of Avantor (within the meaning of Treasury Regulation Section 1.409A-1(i)), then such payments that would otherwise cause such taxation shall be payable in a single lump sum on the first business day that is six months following your “separation from service” (within the meaning of Code Section 409A and the regulations thereunder), and any remaining payments will be made in accordance with the foregoing provisions of this section. Personal Services Agreement: The Personal Services, Confidentiality and Inventions Agreement, that you previously executed, in the form attached hereto as Exhibit A, shall remain in full force and effect. Entire Agreement: This Letter Agreement, (including any Annexes attached hereto) and the Personal Services, Confidentiality and Inventions Agreement referenced above set forth the entire understanding between you and Avantor with respect to the subject matter hereof and thereof, and supersede and preempt all prior oral or written understandings and agreements with respect to the subject matter hereof and thereof between you and Avantor and its affiliates, which shall terminate
4 and be of no further effect upon the execution of this Letter Agreement. This Letter Agreement, and all of your rights and duties hereunder, shall not be assignable or delegable by you. Any purported assignment or delegation by you in violation of the foregoing shall be null and void ab initio and of no force and effect. This Letter Agreement may be assigned by Avantor to a person or entity which is a successor in interest to substantially all of the business operations of Avantor, or to a subsidiary or affiliate of Avantor. Upon such assignment, the rights and obligations of Avantor hereunder shall become the rights and obligations of such subsidiary, affiliate or successor person or entity. Code Section 409A: This Letter Agreement will be interpreted to avoid any tax under §409A of the Code. For purposes of §409A, each payment made under this Letter Agreement will be treated as a separate payment. With respect to any reimbursements provided under this Letter Agreement that are subject to §409A, the amount of expenses eligible for reimbursement during a calendar year cannot affect the expenses eligible for reimbursement in any other calendar year. [Signature page follows]
Exhibit A - Personal Services, Confidentiality and Inventions Agreement See Attached.
VAIL HOLDCO CORP PERSONAL SERVICES, CONFIDENTIALITY AND INVENTIONS AGREEMENT THIS AGREEMENT (this “Agreement”) is between Vail Holdco Corp, presently headquartered at Radnor Corporate Center, Building One, Suite 200, 100 Matsonford Road, Radnor, PA 19087 (with its various affiliates, the “Company”) and Jim Bramwell (“Executive” or “I”) who is employed by Avantor. Avantor’s sound business policy requires that its trade secrets, technical and non- technical know-how, business knowledge, plans, systems, business methods, business records and customer relations to be protected and not utilized by any person or firm who competes or wants to compete with Avantor. The parties wish to evidence the terms of the employment relationship between them and particularly to set forth certain restrictions which shall apply to Executive in the event of termination of his/her employment with Avantor. In consideration of and as part of the terms of employment by Avantor, it is agreed as follows: 1. Compensation and Benefits. Executive shall be entitled to a salary, annual bonus and other monetary compensation, which shall be established by Avantor at the inception of employment, and may be periodically thereafter adjusted for increase only. Executive shall also be entitled to participate in various Company employee benefit plans (for example, health insurance, retirement, and the like), in accordance with the participation requirements of said plans, and nothing contained herein shall confer benefit eligibility which is in any manner inconsistent with the terms of the benefit plans. 2. Executive’s General Obligations; Conflicts of Interest. During my employment with Avantor, I agree to devote substantially all my working time during normal business hours to Avantor. During my employment with Avantor, I agree to use my best efforts to perform the duties associated with my position and title with Avantor as Avantor may direct, not to engage in any other business or activity the nature of which shall be determined by Avantor to be competitive with Avantor, its suppliers or its customers and to comply with any Conflict of Interest Policy of Avantor. I acknowledge and agree that I will not serve on the board of directors of any other companies during my employment with Avantor without first obtaining prior written approval from Avantor’s Chief Executive Officer. I further agree to conform to all Company policies, practices, and procedures, to the extent such policies, practices and procedures have been provided to me in writing, as well as lawful directions of Avantor and/or its affiliates as to performance of services for Avantor, to the extent that the same are consistent with my position and title with Avantor. 3. No Existing Restrictive Agreements. I represent that I am not a party to any contract limiting my present or future right to work for Avantor or to perform such activities as shall be required from time to time by Avantor. 4. Prior Employer Information. I agree that I will not use improperly or disclose any confidential or proprietary information or trade secrets of my former or current employers, principals, partners, co-venturers, customers, or suppliers, or the vendors or customers of such persons or entities, and I will not violate any nondisclosure or
2 proprietary rights agreement I might have signed in connection with any such employer, person or entity. 5. Non-Disclosure of Information. I recognize that, in the performance of my duties with Avantor, Confidential Information belonging to Avantor will come into my possession, including, without limitation, information regarding business methods, plan, systems, customer lists and customer relations, vendor lists and vendor relations, cost and pricing information, distribution and logistical information, and other information relating to the business of Avantor that is not known to the general public. I recognize that the business of Avantor is materially dependent upon the relationship between Avantor and its customers who are serviced by its associates and that Avantor has and will entrust me with Confidential Information that must remain the property of Avantor. As used in this Agreement, “Confidential Information” shall mean the trade secrets, technical and non-technical know-how, technical and business knowledge and information, plans and systems, business methods, customer lists and customer relations of Avantor, including but not limited to research, development, manufacturing, purchasing, accounting, data processing, engineering, marketing, merchandising, selling and invoicing, which information is acquired from or through Avantor during the course of my employment by Avantor. “Confidential Information” shall not include any information that is or becomes publicly known or that enters the public domain other than as a result of my breach of my obligations under this Agreement or any other agreement between me and Avantor or its affiliates. I agree that I will not at any time hereafter disclose Confidential Information to third parties or use Confidential Information for any purpose other than to further Avantor’s business, except as is required by law, any court of competent jurisdiction or any governmental agency or authority or recognized subpoena power. Notwithstanding the above, nothing in this Agreement shall prohibit or impede Executive from communicating, cooperating or filing a complaint with any U.S. federal, state or local governmental or law enforcement branch, agency or entity (collectively, a “Governmental Entity”) with respect to possible violations of any U.S. federal, state or local law or regulation, or otherwise making disclosures to any Governmental Entity, in each case, that are protected under the whistleblower provisions of any such law or regulation, provided that in each case such communications and disclosures are consistent with applicable law. I understand and acknowledge that an individual shall not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of a trade secret that is made (i) in confidence to a Federal, State, or local government official or to an attorney solely for the purpose of reporting or investigating a suspected violation of law, or (ii) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. I understand and acknowledge further that an individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual files any document containing the trade secret under seal; and does not disclose the trade secret, except pursuant to court order. Except as provided in this paragraph or under applicable law, under no circumstance am I authorized to disclose any information covered by Avantor’s attorney-client privilege or attorney work product, or trade secrets, without prior written consent of Avantor.
3 6. Assignment of Inventions. I will make prompt and full disclosure to Avantor, will hold in trust for the sole benefit of Avantor, and will assign, exclusively to Avantor, all my right, title, and interest in and to any and all inventions, discoveries, designs, developments, improvements, copyrightable material, and trade secrets (collectively herein “Inventions”) that I, solely or jointly, may conceive, develop, or reduce to practice during the period of time I am in the employ of Avantor. I hereby waive and quitclaim to Avantor any and all claims of any nature whatsoever that I now or hereafter may have for infringement of any patent resulting from any patent applications for any Inventions so assigned to Avantor. My obligation to assign shall not apply to any Invention about which I can prove that: (a) it was developed entirely on my own time; and (b) no equipment, supplies, facility, services, or trade secret information of Avantor were used in its development; and (c) it does not relate (i) directly to the business of Avantor or (ii) to the actual or demonstrably anticipated research or development of Avantor; and (d) it does not result from any work performed by me for Avantor. 7. Excluded and Licensed Inventions. I have attached hereto a list describing all Inventions belonging to me and made by me prior to my employment with Avantor that I wish to have excluded from this Agreement. If no such list is attached, I represent that there are no such Inventions. If in the course of my employment at Avantor, I incorporate into a Company product, process, or machine, an Invention owned by me or in which I have an interest, Avantor is hereby granted and shall have an exclusive royalty-free, irrevocable, worldwide license to make, have made, use, and sell that Invention without restriction as to the extent of my ownership or interest. 8. Application for Copyrights and Patents. I will execute any proper oath or verify any proper document in connection with carrying out the terms of this Agreement. If, because of my mental or physical condition or for any other reason whatsoever, Avantor is unable to secure my signature to apply for or to pursue any application for any United States or foreign patent or copyright covering Inventions assigned to Avantor as stated above, I hereby irrevocably designate and appoint Avantor and its duly authorized officers and agents as my agent and attorney in fact, to act for me and in my behalf and stead to execute and file any such applications and to do all other lawfully permitted acts to further the prosecution and issuance of U.S. and foreign patents and copyrights thereon with the same legal force and effect as if executed by me. I will testify at Avantor’s request and expense in any interference, litigation, or other legal proceeding that may arise during or after my employment. 9. Third Party Information. I recognize that Avantor has received and will receive confidential or proprietary information from third parties subject to a duty on Avantor’s part to maintain the confidentiality of such information and to use it only for certain limited purposes. This information shall be deemed not to include any information that is or becomes publicly known or that enters the public domain other than as a result of my breach of my obligations under this Agreement or any other agreement between me and Avantor or its affiliates. During the term of my employment and thereafter I will
4 not disclose nor use such information for the benefit of anyone other than Avantor or such third party, or in any manner inconsistent with any agreement between Avantor and such third party of which I am made aware, except as is required by law, any court of competent jurisdiction or any governmental agency or authority or recognized subpoena power. 10. Termination. I acknowledge that this Agreement shall not constitute a contract for employment for any specific period of time, and that either Avantor or I am free to terminate this Agreement, and employment relationship, “at will,” at any time, with or without cause. I agree that upon termination of this Agreement and my employment, for any or no reason, I will promptly return to Avantor all records of Confidential Information, including copies in my possession, and all other physical properties issued to me as an employee, in a reasonable state of function or repair. I will also so return any keys, pass cards, identification cards or other property belonging to Avantor. 11. Non-Waiver. The failure by Avantor to enforce any of the provisions hereof upon any default by me at a particular time or under certain circumstances shall not be treated as a permanent waiver of such provisions and shall not prevent subsequent enforcement of such provisions upon default by either party. 12. Irreparable Harm. I agree that any proven breach of this Agreement by me would cause irreparable harm to Avantor for which monetary damages could not adequately compensate. If Avantor proves a breach, irreparable harm shall be presumed and I expressly waive any bonding requirement as a prerequisite to Avantor obtaining injunctive relief. Avantor can also seek damages. 13. Assignability of This Agreement. The services contracted for between Avantor and me in this Agreement are personal, and therefore I may not assign this Agreement to any other person or entity. This Agreement may, however, be assigned by Avantor to a successor to the business of Avantor or to an affiliate of Avantor. 14. Severability. It is the intention of the parties that this Agreement shall be enforceable to the fullest extent permitted by local, state, and/or federal law in the jurisdiction in which performance of this Agreement occurs, or in which performance of this Agreement is sought to be enforced. In the event that a court of competent jurisdiction determines that one or more provisions of this Agreement are not enforceable under the provisions of the jurisdiction in which performance occurs or enforcement is sought, such a determination shall not affect the enforceability of the remainder of this Agreement. 15. Other Agreements. This Agreement, together with the letter agreement, dated April 5, 2018, between me and Avantor (the “Letter Agreement”), sets forth the sole and entire agreement between the parties hereto, and supersedes and replaces any and all prior agreements, whether oral, written, or implied, entered into by me and Avantor, pertaining to my employment, the terms, conditions, and responsibilities thereof, and/or any other subject matter contained in this Agreement or the Letter Agreement. This Agreement and the Letter Agreement shall be considered together as one agreement. There will be no modification of this Agreement, either verbal, implied, written, or otherwise, except through a written agreement signed by me, and an officer of Avantor, which refers to the specific paragraph of this Agreement intended to be modified, and sets forth, in writing, the specific modification of said paragraph. This Agreement and
5 the Letter Agreement will supersede and preempt all prior oral or written understandings and agreements with respect to the subject matter hereof and thereof between me and Avantor and its affiliates (including without limitation, Avantor, Inc. and VWR Corporation and their respective affiliates). [Signature page follows]
WITNESS WHEREFORE, the parties have executed this Agreement as of the ___ day of November, 2017. Executive – Signature VAIL HOLDCO CORP Executive – Print Name By: Its:
Annex 1 - Employee Covenants 1. Noncompetition, Nonsolicitation and Nondisparagement. You acknowledge that in the course of your employment with Avantor or any of its Subsidiaries or Affiliates you will become familiar with Avantor’s and its Subsidiaries’ and Affiliates’ trade secrets and with other confidential information concerning Avantor and such Subsidiaries and Affiliates and that your services will be of special, unique and extraordinary value to Avantor and such Subsidiaries and Affiliates. Therefore, you agree that: (a) Noncompetition. During the Employment Period and for a period of twelve months thereafter, you shall not directly or indirectly, anywhere in the world, own, manage, control, participate in, consult with, render services for or enter into employment with any business or organization that competes with the business that Avantor or any of its Subsidiaries or Affiliates is engaged in at the time of your Separation (the “Business”). Nothing herein shall prohibit you from being a passive owner of not more than 2% of the outstanding stock of any class of a corporation that is publicly traded, so long as you have no active participation in the business of such corporation; provided that this Section 1(a) shall only apply to the extent that your office is moved out of the State of California and/or you perform a majority of your services outside the State of California. (b) Nonsolicitation. During the Employment Period and for a period of twenty-four months thereafter, you shall not directly or indirectly (i) induce or attempt to induce any employee of Avantor or any of its Subsidiaries or Affiliates to leave the employ of Avantor or any such Subsidiary or Affiliate, or in any way interfere with the relationship between Avantor or any of its Subsidiaries or Affiliates and any employee thereof, (ii) hire any person who was an employee of Avantor or any of its Subsidiaries or Affiliates within 180 days after a Separation, (iii) induce or attempt to induce any customer, supplier, licensee or other business relation of Avantor or any of its Subsidiaries or Affiliates to cease doing business with Avantor or such Subsidiary or Affiliate or in any way interfere with the relationship between any such customer, supplier, licensee or business relation and Avantor or any of its Subsidiaries or Affiliates or (iv) directly or indirectly acquire or attempt to acquire an interest in any business relating to the Business and with which Avantor or any of its Subsidiaries or Affiliates has entertained discussions relating to the acquisition of such business by Avantor or any of its Subsidiaries or Affiliates in the twelve month period immediately preceding a Separation; provided that Sections 1(b)(iii)-(iv) shall only apply to the extent that your office is moved out of the State of California and/or you perform a majority of your services outside the State of California. (c) Nondisparagement. During the Employment Period and at any time thereafter, you shall not disparage Avantor or any of its affiliates, or any employee, director, shareholder or member of Avantor or its affiliates. (d) Enforcement. If, at the time of enforcement of Section 1 or 2, a court holds that the restrictions stated herein are unreasonable under circumstances then existing, the parties hereto agree that the maximum duration, scope or geographical area reasonable under such circumstances shall be substituted for the stated period, scope or area and that the court shall be allowed to revise the restrictions contained herein to cover the maximum duration, scope and area permitted by law. Because your services are unique and because you have access to confidential information, the parties hereto agree that money damages would be an inadequate remedy for any breach of this Annex 1. Therefore, in the event a breach or threatened breach of this Annex 1, Avantor or any of its Subsidiaries or Affiliates or their successors or assigns
2 may, in addition to other rights and remedies existing in their favor, apply to any court of competent jurisdiction for specific performance and/or injunctive or other relief in order to enforce, or prevent any violations of, the provisions hereof (without posting a bond or other security). (e) Additional Acknowledgments. You acknowledge that the provisions of Sections 1 and 2 are in consideration of: (i) employment with Avantor or its Subsidiaries or Affiliates and (ii) additional good and valuable consideration, including the payment of salary and bonus, as set forth in this Letter Agreement. In addition, you agree and acknowledge that the restrictions contained in Sections 1 and 2 do not preclude you from earning a livelihood, nor do they unreasonably impose limitations on your ability to earn a living. In addition, you acknowledge (A) that the business of Avantor and its Subsidiaries and Affiliates will be conducted throughout the world, (B) notwithstanding the state of incorporation or principal office of Avantor or any of its Subsidiaries or Affiliates, or any of their respective executives or employees (including you), it is expected that Avantor and its Subsidiaries and Affiliates will have business activities and have valuable business relationships within its industry throughout the world, and (C) as part of your responsibilities, you will be traveling throughout the world in furtherance of Avantor’s or any of its Subsidiaries’ or Affiliates’ business and relationships. You agree and acknowledge that the potential harm to Avantor and any of its Subsidiaries and Affiliates of the non-enforcement of Sections 1 and 2 outweighs any potential harm to you of its enforcement by injunction or otherwise. You acknowledge that you have carefully read this Annex 1 and have given careful consideration to the restraints imposed upon you by this Annex 1, and are in full accord as to their necessity for the reasonable and proper protection of confidential and proprietary information of Avantor and any of its Subsidiaries and Affiliates now existing or to be developed in the future. You expressly acknowledge and agree that each and every restraint imposed by this Annex 1 is reasonable with respect to subject matter, time period and geographical area. 2. Definitions. “Affiliate” means, with respect to any Person, any Person that controls, is controlled by or is under common control with such Person or an Affiliate of such Person. “Board” means Avantor’s board of directors. “Cause” means (i) the conviction of, or entry of a plea of nolo contendere with respect to, a felony or a crime involving moral turpitude, or the commission of fraud with respect to Avantor or any of its Subsidiaries or Affiliates or any of their customers or suppliers, (ii) substantial and repeated failure to perform duties as reasonably directed by the Board or a supervisor or report, after providing you with 15 days’ prior written notice and a reasonable opportunity to remedy such failure, (iii) gross negligence or willful misconduct with respect to Avantor or any of its Subsidiaries or Affiliates or (iv) a material violation of material Company rules or policies. Your cessation of employment shall not be deemed to be for Cause unless and until, if capable of being cured, the act or omission constituting Cause is not cured within 15 days following your receipt of written notice regarding such act or omission. “Change in Control” shall have the meaning ascribed to it in the Vail Holdco Corp Equity Incentive Plan. “Disability” shall have the meaning ascribed to it in Avantor’s long-term disability policy.
3 “Employment Period” means the period during which you are employed by Avantor or any of its Subsidiaries or Affiliates, regardless of whether such employment is pursuant to the terms of this Letter Agreement or another agreement. “Good Reason” means, within the two year period following a Change in Control, (i) a material diminution to your base salary, bonus opportunity, authority, duties or responsibilities, (ii) Avantor fails to make any compensatory payment to you when due, which is required to be paid to you pursuant to the Letter Agreement, (iii) a relocation of your principal place of employment to a location that is outside a 50 mile radius from your principal place of employment immediately prior to a Change in Control, or (iv) any other action or inaction by Avantor which constitutes a material breach by Avantor of the Letter Agreement; provided that, in order for your resignation for Good Reason to be effective, written notice of the occurrence any event that constitutes Good Reason must be delivered by you to Avantor within 90 days after you have actual knowledge of the occurrence of any such event and the occurrence of such event is not cured by Avantor within thirty (30) days after the date of such written notice by you to Avantor. “Person” means an individual, a partnership, a limited liability company, a corporation, an association, a joint stock company, a trust, a joint venture, an unincorporated organization, investment fund, any other business entity and a governmental entity or any department, agency or political subdivision thereof. “Separation” means you ceasing to be employed by Avantor or any of its Subsidiaries or Affiliates for any reason. “Subsidiary” means, with respect to any Person, any corporation, limited liability company, partnership, association, or business entity of which (i) if a corporation, a majority of the total voting power of shares of stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers, or trustees thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person or a combination thereof, or (ii) if a limited liability company, partnership, association, or other business entity (other than a corporation), a majority of partnership or other similar ownership interest thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more Subsidiaries of that Person or a combination thereof. For purposes hereof, a Person or Persons shall be deemed to have a majority ownership interest in a limited liability company, partnership, association, or other business entity (other than a corporation) if such Person or Persons shall be allocated a majority of limited liability company, partnership, association, or other business entity gains or losses or shall be or control any managing director or general partner of such limited liability company, partnership, association, or other business entity. For purposes hereof, references to a “Subsidiary” of any Person shall be given effect only at such times that such Person has one or more Subsidiaries, and, unless otherwise indicated, the term “Subsidiary” refers to a Subsidiary of Avantor. 3. Miscellaneous. (a) Applicable Law. This Annex 1 shall be governed by, and construed in accordance with, the laws of the Commonwealth of Pennsylvania, without giving effect to any choice of law or conflict of law rules or provisions (whether of the Commonwealth of Pennsylvania or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the Commonwealth of Pennsylvania.
4 (b) Consent to Jurisdiction. You hereby irrevocably submit to the nonexclusive jurisdiction of the United States District Court for the Eastern District of Pennsylvania and the state courts of the Commonwealth of Pennsylvania for the purposes of any suit, action or other proceeding arising out of this Annex 1 or any transaction contemplated hereby. You further agree that service of any process, summons, notice or document by certified or registered mail to your address as listed above or such other address or to the attention of such other person as you have specified by prior written notice to Avantor shall be effective service of process in any action, suit or proceeding in the Commonwealth of Pennsylvania with respect to any matters to which you have submitted to jurisdiction as set forth above in the immediately preceding sentence. You irrevocably and unconditionally waive any objection to the laying of venue of any action, suit or proceeding arising out of this Annex 1 or the transactions contemplated hereby in the United States District Court for the Eastern District of Pennsylvania or the state courts of the Commonwealth of Pennsylvania and hereby irrevocably and unconditionally waive and agree not to plead or claim in any such court that any such action, suit or proceeding brought in such court has been brought in an inconvenient forum. (c) Additional Agreements. The provisions of this Annex 1 are in addition to, and do not supersede, the provisions of the Personal Services, Confidentiality and Inventions Agreement between you and Avantor. (d) MUTUAL WAIVER OF JURY TRIAL. BECAUSE DISPUTES ARISING IN CONNECTION WITH COMPLEX TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND FEDERAL LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT THEIR DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF ARBITRATION, EACH PARTY TO THIS LETTER AGREEMENT (INCLUDING AVANTOR) HEREBY WAIVES ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION, SUIT, OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE BETWEEN OR AMONG ANY OF THE PARTIES HERETO, WHETHER ARISING IN CONTRACT, TORT, OR OTHERWISE, ARISING OUT OF, CONNECTED WITH, RELATED OR INCIDENTAL TO THIS LETTER AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREBY AND/OR THE RELATIONSHIPS ESTABLISHED AMONG THE PARTIES HEREUNDER.
Annex 2 - General Release I, Jim Bramwell, in consideration of and subject to the performance by VWR International, LLC, a Delaware limited liability company (together with its affiliates, the “Company”), of its obligations under the Employment Letter Agreement, dated as of April 2, 2019 (the “Agreement”), do hereby release and forever discharge as of the date hereof the Company and all present and former directors, officers, agents, representatives, employees, successors and assigns of the Company and the Company’s direct or indirect owners (collectively, the “Released Parties”) to the extent provided below. 1. I understand that any payments or benefits paid or granted to me under the “Severance/Restrictive Covenants” section of the Agreement represent, in part, consideration for signing this General Release and are not salary, wages or benefits to which I was already entitled. I understand and agree that I will not receive the payments and benefits specified in the “Severance/Restrictive Covenants” section of the Agreement unless I execute this General Release and do not revoke this General Release within the time period permitted hereafter or breach this General Release. I also acknowledge and represent that I have received all payments and benefits that I am entitled to receive (as of the date hereof) by virtue of any employment by the Company. 2. Except as provided in paragraph 4 below and except for the provisions of the Agreement which expressly survive the termination of my employment with the Company, I knowingly and voluntarily (for myself, my heirs, executors, administrators and assigns) release and forever discharge the Company and the other Released Parties from any and all claims, suits, controversies, actions, causes of action, cross-claims, counter-claims, demands, debts, compensatory damages, liquidated damages, punitive or exemplary damages, other damages, claims for costs and attorneys’ fees, or liabilities of any nature whatsoever in law and in equity, both past and present (through the date this General Release becomes effective and enforceable) and whether known or unknown, suspected, or claimed against the Company or any of the Released Parties which I, my spouse, or any of my heirs, executors, administrators or assigns, may have, which arise out of or are connected with my employment with, or my separation or termination from, the Company (including, but not limited to, any allegation, claim or violation, arising under: Title VII of the Civil Rights Act of 1964, as amended; the Civil Rights Act of 1991; the Age Discrimination in Employment Act of 1967, as amended (including the Older Workers Benefit Protection Act); the Equal Pay Act of 1963, as amended; the Americans with Disabilities Act of 1990; the Family and Medical Leave Act of 1993; the Worker Adjustment Retraining and Notification Act; the Employee Retirement Income Security Act of 1974; any applicable Executive Order Programs; the Fair Labor Standards Act; or their state or local counterparts; or under any other federal, state or local civil or human rights law, or under any other local, state, or federal law, regulation or ordinance; or under any public policy, contract or tort, or under common law; or arising under any policies, practices or procedures of the Company; or any claim for wrongful discharge, breach of contract, infliction of emotional distress, defamation; or any claim for costs, fees, or other expenses, including attorneys’ fees incurred in these matters) (all of the foregoing collectively referred to herein as the “Claims”). 3. I represent that I have made no assignment or transfer of any right, claim, demand, cause of action, or other matter covered by paragraph 2 above.
2 4. I agree that this General Release does not waive or release any rights or claims that I may have under the Age Discrimination in Employment Act of 1967 which arise after the date I execute this General Release. I acknowledge and agree that my separation from employment with the Company in compliance with the terms of the Agreement shall not serve as the basis for any claim or action (including, without limitation, any claim under the Age Discrimination in Employment Act of 1967). 5. In signing this General Release, I acknowledge and intend that it shall be effective as a bar to each and every one of the Claims hereinabove mentioned or implied. I expressly consent that this General Release shall be given full force and effect according to each and all of its express terms and provisions, including those relating to unknown and unsuspected Claims (notwithstanding any state statute that expressly limits the effectiveness of a general release of unknown, unsuspected and unanticipated Claims), if any, as well as those relating to any other Claims hereinabove mentioned or implied. I acknowledge and agree that this waiver is an essential and material term of this General Release and that without such waiver the Company would not have agreed to the terms of the Agreement. I further agree that in the event I should bring a Claim seeking damages against the Company, or in the event I should seek to recover against the Company in any Claim brought by a governmental agency on my behalf, this General Release shall serve as a complete defense to such Claims. I further agree that I am not aware of any pending claim of the type described in paragraph 2 as of the execution of this General Release. 6. I agree that neither this General Release, nor the furnishing of the consideration for this General Release, shall be deemed or construed at any time to be an admission by the Company, any Released Party or myself of any improper or unlawful conduct. 7. I agree that this General Release and the Agreement are confidential and agree not to disclose any information regarding the terms of this General Release or this Agreement, except to my immediate family and any tax, legal or other counsel I have consulted regarding the meaning or effect hereof or as required by law, and I will instruct each of the foregoing not to disclose the same to anyone. Notwithstanding anything herein to the contrary, each of the parties (and each affiliate and person acting on behalf of any such party) agree that each party (and each employee, representative, and other agent of such party) may disclose to any and all persons, without limitation of any kind, the tax treatment and tax structure of this transaction contemplated in the Agreement and all materials of any kind (including opinions or other tax analyses) that are provided to such party or such person relating to such tax treatment and tax structure, except to the extent necessary to comply with any applicable federal or state securities laws. This authorization is not intended to permit disclosure of any other information including (without limitation) (i) any portion of any materials to the extent not related to the tax treatment or tax structure of this transaction, (ii) the identities of participants or potential participants in the Agreement, (iii) any financial information (except to the extent such information is related to the tax treatment or tax structure of this transaction), or (iv) any other term or detail not relevant to the tax treatment or the tax structure of this transaction. 8. Any non-disclosure provision in this General Release does not prohibit or restrict me (or my attorney) from responding to any inquiry about this General Release or its underlying facts and circumstances by the Securities and Exchange Commission (SEC), the National Association of Securities Dealers, Inc. (NASD), any other self-regulatory organization or governmental entity. Furthermore, nothing in this Agreement shall prohibit or impede you from communicating, cooperating or filing a complaint with any U.S. federal, state or local
3 governmental or law enforcement branch, agency or entity (collectively, a “Governmental Entity”) with respect to possible violations of any U.S. federal, state or local law or regulation, or otherwise making disclosures to any Governmental Entity, in each case, that are protected under the whistleblower provisions of any such law or regulation, provided that in each case such communications and disclosures are consistent with applicable law. You understand and acknowledge that an individual shall not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of a trade secret that is made (i) in confidence to a Federal, State, or local government official or to an attorney solely for the purpose of reporting or investigating a suspected violation of law, or (ii) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. You understand and acknowledge further that an individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual files any document containing the trade secret under seal; and does not disclose the trade secret, except pursuant to court order. Except as provided in this paragraph or under applicable law, under no circumstance are you authorized to disclose any information covered by the Company’s attorney-client privilege or attorney work product, or trade secrets, without prior written consent of the Company. 9. Notwithstanding anything in this General Release to the contrary, this General Release shall not relinquish, diminish, or in any way affect any rights or claims arising out of any breach by the Company or by any Released Party of the Agreement after the date hereof. 10. Whenever possible, each provision of this General Release shall be interpreted in, such manner as to be effective and valid under applicable law, but if any provision of this General Release is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision or any other jurisdiction, but this General Release shall be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision had never been contained herein. BY SIGNING THIS GENERAL RELEASE, I REPRESENT AND AGREE THAT: (i) I HAVE READ IT CAREFULLY; (ii) I UNDERSTAND ALL OF ITS TERMS AND KNOW THAT I AM GIVING UP IMPORTANT RIGHTS, INCLUDING BUT NOT LIMITED TO, RIGHTS UNDER THE AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967, AS AMENDED, TITLE VII OF THE CIVIL RIGHTS ACT OF 1964, AS AMENDED; THE EQUAL PAY ACT OF 1963, THE AMERICANS WITH DISABILITIES ACT OF 1990; AND THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED; (iii) I VOLUNTARILY CONSENT TO EVERYTHING IN IT; (iv) I HAVE BEEN ADVISED TO CONSULT WITH AN ATTORNEY BEFORE EXECUTING IT AND I HAVE DONE SO OR, AFTER CAREFUL READING AND CONSIDERATION I HAVE CHOSEN NOT TO DO SO OF MY OWN VOLITION;
4 (v) I HAVE HAD AT LEAST 21 DAYS FROM THE DATE OF MY RECEIPT OF THIS RELEASE SUBSTANTIALLY IN ITS FINAL FORM ON _______________ __, _____ TO CONSIDER IT AND THE CHANGES MADE SINCE THE _______________ __, _____ VERSION OF THIS RELEASE ARE NOT MATERIAL AND WILL NOT RESTART THE REQUIRED 21-DAY PERIOD; (vi) THE CHANGES TO THE AGREEMENT SINCE _______________ ___, _____ EITHER ARE NOT MATERIAL OR WERE MADE AT MY REQUEST. (vii) I UNDERSTAND THAT I HAVE SEVEN DAYS AFTER THE EXECUTION OF THIS RELEASE TO REVOKE IT AND THAT THIS RELEASE SHALL NOT BECOME EFFECTIVE OR ENFORCEABLE UNTIL THE REVOCATION PERIOD HAS EXPIRED; (viii) I HAVE SIGNED THIS GENERAL RELEASE KNOWINGLY AND VOLUNTARILY AND WITH THE ADVICE OF ANY COUNSEL RETAINED TO ADVISE ME WITH RESPECT TO IT; AND (ix) I AGREE THAT THE PROVISIONS OF THIS GENERAL RELEASE MAY NOT BE AMENDED, WAIVED, CHANGED OR MODIFIED EXCEPT BY AN INSTRUMENT IN WRITING SIGNED BY AN AUTHORIZED REPRESENTATIVE OF AVANTOR AND BY ME. DATE: _____________ _________________________________
VWR MANAGEMENT SERVICES, LLC Radnor Corporate Center Building One, Suite 200 100 Matsonford Road, Radnor, PA 19087 April 11, 2023 Randy Stone Via electronic mail RE: Employment Letter Agreement Dear Randy: The following are the terms of your employment with VWR Management Services, LLC, effective as of the date hereof, under which you will provide services to Avantor, Inc. and its various affiliates. As used herein, “Avantor” shall collectively refer to VWR Management Services, LLC, Avantor, Inc. and all of their various affiliates. Position: Executive Vice President, Proprietary Materials Base Salary: $600,000 per year, payable in installments on Avantor’s regular payroll dates. Duties: You will serve as a member of Avantor’s Executive Leadership Team. In addition, you will perform such duties, functions and responsibilities during your employment period as reasonably and lawfully directed by the Chief Executive Officer. Reporting: You will report solely and directly to the Chief Executive Officer of Avantor. Office Location: Your office will be located in Radnor, PA. Annual Bonus: You will be eligible to participate in Avantor’s Incentive Compensation Plan (ICP) with a target bonus of 80% of base salary. Equity: You are eligible to receive a sign-on equity award under the Avantor, Inc. 2019 Equity Incentive Plan. The targeted value of this award is $4,000,000 and will be allocated 50% to Stock Options, 25% to Restricted Stock Units and 25% to Performance Stock Units. The number of Stock Options, Restricted Stock Units and Performance Stock Units to be awarded will be calculated based on the closing price on your date of hire in accordance with the Company’s equity valuation practices. The Stock Options and Restricted Stock Units will vest 50% each year over two years on the grant date anniversary
2 and the Performance Stock Units are subject to the attainment of cumulative three-year performance goals. Notwithstanding anything contained in this Letter Agreement, all equity grants shall be controlled exclusively by the applicable equity plan and award agreement pursuant to which such grants are made. Beginning in 2024, you will be included in the population eligible to participate in the annual equity grant process, subject to satisfactory performance, aligned with company policy. Benefits: You will be entitled to participate in all vacation, health, welfare and other similar benefits available to similarly situated employees of Avantor. You will be entitled to four weeks of vacation annually. Severance/Restrictive Covenants: If your employment with Avantor is terminated by Avantor without Cause, other than within a two year period following a Change in Control (each as defined on Annex 1), you will be entitled to receive (A) an amount equal to your annual base salary then in effect, payable in equal installments on Avantor’s regular payroll dates during a period of twelve months after such termination, (B) your target bonus, prorated for the year of such termination, payable in equal installments on Avantor’s regular payroll dates during a period of twelve months after such termination and (C) continued health benefits for a period ending on the earlier of (x) your becoming eligible to receive health benefits from a new employer and (y) twelve months after such termination. The payments (and benefits) described in the immediately preceding sentence that are due to be paid (or provided) more than sixty (60) days after your termination are subject to your execution and non-revocation of a general release in the form attached to this Letter Agreement as Annex 2 no later than fifty (50) days after your termination. If your employment with Avantor or its successor, as applicable, is terminated by you for Good Reason (as defined on Annex 1) or by Avantor without Cause within a two year period following a Change in Control, you will be entitled to receive (A) an aggregate amount equal to 1.5 times the sum of (x) your base salary then in effect, plus (y) your target bonus for the year of such termination, payable in equal installments on Avantor’s regular payroll dates during a period of twelve months after such termination and (B) continued health benefits for a period ending on the earlier of (x) your becoming eligible to receive health benefits from a new employer and (y) eighteen months after such termination. The payments (and benefits) described in the immediately preceding sentence that are due to be paid (or provided) more than sixty (60) days after your termination are subject to your execution and non-revocation of a general release in the form attached to this Letter Agreement as Annex 2 no later than fifty (50) days after your termination. If your employment is terminated by Avantor by reason of your Disability (as defined on Annex 1), you will be entitled to any
3 compensation and benefits accrued prior to the termination date, including Avantor’s standard applicable disability insurance benefits. If your employment with Avantor is terminated by reason of your death, your beneficiary or estate, as applicable, will be entitled to any compensation and benefits accrued prior to the termination date, including Avantor’s standard applicable life insurance benefits. If your employment is terminated by you without Good Reason, you will only be entitled to any compensation and benefits accrued prior to the termination date. Any such resignation shall require that written notice be delivered by you to Avantor at least 90 days prior to your termination and any failure by you to provide such written notice shall be considered a material breach of this Agreement by you. If your employment is terminated by Avantor for Cause, you will only be entitled to any compensation and benefits accrued prior to the termination date. In the event of a termination of your employment for any reason, you agree to be subject to those restrictions set forth on Annex 1 attached hereto, which are a part of this Letter Agreement (the “Employee Covenants”). You shall be under no obligation to seek other employment for any reason or to mitigate any severance payments following a termination of your employment with Avantor for any reason. In addition, there shall be no offset against amounts due to you upon termination of your employment with Avantor on account of any compensation attributable to any employment subsequent to your employment with Avantor. Subject to the notice requirement as set forth above, either you or Avantor may terminate your employment with Avantor at any time. Except as provided above in this Severance/Restrictive Covenants section, you shall not be entitled to any other salary, compensation or benefits from Avantor after termination of your employment with Avantor, except as otherwise specifically provided for in Avantor’s employee benefit plans or as otherwise expressly required by applicable law. Notwithstanding anything herein to the contrary, if any payments due hereunder would subject you to any tax imposed under Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), as a result of your characterization as a “specified employee” of Avantor (within the meaning of Treasury Regulation Section 1.409A-1(i)), then such payments that would otherwise cause such taxation shall be payable in a single lump sum on the first
4 business day that is six months following your “separation from service” (within the meaning of Code Section 409A and the regulations thereunder), and any remaining payments will be made in accordance with the foregoing provisions of this section. Personal Services Agreement: As a condition to entering into this Letter Agreement with the Company, you shall execute the Personal Services, Confidentiality and Inventions Agreement, in the form attached hereto as Exhibit A. Entire Agreement: This Letter Agreement, (including any Annexes attached hereto) and the Personal Services, Confidentiality and Inventions Agreement referenced above set forth the entire understanding between you and Avantor with respect to the subject matter hereof and thereof, and supersede and preempt all prior oral or written understandings and agreements with respect to the subject matter hereof and thereof between you and Avantor and its affiliates, which shall terminate and be of no further effect upon the execution of this Letter Agreement. This Letter Agreement, and all of your rights and duties hereunder, shall not be assignable or delegable by you. Any purported assignment or delegation by you in violation of the foregoing shall be null and void ab initio and of no force and effect. This Letter Agreement may be assigned by Avantor to a person or entity which is a successor in interest to substantially all of the business operations of Avantor, or to a subsidiary or affiliate of Avantor. Upon such assignment, the rights and obligations of Avantor hereunder shall become the rights and obligations of such subsidiary, affiliate or successor person or entity. Code Section 409A: This Letter Agreement will be interpreted to avoid any tax under §409A of the Code. For purposes of §409A, each payment made under this Letter Agreement will be treated as a separate payment. With respect to any reimbursements provided under this Letter Agreement that are subject to §409A, the amount of expenses eligible for reimbursement during a calendar year cannot affect the expenses eligible for reimbursement in any other calendar year. [Signature page follows]
5 VWR MANAGEMENT SERVICES, LLC By: VWR International, LLC, its sole member By: _/s/ Meghan Henson_____________ Name: Meghan Henson Title: EVP & Chief Human Resources Officer Date: April 11, 2023________________ Accepted and Agreed /s/ Randy Stone_____________ Randy Stone Date: April 10, 2023__________
Exhibit A - Personal Services, Confidentiality and Inventions Agreement See Attached.
AVANTOR, INC. PERSONAL SERVICES, CONFIDENTIALITY AND INVENTIONS AGREEMENT THIS AGREEMENT (this “Agreement”) is between Avantor, Inc., presently headquartered at Radnor Corporate Center, Building One, Suite 200, 100 Matsonford Road, Radnor, PA 19087 (with its various affiliates, “Avantor” or the “Company”) and Randy Stone (“Executive” or “I”) who is employed by Avantor. Avantor’s sound business policy requires that its trade secrets, technical and non- technical know-how, business knowledge, plans, systems, business methods, business records and customer relations to be protected and not utilized by any person or firm who competes or wants to compete with Avantor. The parties wish to evidence the terms of the employment relationship between them and particularly to set forth certain restrictions which shall apply to Executive in the event of termination of his/her employment with Avantor. In consideration of and as part of the terms of employment by Avantor, it is agreed as follows: 1. Compensation and Benefits. Executive shall be entitled to a salary, annual bonus and other monetary compensation, which shall be established by Avantor at the inception of employment and may be periodically thereafter adjusted for increase only. Executive shall also be entitled to participate in various Company employee benefit plans (for example, health insurance, retirement, and the like), in accordance with the participation requirements of said plans, and nothing contained herein shall confer benefit eligibility which is in any manner inconsistent with the terms of the benefit plans. 2. Executive’s General Obligations; Conflicts of Interest. During my employment with Avantor, I agree to devote substantially all my working time during normal business hours to Avantor. During my employment with Avantor, I agree to use my best efforts to perform the duties associated with my position and title with Avantor as Avantor may direct, not to engage in any other business or activity the nature of which shall be determined by Avantor to be competitive with Avantor, its suppliers or its customers and to comply with any Conflict of Interest Policy of Avantor. I acknowledge and agree that I will not serve on the board of directors of any other companies during my employment with Avantor without first obtaining prior written approval from Avantor’s Chief Executive Officer. I further agree to conform to all Company policies, practices, and procedures, to the extent such policies, practices and procedures have been provided to me in writing, as well as lawful directions of Avantor and/or its affiliates as to performance of services for Avantor, to the extent that the same are consistent with my position and title with Avantor. 3. No Existing Restrictive Agreements. I represent that I am not a party to any contract limiting my present or future right to work for Avantor or to perform such activities as shall be required from time to time by Avantor. 4. Prior Employer Information. I agree that I will not use improperly or disclose any confidential or proprietary information or trade secrets of my former or current employers, principals, partners, co-venturers, customers, or suppliers, or the vendors or customers of such persons or entities, and I will not violate any nondisclosure or
2 proprietary rights agreement I might have signed in connection with any such employer, person or entity. 5. Non-Disclosure of Information. I recognize that, in the performance of my duties with Avantor, Confidential Information belonging to Avantor will come into my possession, including, without limitation, information regarding business methods, plan, systems, customer lists and customer relations, vendor lists and vendor relations, cost and pricing information, distribution and logistical information, and other information relating to the business of Avantor that is not known to the general public. I recognize that the business of Avantor is materially dependent upon the relationship between Avantor and its customers who are serviced by its associates and that Avantor has and will entrust me with Confidential Information that must remain the property of Avantor. As used in this Agreement, “Confidential Information” shall mean the trade secrets, technical and non-technical know-how, technical and business knowledge and information, plans and systems, business methods, customer lists and customer relations of Avantor, including but not limited to research, development, manufacturing, purchasing, accounting, data processing, engineering, marketing, merchandising, selling and invoicing, which information is acquired from or through Avantor during the course of my employment by Avantor. “Confidential Information” shall not include any information that is or becomes publicly known or that enters the public domain other than as a result of my breach of my obligations under this Agreement or any other agreement between me and Avantor or its affiliates. I agree that I will not at any time hereafter disclose Confidential Information to third parties or use Confidential Information for any purpose other than to further Avantor’s business, except as is required by law, any court of competent jurisdiction or any governmental agency or authority or recognized subpoena power. Notwithstanding the above, nothing in this Agreement shall prohibit or impede Executive from communicating, cooperating or filing a complaint with any U.S. federal, state or local governmental or law enforcement branch, agency or entity (collectively, a “Governmental Entity”) with respect to possible violations of any U.S. federal, state or local law or regulation, or otherwise making disclosures to any Governmental Entity, in each case, that are protected under the whistleblower provisions of any such law or regulation, provided that in each case such communications and disclosures are consistent with applicable law. I understand and acknowledge that an individual shall not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of a trade secret that is made (i) in confidence to a Federal, State, or local government official or to an attorney solely for the purpose of reporting or investigating a suspected violation of law, or (ii) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. I understand and acknowledge further that an individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual files any document containing the trade secret under seal; and does not disclose the trade secret, except pursuant to court order. Except as provided in this paragraph or under applicable law, under no circumstance am I authorized to disclose any information covered by Avantor’s attorney-client privilege or attorney work product, or trade secrets, without prior written consent of Avantor.
3 6. Assignment of Inventions. I will make prompt and full disclosure to Avantor, will hold in trust for the sole benefit of Avantor, and will assign, exclusively to Avantor, all my right, title, and interest in and to any and all inventions, discoveries, designs, developments, improvements, copyrightable material, and trade secrets (collectively herein “Inventions”) that I, solely or jointly, may conceive, develop, or reduce to practice during the period of time I am in the employ of Avantor. I hereby waive and quitclaim to Avantor any and all claims of any nature whatsoever that I now or hereafter may have for infringement of any patent resulting from any patent applications for any Inventions so assigned to Avantor. My obligation to assign shall not apply to any Invention about which I can prove that: (a) it was developed entirely on my own time; and (b) no equipment, supplies, facility, services, or trade secret information of Avantor were used in its development; and (c) it does not relate (i) directly to the business of Avantor or (ii) to the actual or demonstrably anticipated research or development of Avantor; and (d) it does not result from any work performed by me for Avantor. 7. Excluded and Licensed Inventions. I have attached hereto a list describing all Inventions belonging to me and made by me prior to my employment with Avantor that I wish to have excluded from this Agreement. If no such list is attached, I represent that there are no such Inventions. If in the course of my employment at Avantor, I incorporate into a Company product, process, or machine, an Invention owned by me or in which I have an interest, Avantor is hereby granted and shall have an exclusive royalty-free, irrevocable, worldwide license to make, have made, use, and sell that Invention without restriction as to the extent of my ownership or interest. 8. Application for Copyrights and Patents. I will execute any proper oath or verify any proper document in connection with carrying out the terms of this Agreement. If, because of my mental or physical condition or for any other reason whatsoever, Avantor is unable to secure my signature to apply for or to pursue any application for any United States or foreign patent or copyright covering Inventions assigned to Avantor as stated above, I hereby irrevocably designate and appoint Avantor and its duly authorized officers and agents as my agent and attorney in fact, to act for me and in my behalf and stead to execute and file any such applications and to do all other lawfully permitted acts to further the prosecution and issuance of U.S. and foreign patents and copyrights thereon with the same legal force and effect as if executed by me. I will testify at Avantor’s request and expense in any interference, litigation, or other legal proceeding that may arise during or after my employment. 9. Third Party Information. I recognize that Avantor has received and will receive confidential or proprietary information from third parties subject to a duty on Avantor’s part to maintain the confidentiality of such information and to use it only for certain limited purposes. This information shall be deemed not to include any information that is or becomes publicly known or that enters the public domain other than as a result of my breach of my obligations under this Agreement or any other agreement between me and Avantor or its affiliates. During the term of my employment and thereafter I will
4 not disclose nor use such information for the benefit of anyone other than Avantor or such third party, or in any manner inconsistent with any agreement between Avantor and such third party of which I am made aware, except as is required by law, any court of competent jurisdiction or any governmental agency or authority or recognized subpoena power. 10. Termination. I acknowledge that this Agreement shall not constitute a contract for employment for any specific period of time, and that either Avantor or I am free to terminate this Agreement, and employment relationship, “at will,” at any time, with or without cause. I agree that upon termination of this Agreement and my employment, for any or no reason, I will promptly return to Avantor all records of Confidential Information, including copies in my possession, and all other physical properties issued to me as an employee, in a reasonable state of function or repair. I will also so return any keys, pass cards, identification cards or other property belonging to Avantor. 11. Non-Waiver. The failure by Avantor to enforce any of the provisions hereof upon any default by me at a particular time or under certain circumstances shall not be treated as a permanent waiver of such provisions and shall not prevent subsequent enforcement of such provisions upon default by either party. 12. Irreparable Harm. I agree that any proven breach of this Agreement by me would cause irreparable harm to Avantor for which monetary damages could not adequately compensate. If Avantor proves a breach, irreparable harm shall be presumed and I expressly waive any bonding requirement as a prerequisite to Avantor obtaining injunctive relief. Avantor can also seek damages. 13. Assignability of This Agreement. The services contracted for between Avantor and me in this Agreement are personal, and therefore I may not assign this Agreement to any other person or entity. This Agreement may, however, be assigned by Avantor to a successor to the business of Avantor or to an affiliate of Avantor. 14. Severability. It is the intention of the parties that this Agreement shall be enforceable to the fullest extent permitted by local, state, and/or federal law in the jurisdiction in which performance of this Agreement occurs, or in which performance of this Agreement is sought to be enforced. In the event that a court of competent jurisdiction determines that one or more provisions of this Agreement are not enforceable under the provisions of the jurisdiction in which performance occurs or enforcement is sought, such a determination shall not affect the enforceability of the remainder of this Agreement. 15. Other Agreements. This Agreement, together with the letter agreement, dated April 11, 2023 between me and Avantor (the “Letter Agreement”), sets forth the sole and entire agreement between the parties hereto, and supersedes and replaces any and all prior agreements, whether oral, written, or implied, entered into by me and Avantor, pertaining to my employment, the terms, conditions, and responsibilities thereof, and/or any other subject matter contained in this Agreement or the Letter Agreement. This Agreement and the Letter Agreement shall be considered together as one agreement. There will be no modification of this Agreement, either verbal, implied, written, or otherwise, except through a written agreement signed by me, and an officer of Avantor, which refers to the specific paragraph of this Agreement intended to be modified, and sets forth, in writing, the specific modification of said paragraph. This Agreement and
5 the Letter Agreement will supersede and preempt all prior oral or written understandings and agreements with respect to the subject matter hereof and thereof between me and Avantor and its affiliates. [Signature page follows]
WITNESS WHEREFORE, the parties have executed this Agreement as of the 11th day of April, 2023. /s/ Randy Stone Executive – Signature AVANTOR, INC. Randy Stone Executive – Print Name By:/s/ Meghan Henson Its: EVP & Chief Human Resources Officer
Annex 1 - Employee Covenants 1. Noncompetition, Nonsolicitation and Nondisparagement. You acknowledge that in the course of your employment with Avantor or any of its Subsidiaries or Affiliates you will become familiar with Avantor’s and its Subsidiaries’ and Affiliates’ trade secrets and with other confidential information concerning Avantor and such Subsidiaries and Affiliates and that your services will be of special, unique and extraordinary value to Avantor and such Subsidiaries and Affiliates. Therefore, you agree that: (a) Noncompetition. During the Employment Period and for a period of twelve months thereafter, you shall not directly or indirectly, anywhere in the world, own, manage, control, participate in, consult with, render services for or enter into employment with any business or organization that competes with the business that Avantor or any of its Subsidiaries or Affiliates is engaged in at the time of your Separation (the “Business”). Nothing herein shall prohibit you from being a passive owner of not more than 2% of the outstanding stock of any class of a corporation that is publicly traded, so long as you have no active participation in the business of such corporation. (b) Nonsolicitation. During the Employment Period and for a period of twenty-four months thereafter, you shall not directly or indirectly (i) induce or attempt to induce any employee of Avantor or any of its Subsidiaries or Affiliates to leave the employ of Avantor or any such Subsidiary or Affiliate, or in any way interfere with the relationship between Avantor or any of its Subsidiaries or Affiliates and any employee thereof, (ii) hire any person who was an employee of Avantor or any of its Subsidiaries or Affiliates within 180 days after a Separation, (iii) induce or attempt to induce any customer, supplier, licensee or other business relation of Avantor or any of its Subsidiaries or Affiliates to cease doing business with Avantor or such Subsidiary or Affiliate or in any way interfere with the relationship between any such customer, supplier, licensee or business relation and Avantor or any of its Subsidiaries or Affiliates or (iv) directly or indirectly acquire or attempt to acquire an interest in any business relating to the Business and with which Avantor or any of its Subsidiaries or Affiliates has entertained discussions relating to the acquisition of such business by Avantor or any of its Subsidiaries or Affiliates in the twelve month period immediately preceding a Separation. (c) Nondisparagement. During the Employment Period and at any time thereafter, you shall not disparage Avantor or any of its affiliates, or any employee, director, shareholder or member of Avantor or its affiliates. (d) Enforcement. If, at the time of enforcement of Section 1 or 2, a court holds that the restrictions stated herein are unreasonable under circumstances then existing, the parties hereto agree that the maximum duration, scope or geographical area reasonable under such circumstances shall be substituted for the stated period, scope or area and that the court shall be allowed to revise the restrictions contained herein to cover the maximum duration, scope and area permitted by law. Because your services are unique and because you have access to confidential information, the parties hereto agree that money damages would be an inadequate remedy for any breach of this Annex 1. Therefore, in the event a breach or threatened breach of this Annex 1, Avantor or any of its Subsidiaries or Affiliates or their successors or assigns may, in addition to other rights and remedies existing in their favor, apply to any court of competent jurisdiction for specific performance and/or injunctive or other relief in order to enforce, or prevent any violations of, the provisions hereof (without posting a bond or other security).
2 (e) Additional Acknowledgments. You acknowledge that the provisions of Sections 1 and 2 are in consideration of: (i) employment with Avantor or its Subsidiaries or Affiliates and (ii) additional good and valuable consideration, including the payment of salary and bonus, as set forth in this Letter Agreement. In addition, you agree and acknowledge that the restrictions contained in Sections 1 and 2 do not preclude you from earning a livelihood, nor do they unreasonably impose limitations on your ability to earn a living. In addition, you acknowledge (A) that the business of Avantor and its Subsidiaries and Affiliates will be conducted throughout the world, (B) notwithstanding the state of incorporation or principal office of Avantor or any of its Subsidiaries or Affiliates, or any of their respective executives or employees (including you), it is expected that Avantor and its Subsidiaries and Affiliates will have business activities and have valuable business relationships within its industry throughout the world, and (C) as part of your responsibilities, you will be traveling throughout the world in furtherance of Avantor’s or any of its Subsidiaries’ or Affiliates’ business and relationships. You agree and acknowledge that the potential harm to Avantor and any of its Subsidiaries and Affiliates of the non-enforcement of Sections 1 and 2 outweighs any potential harm to you of its enforcement by injunction or otherwise. You acknowledge that you have carefully read this Annex 1 and have given careful consideration to the restraints imposed upon you by this Annex 1, and are in full accord as to their necessity for the reasonable and proper protection of confidential and proprietary information of Avantor and any of its Subsidiaries and Affiliates now existing or to be developed in the future. You expressly acknowledge and agree that each and every restraint imposed by this Annex 1 is reasonable with respect to subject matter, time period and geographical area. 2. Definitions. “Affiliate” means, with respect to any Person, any Person that controls, is controlled by or is under common control with such Person or an Affiliate of such Person. “Board” means Avantor’s board of directors. “Cause” means (i) the conviction of, or entry of a plea of nolo contendere with respect to, a felony or a crime involving moral turpitude, or the commission of fraud with respect to Avantor or any of its Subsidiaries or Affiliates or any of their customers or suppliers, (ii) substantial and repeated failure to perform duties as reasonably directed by the Board or a supervisor or report, after providing you with 15 days’ prior written notice and a reasonable opportunity to remedy such failure, (iii) gross negligence or willful misconduct with respect to Avantor or any of its Subsidiaries or Affiliates or (iv) a material violation of material Company rules or policies. Your cessation of employment shall not be deemed to be for Cause unless and until, if capable of being cured, the act or omission constituting Cause is not cured within 15 days following your receipt of written notice regarding such act or omission. “Change in Control” shall have the meaning ascribed to it in the Avantor, Inc. 2019 Equity Incentive Plan. “Disability” shall have the meaning ascribed to it in Avantor’s long-term disability policy. “Employment Period” means the period during which you are employed by Avantor or any of its Subsidiaries or Affiliates, regardless of whether such employment is pursuant to the terms of this Letter Agreement or another agreement.
3 “Good Reason” means, within the two year period following a Change in Control, (i) a material diminution to your base salary, bonus opportunity, authority, duties or responsibilities, (ii) Avantor fails to make any compensatory payment to you when due, which is required to be paid to you pursuant to the Letter Agreement, (iii) a relocation of your principal place of employment to a location that is outside a 50 mile radius from your principal place of employment immediately prior to a Change in Control, or (iv) any other action or inaction by Avantor which constitutes a material breach by Avantor of the Letter Agreement; provided that, in order for your resignation for Good Reason to be effective, written notice of the occurrence any event that constitutes Good Reason must be delivered by you to Avantor within 90 days after you have actual knowledge of the occurrence of any such event and the occurrence of such event is not cured by Avantor within thirty (30) days after the date of such written notice by you to Avantor. “Person” means an individual, a partnership, a limited liability company, a corporation, an association, a joint stock company, a trust, a joint venture, an unincorporated organization, investment fund, any other business entity and a governmental entity or any department, agency or political subdivision thereof. “Separation” means you ceasing to be employed by Avantor or any of its Subsidiaries or Affiliates for any reason. “Subsidiary” means, with respect to any Person, any corporation, limited liability company, partnership, association, or business entity of which (i) if a corporation, a majority of the total voting power of shares of stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers, or trustees thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person or a combination thereof, or (ii) if a limited liability company, partnership, association, or other business entity (other than a corporation), a majority of partnership or other similar ownership interest thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more Subsidiaries of that Person or a combination thereof. For purposes hereof, a Person or Persons shall be deemed to have a majority ownership interest in a limited liability company, partnership, association, or other business entity (other than a corporation) if such Person or Persons shall be allocated a majority of limited liability company, partnership, association, or other business entity gains or losses or shall be or control any managing director or general partner of such limited liability company, partnership, association, or other business entity. For purposes hereof, references to a “Subsidiary” of any Person shall be given effect only at such times that such Person has one or more Subsidiaries, and, unless otherwise indicated, the term “Subsidiary” refers to a Subsidiary of Avantor. 3. Miscellaneous. (a) Applicable Law. This Annex 1 shall be governed by, and construed in accordance with, the laws of the Commonwealth of Pennsylvania, without giving effect to any choice of law or conflict of law rules or provisions (whether of the Commonwealth of Pennsylvania or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the Commonwealth of Pennsylvania. (b) Consent to Jurisdiction. You hereby irrevocably submit to the nonexclusive jurisdiction of the United States District Court for the Eastern District of Pennsylvania and the state courts of the Commonwealth of Pennsylvania for the purposes of any suit, action or other proceeding arising out of this Annex 1 or any transaction contemplated hereby. You further
4 agree that service of any process, summons, notice or document by certified or registered mail to your address as listed above or such other address or to the attention of such other person as you have specified by prior written notice to Avantor shall be effective service of process in any action, suit or proceeding in the Commonwealth of Pennsylvania with respect to any matters to which you have submitted to jurisdiction as set forth above in the immediately preceding sentence. You irrevocably and unconditionally waive any objection to the laying of venue of any action, suit or proceeding arising out of this Annex 1 or the transactions contemplated hereby in the United States District Court for the Eastern District of Pennsylvania or the state courts of the Commonwealth of Pennsylvania and hereby irrevocably and unconditionally waive and agree not to plead or claim in any such court that any such action, suit or proceeding brought in such court has been brought in an inconvenient forum. (c) Additional Agreements. The provisions of this Annex 1 are in addition to, and do not supersede, the provisions of the Personal Services, Confidentiality and Inventions Agreement between you and Avantor. (d) MUTUAL WAIVER OF JURY TRIAL. BECAUSE DISPUTES ARISING IN CONNECTION WITH COMPLEX TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND FEDERAL LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT THEIR DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF ARBITRATION, EACH PARTY TO THIS LETTER AGREEMENT (INCLUDING AVANTOR) HEREBY WAIVES ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION, SUIT, OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE BETWEEN OR AMONG ANY OF THE PARTIES HERETO, WHETHER ARISING IN CONTRACT, TORT, OR OTHERWISE, ARISING OUT OF, CONNECTED WITH, RELATED OR INCIDENTAL TO THIS LETTER AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREBY AND/OR THE RELATIONSHIPS ESTABLISHED AMONG THE PARTIES HEREUNDER.
Annex 2 - General Release I, Randy Stone, in consideration of and subject to the performance by VWR Management Services, LLC, a Delaware limited liability company (together with its affiliates, the “Company”), of its obligations under the Employment Letter Agreement, dated as of April 11, 2023 (the “Agreement”), do hereby release and forever discharge as of the date hereof the Company and all present and former directors, officers, agents, representatives, employees, successors and assigns of the Company and the Company’s direct or indirect owners (collectively, the “Released Parties”) to the extent provided below. 1. I understand that any payments or benefits paid or granted to me under the “Severance/Restrictive Covenants” section of the Agreement represent, in part, consideration for signing this General Release and are not salary, wages or benefits to which I was already entitled. I understand and agree that I will not receive the payments and benefits specified in the “Severance/Restrictive Covenants” section of the Agreement unless I execute this General Release and do not revoke this General Release within the time period permitted hereafter or breach this General Release. I also acknowledge and represent that I have received all payments and benefits that I am entitled to receive (as of the date hereof) by virtue of any employment by the Company. 2. Except as provided in paragraph 4 below and except for the provisions of the Agreement which expressly survive the termination of my employment with the Company, I knowingly and voluntarily (for myself, my heirs, executors, administrators and assigns) release and forever discharge the Company and the other Released Parties from any and all claims, suits, controversies, actions, causes of action, cross-claims, counter-claims, demands, debts, compensatory damages, liquidated damages, punitive or exemplary damages, other damages, claims for costs and attorneys’ fees, or liabilities of any nature whatsoever in law and in equity, both past and present (through the date this General Release becomes effective and enforceable) and whether known or unknown, suspected, or claimed against the Company or any of the Released Parties which I, my spouse, or any of my heirs, executors, administrators or assigns, may have, which arise out of or are connected with my employment with, or my separation or termination from, the Company (including, but not limited to, any allegation, claim or violation, arising under: Title VII of the Civil Rights Act of 1964, as amended; the Civil Rights Act of 1991; the Age Discrimination in Employment Act of 1967, as amended (including the Older Workers Benefit Protection Act); the Equal Pay Act of 1963, as amended; the Americans with Disabilities Act of 1990; the Family and Medical Leave Act of 1993; the Worker Adjustment Retraining and Notification Act; the Employee Retirement Income Security Act of 1974; any applicable Executive Order Programs; the Fair Labor Standards Act; or their state or local counterparts; or under any other federal, state or local civil or human rights law, or under any other local, state, or federal law, regulation or ordinance; or under any public policy, contract or tort, or under common law; or arising under any policies, practices or procedures of the Company; or any claim for wrongful discharge, breach of contract, infliction of emotional distress, defamation; or any claim for costs, fees, or other expenses, including attorneys’ fees incurred in these matters) (all of the foregoing collectively referred to herein as the “Claims”). 3. I represent that I have made no assignment or transfer of any right, claim, demand, cause of action, or other matter covered by paragraph 2 above.
2 4. I agree that this General Release does not waive or release any rights or claims that I may have under the Age Discrimination in Employment Act of 1967 which arise after the date I execute this General Release. I acknowledge and agree that my separation from employment with the Company in compliance with the terms of the Agreement shall not serve as the basis for any claim or action (including, without limitation, any claim under the Age Discrimination in Employment Act of 1967). 5. In signing this General Release, I acknowledge and intend that it shall be effective as a bar to each and every one of the Claims hereinabove mentioned or implied. I expressly consent that this General Release shall be given full force and effect according to each and all of its express terms and provisions, including those relating to unknown and unsuspected Claims (notwithstanding any state statute that expressly limits the effectiveness of a general release of unknown, unsuspected and unanticipated Claims), if any, as well as those relating to any other Claims hereinabove mentioned or implied. I acknowledge and agree that this waiver is an essential and material term of this General Release and that without such waiver the Company would not have agreed to the terms of the Agreement. I further agree that in the event I should bring a Claim seeking damages against the Company, or in the event I should seek to recover against the Company in any Claim brought by a governmental agency on my behalf, this General Release shall serve as a complete defense to such Claims. I further agree that I am not aware of any pending claim of the type described in paragraph 2 as of the execution of this General Release. 6. I agree that neither this General Release, nor the furnishing of the consideration for this General Release, shall be deemed or construed at any time to be an admission by the Company, any Released Party or myself of any improper or unlawful conduct. 7. I agree that this General Release and the Agreement are confidential and agree not to disclose any information regarding the terms of this General Release or this Agreement, except to my immediate family and any tax, legal or other counsel I have consulted regarding the meaning or effect hereof or as required by law, and I will instruct each of the foregoing not to disclose the same to anyone. Notwithstanding anything herein to the contrary, each of the parties (and each affiliate and person acting on behalf of any such party) agree that each party (and each employee, representative, and other agent of such party) may disclose to any and all persons, without limitation of any kind, the tax treatment and tax structure of this transaction contemplated in the Agreement and all materials of any kind (including opinions or other tax analyses) that are provided to such party or such person relating to such tax treatment and tax structure, except to the extent necessary to comply with any applicable federal or state securities laws. This authorization is not intended to permit disclosure of any other information including (without limitation) (i) any portion of any materials to the extent not related to the tax treatment or tax structure of this transaction, (ii) the identities of participants or potential participants in the Agreement, (iii) any financial information (except to the extent such information is related to the tax treatment or tax structure of this transaction), or (iv) any other term or detail not relevant to the tax treatment or the tax structure of this transaction. 8. Any non-disclosure provision in this General Release does not prohibit or restrict me (or my attorney) from responding to any inquiry about this General Release or its underlying facts and circumstances by the Securities and Exchange Commission (SEC), the National Association of Securities Dealers, Inc. (NASD), any other self-regulatory organization or governmental entity. Furthermore, nothing in this Agreement shall prohibit or impede you from communicating, cooperating or filing a complaint with any U.S. federal, state or local
3 governmental or law enforcement branch, agency or entity (collectively, a “Governmental Entity”) with respect to possible violations of any U.S. federal, state or local law or regulation, or otherwise making disclosures to any Governmental Entity, in each case, that are protected under the whistleblower provisions of any such law or regulation, provided that in each case such communications and disclosures are consistent with applicable law. You understand and acknowledge that an individual shall not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of a trade secret that is made (i) in confidence to a Federal, State, or local government official or to an attorney solely for the purpose of reporting or investigating a suspected violation of law, or (ii) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. You understand and acknowledge further that an individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual files any document containing the trade secret under seal; and does not disclose the trade secret, except pursuant to court order. Except as provided in this paragraph or under applicable law, under no circumstance are you authorized to disclose any information covered by the Company’s attorney-client privilege or attorney work product, or trade secrets, without prior written consent of the Company. 9. Notwithstanding anything in this General Release to the contrary, this General Release shall not relinquish, diminish, or in any way affect any rights or claims arising out of any breach by the Company or by any Released Party of the Agreement after the date hereof. 10. Whenever possible, each provision of this General Release shall be interpreted in, such manner as to be effective and valid under applicable law, but if any provision of this General Release is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision or any other jurisdiction, but this General Release shall be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision had never been contained herein. BY SIGNING THIS GENERAL RELEASE, I REPRESENT AND AGREE THAT: (i) I HAVE READ IT CAREFULLY; (ii) I UNDERSTAND ALL OF ITS TERMS AND KNOW THAT I AM GIVING UP IMPORTANT RIGHTS, INCLUDING BUT NOT LIMITED TO, RIGHTS UNDER THE AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967, AS AMENDED, TITLE VII OF THE CIVIL RIGHTS ACT OF 1964, AS AMENDED; THE EQUAL PAY ACT OF 1963, THE AMERICANS WITH DISABILITIES ACT OF 1990; AND THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED; (iii) I VOLUNTARILY CONSENT TO EVERYTHING IN IT; (iv) I HAVE BEEN ADVISED TO CONSULT WITH AN ATTORNEY BEFORE EXECUTING IT AND I HAVE DONE SO OR, AFTER CAREFUL READING AND CONSIDERATION I HAVE CHOSEN NOT TO DO SO OF MY OWN VOLITION;
4 (v) I HAVE HAD AT LEAST 21 DAYS FROM THE DATE OF MY RECEIPT OF THIS RELEASE SUBSTANTIALLY IN ITS FINAL FORM ON _______________ __, _____ TO CONSIDER IT AND THE CHANGES MADE SINCE THE _______________ __, _____ VERSION OF THIS RELEASE ARE NOT MATERIAL AND WILL NOT RESTART THE REQUIRED 21-DAY PERIOD; (vi) THE CHANGES TO THE AGREEMENT SINCE _______________ ___, _____ EITHER ARE NOT MATERIAL OR WERE MADE AT MY REQUEST. (vii) I UNDERSTAND THAT I HAVE SEVEN DAYS AFTER THE EXECUTION OF THIS RELEASE TO REVOKE IT AND THAT THIS RELEASE SHALL NOT BECOME EFFECTIVE OR ENFORCEABLE UNTIL THE REVOCATION PERIOD HAS EXPIRED; (viii) I HAVE SIGNED THIS GENERAL RELEASE KNOWINGLY AND VOLUNTARILY AND WITH THE ADVICE OF ANY COUNSEL RETAINED TO ADVISE ME WITH RESPECT TO IT; AND (ix) I AGREE THAT THE PROVISIONS OF THIS GENERAL RELEASE MAY NOT BE AMENDED, WAIVED, CHANGED OR MODIFIED EXCEPT BY AN INSTRUMENT IN WRITING SIGNED BY AN AUTHORIZED REPRESENTATIVE OF AVANTOR AND BY ME. DATE: _____________ _________________________________ Randy Stone
Exhibit 31.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Michael Stubblefield, certify that:
1.I have reviewed this Quarterly Report on Form 10-Q of Avantor, Inc.;
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.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
| Date: April 26, 2024 | By: | /s/ Michael Stubblefield | |||||||||
| Name: | Michael Stubblefield | ||||||||||
| Title: | President and Chief Executive Officer (Principal Executive Officer) | ||||||||||
Exhibit 31.2
CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, R. Brent Jones, certify that:
1.I have reviewed this Quarterly Report on Form 10-Q of Avantor, Inc.;
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.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
| Date: April 26, 2024 | By: | /s/ R. Brent Jones | |||||||||
| Name: | R. Brent Jones | ||||||||||
| Title: | Executive Vice President and Chief Financial Officer (Principal Financial Officer) | ||||||||||
Exhibit 32.1
Certification Pursuant to
18 U.S.C. Section 1350,
as Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
In connection with the Quarterly Report on Form 10-Q of Avantor, Inc. (the “Company”) for the three months ended March 31, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Michael Stubblefield, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:
(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
| Date: April 26, 2024 | By: | /s/ Michael Stubblefield | |||||||||
| Name: | Michael Stubblefield | ||||||||||
| Title: | President and Chief Executive Officer (Principal Executive Officer) | ||||||||||
Exhibit 32.2
Certification Pursuant to
18 U.S.C. Section 1350,
as Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
In connection with the Quarterly Report on Form 10-Q of Avantor, Inc. (the “Company”) for the three months ended March 31, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, R. Brent Jones, Executive Vice President, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:
(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
| Date: April 26, 2024 | By: | /s/ R. Brent Jones | |||||||||
| Name: | R. Brent Jones | ||||||||||
| Title: | Executive Vice President and Chief Financial Officer (Principal Financial Officer) | ||||||||||