x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
For the quarterly period ended April 2, 2011
|
|
OR
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
For the transition period from ________ to _________
|
Delaware
|
52-1762325
|
|
(State or Other Jurisdiction of Incorporation or Organization)
|
(I.R.S. Employer Identification No.)
|
|
One Technology Park Drive
|
||
Westford, Massachusetts
|
01886
|
|
(Address of Principal Executive Offices)
|
(Zip Code)
|
Large accelerated filer
o
|
Accelerated Filer
x
|
Non-accelerated filer
o
|
Smaller reporting company
o
|
Class
|
Outstanding at April 29, 2011
|
||||||
Common Stock, $.01 par value
|
12,304,045
|
April 2,
|
January 1,
|
|||||||
(In thousands)
|
2011
|
2011
|
||||||
Current Assets:
|
||||||||
Cash and cash equivalents
|
$ | 54,963 | $ | 61,805 | ||||
Restricted cash (Note 2)
|
2,272 | – | ||||||
Accounts receivable, less allowances of $2,229 and $2,185
|
52,261 | 49,897 | ||||||
Inventories (Note 6)
|
51,517 | 41,628 | ||||||
Other current assets
|
13,105 | 9,876 | ||||||
Assets of discontinued operation
|
394 | 401 | ||||||
Total Current Assets
|
174,512 | 163,607 | ||||||
Property, Plant, and Equipment, at Cost
|
102,517 | 99,346 | ||||||
Less: accumulated depreciation and amortization
|
65,048 | 62,435 | ||||||
37,469 | 36,911 | |||||||
Other Assets (including $415 of restricted cash at April 2, 2011; Note 2)
|
36,919 | 38,266 | ||||||
Goodwill
|
100,608 | 97,988 | ||||||
Total Assets
|
$ | 349,508 | $ | 336,772 |
April 2,
|
January 1,
|
|||||||
(In thousands, except share amounts)
|
2011
|
2011
|
||||||
Current Liabilities:
|
||||||||
Short-term obligations and current maturities of long-term obligations
|
$ | 500 | $ | 5,500 | ||||
Accounts payable
|
26,054 | 23,756 | ||||||
Accrued payroll and employee benefits
|
11,795 | 15,739 | ||||||
Customer deposits
|
27,114 | 19,269 | ||||||
Other current liabilities
|
18,121 | 17,940 | ||||||
Liabilities of discontinued operation
|
2,397 | 2,397 | ||||||
Total Current Liabilities
|
85,981 | 84,601 | ||||||
Other Long-Term Liabilities
|
27,228 | 27,620 | ||||||
Long-Term Obligations (Note 8)
|
17,125 | 17,250 | ||||||
Shareholders’ Investment:
|
||||||||
Preferred stock, $.01 par value, 5,000,000 shares authorized; none issued
|
– | – | ||||||
Common stock, $.01 par value, 150,000,000 shares authorized;
14,624,159 shares issued
|
146 | 146 | ||||||
Capital in excess of par value
|
92,441 | 92,935 | ||||||
Retained earnings
|
170,922 | 165,131 | ||||||
Treasury stock at cost, 2,320,114 and 2,369,422 shares
|
(47,771 | ) | (48,786 | ) | ||||
Accumulated other comprehensive items (Note 4)
|
1,802 | (3,586 | ) | |||||
Total Kadant Shareholders’ Investment
|
217,540 | 205,840 | ||||||
Noncontrolling interest
|
1,634 | 1,461 | ||||||
Total Shareholders’ Investment
|
219,174 | 207,301 | ||||||
Total Liabilities and Shareholders’ Investment
|
$ | 349,508 | $ | 336,772 |
Three Months Ended
|
||||||||
April 2,
|
April 3,
|
|||||||
(In thousands, except per share amounts)
|
2011
|
2010
|
||||||
Revenues
|
$ | 71,680 | $ | 61,121 | ||||
Costs and Operating Expenses:
|
||||||||
Cost of revenues
|
37,587 | 34,246 | ||||||
Selling, general, and administrative expenses
|
24,473 | 21,124 | ||||||
Research and development expenses
|
1,312 | 1,372 | ||||||
Restructuring and other income, net (Note 10)
|
– | (302 | ) | |||||
63,372 | 56,440 | |||||||
Operating Income
|
8,308 | 4,681 | ||||||
Interest Income
|
99 | 38 | ||||||
Interest Expense
|
(257 | ) | (358 | ) | ||||
Income from Continuing Operations Before Provision for Income Taxes
|
8,150 | 4,361 | ||||||
Provision for Income Taxes (Note 7)
|
2,273 | 716 | ||||||
Income from Continuing Operations
|
5,877 | 3,645 | ||||||
Loss from Discontinued Operation (net of income tax benefit of $3 and $3)
|
(4 | ) | (4 | ) | ||||
Net Income
|
5,873 | 3,641 | ||||||
Net Income Attributable to Noncontrolling Interest
|
(82 | ) | (30 | ) | ||||
Net Income Attributable to Kadant
|
$ | 5,791 | $ | 3,611 | ||||
Amounts Attributable to Kadant:
|
||||||||
Income from Continuing Operations
|
$ | 5,795 | $ | 3,615 | ||||
Loss from Discontinued Operation
|
(4 | ) | (4 | ) | ||||
Net Income Attributable to Kadant
|
$ | 5,791 | $ | 3,611 | ||||
Basic and Diluted Earnings per Share from Continuing Operations (Note 5)
|
$ | .47 | $ | .29 | ||||
Basic and Diluted Earnings per Share (Note 5)
|
$ | .47 | $ | .29 | ||||
Weighted Average Shares (Note 5):
|
||||||||
Basic
|
12,267 | 12,411 | ||||||
Diluted
|
12,408 | 12,492 | ||||||
Three Months Ended
|
||||||||
April 2,
|
April 3,
|
|||||||
(In thousands)
|
2011
|
2010
|
||||||
Operating Activities:
|
||||||||
Net income attributable to Kadant
|
$ | 5,791 | $ | 3,611 | ||||
Net income attributable to noncontrolling interest
|
82 | 30 | ||||||
Loss from discontinued operation
|
4 | 4 | ||||||
Income from continuing operations
|
5,877 | 3,645 | ||||||
Adjustments to reconcile income from continuing operations to net cash provided by (used in) operating activities:
|
||||||||
Depreciation and amortization
|
1,865 | 1,658 | ||||||
Stock-based compensation expense
|
824 | 454 | ||||||
Provision for losses on accounts receivable
|
194 | 170 | ||||||
Gain on the sale of property, plant, and equipment
|
(5 | ) | (314 | ) | ||||
Other items, net
|
519 | 624 | ||||||
Changes in current assets and liabilities, net of effects of acquisitions:
|
||||||||
Accounts receivable
|
(1,207 | ) | (5,234 | ) | ||||
Unbilled contract costs and fees
|
(622 | ) | (1,356 | ) | ||||
Inventories
|
(8,809 | ) | (3,265 | ) | ||||
Other current assets
|
(2,357 | ) | (1,262 | ) | ||||
Accounts payable
|
1,561 | 5,121 | ||||||
Other current liabilities
|
2,752 | 404 | ||||||
Contributions to pension plan
|
(225 | ) | (1,200 | ) | ||||
Net cash provided by (used in) continuing operations
|
367 | (555 | ) | |||||
Net cash provided by discontinued operation
|
3 | 3 | ||||||
Net cash provided by (used in) operating activities
|
370 | (552 | ) | |||||
Investing Activities:
|
||||||||
Acquisition consideration (Note 3)
|
(412 | ) | – | |||||
Purchases of property, plant, and equipment
|
(1,164 | ) | (539 | ) | ||||
Proceeds from sale of property, plant, and equipment
|
7 | 676 | ||||||
Other, net
|
31 | – | ||||||
Net cash (used in) provided by continuing operations for investing activities
|
(1,538 | ) | 137 | |||||
Financing Activities:
|
||||||||
Repayments of short- and long-term obligations
|
(5,125 | ) | (125 | ) | ||||
Increase in restricted cash (Note 2)
|
(2,687 | ) | – | |||||
Proceeds from issuance of Company common stock
|
149 | – | ||||||
Other, net
|
5 | 1 | ||||||
Net cash used in continuing operations for financing activities
|
(7,658 | ) | (124 | ) | ||||
Exchange Rate Effect on Cash and Cash Equivalents
|
1,984 | (1,493 | ) | |||||
Decrease in Cash and Cash Equivalents
|
(6,842 | ) | (2,032 | ) | ||||
Cash and Cash Equivalents at Beginning of Period
|
61,805 | 45,675 | ||||||
Cash and Cash Equivalents at End of Period
|
$ | 54,963 | $ | 43,643 | ||||
Non-cash Financing Activities:
|
||||||||
Issuance of Company common stock
|
$ | 657 | $ | 298 | ||||
2.
|
Restricted Cash
|
3.
|
Acquisitions
|
Three Months Ended
|
||||||||
April 2,
|
April 3,
|
|||||||
(In thousands)
|
2011
|
2010
|
||||||
Net Income
|
$ | 5,873 | $ | 3,641 | ||||
Other Comprehensive Items:
|
||||||||
Foreign Currency Translation Adjustment
|
6,150 | (3,905 | ) | |||||
Pension and Other Post-Retirement Liability Adjustments, net (net of income tax of $44 and $42 in 2011 and 2010, respectively)
|
(877 | ) | 80 | |||||
Deferred Gain (Loss) on Hedging Instruments (net of income tax of $7 and $155 in 2011 and 2010, respectively)
|
206 | (341 | ) | |||||
5,479 | (4,166 | ) | ||||||
Comprehensive Income (Loss)
|
11,352 | (525 | ) | |||||
Comprehensive (Income) Loss Attributable to Noncontrolling Interest
|
(173 | ) | 48 | |||||
Comprehensive Income (Loss) Attributable to Kadant
|
$ | 11,179 | $ | (477 | ) |
Three Months Ended
|
||||||||
April 2,
|
April 3,
|
|||||||
(In thousands, except per share amounts)
|
2011
|
2010
|
||||||
Amounts Attributable to Kadant:
|
||||||||
Income from Continuing Operations
|
$ | 5,795 | $ | 3,615 | ||||
Loss from Discontinued Operation
|
(4 | ) | (4 | ) | ||||
Net Income
|
$ | 5,791 | $ | 3,611 | ||||
Basic Weighted Average Shares
|
12,267 | 12,411 | ||||||
Effect of Stock Options, Restricted Stock Units and Employee Stock Purchase Plan
|
141 | 81 | ||||||
Diluted Weighted Average Shares
|
12,408 | 12,492 | ||||||
Basic and Diluted Earnings per Share:
|
||||||||
Continuing Operations
|
$ | .47 | $ | .29 | ||||
Discontinued Operation
|
– | – | ||||||
Net Income
|
$ | .47 | $ | .29 |
April 2,
|
January 1,
|
|||||||
(In thousands)
|
2011
|
2011
|
||||||
Raw Materials and Supplies
|
$ | 21,211 | $ | 16,718 | ||||
Work in Process
|
12,772 | 8,584 | ||||||
Finished Goods
|
17,534 | 16,326 | ||||||
$ | 51,517 | $ | 41,628 |
April 2,
|
January 1,
|
|||||||
(In thousands)
|
2011
|
2011
|
||||||
Revolving Credit Facility
|
$ | 10,000 | $ | 15,000 | ||||
Variable Rate Term Loan, due from 2011 to 2016
|
7,625 | 7,750 | ||||||
Total Short- and Long-Term Obligations
|
17,625 | 22,750 | ||||||
Less: Short-Term Obligations and Current Maturities
|
(500 | ) | (5,500 | ) | ||||
Long-Term Obligations, less Current Maturities
|
$ | 17,125 | $ | 17,250 |
Three Months
Ended
|
||||
(In thousands)
|
April 2, 2011
|
|||
Balance at January 1, 2011
|
$ | 3,778 | ||
Provision
|
556 | |||
Usage
|
(325 | ) | ||
Currency translation
|
150 | |||
Balance at April 2, 2011
|
$ | 4,159 | ||
(In thousands)
|
Severance
Costs
|
|||
2008 Restructuring Plan
|
||||
Balance at January 1, 2011
|
$ | 433 | ||
Payments
|
(43 | ) | ||
Currency translation
|
3 | |||
Balance at April 2, 2011
|
$ | 393 | ||
Three Months Ended
|
|||||||||
April 2,
|
April 3,
|
||||||||
(In thousands)
|
2011
|
2010
|
|||||||
Revenues:
|
|||||||||
Papermaking Systems
|
$ | 67,534 | $ | 57,469 | |||||
Fiber-based Products
|
4,146 | 3,652 | |||||||
$ | 71,680 | $ | 61,121 | ||||||
Income from Continuing Operations Before Provision for Income Taxes:
|
|||||||||
Papermaking Systems
|
$ | 10,697 | $ | 6,304 | |||||
Corporate and Fiber-based Products (a)
|
(2,389 | ) | (1,623 | ) | |||||
Total Operating Income
|
8,308 | 4,681 | |||||||
Interest Expense, Net
|
(158 | ) | (320 | ) | |||||
$ | 8,150 | $ | 4,361 | ||||||
Capital Expenditures:
|
|||||||||
Papermaking Systems
|
$ | 1,164 | $ | 526 | |||||
Corporate and Fiber-based Products
|
– | 13 | |||||||
$ | 1,164 | $ | 539 |
Shares
(In thousands)
|
Weighted Average Exercise Price
|
Weighted Average
Remaining Contractual Life
|
|||||||
Options Outstanding at January 1, 2011
|
161 | $ | 14.82 | ||||||
Granted
|
82 | $ | 24.90 | ||||||
Exercised
|
(8 | ) | $ | 20.01 | |||||
Options Outstanding at April 2, 2011
|
235 | $ | 18.15 |
8.9 years
|
Units
(In thousands)
|
Weighted Average Grant-Date Fair Value
|
|||||||
Unvested RSUs at January 1, 2011
|
312 | $ | 16.77 | |||||
Granted (based on the target RSU amount)
|
153 | $ | 24.82 | |||||
Vested
|
(60 | ) | $ | 15.24 | ||||
Forfeited
|
(9 | ) | $ | 8.81 | ||||
Unvested RSUs at April 2, 2011
|
396 | $ | 20.28 |
April 2, 2011
|
January 1, 2011
|
||||||||||||||||
Balance Sheet
|
Asset
|
Notional
|
Asset
|
Notional
|
|||||||||||||
(In thousands)
|
Location
|
(Liability) (a)
|
Amount (b)
|
(Liability) (a)
|
Amount
|
||||||||||||
Derivatives Designated as Hedging Instruments:
|
|||||||||||||||||
Derivatives in an Asset Position:
|
|||||||||||||||||
Forward currency-exchange contracts
|
Other Current Assets
|
$ | 114 | $ | 2,164 | $ | 131 | $ | 1,794 | ||||||||
Derivatives in a Liability Position:
|
|||||||||||||||||
Forward currency-exchange contracts
|
Other Current Liabilities
|
$ | – | $ | – | $ | (59 | ) | $ | 1,056 | |||||||
Interest rate swap agreements
|
Other Long-Term Liabilities
|
$ | (1,404 | ) | $ | 17,625 | $ | (1,595 | ) | $ | 17,750 | ||||||
Derivatives Not Designated as Hedging Instruments:
|
|||||||||||||||||
Derivatives in a Liability Position:
|
|||||||||||||||||
Forward currency-exchange contracts
|
Other Current Liabilities
|
$ | (3 | ) | $ | 518 | $ | (48 | ) | $ | 1,816 |
(a)
|
See Note 15 for the fair value measurements related to these financial instruments.
|
(b)
|
The total notional amount is indicative of the level of the Company’s derivative activity during the first quarter of 2011.
|
|
•
|
Level 1—Quoted prices in active markets for identical assets or liabilities.
|
|
•
|
Level 2—Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly.
|
|
•
|
Level 3—Unobservable inputs based on the Company’s own assumptions.
|
Fair Value as of April 2, 2011
|
||||||||||||||||
(In thousands)
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
Assets:
|
||||||||||||||||
Money market funds and time deposits
|
$ | 24,413 | $ | – | $ | – | $ | 24,413 | ||||||||
Forward currency-exchange contracts
|
$ | – | $ | 114 | $ | – | $ | 114 | ||||||||
Liabilities:
|
||||||||||||||||
Forward currency-exchange contracts
|
$ | – | $ | 3 | $ | – | $ | 3 | ||||||||
Interest rate swap agreements
|
$ | – | $ | 1,404 | $ | – | $ | 1,404 | ||||||||
Fair Value as of January 1, 2011
|
||||||||||||||||
(In thousands)
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
Assets:
|
||||||||||||||||
Money market funds and time deposits
|
$ | 28,156 | $ | – | $ | – | $ | 28,156 | ||||||||
Forward currency-exchange contracts
|
$ | – | $ | 131 | $ | – | $ | 131 | ||||||||
Liabilities:
|
||||||||||||||||
Forward currency-exchange contracts
|
$ | – | $ | 107 | $ | – | $ | 107 | ||||||||
Interest rate swap agreements
|
$ | – | $ | 1,595 | $ | – | $ | 1,595 |
April 2, 2011
|
January 1, 2011
|
|||||||||||||||
Carrying
|
Fair
|
Carrying
|
Fair
|
|||||||||||||
(In thousands)
|
Value
|
Value
|
Value
|
Value
|
||||||||||||
Long-term debt obligations
|
$ | 17,125 | $ | 17,125 | $ | 17,250 | $ | 17,250 |
|
-
|
Stock-preparation:
custom-engineered systems and equipment, as well as standard individual components, for pulping, de-inking, screening, cleaning, and refining recycled and virgin fibers for preparation for entry into the paper machine;
|
|
-
|
Fluid-handling:
rotary joints, precision unions, steam and condensate systems, components, and controls used primarily in the dryer section of the papermaking process and during the production of corrugated boxboard, metals, plastics, rubber, textiles, chemicals, and food;
|
|
-
|
Doctoring:
doctoring systems and related consumables that continuously clean rolls to keep paper machines running efficiently; doctor blades made of a variety of materials to perform functions including cleaning, creping, web removal, flaking, and the application of coatings; and profiling systems that control moisture, web curl, and gloss during paper converting; and
|
|
-
|
Water-management:
systems and equipment used to continuously clean paper machine fabrics, drain water from pulp mixtures, form the sheet or web, and filter the process water for reuse.
|
Three Months Ended
|
||||||||
April 2,
|
April 3,
|
|||||||
2011
|
2010
|
|||||||
Revenues
|
100 | % | 100 | % | ||||
Costs and Operating Expenses:
|
||||||||
Cost of revenues
|
52 | 56 | ||||||
Selling, general, and administrative expenses
|
34 | 34 | ||||||
Research and development expenses
|
2 | 2 | ||||||
Restructuring and other income, net
|
– | – | ||||||
88 | 92 | |||||||
Operating Income
|
12 | 8 | ||||||
Interest Income
|
– | – | ||||||
Interest Expense
|
(1 | ) | (1 | ) | ||||
Income from Continuing Operations Before Provision for Income Taxes
|
11 | 7 | ||||||
Provision for Income Taxes
|
(3 | ) | (1 | ) | ||||
Income from Continuing Operations
|
8 | % | 6 | % |
Three Months Ended
|
||||||||
April 2,
|
April 3,
|
|||||||
(In thousands)
|
2011
|
2010
|
||||||
Revenues:
|
||||||||
Papermaking Systems
|
$ | 67,534 | $ | 57,469 | ||||
Fiber-based Products
|
4,146 | 3,652 | ||||||
$ | 71,680 | $ | 61,121 |
Three Months Ended
|
Increase
Excluding
Effect of
|
|||||||||||||||
(In millions)
|
April 2,
2011
|
April 3,
2010
|
Increase
|
Currency
Translation
|
||||||||||||
Papermaking Systems Product Lines:
|
||||||||||||||||
Stock-Preparation
|
$ | 23.3 | $ | 17.8 | $ | 5.5 | $ | 5.3 | ||||||||
Fluid-Handling
|
22.6 | 20.1 | 2.5 | 2.1 | ||||||||||||
Doctoring
|
14.1 | 12.5 | 1.6 | 1.4 | ||||||||||||
Water-Management
|
6.8 | 6.5 | 0.3 | 0.2 | ||||||||||||
Other
|
0.7 | 0.6 | 0.1 | – | ||||||||||||
$ | 67.5 | $ | 57.5 | $ | 10.0 | $ | 9.0 |
Three Months Ended
|
||||||||
April 2,
|
April 3,
|
|||||||
2011
|
2010
|
|||||||
Gross Profit Margin:
|
||||||||
Papermaking Systems
|
47.4 | % | 43.5 | % | ||||
Fiber-based Products
|
50.8 | 50.7 | ||||||
47.6 | % | 44.0 | % |
|
–
|
agreements may be difficult to enforce and receivables difficult to collect through a foreign country’s legal system,
|
|
–
|
foreign customers may have longer payment cycles,
|
|
–
|
foreign countries may impose additional withholding taxes or otherwise tax our foreign income, impose tariffs, adopt other restrictions on foreign trade, impose currency restrictions or enact other protectionist or anti-trade measures,
|
|
–
|
worsening economic conditions may result in worker unrest, labor actions, and potential work stoppages,
|
|
–
|
political unrest, such as that currently occurring in North Africa and the Middle East, may disrupt commercial activities of ours or our customers,
|
|
–
|
it may be difficult to repatriate funds, due to unfavorable domestic and foreign tax consequences or other restrictions or limitations imposed by foreign governments, and
|
|
–
|
the protection of intellectual property in foreign countries may be more difficult to enforce.
|
|
–
|
increasing our vulnerability to adverse economic and industry conditions,
|
|
–
|
limiting our ability to obtain additional financing,
|
|
–
|
limiting our ability to pay dividends on or to repurchase our capital stock,
|
|
–
|
limiting our ability to complete a merger or an acquisition,
|
|
–
|
limiting our ability to acquire new products and technologies through acquisitions or licensing agreements, and
|
|
–
|
limiting our flexibility in planning for, or reacting to, changes in our business and the industries in which we compete.
|
|
–
|
incur additional indebtedness,
|
|
–
|
pay dividends on, redeem, or repurchase our capital stock,
|
|
–
|
make investments,
|
|
–
|
create liens,
|
|
–
|
sell assets,
|
|
–
|
enter into transactions with affiliates, and
|
|
–
|
consolidate, merge, or transfer all or substantially all of our assets and the assets of our subsidiaries.
|
|
–
|
competition with other prospective buyers resulting in our inability to complete an acquisition or in us paying substantial premiums over the fair value of the net assets of the acquired business,
|
|
–
|
inability to obtain regulatory approval, including antitrust approvals,
|
|
–
|
difficulty in assimilating operations, technologies, products and the key employees of the acquired business,
|
|
–
|
inability to maintain existing customers or to sell the products and services of the acquired business to our existing customers,
|
|
–
|
diversion of management’s attention away from other business concerns,
|
|
–
|
inability to improve the revenues and profitability or realize the cost savings and synergies expected in the acquisition,
|
|
–
|
assumption of significant liabilities, some of which may be unknown at the time,
|
|
–
|
potential future impairment of the value of goodwill and intangible assets acquired, and
|
|
–
|
identification of internal control deficiencies of the acquired business.
|
|
–
|
failure of our products to pass contractually agreed upon acceptance tests, which would delay or prohibit recognition of revenues under applicable accounting guidelines,
|
|
–
|
changes in the assumptions used for revenue recognized under the percentage-of-completion method of accounting,
|
|
–
|
fluctuations in revenues due to customer-initiated delays in product shipments,
|
|
–
|
failure of a customer, particularly in Asia, to comply with an order’s contractual obligations or inability of a customer to provide financial assurances of performance,
|
|
–
|
adverse changes in demand for and market acceptance of our products,
|
|
–
|
competitive pressures resulting in lower sales prices for our products,
|
|
–
|
adverse changes in the pulp and paper industry,
|
|
–
|
delays or problems in our introduction of new products,
|
|
–
|
delays or problems in the manufacture of our products,
|
|
–
|
our competitors’ announcements of new products, services, or technological innovations,
|
|
–
|
contractual liabilities incurred by us related to guarantees of our product performance,
|
|
–
|
increased costs of raw materials or supplies, including the cost of energy,
|
|
–
|
changes in the timing of product orders,
|
|
–
|
impact of new acquisition accounting, including the treatment of acquisition and restructuring costs as period costs,
|
|
–
|
fluctuations in our effective tax rate,
|
|
–
|
the operating and share price performance of companies that investors consider to be comparable to us, and
|
|
–
|
changes in global financial markets and global economies and general market conditions.
|
|
|
|
–
|
authorize the issuance of “blank check” preferred stock without any need for action by shareholders,
|
|
–
|
provide for a classified board of directors with staggered three-year terms,
|
|
–
|
require supermajority shareholder voting to effect various amendments to our charter and bylaws,
|
|
–
|
eliminate the ability of our shareholders to call special meetings of shareholders,
|
|
–
|
prohibit shareholder action by written consent, and
|
|
–
|
establish advance notice requirements for nominations for election to our board of directors or for proposing matters that can be acted on by shareholders at shareholder meetings.
|
KADANT INC.
|
|
/s/ Thomas M. O’Brien
|
|
Thomas M. O’Brien
|
|
Executive Vice President and Chief Financial Officer
|
|
(Principal Financial Officer)
|
Exhibit
|
||
Number
|
Description of Exhibit
|
|
10.1*
|
Restoration Plan of the Registrant.
|
|
10.2*
|
Amended and Restated 2006 Equity Incentive Plan of the Registrant.
|
|
31.1
|
Certification of the Principal Executive Officer of the Registrant Pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended.
|
|
31.2
|
Certification of the Principal Financial Officer of the Registrant Pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended.
|
|
32
|
Certification of the Chief Executive Officer and the Chief Financial Officer of the Registrant Pursuant
to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
Article 1 Purpose And Intent........................................................................................................................................................................................................................1
|
|
Article 2 Definitions........................................................................................................................................................................................................................................2
|
|
Article 3 Administration.................................................................................................................................................................................................................................4
|
|
Article 4 Participation.....................................................................................................................................................................................................................................5
|
|
Article 5 Plan Benefits....................................................................................................................................................................................................................................6
|
|
Article 6 Vesting..............................................................................................................................................................................................................................................7
|
|
Article 7 Change In Control...........................................................................................................................................................................................................................8
|
|
Article 8 Forfeiture Of Benefits......................................................................................................................................................................................................................9
|
|
Article 9 Amendment Or Termination.........................................................................................................................................................................................................10
|
|
Article 10 Claims Procedures....................................................................................................................................................................................................................... 11
|
|
Article 11 General Provisions........................................................................................................................................................................................................................12
|
2.1
|
Actuarial Equivalent
is determined using the assumptions set forth in the Qualified Plan for purposes of determining the lump sum present value of an accrued benefit.
|
2.2
|
Change in Control
means an event or occurrence set forth in any one or more of subsections (a) through (d) below (including an event or occurrence that constitutes a Change in Control under one of such subsections but is specifically exempted from another such subsection):
|
a.
|
the acquisition by an individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (a “Person”) of beneficial ownership of any capital stock of the Company if, after such acquisition, such Person beneficially owns (within the meaning of Rule 13d 3 promulgated under the Exchange Act) 20% or more of either (i) the then outstanding shares of common stock of the Company (the “Outstanding Company Common Stock”) or (ii) the combined voting power of the then outstanding securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”); provided, however, that for purposes of this subsection (a), the following acquisitions shall not constitute a Change in Control: (i) any acquisition by the Company, (ii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company, or (iii) any acquisition by any corporation pursuant to a transaction which complies with clauses (i) and (ii) of subsection (c) of this Section 2.2; or
|
b.
|
such time as the Continuing Directors (as defined below) do not constitute a majority of the Board (or, if applicable, the Board of Directors of a successor corporation to the Company), where the term “Continuing Director” means at any date a member of the Board (i) who was a member of the Board on the date of the execution of this Agreement or (ii) who was nominated or elected subsequent to such date by at least a majority of the directors who were Continuing Directors at the time of such nomination or election or whose election to the Board was recommended or endorsed by at least a majority of the directors who were Continuing Directors at the time of such nomination or election; provided, however, that there shall be excluded from this clause (ii) any individual whose initial assumption of office occurred as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents, by or on behalf of a person other than the Board; or
|
c.
|
the consummation of a merger, consolidation, reorganization, recapitalization or statutory share exchange involving the Company or a sale or other disposition of all or substantially all of the assets of the Company in one or a series of transactions (a “Business Combination”), unless, immediately following such Business Combination, each of the following two conditions is satisfied: (i) all or substantially all of the individuals and entities who were the beneficial owners of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 80% of the then outstanding shares of common stock and the combined voting power of the then outstanding securities entitled to vote generally in the election of directors, respectively, of the resulting or acquiring corporation in such Business Combination (which shall include, without limitation, a corporation which as a result of such transaction owns the Company or substantially all of the Company's assets either directly or through one or more subsidiaries) (such resulting or acquiring corporation is referred to herein as the “Acquiring Corporation”) in substantially the same proportions as their ownership, immediately prior to such Business Combination, of the Outstanding Company Common Stock and Outstanding Company Voting Securities, respectively; and (ii) no Person (excluding the Acquiring Corporation or any employee benefit plan (or related trust) maintained or sponsored by the Company or by the Acquiring Corporation) beneficially owns, directly or indirectly, 20% or more of the then outstanding shares of common stock of the Acquiring Corporation, or of the combined voting power of the then outstanding securities of such corporation entitled to vote generally in the election of directors; or
|
d.
|
approval by the stockholders of the Company of a complete liquidation or dissolution of the Company.
|
2.3
|
Committee
means the Compensation Committee of the Board of Directors, or any successor committee charged with responsibility relating to compensation of the Company’s executive officers.
|
2.4
|
Company
means Kadant Inc.
|
2.5
|
Disability
means a physical or mental condition entitling a Participant to benefits under the Company’s long-term disability plan or which, as determined by the Federal Social Security Administration, renders the Participant eligible to receive disability benefits under Title II of the Federal Social Security Act, as amended from time to time.
|
2.6
|
Effective Date
means March 10, 2011.
|
2.7
|
Employee
means any person employed by the Company or a Participating Employer or a successor in a merger or other reorganization.
|
2.8
|
Employment
means service in the employ of the Company, or a successor in a merger or other reorganization.
|
2.9
|
Executive Officer
means an executive officer of the Company.
|
2.10
|
Participant
means an individual who participates in the Plan in accordance with Article 4.
|
2.11
|
Participating Employer
means Kadant Inc. and any affiliated employer designated as a “participating employer” by the Committee.
|
2.12
|
Plan Benefit
means the benefit payable in accordance with the Plan.
|
2.13
|
Plan Year
means the calendar year.
|
2.14
|
Qualified Plan Benefit
means the annual benefit payable under the Qualified Plan in the form of a single-life annuity at a Participant’s Normal Retirement Date or, if later, at the Participant’s Separation from Service.
|
2.15
|
Separation from Service
means, with respect to a Participant, the earliest to occur of the following: (i) the date on which the level of bona fide services the Participant is expected to perform after such date (whether as an employee or as an independent contractor) would permanently decrease to no more than 20 percent of the average level of bona fide services performed (whether as an employee or an independent contractor) over the immediately preceding 36-month period (or the full period of services to the Company if the Participant has been providing services to the Company less than 36 months); (ii) the date immediately following a 6 month leave of absence, other than for a disability, unless the Participant retains a right to reemployment under an applicable statute or by contract; or (iii) the date immediately following a 29 month leave of absence for a disability, unless otherwise terminated by the Company or the Participant, regardless of whether the employee retains a contractual right to reemployment. “Separation from Service” as defined herein is intended to be interpreted consistently with “Separation from Service” within the meaning of Treas. Reg. § 1.409A-1(h).
|
2.16
|
Specified Employee
mean an employee of the Company or other Participating Employer who, as of the date of the employee’s Separation from Service, is a key employee of the Company, meeting the requirements of Code section 416(i)(1)(A)(i), (ii) or (iii) (applied in accordance with the regulations thereunder and disregarding Code section 416(i)(5)) at any time during the 12-month period ending on December 31. If an employee is a key employee as of a December 31, the employee is treated as a key employee hereunder for the twelve-month period commencing the subsequent April 1. In accordance with Code section 416(i)(1)(A), no more than 50 people shall be treated as “officers” within the meaning of Code section 416(i)(1)(A)(i).
|
2.17
|
Total Compensation
means “Compensation” as defined under the Qualified Plan except that Total Compensation shall be determined without respect to the limits of Section 401(a)(17) of the Code.
|
4.1
|
Participation
.
Participants shall be those Employees who from time to time:
|
a.
|
are participants in the Qualified Plan, and
|
b.
|
either (i) are an Executive Officer on or after the Effective Date, or (ii) are both selected by the Committee as a Participant and who are “management” or “highly compensated” employees within the meaning of Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA.
|
4.2
|
Termination of Participation
.
A Participant’s participation in the Plan shall end upon his Separation from Service with the Company for any reason or his ceasing to be an Employee eligible to participate under Section 4.1. In addition, the Committee may terminate a Participant’s participation in the Plan, but such termination shall not reduce the obligation of the Company to any Participant below the amount to which he would be entitled under the Plan as in effect immediately prior to such termination of participation if his Employment with the Company were then terminated.
|
5.1
|
Amount of Plan Benefit
.
A Participant who becomes vested pursuant to Article 6 shall be entitled to a lump sum benefit that is the Actuarial Equivalent lump sum, calculated as of the payment date provided in Section 5.3, of the difference between (a) and (b), where:
|
a.
|
single life annuity payable at the Participant’s Normal Retirement Date or, if later, at the Participant’s Separation from Service, determined under the provisions of Section 3.1 of the Qualified Plan, but (i) substituting the Participant’s Total Compensation determined under this Plan for the Participant’s “Compensation” determined under the Qualified Plan, (ii) ignoring any limitations under Code section 415 or 401(a)(17), and (iii) taking into account only Total Compensation and service through the date the Participant’s participation in the Plan is terminated; and
|
b.
|
the Participant’s Qualified Plan Benefit.
|
5.2
|
Form of Payment
.
The form of payment shall be a single lump sum that is the Actuarial Equivalent of the Plan Benefit described in Section 5.1.
|
5.3
|
Time of Payment
.
Benefit payments will be made on the date which is 6 months and 1 day after the date of the Participant’s Separation from Service as determined under section 409A of the Code.
|
6.1
|
Full Vesting
.
A Participant who commences participation in the Plan on the Effective Date shall become fully vested on December 31, 2013, provided he is an Employee on such date (or, if earlier, upon death or Disability while an Employee). Each other Participant shall become fully vested upon the earliest of:
|
a.
|
death;
|
b.
|
Disability, or
|
c.
|
the third anniversary of his commencement of participation in the Plan,
provided he is an Employee on such date.
|
6.2
|
Separation from Service
.
A Participant who experiences a Separation from Service with the Company before he satisfies the conditions stated in Section 6.1 shall not be entitled to any benefits hereunder.
|
6.3
|
Change in Control
.
Upon a Change in Control, Article 7 shall become operative to override the provisions of Sections 6.1 and 6.2.
|
7.1
|
Additional Retirement Security
.
Upon a Change in Control, the provisions of this Article 7 shall become operative and shall supersede any conflicting provisions in the Plan.
|
7.2
|
Participation Frozen
.
No new Participants shall be admitted to participation after the occurrence of the Change in Control.
|
7.3
|
Accelerated Vesting
.
Each Participant in the employ of the Company on the date of the Change in Control shall become 100% vested in his Plan Benefit.
|
(i)
|
conduct related to the Participant’s employment for which either criminal or civil penalties may be sought against the Participant,
|
(ii)
|
violation of Company policies, including, without limitation, the Company’s personnel and insider trading policies,
|
(iii)
|
accepting employment that is in competition with or acting against the interests of the Company,
|
(iv)
|
employing or recruiting any present, former or future employee of the Company,
|
(v)
|
disclosing or misusing any confidential information or material concerning the Company, or
|
(vi)
|
participating in a hostile takeover attempt, tender offer or proxy contest.
|
10.1
|
General
.
Any claim for benefits under the Plan shall be filed by the Participant or beneficiary (claimant) of the Plan on the form prescribed for such purpose with the Committee, or in lieu thereof, by written communication which is made by the claimant’s authorized representative in a manner reasonably calculated to bring the claim to the attention of the Committee.
|
10.2
|
Denials
.
If a claim for a Plan benefit is wholly or partially denied, notice of the decision shall be furnished to the claimant by the Committee within a reasonable period of time after receipt of the claim by the Committee.
|
10.3
|
Notice
.
Any claimant who is denied a claim for benefits shall be furnished written notice setting forth:
|
a.
|
the specific reason or reasons for the denial;
|
b.
|
specific reference to the pertinent Plan or provision upon which the denial is based;
|
c.
|
a description of any additional material or information necessary for the claimant to perfect the claim; and
|
d.
|
an explanation of the Plan’s claim review procedure.
|
10.4
|
Appeals Procedure
.
To appeal the denial of a claim, a claimant or his duly authorized representative:
|
a.
|
may request a review by written application to the Company’s Board of Directors, or its designate, not later than sixty (60) days after receipt by the claimant of written notification of denial of claim;
|
b.
|
may review pertinent documents; and
|
c.
|
may submit issues and comments in writing.
|
10.5
|
Review
.
A decision on review of a denied claim shall be made not later than sixty (60) days after receipt of a request for review, unless special circumstances require an extension of time for processing, in which case a decision shall be rendered within a reasonable period of time, but not later than 120 days after receipt of a request for review. The decision on review shall be in writing and shall include the specific reason(s) for the decision and the specific reference(s) to the pertinent Plan provisions on which the decision is based.
|
10.6
|
Arbitration
.
Any controversy or claim arising under or relating to a claim for benefits under the Plan shall be resolved by binding arbitration in accordance with the rules and procedures of the American Arbitration Association. The Plan shall not be required to submit any such claim or controversy until the claimant has first exhausted the procedures described in Section 10.5 although the Committee may voluntarily do so at any point in processing an appeal from a prior claim denial or other disputed benefit determination.
|
11.1
|
Plan Not Funded
.
The Plan is intended to be and shall be construed and administered as an employee pension benefit plan under Section 3(2)(A) of ERISA which is unfunded and maintained by the Company solely to provide deferred compensation to a “select group of management or highly compensated employees” within the meaning of Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA. The obligation of the Company to make payments under the Plan constitutes nothing more than an unsecured promise of the Company to make such payments. No Participant, beneficiary or any other person shall have any interest in any particular assets of the Company by reason of the right to receive a benefit under the Plan and any such Participant, beneficiary or other person shall have only the rights of a general unsecured creditor of the Company with respect to any rights under the Plan. Kadant Inc.., in its sole discretion, may create one or more trusts to hold assets of the Plan and to provide for the payment of benefits. Kadant Inc. shall be the owner of each trust and the trust corpus shall be subject to the claims of general creditors in the event of the bankruptcy or insolvency of Kadant Inc. The trusts shall contain such other terms and conditions as Kadant Inc. may deem necessary or advisable to ensure that benefits are not includable, by reason of the trusts, in the income of trust beneficiaries prior to actual distribution and that the existence of the trusts does not cause the Plan to be considered “funded” for purposes of Title I of the Employee Retirement Income Security Act of 1974, as amended.
|
11.2
|
No Guaranty of Benefits
.
Nothing contained in the Plan shall constitute a guaranty by the Company or any other entity or person that the assets of the Company will be sufficient to pay any benefit hereunder.
|
11.3
|
No Enlargement of Employee Rights
.
No Participant or beneficiary shall have any right to a benefit under the Plan except in accordance with terms of the Plan. Establishment of the Plan shall not be construed to give any Participant the right to be retained in the service of the Company.
|
11.4
|
Spendthrift Provision
.
No interest of any person or entity in, or right to receive a benefit under, the Plan shall be subject in any manner to sale, transfer, assignment, pledge, attachment, garnishment, or other alienation or encumbrance of any kind; nor may such interest or right to receive a benefit be taken, either voluntarily or involuntarily, for the satisfaction of the debts or other obligations or claims against, such person or entity, including claims for alimony, support, separate maintenance and claims in bankruptcy proceedings.
|
11.5
|
Applicable Law
.
Subject to ERISA to the extent applicable, the provisions of this Plan shall be construed and administered under the laws of the Commonwealth of Massachusetts, without regard to its conflicts of laws and principles.
|
11.6
|
Incapacity of Recipient
.
If any person entitled to a benefit payment under the Plan is deemed by the Company to be incapable of personally receiving and giving a valid receipt for such payment, then, unless and until claim therefor shall have been made by a duly appointed guardian or other legal representative of such person, the Company may provide for such payment or any part thereof to be made to any other person or institution than contributing toward or providing for the care and maintenance of such person. Any such payment shall be a payment for the account of such person and a complete discharge of any liability of the Company and the Plan thereof.
|
11.7
|
Corporate Successors
.
The Plan shall not be automatically terminated by a transfer or sale of assets of the Company.
|
11.8
|
Taxes
. The Company shall withhold from any distribution made under the Plan or from other compensation payable to the Participant such amount or amounts as may be required for purposes of complying with the tax withholding provisions of the Code or any applicable State, local or other law. For each Plan Year, arrangements satisfactory to the Company (including withholding from other compensation payable to the Participant) shall be made for the payment of the Participant’s share of employment or other similar taxes payable with respect to contributions hereunder.
|
11.9
|
Section 409A
. The Plan is intended to comply with the requirements of section 409A of the Code and shall be interpreted and construed consistently with such intent. In the event the terms of the Plan would subject any Participant or beneficiary to taxes or penalties under section 409A of the Code (“409A Penalties”), the Company may amend the terms of the Plan to avoid such 409A Penalties, to the extent possible. Notwithstanding the foregoing, under no circumstances shall the Company be responsible for any taxes, penalties, interest or other loses or expenses incurred by a Participant or other person due to any failure to comply with section 409A of the Code.
|
KADANT INC.
|
|
|
|
By:
/s/ Thomas M. O’Brien
|
|
Title: Executive Vice President & Chief
Financial Officer
|
|
·
|
prescribe, amend and rescind rules and regulations relating to the Plan and Awards,
|
·
|
select the persons to whom Awards will be granted (“Participants”),
|
·
|
determine the type and amount of Awards to be granted to Participants (including any combination of Awards),
|
·
|
determine the terms and conditions of Awards granted under the Plan (including terms and conditions relating to events of merger, consolidation, dissolution and liquidation, change in control, vesting, forfeiture, restrictions, dividends and interest, if any, on deferred amounts),
|
·
|
waive compliance by a Participant with any obligation to be performed by him or her under an Award,
|
·
|
waive any term or condition of an Award, cancel an existing Award in whole or in part with the consent of a Participant,
|
·
|
grant replacement Awards,
|
·
|
accelerate the vesting or lapse of any restrictions of any Award,
|
·
|
correct any defect, supply any omission or reconcile any inconsistency in the Plan or in any Award, and
|
·
|
adopt the form of instruments evidencing Awards under the Plan and change such forms from time to time.
|
·
|
shares of Common Stock covered by Awards of stock appreciation rights shall be counted against the number of shares available for the grant of Awards under the Plan; provided that Awards of stock appreciation rights that may be settled in cash only shall not be so counted;
|
·
|
if any Award of shares of Common Stock expires or terminates without having been exercised in full, is forfeited or is otherwise terminated, surrendered or cancelled in whole or in part (including as a result of shares of Common Stock subject to such Award being repurchased by the Company pursuant to the terms of any Award, the unused shares of Common Stock covered by such Award shall be available again for the future grant of Awards under the Plan, subject, however, in the case of Incentive Stock Options (as hereinafter defined), to any applicable limitations under the Internal Revenue Code of 1986, as amended (the “Code”);
|
·
|
if any Award results in Common Stock not being issued (including as a result of an stock appreciation right that could be settled either in cash or in stock and was actually settled in cash), the unused shares of Common Stock covered by such Award shall be available again for the future grant of Awards under the Plan, subject, however, in the case of Incentive Stock Options (as hereinafter defined), to any limitations under the Code;
|
·
|
Shares of Common Stock tendered to the Company by a Participant to purchase shares of Common Stock upon the exercise of an Award or to satisfy tax withholding obligations (including shares retained from the Award creating the tax obligation), the number of shares tendered shall be added to the number of shares of Common Stock available for the future grant of Awards under the Plan; and
|
·
|
Any shares of Common Stock underlying Awards granted in assumption of, or in substitution for, outstanding awards previously granted by a company acquired by the Company or any of its subsidiaries or affiliates or with which the Company or any of its subsidiaries or affiliates combines, shall not, unless required by law or regulation, count against the number of shares of Common Stock available for the future grant of Awards under the Plan.
|
9
.
|
General Provisions
|
9.1
|
Documentation of Awards
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q for the period ended April 2, 2011 of Kadant 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 11, 2011
|
/s/ Jonathan W. Painter
|
Jonathan W. Painter
|
|
Chief Executive Officer
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q for the period ended April 2, 2011 of Kadant 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;
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b)
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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;
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c)
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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
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d)
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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
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5.
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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):
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a)
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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
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b)
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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.
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Date: May 11, 2011
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/s/ Thomas M. O’Brien
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Thomas M. O’Brien
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Chief Financial Officer
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Dated: May 11, 2011
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/s/ Jonathan W. Painter
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Jonathan W. Painter
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Chief Executive Officer
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/s/ Thomas M. O’Brien
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Thomas M. O’Brien
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Chief Financial Officer
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