Revvity, Inc 10-Q for FY2023 Q1
Revvity, Inc. (RVTY)
10-Q
2023-05-12
For: 2023-04-02
View Original
Added on
April 10, 2026
About this 10-Q
Revvity, Inc filed this 10-Q on May 12, 2023, covering the quarter ended April 2, 2023 (FY2023 Q1).
Headline figures
Quarter ended April 2, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $674.87M
- down 29.9% from $963.16M a year earlier
- Net income
- $569.48M
- up 221.8% from net income of $176.96M a year earlier
- Diluted EPS
- $4.50
- up 221.4% from $1.40 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________________________
FORM 10-Q
_______________________________________
(Mark One)
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the quarterly period ended April 2, 2023
or
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the transition period from ____________ to ____________
Commission File Number 001-5075
_______________________________________
Revvity, Inc.
(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) | |||||||||||||
(781 ) 663-6900
(Registrant’s telephone number, including area code)
______________________________________
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol (s) | Name of each 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.
| ☑ | Accelerated filer | ☐ | |||||||||||||||
| Non-accelerated filer | ☐ | Smaller reporting company | |||||||||||||||
| Emerging growth company | |||||||||||||||||
If an emerging growth company, indicate by check mark whether 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 ☑
As of May 9, 2023, there were outstanding 125,441,002 shares of common stock, $1 par value per share.
TABLE OF CONTENTS
| Page | ||||||||
| PART I. FINANCIAL INFORMATION | ||||||||
| Item 1. | ||||||||
| Item 2. | ||||||||
| Item 3. | ||||||||
| Item 4. | ||||||||
| PART II. OTHER INFORMATION | ||||||||
| Item 1. | ||||||||
| Item 1A. | ||||||||
| Item 2. | ||||||||
| Item 6. | ||||||||
3
PART I. FINANCIAL INFORMATION
Item 1.Unaudited Financial Statements
REVVITY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
| Three Months Ended | |||||||||||||||||||||||
| April 2, 2023 | April 3, 2022 | ||||||||||||||||||||||
| (In thousands, except per share data) | |||||||||||||||||||||||
| Product revenue | $ | $ | |||||||||||||||||||||
| Service revenue | |||||||||||||||||||||||
| Total revenue | |||||||||||||||||||||||
| Cost of product revenue | |||||||||||||||||||||||
| Cost of service revenue | |||||||||||||||||||||||
| Total cost of revenue | |||||||||||||||||||||||
| Selling, general and administrative expenses | |||||||||||||||||||||||
| Research and development expenses | |||||||||||||||||||||||
| Operating income from continuing operations | |||||||||||||||||||||||
| Interest and other expense, net | |||||||||||||||||||||||
| Income from continuing operations before income taxes | |||||||||||||||||||||||
| Provision for income taxes | |||||||||||||||||||||||
| Income from continuing operations | |||||||||||||||||||||||
| Income (loss) from discontinued operations | ( | ||||||||||||||||||||||
| Net income | $ | $ | |||||||||||||||||||||
| Basic earnings per share: | |||||||||||||||||||||||
| Income from continuing operations | $ | $ | |||||||||||||||||||||
| Income (loss) from discontinued operations | ( | ||||||||||||||||||||||
| Net income | $ | $ | |||||||||||||||||||||
| Diluted earnings per share: | |||||||||||||||||||||||
| Income from continuing operations | $ | $ | |||||||||||||||||||||
| Income (loss) from discontinued operations | ( | ||||||||||||||||||||||
| Net income | $ | $ | |||||||||||||||||||||
| Weighted average shares of common stock outstanding: | |||||||||||||||||||||||
| Basic | |||||||||||||||||||||||
| Diluted | |||||||||||||||||||||||
| Cash dividends declared per common share | $ | $ | |||||||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
4
REVVITY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
| Three Months Ended | |||||||||||||||||||||||
| April 2, 2023 | April 3, 2022 | ||||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||
| Net income | $ | $ | |||||||||||||||||||||
| Other comprehensive income (loss): | |||||||||||||||||||||||
| Foreign currency translation adjustments, net of income taxes: | |||||||||||||||||||||||
| Amounts recognized in other comprehensive income | ( | ||||||||||||||||||||||
| Less: amounts reclassified to earnings | ( | ||||||||||||||||||||||
| Net foreign currency translation adjustments, net of income taxes | ( | ||||||||||||||||||||||
| Unrealized gain on securities, net of income taxes | ( | ||||||||||||||||||||||
| Other comprehensive income (loss) | ( | ||||||||||||||||||||||
| Comprehensive income | $ | $ | |||||||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
5
REVVITY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
| April 2, 2023 | January 1, 2023 | ||||||||||
| (In thousands, except share and per share data) | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
| Marketable securities | |||||||||||
| Accounts receivable, net | |||||||||||
| Inventories | |||||||||||
| Other current assets | |||||||||||
| Current assets of discontinued operations | |||||||||||
| Total current assets | |||||||||||
| Property, plant and equipment, net | |||||||||||
| Operating lease right-of-use assets | |||||||||||
| Intangible assets, net | |||||||||||
| Goodwill | |||||||||||
| Other assets, net | |||||||||||
| Total assets | $ | $ | |||||||||
| Current liabilities: | |||||||||||
| Current portion of long-term debt | $ | $ | |||||||||
| Accounts payable | |||||||||||
| Accrued expenses and other current liabilities | |||||||||||
| Current liabilities of discontinued operations | |||||||||||
| Total current liabilities | |||||||||||
| Long-term debt | |||||||||||
| Deferred taxes and long-term liabilities | |||||||||||
| Operating lease liabilities | |||||||||||
| Total liabilities | |||||||||||
| Commitments and contingencies (see Note 13) | |||||||||||
| Stockholders’ equity: | |||||||||||
| Preferred stock—$1 par value per share, authorized 1,000,000 shares; none issued or outstanding | |||||||||||
| Common stock—$1 par value per share, authorized 300,000,000 shares; issued and outstanding 125,981,000 shares and 126,300,000 shares at April 2, 2023 and January 1, 2023, respectively | |||||||||||
| Capital in excess of par value | |||||||||||
| Retained earnings | |||||||||||
| Accumulated other comprehensive loss | ( | ( | |||||||||
| Total stockholders’ equity | |||||||||||
| Total liabilities and stockholders’ equity | $ | $ | |||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
6
REVVITY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Unaudited)
For the Three-Month Period Ended April 2, 2023 | |||||||||||||||||||||||||||||||||||
| Common Stock Shares | Common Stock Amount | Capital in Excess of Par Value | Retained Earnings | Accumulated Other Comprehensive Loss | Total Stockholders’ Equity | ||||||||||||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||||||||||||||
| Balance, January 1, 2023 | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||
| Net income | — | — | — | ||||||||||||||||||||||||||||||||
| Other comprehensive income | — | — | — | ||||||||||||||||||||||||||||||||
| Dividends | — | — | ( | — | ( | ||||||||||||||||||||||||||||||
| Exercise of employee stock options | — | — | |||||||||||||||||||||||||||||||||
| Purchases of common stock | ( | ( | ( | — | — | ( | |||||||||||||||||||||||||||||
| Issuance of common stock for long-term incentive program | — | — | |||||||||||||||||||||||||||||||||
| Stock compensation | |||||||||||||||||||||||||||||||||||
| Balance, April 2, 2023 | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||
For the Three-Month Period Ended April 3, 2022 | |||||||||||||||||||||||||||||||||||
| Common Stock Shares | Common Stock Amount | Capital in Excess of Par Value | Retained Earnings | Accumulated Other Comprehensive Loss | Total Stockholders’ Equity | ||||||||||||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||||||||||||||
| Balance, January 2, 2022 | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||
| Net income | — | — | — | ||||||||||||||||||||||||||||||||
| Other comprehensive loss | — | — | — | ( | ( | ||||||||||||||||||||||||||||||
| Dividends | — | — | ( | — | ( | ||||||||||||||||||||||||||||||
| Exercise of employee stock options | — | — | |||||||||||||||||||||||||||||||||
| Purchases of common stock | ( | ( | ( | — | — | ( | |||||||||||||||||||||||||||||
| Issuance of common stock for long-term incentive program | — | — | |||||||||||||||||||||||||||||||||
| Stock compensation | |||||||||||||||||||||||||||||||||||
| Balance, April 3, 2022 | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
7
REVVITY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| Three Months Ended | |||||||||||
| April 2, 2023 | April 3, 2022 | ||||||||||
| (In thousands) | |||||||||||
| Operating activities: | |||||||||||
| Net income | $ | $ | |||||||||
| (Income) loss from discontinued operations, net of income taxes | ( | ||||||||||
| Income from continuing operations | |||||||||||
| Adjustments to reconcile income from continuing operations to net cash provided by continuing operations: | |||||||||||
| Stock-based compensation | |||||||||||
| Restructuring and other costs, net | |||||||||||
| Depreciation and amortization | |||||||||||
| Change in fair value of contingent consideration | ( | ||||||||||
| Amortization of deferred debt financing costs and accretion of discounts | |||||||||||
| Change in fair value of financial securities | ( | ||||||||||
| Debt extinguishment (income) loss | ( | ||||||||||
| Unrealized foreign exchange loss | |||||||||||
| Amortization of acquired inventory revaluation | |||||||||||
| Changes in assets and liabilities which provided (used) cash, excluding effects from companies acquired: | |||||||||||
| Accounts receivable, net | |||||||||||
| Inventories | ( | ( | |||||||||
| Accounts payable | ( | ||||||||||
| Accrued expenses and other | ( | ( | |||||||||
| Net cash provided by operating activities of continuing operations | |||||||||||
| Net cash used in operating activities of discontinued operations | ( | ( | |||||||||
| Net cash provided by operating activities | |||||||||||
| Investing activities: | |||||||||||
| Capital expenditures | ( | ( | |||||||||
| Purchases of investments | ( | ||||||||||
| Purchases of marketable securities | ( | ||||||||||
| Cash paid for acquisitions, net of cash acquired | ( | ( | |||||||||
| Net cash used in investing activities of continuing operations | ( | ( | |||||||||
| Net cash provided by (used in) investing activities of discontinued operations | ( | ||||||||||
| Net cash provided by (used in) investing activities | ( | ||||||||||
| Financing activities: | |||||||||||
8
| Payments on borrowings | ( | ||||||||||
| Proceeds from borrowings | |||||||||||
| Payments of term loan | ( | ||||||||||
| Payments of senior unsecured notes | ( | ||||||||||
| Settlement of cash flow hedges | ( | ||||||||||
| Net proceeds (payments) on other credit facilities | ( | ||||||||||
| Payments for acquisition-related contingent consideration | ( | ||||||||||
| Proceeds from issuance of common stock under stock plans | |||||||||||
| Purchases of common stock | ( | ( | |||||||||
| Dividends paid | ( | ( | |||||||||
| Net cash used in financing activities | ( | ( | |||||||||
| Effect of exchange rate changes on cash, cash equivalents and restricted cash | ( | ( | |||||||||
| Net increase in cash, cash equivalents and restricted cash | |||||||||||
| Cash, cash equivalents and restricted cash at beginning of period | |||||||||||
| Cash, cash equivalents and restricted cash at end of period | $ | $ | |||||||||
| Supplemental disclosures of cash flow information | |||||||||||
| Reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets that sum to the total shown in the condensed consolidated statements of cash flows: | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
| Restricted cash included in other current assets | |||||||||||
| Restricted cash included in other assets | |||||||||||
| Cash and cash equivalents included in current assets of discontinued operations | |||||||||||
| Total cash, cash equivalents and restricted cash shown in the condensed consolidated statements of cash flows | $ | $ | |||||||||
| Supplemental disclosures of non-cash investing and financing activities: | |||||||||||
| Non-cash consideration in sale of business | $ | $ | |||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
9
REVVITY, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1: Basis of Presentation
Note 2: Revenue
Disaggregation of revenue
In the following tables, revenue is disaggregated by primary geographical markets and primary end-markets.
| Reportable Segments | |||||||||||||||||||||||||||||||||||
| Three Months Ended | |||||||||||||||||||||||||||||||||||
| April 2, 2023 | April 3, 2022 | ||||||||||||||||||||||||||||||||||
| Life Sciences | Diagnostics | Total | Life Sciences | Diagnostics | Total | ||||||||||||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||||||||||||||
| Primary geographical markets | |||||||||||||||||||||||||||||||||||
| Americas | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Europe | |||||||||||||||||||||||||||||||||||
| Asia | |||||||||||||||||||||||||||||||||||
| $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
| Primary end-markets | |||||||||||||||||||||||||||||||||||
| Life sciences | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Diagnostics | |||||||||||||||||||||||||||||||||||
| $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
Major Customer Concentration
Revenues from one customer in the Company’s Diagnostics segment represent approximately $112.7 million of the Company’s total revenue for the three months ended April 3, 2022. No single customer comprises more than 10% of net revenues for the three months ended April 2, 2023.
10
Contract assets: The unbilled receivables (contract assets) primarily relate to the Company’s right to consideration for work completed but not billed at the reporting date. The unbilled receivables are transferred to trade receivables when billed to customers. Contract assets are generally classified as current assets and are included in “Accounts receivable, net” in the condensed consolidated balance sheets.
Contract liabilities: The contract liabilities primarily relate to the advance consideration received from customers for products and related services for which transfer of control has not occurred at the balance sheet date. Contract liabilities are classified as either current in “Accounts payable” or “Accrued expenses and other current liabilities” or as long-term in “Long-term liabilities” in the condensed consolidated balance sheets based on the timing of when the Company expects to recognize revenue. The contract liability balances at the beginning of each period presented were generally fully recognized in the subsequent three month period.
Contract balances were as follows:
| April 2, 2023 | January 1, 2023 | ||||||||||
| (In thousands) | |||||||||||
| Contract assets | $ | $ | |||||||||
| Contract liabilities | ( | ( | |||||||||
Note 3: Discontinued Operations
On March 13, 2023, the Company completed the previously announced sale (the “Closing”) of its Applied, Food and Enterprise Services businesses (the “Business”) to PerkinElmer Topco, L.P. (formerly known as Polaris Purchaser, L.P.) (the “Purchaser”), a Delaware limited partnership owned by funds managed by affiliates of New Mountain Capital L.L.C. (the “Sponsor”), for an aggregate purchase price of up to $2.45 billion. Upon the Closing, the Company received approximately $2.14 billion in cash proceeds, before transaction costs and subject to post-closing adjustments. The Company is entitled to an additional $75.0 million in proceeds that will be paid to the Company in connection with the transfer of the PerkinElmer brand and related trademarks to the Purchaser, and this consideration will be paid to the Company in installments over the next 24 months. The discounted value of the $75.0 million was measured as $68.0 million and is included in the proceeds at Closing. In addition, the Company is entitled to additional consideration of up to $150.0 million that is contingent on the exit valuation the Sponsor and its affiliated funds receive on a sale or other capital events related to the Business. The fair value of this element of consideration was determined to be $15.9 million and was included in the proceeds at Closing. The Company also recorded a receivable of approximately $177.5 million for working capital adjustments that are expected to be settled with the Purchaser during the second half of fiscal year 2023. In the first quarter ended April 2, 2023, the Company recognized a pre-tax gain on the disposal of the Business totaling $866.9 million and income tax expense of $299.6 million related to the transaction in discontinued operations.
As the Company is in the process of measuring the calculation of the gain on sale and related income tax provision, additional adjustments may arise that may impact the final measurement of the gain recognized. The elements of the gain calculation that may result in adjustments include the measurement of the proceeds, including the settlement of the working capital adjustment, determination of the basis of certain assets and liabilities, as well as the provision for income taxes.
In connection and concurrent with the Closing, the Company has also entered into a Transition Services Agreement with the Purchaser for a period of up to 24 months and a Contract Manufacturing Agreement for two locations for a period of up to 6 months from the Closing. Commercial transactions between the parties following the Closing are not expected to be significant.
The Business is reported for all periods as discontinued operations in the Company’s condensed consolidated financial statements. The following table summarizes the results of discontinued operations which are presented as Income from discontinued operations in the Company’s condensed consolidated statements of operations:
11
| Three Months Ended | |||||||||||||||||||||||
| April 2, 2023 | April 3, 2022 | ||||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||
| Revenue | $ | $ | |||||||||||||||||||||
| Cost of revenue | |||||||||||||||||||||||
| Selling, general and administrative expenses | |||||||||||||||||||||||
| Research and development expenses | |||||||||||||||||||||||
| Operating loss | ( | ( | |||||||||||||||||||||
| Other income (expense): | |||||||||||||||||||||||
| Gain on sale | 866,919 | ||||||||||||||||||||||
| Other income (expense), net | ( | ||||||||||||||||||||||
| Total other income (expense) | ( | ||||||||||||||||||||||
| Income (loss) from discontinued operations before income taxes | ( | ||||||||||||||||||||||
| Provision for (benefit from) income tax | ( | ||||||||||||||||||||||
| Income (loss) from discontinued operations | $ | $ | ( | ||||||||||||||||||||
The table below provides a reconciliation of the carrying amounts of the major classes of assets and liabilities of the discontinued operations to the amounts presented separately in the consolidated balance sheets at April 2, 2023 and January 1, 2023.
| April 2, 2023 | January 1, 2023 | ||||||||||
| (In thousands) | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
| Accounts receivable | |||||||||||
| Inventories | |||||||||||
| Other current assets | |||||||||||
| Total current assets | |||||||||||
| Property, plant and equipment, net | |||||||||||
| Operating lease right-of-use assets | |||||||||||
| Intangible assets, net | |||||||||||
| Goodwill | |||||||||||
| Other assets, net | |||||||||||
Total long-term assets | |||||||||||
Total assets of discontinued operations | $ | $ | |||||||||
| Accounts payable | $ | $ | |||||||||
| Accrued expenses and other current liabilities | |||||||||||
| Total current liabilities | |||||||||||
| Deferred taxes and long-term liabilities | |||||||||||
| Operating lease liabilities | |||||||||||
| Total long-term liabilities | |||||||||||
| Total liabilities of discontinued operations | $ | $ | |||||||||
12
The following operating and investing non-cash items from discontinued operations were as follows for the three months ended:
| April 2, 2023 | April 3, 2022 | ||||||||||
| (In thousands) | |||||||||||
| Capital expenditures | $ | $ | |||||||||
Depreciation | |||||||||||
Amortization | |||||||||||
Note 4: Interest and Other Expense, Net
Interest and other expense, net, consisted of the following:
| Three Months Ended | |||||||||||||||||||||||
| April 2, 2023 | April 3, 2022 | ||||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||
| Interest income | $ | ( | $ | ( | |||||||||||||||||||
| Interest expense | |||||||||||||||||||||||
| Change in fair value of financial securities | ( | ||||||||||||||||||||||
| Other components of net periodic pension cost (credit) | ( | ||||||||||||||||||||||
| Foreign exchange losses and other expense (income), net | ( | ||||||||||||||||||||||
| Total interest and other expense, net | $ | $ | |||||||||||||||||||||
During the three months ended April 2, 2023, foreign exchange losses of $26.1 million related to the cash proceeds from the sale of the Business that was held offshore is included in Other expense (income), net.
Note 5: Inventories
Inventories consisted of the following:
| April 2, 2023 | January 1, 2023 | ||||||||||
| (In thousands) | |||||||||||
| Raw materials | $ | $ | |||||||||
| Work in progress | |||||||||||
| Finished goods | |||||||||||
| Total inventories | $ | $ | |||||||||
13
Note 6: Debt
The Company’s debt consisted of the following:
| April 2, 2023 | |||||||||||||||||||||||
| Outstanding Principal | Unamortized Debt Discount | Unamortized Debt Issuance Costs | Net Carrying Amount | ||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
| Long-Term Debt: | |||||||||||||||||||||||
| Senior Unsecured Revolving Credit Facility | $ | $ | $ | ( | $ | ( | |||||||||||||||||
0.850% Senior Unsecured Notes due in 2024 (“2024 Notes”) | ( | ( | |||||||||||||||||||||
€500,000 Principal 1.875% Senior Unsecured Notes due in 2026 (“2026 Notes”) | ( | ( | |||||||||||||||||||||
1.900% Senior Unsecured Notes due in 2028 (“2028 Notes”) | ( | ( | |||||||||||||||||||||
3.3% Senior Unsecured Notes due in 2029 (“2029 Notes”) | ( | ( | |||||||||||||||||||||
| 2.55% Senior Unsecured Notes due in March 2031 ("March 2031 Notes") | ( | ( | |||||||||||||||||||||
2.250% Senior Unsecured Notes due in September 2031 (“September 2031 Notes”) | ( | ( | |||||||||||||||||||||
3.625% Senior Unsecured Notes due in 2051 (“2051 Notes”) | ( | ( | |||||||||||||||||||||
| Other Debt Facilities, non-current | |||||||||||||||||||||||
| Total Long-Term Debt | $ | $ | ( | $ | ( | $ | |||||||||||||||||
| Current Portion of Long-term Debt: | |||||||||||||||||||||||
0.550% Senior Unsecured Notes due in 2023 (“2023 Notes”) | ( | ( | |||||||||||||||||||||
| Other Debt Facilities, current | |||||||||||||||||||||||
| Total Current Portion of Long-Term Debt | ( | ( | |||||||||||||||||||||
| Total | $ | $ | ( | $ | ( | $ | |||||||||||||||||
During the first quarter of fiscal year 2023, the Company repurchased $49.6 million in aggregate principal amount of the 2024 Notes in open market transactions. Subsequent to the first quarter of fiscal year 2023, the Company repurchased $0.8 million in aggregate principal amount of the 2024 Notes in open market transactions. During the first quarter of fiscal year 2023, the Company purchased U.S. treasury securities whose proceeds upon maturity are intended to be utilized to repay outstanding debt securities (see Note 12).
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| January 1, 2023 | |||||||||||||||||||||||
| Outstanding Principal | Unamortized Debt Discount | Unamortized Debt Issuance Costs | Net Carrying Amount | ||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
| Long-Term Debt: | |||||||||||||||||||||||
| Senior Unsecured Revolving Credit Facility | $ | $ | $ | ( | $ | ( | |||||||||||||||||
| 2024 Notes | ( | ( | |||||||||||||||||||||
| 2026 Notes | ( | ( | |||||||||||||||||||||
| 2028 Notes | ( | ( | |||||||||||||||||||||
| 2029 Notes | ( | ( | |||||||||||||||||||||
| March 2031 Notes | ( | ( | |||||||||||||||||||||
| September 2031 Notes | ( | ( | |||||||||||||||||||||
| 2051 Notes | ( | ( | |||||||||||||||||||||
| Other Debt Facilities, non-current | |||||||||||||||||||||||
| Total Long-Term Debt | ( | ( | |||||||||||||||||||||
| Current Portion of Long-term Debt: | |||||||||||||||||||||||
2023 Notes | ( | ( | |||||||||||||||||||||
| Other Debt Facilities, current | |||||||||||||||||||||||
| Total Current Portion of Long-Term Debt | ( | ( | |||||||||||||||||||||
| Total | $ | $ | ( | $ | ( | $ | |||||||||||||||||
Note 7: Earnings Per Share
Basic earnings per share was computed by dividing net income by the weighted-average number of common shares outstanding during the period less restricted unvested shares. Diluted earnings per share was computed by dividing net income by the weighted-average number of common shares outstanding plus all potentially dilutive common stock equivalents, primarily shares issuable upon the exercise of stock options using the treasury stock method. The following table reconciles the number of shares utilized in the earnings per share calculations:
| Three Months Ended | |||||||||||||||||||||||
| April 2, 2023 | April 3, 2022 | ||||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||
| Number of common shares—basic | |||||||||||||||||||||||
| Effect of dilutive securities: | |||||||||||||||||||||||
| Stock options | |||||||||||||||||||||||
| Restricted stock awards | |||||||||||||||||||||||
| Number of common shares—diluted | |||||||||||||||||||||||
| Number of potentially dilutive securities excluded from calculation due to antidilutive impact | |||||||||||||||||||||||
Antidilutive securities include outstanding stock options with exercise prices and average unrecognized compensation cost in excess of the average fair market value of common stock for the related period. Antidilutive options were excluded from the calculation of diluted net income per share and could become dilutive in the future.
Note 8: Segment Information
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significant. The accounting policies of the operating segments are the same as those described in Note 1, Nature of Operations and Accounting Policies, to the audited consolidated financial statements in the 2022 Form 10-K.
The principal products and services of the Company’s two operating segments are:
•Life Sciences. As a result of the sale of the Business, the former Discovery & Analytical Solutions segment will now be referred to as the Life Sciences segment. This segment provides products and services targeted towards the life sciences market.
•Diagnostics. Develops diagnostics, tools and applications focused on clinically-oriented customers, especially within the reproductive health, immunodiagnostics and applied genomics markets.
The Company has included the expenses for its corporate headquarters, such as legal, tax, audit, human resources, information technology, and other management and compliance costs, as well as the activity related to the mark-to-market adjustment on postretirement benefit plans, as “Corporate” below. The Company has a process to allocate and recharge expenses to the reportable segments when these costs are administered or paid by the corporate headquarters based on the extent to which the segment benefited from the expenses. These amounts have been calculated in a consistent manner and are included in the Company’s calculations of segment results to internally plan and assess the performance of each segment for all purposes, including determining the compensation of the business leaders for each of the Company’s operating segments.
The primary financial measure by which the Company evaluates the performance of its segments is adjusted operating income, which consists of operating income plus amortization of intangible assets, adjustments to operations arising from purchase accounting (primarily adjustments to the fair value of acquired inventory that are subsequently recognized), acquisition and divestiture-related costs, and other costs that are not expected to recur or are of a non-cash nature, including primarily restructuring actions.
Revenue and operating income (loss) from continuing operations by operating segment are shown in the table below:
| Three Months Ended | |||||||||||||||||||||||
| April 2, 2023 | April 3, 2022 | ||||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||
| Revenues | |||||||||||||||||||||||
| Life Sciences | $ | $ | |||||||||||||||||||||
| Diagnostics | |||||||||||||||||||||||
| Revenue purchase accounting adjustments | ( | ( | |||||||||||||||||||||
| Total revenues | $ | $ | |||||||||||||||||||||
| Segment Operating Income | |||||||||||||||||||||||
| Life Sciences | $ | $ | |||||||||||||||||||||
| Diagnostics | |||||||||||||||||||||||
| Corporate | ( | ( | |||||||||||||||||||||
| Subtotal reportable segments operating income | |||||||||||||||||||||||
| Amortization of intangible assets | ( | ( | |||||||||||||||||||||
| Purchase accounting adjustments | ( | ||||||||||||||||||||||
| Acquisition and divestiture-related costs | ( | ( | |||||||||||||||||||||
| Significant litigation matters and settlements | ( | ||||||||||||||||||||||
| Significant environmental matters | ( | ||||||||||||||||||||||
| Restructuring and other, net | ( | ( | |||||||||||||||||||||
| Operating income from continuing operations | |||||||||||||||||||||||
| Interest and other expense, net (see Note 4) | |||||||||||||||||||||||
| Income from continuing operations before income taxes | $ | $ | |||||||||||||||||||||
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Note 9: Stockholders’ Equity
Comprehensive Income:
The components of accumulated other comprehensive loss consisted of the following:
| April 2, 2023 | January 1, 2023 | ||||||||||
| (In thousands) | |||||||||||
| Foreign currency translation adjustments, net of income taxes | $ | ( | $ | ( | |||||||
| Unrecognized prior service costs, net of income taxes | ( | ( | |||||||||
| Unrealized net gains (losses) on marketable securities, net of income taxes | ( | ||||||||||
| Accumulated other comprehensive loss | $ | ( | $ | ( | |||||||
Stock Repurchases:
On July 22, 2022, the Company’s Board of Directors (the “Board”) authorized the Company to repurchase shares of common stock for an aggregate amount up to $300.0 million under a stock repurchase program (the “Repurchase Program”). During the three months ended April 2, 2023, the Company repurchased 450,238 shares of common stock under the Repurchase Program for an aggregate cost of $57.9 million. Subsequent to the first quarter of fiscal year 2023, the Company repurchased 554,306 shares of common stock under the Repurchase Program at an aggregate cost of $73.3 million.
On April 27, 2023, the Repurchase Program was terminated by the Board and the Board authorized the Company to repurchase shares of common stock for an aggregate amount up to $600.0 million under a new stock repurchase program (the “New Repurchase Program”). No shares remain available for repurchase under the Repurchase Program due to its termination. The New Repurchase Program will expire on April 26, 2025 unless terminated earlier by the Board and may be suspended or discontinued at any time.
In addition, the Board has authorized the Company to repurchase shares of common stock to satisfy minimum statutory tax withholding obligations in connection with the vesting of restricted stock awards and restricted stock unit awards granted pursuant to the Company’s equity incentive plans and to satisfy obligations related to the exercise of stock options made pursuant to the Company’s equity incentive plans. During the three months ended April 2, 2023, the Company repurchased 65,993 shares of common stock for this purpose at an aggregate cost of $9.0 million. The repurchased shares have been reflected as additional authorized but unissued shares, with the payments reflected in common stock and capital in excess of par value.
Dividends:
The Board declared a regular quarterly cash dividend of $0.07 per share for the first quarter of fiscal year 2023 and in each quarter of fiscal year 2022. At April 2, 2023, the Company had accrued $8.8 million for dividends declared on January 26, 2023 for the first quarter of fiscal year 2023 that will be paid in May 2023. On April 25, 2023, the Company announced that the Board had declared a quarterly dividend of $0.07 per share for the second quarter of fiscal year 2023 that will be payable in August 2023. In the future, the Board may determine to reduce or eliminate the Company’s common stock dividend in order to fund investments for growth, repurchase shares or conserve capital resources.
Note 10: Goodwill and Intangible Assets, Net
The Company tests goodwill and indefinite-lived intangible assets at least annually for possible impairment. The Company completes the annual testing of impairment for goodwill and indefinite-lived intangible assets on the later of January 1 or the first day of each fiscal year. In addition to its annual test, the Company regularly evaluates whether events or circumstances have occurred that may indicate a potential impairment of goodwill or indefinite-lived intangible assets.
The process of testing goodwill for impairment involves the determination of the fair value of the applicable reporting units. The test consists of the comparison of the fair value to the carrying value of the reporting unit to determine if the carrying value exceeds the fair value. If the carrying value of the reporting unit exceeds its fair value, an impairment loss in an amount equal to that excess is recognized up to the amount of goodwill. The Company performed its annual impairment testing for its reporting units as of January 2, 2023 , its annual impairment testing date for fiscal year 2023. There were no impairments measured in the periods presented. While the Company believes that its estimates of current value are reasonable, if actual results differ from the estimates and judgments used, including such items as future cash flows and the volatility inherent in markets which the Company serves, impairment charges against the carrying value of those assets could be required in the future.
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The changes in the carrying amount of goodwill for the three months ended April 2, 2023 were as follows:
| Life Sciences | Diagnostics | Consolidated | |||||||||||||||
| (In thousands) | |||||||||||||||||
| Balance at January 1, 2023 | $ | $ | $ | ||||||||||||||
| Foreign currency translation | |||||||||||||||||
| Balance at April 2, 2023 | $ | $ | $ | ||||||||||||||
Identifiable intangible asset balances by category were as follows:
| April 2, 2023 | January 1, 2023 | ||||||||||
| (In thousands) | |||||||||||
| Patents | $ | $ | |||||||||
| Less: Accumulated amortization | ( | ( | |||||||||
| Net patents | |||||||||||
| Trade names and trademarks | |||||||||||
| Less: Accumulated amortization | ( | ( | |||||||||
| Net trade names and trademarks | |||||||||||
| Licenses | |||||||||||
| Less: Accumulated amortization | ( | ( | |||||||||
| Net licenses | |||||||||||
| Core technology | |||||||||||
| Less: Accumulated amortization | ( | ( | |||||||||
| Net core technology | |||||||||||
| Customer relationships | |||||||||||
| Less: Accumulated amortization | ( | ( | |||||||||
| Net customer relationships | |||||||||||
| In-process research and development | |||||||||||
| Total | $ | $ | |||||||||
Note 11: Derivatives and Hedging Activities
The Company uses derivative instruments as part of its risk management strategy only, and includes derivatives utilized as economic hedges that are not designated as hedging instruments. By nature, all financial instruments involve market and credit risks. The Company enters into derivative instruments with major investment grade financial institutions and has policies to monitor the credit risk of those counterparties. The Company does not enter into derivative contracts for trading or other speculative purposes, nor does the Company use leveraged financial instruments. Approximately 50 % of the Company’s business is conducted outside of the United States, generally in foreign currencies. As a result, fluctuations in foreign currency exchange rates can increase the costs of financing, investing and operating the business.
In the ordinary course of business, the Company enters into foreign exchange contracts for periods consistent with its committed exposures to mitigate the effect of foreign currency movements on transactions denominated in foreign currencies. The intent of these economic hedges is to offset gains and losses that occur on the underlying exposures from these currencies, with gains and losses resulting from the forward currency contracts that hedge these exposures. Transactions covered by hedge contracts include intercompany and third-party receivables and payables. The contracts are primarily in European and Asian currencies, have maturities that do not exceed 12 months, have no cash requirements until maturity, and are recorded at fair value on the Company’s condensed consolidated balance sheets. The unrealized gains and losses on the Company’s foreign currency contracts are recognized immediately in interest and other expense, net. The cash flows related to the settlement of
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these hedges are included in cash flows from operating activities within the Company’s condensed consolidated statement of cash flows.
Principal hedged currencies include the Chinese Renminbi, British Pound, Euro and Singapore Dollar. The Company held forward foreign exchange contracts, designated as economic hedges, with U.S. dollar equivalent notional amounts totaling $291.4 million, $476.9 million and $376.6 million at April 2, 2023, January 1, 2023 and April 3, 2022, respectively, and the fair value of these foreign currency derivative contracts was insignificant. The gains and losses realized on these foreign currency derivative contracts are not material. The duration of these contracts was generally 30 days or less during each of the three months ended April 2, 2023 and April 3, 2022.
In addition, in connection with certain intercompany loan agreements utilized to finance its acquisitions and stock repurchase program, the Company enters into forward foreign exchange contracts intended to hedge movements in foreign exchange rates prior to settlement of such intercompany loans denominated in foreign currencies. The Company records these hedges at fair value on the Company’s condensed consolidated balance sheets. The unrealized gains and losses on these hedges, as well as the gains and losses associated with the remeasurement of the intercompany loans, are recognized immediately in interest and other expense, net. The cash flows related to the settlement of these hedges are included in cash flows from financing activities within the Company’s condensed consolidated statement of cash flows.
During fiscal year 2018, the Company designated a portion of the 2026 Notes to hedge its net investments in certain foreign subsidiaries. Unrealized translation adjustments from a portion of the 2026 Notes were included in the foreign currency translation component of accumulated other comprehensive income (“AOCI”), which offsets translation adjustments on the underlying net assets of foreign subsidiaries. The cumulative translation gains or losses will remain in AOCI until the foreign subsidiaries are liquidated or sold. As of April 2, 2023, the total notional amount of the 2026 Notes that was designated to hedge net investments in foreign subsidiaries was €497.2 million. The unrealized foreign exchange losses (gains) recorded in AOCI related to the net investment hedge were $9.3 million and $(16.7 ) million for the three months ended April 2, 2023 and April 3, 2022, respectively.
The Company does no t expect any material net pre-tax gains or losses to be reclassified from accumulated other comprehensive loss into interest and other expense, net within the next twelve months.
Note 12: Fair Value Measurements
Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash equivalents, derivatives, marketable securities and accounts receivable. The Company believes it had no significant concentrations of credit risk as of April 2, 2023.
The Company uses the market approach technique to value its financial instruments and there were no changes in valuation techniques during the three months ended April 2, 2023. The Company’s financial assets and liabilities carried at fair value are primarily comprised of marketable securities, derivative contracts used to hedge the Company’s currency risk, and acquisition and divestiture related contingent consideration. The Company has not elected to measure any additional financial instruments or other items at fair value.
Valuation Hierarchy: The following summarizes the three levels of inputs required to measure fair value. For Level 1 inputs, the Company utilizes quoted market prices as these instruments have active markets. For Level 2 inputs, the Company utilizes quoted market prices in markets that are not active, broker or dealer quotations, or utilizes alternative pricing sources with reasonable levels of price transparency. For Level 3 inputs, the Company utilizes unobservable inputs based on the best information available, including estimates by management primarily based on information provided by third-party fund managers, independent brokerage firms and insurance companies. A financial asset’s or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible.
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The following tables show the assets and liabilities carried at fair value measured on a recurring basis as of April 2, 2023 and January 1, 2023 classified in one of the three classifications described above:
| Fair Value Measurements at April 2, 2023 Using: | |||||||||||||||||||||||
| Total Carrying Value at April 2, 2023 | Quoted Prices in Active Markets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||
| Marketable securities - equity securities | $ | $ | $ | $ | |||||||||||||||||||
| Marketable securities - U.S. treasury securities | |||||||||||||||||||||||
| Foreign exchange derivative assets | |||||||||||||||||||||||
| Foreign exchange derivative liabilities | ( | ( | |||||||||||||||||||||
| Contingent consideration assets | |||||||||||||||||||||||
| Contingent consideration liabilities | ( | ( | |||||||||||||||||||||
| Fair Value Measurements at January 1, 2023 Using: | |||||||||||||||||||||||
| Total Carrying Value at January 1, 2023 | Quoted Prices in Active Markets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||
| Marketable securities | $ | $ | $ | $ | |||||||||||||||||||
| Foreign exchange derivative assets | |||||||||||||||||||||||
| Foreign exchange derivative liabilities | ( | ( | |||||||||||||||||||||
| Contingent consideration liabilities | ( | ( | |||||||||||||||||||||
Level 1 and Level 2 Valuation Techniques: The Company’s Level 1 and Level 2 assets and liabilities are comprised of investments in equity, fixed-income and U.S. treasury securities as well as derivative contracts. For financial assets and liabilities that utilize Level 1 and Level 2 inputs, the Company utilizes both direct and indirect observable price quotes, including common stock price quotes, foreign exchange forward prices and bank price quotes. Below is a summary of valuation techniques for Level 1 and Level 2 financial assets and liabilities.
Marketable securities - equity securities: Include equity and fixed-income securities measured at fair value using the quoted market prices in active markets at the reporting date.
Marketable securities - U.S. treasury securities: Include investments in U.S. treasury securities that are classified as held-to-maturity and measured at fair value using the quoted market prices at the reporting date. Investments amounting to $99.2 million had a contractual maturity of less than one year as of April 2, 2023. Investments amounting to $94.8 million had a contractual maturity of more than one year and less than 2 years as of April 2, 2023.
Foreign exchange derivative assets and liabilities: Include foreign exchange derivative contracts that are valued using quoted forward foreign exchange prices at the reporting date. The Company’s foreign exchange derivative contracts are subject to master netting arrangements that allow the Company and its counterparties to net settle amounts owed to each other. Derivative assets and liabilities that can be net settled under these arrangements have been presented in the Company’s condensed consolidated balance sheet on a net basis and are recorded in other assets. As of both April 2, 2023 and January 1, 2023, none of the master netting arrangements involved collateral.
Level 3 Valuation Techniques: The Company’s Level 3 assets and liabilities are comprised of contingent consideration related to the sale of the Business (see note 4) and acquisitions. For assets and liabilities that utilize Level 3 inputs, the Company uses significant unobservable inputs. Below is a summary of valuation techniques for Level 3 assets and liabilities.
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Contingent consideration: Contingent consideration is measured at fair value at the disposition or acquisition date using projected milestone dates, discount rates, volatility, probabilities of success and projected achievement of financial targets, including revenues of the acquired business in many instances. Projected risk-adjusted contingent payments are discounted back to the current period using a discounted cash flow model.
The fair value of the contingent consideration asset was initially measured using a lattice model and recognized upon the sale of the Business on March 13, 2023. In accordance with the terms of the sale of the Business, the Company is entitled to receive up to $150.0 million that is contingent on the exit valuation the Sponsor and its affiliated funds receive on a sale or other capital event related to the Business. Potential valuation adjustments may be made as additional information and market factors that impact the expected exit valuation of the Business becomes available, with the impact of such adjustments being recorded in the Company’s condensed consolidated statements of operations.
A reconciliation of the contingent consideration assets is as follows:
| Three Months Ended | |||||||||||||||||||||||
| April 2, 2023 | |||||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||
| Balance at beginning of period | $ | ||||||||||||||||||||||
| Amount recognized upon the sale of the Business | |||||||||||||||||||||||
| Change in fair value | |||||||||||||||||||||||
| Balance at end of period | $ | ||||||||||||||||||||||
The fair values of contingent consideration liabilities are calculated on a quarterly basis based on a collaborative effort of the Company’s operations, finance and accounting groups, as appropriate. Potential valuation adjustments are made as additional information becomes available, including the progress towards achieving the revenue targets, with the impact of such adjustments being recorded in the Company’s condensed consolidated statements of operations.
A reconciliation of the contingent consideration liabilities is as follows:
| Three Months Ended | |||||||||||||||||||||||
| April 2, 2023 | April 3, 2022 | ||||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||
| Balance at beginning of period | $ | ( | $ | ( | |||||||||||||||||||
| Additions | ( | ||||||||||||||||||||||
| Amounts paid and foreign currency translation | |||||||||||||||||||||||
| Adjustments recognized in goodwill | |||||||||||||||||||||||
| Change in fair value (included within selling, general and administrative expenses) | ( | ||||||||||||||||||||||
| Balance at end of period | $ | ( | $ | ( | |||||||||||||||||||
Financial Instruments Not Recorded at Fair Value
The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable and accrued expenses approximate fair value due to the short-term maturities of these assets and liabilities. If measured at fair value, cash and cash equivalents would be classified as Level 1.
The Company’s outstanding senior unsecured notes had a fair value of $3,859.4 million and a carrying value of $4,348.7 million as of April 2, 2023. The Company’s outstanding senior unsecured notes had a fair value of $3,812.3 million and a carrying value of $4,390.5 million as of January 1, 2023. The fair values of the outstanding senior unsecured notes were estimated using market quotes from brokers and were based on current rates offered for similar debt, which are Level 2 measurements.
The Company’s other debt facilities had an aggregate carrying value of $11.7 million and $3.7 million as of April 2, 2023 and January 1, 2023, respectively. The carrying value approximates fair value and were classified as Level 2.
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Note 13: Contingencies
The Company is conducting a number of environmental investigations and remedial actions at current and former locations of the Company and, along with other companies, has been named a potentially responsible party (“PRP”) for certain waste disposal sites. The Company accrues for environmental issues in the accounting period that the Company’s responsibility is established and when the cost can be reasonably estimated. The Company has accrued $13.5 million and $12.2 million as of April 2, 2023 and January 1, 2023, respectively, which represents its management’s estimate of the cost of the remediation of known environmental matters and does not include any potential liability for related personal injury or property damage claims. These amounts were included in accrued expenses and other current liabilities. The Company’s environmental accrual is not discounted and does not reflect the recovery of any material amounts through insurance or indemnification arrangements. The cost estimates are subject to a number of variables, including the stage of the environmental investigations, the magnitude of the possible contamination, the nature of the potential remedies, possible joint and several liability, the time period over which remediation may occur, and the possible effects of changing laws and regulations. For sites where the Company has been named a PRP, management does not currently anticipate any additional liability to result from the inability of other significant named parties to contribute. The Company expects that the majority of such accrued amounts could be paid out over a period of up to ten years. As assessment and remediation activities progress at each individual site, these liabilities are reviewed and adjusted to reflect additional information as it becomes available. There have been no environmental problems to date that have had, or are expected to have, a material adverse effect on the Company’s condensed consolidated financial statements. While it is possible that a loss exceeding the amounts recorded in the condensed consolidated financial statements may be incurred, the potential exposure is not expected to be materially different from those amounts recorded.
The Company is subject to various claims, legal proceedings, regulatory matters, and investigations covering a wide range of matters that arise in the ordinary course of its business activities. Although the Company has established accruals for potential losses that it believes are probable and reasonably estimable, in the opinion of the Company’s management, based on its review of the information available at this time, the total cost of resolving these contingencies at April 2, 2023 would not have a material adverse effect on the Company’s consolidated financial statements. However, each of these matters is subject to uncertainties, and it is possible that some of these matters may be resolved unfavorably to the Company.
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Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations
This quarterly report on Form 10-Q, including the following management’s discussion and analysis, contains forward-looking information that you should read in conjunction with the condensed consolidated financial statements and notes to the condensed consolidated financial statements that we have included elsewhere in this report. For this purpose, any statements contained in this report that are not statements of historical fact may be deemed to be forward-looking statements. Words such as “believes,” “plans,” “anticipates,” “intends,” “expects,” “will” and similar expressions are intended to identify forward-looking statements. Our actual results may differ materially from the plans, intentions or expectations we disclose in the forward-looking statements we make. We have included important factors below under the heading “Risk Factors” in Part II, Item 1A. that we believe could cause actual results to differ materially from the forward-looking statements we make. We are not obligated to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.
Overview
We are a leading provider of products, services and solutions for the diagnostics and life sciences. Through our advanced technologies and differentiated solutions, we address critical issues that help to improve lives and the world around us.
The principal products and services of our two operating segments are:
•Life Sciences. As a result of the sale of the Business, the former Discovery & Analytical Solutions segment will now be referred to as the Life Sciences segment. This segment provides products and services targeted towards the life sciences market.
•Diagnostics. Develops diagnostics, tools and applications focused on clinically-oriented customers, especially within the reproductive health, immunodiagnostics and applied genomics markets.
Effective as of April 26, 2023, we changed our name from “PerkinElmer, Inc.” to “Revvity, Inc.”.
Overview of the First Quarter of Fiscal Year 2023
Our overall revenue in the first quarter of fiscal year 2023 was $674.9 million which decreased by $288.3 million, or 29.9%, as compared to the first quarter of fiscal year 2022, reflecting a decrease of $310.6 million, or 47%, in our Diagnostics segment revenue, which was partially offset by an increase of $22.4 million, or 7%, in our Life Sciences segment revenue. The decrease in our Diagnostics segment revenue for the first quarter of fiscal year 2023 was driven by a decrease in revenue from our COVID-19 product offerings and a decrease of approximately 3% in revenue due to unfavorable changes in foreign exchange rates, partially offset by an increase in revenue from our core product offerings. The increase in our Life Sciences segment revenue for the first quarter of fiscal year 2023 was primarily a result of an increase in revenue in our pharmaceutical and biotechnology markets, partially offset by a 2% decrease in revenue due to unfavorable changes in foreign exchange rates.
Our consolidated gross margins decreased 524 basis points in the first quarter of fiscal year 2023, as compared to the first quarter of fiscal year 2022, primarily due to lower COVID-19 revenue partially offset by a favorable shift in product volume mix and productivity gains. For the first quarter of fiscal year 2023, supply chain disruptions and inflation did not materially impact our results of operations as compared to the first quarter of fiscal year 2022 as the effects of our initiatives to reduce transportation costs more than offset the impact of inflation on our raw materials purchases. Our consolidated operating margins decreased from 27% to 11% in the first quarter of fiscal year 2023, primarily due to lower COVID-19 revenue, partially offset by a favorable shift in product volume mix and productivity gains. The Company expects that the consolidated operating margins will be approximately 30% during fiscal year 2023.
In March 2023, we completed the previously announced sale of certain assets and the equity interests of certain entities constituting our Applied, Food and Enterprise Services businesses (the “Business”). The Business is reported for all periods as discontinued operations in our consolidated financial statements.
Critical Accounting Policies and Estimates
The preparation of condensed consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates, including those related to accounting for business combinations, long-lived assets, including goodwill and other intangible assets and employee compensation and benefits. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which
23
form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
Critical accounting policies are those policies that affect our more significant judgments and estimates used in the preparation of our condensed consolidated financial statements. We believe our critical accounting policies include policies regarding business combinations, valuation of long-lived assets, including goodwill and other intangibles and employee compensation and benefits.
For a more detailed discussion of our critical accounting policies and estimates, refer to the Notes to our audited consolidated financial statements and Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in our Annual Report on Form 10-K for the fiscal year ended January 1, 2023 (our “2022 Form 10-K”), as filed with the Securities and Exchange Commission. There have been no significant changes in our critical accounting policies and estimates during the three months ended April 2, 2023.
Consolidated Results of Continuing Operations
Revenue
Revenue for the three months ended April 2, 2023 was $674.9 million, as compared to $963.2 million for the three months ended April 3, 2022, a decrease of $288.3 million, or approximately 29.9%, which includes an approximate 3% decrease in revenue attributable to unfavorable changes in foreign exchange rates. The analysis in the remainder of this paragraph compares segment revenue for the three months ended April 2, 2023 as compared to the three months ended April 3, 2022 and includes the effect of foreign exchange rate fluctuations. Our Diagnostics segment revenue was $346.6 million for the three months ended April 2, 2023, as compared to $657.3 million for the three months ended April 3, 2022, a decrease of $310.6 million, or 47%, primarily due to decreased demand for our COVID-19 product offerings, partially offset by an increase in our core product offerings. There was a decrease of $221.0 million in our immunodiagnostics revenue, a decrease of $86.9 million in our applied genomics revenue, and a decrease of $2.7 million in our reproductive health revenue. Our Life Sciences segment revenue was $328.4 million for the three months ended April 2, 2023, as compared to $306.1 million for the three months ended April 3, 2022, an increase of $22.4 million, or 7%, driven by an increase in our life sciences portfolio, particularly in the pharmaceutical and biotechnology markets. As a result of adjustments to deferred revenue related to certain acquisitions required by business combination accounting rules, we did not recognize $0.2 million of revenue for each of the three months ended April 2, 2023 and April 3, 2022 that otherwise would have been recorded by the acquired businesses during each of the respective periods.
Cost of Revenue
Cost of revenue for the three months ended April 2, 2023 was $293.5 million, as compared to $368.4 million for the three months ended April 3, 2022, a decrease of $74.9 million, or approximately 20%. As a percentage of revenue, cost of revenue increased to 43.5% for the three months ended April 2, 2023, from 38.3% for the three months ended April 3, 2022, resulting in a decrease in gross margin of 524 basis points to 56.5% for the three months ended April 2, 2023, from 61.7% for the three months ended April 3, 2022. The amortization of purchase accounting adjustments to record the inventory from certain acquisitions added an incremental expense of $16.9 million for the three months ended April 3, 2022. Stock compensation expense related to awards given to BioLegend employees post-acquisition added an incremental expense of $0.9 million for the three months ended April 2, 2023, as compared to $1.6 million for the three months ended April 3, 2022. Purchase accounting adjustments for depreciation on property, plant and equipment added an incremental expense of $0.1 million for each of the three months ended April 2, 2023 and April 3, 2022. The above decreases were partially offset by an increase in amortization of intangible assets which was $38.4 million for the three months ended April 2, 2023, as compared to $36.2 million for the three months ended April 3, 2022.
Selling, General and Administrative Expenses
Selling, general and administrative expenses for the three months ended April 2, 2023 were $248.6 million, as compared to $275.3 million for the three months ended April 3, 2022, a decrease of $26.7 million, or 10%. As a percentage of revenue, selling, general and administrative expenses increased and were 36.8% for the three months ended April 2, 2023, as compared to 28.6% for the three months ended April 3, 2022. Amortization of intangible assets decreased and was $53.4 million for the three months ended April 2, 2023, as compared to $59.1 million for the three months ended April 3, 2022. Purchase accounting adjustments decreased expenses by $1.3 million for the three months ended April 2, 2023, which primarily consisted of a change in contingent consideration, as compared to adding incremental expense of $0.7 million for the three months ended April 3, 2022. Restructuring and other costs, net, decreased and was $3.1 million for the three months ended April 2, 2023, as compared to $9.0 million for the three months ended April 3, 2022. Legal and settlement costs for significant litigation matters, net of reversals, were $0.4 million for the three months ended April 3, 2022. The above decreases were partially offset by an
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increase in acquisition and divestiture-related expenses, which primarily consisted of legal, due diligence and integration costs and stock compensation expense related to the awards given to BioLegend employees post-acquisition, and added an incremental expense of $15.9 million for the three months ended April 2, 2023, as compared to $5.7 million for the three months ended April 3, 2022. Costs for significant environmental matters also added an incremental expense of $1.1 million for the three months ended April 2, 2023. Excluding the factors above, the net decrease in selling, general and administrative expenses was also the result of lower costs resulting from cost containment and productivity initiatives, which were partially offset by costs related to investments in people, digital capabilities, innovation, and recent acquisitions.
Research and Development Expenses
Research and development expenses for the three months ended April 2, 2023 were $56.7 million, as compared to $57.5 million for the three months ended April 3, 2022, a decrease of $0.8 million, or 1%. As a percentage of revenue, research and development expenses increased and were 8.4% for the three months ended April 2, 2023, as compared to 6.0% for the three months ended April 3, 2022. Stock compensation expense related to awards given to BioLegend employees post-acquisition added an incremental expense of $1.2 million for the three months ended April 2, 2023 as compared to $1.5 million for the three months ended April 3, 2022. Purchase accounting adjustments for depreciation on property, plant and equipment added an incremental expense of $0.1 million for each of the three months ended April 2, 2023 and April 3, 2022. Excluding the factors above, the net decrease in research and development expenses was due to a decrease in COVID-19 related research and development expenses.
Interest and Other Expense, Net
Interest and other expense, net, consisted of the following:
| Three Months Ended | |||||||||||||||||||||||
| April 2, 2023 | April 3, 2022 | ||||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||
| Interest income | $ | (5,272) | $ | (595) | |||||||||||||||||||
| Interest expense | 22,738 | 28,388 | |||||||||||||||||||||
| Change in fair value of financial securities | (2,768) | 12,125 | |||||||||||||||||||||
| Other components of net periodic pension cost (credit) | 2,189 | (2,555) | |||||||||||||||||||||
| Foreign exchange losses and other expense (income), net | 29,792 | (311) | |||||||||||||||||||||
| Total interest and other expense, net | $ | 46,679 | $ | 37,052 | |||||||||||||||||||
The increase in interest and other expense, net, for the three months ended April 2, 2023, as compared to the three months ended April 3, 2022, was primarily due to an increase in other expense, net of $30.1 million and an increase in other components of net periodic pension cost of $4.7 million, partially offset by a decrease in the change in fair value of financial securities of $14.9 million and a decrease of $5.7 million in interest expense. Other expense, net, increased due to a foreign exchange loss of $26.1 million for the three months ended April 2, 2023 related to the cash proceeds from the sale of the Business that was held offshore. Interest expense decreased due to $3.3 million of debt extinguishment income for the three months ended April 2, 2023, as compared to $0.1 million of debt extinguishment expense for the three months ended April 3, 2022, as well as a result of an overall decrease in debt.
Provision for Income Taxes
The provision for income taxes from continuing operations was $4.6 million for the three months ended April 2, 2023, as compared to $40.8 million for the three months ended April 3, 2022.
The effective tax rate from continuing operations was 15.6% for the three months ended April 2, 2023, as compared to 18.2% for the three months ended April 3, 2022. The effective tax rate during the three months ended April 2, 2023 is lower due to a discrete tax benefit totaling $1.6 million, offset by a projected higher income in certain higher tax rate jurisdictions in fiscal year 2023 as compared to fiscal year 2022. The Company expects that the effective tax rate on continuing operations, before discrete items, will be approximately 20% during fiscal 2023.
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Reporting Segment Results of Continuing Operations
Life Sciences
Revenue for the three months ended April 2, 2023 was $328.4 million, as compared to $306.1 million for the three months ended April 3, 2022, an increase of $22.4 million, or 7%, which includes a decrease of approximately 2% in revenue attributable to unfavorable changes in foreign exchange rates. The increase in our life sciences market revenue was primarily a result of an increase in revenue in our pharmaceutical and biotechnology markets.
Segment operating income for the three months ended April 2, 2023 was $129.5 million, as compared to $110.2 million for the three months ended April 3, 2022, an increase of $19.3 million, or 17%. Segment operating margin increased 342 basis points in the three months ended April 2, 2023, as compared to the three months ended April 3, 2022, primarily due to pricing actions, product mix and higher sales volume.
Diagnostics
Revenue for the three months ended April 2, 2023 was $346.6 million, as compared to $657.3 million for the three months ended April 3, 2022, a decrease of $310.6 million, or 47%, which includes a 3% decrease in revenue attributable to unfavorable changes in foreign exchange rates. The decrease in our Diagnostics segment revenue during the three months ended April 2, 2023 was primarily driven by decreased demand for our COVID-19 product offerings, partially offset by an increase in our core product offerings. There was a decrease of $221.0 million in our immunodiagnostics revenue, a decrease of $86.9 million in our applied genomics revenue, and a decrease of $2.7 million in our reproductive health revenue.
Segment operating income for the three months ended April 2, 2023 was $74.4 million, as compared to $300.9 million for the three months ended April 3, 2022, a decrease of $226.5 million, or 75%. Segment operating margin decreased 2,431 basis points in the three months ended April 2, 2023, as compared to the three months ended April 3, 2022, primarily due to lower sales volume, partially offset by cost controls.
Discontinued Operations
On March 13, 2023, we completed the previously announced sale (the “Closing”) of our Applied, Food and Enterprise Services businesses (the “Business”) to PerkinElmer Topco, L.P. (formerly known as Polaris Purchaser, L.P.) (the “Purchaser”), a Delaware limited partnership owned by funds managed by affiliates of New Mountain Capital L.L.C. (the “Sponsor”), for an aggregate purchase price of up to $2.45 billion. Upon the Closing, we received approximately $2.14 billion in cash proceeds, before transaction costs and subject to post-closing adjustments. We are entitled to an additional $75.0 million in proceeds that will be paid to us in connection with the transfer of the PerkinElmer brand and related trademarks to the Purchaser, and this consideration will be paid to us in installments over the next 24 months. The discounted value of the $75.0 million was measured as $68.0 million and is included in the proceeds at Closing. In addition, we are entitled to additional consideration of up to $150.0 million that is contingent on the exit valuation the Sponsor and its affiliated funds receive on a sale or other capital events related to the Business. The fair value of this element of consideration was determined to be $15.9 million and was included in the proceeds at Closing. We also recorded a receivable of approximately $177.5 million for working capital adjustments that are expected to be settled with the Purchaser during the second half of fiscal year 2023. In the first quarter ended April 2, 2023, we recognized a pre-tax gain on the disposal of the Business totaling $866.9 million and income tax expense of $299.6 million related to the transaction in discontinued operations.
As we are in the process of measuring the calculation of the gain on sale and related income tax provision, additional adjustments may arise that may impact the final measurement of the gain recognized. The elements of the gain calculation that may result in adjustments include the measurement of the proceeds, including the settlement of the working capital adjustment, determination of the basis of certain assets and liabilities, as well as the provision for income taxes.
In connection and concurrent with the Closing, we also entered into a Transition Services Agreement with the Purchaser for a period of up to 24 months and a Contract Manufacturing Agreement for two locations for a period of up to 6 months from the Closing. Commercial transactions between the parties following the Closing are not expected to be significant.
The Business is reported for all periods as discontinued operations in our condensed consolidated financial statements. The following table summarizes the results of discontinued operations which are presented as Income from discontinued
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operations in our condensed consolidated statements of operations:
| Three Months Ended | |||||||||||||||||||||||
| April 2, 2023 | April 3, 2022 | ||||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||
| Revenue | $ | 175,423 | $ | 296,279 | |||||||||||||||||||
| Cost of revenue | 124,647 | 211,788 | |||||||||||||||||||||
| Selling, general and administrative expenses | 74,794 | 72,528 | |||||||||||||||||||||
| Research and development expenses | 10,434 | 19,085 | |||||||||||||||||||||
| Operating loss | (34,452) | (7,122) | |||||||||||||||||||||
| Other income (expense): | |||||||||||||||||||||||
| Gain on sale | 866,919 | — | |||||||||||||||||||||
| Other income (expense), net | 913 | (182) | |||||||||||||||||||||
| Total other income (expense) | 867,832 | (182) | |||||||||||||||||||||
| Income (loss) from discontinued operations before income taxes | 833,380 | (7,304) | |||||||||||||||||||||
| Provision for (benefit from) income tax | 288,750 | (196) | |||||||||||||||||||||
| Income (loss) from discontinued operations | $ | 544,630 | $ | (7,108) | |||||||||||||||||||
The results of discontinued operations during the three months ended April 2, 2023 include the results of the Business through March 13, 2023. During the three months ended April 2, 2023, we recognized $36.0 million of divestiture-related costs in selling, general and administrative expenses in discontinued operations, as compared to $13.4 million during the three months ended April 3, 2022, an increase of $22.5 million. During the three months ended April 2, 2023, we recognized $19.0 million of divestiture-related costs in gain on sale.
Liquidity and Capital Resources
We require cash to pay our operating expenses, make capital expenditures, make strategic acquisitions, service our debt and other long-term liabilities, repurchase shares of our common stock and pay dividends on our common stock. Our principal sources of funds are from our operations, borrowing capacity available under our senior unsecured credit facility and access to debt markets. We anticipate that our internal operations will generate sufficient cash to fund our operating expenses, capital expenditures, smaller acquisitions, interest payments on our debt and dividends on our common stock. However, we expect to use external sources to satisfy the balance of our debt when due, any larger acquisitions and other long-term liabilities, such as contributions to our postretirement benefit plans. The sale of the Business generated approximately $2.14 billion in cash proceeds. We expect to use these proceeds through a combination of funding upcoming debt maturities, opportunistic share repurchases and continued strategic and value creating acquisitions.
We and our subsidiaries may from time to time, in our sole discretion, purchase, repay, redeem or retire any of our outstanding debt securities (including any publicly issued debt securities), in privately negotiated or open market transactions, by tender offer or otherwise, or extend or refinance any of our outstanding indebtedness. Additionally, we intend to purchase U.S. treasury securities whose proceeds upon maturity are intended to be utilized to repay outstanding debt securities.
Principal factors that could affect the availability of our internally generated funds include:
•changes in sales due to weakness in markets in which we sell our products and services, and
•changes in our working capital requirements and capital expenditures.
Principal factors that could affect our ability to obtain cash from external sources include:
•financial covenants contained in the financial instruments controlling our borrowings that limit our total borrowing capacity,
•increases in interest rates applicable to our outstanding variable rate debt,
•a ratings downgrade that could limit the amount we can borrow under our senior unsecured revolving credit facility and our overall access to the corporate debt market,
•increases in interest rates or credit spreads, as well as limitations on the availability of credit, that affect our ability to borrow under future potential facilities on a secured or unsecured basis,
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•a decrease in the market price for our common stock, and
•volatility in the public debt and equity markets.
At April 2, 2023, we had cash and cash equivalents of $2.3 billion, of which $1.9 billion was held by our non-U.S. subsidiaries, and we had $1.5 billion of borrowing capacity available under our senior unsecured revolving credit facility. We had no other liquid investments at April 2, 2023. At April 2, 2023, we had investments in U.S. treasury securities amounting to $99.2 million which had a contractual maturity of less than one year and $94.8 million which had a contractual maturity of more than one year and less than 2 years. Subsequent to the first quarter of fiscal year 2023, we have repatriated $855.0 million of cash from our foreign subsidiaries to the United States.
We utilize a variety of tax planning and financing strategies to ensure that our worldwide cash is available in the locations in which it is needed. We use our non-U.S. cash for needs outside of the United States including foreign operations,
capital investments, acquisitions and repayment of debt. In addition, we transfer cash to the United States using nontaxable returns of capital, distributions of previously taxed income, as well as dividends, where the related income tax cost is managed efficiently. We have accrued tax expense on the unremitted earnings of foreign subsidiaries as required by the Tax Cuts and Jobs Act of 2017 (the “Tax Act”) and where the foreign earnings are not considered permanently reinvested. In accordance with the Tax Act, we are making scheduled annual cash payments on our accrued transition tax.
As of the end of fiscal year 2022, we evaluated our undistributed foreign earnings and identified approximately $879.0 million in earnings that we do not consider to be permanently reinvested. We have recorded a provision of approximately $14.1 million for taxes that would fall due when such earnings are repatriated. We repatriated foreign earnings to the United States during fiscal year 2022 and expect to continue the repatriation in fiscal year 2023. As of April 2, 2023, we also plan to repatriate proceeds from the sale of the Business described in Note 3 to the consolidated financial statements and have accrued the associated tax expense in discontinued operations. There are other undistributed foreign earnings and outside basis differences for which we have not provided for any taxes as these amounts continue to be indefinitely reinvested, and it is not practicable to estimate the amount of deferred tax liability that would be incurred.
On July 22, 2022, our Board of Directors (our “Board”) authorized us to repurchase shares of common stock for an aggregate amount up to $300.0 million under a stock repurchase program (the “Repurchase Program”). During the three months ended April 2, 2023, we repurchased 450,238 shares of common stock under the Repurchase Program for an aggregate cost of $57.9 million. Subsequent to the first quarter of fiscal year 2023, we repurchased 554,306 shares of common stock under the Repurchase Program at an aggregate cost of $73.3 million. On April 27, 2023, the Repurchase Program was terminated by our Board and our Board authorized us to repurchase shares of common stock for an aggregate amount up to $600.0 million under a new stock repurchase program (the “New Repurchase Program”). No shares remain available for repurchase under the Repurchase Program due to its termination. The New Repurchase Program will expire on April 26, 2025 unless terminated earlier by our Board and may be suspended or discontinued at any time.
As of April 2, 2023, we may have to pay contingent consideration related to acquisitions with open contingency periods of up to $105.5 million. As of April 2, 2023, we have recorded contingent consideration obligations of $43.8 million, of which $19.8 million was recorded in accrued expenses and other current liabilities, and $24.0 million was recorded in long-term liabilities. The maximum earnout period for acquisitions with open contingency periods is 5.7 years from April 2, 2023, and the remaining weighted average expected earnout period at April 2, 2023 was 4.8 years.
Distressed global financial markets could adversely impact general economic conditions by reducing liquidity and credit availability, creating increased volatility in security prices, widening credit spreads, increasing the cost of borrowings and decreasing valuations of certain investments. The widening of credit spreads may create a less favorable environment for certain of our businesses and may affect the fair value of financial instruments that we issue or hold. Increases in credit spreads, as well as limitations on the availability of credit at rates we consider to be reasonable, could affect our ability to borrow under future potential facilities on a secured or unsecured basis, which may adversely affect our liquidity and results of operations. In difficult global financial markets, we may be forced to fund our operations at a higher cost, or we may be unable to raise as much funding as we need to support our business activities or fund our strategic transactions.
Our pension plans have not experienced a material impact on liquidity or counterparty exposure due to the volatility and uncertainty in the credit markets. During the three months ended April 2, 2023, we contributed $10.0 million to our defined benefit pension plan in the United States for the plan year 2022. During the three months ended April 2, 2023, we contributed $1.7 million, in the aggregate, to pension plans outside of the United States, and expect to contribute an additional $5.1 million by the end of fiscal year 2023. We could potentially have to make additional contributions in future periods for all pension plans. We expect to use existing cash and external sources to satisfy future contributions to our pension plans.
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Cash Flows
Operating Activities. Net cash provided by operating activities of our continuing operations was $71.7 million for the three months ended April 2, 2023, as compared to net cash provided by operating activities of our continuing operations of $326.1 million for the three months ended April 3, 2022, a decrease of $254.4 million, primarily due to lower profitability and more cash used in working capital during the three months ended April 2, 2023 as compared to the three months ended April 3, 2022. The cash provided by operating activities for the three months ended April 2, 2023 was principally a result of income from continuing operations of $24.8 million, adjustments for non-cash charges aggregating to $142.4 million, including depreciation and amortization of $109.0 million, and a net cash decrease in working capital of $95.6 million. The cash provided by operating activities for the three months ended April 3, 2022 was principally a result of income from continuing operations of $184.1 million, and adjustments for non-cash charges aggregating to $164.3 million, including depreciation and amortization of $109.3 million, as well as net cash decrease in working capital of $22.3 million. During the three months ended April 2, 2023, we contributed $10.0 million to our pension plan in the United States and $1.7 million, in the aggregate, to pension plans outside of the United States.
Investing Activities. Net cash used in investing activities of our continuing operations was $215.1 million for the three months ended April 2, 2023, as compared to $48.6 million for the three months ended April 3, 2022, an increase of $166.5 million. During the three months ended April 2, 2023, we made purchases of investments in U.S. treasury securities totaling $193.5 million. For the three months ended April 2, 2023, the net cash used for capital expenditures and acquisitions were $20.9 million and $0.7 million, respectively, as compared to $27.0 million and $3.6 million, respectively, for the three months ended April 3, 2022. The capital expenditures in each period were primarily for manufacturing, software and other capital equipment purchases. During the three months ended April 3, 2022, purchases of investments were $18.0 million.
Financing Activities. Net cash used in financing activities was $113.2 million for the three months ended April 2, 2023, as compared to $164.9 million for the three months ended April 3, 2022, a decrease in net cash used in financing activities of $51.7 million. During the three months ended April 2, 2023, we made net payments of $41.7 million on debts, as compared to $101.1 million during the three months ended April 3, 2022. The changes in both periods reflect our intentions to pay down debt, which we expect to continue throughout fiscal year 2023 and fiscal year 2024. During the three months ended April 2, 2023, we repurchased shares of our common stock for a total cost of $61.7 million, as compared to $55.6 million in the prior year period. We paid $8.8 million in dividends for each of the three months ended April 2, 2023 and April 3, 2022. We paid $0.8 million in settlement of hedges for the three months ended April 3, 2022. The cash used in financing activities during the three months ended April 2, 2023 was partially offset by proceeds from the issuance of common stock under our stock plans of $0.5 million during the three months ended April 2, 2023, as compared to $1.4 million for the three months ended April 3, 2022.
Borrowing Arrangements
Since the beginning of the third quarter of fiscal year 2022, we have repurchased $32.9 million in aggregate principal amount of our 0.550% senior unsecured notes due in September 2023 (the “2023 Notes”) and $81.9 million in aggregate principal amount of our 0.850% senior unsecured notes due in September 2024 (the “2024 Notes”), and we expect to continue repurchasing outstanding 2023 Notes and 2024 Notes from time to time, subject to market conditions. See Note 6, Debt, in the Notes to Condensed Consolidated Financial Statements and Note 13, Debt, to our audited consolidated financial statements in the 2022 Form 10-K for a detailed discussion of our borrowing arrangements.
Dividends
Our Board declared a regular quarterly cash dividend of $0.07 per share for the first quarter of fiscal year 2023 and in each quarter of fiscal year 2022. At April 2, 2023, we had accrued $8.8 million for dividends declared on January 26, 2023 for the first quarter of fiscal year 2023 that will be paid in May 2023. On April 25, 2023, we announced that our Board had declared a quarterly dividend of $0.07 per share for the second quarter of fiscal year 2023 that will be payable in August 2023. In the future, our Board may determine to reduce or eliminate our common stock dividend in order to fund investments for growth, repurchase shares or conserve capital resources.
Effects of Recently Adopted and Issued Accounting Pronouncements
See Note 1, Nature of Operations and Accounting Policies, to our audited consolidated financial statements in the 2022 Form 10-K for a summary of recently adopted new accounting pronouncements during the fiscal year ended January 1, 2023.
We have not adopted any new accounting pronouncements during the three months ended April 2, 2023, and there were no recently issued accounting pronouncements that are expected to have a significant impact on our financial statements.
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Item 3.Quantitative and Qualitative Disclosures About Market Risk
Market Risk. We are exposed to market risk, including changes in interest rates and currency exchange rates. To manage the volatility relating to these exposures, we enter into various derivative transactions pursuant to our policies to hedge against known or forecasted market exposures. We briefly describe several of the market risks we face below. Our market risks are not materially different from the disclosure provided under the heading, Item 7A. “Quantitative and Qualitative Disclosures About Market Risk,” in our 2022 Form 10-K.
Foreign Currency Exchange Risk—Value-at-Risk Disclosure. We continue to measure foreign currency risk using the Value-at-Risk model described in Item 7A. “Quantitative and Qualitative Disclosures About Market Risk,” in our 2022 Form 10-K. The measures for our Value-at-Risk analysis have not changed materially.
Interest Rate Risk. Our debt portfolio is primarily comprised of fixed interest debt, however, there is $14.2 million of variable rate instruments. Our cash and cash equivalents, for which we receive interest at variable rates, were $2.3 billion at April 2, 2023. Fluctuations in interest rates can therefore have a direct impact on both our short-term cash flows, as they relate to interest, and our earnings. To manage the volatility relating to these exposures, we periodically enter into various derivative transactions pursuant to our policies to hedge against known or forecasted interest rate exposures. However, no such instruments are outstanding at April 2, 2023.
Interest Rate Risk—Sensitivity. Our 2022 Form 10-K presents sensitivity measures for our interest rate risk. The measures for our sensitivity analysis have not changed materially. More information is available in Item 7A. “Quantitative and Qualitative Disclosures About Market Risk,” in our 2022 Form 10-K for our sensitivity disclosure.
Item 4.Controls and Procedures
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 of the end of our fiscal quarter ended April 2, 2023. The term “disclosure controls and procedures” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), means controls and other procedures of a company that are designed to provide reasonable assurance that information required to be disclosed by the company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of the end of our fiscal quarter ended April 2, 2023, our Chief Executive Officer and Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.
Changes in Internal Control Over Financial Reporting. There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter ended April 2, 2023 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II. OTHER INFORMATION
Item 1.Legal Proceedings
We are subject to various claims, legal proceedings and investigations covering a wide range of matters that arise in the ordinary course of our business activities. Although we have established accruals for potential losses that we believe are probable and reasonably estimable, in the opinion of our management, based on its review of the information available at this time, the total cost of resolving these contingencies at April 2, 2023 should not have a material adverse effect on our condensed consolidated financial statements. However, each of these matters is subject to uncertainties, and it is possible that some of these matters may be resolved unfavorably to us.
Item 1A.Risk Factors
The following important factors affect our business and operations generally or affect multiple segments of our business and operations:
Risks Related to our Business Operations and Industry
If the markets into which we sell our products decline or do not grow as anticipated due to a decline in general economic conditions, or there are uncertainties surrounding the approval of government or industrial funding proposals, or there are unfavorable changes in government regulations, we may see an adverse effect on the results of our business operations.
Our customers include pharmaceutical and biotechnology companies, laboratories, academic and research institutions, public health authorities, private healthcare organizations, doctors and government agencies. Our quarterly revenue and results of operations are highly dependent on the volume and timing of orders received during the quarter. In addition, our revenues and earnings forecasts for future quarters are often based on the expected trends in our markets. However, the markets we serve do not always experience the trends that we may expect. Negative fluctuations in our customers’ markets, the inability of our customers to secure credit or funding, restrictions in capital expenditures, general economic conditions, cuts in government funding or unfavorable changes in government regulations would likely result in a reduction in demand for our products and services. In addition, government funding is subject to economic conditions and the political process, which is inherently fluid and unpredictable. Our revenues may be adversely affected if our customers delay or reduce purchases as a result of uncertainties surrounding the approval of government or industrial funding proposals. Such declines could harm our consolidated financial position, results of operations, cash flows and trading price of our common stock, and could limit our ability to sustain profitability.
The pandemic caused by COVID-19 has had, and may continue to have, a negative effect on the demand for certain of our products and our global operations including our manufacturing capabilities, logistics and supply chain that may materially and adversely impact our business, financial conditions, results of operations and cash flows.
We face risks related to public health crises and pandemics, including the COVID-19 pandemic. The global impact of COVID-19 resulted in an adverse impact on our operations, supply chains and distribution systems, due to significant global mitigation measures, including government-directed quarantines, social distancing and shelter-in-place mandates, and travel restrictions and/or bans.
We have experienced significant reductions in demand for certain of our products due to the COVID-19 pandemic and although the severity and duration of the COVID-19 pandemic cannot be fully estimated at this time, additional impacts that we may experience include, but are not limited to: fluctuations in our stock price due to market volatility; further decreases in demand for certain of our products; reduced profitability; large-scale supply chain disruptions impeding our ability to ship and/or receive product; potential interruptions of, or limitations on manufacturing operations imposed by local, state or federal governments; shortages of key raw materials or components; workforce absenteeism and distraction; labor shortages including those resulting from unwillingness to comply with vaccination or other requirements; customer credit concerns; cybersecurity risks and data accessibility disruptions due to remote working arrangements; reduced sources of liquidity; increased borrowing costs; fluctuations in foreign currency markets; potential impairment in the carrying value of goodwill; other asset impairment charges; increased obligations related to our pension and other postretirement benefit plans; and deferred tax valuation allowances.
Our Diagnostics segment experienced an increase in revenue resulting from increased demand for our immunodiagnostics and applied genomics COVID-19 product offerings during fiscal years 2020 and 2021, as well as from the COVID-19 testing laboratory facilities we developed to service the State of California and the United Kingdom. Both of these laboratories closed in the first half of 2022. As a result of these closures, and the general reduction in COVID-19 testing spending by our
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customers, the demand for these products and services declined in fiscal year 2022 and in the first quarter of fiscal year 2023. We expect demand for COVID-19 related products and services to continue to decline during the remainder of fiscal year 2023.
Our growth and profitability is subject to global economic and political conditions, and operational disruptions at our facilities.
Our business is affected by global economic and political conditions as well as the state of the financial markets, particularly as the United States and other countries balance concerns around debt, inflation, growth and budget allocations in their policy initiatives. There can be no assurance that global economic conditions and financial markets will not worsen and that we will not experience any adverse effects that may be material to our consolidated cash flows, results of operations, financial position or our ability to access capital, such as the adverse effects resulting from a prolonged shutdown in government operations both in the United States and internationally. Our business is also affected by local economic environments, including inflation, recession, financial liquidity and currency volatility or devaluation. Political changes, including war or other conflicts, such as the current conflict in Ukraine, some of which may be disruptive, could interfere with our supply chain, our customers and all of our activities in a particular location.
While we take precautions to prevent production or service interruptions at our global facilities, a major earthquake, fire, flood, power loss or other catastrophic event that results in the destruction or delay of any of our critical business operations could result in our incurring significant liability to customers or other third parties, cause significant reputational damage or have a material adverse effect on our business, operating results or financial condition.
Certain of these risks can be hedged to a limited degree using financial instruments, or other measures, and some of these risks are insurable, but any such mitigation efforts are costly and may not always be fully successful. Our ability to engage in such mitigation efforts has decreased or become even more costly as a result of recent market developments.
If we do not introduce new products in a timely manner, we may lose market share and be unable to achieve revenue growth targets.
We sell many of our products in industries characterized by rapid technological change, frequent new product and service introductions, and evolving customer needs and industry standards. Many of the businesses competing with us in these industries have significant financial and other resources to invest in new technologies, substantial intellectual property portfolios, substantial experience in new product development, regulatory expertise, manufacturing capabilities, and established distribution channels to deliver products to customers. Our products could become technologically obsolete over time, or we may invest in technology that does not lead to revenue growth or continue to sell products for which the demand from our customers is declining, in which case we may lose market share or not achieve our revenue growth targets. The success of our new product offerings will depend upon several factors, including our ability to:
•accurately anticipate customer needs,
•innovate and develop new reliable technologies and applications,
•receive regulatory approvals in a timely manner,
•successfully commercialize new technologies in a timely manner,
•price our products competitively, and manufacture and deliver our products in sufficient volumes and on time, and
•differentiate our offerings from our competitors’ offerings.
Many of our products are used by our customers to develop, test and manufacture their products. We must anticipate industry trends and consistently develop new products to meet our customers’ expectations. In developing new products, we may be required to make significant investments before we can determine the commercial viability of the new product. If we fail to accurately foresee our customers’ needs and future activities, we may invest heavily in research and development of products that do not lead to significant revenue. We may also suffer a loss in market share and potential revenue if we are unable to commercialize our technology in a timely and efficient manner.
In addition, some of our licensed technology is subject to contractual restrictions, which may limit our ability to develop or commercialize products for some applications.
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We may not be able to successfully execute acquisitions or divestitures, license technologies, integrate acquired businesses or licensed technologies into our existing businesses, or make acquired businesses or licensed technologies profitable.
We have in the past supplemented, and may in the future supplement, our internal growth by acquiring businesses and licensing technologies that complement or augment our existing product lines. However, we may be unable to identify or complete promising acquisitions or license transactions for many reasons, such as:
•competition among buyers and licensees,
•the high valuations of businesses and technologies,
•the need for regulatory and other approval, and
•our inability to raise capital to fund these acquisitions.
Some of the businesses we acquire may be unprofitable or marginally profitable, or may increase the variability of our revenue recognition. If, for example, we are unable to successfully commercialize products and services related to significant in-process research and development that we have capitalized, we may have to impair the value of such assets. Accordingly, the earnings or losses of acquired businesses may dilute our earnings. For these acquired businesses to achieve acceptable levels of profitability, we would have to improve their management, operations, products and market penetration. We may not be successful in this regard and may encounter other difficulties in integrating acquired businesses into our existing operations, such as incompatible management, information or other systems, cultural differences, loss of key personnel, unforeseen regulatory requirements, previously undisclosed liabilities or difficulties in predicting financial results. To finance our acquisitions, we may have to raise additional funds, either through public or private financings. We may be unable to obtain such funds or may be able to do so only on terms unacceptable to us. We may also incur expenses related to completing acquisitions or licensing technologies, or in evaluating potential acquisitions or technologies, which may adversely impact our profitability.
If we do not compete effectively, our business will be harmed.
We encounter aggressive competition from numerous competitors in many areas of our business. We may not be able to compete effectively with all of these competitors. To remain competitive, we must develop new products and periodically enhance our existing products. We anticipate that we may also have to adjust the prices of many of our products to stay competitive. In addition, new competitors, technologies or market trends may emerge to threaten or reduce the value of entire product lines.
Our quarterly operating results could be subject to significant fluctuation, and we may not be able to adjust our operations to effectively address changes we do not anticipate, which could increase the volatility of our stock price and potentially cause losses to our shareholders.
Given the nature of the markets in which we participate, we cannot reliably predict future revenue and profitability. Changes in competitive, market and economic conditions may require us to adjust our operations, and we may not be able to make those adjustments or make them quickly enough to adapt to changing conditions. A high proportion of our costs are fixed in the short term, due in part to our research and development and manufacturing costs. As a result, small declines in sales could disproportionately affect our operating results in a quarter. Factors that may affect our quarterly operating results include:
•demand for and market acceptance of our products,
•competitive pressures resulting in lower selling prices,
•changes in the level of economic activity in regions in which we do business, including as a result of the COVID-19 pandemic and other global health crises or pandemics,
•changes in general economic conditions or government funding,
•settlements of income tax audits,
•expenses incurred in connection with claims related to environmental conditions at locations where we conduct or formerly conducted operations,
•contract termination and litigation costs,
•differing tax laws and changes in those laws, or changes in the countries in which we are subject to taxation,
•changes in our effective tax rate,
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•changes in industries, such as pharmaceutical and biomedical,
•changes in the portions of our revenue represented by our various products and customers,
•our ability to introduce new products,
•our competitors’ announcement or introduction of new products, services or technological innovations,
•costs of raw materials, labor, energy, supplies, transportation or other indirect costs,
•changes in healthcare or other reimbursement rates paid by government agencies and other third parties for certain of our products and services,
•our ability to realize the benefit of ongoing productivity initiatives,
•changes in the volume or timing of product orders,
•fluctuation in the expense related to the mark-to-market adjustment on postretirement benefit plans,
•changes in our assumptions underlying future funding of pension obligations,
•changes in assumptions used to determine contingent consideration in acquisitions, and
•changes in foreign currency exchange rates.
A significant disruption in third-party package delivery and import/export services, or significant increases in prices for those services, could interfere with our ability to ship products, increase our costs and lower our profitability.
We ship a significant portion of our products to our customers through independent package delivery and import/export companies, including UPS and Federal Express in the United States; TNT, UPS and DHL in Europe; and UPS in Asia. We also ship our products through other carriers, including commercial airlines, freight carriers, national trucking firms, overnight carrier services and the United States Postal Service. If one or more of the package delivery or import/export providers experiences a significant disruption in services or institutes a significant price increase, we may have to seek alternative providers and the delivery of our products could be prevented or delayed. Such events could cause us to incur increased shipping costs that could not be passed on to our customers, negatively impacting our profitability and our relationships with certain of our customers.
Disruptions in the supply of raw materials, certain key components and other goods from our limited or single source suppliers could have an adverse effect on the results of our business operations, and could damage our relationships with customers.
The production of our products requires a wide variety of raw materials, key components and other goods that are generally available from alternate sources of supply. However, certain critical raw materials, key components and other goods required for the production and sale of some of our principal products are available from limited or single sources of supply. We generally have multi-year contracts with no minimum purchase requirements with these suppliers, but those contracts may not fully protect us from a failure by certain suppliers to supply critical materials or from the delays inherent in being required to change suppliers and, in some cases, validate new raw materials. Such raw materials, key components and other goods can usually be obtained from alternative sources with the potential for an increase in price, decline in quality or delay in delivery. A prolonged inability to obtain certain raw materials, key components or other goods is possible and could have an adverse effect on our business operations, and could damage our relationships with customers. In addition, a global health crisis or pandemic such as the COVID-19 pandemic, wars, conflicts, or other changes in a country’s or region’s political or economic conditions, could have a significant adverse effect on our supply chain.
We are subject to the rules of the Securities and Exchange Commission requiring disclosure as to whether certain materials known as conflict minerals (tantalum, tin, gold, tungsten and their derivatives) that may be contained in our products are mined from the Democratic Republic of the Congo and adjoining countries. As a result of these rules, we may incur additional costs in complying with the disclosure requirements and in satisfying those customers who require that the components used in our products be certified as conflict-free, and the potential lack of availability of these materials at competitive prices could increase our production costs.
If we do not retain our key personnel, our ability to execute our business strategy will be limited.
Our success depends to a significant extent upon the continued service of our executive officers and key management and technical personnel, particularly our experienced engineers and scientists, and on our ability to continue to attract, retain, and motivate qualified personnel. The competition for these employees is intense. The loss of the services of key personnel could have a material adverse effect on our operating results. In addition, there could be a material adverse effect on us should the
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turnover rates for key personnel increase significantly or if we are unable to continue to attract qualified personnel. We do not maintain any key person life insurance policies on any of our officers or employees.
Our success also depends on our ability to execute leadership succession plans. The inability to successfully transition key management roles could have a material adverse effect on our operating results.
If we experience a significant disruption in, or breach in security of, our information technology systems or those of our customers, suppliers or other third parties, or cybercrime, resulting in inappropriate access to or inadvertent transfer of information or assets, or if we fail to implement new systems, software and technologies successfully, our business could be adversely affected.
We rely on several centralized information technology systems throughout our company to develop, manufacture and provide products and services, keep financial records, process orders, manage inventory, process shipments to customers and operate other critical functions. Our and our third-party service providers' information technology systems may be susceptible to damage, disruptions or shutdowns due to power outages, hardware failures, computer viruses, attacks by computer hackers, telecommunication failures, user errors, catastrophes or other unforeseen events. If we were to experience a prolonged system disruption in the information technology systems that involve our interactions with customers, suppliers or other third parties, it could result in the loss of sales and customers and significant incremental costs, which could adversely affect our business. In addition, security breaches of our information technology systems or cybercrime, resulting in inappropriate access to or inadvertent transfer of information or assets, could result in losses or misappropriation of assets or unauthorized disclosure of confidential information belonging to us or to our employees, partners, customers or suppliers, which could result in our suffering significant financial or reputational damage.
Our results of operations will be adversely affected if we fail to realize the full value of our intangible assets.
As of April 2, 2023, our total assets included $9.8 billion of net intangible assets. Net intangible assets consist principally of goodwill associated with acquisitions and costs associated with securing patent rights, trademark rights, customer relationships, core technology and technology licenses and in-process research and development, net of accumulated amortization. We test certain of these items—specifically all of those that are considered “indefinite-lived”—at least annually for potential impairment by comparing the carrying value to the fair market value of the reporting unit to which they are assigned. All of our amortizing intangible assets are also evaluated for impairment should events occur that call into question the value of the intangible assets.
Adverse changes in our business, adverse changes in the assumptions used to determine the fair value of our reporting units, or the failure to grow our Life Sciences and Diagnostics segments may result in impairment of our intangible assets, which could adversely affect our results of operations.
Risks Related to our Intellectual Property
We may not be successful in adequately protecting our intellectual property.
Patent and trade secret protection is important to us because developing new products, processes and technologies gives us a competitive advantage, although it is time-consuming and expensive. We own many United States and foreign patents and intend to apply for additional patents. Patent applications we file, however, may not result in issued patents or, if they do, the claims allowed in the patents may be narrower than what is needed to protect fully our products, processes and technologies. The expiration of our previously issued patents may cause us to lose a competitive advantage in certain of the products and services we provide. Similarly, applications to register our trademarks may not be granted in all countries in which they are filed. For our intellectual property that is protected by keeping it secret, such as trade secrets and know-how, we may not use adequate measures to protect this intellectual property.
Third parties have in the past and may in the future also challenge the validity of our issued patents, may circumvent or “design around” our patents and patent applications, or claim that our products, processes or technologies infringe their patents. In addition, third parties may assert that our product names infringe their trademarks. We may incur significant expense in legal proceedings to protect our intellectual property against infringement by third parties or to defend against claims of infringement by third parties. Claims by third parties in pending or future lawsuits could result in awards of substantial damages against us or court orders that could effectively prevent us from manufacturing, using, importing or selling our products in the United States or other countries.
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If we are unable to renew our licenses or otherwise lose our licensed rights, we may have to stop selling products or we may lose competitive advantage.
We may not be able to renew our existing licenses, or licenses we may obtain in the future, on terms acceptable to us, or at all. If we lose the rights to a patented or other proprietary technology, we may need to stop selling products incorporating that technology and possibly other products, redesign our products or lose a competitive advantage. Potential competitors could in-license technologies that we fail to license and potentially erode our market share.
Our licenses typically subject us to various economic and commercialization obligations. If we fail to comply with these obligations, we could lose important rights under a license, such as the right to exclusivity in a market, or incur losses for failing to comply with our contractual obligations. In some cases, we could lose all rights under the license. In addition, rights granted under the license could be lost for reasons out of our control. For example, the licensor could lose patent protection for a number of reasons, including invalidity of the licensed patent, or a third-party could obtain a patent that curtails our freedom to operate under one or more licenses.
Risks Related to Legal, Government and Regulatory Matters
The manufacture and sale of products and services may expose us to product and other liability claims for which we could have substantial liability.
We face an inherent business risk of exposure to product and other liability claims if our products, services or product candidates are alleged or found to have caused injury, damage or loss. We may be unable to obtain insurance with adequate levels of coverage for potential liability on acceptable terms or claims of this nature may be excluded from coverage under the terms of any insurance policy that we obtain. If we are unable to obtain such insurance or the amounts of any claims successfully brought against us substantially exceed our coverage, then our business could be adversely impacted.
If we fail to maintain satisfactory compliance with the regulations of the United States Food and Drug Administration and other governmental agencies in the United States and abroad, we may be forced to recall products and cease their manufacture and distribution, and we could be subject to civil, criminal or monetary penalties.
Our operations are subject to regulation by different state and federal government agencies in the United States and other countries, as well as to the standards established by international standards bodies. If we fail to comply with those regulations or standards, we could be subject to fines, penalties, criminal prosecution or other sanctions. Some of our products are subject to regulation by the United States Food and Drug Administration and similar foreign and domestic agencies. These regulations govern a wide variety of product activities, from design and development to labeling, manufacturing, promotion, sales and distribution. If we fail to comply with those regulations or standards, we may have to recall products, cease their manufacture and distribution, and may be subject to fines or criminal prosecution.
We are also subject to a variety of laws, regulations and standards that govern, among other things, the importation and exportation of products, the handling, transportation and manufacture of toxic or hazardous substances, the collection, storage, transfer, use, disclosure, retention and other processing of personal data, and our business practices in the United States and abroad such as anti-bribery, anti-corruption and competition laws. This requires that we devote substantial resources to maintaining our compliance with those laws, regulations and standards. A failure to do so could result in the imposition of civil, criminal or monetary penalties having a material adverse effect on our operations.
Changes in governmental regulations may reduce demand for our products or increase our expenses.
We compete in markets in which we or our customers must comply with federal, state, local and foreign regulations, such as environmental, health and safety, data privacy and food and drug regulations. We develop, configure and market our products to meet customer needs created by these regulations. Any significant change in these regulations could reduce demand for our products or increase our costs of producing these products.
The healthcare industry is highly regulated and if we fail to comply with its extensive system of laws and regulations, we could suffer fines and penalties or be required to make significant changes to our operations which could have a significant adverse effect on the results of our business operations.
The healthcare industry, including the genetic screening market, is subject to extensive and frequently changing international and United States federal, state and local laws and regulations. In addition, legislative provisions relating to healthcare fraud and abuse, patient privacy violations and misconduct involving government insurance programs provide federal enforcement personnel with substantial powers and remedies to pursue suspected violations. We believe that our business will continue to be subject to increasing regulation as the federal government continues to strengthen its position on healthcare matters, the scope and effect of which we cannot predict. If we fail to comply with applicable laws and regulations,
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we could suffer civil and criminal damages, fines and penalties, exclusion from participation in governmental healthcare programs, and the loss of various licenses, certificates and authorizations necessary to operate our business, as well as incur liabilities from third-party claims, all of which could have a significant adverse effect on our business.
Risks Related to our Foreign Operations
Economic, political and other risks associated with foreign operations could adversely affect our international sales and profitability.
Because we sell our products worldwide, our businesses are subject to risks associated with doing business internationally. Our sales originating outside the United States represented the majority of our total revenue in fiscal year 2022. We anticipate that sales from international operations will continue to represent a substantial portion of our total revenue. In addition, many of our manufacturing facilities, employees and suppliers are located outside the United States. Accordingly, our future results of operations could be harmed by a variety of factors, including:
•changes in actual, or from projected, foreign currency exchange rates,
•a global health crisis of unknown duration, such as the COVID-19 pandemic,
•wars, conflicts, or other changes in a country’s or region’s political or economic conditions, particularly in developing or emerging markets,
•longer payment cycles of foreign customers and timing of collections in foreign jurisdictions,
•trade protection measures including embargoes, sanctions and tariffs, such as the sanctions and other restrictions implemented by the United States and other governments on the Russian Federation and related parties in connection with the conflict in Ukraine,
•import or export licensing requirements and the associated potential for delays or restrictions in the shipment of our products or the receipt of products from our suppliers,
•policies in foreign countries benefiting domestic manufacturers or other policies detrimental to companies headquartered in the United States,
•differing tax laws and changes in those laws, or changes in the countries in which we are subject to tax,
•adverse income tax audit settlements or loss of previously negotiated tax incentives,
•differing business practices associated with foreign operations,
•difficulty in transferring cash between international operations and the United States,
•difficulty in staffing and managing widespread operations,
•differing labor laws and changes in those laws,
•differing protection of intellectual property and changes in that protection,
•expanded enforcement of laws related to data protection and personal privacy,
•increasing global enforcement of anti-bribery and anti-corruption laws, and
•differing regulatory requirements and changes in those requirements.
Risks Related to our Debt
We have a substantial amount of outstanding debt, which could impact our ability to obtain future financing and limit our ability to make other expenditures in the conduct of our business.
We have a substantial amount of debt and other financial obligations. Our debt level and related debt service obligations could have negative consequences, including:
•requiring us to dedicate significant cash flow from operations to the payment of principal and interest on our debt, which reduces the funds we have available for other purposes, such as acquisitions and stock repurchases;
•reducing our flexibility in planning for or reacting to changes in our business and market conditions;
•exposing us to interest rate risk as a portion of our debt obligations are at variable rates;
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•increasing our foreign currency risk as a portion of our debt obligations are in denominations other than the U.S. dollar; and
•increasing the chances of a downgrade of our debt ratings due to the amount or intended purpose of our debt obligations.
We may incur additional indebtedness in the future to meet future financing needs. If we add new debt, the risks described above could increase. In addition, the market for both public and private debt offerings has experienced liquidity concerns and increased volatility, which could ultimately increase our borrowing costs and limit our ability to obtain future financing.
Restrictions in our senior unsecured revolving credit facility and other debt instruments may limit our activities.
Our senior unsecured revolving credit facility, senior unsecured notes due in 2023 (“2023 Notes”), senior unsecured notes due in 2024 (“2024 Notes”), senior unsecured notes due in 2026 (“2026 Notes”), senior unsecured notes due in 2028 (“2028 Notes”), senior unsecured notes due in 2029 (“2029 Notes”), senior unsecured notes due in 2031 (“March 2031 Notes”), senior unsecured notes due in 2031 (“September 2031 Notes”) and senior unsecured notes due in 2051 (“2051 Notes”) include restrictive covenants that limit our ability to engage in activities that could otherwise benefit our company. These include restrictions on our ability and the ability of our subsidiaries to:
•pay dividends on, redeem or repurchase our capital stock,
•sell assets,
•incur obligations that restrict our subsidiaries’ ability to make dividend or other payments to us,
•guarantee or secure indebtedness,
•enter into transactions with affiliates, and
•consolidate, merge or transfer all, or substantially all, of our assets and the assets of our subsidiaries on a consolidated basis.
We are also required to meet specified financial ratios under the terms of certain of our existing debt instruments. Our ability to comply with these financial restrictions and covenants is dependent on our future performance, which is subject to prevailing economic conditions and other factors, including factors that are beyond our control, such as foreign exchange rates, interest rates, changes in technology and changes in the level of competition. In addition, if we are unable to maintain our investment grade credit rating, our borrowing costs would increase and we would be subject to different and potentially more restrictive financial covenants under some of our existing debt instruments.
Any future indebtedness that we incur may include similar or more restrictive covenants. Our failure to comply with any of the restrictions in our senior unsecured revolving credit facility, the 2023 Notes, the 2024 Notes, the 2026 Notes, the 2028 Notes, the 2029 Notes, the March 2031 Notes, the September 2031 Notes, the 2051 Notes or any future indebtedness may result in an event of default under those debt instruments, which could permit acceleration of the debt under those debt instruments, and require us to prepay that debt before its scheduled due date under certain circumstances.
Risks Related to Ownership of our Common Stock
Our share price will fluctuate.
Over the last several years, stock markets in general and our common stock in particular have experienced significant price and volume volatility. Both the market price and the daily trading volume of our common stock may continue to be subject to significant fluctuations due not only to general stock market conditions but also to a change in sentiment in the market regarding our operations and business prospects. In addition to the risk factors discussed above, the price and volume volatility of our common stock may be affected by:
•operating results that vary from our financial guidance or the expectations of securities analysts and investors,
•the financial performance of the major end markets that we target,
•the operating and securities price performance of companies that investors consider to be comparable to us,
•announcements of strategic developments, acquisitions and other material events by us or our competitors,
•changes in global financial markets and global economies and general market conditions, such as interest or foreign exchange rates, inflation, freight costs, commodity and equity prices and the value of financial assets, and
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•changes to economic conditions arising from global health crises such as the COVID-19 pandemic or from wars or conflicts.
Dividends on our common stock could be reduced or eliminated in the future.
On January 26, 2023, we announced that our Board of Directors (our “Board”) had declared a quarterly dividend of $0.07 per share for the first quarter of fiscal year 2023 that will be paid in May 2023. On April 25, 2023, we announced that our Board had declared a quarterly dividend of $0.07 per share for the second quarter of fiscal year 2023 that will be payable in August 2023. In the future, our Board may determine to reduce or eliminate our common stock dividend in order to fund investments for growth, repurchase shares or conserve capital resources.
Item 2.Unregistered Sales of Equity Securities and Use of Proceeds
Stock Repurchases
The following table provides information with respect to the shares of common stock repurchased by us for the periods indicated.
| Issuer Repurchases of Equity Securities | |||||||||||||||||||||||
| Period | Total Number of Shares Purchased(1) | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(2) | Maximum Number (or Approximate Dollar Value) Shares that May Yet Be Purchased Under the Plans or Programs(2) | |||||||||||||||||||
| January 2, 2023—February 5, 2023 | 39,158 | $ | 138.41 | — | $ | 280,865,541 | |||||||||||||||||
| February 6, 2023—March 5, 2023 | 21,523 | 138.06 | — | 280,865,541 | |||||||||||||||||||
| March 6, 2023—April 2, 2023 | 455,550 | 128.59 | 450,238 | 222,938,052 | |||||||||||||||||||
| Activity for quarter ended April 2, 2023 | 516,231 | $ | 129.73 | 450,238 | $ | 222,938,052 | |||||||||||||||||
____________________
(1)Our Board of Directors (our “Board”) has authorized us to repurchase shares of common stock to satisfy minimum statutory tax withholding obligations in connection with the vesting of restricted stock awards and restricted stock unit awards granted pursuant to our equity incentive plans and to satisfy obligations related to the exercise of stock options made pursuant to our equity incentive plans. During the three months ended April 2, 2023, we repurchased 65,993 shares of common stock for this purpose at an aggregate cost of $9.0 million.
(2)On July 22, 2022, our Board authorized us to repurchase shares of common stock for an aggregate amount up to $300.0 million under a stock repurchase program (the “Repurchase Program”). During the three months ended April 2, 2023, we repurchased 450,238 shares of common stock under the Repurchase Program for an aggregate cost of $57.9 million. As of April 2, 2023, $222.9 million remained available for aggregate repurchases of shares under the Repurchase Program. Subsequent to the first quarter of fiscal year 2023, we repurchased 554,306 shares of common stock under the Repurchase Program at an aggregate cost of $73.3 million. On April 27, 2023, the Repurchase Program was terminated by our Board and our Board authorized us to repurchase shares of common stock for an aggregate amount up to $600 million under a new stock repurchase program (the “New Repurchase Program”). No shares remain available for repurchase under the Repurchase Program due to its termination. The New Repurchase Program will expire on April 26, 2025 unless terminated earlier by our Board and may be suspended or discontinued at any time.
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Item 6.Exhibits
Exhibit Number | Exhibit Name | |||||||
| 2.1* | ||||||||
| 3.1 | ||||||||
| 3.2 | ||||||||
| 31.1 | ||||||||
| 31.2 | ||||||||
| 32.1 | ||||||||
| 101.INS | Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | |||||||
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document. | |||||||
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | |||||||
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document. | |||||||
| 101.LAB | Inline XBRL Taxonomy Extension Labels Linkbase Document. | |||||||
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | |||||||
| 104 | Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101). | |||||||
____________________________
* The exhibits and schedules to this agreement have been omitted from this filing pursuant to Item 601(b)(2) of Regulation S-K. The Company agrees to furnish copies of any of such exhibits or schedules to the SEC upon request.
Attached as Exhibit 101 to this report are the following formatted in XBRL (Extensible Business Reporting Language):
(i) Cover Page, Form 10-Q, Quarterly Report for the quarterly period ended April 2, 2023 (ii) Condensed Consolidated Statements of Operations for the three months ended April 2, 2023 and April 3, 2022, (iii) Condensed Consolidated Statements of Comprehensive Income for the three months ended April 2, 2023 and April 3, 2022, (iv) Condensed Consolidated Balance Sheets at April 2, 2023 and January 1, 2023, (v) Condensed Consolidated Statements of Stockholders’ Equity for the three months ended April 2, 2023 and April 3, 2022, (vi) Condensed Consolidated Statements of Cash Flows for the three months ended April 2, 2023 and April 3, 2022, and (vii) Notes to Condensed Consolidated Financial Statements.
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SIGNATURES
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.
REVVITY, INC. | |||||||||||
| May 12, 2023 | By: | /s/ MAXWELL KRAKOWIAK | |||||||||
| Maxwell Krakowiak Senior Vice President and Chief Financial Officer (Principal Financial Officer) | |||||||||||
REVVITY, INC. | |||||||||||
| May 12, 2023 | By: | /s/ ANDREW OKUN | |||||||||
| Andrew Okun Vice President, Chief Accounting Officer and Treasurer (Principal Accounting Officer) | |||||||||||
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FEDERAL IDENTIFICATION No. 04-2052042 | ||||||||||||||||||||||||||||||||||||||||||||
 | The Commonwealth of Massachusetts William Francis Galvin Secretary of the Commonwealth One Ashburton Place, Boston, Massachusetts 02108-1512 |  | ||||||||||||||||||||||||||||||||||||||||||
RESTATED ARTICLES OF ORGANIZATION (General Laws, Chapter 156B, Section 74) | ||||||||||||||||||||||||||||||||||||||||||||
| We, | Terrance L. Carlson | , | *Vice President. | |||||||||||||||||||||||||||||||||||||||||
| and | John L. Healy | , | *Assistant Clerk. | |||||||||||||||||||||||||||||||||||||||||
| of | PerkinElmer, Inc. | |||||||||||||||||||||||||||||||||||||||||||
| (Exact name of corporation) | ||||||||||||||||||||||||||||||||||||||||||||
| located at | 45 William Street, Wellesley, MA 02481 | |||||||||||||||||||||||||||||||||||||||||||
| (Street address of corporation Massachusetts) | ||||||||||||||||||||||||||||||||||||||||||||
| do hereby certify that the following Restatement of the Articles of Organization was duly adopted at a meeting | ||||||||||||||||||||||||||||||||||||||||||||
| held on | April 24 | , 20 | 01 | By a vote of directors/or: | ||||||||||||||||||||||||||||||||||||||||
| shares of | of | shares outstanding, | ||||||||||||||||||||||||||||||||||||||||||
(type, class & series, if any) | ||||||||||||||||||||||||||||||||||||||||||||
| shares of | of | shares outstanding, and | ||||||||||||||||||||||||||||||||||||||||||
(type, class & series, if any) | ||||||||||||||||||||||||||||||||||||||||||||
| shares of | of | shares outstanding, | ||||||||||||||||||||||||||||||||||||||||||
(type, class & series, if any) | ||||||||||||||||||||||||||||||||||||||||||||
**being at least a majority of each type, class or series outstanding and entitled to vote shares: / **being at least two thirds of each type, class or series outstanding and entitled to vote thereon and of each type, class or series of stock whose rights are adversely affected thereby: | ||||||||||||||||||||||||||||||||||||||||||||
 | ARTICLE I | |||||||||||||||||||||||||||||||||||||||||||
The name of the corporation is: | ||||||||||||||||||||||||||||||||||||||||||||
| PerkinElmer, Inc. | ||||||||||||||||||||||||||||||||||||||||||||
| ARTICLE II | ||||||||||||||||||||||||||||||||||||||||||||
The purpose of the corporation is to engage in the following business activity(ies): | ||||||||||||||||||||||||||||||||||||||||||||
See attached Article II | ||||||||||||||||||||||||||||||||||||||||||||
 | * Delete the inapplicable words. ** Delete the inapplicable clause. Note: If the space provided under any article or item on this form is insufficient, additions shall be set forth on separate 8 ½ 11 sheets of paper with left margin of at least 1 inch. Additions to more than one article may be made on a single sheet as long as each article requiring each addition is clearly indicated. | |||||||||||||||||||||||||||||||||||||||||||
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ARTICLE III
State the total number of shares and par value, if any, of each class of stock which the corporation is authorized to issue:
| WITHOUT PAR VALUE | WITH PAR VALUE | |||||||||||||
| TYPE | NUMBER OF SHARES | TYPE | NUMBER OF SHARES | PAR VALUE | ||||||||||
| Common: | Common: | 300,000,000 | $1.00 | |||||||||||
Preferred: | Preferred: | 1,000,000 | $1.00 | |||||||||||
ARTICLE IV
If more than one data of stock is authorized, state a distinguishing designation for each class. Prior to the issuance of any shares of a class, if shares of another class are outstanding, the corporation must provide a description of the preferences, voting powers, qualifications and special or relative rights or privileges of that class and of each other class of which shares are outstanding and of each series then established within any class.
See Attached Article IV
ARTICLE V
The restrictions, if any, imposed by the Articles of Organization upon the transfer of shares of stock of any class are:
None
ARTICLE VI
**Other lawful provisions, if any, for the conduct and regulation of the business and affairs of the corporation, for its voluntary dissolution, or for limiting, defining, or regulating the powers of the corporation, or of its directors or stockholders, or of any class of stockholders:
See Attached Article VI
**If there are no provisions state "None"
Note The preceding six (6) articles are considered so be permanent and may ONLY be changed by filing appropriate Articles of Amendment.
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Article II
The purpose of the corporation is to engage in the following business activities:
To manufacture, buy, sell, store, alter, and otherwise deal in or with electrical, electronic, photographic and mechanical equipment, devices, machinery, products, supplies, and material of all kinds.
To render consulting and advisory services of all kinds.
To engage in research, experimentation, and development work of all kinds either for its
own account or for others.
To engage in, conduct, and carry on any other business or businesses and to engage in
any lawful act or activity for which corporations may be organized under Chapter 156B of the
Laws of the Commonwealth of Massachusetts or any amendment or substitution therefor.
To purchase, lease, exchange or otherwise acquire, hold, store, sell, encumber, or
otherwise deal in or with any real or personal property or any rights or privileges which the
corporation may consider necessary or convenient for the purpose of its business, provided,
however, that this Corporation shall not engage in the real estate business.
To acquire by purchase, lease, exchange or otherwise the whole or any part of the good
will, patents, trade names, rights, licenses, and property of any person or persons, firm,
association, or corporation heretofore or hereafter engaged in any of these businesses or any
similar business or businesses or in any business which this corporation is authorized to carry on
and pay for the same in cash or in stock or other securities of this corporation or otherwise, and
hold and in any manner dispose of the whole or any part of the property so acquired, and conduct
in any lawful manner the whole or any part of the business or businesses so acquired.
To borrow money, to issue notes, bonds or other obligations, secured or unsecured, of the
corporation for any purpose for which it is incorporated.
To purchase or otherwise receive, hold, sell, and otherwise deal in or with all or any part
of the capital stock of any class, bonds, notes, debentures, or other securities of any corporation,
including this corporation, association, government, state municipality, or other organization.
To do any and all other acts and things and to exercise any and all other powers which a
partnership or a natural person could do and exercise which now or hereafter may be authorized
by the law governing business corporations in furtherance of these purposes.
To carry on any business herein described either for its own account or as agent broker,
or otherwise.
Article IV
If more than one class of stock is authorized, state a distinguishing designation for each
class. Prior to the issuance of any shares of a class, if shares of another class are outstanding, the
corporation must provide a description of the preferences, voting powers, qualifications, and
special or relative rights or privileges of that class and of each other class of which shares are
outstanding and of each series then established within any class:
The following is a description of each class of stock of the corporation and the respective
preferences, powers, qualifications and special or relative rights or privileges as to each class.
A. Preferred Stock. The Preferred Stock may be issued in one or more series at such
time or times and for such considerations as the Board of Directors may
determine. Each series shall be so designated as to distinguish the shares thereof
from the shares of all other series and classes. Except as to the relative rights and
preferences referred to hereinafter in respect of any or all of which there may be
variations between different series, and except that shares of any one series issued
at different times may differ as to the dates from which dividends thereon shall
accrue and be cumulative, all shares of Preferred Stock shall be identical.
Different series of Preferred Stock shall not be construed to constitute different
classes of shares for the purpose of voting by classes.
The Board of Directors is expressly authorized, subject to the limitations prescribed by
law and the provisions of these Articles, to provide by adopting a resolution or
resolutions, a certificate of which shall be filed in accordance with the Business
Corporation Law of the Commonwealth of Massachusetts, for the issue of the Preferred
Stock in one or more series, each with such designations, preferences and relative,
participating, optional or other special rights, and qualifications, limitations or restrictions
thereof as shall be stated in the resolution or resolutions creating such series. The
authority of the Board of Directors with respect to each such series shall include, without
limitation of the foregoing, the right to determine and fix:
(1) The distinctive designation of such series and the number of shares to
constitute such series;
(2) The rate at which dividends on the shares of such series shall be declared and
paid, or set aside for payment, before any dividends on the Common Stock with
respect to the same dividend period shall be declared and paid or set aside for
payment; whether dividends at the rate so determined shall be cumulative and if
so from what date or dates and on what terms; and whether the shares of such
series shall he entitled to any participating or other dividends in addition to
dividends at the rate so determined, and if so on what terms;
(3) The right, if any, of the corporation to redeem shares of the particular series
and, if redeemable, the terms and conditions of such redemption, including the
redemption price or prices which the shares of such series shall be entitled to
receive upon redemption;
(4) The preferences, if any, and the amount or amounts per share, which the
shares of such series shall be entitled to receive upon any voluntary or involuntary
liquidation, dissolution or winding up of the corporation;
(5) The terms and conditions, if any, upon which shares of such series shall be
convertible into, or exchangeable for, shares of stock of any other class or classes
or other series of the same class, including the price or prices or the rate or rates
of conversion or exchange and the terms of adjustment, if any;
(6) The obligation, if any, of the corporation to retire or purchase shares of such
series pursuant to a sinking fund of a similar nature or otherwise, and the terms
and conditions of such obligations;
(7) Voting rights, if any, provided that the shares of all series with voting rights
shall not have more than one vote per share;
(8) The status as to reissuance or sale of shares of such series redeemed,
purchased or otherwise reacquired, or surrendered to the corporation on
conversion;
(9) The conditions and restrictions, if any, on the payment of dividends or on the
making of other distributions on, or the purchase, redemption or other acquisition
by the corporation or any subsidiary, of the Common Stock or of any other class
of stock of the corporation ranking junior to the shares of such series as to
dividends or upon liquidation;
(10) The conditions and restrictions, if any, on the creation of indebtedness of the
corporation, or any subsidiary, or on the issue of any additional stock ranking on a
parity with or prior to the shares of such series as to dividends or upon
liquidation;
(11) Such other preferences or restrictions or qualifications thereof as the Board
of Directors may deem advisable and are not inconsistent with law and the
provisions of these Articles.
No holder of shares of the Preferred Stock shall be entitled as such, as a matter of right, to
subscribe for or purchase any part of any new or additional issue of stock of any class
whatsoever of the corporation, or of securities convertible into stock of any class,
whether now or hereafter authorized, or whether issued for cash or other consideration or
by way of dividend.
Terms of Series C Junior Participating Preferred Stock:
I. Designation and Amount
The shares of such series shall be designated as “Series C Junior Participating Preferred
Stock” (the “Series C Preferred Stock”) and the number of shares constituting the Series C
Preferred Stock shall be 70,000. Such number of shares may be increased or decreased by
resolution of the Board of Directors; provided, that no decrease shall reduce the number of shares
of Series C Preferred Stock to a number less than the number of shares then outstanding plus the
number of shares reserved for issuance upon the exercise of outstanding options, rights or
warrants or upon the conversion of any outstanding securities issued by the Corporation
convertible into Series C Preferred Stock.
II. Dividends and Distributions
(A) Subject to the rights of the holders of any shares of any series of Preferred Stock
(or any similar stock) ranking prior and superior to the Series C Preferred Stock with respect to
dividends, the holders of shares of Series C Preferred Stock, in preference to the holders of
Common Stock, par value $1 per share (the “Common Stock”), of the Corporation, and of any
other junior stock, shall be entitled to receive, when, as and if declared by the Board of Directors
out of funds of the Corporation legally available for the payment of dividends, quarterly
dividends payable in cash on the first day of March, June, September and December in each year
(each such date being referred to herein as a “Quarterly Dividend Payment Date”), commencing
on the first quarterly Dividend Payment Date after the first issuance of a share or fraction of a
share of Series C Preferred Stock, in an amount per share (rounded to the nearest cent) equal to
the greater of (a) $1 or (b) subject to the provision for adjustment hereinafter set forth, 1,000
times the aggregate per share amount of all cash dividends, and 1,000 times the aggregate per
share amount (payable in kind) of all non-cash dividends or other distributions, other than a
dividend payable in shares of Common Stock or a subdivision of the outstanding shares of
Common Stock (by reclassification or otherwise), declared on the Common Stock since the
immediately preceding Quarterly Dividend Payment Date or, with respect to the first Quarterly
Dividend Payment Date, since the first issuance of any share or fraction of a share of Series C
Preferred Stock. In the event the Corporation shall at any time declare or pay any dividend on the
Common Stock payable in shares of Common Stock, or effect a subdivision, combination or
consolidation of the outstanding shares of Common Stock (by reclassification or otherwise than
by payment of a dividend in shares of Common Stock) into a greater or lesser number of shares
of Common Stock, then in each such case the amount to which holders of shares of Series C
Preferred Stock were entitled immediately prior to such event under clause (b) of the preceding
sentence shall be adjusted by multiplying such amount by a fraction, the numerator of which is
the number of shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were outstanding
immediately prior to such event.
(B) The Corporation shall declare a dividend or distribution on the Series C Preferred
Stock as provided in paragraph (A) of this Section immediately after it declares a dividend or
distribution on the Common Stock (other than a dividend payable in shares of Common Stock)
and the Corporation shall pay such dividend or distribution on the Series C Preferred Stock
before the dividend or distribution declared on the Common Stock is paid or set apart; provided
that, in the event no dividend or distribution shall have been declared on the Common Stock
during the period between any Quarterly Dividend Payment Date and the next subsequent
Quarterly Dividend Payment Date, a dividend of $1 per share on the Series C Preferred Stock
shall nevertheless be payable on such subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on outstanding shares of Series C Preferred Stock from the Quarterly Dividend Payment Date next preceding the date of or is a
date after the record date for the determination of holders of shares of Series C Preferred Stock
entitled to receive a quarterly dividend and before such Quarterly Dividend Payment Date, in
either of which events such dividends shall begin to accrue and be cumulative from such
Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear interest.
Dividends paid on the shares of Series C Preferred Stock in an amount less than the total amount
of such dividends at the time accrued and payable on such shares shall be allocated pre rata on a
share-by-share basis among all such shares at the time outstanding. The Board of Director may
fix a record date for the determination of holders of shares of Series C Preferred Stock entitled to
receive payment of a dividend or distribution declared thereon, which record date shall be not
more than 60 days prior to the date fixed for the payment thereof.
III. Voting Rights
The holders of shares of Series C Preferred Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set forth, each share of Series
C Preferred Stock shall entitle the holder thereof to 1,000 votes on all matters submitted to a vote
C Preferred Stock shall entitle the holder thereof to 1,000 votes on all matters submitted to a vote
of the stockholders of the Corporation. In the event the Corporation shall at any time declare or
pay any dividend on the Common Stock payable in shares of Common Stock, or effect a
subdivision, combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common Stock) into a
greater or lesser number of shares of Common Stock, then in each such case the number of votes
per share to which holders of shares of Series C Preferred Stock were entitled immediately prior
to such event shall be adjusted by multiplying such number by a fraction, the numerator of which
is the number of shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were outstanding
immediately prior to such event.
(B) Except as otherwise provided herein, by law, or in any other Certificate of Vote of
Directors creating a series of Preferred Stock or any similar stock, the holders of shares of Series
C Preferred Stock and the holders of shares of Common Stock and any other capital stock of the
Corporation having general voting rights shall vote together as one class on all matters submitted
to a vote of stockholders of the Corporation.
(C) (i) If at any time dividends on any Series C Preferred Stock shall be in arrears in
an amount equal to six quarterly dividends thereon, the holders of the Series C Preferred Stock,
voting as a separate series from all other series of Preferred Stock and classes of capital stock,
shall be entitled to elect two members of the Board of Directors in addition to any Directors
elected by any other series, class or classes of securities and the authorized number of Directors
will automatically be increased by two. Promptly thereafter, the Board of Directors of this
Corporation shall, as soon as may be practicable, call a special meeting of holders of Series C
Preferred Stock for the purpose of electing such members of the Board of Directors. Said special
meeting shall in any event be held within 45 days of the occurrence of such arrearage.
(ii) During any period when the holders of Series C Preferred Stock, voting as a
separate series, shall be entitled and shall have exercised their right to elect two Directors, then
and during such time as such right continues (a) the then authorized number of Directors shall be
increased by two, and the holders of Series C Preferred Stock, voting as a separate series, shall
be entitled to elect the additional Directors so provided for, and (b) each such additional Director
shall not be a member of any existing class of the Board of Directors, but shall serve until the
next annual meeting of stockholders for the election of Directors, or until his successor shall be
elected and shall qualify, or until his right to hold such office terminates pursuant to the
provisions of this Section III(C).
(iii) A Director elected pursuant to the terms hereof may be removed with or
without cause by the holders of Series C Preferred Stock entitled to vote in an election of such
Director.
(iv) If, during any interval between annual meetings of stockholders for the
election of Directors and while the holders of Series C Preferred Stock shall be entitled to elect
two Directors, there is no such Director in office by reason of resignation, death or removal,
then, promptly thereafter, the Board of Directors shall call a special meeting of the holders of
Series C Preferred Stock for the purpose of filling such vacancy and such vacancy shall be filled
at such special meeting. Such special meeting shall in any event be held within 45 days of the
occurrence of such vacancy.
(v) At such time as the arrearage is fully cured, and all dividends accumulated
and unpaid on any shares of Series C Preferred Stock outstanding are paid, and, in addition
thereto, at least one regular dividend has been paid subsequent to curing such arrearage, the term
of office of any Director elected pursuant to this Section III(C), or his successor, shall
automatically terminate, and the authorized number of Directors shall automatically decrease by
two, the rights of the holders of the shares of the Series C Preferred Stock to vote as provided in
this Section III(C) shall cease, subject to renewal from time to time upon the same terms and
conditions, and the holders of shares of the Series C Preferred Stock shall have only the limited
voting rights elsewhere herein set forth.
(D) Except as set forth herein, or as otherwise provided by law, holders of Series C
Preferred Stock shall have no special voting rights and their consent shall not be required (except
to the extent they are entitled to vote with holders of Common Stock as set forth herein) for
taking any corporate action.
IV. Certain Restrictions
(A) Whenever quarterly dividends or other dividends or distributions payable on the
Series C Preferred Stock as provided in Section II are in arrears, thereafter and until all accrued
and unpaid dividends and distributions, whether or not declared, on shares of Series C Preferred
Stock outstanding shall have been paid in full, the Corporation shall not:
(i) declare or pay dividends, or make any other distributions, on any shares of stock
ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series C Preferred Stock;
(ii) declare or pay dividends, or make any other distributions, on any shares of stock
ranking on parity (either as to dividends or upon liquidation, dissolution or winding up) with the
Series C Preferred Stock, except dividends paid ratably on the Series C Preferred Stock and all
such parity stock on which dividends are payable or in arrears in proportion to the total amounts
to which the holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for consideration shares of any stock
ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series
C Preferred Stock, provided that the Corporation may at any time redeem, purchase or otherwise
acquire shares of any such junior stock in exchange for shares of any stock of the Corporation
ranking junior (either as to dividends or upon dissolution, liquidation or winding up) to the Series
C Preferred Stock; or
(iv) redeem or purchase or otherwise acquire for consideration any shares of Series C
Preferred Stock, or any shares of stock ranking on a parity with the Series C Preferred Stock,
except in accordance with a purchase offer made in writing or by publication (as determined by
the Board of Directors) to all holders of such shares upon such terms as the Board of Directors,
after consideration of the respective annual dividend rates and other relative rights and
preferences of the respective series and classes, shall determine in good faith will result in fair
and equitable treatment among the respective series or classes.
(B) The Corporation shall not permit any subsidiary of the Corporation to purchase or
otherwise acquire for consideration any shares of stock of the Corporation unless the Corporation
could, under paragraph (A) of this Section IV, purchase or otherwise acquire such shares at such
time and in such manner.
V. Reacquired Shares
Any shares of Series C Preferred Stock purchased or otherwise acquired by the
Corporation in any manner whatsoever shall be retired and cancelled promptly after the
acquisition thereof. All such shares shall upon their cancellation become authorized but unissued
shares of Preferred Stock and may be reissued as part of a new series of Preferred Stock subject
to the conditions and restrictions on issuance set forth herein, in the Articles of Organization, in
any other Certificate of Vote of Directors creating a series of Preferred Stock or any similar stock
or as otherwise required by law.
VI. Liquidation, Dissolution or Winding Up
(A) Upon any liquidation, dissolution or winding up of the Corporation, no
distribution shall be made (1) to the holders of shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series C Preferred Stock unless,
prior thereto, the holders of shares of Series C Preferred Stock shall have received $1,000 per
share, plus an amount equal to accrued and unpaid dividends and distributions thereon, whether
or not declared, to the date of such payment, provided that the holders of shares of Series C
Preferred Stock shall be entitled to receive an aggregate amount per share, subject to the
provision for adjustment hereinafter set forth, equal to 1,000 times the aggregate amount to be distributed per share to holders of shares of Common Stock, or (2) to the holders of shares of
stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up)
with the Series C Preferred Stock, except distributions made ratably on the Series C Preferred
Stock and all such parity stock in proportion to the total amounts to which the holders of all such
shares are entitled upon such liquidation, dissolution or winding up.
(B) Neither the consolidation, merger or other business combination of the
Corporation with or into any other corporation nor the sale, lease, exchange or conveyance of all
or any part of the property, assets or business of the Corporation shall be deemed to be a liquidation, dissolution or winding up of the Corporation for purposes of this Section VI.
(C) In the event the Corporation shall at any time declare or pay any dividend on the
Common Stock payable in shares of Common Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by reclassification or otherwise than
by payment of a divided in shares of Common Stock) into a greater or lesser number of shares of
Common Stock, then in each such case the aggregate amount to which holders of shares of
Series C Preferred Stock were entitled immediately prior to such event under the proviso in
clause (1) of paragraph (A) of this Section VI shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of shares of Common
Stock that were outstanding immediately prior to such event.
VII. Consolidation, Merger, etc.
Notwithstanding anything to the contrary contained herein, in case the Corporation shall
enter into any consolidation, merger, combination or other transaction in which the shares of
Common Stock are exchanged for or changed into other stock or securities, cash and/or any other
property, then in any such case each share of Series C Preferred Stock shall at the same time be
similarly exchanged or changed into an amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 1,000 times the aggregate amount of stock, securities, cash and/or
any other property (payable in kind), as the case may be, into which or for which each share of
Common Stock is changed or exchanged. In the event the Corporation shall at any time declare
or pay any dividend on the Common Stock payable in shares of Common Stock, or effect a
subdivision, combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common Stock) into a
greater or lesser number of shares of Common Stock, then in each such case the amount set forth
in the preceding sentence with respect to the exchange or change of shares of Series C Preferred
Stock shall be adjusted by multiplying such amount by a fraction the numerator of which is the
number of shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were outstanding
immediately prior to such event.
VIII. Redemption
The shares of Series C Preferred Stock shall not be redeemable.
IX. Rank
The Series C Preferred Stock shall rank, with respect to the payment of dividends and the
distribution of assets, junior to all series of any other class of the Corporation's Preferred Stock
issued either before or after the issuance of the Series C Preferred Stock, unless the terms of any
such series shall provide otherwise.
X. Amendment
The Articles of Organization of the Corporation shall not be amended in any manner
which would materially alter or change the powers, preference or special rights of the Series C
Preferred Stock so as to affect them adversely without the affirmative vote of the holders of at
least two-thirds of the outstanding shares of Series C Preferred Stock, voting together as a single
series.
XI. Fractional Shares
Series C Preferred Stock may be issued in fractions of a share which are integral
multiples of one-thousandth of a share which shall entitle the holder, in proportion to such
holder's fractional shares, to exercise voting rights, receive dividends, participate in distributions
and have the benefit of all other rights of holders of Series C Preferred Stock.
B. Common Stock. After the requirements with respect to preferential dividends on the
Preferred Stock (fixed in accordance with the provisions of paragraph A of this Article 4) shall
have been met and after the corporation shall have complied with all the requirements, if any,
with respect to the setting aside of sums as sinking funds or redemption or purchase accounts
(fixed in accordance with the provisions of paragraph A of this Article 4), then and not otherwise
the holders of Common Stock shall be entitled to receive such dividends as may be declared from time to time by the Board of Directors.
After distribution in full of the preferential amount (fixed in accordance with the
provisions of paragraph A of this Article 4) to be distributed to the holders of Preferred Stock in
the event of voluntary and involuntary liquidation, distribution or sale of assets, dissolution or
winding up of this corporation, the holders of the Common Stock shall be entitled to receive all
the remaining assets of this corporation, tangible and intangible, of whatever kind available for
distribution to the stockholders ratably in proportion to the number of shares of Common Stock
held by them respectively.
Except as may otherwise be required by law or the provisions of these Articles, or by the
Board of Directors pursuant to authority granted in these Articles, each holder of Common Stock
shall have one vote in respect of each share of stock held by him in all matters voted upon by the
stockholders.
No holder of shares of the Common Stock shall be entitled as such, as a matter of right, to
subscribe for or purchase any part of any new or additional issue of stock of any class
whatsoever of the corporation, or of securities authorized, or whether issued for cash or other
consideration or by way of dividend.
Article VI
Other lawful provisions, if any, for the conduct and regulation of the business and affairs
of the corporation, for its voluntary dissolution, or for limiting, defining, or regulating the powers
of the corporation, or of its directors or stockholders, or of any class of stockholders.
Meetings of Stockholders may be held within the Commonwealth of Massachusetts or
elsewhere in the United States of America to the extent permitted by the By-laws of the
Corporation.
The Directors may make, amend, or repeal the By-laws of the Corporation in whole or in
part at any meeting of the Directors by vote of a majority of the Directors then in office, except
that the provisions thereof fixing the place of the meetings of Stockholders, designating the
number necessary to constitute a quorum at meetings of the Stockholders, governing procedure
with respect to the removal of Directors, and affording indemnification to Directors or officers
may be made, amended, or repealed only by the Stockholders.
The number of Directors which shall constitute the whole Board of Directors shall be
such number, not less than three nor more than thirteen, as shall be fixed by vote of the
stockholders or the Board of Directors. During the time periods specified in this Article 6, the
Board of Directors shall be divided into three classes in respect of term of office, each class to
contain, as nearly as possible, one-third of the whole number of the Board. Of the Board of
Directors elected at the Annual Meeting of Stockholders in 1975, the members of one class shall
serve until the Annual Meeting of Stockholders held in the year following their election, the
members of the second class shall serve until the Annual Meeting of Stockholders held two years
following their election, and the members of the third class shall serve until the Annual Meeting
of Stockholders held three years following their election; provided, however, that in each case
Directors shall serve until their successors shall be elected and qualified. At each Annual
Meeting of Stockholders, commencing with the Annual Meeting in 1976 through and including
the Annual Meeting 1995, the successors of the Directors of the class whose terms expire in that
year shall be elected to serve until the Annual Meeting of Stockholders held three years next
following (and until their successors shall be duly elected and qualified), so that the term of one
class of Directors shall expire in each year. At each Annual Meeting of Stockholders,
commencing with the Annual Meeting in 1996, the successors of the Directors whose terms
expire in that year shall be elected to serve until the Annual Meeting of Stockholders held in the
following year (and until their successors shall be duly elected and qualified), so that, upon the
expiration in 1998 of the terms of the Directors elected at the Annual Meeting in 1995, all
Directors shall be elected to hold office for a one-year term. A vacancy in the Board of Directors,
however occurring, unless and until filled by the stockholders, may be filled by the Directors.
The number of the Board of Directors may be increased or decreased and one or more additional
Directors elected at any special meeting of the stockholders or by a vote of the Directors then in
office. For so long as the Directors are divided into classes in accordance with the terms of this
Article 6, Directors who are elected to fill vacancies, whether or not created by an enlargement
of the Board, shall be apportioned among the classes so as to make all classes as nearly equal in
number as possible. Directors who are elected to fill vacancies, whether or not created by an
enlargement of the Board, shall serve until the expiration of the term of his or her predecessor
and until his or her successor is duly elected and qualified. No decrease in the number of the
Board of Directors shall shorten the term of any incumbent Directors.
A Director may be removed from office (a) with or without cause, by vote of two-thirds of the
stock outstanding and entitled to vote in the election of Directors, provided that the Directors of a
class elected by a particular class of stockholders may be removed only by the vote of two-thirds
of the shares of such class which are outstanding and entitled to vote or (b) for cause by vote of a
majority of the Directors then in office. A Directors may be removed for cause only after
reasonable notice and opportunity to be heard before the body proposing to remove him.
To the fullest extent permitted by Chapter 156B of the Massachusetts General Laws, as it exists
or may be amended, a Director of this Corporation shall not be personally liable to the
Corporation or its stockholders for monetary damages for breach of fiduciary duty as a Director, notwithstanding any provision of law imposing such liability.
Article VIII (b)
| NAME | ADDRESS | |||||||
President | Gregory L. Summe | 466 Glenn Rd. Weston, MA 02493 | ||||||
| Treasurer | Robert F. Friel | 16 Longmeadow Drive Westwood, MA 02090 | ||||||
| Clerk / Vice President | Terrance L. Carlson | Cronin's Landing 25 Crescent Street Apt. 527 Waltham, MA 02154 | ||||||
| Asst. Clerk | John L. Healy | 50 Rolling Meadow Drive Holliston, MA 01746 | ||||||
| Directors | Tamara J. Erickson | 886 Lowell Street Carlisle, MA 01741 | ||||||
| Dr. Kent F. Hansen | 780 Boylston, Apt. 17H Boston, MA 02199 | |||||||
| John F. Keane | 55 Black Horse Lane Cohasset, MA 02025 | |||||||
| Nicholas A. Lopardo | 62 Boren Lane Boxford, MA 01921 | |||||||
| Michael C. Ruettgers | 453 Bedford Rd. Carlisle, MA 01741 | |||||||
| Gregory L. Summe | 466 Glen Rd. Weston, MA 02493 | |||||||
| Gabriel Schmergel | 15 Lowell Rd. Wellesley, MA 02481 | |||||||
| Kenton J. Sicchitano | 25 Hundreds Circle Wellesley Hills, MA 02481 | |||||||
| G. Robert Tod | 116 Estabrook Rd. Concord, MA 01742 | |||||||
ARTICLE VII
The effective date of the restated Articles of Organization of the corporation shall be the date approved and filed by the
Secretary of the Commonwealth. If a later effective date is desired, specify such date which shall not be more than thirty
days after the date of filing.
ARTICLE VIII
The information contained in Article VIII is not a permanent part of the Articles of Organization.
The Street address (post office boxes are not acceptable) of the principal office of the corporation in Massachusetts is:
45 William Street, Wellesley, MA 02481
The name residential address and post office address of each director and officer of the corporation is as follows:
NAME | RESIDENTIAL ADDRESS | POST OFFICE ADDRESS | |||||||||
| President: | |||||||||||
| Treasurer: | See Attached Article VIII (b) | ||||||||||
| Clerk: | |||||||||||
| Directors: | |||||||||||
The fiscal year (i.e., tax year) of the corporation shall end on the last day of the xxxxxxx Sunday closest to
December 31
The name and business address of the resident agent, if any, of the corporation is:
CT Corporation
101 Federal Street, Boston, MA 02110
We further certify that the foregoing Restated Articles of Organization affect no amendments to the Articles of Organization
the corporation as heretofore amended, except amendments to the following articles. Briefly describe amendments below:
None
759584
THE COMMONWEALTH OF MASSACHUSETTS
RESTATED ARTICLES OF ORGANIZATION
(General Laws, Chapter 156B, Section 74) 
I hereby approve the within Restated Articles of Organization and,
the filing fee in the amount of $ 200 having been paid, said
articles are deemed to have been filed with me this 29th day of
June, 2001.
Effective Date: ___________________________________________
WILLIAM FRANCIS GALVLIN
Secretary of the Commonwealth
TO RE FILLED IN BY CORPORATION Photocopy of document to be sent to: | |||||||||||
| Hal J. Leibowitz, Esq. c/o Hale and Dorr LLP | |||||||||||
| 60 State Street | |||||||||||
| Boston, MA 02109 | |||||||||||
| Telephone: | 617-526-6000 | ||||||||||
042052042
Articles of Amendment
(General Laws Chapter 156D, Section 10.06; 950 CMR 113.34)
(General Laws Chapter 156D, Section 10.06; 950 CMR 113.34)
PerkinElmer, Inc., having a registered office at 155 Federal Street, Boston, Massachusetts 02110,
certifies as follows:
FIRST, Article VI of the Restated Articles of Organization of the corporation are amended by
this Amendment.
SECOND, this Amendment was duly adopted and approved on January 24, 2007 by the board of
directors and the shareholders in the manner required by law and the Articles of Organization.
THIRD, the specific text of the amendments effected by this Amendment is as follows:
Article VI is amended to add the following at the end thereof:
The By-laws of this Corporation may, but are not required to, provide that in a
meeting of stockholders other than a Contested Election Meeting (as defined below), a
nominee for director shall be elected to the Board of Directors only if the votes cast for
such nominee's election exceed the votes cast against such nominee's election. In a
Contested Election Meeting, directors shall be elected by a plurality of the votes cast at
such Contested Election Meeting. A meeting of stockholders shall be a "Contested
Election Meeting" if, as of the day immediately preceding the date of this Corporation's
first notice to stockholders of such meeting sent pursuant to Section 4 of Article 1 of this
Corporation's By-laws, as such date is stated in such notice, either (i) there is any person
nominated for election as a director at such meeting who was not nominated for election
as a director by the Board of Directors, and such nomination other than by the Board of
Directors has not been withdrawn, or (ii) there are more persons nominated for election
as directors at such meeting than there are directors to be elected at such meeting.
FOURTH, this Amendment does not authorize.an exchange or effect a reclassification or
cancellation of issued shares of the corporation.
FIFTH, this Amendment does not change the number of shares or par value (if any) of any type,
or designate a class or series, of stock, or change a designation of any class or series of stock.
The foregoing amendments will become effective at the time and on the date when these Articles
of Amendment are approved by the Division.
Signed by | |||||
(Please check appropriate box)
Chairman of the board of directors,
President,
Other officer,
Court-appointed fiduciary,
on this 26th day of April , 2007.
1017093 COMMONWEALTH OF MASSACHUSETTS
William Francis Galvin
Secretary of the Commonwealth
One Ashburton Place, Boston, Massachusetts 02108-1512
Articles of Amendment
(General Laws Chapter 156D, Section 10.06; 950 CMR 113.34)
Effective date:________________________________________________________________________ (must be within 90 days of date submitted) | |||||
Secretary of the Commonwealth
Filing fee: Minimum filing fee $100 per article amended, stock increases $100 per 100,000 shares, plus $100 for each additional 100,000 shares or any fraction thereof. TO BE FILLED IN BY CORPORATION Contact Information: | |||||
| Examiner | |||||
 | |||||
| Name approval | |||||
| C | ||||||||||||||
| M | ||||||||||||||
| Telephone: | ||||||||||||||
| Email: | ||||||||||||||
Upon filing, a copy of this filing will be available at www.sec.state.ma.us/com.
If the document is rejected, a copy of the rejection sheet and rejected document will
be available in the rejected queue.
The Commonwealth of Massachusetts
William Francis Galvin
Secretary of the Commonwealth
One Ashburton Place, Boston, Massachusetts 02108-1512
Articles of Amendment
(General Laws Chapter 156D, Section 10.06; 950 CMR 113.34)
| (1) | Exact name of corporation: | PerkinElmer, Inc. | |||||||||
| (2) | Registered office address: | 155 Federal Street, Boston, Massachusetts 02110 | ||||||||||||
| (number, street, city or town, state, zip code) | ||||||||||||||
| (3) | These articles of amendment affect article(s): | I (specify the number(s) of article(s) being amended (I-VI)) | ||||||||||||
| (4) | Date adopted: | April 25, 2023 | ||||||||||||
| (month, day, year) | ||||||||||||||
| (5) | Approved by: | |||||||
(check appropriate box)
☐ the incorporators.
☐ the board of directors without shareholder approval and shareholder approval was not required.
☒ the board of directors and the shareholders in the manner required by law and the articles of organization.
(6) State the article number and the text of the amendment. Unless contained in the text of the amendment, state the provisions
for implementing the exchange, reclassification or cancellation of issued shares.
ARTICLE I
The name of the corporation is:
Revvity, Inc.
P.C.
To change the number of shares and the par value, * if any, of any type, or to designate a class or series, of stock, or change a designation of
class or series of stock, which the corporation is authorized to issue, complete the following:
Total authorized prior to amendment:
| WITHOUT PAR VALUE | WITH PAR VALUE | |||||||||||||
| TYPE | NUMBER OF SHARES | TYPE | NUMBER OF SHARES | PAR VALUE | ||||||||||
Total authorized after amendment:
| WITHOUT PAR VALUE | WITH PAR VALUE | |||||||||||||
| TYPE | NUMBER OF SHARES | TYPE | NUMBER OF SHARES | PAR VALUE | ||||||||||
(7) The amendment shall be effective at the time and on the date approved by the Division, unless a later effective date not more than 90 days from the date and time of filing is specified:
*G.L. Chapter 156D eliminates the concept of par value, however a corporation may specify par value in Article III. See G.L. Chapter 156D, Section 6.21, and the comments relative thereto.
| Signed by: | /s/ Joel S. Goldberg | . | ||||||
| (signature of authorized individual) | ||||||||
☐ Chairman of the board of directors,
☐ President,
☒ Other officer,
☐ Court-appointed fiduciary,
| on this | 26th | day of | April | , 2023 . | ||||||||||
THE COMMONWEALTH OF MASSACHUSETTS
I hereby certify that, upon examination of this document, duly submitted to me, it appears
That the provisions of the General Laws relative to corporations have been complied with,
and I hereby approve said articles; and the filing fee having been paid, said articles are
deemed to have been filed with me on:
April 26, 2023 10:40 AM
WILLIAM FRANCIS GALVIN
Secretary of the Commonwealth
REVVITY, INC. BY-LAWS
Amended and Restated as of
April 26, 2023
ARTICLE I.
Stockholders.
1. Place of Meetings. All meetings of stockholders shall be held within Massachusetts unless the Articles of Organization permit the holding of stockholder meetings outside Massachusetts, in which event such meetings may be held either within or without Massachusetts. Meetings of stockholders shall be held at the principal office of the corporation unless a different place is fixed by the Directors or the Chairman of the Board and stated in the notice of the meeting.
2. Annual Meetings. The annual meeting of stockholders shall be held on the fourth Tuesday of April in each year (or if that be a legal holiday in the place where the meeting is to be held, on the next succeeding full business day) at 10:30 o’clock A.M., unless a different hour is fixed by the Directors or the Chairman of the Board and stated in the notice of the meeting. The purposes for which the annual meeting is to be held, in addition to those prescribed by law, by the Articles of Organization or by these By-Laws, may be specified by the Directors or the Chairman of the Board and shall be as specified in the notice of the meeting and only business within such purposes may be conducted at the meeting. If no annual meeting is held in accordance with the foregoing provisions, a special meeting may be held in lieu thereof and any action taken at such meeting shall have the same effect as if taken at the annual meeting.
3. Special Meetings. Special meetings of stockholders may be called by the President or by the Directors. In addition, upon written application of one or more stockholders who are entitled to vote and who hold at least the Required Percentage (as defined below) of the capital stock entitled to vote at the meeting (the “Voting Stock”), special meetings shall be called by the Secretary, or in case of the death, absence, incapacity or refusal of the Secretary, by any other officer. For purposes of this Section 3, the “Required Percentage” shall be 40% or such lesser percentage as shall constitute the maximum percentage permitted by law for this purpose. Any request for a call of special meeting of stockholders (a “Call”) by the holders of the Required Percentage of the Voting Stock shall be governed by and subject to the following:
(a) Any stockholder of record seeking to solicit requests for a Call pursuant to this Section 3 shall so notify the corporation in writing to the Secretary of the corporation, and such written notification shall set forth the reason or reasons for the Call and the purpose or purposes of such special meeting and the information required by Section 13(b) and/or Section 14(b), as applicable.
(b) No solicitation of stockholder requests for a Call (a “Call Solicitation”) may be commenced (i) before the Call Request Record Date, as defined in paragraph (c) of this Section 3, or (ii) during the period of 90 days following the most recent meeting of the stockholders of the corporation.
(c) In order that the corporation may determine the stockholders entitled to request a Call, the Board of Directors of the corporation shall fix a record date (the “Call Request Record Date”). Any stockholder of record seeking to solicit stockholder requests for a Call shall, with delivery to the corporation of the written information specified in paragraph (a), request in writing that the Board of Directors fix the Call Request Record Date. The Board of Directors shall, within 10 days after the date on which such request is received, adopt a resolution fixing the Call Request Record Date, and such Call Request Record Date shall be not more than 10 days after the date upon which such resolution is adopted by the Board of Directors.
(d) All requests for a Call and revocations thereof shall be delivered to the corporation no later than the 30th day (the “Delivery Date”) after the Call Request Record Date.
(e) Any stockholder may revoke a prior request for a Call or opposition to a Call by an instrument in writing delivered prior to the Delivery Date.
(f) Promptly after the Delivery Date, requests for a Call and revocations thereof shall be counted and verified by an independent party selected by the corporation.
(g) If, in response to any Call Solicitation, the holders of record of the Required Percentage of the Voting Stock as of the Call Request Record Date submit valid and unrevoked requests for a Call no later than the Delivery Date, the Board of Directors of the corporation shall fix a record date and a meeting date for the special meeting, provided that the date to be fixed for such meeting shall be no earlier than 60 days or later than 90 days after the Delivery Date, and provided further that the Board of Directors shall not be obligated to fix a meeting date or to hold any meeting of stockholders within 60 days of the next scheduled meeting of the stockholders of the corporation.
(h) In the absence of a quorum at any special meeting called pursuant to a Call Solicitation, such special meeting may be postponed or adjourned from time to time only by the officer of the corporation entitled to preside at such meeting.
(i) If a Call Solicitation does not receive the support of the holders of record of the Required Percentage of the Voting Stock, no subsequent Call may be made or solicited by any stockholder during a period of 90 days after the Delivery Date.
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4. Notice of Meetings. A written notice of every meeting of stockholders, stating the place, date and hour thereof, and the purposes for which the meeting is to be held, shall be given by the Secretary or other person calling the meeting at least seven days and no more than 60 days before the meeting to each stockholder entitled to vote thereat and to each stockholder who, by law, by the Articles of Organization or by these By-Laws, is entitled to such notice. A stockholder may waive any notice required by law, the Articles of Organization or these By-Laws before or after the date and time stated in the notice. The waiver shall be in writing, be signed by the stockholder entitled to the notice and be delivered to the corporation for inclusion with the records of the meeting. A stockholder’s attendance at a meeting: (a) waives objection to lack of notice or defective notice of the meeting, unless the stockholder at the beginning of the meeting objects to holding the meeting or transacting business at the meeting; and (b) waives objection to consideration of a particular matter at the meeting that is not within the purpose or purposes described in the meeting notice, unless the stockholder objects to considering the matter when it is presented.
5. Quorum. Unless the Articles of Organization otherwise provide, a majority in interest of all stock issued, outstanding and entitled to vote on any matter shall constitute a quorum with respect to that matter, except that if two or more classes of stock are outstanding and entitled to vote as separate classes, then in the case of each such class a quorum shall consist of a majority in interest of the stock of that class issued, outstanding and entitled to vote.
6. Adjournments. Except as provided in Section 3 of this Article I, any meeting of stockholders may be adjourned to any other time and to any other place at which a meeting of stockholders may be held under these By-Laws by the stockholders present or represented at the meeting, although less than a quorum, or by any officer entitled to preside or to act as secretary of such meeting, if no stockholder is present. It shall not be necessary to notify any stockholder of any adjournment. Any business which could have been transacted at any meeting of the stockholders as originally called may be transacted at any adjournment thereof.
7. Voting and Proxies. Each stockholder shall have one vote for each share of stock entitled to vote held by him of record according to the records of the corporation and a proportionate vote for a fractional share so held by him, unless otherwise provided by the Articles of Organization. A stockholder may vote his or her shares in person or may appoint a proxy to vote or otherwise act for him by signing an appointment form, either personally or by his attorney-in-fact. An appointment of a proxy is effective when received by the Secretary or other officer or agent authorized to tabulate votes. Unless otherwise provided in the appointment form, an appointment is valid for a period of 11 months from the date the stockholder signed the form or, if it is undated, from the date of its receipt by the officer or agent. An appointment of a proxy is revocable by the stockholder unless the appointment form conspicuously states that it is irrevocable and the appointment is coupled with an interest, as defined in the Massachusetts Business Corporation Act, as in effect from time to time (the “MBCA”). An appointment made irrevocable is revoked when the interest with which it is coupled is extinguished. The death or incapacity of the stockholder appointing a proxy shall not affect the right of the corporation to accept the proxy’s authority unless notice of the death or incapacity is received by the Secretary or other officer or agent authorized to tabulate votes before the proxy exercises his or her authority under the appointment. A transferee for value of shares subject to an irrevocable appointment may revoke the appointment if he or she did not know of its existence when he or she acquired the shares and the existence of the irrevocable appointment was not noted conspicuously on the certificate representing the shares or on the information statement for shares without certificates. Subject to the provisions of Section 7.24 of the MBCA, or any successor Section thereto, and to any express limitation on the proxy’s authority appearing on the face of the appointment form, the corporation is entitled to accept the proxy’s vote or other action as that of the stockholder making the appointment. Any stockholder directly or indirectly soliciting proxies from other stockholders must use a proxy card color other than white, which shall be reserved for exclusive use of the Board of Directors.
8. Action at Meeting. When a quorum is present, the vote of a majority of the stock present or represented and voting on a matter (or if there are two or more classes of stock entitled to vote as separate classes, then in the case of each such class, the vote of a majority of the stock of that class present or represented and voting on a matter), except where a larger vote is required by law, the Articles of Organization or these By-Laws, shall decide any matter to be voted on by the stockholders other than an election of directors. A nominee for director shall be elected to the Board of Directors if the votes cast for such nominee’s election exceed the votes cast against such nominee’s election; provided, however, that directors shall be elected by a plurality of the votes cast at any meeting of stockholders that is a Contested Election Meeting (as defined below). A meeting of stockholders shall be a “Contested Election Meeting” if, as of the day immediately preceding the date of the corporation’s first notice to stockholders of such meeting sent pursuant to Section 4 of Article I of these By-Laws, as such date is stated in such notice, either (i) there is any person nominated for election as a director at such meeting who was not nominated for election as a director by the Board of Directors, and such nomination other than by the Board of Directors has not been withdrawn, or (ii) there are more persons nominated for election as directors at such meeting than there are directors to be elected at such meeting. No ballot shall be required for such election unless requested by a stockholder present or represented at the meeting and entitled to vote in the election. The corporation shall not directly or indirectly vote any share of its stock. Nothing in this Section shall be construed as limiting the right of this corporation to vote shares of stock held directly or indirectly by it in a fiduciary capacity. In the event that a vote of stockholders of this corporation is required to approve an agreement to consolidate this corporation with another corporation to form a new corporation, or to merge this corporation into another corporation, or to merge or consolidate another corporation into this corporation, the vote of two-thirds of each class of stock of this corporation outstanding and entitled to vote on the question, voting separately, shall be necessary for the approval of such agreement.
9. Action without Meeting. Any action to be taken by stockholders may be taken without a meeting if all stockholders entitled to vote on the matter consent to the action by a writing filed with the records of the meetings of stockholders. Such consent shall be treated for all purposes as a vote at a meeting.
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10. Conduct of Meetings. The Board of Directors may adopt such rules, regulations and procedures for the conduct of any meeting of stockholders as it shall deem appropriate, including without limitation such guidelines and procedures as it may deem appropriate regarding the participation by means of remote communication of stockholders and proxyholders not physically present at a meeting. Except to the extent inconsistent with such rules, regulations and procedures as adopted by the Board of Directors, the presiding officer of any meeting of stockholders shall have the right and authority to prescribe such rules, regulations and procedures and to do all such acts as, in the judgment of such presiding officer, are appropriate for the proper conduct of the meeting. Such rules, regulations or procedures, whether adopted by the Board of Directors or prescribed by the presiding officer of the meeting, may include, without limitation, the following: (a) the establishment of an agenda or order of business for the meeting; (b) rules and procedures for maintaining order at the meeting and the safety of those present; (c) limitations on attendance at or participation in the meeting to stockholders, their duly authorized and constituted proxies or attorneys or such other persons as shall be determined by the Board of Directors or the chairman of any meeting; (d) restrictions on entry to the meeting after the time fixed for the commencement thereof; and (e) limitations on the time allotted to questions or comments by participants. Unless and to the extent determined by the Board of Directors or the presiding officer of the meeting, meetings of stockholders shall not be required to be held in accordance with the rules of parliamentary procedure.
11. Meetings by Remote Communication. Unless otherwise provided in the Articles of Organization, if authorized by the Board of Directors, subject to such guidelines and procedures as the Board of Directors may adopt, stockholders and proxyholders not physically present at a meeting of stockholders may, by means of remote communication: (a) participate in a meeting of stockholders; and (b) be deemed present in person and vote at a meeting of stockholders, provided that: (1) the corporation shall implement reasonable measures to verify that each person deemed present and permitted to vote at the meeting by means of remote communication is a stockholder or proxyholder; (2) the corporation shall implement reasonable measures to provide such stockholders and proxyholders a reasonable opportunity to participate in the meeting and to vote on matters submitted to the stockholders, including an opportunity to read or hear the proceedings of the meeting substantially concurrently with such proceedings; and (3) if any stockholder or proxyholder votes or takes other action at the meeting by means of remote communication, a record of such vote or other action shall be maintained by the corporation.
12. Form of Stockholder Action.
(a) Any vote, consent, waiver, proxy appointment or other action by a stockholder or by the proxy or other agent of any stockholder shall be considered given in writing, dated and signed, if, in lieu of any other means permitted by law, it consists of an electronic transmission that sets forth or is delivered with information from which the corporation can determine (1) that the electronic transmission was transmitted by the stockholder, proxy or agent or by a person authorized to act for the stockholder,
proxy or agent; and (2) the date on which such stockholder, proxy, agent or authorized person transmitted the electronic transmission. The date on which the electronic transmission is transmitted shall be considered to be the date on which it was signed. The electronic transmission shall be considered received by the corporation if it has been sent to any address specified by the corporation for the purpose or, if no address has been specified, to the principal office of the corporation, addressed to the Secretary or other officer or agent having custody of the records of proceedings of stockholders.
(b) Any copy, facsimile or other reliable reproduction of a vote, consent, waiver, proxy appointment or other action by a stockholder or by the proxy or other agent of any stockholder may be substituted or used in lieu of the original writing for any purpose for which the original writing could be used, but the copy, facsimile or other reproduction shall be a complete reproduction of the entire original writing.
13. Nomination of Directors.
(a) Except for (i) any Directors entitled to be elected by the holders of any class or series of preferred stock, (ii) any Directors elected by the Board of Directors in accordance with Section 3 of Article II of these By-Laws to fill vacancies in the Board of Directors (however occurring) or (iii) as otherwise required by applicable law or stock market regulation, only persons who are nominated in accordance with the procedures in this Section 13 or in Section 3 of Article I shall be eligible for election as Directors. Nomination for election to the Board of Directors at a meeting of stockholders may be made (x) by or at the direction of the Board of Directors, (y) by any stockholder of the corporation who (1) complies with the notice procedures set forth in Section 13(b) or in Section 3 of Article I and (2) is a stockholder of record on the date of the giving of such notice and on the record date for the determination of stockholders entitled to vote at such meeting or (z) by any Eligible Stockholder (as defined in Section 13(c) of Article I) whose Stockholder Nominee (as defined in Section 13(c) of Article I) is included in the corporation’s proxy materials for the relevant annual meeting.
(b) To be timely, a stockholder’s notice must be received in writing by the Secretary at the principal office of the corporation as follows: (i) in the case of an election of Directors at an annual meeting of stockholders, not less than 75 days prior to the first anniversary of the preceding year’s annual meeting; provided, however, that in the event that the date of the annual meeting is advanced by more than 20 days, or delayed by more than 60 days, from the first anniversary of the preceding year’s annual meeting, a stockholder’s notice must be so received not later than the close of business on the later of (A) the 75th day prior to such annual meeting and (B) the seventh day following the day on which notice of the date of such annual meeting was given or public disclosure of the date of such annual meeting was made, whichever first occurs; or (ii) in the case of an election of Directors at a special meeting of stockholders, provided that the Board of Directors has determined that Directors shall be elected at such special meeting and the stockholders are not then prohibited from filling vacancies or newly created directorships on the Board of Directors, not later than the close of business on the later of (x) the 75th day prior to such special meeting and (y) the seventh day following the day on which notice of the date of such special meeting was given or
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public disclosure of the date of such special meeting was made, whichever first occurs. In no event shall the adjournment or postponement of a stockholders’ meeting (or the public disclosure thereof) commence a new time period (or extend any time period) for the giving of a stockholder’s notice.
The stockholder’s notice to the Secretary shall set forth:
(A) as to each proposed nominee
(1) such person’s name, age, business address and, if known, residence address,
(2) such person’s principal occupation or employment,
(3) the class and series and number of shares of stock of the corporation which are, directly or indirectly, owned, beneficially or of record, by such person,
(4) a description of all direct and indirect compensation and other material monetary agreements, arrangements and understandings during the past three years, and any other material relationships, between or among (x) the stockholder, the beneficial owner, if any, on whose behalf the nomination is being made and the respective affiliates and associates of, or others acting in concert with, such stockholder and such beneficial owner (each, a “Stockholder Associated Person”), on the one hand, and (y) each proposed nominee, and his or her respective affiliates and associates, or others acting in concert with such nominee, on the other hand, including all information that would be required to be disclosed pursuant to Item 404 of Regulation S-K under the Securities Exchange Act of 1934 (such Act, including the rules and regulations promulgated thereunder, the “Exchange Act”) (or any successor provision thereto) if the stockholder making the nomination and any beneficial owner on whose behalf the nomination is made or any Stockholder Associated Person were the “registrant” for purposes of such Item and the proposed nominee were a director or executive officer of such registrant, and
(5) any other information concerning such person that must be disclosed as to nominees in proxy solicitations pursuant to Regulation 14A under the Exchange Act (or any successor regulation thereto); and
(B) as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the nomination is being
made
(1) the name and address of such stockholder, as they appear on the corporation’s books, and of such beneficial owner,
(2)the class and series and number of shares of stock of the corporation which are, directly or indirectly, owned, beneficially or of record, by such stockholder and such beneficial owner,
(3) a description of any material interest related to the nomination of such stockholder, such beneficial owner and/or any Stockholder Associated Person,
(4) a description of any agreement, arrangement or understanding between or among such stockholder, such beneficial owner and/or any Stockholder Associated Person and each proposed nominee and any other person or persons (including their names) pursuant to which the nomination(s) are being made by such stockholder or who may participate in the solicitation of proxies or votes in favor of electing such nominee(s),
(5) a description of any agreement, arrangement or understanding (including any derivative or short positions, profit interests, options, swaps, warrants, stock appreciation or similar rights, hedging transactions, and borrowed or loaned shares) that has been entered into by, or on behalf of, such stockholder, such beneficial owner and/or any Stockholder Associated Person, the effect or intent of which is to mitigate loss to, manage risk or benefit of share price changes for, or increase or decrease the voting power of, such stockholder, such beneficial owner and/or any Stockholder Associated Person with respect to shares of stock of the corporation,
(6) any other information relating to such stockholder, such beneficial owner and/or any Stockholder Associated Person that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for the election of such nominee in a Contested Election Meeting (even if an election contest is not involved) pursuant to Section 14 of the Exchange Act (or any successor provision thereto),
(7) a representation that such stockholder intends to appear in person or by proxy at the meeting to nominate the person(s) named in its notice,
(8) a representation that such stockholder, such beneficial owner and/or any Stockholder Associated Person has complied, and will comply, with all applicable requirements of state law and the Exchange Act with respect to matters set forth in this Section 13(b), and
(9) a representation whether such stockholder, such beneficial owner and/or any Stockholder Associated Person intends or is part of a group which intends (x) to deliver a proxy statement and/or form of proxy to holders of at least the percentage of the corporation’s outstanding capital stock reasonably believed by such stockholder or such beneficial owner to be sufficient to elect the nominee (and such representation shall be included in any such proxy statement and form of proxy) and/or
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(y) otherwise to solicit proxies or votes from stockholders in support of such nomination (and such representation shall be included in any such solicitation materials).
Not later than 10 days after the record date of the meeting, the information required by Items (A)(1)-(5) and (B)(1)-
(6) of the prior sentence shall be supplemented by the stockholder giving the notice to provide updated information as of the record date. In addition, to be effective, the stockholder’s notice must also be accompanied by the written consent of the proposed nominee to being named in the corporation’s proxy statement and accompanying proxy card as a nominee and to serve as a Director if elected. The corporation may require any proposed nominee to furnish such other information as may reasonably be required to determine, among other things, the eligibility of such proposed nominee to serve as a Director of the corporation and to assess the independence of such proposed nominee. Notwithstanding anything herein to the contrary, a stockholder shall not have complied with this Section 13(b) if the stockholder, beneficial owner and/or any Stockholder Associated Person solicits or does not solicit, as the case may be, proxies or votes in support of such stockholder’s nominee in contravention of the representations with respect thereto required by this Section 13(b).
Such notice must also be accompanied by a representation as to whether or not such stockholder, beneficial owner and/or any Stockholder Associated Person intends to solicit proxies in support of any director nominees other than the corporation’s nominees in accordance with Rule 14a-19 under the Exchange Act, and, where such stockholder, beneficial owner and/or Stockholder Associated Person intends to so solicit proxies, the notice and information required by Rule 14a-19(b) under the Exchange Act. Notwithstanding anything to the contrary in these By-laws, unless otherwise required by law, if any stockholder, beneficial owner and/or Stockholder Associated Person (i) provides notice pursuant to Rule 14a-19(b) under the Exchange Act and (ii) subsequently fails to comply with the requirements of Rule 14a-19(a)(2) and Rule 14a-19(a)(3) under the Exchange Act (or fails to timely provide reasonable evidence sufficient to satisfy the corporation that such stockholder, beneficial owner and/or Stockholder Associated Person has met the requirements of Rule 14a-19(a)(3) promulgated under the Exchange Act in accordance with the following sentence), then the nomination of each of the director nominees proposed by such stockholder, beneficial owner and/or Stockholder Associated Person shall be disregarded, notwithstanding that proxies or votes in respect of the election of such proposed nominees may have been received by the corporation (any and all of which proxies and votes shall be disregarded solely with respect to the election of such disregarded nominees but shall be deemed present in person or represented by proxy for quorum purposes and to vote for any other nominees or any other matters at the meeting). If any stockholder, beneficial owner and/or Stockholder Associated Person provides notice pursuant to Rule 14a-19(b) under the Exchange Act, such stockholder, beneficial owner and/or Stockholder Associated Person shall deliver to the Secretary of the corporation, no later than five business days prior to the applicable meeting, reasonable evidence that it has met the requirements of Rule 14a-19(a)(3) under the Exchange Act. In addition, if any change occurs with respect to the intent of any such stockholder, beneficial owner and/or Stockholder Associated Person to meet the requirements of Rule 14a-19(a)(3), such stockholder, beneficial owner and/or Stockholder Associated Person shall notify the corporation promptly of such change.
(c) Proxy Access.
(i) Subject to the provisions of this Section 13(c), the corporation shall include in its proxy statement (including its form of proxy) for an annual meeting of stockholders the name of any stockholder nominee for election to the Board of Directors submitted pursuant to this Section 13(c) (each a “Stockholder Nominee”) provided (A) timely written notice of such Stockholder Nominee satisfying this Section 13(c) (“Notice”) is delivered to the corporation by or on behalf of a stockholder or stockholders that, at the time the Notice is delivered, satisfy the ownership and other requirements of this Section 13(c) (such stockholder or stockholders, and any person on whose behalf they are acting, the “Eligible Stockholder”), (B) the Eligible Stockholder expressly elects in writing at the time of providing the Notice to have its nominee included in the corporation’s
proxy statement pursuant to this Section 13(c), and (C) the Eligible Stockholder and the Stockholder Nominee otherwise satisfy the requirements of this Section 13(c) and the director qualification requirements set forth in the corporation’s Corporate Governance Guidelines and any other document(s) setting forth qualifications for directors.
(ii) To be timely, an Eligible Stockholder’s notice must be received in writing by the Secretary at the principal office of the corporation not less than 120 days nor more than 150 days prior to the first anniversary of the preceding year’s annual meeting; provided, however, that in the event that the date of the annual meeting is advanced by more than 20 days, or delayed by more than 60 days, from the first anniversary of the preceding year’s annual meeting, a stockholder’s notice must be so received not later than the close of business on the later of (A) the 120th day prior to such annual meeting and (B) the seventh day following the day on which notice of the date of such annual meeting was mailed or public disclosure of the date of such annual meeting was made, whichever first occurs. In no event shall the adjournment or postponement of a stockholders’ meeting (or the public disclosure thereof) commence a new time (or extend any time period) for the giving of a stockholder’s notice.
(iii) In addition to including the name of the Stockholder Nominee in the corporation’s proxy statement for the annual meeting, the corporation also shall include (A) the information concerning the Stockholder Nominee and the Eligible Stockholder that is required to be disclosed in the corporation’s proxy statement pursuant to Section 14 of the Exchange Act and (B) if the Eligible Stockholder so elects, a Statement (defined below) (collectively, the “Required Information”). Nothing in this Section 13(c) shall limit the corporation’s ability to solicit against and include in its proxy statement its own statements relating to any Stockholder Nominee.
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(iv) The number of Stockholder Nominees (including Stockholder Nominees that were submitted by an Eligible Stockholder for inclusion in the corporation’s proxy statement pursuant to this Section 13(c) but either are subsequently withdrawn or that the Board of Directors decides to nominate (a “Board Nominee”)) appearing in the corporation’s proxy statement with respect to a meeting of stockholders shall not exceed the greater of (A) two or (B) 20% of the number of directors in office as of the last day on which notice of a nomination may be delivered pursuant to this Section 13(c) (the “Final Proxy Access Nomination Date”) or, if such amount is not a whole number, the closest whole number below 20% (the “Permitted Number”); provided, however, that (1) any director in office as of the nomination deadline who was included in the corporation’s proxy statement as a Stockholder Nominee for any of the two preceding annual meetings and whom the Board of Directors decides to nominate for election to the Board of Directors also will be counted against the Permitted Number and (2) in the event that one or more vacancies for any reason occurs on the Board of Directors at any time after the Final Proxy Access Nomination Date and before the date of the applicable annual meeting of stockholders and the Board of Directors resolves to reduce the size of the Board of Directors in connection therewith, the Permitted Number shall be calculated based on the number of directors in office as so reduced.
(v) In the event that the number of Stockholder Nominees submitted by Eligible Stockholders pursuant to this Section 13(c) exceeds the Permitted Number, each Eligible Stockholder shall select one Stockholder Nominee for inclusion in the corporation’s proxy statement until the Permitted Number is reached, going in order of the amount (greatest to least) of voting power of the corporation’s capital stock entitled to vote on the election of directors as disclosed in the Notice. If the Permitted Number is not reached after each Eligible Stockholder has selected one Stockholder Nominee, this selection process shall continue as many times as necessary, following the same order each time, until the Permitted Number is reached.
(vi) An Eligible Stockholder must have owned (as defined below) continuously for at least three years a number of shares that represents 3% or more of the total voting power of the corporation’s outstanding shares of capital stock entitled to vote in the election of directors (the “Required Shares”) as of both the date the Notice is delivered to or received by the corporation in accordance with this Section 13(c) and the record date for determining stockholders entitled to vote at the meeting and must continue to own the Required Shares through the meeting date. For purposes of satisfying the ownership requirement under this Section 13(c), the voting power represented by the shares of the corporation’s capital stock owned by one or more stockholders, or by the person or persons who own shares of the corporation’s capital stock and on whose behalf any stockholder is acting, may be aggregated, provided that (A) the number of stockholders and other persons whose ownership of shares is aggregated for such purpose shall not exceed 20, (B) each stockholder or other person whose shares are aggregated shall have held such shares continuously for at least three years, and (C) a group of two or more funds that are (1) under common management and investment control, (2) under common management and funded primarily by the same employer (or by a group of related employers that are under common control), or (3) a “group of investment companies,” as such term is defined in Section 12(d)(1)(G)(ii) of the Investment Company Act of 1940, as amended, shall be treated as one stockholder or person for this purpose. Whenever an Eligible Stockholder consists of a group of stockholders and/or other persons, all requirements and obligations for an Eligible Stockholder set forth in this Section 13(c) must be satisfied by and as to each such stockholder or other person, except that shares may be aggregated to meet the Required Shares as provided in this Section 13(c). With respect to any one particular annual meeting, no stockholder or other person may be a member of more than one group of persons constituting an Eligible Stockholder under this Section 13(c).
(vii) For purposes of this Section 13(c), an Eligible Stockholder shall be deemed to “own” only those outstanding shares of the corporation’s capital stock as to which the person possesses both (A) the full voting and investment rights pertaining to the shares and (B) the full economic interest in (including the opportunity for profit and risk of loss on) such shares; provided that the number of shares calculated in accordance with clauses (A) and (B) shall not include any shares (x) sold by such person or any of its affiliates in any transaction that has not been settled or closed, (y) borrowed by such person or any of its affiliates for any purposes or purchased by such person or any of its affiliates pursuant to an agreement to resell, or (z) subject to any option, warrant, forward contract, swap, contract of sale, other derivative or similar agreement entered into by such person or any of its affiliates, whether any such instrument or agreement is to be settled with shares or with cash based on the notional amount or value of outstanding shares of the corporation’s capital stock, in any such case which instrument or agreement has, or is intended to have, the purpose or effect of (1) reducing in any manner, to any extent or at any time in the future, such person’s or affiliates’ full right to vote or direct the voting of any such shares, and/or (2) hedging, offsetting or altering to any degree gain or loss arising from the full economic ownership of such shares by such person or affiliate. A person shall “own” shares held in the name of a nominee or other intermediary so long as the person retains the right to instruct how the shares are voted with respect to the election of directors and possesses the full economic interest in the shares. The terms “owned,” “owning” and other variations of the word “own” shall have correlative meanings. For purposes of this Section 13(c), the term “affiliate” shall have the meaning ascribed thereto in the regulations promulgated under the Exchange Act.
(viii) A person’s ownership of shares shall be deemed to continue during any period in which (A) the person has loaned such shares, provided that the person has the power to recall such loaned shares on five business days’ notice and provides a representation that it will promptly recall such loaned shares upon being notified that any of its Stockholder Nominees will be included in the corporation’s proxy statement, or (B) the person has delegated any voting power by means of a proxy, power of attorney or other instrument or arrangement that is revocable at any time by the person.
(ix) An Eligible Stockholder must provide with its Notice the following information in writing to the Secretary: (A) one or more written statements from the record holder of the shares (and from each intermediary through which the shares are or have been held during the requisite three-year holding period) verifying that, as of a date within seven calendar days prior to the date the Notice is delivered to or received by the corporation, the Eligible Stockholder owns, and has owned continuously for the preceding three years, the Required Shares, and the Eligible Stockholder’s agreement to provide (1) within five business days
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after the record date for the meeting, written statements from the record holder and intermediaries verifying the Eligible Stockholder’s continuous ownership of the Required Shares through the record date and (2) immediate notice if the Eligible Stockholder ceases to own any of the Required Shares prior to the date of the applicable annual meeting of stockholders; (B) documentation satisfactory to the corporation demonstrating that a group of funds qualifies to be treated as one stockholder or person for purposes of this Section 13(c); (C) a representation that the Eligible Stockholder (including each member of any group of stockholders that together is an Eligible Stockholder hereunder): (1) intends to continue to own the Required Shares through the date of the annual meeting, (2) acquired the Required Shares in the ordinary course of business and not with the intent to change or influence control of the corporation, and does not presently have such intent, (3) will not distribute to any stockholder any form of proxy for the meeting other than the form distributed by the corporation, and (4) has provided and will provide facts, statements and other information in all communications with the corporation and its stockholders that are or will be true and correct in all material respects and do not and will not omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading; (D) a statement of the Eligible Stockholder’s intent with regard to continued ownership of the Required Shares for the year following the date of the annual meeting; (E) the written consent of each Stockholder Nominee to be named in the corporation’s proxy statement as a nominee and to serve as a director if elected; (F) a copy of the Schedule 14N that has been filed with the SEC as required by Rule 14a-18 under the Exchange Act; (G) the information required to be provided by Section 13(b) of Article I; (H) in the case of a nomination by a group of stockholders that together is an Eligible Stockholder, the designation by all group members of one group member that is authorized to act on behalf of all members of the nominating stockholder group with respect to the nomination and matters related thereto, including withdrawal of the nomination; and (I) an undertaking that the Eligible Stockholder agrees to (1) assume all liability stemming from any legal or regulatory violation arising out of the Eligible Stockholder’s communications with the corporation’s stockholders or out of the information that the Eligible Stockholder provides to the corporation, (2) indemnify and hold harmless the corporation and each of its directors, officers and employees individually against any liability, loss or damages in connection with any threatened or pending action, suit or proceeding, whether legal, administrative or investigative, against the corporation or any of its directors, officers or employees arising out of any nomination submitted by the Eligible Stockholder pursuant to this Section 13(c), (3) file with the SEC any solicitation or other communication with the corporation’s stockholders relating to the meeting at which the Stockholder Nominee will be nominated, regardless of whether any such filing is required under Section 14 of the Exchange Act or whether any exemption from filing is available for such solicitation or other communication under Section 14 of the Exchange Act, and (4) comply with all other applicable laws, rules, regulations and listing standards with respect to any solicitation in connection with the meeting.
(x) The Eligible Stockholder may include with its Notice a written statement for inclusion in the corporation’s proxy statement for the meeting, not to exceed 500 words per Stockholder Nominee, in support of each Stockholder Nominee’s candidacy (the “Statement”). Notwithstanding anything to the contrary contained in this Article I, the corporation may omit from its proxy statement any information or Statement that it believes would violate any applicable law, rule, regulation or listing standard.
(xi) Each Stockholder Nominee must (A) provide within five business days of the corporation’s request an executed agreement, in a form deemed satisfactory to the corporation, that (1) the Stockholder Nominee has read and agrees to adhere to the corporation’s Corporate Governance Guidelines and any other corporation policies and guidelines applicable to directors, including with regard to securities trading, (2) the Stockholder Nominee is not and will not become a party to any agreement, arrangement or understanding with, and has not given any commitment or assurance to, any person or entity as to how such person, if elected as a director of the corporation, will act or vote on any issue or question (a “Voting Commitment”) that has not been disclosed to the corporation, and (3) the Stockholder Nominee is not and will not become a party to any agreement, arrangement or understanding with any person or entity other than the corporation with respect to any direct or indirect compensation, reimbursement or indemnification (a “Compensation Arrangement”) in connection with such person’s nomination for director and/or service as a director that has not been disclosed to the corporation; (B) complete, sign and submit all questionnaires required of the corporation’s Board of Directors within five business days of receipt of each such questionnaire from the corporation; and (C) provide within five business days of the corporation’s request such additional information as the corporation determines may be necessary to permit the Board of Directors to determine whether such Stockholder Nominee meets the requirements of this Section 13(c) and/or the corporation’s requirements with regard to director qualifications and policies and guidelines applicable to directors, including whether (1) such Stockholder Nominee is independent under the listing standards of any U.S. exchange upon which the capital stock of the corporation is listed, any applicable rules of the Securities and Exchange Commission, and any publicly disclosed standards used by the Board of Directors in determining and disclosing the independence of the directors (the “Independence Standards”), (2) such Stockholder Nominee has any direct or indirect relationship with the corporation, and (3) such Stockholder Nominee is or has been subject to (a) any event specified in Item 401(f) of Regulation S-K under the Securities Act of 1933, as amended (the “Securities Act”) or (b) any order of the type specified in Rule 506(d) of Regulation D under the Securities Act.
(xii) In the event that any information or communications provided by the Eligible Stockholder or Stockholder Nominee to the corporation or its stockholders ceases to be true and correct in any respect or omits a fact necessary to make the statements made, in light of the circumstances under which they were made, not misleading, each Eligible Stockholder or Stockholder Nominee, as the case may be, shall promptly notify the Secretary of any such inaccuracy or omission in such previously provided information and of the information that is required to make such information or communication true and correct; it being understood that providing any such notification shall not be deemed to cure any defect or limit the corporation’s right to omit a Stockholder Nominee from its proxy materials as provided in this Section 13(c).
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(xiii) The corporation shall not be required to include, pursuant to this Section 13(c), a Stockholder Nominee in its proxy statement (or, if the proxy statement has already been filed, to allow the nomination of a Stockholder Nominee, notwithstanding that proxies in respect of such vote may have been received by the corporation) (A) for any meeting for which the Secretary receives a notice that any stockholder has nominated a person for election to the Board of Directors pursuant to Section 13(b) of Article I, (B) who is not independent under the Independence Standards, (C) whose election as a member of the Board of Directors would violate or cause the corporation to be in violation of these By-Laws, the corporation’s articles of organization, the corporation’s Corporate Governance Guidelines or other document setting forth qualifications for directors, the listing standards of any U.S. exchange upon which the corporation’s capital stock is listed, or any applicable state or federal law, rule or regulation, (D) if the Stockholder Nominee is or becomes a party to any undisclosed Voting Commitment, (E) if the Stockholder Nominee is or becomes a party to any undisclosed Compensation Agreement, (F) who is or has been, within the past three years, an officer or director of a competitor, as defined in Section 8 of the Clayton Antitrust Act of 1914, (G) whose then-current or prior business or personal interests place such Stockholder Nominee in a conflict of interest with the corporation or any of its subsidiaries that would cause such Stockholder Nominee to violate any fiduciary duties of directors established pursuant to Massachusetts law, including but not limited to the duty of loyalty and duty of care, (H) who is a named subject of a pending criminal proceeding (excluding traffic violations and other minor offenses) or has been convicted in such a criminal proceeding within the past ten years, (I) who is subject to any order of the type specified in Rule 506(d) of Regulation D under the Securities Act, or (J) if such Stockholder Nominee or the applicable Eligible Stockholder shall have provided information to the corporation in respect of such nomination that was untrue in any material respect or omitted to state a material fact necessary in order to make the statement made, in light of the circumstances under which they were made, not misleading or shall have breached its or their agreements, representations, undertakings and/or obligations pursuant to this Section 13(c).
(xiv) Notwithstanding anything to the contrary set forth herein, if the Stockholder Nominee and/or the applicable Eligible Stockholder shall have breached its or their agreements, representations, undertakings and/or obligations pursuant to this Section 13(c), as determined by the Board of Directors or the person presiding at the meeting, (A) the Board of Directors or the person presiding at the meeting shall be entitled to declare a nomination by an Eligible Stockholder to be invalid, and such nomination shall be disregarded notwithstanding that proxies in respect of such vote may have been received by the corporation and (B) the corporation shall not be required to include in its proxy statement any successor or replacement nominee proposed by the applicable Eligible Stockholder or any other Eligible Stockholder.
(xv) Any Stockholder Nominee who is included in the corporation’s proxy statement for a particular meeting of stockholders but either (A) withdraws from or becomes ineligible or unavailable for election at the meeting or (B) does not receive a number of votes cast in favor of his or her election at least equal to 25% of the shares present in person or represented by proxy at the annual meeting and entitled to vote on the Stockholder Nominee’s election, shall be ineligible to be included in the corporation’s proxy statement as a Stockholder Nominee pursuant to this Section 13(c) for the next two annual meetings of stockholders following the meeting for which the Stockholder Nominee has been nominated for election.
(xvi) The Board of Directors (and any other person or body authorized by the Board of Directors) shall have the power and authority to interpret this Section 13(c) and to make any and all determinations necessary or advisable to apply this Section 13(c) to any persons, facts or circumstances, including the power to determine (A) whether a person or group of persons qualifies as an Eligible Stockholder, (B) whether outstanding shares of the corporation’s capital stock are “owned” for purposes of meeting the ownership requirements of this Section 13(c), (C) whether a notice complies with the requirements of this Section 13(c), (D) whether a person satisfies the qualifications and requirements to be a Stockholder Nominee, (E) whether inclusion of the Required Information in the corporation’s proxy statement is consistent with all applicable laws, rules, regulations and listing standards, and (F) whether any and all requirements of this Section 13(c) have been satisfied. Any such interpretation or determination adopted in good faith by the Board of Directors (or any other person or body authorized by the Board of Directors) shall be conclusive and binding on all persons, including the corporation and all record or beneficial owners of stock of the corporation.
(d) The chairman of any meeting of stockholders (and, in advance of any meeting, the Board of Directors) shall have the power and duty to determine whether a nomination was made in accordance with the provisions of this Section 13 (including whether the stockholder, beneficial owner and/or any Stockholder Associated Person did or did not solicit, as the case may be, proxies or votes in support of such stockholder’s nominee in compliance with the representations with respect thereto required by this Section 13), and if the chairman (or the Board of Directors) should determine that a nomination was not made in accordance with the provisions of this Section 13, the chairman shall so declare to the meeting and such nomination shall not be brought before the meeting.
(e) Except as otherwise required by law (including Rule 14a-19 under the Exchange Act), nothing in this Section 13 shall obligate the corporation or the Board of Directors to include in any proxy statement, proxy card or other stockholder communication distributed on behalf of the corporation or the Board of Directors the name of or other information with respect to any nominee for Director submitted by a stockholder.
(f) Notwithstanding the foregoing provisions of this Section 13, if the stockholder (or a qualified representative of the stockholder) does not appear at the annual or special meeting of stockholders of the corporation to present a nomination, such nomination shall be disregarded, notwithstanding that proxies in respect of such nominee may have been received by the corporation. For purposes of this Section 13, to be considered a qualified representative of the stockholder, a person must be authorized by a written instrument executed by such stockholder or an electronic transmission delivered by such stockholder to
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act for such stockholder as proxy at the meeting of stockholders and such person must produce such written instrument or electronic transmission, or a reliable reproduction of the written instrument or electronic transmission, at the meeting of stockholders.
(g) For purposes of this Section 13, “public disclosure” shall include disclosure in a press release reported by the Dow Jones News Service, Associated Press or comparable national news service or in a document publicly filed by the corporation with the Securities and Exchange Commission pursuant to Sections 13, 14 or 15(d) of the Exchange Act (or any successor provisions thereto).
(h) Unless the corporation elects otherwise, a stockholder’s notice to the corporation of nominations shall be in writing exclusively (and not in an electronic transmission) and shall be delivered exclusively by hand (including, without limitation, overnight courier service) or by certified or registered mail, return receipt requested, and the corporation shall not be required to accept delivery of any document not in such written form or so delivered.
14. Notice of Business at Meetings.
(a) At any meeting of the stockholders, only such business shall be conducted as shall have been properly brought before the meeting. To be properly brought before a special meeting, business must be brought before the meeting in accordance with Article 1 Section 3 or Article 1 Section 13 of these By-Laws. To be properly brought before an annual meeting, business must be
(1) specified in the notice of meeting (or any supplement thereto) given by or at the direction of the Board of Directors,
(2) otherwise properly brought before the meeting by or at the direction of the Board of Directors, or
(3) properly brought before the meeting by a stockholder.
For business to be properly brought before an annual meeting by a stockholder, (i) if such business relates to the
nomination of a person for election as a Director of the corporation, the procedures in Section 13 of Article I of these By-Laws must be complied with and (ii) if such business relates to any other matter, the business must (x) constitute a proper matter under Massachusetts law for stockholder action and (y) be within the purposes specified in the corporation’s notice of meeting and the stockholder must (A) have given timely notice thereof and provided all required information in writing to the Secretary in accordance with the procedures in this Section 14, (B) be a stockholder of record on the date of the giving of such notice and on the record date for the determination of stockholders entitled to vote at such annual meeting and (C) be entitled to vote at such annual meeting.
(b) To be timely, a stockholder’s notice must be received in writing by the Secretary at the principal office of the corporation not less than 75 days prior to the first anniversary of the preceding year’s annual meeting; provided, however, that in the event that the date of the annual meeting is advanced by more than 20 days, or delayed by more than 60 days, from the first anniversary of the preceding year’s annual meeting, a stockholder’s notice must be so received not later than the close of business on the later of (A) the 75th day prior to such annual meeting and (B) the seventh day following the day on which notice of the date of such annual meeting was given or public disclosure of the date of such annual meeting was made, whichever first occurs. In no event shall the adjournment or postponement of a stockholders’ meeting (or the public disclosure thereof) commence a new time (or extend any time period) for the giving of a stockholder’s notice. The stockholder’s notice to the Secretary shall set forth:
(A) as to each matter the stockholder proposes to bring before the annual meeting
(1) a brief description of the business desired to be brought before the annual meeting,
(2) the reasons for conducting such business at the annual meeting, and
(3) the text of the proposal (including the exact text of any resolutions proposed for consideration and, if such business includes a proposal to amend the By-Laws, the exact text of the proposed amendment); and
(B) as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the proposal is being
made
(1) the name and address of such stockholder, as they appear on the corporation’s books, and of such beneficial owner,
(2) the class and series and number of shares of stock of the corporation that are, directly or indirectly, owned, beneficially or of record, by such stockholder and such beneficial owner,
(3) a description of any material interest of such stockholder, such beneficial owner, and/or any Stockholder Associated Person in the business proposed to be brought before the annual meeting,
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(4) a description of any agreement, arrangement or understanding between or among such stockholder, such beneficial owner, any Stockholder Associated Person and any other person or persons (including their names) in connection with the proposal of such business or who may participate in the solicitation of proxies in favor of such proposal,
(5) a description of any agreement, arrangement or understanding (including any derivative or short positions, profit interests, options, swaps, warrants, stock appreciation or similar rights, hedging transactions, and borrowed or loaned shares) that has been entered into by, or on behalf of, such stockholder, such beneficial owner and/or any Stockholder Associated Person, the effect or intent of which is to mitigate loss to, manage risk or benefit of share price changes for, or increase or decrease the voting power of, such stockholder, such beneficial owner and/or any Stockholder Associated Person with respect to shares of stock of the corporation,
(6) any other information relating to such stockholder, such beneficial owner and/or any Stockholder Associated Person that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for such business proposed pursuant to Section 14 of the Exchange Act (or any successor provision thereto),
(7) a representation that such stockholder intends to appear in person or by proxy at the annual meeting to bring such business before the meeting,
(8) a representation that such stockholder, such beneficial owner and/or any Stockholder Associated Person has complied, and will comply, with all applicable requirements of state law and the Exchange Act with respect to matters set forth in this Section 14, and
(9) a representation whether such stockholder, such beneficial owner and/or any Stockholder Associated Person intends or is part of a group which intends (x) to deliver a proxy statement and/or form of proxy to holders of at least the percentage of the corporation’s outstanding capital stock reasonably believed by such stockholder or such beneficial owner to be sufficient to approve or adopt the proposal (and such representation shall be included in any such proxy statement and form of proxy) and/or (y) otherwise to solicit proxies or votes from stockholders in support of such proposal (and such representation shall be included in any such solicitation materials).
Not later than 10 days after the record date of the meeting, the information required by Items (A)(3) and (B)(1)-
(6) of the prior sentence shall be supplemented by the stockholder giving the notice to provide updated information as of the record date. Notwithstanding anything in these By-Laws to the contrary, no business shall be conducted at any annual meeting of stockholders except in accordance with the procedures set forth in this Section 14; provided that nothing in this Section 14 shall be deemed to affect any rights of stockholders to request inclusion of proposals in the corporation’s proxy statement pursuant to Rule 14a-8 under the Exchange Act or any successor Rule. Notwithstanding anything herein to the contrary, a stockholder shall not have complied with this Section 14 if the stockholder, beneficial owner and/or any Stockholder Associated Person solicits or does not solicit, as the case may be, proxies or votes in support of such stockholder’s proposal in contravention of the representations with respect thereto required by this Section 14.
(c) The chairman of any meeting of stockholders (and, in advance of any annual meeting, the Board of Directors) shall have the power and duty to determine whether business was properly brought before the meeting in accordance with the provisions of this Section 14 (including whether the stockholder, beneficial owner and/or any Stockholder Associated Person did or did not solicit, as the case may be, proxies or votes in support of such stockholder’s proposal in compliance with the representations with respect thereto required by this Section 14), and if the chairman (or the Board of Directors) should determine that business was not properly brought before the meeting in accordance with the provisions of this Section 14, the chairman shall so declare to the meeting and such business shall not be brought before the meeting.
(d) Except as otherwise required by law, nothing in this Section 14 shall obligate the corporation or the Board of Directors to include in any proxy statement or other stockholder communication distributed on behalf of the corporation or the Board of Directors information with respect to any proposal submitted by a stockholder.
(e) Notwithstanding the foregoing provisions of this Section 14, if the stockholder (or a qualified representative of the stockholder) does not appear at the annual or special meeting of stockholders of the corporation to present business, such business shall be disregarded, notwithstanding that proxies in respect of such business may have been received by the corporation. For purposes of this Section 14, to be considered a qualified representative of the stockholder, a person must be authorized by a written instrument executed by such stockholder or an electronic transmission delivered by such stockholder to act for such stockholder as proxy at the meeting of stockholders and such person must produce such written instrument or electronic transmission, or a reliable reproduction of the written instrument or electronic transmission, at the meeting of stockholders.
(f) For purposes of this Section 14, “public disclosure” shall include disclosure in a press release reported by the Dow Jones New Service, Associated Press or comparable national news service or in a document publicly filed by the corporation with the Securities and Exchange Commission pursuant to Sections 13, 14 or 15(d) of the Exchange Act or any successor provision thereto.
(g) Unless the corporation elects otherwise, a stockholder’s notice to the corporation of other business shall be in writing exclusively (and not in an electronic transmission) and shall be delivered exclusively by hand (including, without limitation,
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overnight courier service) or by certified or registered mail, return receipt requested, and the corporation shall not be required to accept delivery of any document not in such written form or so delivered.
ARTICLE II.
Directors.
1. Powers. The business of the corporation shall be managed by a Board of Directors who may exercise all the powers of the corporation except as otherwise provided by law, by the Articles of Organization or by these By-Laws. In the event of a vacancy in the Board of Directors, the remaining Directors, except as otherwise provided by law, may exercise the powers of the full Board until the vacancy is filled.
2. Number and Election. The number of Directors which shall constitute the whole Board of Directors shall be such number, not less than three nor more than thirteen, as shall be fixed by vote of the stockholders or the Board of Directors. During the time periods specified in this Section 2, the Board of Directors shall be divided into three classes in respect of term of office, each class to contain, as nearly as possible, one-third of the whole number of the Board. Of the Board of Directors elected at the Annual Meeting of Stockholders in 1975, the members of one class shall serve until the Annual Meeting of Stockholders held two years following their election, and the members of the third class shall serve until the Annual Meeting of Stockholders held three years following their election; provided, however, that in each case Directors shall serve until their successors shall be elected and qualified. At each Annual Meeting of Stockholders, commencing with the Annual Meeting in 1976 through and including the Annual Meeting in 1995, the successors of the Directors of the class whose terms expire in that year shall be elected to serve until the Annual Meeting of Stockholders held three years next following (and until their successors shall be duly elected and qualified), so that the term of one class of Directors shall expire in each year. At each Annual Meeting of Stockholders, commencing with the Annual Meeting in 1996, the successors of the Directors whose terms expire in that year shall be elected to serve until the Annual Meeting of Stockholders held in the following year (and until their successors shall be duly elected and qualified), so that, upon the expiration in 1998 of the terms of the Directors elected at the Annual Meeting in 1995, all Directors shall be elected to hold office for a one-year term (and until their successors shall be duly elected and qualified).
3. Vacancies. A vacancy in the Board of Directors, however occurring, unless and until filled by the stockholders, may be filled by the Directors.
4. Change in Number of the Board of Directors. The number of the Board of Directors may be increased or decreased and one or more additional Directors elected at any special meeting of the stockholders or by a vote of a majority of the Directors then in office. For so long as the Directors are divided into classes in accordance with the terms of Section 2 of this Article II, Directors who are elected to fill vacancies, whether or not created by an enlargement of the Board of Directors, shall be apportioned among the classes so as to make all classes as nearly equal in number as possible. Directors who are elected to fill vacancies, whether or not created by an enlargement of the Board of Directors, shall serve until the expiration of the term of his or her predecessor and until his or her successor is duly elected and qualified. No decrease in the number of the Board of Directors shall shorten the term of any incumbent Directors.
5. Resignation and Retirement. Any Director may resign by delivering his written resignation to the corporation at its principal office or to the Chairman of the Board, the President or the Secretary. Such resignation shall be effective upon receipt unless it is specified to be effective at some other time or upon the happening of some event. Except in special circumstances specifically approved by the Board of Directors, a Director shall be deemed to have retired at the Annual Meeting of Stockholders following the date the Director shall have attained the age of seventy-two.
6. Removal. A Director may be removed from office (a) with or without cause by a vote of two-thirds of the stock outstanding and entitled to vote in the election of Directors, provided that the Directors of a class elected by a particular class of stockholders may be removed only by the vote of two-thirds of the shares of such class which are outstanding and entitled to vote or (b) for cause by vote of a majority of the Directors then in office. A Director may be removed for cause only after reasonable notice and opportunity to be heard before the body proposing to remove him.
7. Meetings. Regular meetings of the Directors may be held without call or notice at such places, within or without Massachusetts, and at such times as the Directors may from time to time determine, provided that any Director who is absent when such determination is made shall be given notice of the determination. A regular meeting of the Directors may be held without a call or notice at the same place as the annual meeting of stockholders, or the special meeting held in lieu thereof, following such meeting of stockholders.
Special meetings of the Directors may be held at any time and place, within or without Massachusetts, designated in a call by the Chairman of the Board, the President, Treasurer or two or more Directors.
The Board of Directors may permit any or all Directors to participate in a regular or special meeting by, or conduct the meeting through the use of, any means of communication by which all Directors participating may simultaneously hear each other during the meeting. A Director participating in a meeting by this means is considered to be present in person at the meeting.
8. Notice of Special Meetings. Notice of a special meeting of the Directors shall be given to each Director at least 24 hours before the meeting by the Secretary or any Assistant Secretary, or in case of the death, absence, incapacity or refusal of
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such persons, by the officer or one of the Directors calling the meeting. All notices to Directors shall conform to the requirements of Section 12 of Article V of these By-Laws. A Director may waive any notice before or after the date and time of the meeting. The waiver shall be in writing, signed by the Director entitled to the notice, or in the form of an electronic transmission by the Director to the corporation, and filed with the minutes or corporate records. A Director’s attendance at or participation in a meeting waives any required notice to him of the meeting unless the Director at the beginning of the meeting, or promptly upon his arrival, objects to holding the meeting or transacting business at the meeting and does not thereafter vote for or assent to action taken at the meeting.
9. Quorum. At any meeting of the Directors, a majority of the Directors then in office shall constitute a quorum. Less than a quorum may adjourn any meeting from time to time without further notice.
10. Action at Meeting. At any meeting of the Directors at which a quorum is present, the vote of a majority of those present, unless a different vote is specified by law, by the Articles of Organization or by these By-Laws, shall be sufficient to take any action.
11. Action by Consent. Any action required or permitted to be taken by the Directors may be taken without a meeting if the action is taken by the unanimous consent of the members of the Board of Directors. The action must be evidenced by one or more consents describing the action taken, in writing, signed by each Director, or delivered to the corporation by electronic transmission, to the address specified by the corporation for the purpose or, if no address has been specified, to the principal office of the corporation, addressed to the Secretary or other officer or agent having custody of the records of proceedings of Directors, and included in the minutes or filed with the corporate records reflecting the action taken. Action taken under this Section 11 is effective when the last Director signs or delivers the consent unless the consent specifies a different effective date. A consent signed or delivered under this Section 11 has the effect of a meeting vote and may be described as such in any document.
12. Committees. The Directors may, by vote of a majority of the Directors then in office, elect from their number an executive committee or other committees and may by like vote delegate thereto some or all of their powers except those which by law, the Articles of Organization or these By-Laws they are prohibited from delegating. Except as the Directors may otherwise determine, any such committee may make rules for the conduct of its business, but unless otherwise provided by the Directors or in such rules, its business shall be conducted as nearly as may be in the same manner as is provided by these By- Laws for the Directors.
ARTICLE III.
Officers.
1. Enumeration. The officers of the corporation shall consist of a Chairman of the Board, President, one or more Senior Vice Presidents, Vice Presidents, a Treasurer, a Secretary and such other officers as the Directors may determine. Such other officers may include, without limiting the foregoing, a Controller and one or more Assistant Vice Presidents, Assistant Controllers, Assistant Treasurers and Assistant Secretaries.
2. Election. The Chairman of the Board, President, Treasurer and Secretary shall be elected annually by the Directors at their first meeting following the annual meeting of stockholders. Other officers may be appointed by the Directors at such meeting or at any other meeting. The Chief Executive Officer shall also have the power to appoint Vice Presidents, Assistant Vice Presidents, Assistant Treasurers, Assistant Controllers and Assistant Secretaries.
3. Qualification. The Chairman of the Board and the Chief Executive Officer shall be Directors. No officer need be a stockholder. Any two or more officers may be held by the same person, provided that the Chairman of the Board and Secretary shall not be the same person, nor shall the President and Secretary be the same person. The Secretary shall be a resident of Massachusetts unless the corporation has a resident agent appointed for the purpose of service of process. Any officer may be required by the Directors to give bond for the faithful performance of his duties to the corporation in such amount and with such sureties as the Directors may determine.
4. Tenure. Except as otherwise provided by law, by the Articles of Organization or by these By-Laws, the Chairman of the Board, President, Treasurer and Secretary shall hold office until the first meeting of the Directors following the annual meeting of stockholders and thereafter until his successor is chosen and qualified or until his earlier death, resignation or removal; and all other officers appointed by the Directors or by the Chief Executive Officer shall hold office until the first meeting of the Directors following the annual meeting of stockholders, unless a different term is specified in choosing or appointing them or until his earlier death, resignation or removal. Any officer may resign by delivering his written resignation to the corporation at its principal office or to the Chairman of the Board, President, or Secretary, and such resignation shall be effective upon receipt unless it is specified to be effective at some other time or upon the happening of some other event.
5. Removal. The Directors may remove any officer with or without cause by a vote or a majority of the entire number of Directors then in office.
6. Chairman of the Board. The Directors shall appoint a Chairman of the Board. When present he shall preside at all meetings of the Directors and stockholders and shall have such other powers and duties as are usually vested in the office of Chairman of the Board as well as such other powers and duties as may be vested in him by the Board of Directors.
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7. President. The President shall have general supervision and control of all or a substantial portion of the operations of the business, as well as such other power and duties as may be vested in the President by the Board of Directors, or the Chief Executive Officer if other than the President. In the absence or disability of the Chief Executive Officer, if other than the President, the President shall perform the duties and exercise the powers of the Chief Executive Officer.
8. Chief Executive Officer. The Board of Directors shall appoint, as the Chief Executive Officer of the corporation, the President, the Chairman of the Board, or any other officer of the corporation as the Board of Directors may deem appropriate. The Chief Executive Officer shall have the ultimate supervision and control of the operations of the business. In the absence of the Chairman of the Board, the Chief Executive Officer shall preside, when present, at all meetings of the Directors and stockholders.
9. Senior Vice President, Vice President and Assistant Vice President. Unless otherwise specified by the Board of Directors, the Senior Vice President, or if there shall be more than one, the Senior Vice Presidents in the order determined by the Directors, and subsequently, the Vice President or Vice Presidents, shall, in the absence or disability of the President, perform the duties and exercise the powers of the President and shall perform such other duties and shall have such other powers as the Directors or the Chief Executive Officer may from time to time prescribe.
An Assistant Vice President shall have such duties and powers as the Directors or the Chief Executive Officer may from time to time prescribe.
10. Financial Officers. In addition to the election of a Treasurer, the Directors may appoint one or more additional financial officers. The Directors may designate one of the officers as the Chief Financial Officer who, subject to the direction of the Directors and the Chief Executive Officer, shall have overall supervision and control of the internal and external financial affairs of the corporation including financial reporting, and the management of the assets of the corporation as well as such other powers and duties as may be vested in him by the Directors or the Chief Executive Officer. He shall have responsibility, custody and control of all funds, securities and valuable documents of the corporation except as the Directors may otherwise provide.
The Treasurer shall, subject to the direction of the Directors, the Chief Executive Officer and the Chief Financial Officer, if there be one, have general charge of managing the assets of the corporation. He shall perform such other duties as may be vested in him by the Directors, the Chief Executive Officer, or the Chief Financial Officer. In the event the Directors have not designated a Chief Financial Officer, or, if one is designated, in his absence or disability, the Treasurer shall have custody of all funds, securities and valuable documents of the corporation except as the Directors may otherwise provide.
The Assistant Treasurer, or if there shall be more than one, the Assistant Treasurers in the order determined by the Directors, shall in the absence or disability of the Treasurer, perform the duties and exercise the powers of the Treasurer and shall perform such other duties and shall have such other powers as the Directors may from time to time prescribe.
The Assistant Controller, or if there shall be more than one, the Assistant Controllers in the order determined by the Directors, shall, in the absence or disability of the Controller, perform the duties and exercise the powers of the Controller and shall perform such other duties and shall have such other powers as the Directors may from time to time prescribe.
11. Secretary and Assistant Secretaries. The Secretary shall have the duty and power to give notices of all meetings of stockholders and Directors, to attend all meetings of stockholders and Directors, to prepare minutes of the meetings of stockholders and Directors, to authenticate the records of the corporation, to maintain a stock ledger and prepare lists of stockholders and their addresses as required, to be custodian of corporate records and the corporate seal and to affix and attest to the same on documents. The Assistant Secretary, or if there shall be more than one, the Assistant Secretaries in the order determined by the Directors, shall in the absence or disability of the Secretary, perform the duties and exercise the powers of the Secretary and shall perform such other duties and shall have such other powers as the Directors may from time to time prescribe.
12. Other Powers and Duties. Each officer shall, subject to these By-Laws, have in addition to the duties and powers specifically set forth in these By-Laws, such duties and powers as are customarily incident to his office, and such duties and powers as the Directors may from time to time designate.
ARTICLE IV.
Capital Stock.
1. Certificates of Stock. If shares are represented by certificates, at a minimum each share certificate shall state on its face: (a) the name of the corporation and that it is organized under the laws of The Commonwealth of Massachusetts; (b) the name of the person to whom issued; and (c) the number and class of shares and the designation of the series, if any, the certificate represents. The certificate shall be signed either manually or in facsimile by the Chairman of the Board of Directors, the President or a Vice President and by the Treasurer or any Assistant Treasurer, and when a certificate is countersigned by a transfer agent or a registrar, other than a Director, officer of employee of the corporation, such signatures may be facsimiles. In case any officer who has signed or whose facsimile signature has been placed on such certificate shall have ceased to be such officer before such certificate is issued, it may be issued by the corporation with the same effect as if he were such officer at the time of its issue.
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Every certificate representing shares of stock which are subject to any restriction on transfer pursuant to the Articles of Organization, the By-Laws or any agreement to which the corporation is a party, shall have conspicuously noted on the face or back of the certificate either the full text of the restriction or a statement of the existence of such restrictions and a statement that the corporation will furnish a copy thereof to the holder of such certificate upon written request and without charge. Every certificate issued when the corporation is authorized to issue more than one class or series of stock shall set forth on its face or back either the full text of the preferences, voting powers, qualifications and special and relative rights of the shares of each class and series authorized to be issued or a statement of the existence of such preferences, powers, qualifications and rights and a statement that the corporation will furnish a copy thereof to the holder of such certificate upon written request and without charge.
The Directors may authorize the issue of some or all of the shares of any or all of the corporation’s classes or series without certificates. The authorization shall not affect shares already represented by certificates until they are surrendered to the corporation. Within a reasonable time after the issue or transfer of shares without certificates, the corporation shall send the stockholder a written statement of the information required by the law to be on certificates.
2. Transfers. Subject to the restrictions, if any, stated or noted on the stock certificates, shares of stock may be transferred on the books of the corporation by the surrender to the corporation or its transfer agent of the certificate therefor properly endorsed or accompanied by a written assignment and power of attorney properly executed, with necessary transfer stamps affixed, and with such proof of the authenticity of signature as the corporation or its transfer agent may reasonably require. Except as may be otherwise required by law, by the Articles of Organization or by these By-Laws, the corporation shall be entitled to treat the record holder of stock as shown on its books as the owner of such stock for all purposes, including the payment of dividends and the right to vote with respect thereto, regardless of any transfer pledge or other disposition of such stock, until the shares have been transferred on the books of the corporation in accordance with the requirements of these By- Laws.
It shall be the duty of each stockholder to notify the corporation of his post office address and of his taxpayer identification number.
3. Record Date. The Directors may fix in advance a time not more than sixty days preceding the date of any meeting of stockholders or the date for the payment of any dividend or the making of any distribution to stockholders or the last day on which the consent or dissent of stockholders may be effectively expressed for any purpose, as the record date for determining the stockholders having the right to notice of and to vote at such meeting, and any adjournment thereof, or the right to receive such dividend or distribution or the right to give such consent or dissent. In such case only stockholders of record on such record date shall have such right, notwithstanding any transfer of stock on the books of the corporation after the record date. A determination of stockholders entitled to notice of or to vote at a stockholders’ meeting is effective for any adjournment of the meeting unless the Board of Directors fixes a new record date, which it shall do if the meeting is adjourned to a date more than 120 days after the date fixed for the original meeting.
4. Replacement of Certificates. In case of the alleged loss or destruction or the mutilation of a certificate of stock, a duplicate certificate may be issued in place thereof, upon such terms as the Directors may prescribe, including the presentation of reasonable evidence of such loss, destruction or mutilation and the giving of such indemnity as the Directors may require for the protection of the corporation or any transfer agent or registrar.
5. Issue of Capital Stock. Unless otherwise voted by the stockholders, the whole or any part of any unissued balance of the authorized capital stock of the corporation or the whole or any part of the capital stock of the corporation held in its treasury may be issued or disposed of by vote of the Directors, in such manner, for such consideration and on such terms as the Directors may determine.
ARTICLE V.
Miscellaneous Provisions.
1. Fiscal Year. The fiscal year of the corporation shall end on the 31st day of December in each year in which such date falls on Sunday, or the Sunday next preceding or following the 31st day of December in each year, which ever Sunday is nearest to such 31st day of December.
2. Seal. The seal of the corporation shall, subject to alteration by the Directors, bear its name, the word “Massachusetts”, and the year of its incorporation.
3. Execution of Instruments. All deeds, leases, transfers, contracts, bonds, notes and other obligations authorized to be executed by an officer of the corporation in its behalf shall be signed by the Chairman of the Board and Chief Executive Officer or the Treasurer except as the Directors may generally or in particular cases otherwise determine.
4. Voting of Securities. Except as the Directors may otherwise designate, the Chairman of the Board, the President the chief financial officer, Treasurer or Secretary may waive notice of, and act as, or appoint any person or persons to act as, proxy or attorney-in-fact for, this corporation (with or without power of substitution) at any meeting of stockholders or shareholders of any other corporation or organization, the securities of which may be held by this corporation.
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5. Corporate Records. The original, or attested copies, of the Articles of Organization, By-Laws and records of all meetings of the incorporators and stockholders, and the stock and transfer records, which shall contain the names of all stockholders and the record address and the amount of stock held by each, shall be kept in Massachusetts at the principal office of the corporation, or at an office of its transfer agent or of the Secretary. Said copies and records need not all be kept in the same office. They shall be available at all reasonable times to the inspection of any stockholder for any proper purpose, but not to secure a list of stockholders for the purpose of selling said list or copies thereof or of using the same for a purpose other than in the interest of the applicant, as a stockholder, relative to the affairs of the corporation.
6. Evidence of Authority. A certificate by the Secretary, or an Assistant Secretary, or a temporary Secretary, as to any action taken by the stockholders, Directors, Executive Committee or any officer or representative of the corporation shall as to all persons who rely thereon in good faith be conclusive evidence of such action.
7. Articles of Organization. All references in these By-Laws to the Articles of Organization shall be deemed to refer to the Articles of Organization of the corporation, as amended and in effect from time to time.
8. Transactions with Interested Parties. In the absence of fraud, no contract or other transaction between this corporation and any other corporation or any firm, association, partnership or person shall be affected or invalidated by the fact that any Director or officer of this corporation is pecuniarily or otherwise interested in or is a director, member or officer of such other corporation or of such firm, association or partnership or is a party to or is pecuniarily or otherwise interested in such contract or other transaction or is in any way connected with any person or persons, firm, association, partnership or corporation pecuniarily or otherwise interested therein; provided that the fact that he individually or as a director, member or officer of such corporation, firm, association or partnership is such a party or is so interested shall be disclosed to or shall have been known by the Board of Directors or a majority of the Board of Directors at which action upon any such contract or transaction shall be taken; any Director may be counted in determining the existence of a quorum and may vote at any meeting of the Board of Directors of this corporation for the purpose of authorizing any such contract or transaction with like force and effect as if he were not so interested, or were not a director, member or officer of such other corporation, firm, association or partnership, provided that any vote with respect to such contract or transaction must be adopted by a majority of the Directors then in office who have no interest in such contract or transaction.
9. Indemnification.
(a) Actions, Suits and Proceedings. The corporation shall indemnify each person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he is or was, or has agreed to become, a director or officer of the corporation, or is or was serving, or has agreed to serve, at the request of the corporation, as a director or officer of, or in a similar capacity with, another organization or in any capacity with respect to any employee benefit plan of the corporation (all such persons being referred to hereafter as an “Indemnitee”), or by reason of any action alleged to have been taken or omitted in such capacity, against all expenses (including attorneys’ fees), judgments and fines incurred by him or on his behalf in connection with such action, suit or proceeding and any appeal therefrom, unless the Indemnitee shall be finally adjudicated in such action, suit or proceeding not to have acted in good faith in the reasonable belief that his action was in the best interests of the corporation or, to the extent such matter relates to service with respect to an employee benefit plan, in the best interests of the participants or beneficiaries of such employee benefit plan. Notwithstanding anything to the contrary in this Article, except as set forth in Section 6 below, the corporation shall not indemnify an Indemnitee seeking indemnification in connection with a proceeding (or part thereof) initiated by the Indemnitee unless the initiation thereof was approved by the Board of Directors of the corporation. Notwithstanding anything to the contrary in this Article, the corporation shall not indemnify an Indemnitee to the extent such Indemnitee is reimbursed from the proceeds of insurance, and in the event the corporation makes any indemnification payments to an Indemnitee and the Indemnitee is subsequently reimbursed from the proceeds of insurance, such Indemnitee shall promptly refund such indemnification payments to the corporation to the extent of such insurance reimbursement.
(b) Settlements. The right to indemnification conferred in this Article shall include the right to be paid by the corporation for amounts paid in settlement of any such action, suit or proceeding and any appeal therefrom, and all expenses (including attorneys’ fees) incurred in connection with such settlement, pursuant to a consent decree or otherwise, unless and to the extent it is determined pursuant to Section 5 below that the Indemnitee did not act in good faith in the reasonable belief that his action was in the best interests of the corporation or, to the extent such matter relates to service with respect to an employee benefit plan, in the best interests of the participants or beneficiaries of such employee benefit plan.
(c) Notification and Defense of Claim. As a condition precedent to his right to be indemnified, the Indemnitee must notify the corporation in writing as soon as practicable of any action, suit, proceeding or investigation involving him for which indemnity will or could be sought. With respect to any action, suit, proceeding or investigation of which the corporation is so notified, the corporation will be entitled to participate therein at its own expense and/or to assume the defense thereof at its own expense, with legal counsel reasonably acceptable to the Indemnitee. After notice from the corporation to the Indemnitee of its election so to assume such defense, the corporation shall not be liable to the Indemnitee for any legal or other expenses subsequently incurred by the Indemnitee in connection with such claim, other than as provided below in this Section 3. The Indemnitee shall have the right to employ his own counsel in connection with such claim, but the fees and expenses of such counsel incurred after notice from the corporation of its assumption of the defense thereof shall be at the expense of the Indemnitee unless (i) the employment of counsel by the Indemnitee has been authorized by the corporation, (ii) counsel to the Indemnitee shall have reasonably concluded that there may be a conflict of interest or position on any significant issue between
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the corporation and the Indemnitee in the conduct of the defense of such action or (iii) the corporation shall not in fact have employed counsel to assume the defense of such action, in each of which cases the fees and expenses of counsel for the Indemnitee shall be at the expense of the corporation, except as otherwise expressly provided by this Article. The corporation shall not be entitled, without the consent of the Indemnitee, to assume the defense of any claim brought by or in the right of the corporation or as to which counsel for the Indemnitee shall have reasonably made the conclusion provided for in clause
(ii) above.
(d) Advance of Expenses. Subject to the provisions of Section 5 below, in the event that the corporation does not assume the defense pursuant to Section 3 of this Article of any action, suit, proceeding or investigation of which the corporation receives notice under this Article, any expenses (including attorneys’ fees) incurred by an Indemnitee in defending a civil or criminal action, suit, proceeding or investigation or any appeal therefrom shall be paid by the corporation in advance of the final disposition of such matter; provided , however , that the payment of such expenses incurred by an Indemnitee in advance of the final disposition of such matter shall be made only upon receipt of an undertaking by or on behalf of the Indemnitee to repay all amounts so advanced in the event that it shall ultimately be determined that the Indemnitee is not entitled to be indemnified by the corporation as authorized in this Article. Such undertaking shall be accepted without reference to the financial ability of the Indemnitee to make such repayment.
(e) Procedure for Indemnification. In order to obtain indemnification or advancement of expenses pursuant to Section 1, 2 or 4 of this Article, the Indemnitee shall submit to the corporation a written request, including in such request such documentation and information as is reasonably available to the Indemnitee and is reasonably necessary to determine whether and to what extent the Indemnitee is entitled to indemnification or advancement of expenses. Any such indemnification or advancement of expenses shall be made promptly, and in any event within 60 days after receipt by the corporation of the written request of the Indemnitee, unless the corporation determines within such 60-day period that the Indemnitee did not meet the applicable standard of conduct set forth in Section 1 or 2, as the case may be. Such determination shall be made in each instance by (a) a majority vote of a quorum of the directors of the corporation, (b) a majority vote of a quorum of the outstanding shares of stock of all classes entitled to vote for directors, voting as a single class, which quorum shall consist of stockholders who are not at that time parties to the action, suit or proceeding in question, (c) independent legal counsel (who may, to the extent permitted by law, be regular legal counsel to the corporation), or (d) a court of competent jurisdiction.
(f) Remedies. The right to indemnification or advances as granted by this Article shall be enforceable by the Indemnitee in any court of competent jurisdiction if the corporation denies such request, in whole or in part, or if no disposition thereof is made within the 60-day period referred to above in Section 5. Unless otherwise required by law, the burden of proving that the Indemnitee is not entitled to indemnification or advancement of expenses under this Article shall be on the corporation. Neither the failure of the corporation to have made a determination prior to the commencement of such action that indemnification is proper in the circumstances because the Indemnitee has met the applicable standard of conduct, nor an actual determination by the corporation pursuant to Section 5 that the Indemnitee has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that the Indemnitee has not met the applicable standard of conduct. The Indemnitee’s expenses (including attorneys’ fees) incurred in connection with successfully establishing his right to indemnification, in whole or in part, in any such proceeding shall also be indemnified by the corporation.
(g) Subsequent Amendment. No amendment, termination or repeal of this Article or of the relevant provisions of Chapter 156B of the Massachusetts General Laws or any other applicable laws shall affect or diminish in any way the rights of any Indemnitee to indemnification under the provisions hereof with respect to any action, suit, proceeding or investigation arising out of or relating to any actions, transactions or facts occurring prior to the final adoption of such amendment, termination or repeal.
(h) Other Rights. The indemnification and advancement of expenses provided by this Article shall not be deemed exclusive of any other rights to which an Indemnitee seeking indemnification or advancement of expenses may be entitled under any law (common or statutory), agreement or vote of stockholders or directors or otherwise, both as to action in his official capacity and as to action in any other capacity while holding office for the corporation, and shall continue as to an Indemnitee who has ceased to be a director or officer, and shall inure to the benefit of the estate, heirs, executors and administrators of the Indemnitee. Nothing contained in this Article shall be deemed to prohibit, and the corporation is specifically authorized to enter into, agreements with officers and directors providing indemnification rights and procedures different from those set forth in this Article. In addition, the corporation may, to the extent authorized from time to time by its Board of Directors, grant indemnification rights to other employees or agents of the corporation or other persons serving the corporation and such rights may be equivalent to, or greater or less than, those set forth in this Article.
(i) Partial Indemnification. If an Indemnitee is entitled under any provision of this Article to indemnification by the corporation for some or a portion of the expenses (including attorneys’ fees), judgments, fines or amounts paid in settlement actually and reasonably incurred by him or on his behalf in connection with any action, suit, proceeding or investigation and any appeal therefrom but not, however, for the total amount thereof, the corporation shall nevertheless indemnify the Indemnitee for the portion of such expenses (including attorneys’ fees), judgments, fines or amounts paid in settlement to which the Indemnitee is entitled.
(j) Insurance. The corporation may purchase and maintain insurance, at its expense, to protect itself and any director, officer, employee or agent of the corporation or another organization or employee benefit plan against any expense, liability or loss incurred by him in any such capacity, or arising out of his status as such, whether or not the corporation would have the power to indemnify such person against such expense, liability or loss under Chapter 156B of the Massachusetts General Laws.
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(k) Merger or Consolidation. If the corporation is merged into or consolidated with another corporation and the corporation is not the surviving corporation, the surviving corporation shall assume the obligations of the corporation under this Article with respect to any action, suit, proceeding or investigation arising out of or relating to any actions, transactions or facts occurring prior to the date of such merger or consolidation.
(l) Savings Clause. If this Article or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the corporation shall nevertheless indemnify each Indemnitee as to any expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement in connection with any action, suit, proceeding or investigation, whether civil, criminal or administrative, including an action by or in the right of the corporation, to the fullest extent permitted by any applicable portion of this Article that shall not have been invalidated and to the fullest extent permitted by applicable law.
(m) Subsequent Legislation. If the Massachusetts General Laws are amended after adoption of this Article to expand further the indemnification permitted to Indemnitees, then the corporation shall indemnify such persons to the fullest extent permitted by the Massachusetts General Laws, as so amended.
10. Amendments. The stockholders may by a vote of two-thirds of the stock of the corporation, outstanding and entitled to vote, make, amend or repeal the By-Laws of the corporation in whole or in part at any meeting of the stockholders provided that notice of the substance of the proposed action is stated in the notice of meeting. The Directors may make, amend or repeal the By-Laws of the corporation in whole or in part at any meeting of the Directors by vote of a majority of the Directors then in office, except that the provisions thereof fixing the place of the meetings of stockholders, fixing the date of the annual meeting of stockholders, designating the number necessary to constitute a quorum at meetings of the stockholders, governing procedure with respect to the removal of Directors, affording indemnification to Directors or officers and governing amendment of these By-Laws, may be made, amended, or repealed only by the stockholders. No change in the date of the annual meeting may be made within sixty days before the date fixed in these By-Laws, and in case of any change of such date, notice thereof shall be given to each stockholder in person or by letter mailed to his last known post office address at least twenty days before the new date fixed for such meeting.
11. 1987 Massachusetts Control Share Acquisition Act. The 1987 Massachusetts Control Share Acquisition Act, Chapter 110D of the Massachusetts General Laws, as it may be amended from time to time, shall not apply to the corporation.
12. Manner of Notice. All notices provided for under these By-Laws shall conform to the following requirements:
(a) Notice shall be in writing unless oral notice is reasonable under the circumstances. Notice by electronic transmission is written notice.
(b) Notice may be communicated in person; by telephone, voice mail, telegraph, teletype or other electronic means; by mail; by electronic transmission; or by messenger or delivery service. If these forms of personal notice are impracticable, notice may be communicated by a newspaper of general circulation in the area where published; or by radio, television or other form of public broadcast communication.
(c) Written notice, other than notice by electronic transmission, by the Corporation to any of its stockholders, if in a comprehensible form, is effective upon deposit in the United States mail, if mailed postpaid and correctly addressed to the addressee’s address shown in the Corporation’s current records.
(d) Written notice by electronic transmission, if in comprehensible form, is effective:
(1) if by facsimile telecommunication, when directed to a number furnished by the addressee for the purpose;
(2) if by electronic mail, when directed to an electronic mail address furnished by the addressee for the purpose;
(3) if by a posting on an electronic network together with separate notice to the addressee of such specific posting, directed to an electronic mail address furnished by the addressee for the purpose, upon the later of (i) such posting and (ii) the giving of such separate notice; and
(4) if by any other form of electronic transmission, when directed to the addressee in such manner as the addressee shall have specified to the corporation. An affidavit of the Secretary or an Assistant Secretary of the corporation, the transfer agent or other agent of the corporation that the notice has been given by a form of electronic transmission shall, in the absence of fraud, be prima facie evidence of the facts stated therein.
(e) Except as provided in Section 12(c) of this Article V, written notice, other than notice by electronic transmission, if in a comprehensible form, is effective at the earliest of the following:
(1) when received;
(2) five days after its deposit in the United States mail, if mailed postpaid and correctly addressed;
(3) on the date shown on the return receipt, if sent by registered or certified mail, return receipt requested; or if sent by messenger or delivery service, on the date shown on the return receipt signed by or on behalf of the addressee; or
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(4) on the date of publication if notice by publication is permitted.
(f) Oral notice is effective when communicated if communicated in a comprehensible manner.
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EXHIBIT 31.1
CERTIFICATION
I, Prahlad Singh, certify that:
1.I have reviewed this Quarterly Report on Form 10-Q of Revvity, 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: | May 12, 2023 | /s/ PRAHLAD SINGH, PhD | ||||||
| Prahlad Singh, PhD President and Chief Executive Officer | ||||||||
EXHIBIT 31.2
CERTIFICATION
I, Maxwell Krakowiak, certify that:
1.I have reviewed this Quarterly Report on Form 10-Q of Revvity, 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: | May 12, 2023 | /s/ MAXWELL KRAKOWIAK | ||||||
| Maxwell Krakowiak Senior Vice President and Chief 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 Revvity, Inc. (the “Company”) for the period ended April 2, 2023 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, Prahlad Singh, President and Chief Executive Officer of the Company, and Maxwell Krakowiak, Senior Vice President and Chief Financial Officer of the Company, each hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) Based on my knowledge, the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) Based on my knowledge, the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
| Dated: | May 12, 2023 | /S/ PRAHLAD SINGH, PhD | ||||||
| Prahlad Singh, PhD President and Chief Executive Officer | ||||||||
| Dated: | May 12, 2023 | /S/ MAXWELL KRAKOWIAK | ||||||
| Maxwell Krakowiak Senior Vice President and Chief Financial Officer | ||||||||