x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended March 29, 2014 |
¨ | 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 25, 2014
|
Common Stock, $.01 par value
|
|
11,174,583
|
|
March 29,
|
December 28,
|
||||||
(In thousands)
|
2014
|
2013
|
||||||
|
|
|
||||||
Current Assets:
|
|
|
||||||
Cash and cash equivalents
|
$
|
57,024
|
$
|
50,032
|
||||
Restricted cash (Note 1)
|
162
|
168
|
||||||
Accounts receivable, less allowances of $2,695 and $2,689 (Note 1)
|
69,258
|
70,271
|
||||||
Inventories (Note 1)
|
61,962
|
62,805
|
||||||
Unbilled contract costs and fees
|
1,621
|
3,679
|
||||||
Other current assets
|
19,280
|
19,189
|
||||||
Assets of discontinued operation
|
137
|
144
|
||||||
Total Current Assets
|
209,444
|
206,288
|
||||||
|
||||||||
Property, Plant, and Equipment, at Cost
|
118,290
|
117,997
|
||||||
Less: accumulated depreciation and amortization
|
74,024
|
73,112
|
||||||
|
44,266
|
44,885
|
||||||
|
||||||||
Other Assets
|
10,687
|
11,230
|
||||||
|
||||||||
Intangible Assets, Gross
|
77,690
|
78,223
|
||||||
Less: accumulated amortization
|
31,998
|
30,373
|
||||||
|
45,692
|
47,850
|
||||||
|
||||||||
Goodwill
|
134,809
|
131,915
|
||||||
|
||||||||
Total Assets
|
$
|
444,898
|
$
|
442,168
|
|
March 29,
|
December 28,
|
||||||
(In thousands, except share amounts)
|
2014
|
2013
|
||||||
|
|
|
||||||
Current Liabilities:
|
|
|
||||||
Current maturities of long-term obligations (Note 6)
|
$
|
648
|
$
|
625
|
||||
Accounts payable
|
26,172
|
28,388
|
||||||
Accrued payroll and employee benefits
|
17,956
|
19,116
|
||||||
Customer deposits
|
25,977
|
28,174
|
||||||
Other current liabilities
|
26,342
|
23,286
|
||||||
Liabilities of discontinued operation
|
213
|
213
|
||||||
Total Current Liabilities
|
97,308
|
99,802
|
||||||
|
||||||||
Other Long-Term Liabilities
|
33,246
|
33,935
|
||||||
|
||||||||
Long-Term Obligations (Note 6)
|
42,290
|
38,010
|
||||||
|
||||||||
Commitments and Contingencies (Note 13)
|
–
|
–
|
||||||
|
||||||||
Stockholders' Equity:
|
||||||||
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
|
94,731
|
96,809
|
||||||
Retained earnings
|
251,547
|
248,170
|
||||||
Treasury stock at cost, 3,449,576 and 3,524,742 shares
|
(75,544
|
)
|
(76,339
|
)
|
||||
Accumulated other comprehensive items (Note 9)
|
116
|
710
|
||||||
Total Kadant Stockholders' Equity
|
270,996
|
269,496
|
||||||
Noncontrolling interest
|
1,058
|
925
|
||||||
Total Stockholders' Equity
|
272,054
|
270,421
|
||||||
|
||||||||
Total Liabilities and Stockholders' Equity
|
$
|
444,898
|
$
|
442,168
|
|
Three Months Ended
|
|||||||
|
March 29,
|
March 30,
|
||||||
(In thousands, except per share amounts)
|
2014
|
2013
|
||||||
|
|
|
||||||
Revenues
|
$
|
93,367
|
$
|
76,204
|
||||
|
||||||||
Costs and Operating Expenses:
|
||||||||
Cost of revenues
|
51,187
|
40,178
|
||||||
Selling, general, and administrative expenses
|
32,482
|
26,950
|
||||||
Research and development expenses
|
1,749
|
1,704
|
||||||
Restructuring costs (Note 3)
|
328
|
–
|
||||||
|
85,746
|
68,832
|
||||||
|
||||||||
Operating Income
|
7,621
|
7,372
|
||||||
|
||||||||
Interest Income
|
222
|
109
|
||||||
Interest Expense
|
(306
|
)
|
(165
|
)
|
||||
|
||||||||
Income from Continuing Operations Before Provision for Income Taxes
|
7,537
|
7,316
|
||||||
Provision for Income Taxes (Note 5)
|
2,352
|
1,967
|
||||||
|
||||||||
Income from Continuing Operations
|
5,185
|
5,349
|
||||||
Loss from Discontinued Operation (net of income tax benefit of $3 and $17 in 2014 and 2013, respectively)
|
(5
|
)
|
(29
|
)
|
||||
|
||||||||
Net Income
|
5,180
|
5,320
|
||||||
|
||||||||
Net Income Attributable to Noncontrolling Interest
|
(127
|
)
|
(36
|
)
|
||||
|
||||||||
Net Income Attributable to Kadant
|
$
|
5,053
|
$
|
5,284
|
||||
|
||||||||
Amounts Attributable to Kadant:
|
||||||||
Income from Continuing Operations
|
$
|
5,058
|
$
|
5,313
|
||||
Loss from Discontinued Operation
|
(5
|
)
|
(29
|
)
|
||||
Net Income Attributable to Kadant
|
$
|
5,053
|
$
|
5,284
|
||||
|
||||||||
Earnings per Share from Continuing Operations Attributable to Kadant (Note 4):
|
||||||||
Basic
|
$
|
0.45
|
$
|
0.48
|
||||
Diluted
|
$
|
0.45
|
$
|
0.47
|
||||
|
||||||||
Earnings per Share Attributable to Kadant (Note 4):
|
||||||||
Basic
|
$
|
0.45
|
$
|
0.47
|
||||
Diluted
|
$
|
0.45
|
$
|
0.47
|
||||
|
||||||||
Weighted Average Shares (Note 4):
|
||||||||
Basic
|
11,132
|
11,163
|
||||||
Diluted
|
11,314
|
11,267
|
||||||
|
||||||||
Cash Dividends Declared per Common Share
|
$
|
0.15
|
$
|
0.125
|
|
Three Months Ended
|
|||||||
|
March 29,
|
March 30,
|
||||||
(In thousands)
|
2014
|
2013
|
||||||
|
|
|
||||||
Net Income
|
$
|
5,180
|
$
|
5,320
|
||||
|
||||||||
Other Comprehensive Items:
|
||||||||
Foreign Currency Translation Adjustment
|
(757
|
)
|
(3,108
|
)
|
||||
Pension and Other Post-Retirement Liability Adjustments, net (net of tax provision of $43 and $77 in 2014 and 2013, respectively)
|
77
|
137
|
||||||
Deferred Gain on Hedging Instruments (net of tax provision of $49 and $29 in 2014 and 2013, respectively)
|
92
|
195
|
||||||
|
(588
|
)
|
(2,776
|
)
|
||||
Comprehensive Income
|
4,592
|
2,544
|
||||||
Comprehensive (Income) Loss Attributable to Noncontrolling Interest
|
(133
|
)
|
12
|
|||||
Comprehensive Income Attributable to Kadant
|
$
|
4,459
|
$
|
2,556
|
|
Three Months Ended
|
|||||||
|
March 29,
|
March 30,
|
||||||
(In thousands)
|
2014
|
2013
|
||||||
|
|
|
||||||
Operating Activities:
|
|
|
||||||
Net income attributable to Kadant
|
$
|
5,053
|
$
|
5,284
|
||||
Net income attributable to noncontrolling interest
|
127
|
36
|
||||||
Loss from discontinued operation
|
5
|
29
|
||||||
Income from continuing operations
|
5,185
|
5,349
|
||||||
Adjustments to reconcile income from continuing operations to net cash provided by operating activities:
|
||||||||
Depreciation and amortization
|
3,045
|
1,953
|
||||||
Stock-based compensation expense
|
1,395
|
1,269
|
||||||
Provision (benefit) for losses on accounts receivable
|
85
|
(158
|
)
|
|||||
Gain on the sale of property, plant, and equipment
|
(96
|
)
|
(78
|
)
|
||||
Other items, net
|
(197
|
)
|
(210
|
)
|
||||
Contributions to pension plan
|
(270
|
)
|
(270
|
)
|
||||
Changes in current assets and liabilities, net of effects of acquisitions:
|
||||||||
Accounts receivable
|
1,187
|
1,092
|
||||||
Unbilled contract costs and fees
|
2,065
|
(621
|
)
|
|||||
Inventories
|
312
|
(592
|
)
|
|||||
Other current assets
|
(813
|
)
|
(829
|
)
|
||||
Accounts payable
|
(2,290
|
)
|
83
|
|||||
Other current liabilities
|
(3,406
|
)
|
(7
|
)
|
||||
Net cash provided by continuing operations
|
6,202
|
6,981
|
||||||
Net cash provided by (used in) discontinued operation
|
1
|
(106
|
)
|
|||||
Net cash provided by operating activities
|
6,203
|
6,875
|
||||||
|
||||||||
Investing Activities:
|
||||||||
Acquisitions, net of cash acquired
|
(2,035
|
)
|
–
|
|||||
Purchases of property, plant, and equipment
|
(539
|
)
|
(1,178
|
)
|
||||
Proceeds from sale of property, plant, and equipment
|
139
|
222
|
||||||
Other, net
|
1
|
–
|
||||||
Net cash used in continuing operations for investing activities
|
(2,434
|
)
|
(956
|
)
|
||||
|
||||||||
Financing Activities:
|
||||||||
Proceeds from issuance of long-term obligations
|
5,354
|
4,500
|
||||||
Repayments of long-term obligations
|
(131
|
)
|
(4,750
|
)
|
||||
Purchases of Company common stock
|
(1,918
|
)
|
(1,334
|
)
|
||||
Dividends paid
|
(1,389
|
)
|
–
|
|||||
Proceeds from issuance of Company common stock
|
514
|
337
|
||||||
Other, net
|
683
|
303
|
||||||
Net cash provided by (used in) continuing operations for financing activities
|
3,113
|
(944
|
)
|
|||||
|
||||||||
Exchange Rate Effect on Cash and Cash Equivalents from Continuing Operations
|
110
|
(1,126
|
)
|
|||||
|
||||||||
Increase in Cash and Cash Equivalents from Continuing Operations
|
6,992
|
3,849
|
||||||
Cash and Cash Equivalents at Beginning of Period
|
50,032
|
54,553
|
||||||
Cash and Cash Equivalents at End of Period
|
$
|
57,024
|
$
|
58,402
|
||||
|
(In thousands, except share
|
Common
Stock
|
Capital in
Excess of Par
|
Retained
|
Treasury
Stock
|
Accumulated
Other
Comprehensive
|
Noncontrolling
|
Total
Stockholders'
|
|||||||||||||||||||||||||||||
amounts)
|
Shares
|
Amount
|
Value
|
Earnings
|
Shares
|
Amount
|
Items
|
Interest
|
Equity
|
|||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Balance at December 29, 2012
|
14,624,159
|
$
|
146
|
$
|
95,448
|
$
|
230,329
|
3,493,546
|
$
|
(74,025
|
)
|
$
|
(3,315
|
)
|
$
|
1,384
|
$
|
249,967
|
||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||
Net income
|
–
|
–
|
–
|
5,284
|
–
|
–
|
–
|
36
|
5,320
|
|||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||
Dividend declared
|
–
|
–
|
–
|
(1,401
|
)
|
–
|
–
|
–
|
–
|
(1,401
|
)
|
|||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||
Activity under stock plans
|
–
|
–
|
(2,535
|
)
|
–
|
(125,054
|
)
|
2,651
|
–
|
–
|
116
|
|||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||
Tax benefits related to employees' and directors' stock plans
|
–
|
–
|
303
|
–
|
–
|
–
|
–
|
–
|
303
|
|||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||
Purchases of Company common stock
|
–
|
–
|
–
|
–
|
50,000
|
(1,334
|
)
|
–
|
–
|
(1,334
|
)
|
|||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||
Other comprehensive items
|
–
|
–
|
–
|
–
|
–
|
–
|
(2,728
|
)
|
(48
|
)
|
(2,776
|
)
|
||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||
Balance at March 30, 2013
|
14,624,159
|
$
|
146
|
$
|
93,216
|
$
|
234,212
|
3,418,492
|
$
|
(72,708
|
)
|
$
|
(6,043
|
)
|
$
|
1,372
|
$
|
250,195
|
||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||
Balance at December 28, 2013
|
14,624,159
|
$
|
146
|
$
|
96,809
|
$
|
248,170
|
3,524,742
|
$
|
(76,339
|
)
|
$
|
710
|
$
|
925
|
$
|
270,421
|
|||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||
Net income
|
–
|
–
|
–
|
5,053
|
–
|
–
|
–
|
127
|
5,180
|
|||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||
Dividend declared
|
–
|
–
|
–
|
(1,676
|
)
|
–
|
–
|
–
|
–
|
(1,676
|
)
|
|||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||
Activity under stock plans
|
–
|
–
|
(2,761
|
)
|
–
|
(125,166
|
)
|
2,713
|
–
|
–
|
(48
|
)
|
||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||
Tax benefits related to employees' and directors' stock plans
|
–
|
–
|
683
|
–
|
–
|
–
|
–
|
–
|
683
|
|||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||
Purchases of Company common stock
|
–
|
–
|
–
|
–
|
50,000
|
(1,918
|
)
|
–
|
–
|
(1,918
|
)
|
|||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||
Other comprehensive items
|
–
|
–
|
–
|
–
|
–
|
–
|
(594
|
)
|
6
|
(588
|
)
|
|||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||
Balance at March 29, 2014
|
14,624,159
|
$
|
146
|
$
|
94,731
|
$
|
251,547
|
3,449,576
|
$
|
(75,544
|
)
|
$
|
116
|
$
|
1,058
|
$
|
272,054
|
1. | Nature of Operations and Summary of Significant Accounting Policies |
1. | Nature of Operations and Summary of Significant Accounting Policies (continued) |
|
Three Months Ended
|
|||||||
(In thousands)
|
March 29, 2014
|
March 30, 2013
|
||||||
|
|
|
||||||
Non-Cash Investing Activities:
|
|
|
||||||
Fair Value of Assets Acquired
|
$
|
5,610
|
$
|
–
|
||||
Cash Paid for Acquired Businesses
|
(2,709
|
)
|
–
|
|||||
Liabilities Assumed of Acquired Businesses
|
$
|
2,901
|
$
|
–
|
||||
|
||||||||
Non-Cash Financing Activities:
|
||||||||
Issuance of Company Common Stock
|
$
|
2,480
|
$
|
2,191
|
||||
Dividends Declared but Unpaid
|
$
|
1,676
|
$
|
1,401
|
|
March 29,
|
December 28,
|
||||||
(In thousands)
|
2014
|
2013
|
||||||
|
|
|
||||||
Raw Materials and Supplies
|
$
|
21,042
|
$
|
20,836
|
||||
Work in Process
|
20,980
|
21,051
|
||||||
Finished Goods
|
19,940
|
20,918
|
||||||
|
$
|
61,962
|
$
|
62,805
|
|
Three Months Ended
|
|||||||
(In thousands)
|
March 29, 2014
|
March 30, 2013
|
||||||
|
|
|
||||||
Balance at beginning of period
|
$
|
4,571
|
$
|
4,462
|
||||
Provision
|
559
|
291
|
||||||
Usage
|
(697
|
)
|
(555
|
)
|
||||
Currency translation
|
(9
|
)
|
(79
|
)
|
||||
Balance at end of period
|
$
|
4,424
|
$
|
4,119
|
2. | Acquisitions |
(In thousands)
|
Severance
Costs
|
Other
Costs
|
Total
Costs
|
|||||||||
Balance at December 28, 2013
|
$
|
467
|
$
|
–
|
$
|
467
|
||||||
Provision
|
(11
|
)
|
339
|
328
|
||||||||
Usage
|
(206
|
)
|
(338
|
)
|
(544
|
)
|
||||||
Currency translation
|
6
|
(1
|
)
|
5
|
||||||||
Balance at March 29, 2014
|
$
|
256
|
$
|
–
|
$
|
256
|
4. | Earnings per Share |
|
Three Months Ended
|
|||||||
|
March 29,
|
March 30,
|
||||||
(In thousands, except per share amounts)
|
2014
|
2013
|
||||||
|
|
|
||||||
Amounts Attributable to Kadant:
|
|
|
||||||
Income from Continuing Operations
|
$
|
5,058
|
$
|
5,313
|
||||
Loss from Discontinued Operation
|
(5
|
)
|
(29
|
)
|
||||
Net Income
|
$
|
5,053
|
$
|
5,284
|
||||
|
||||||||
Basic Weighted Average Shares
|
11,132
|
11,163
|
||||||
Effect of Stock Options, Restricted Stock Units and Employee Stock Purchase Plan
|
182
|
104
|
||||||
Diluted Weighted Average Shares
|
11,314
|
11,267
|
||||||
|
||||||||
Basic Earnings per Share:
|
||||||||
Continuing Operations
|
$
|
0.45
|
$
|
0.48
|
||||
Discontinued Operation
|
$
|
–
|
$
|
–
|
||||
Net Income per Basic Share
|
$
|
0.45
|
$
|
0.47
|
||||
|
||||||||
Diluted Earnings per Share:
|
||||||||
Continuing Operations
|
$
|
0.45
|
$
|
0.47
|
||||
Discontinued Operation
|
$
|
–
|
$
|
–
|
||||
Net Income per Diluted Share
|
$
|
0.45
|
$
|
0.47
|
5. | Provision for Income Taxes |
6. | Long-Term Obligations |
|
March 29,
|
December 28,
|
||||||
(In thousands)
|
2014
|
2013
|
||||||
|
|
|
||||||
Revolving Credit Facility, due 2018
|
$
|
36,640
|
$
|
32,260
|
||||
Variable Rate Term Loan, due from 2014 to 2016
|
6,250
|
6,375
|
||||||
Other
|
48
|
–
|
||||||
Total Long-Term Obligations
|
42,938
|
38,635
|
||||||
Less: Current Maturities
|
(648
|
)
|
(625
|
)
|
||||
Long-Term Obligations, less Current Maturities
|
$
|
42,290
|
$
|
38,010
|
7. | Stock-Based Compensation |
8. | Employee Benefit Plans |
9. | Accumulated Other Comprehensive Items |
(In thousands)
|
Foreign
Currency
Translation
Adjustment
|
Unrecognized
Prior Service
Cost
|
Deferred Loss
on Pension and
Other Post-
Retirement
Plans
|
Deferred Loss
on Hedging
Instruments
|
Accumulated
Other
Comprehensive
Items
|
|||||||||||||||
Balance at December 28, 2013
|
$
|
8,919
|
$
|
(657
|
)
|
$
|
(6,919
|
)
|
$
|
(633
|
)
|
$
|
710
|
|||||||
Other comprehensive (loss) income before reclassifications
|
(763
|
)
|
–
|
(3
|
)
|
38
|
(728
|
)
|
||||||||||||
Reclassifications from AOCI
|
–
|
22
|
58
|
54
|
134
|
|||||||||||||||
Net current period other comprehensive (loss) income
|
(763
|
)
|
22
|
55
|
92
|
(594
|
)
|
|||||||||||||
Balance at March 29, 2014
|
$
|
8,156
|
$
|
(635
|
)
|
$
|
(6,864
|
)
|
$
|
(541
|
)
|
$
|
116
|
|||||||
|
||||||||||||||||||||
Balance at December 29, 2012
|
$
|
8,124
|
$
|
(748
|
)
|
$
|
(9,645
|
)
|
$
|
(1,046
|
)
|
$
|
(3,315
|
)
|
||||||
Other comprehensive (loss) income before reclassifications
|
(3,060
|
)
|
2
|
–
|
(47
|
)
|
(3,105
|
)
|
||||||||||||
Reclassifications from AOCI
|
–
|
22
|
113
|
242
|
377
|
|||||||||||||||
Net current period other comprehensive (loss) income
|
(3,060
|
)
|
24
|
113
|
195
|
(2,728
|
)
|
|||||||||||||
Balance at March 30, 2013
|
$
|
5,064
|
$
|
(724
|
)
|
$
|
(9,532
|
)
|
$
|
(851
|
)
|
$
|
(6,043
|
)
|
|
Three Months Ended
|
|
|||||||
(In thousands)
|
March 29, 2014
|
March 30, 2013
|
Statement of Income Line Item
|
||||||
Pension and Other Post-retirement Plans: (1)
|
|
|
|
||||||
Amortization of prior service cost
|
$
|
(35
|
)
|
$
|
(35
|
)
|
Selling, general, and administrative expenses
|
||
Amortization of actuarial losses
|
(88
|
)
|
(172
|
)
|
Selling, general, and administrative expenses
|
||||
Total expense before income taxes
|
(123
|
)
|
(207
|
)
|
|
||||
Income tax benefit
|
43
|
72
|
Provision for income taxes
|
||||||
|
(80
|
)
|
(135
|
)
|
|
||||
Cash Flow Hedges: (2)
|
|
||||||||
Interest rate swap agreements
|
(84
|
)
|
(106
|
)
|
Interest expense
|
||||
Forward currency-exchange contracts
|
–
|
(43
|
)
|
Revenues
|
|||||
Total expense before income taxes
|
(84
|
)
|
(149
|
)
|
|
||||
Income tax benefit (provision)
|
30
|
(93
|
)
|
Provision for income taxes
|
|||||
|
(54
|
)
|
(242
|
)
|
|
||||
Total reclassifications
|
$
|
(134
|
)
|
$
|
(377
|
)
|
|
(1) | Included in the computation of net periodic benefit costs. See Note 8 for additional information. |
(2) | See Note 10 for additional information. |
10. | Derivatives |
10. | Derivatives (continued) |
|
|
March 29, 2014
|
December 28, 2013
|
||||||||||||||
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
|
$
|
44
|
$
|
840
|
$
|
–
|
$
|
–
|
||||||||
Derivatives in a Liability Position:
|
|
||||||||||||||||
Forward currency-exchange contracts
|
Other Current Liabilities
|
$
|
(8
|
)
|
$
|
500
|
$
|
(22
|
)
|
$
|
1,340
|
||||||
Interest rate swap agreement
|
Other Long-Term Liabilities
|
$
|
(690
|
)
|
$
|
6,250
|
$
|
(773
|
)
|
$
|
6,375
|
||||||
|
|
||||||||||||||||
Derivatives Not Designated as Hedging Instruments:
|
|
||||||||||||||||
Derivatives in an Asset Position:
|
|
||||||||||||||||
Forward currency-exchange contracts
|
Other Current Assets
|
$
|
–
|
$
|
–
|
$
|
97
|
$
|
1,419
|
||||||||
Derivatives in a Liability Position:
|
|
||||||||||||||||
Forward currency-exchange contracts
|
Other Current Liabilities
|
$
|
–
|
$
|
–
|
$
|
(1
|
)
|
$
|
288
|
(a) | See Note 11 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 three months of 2014. |
(In thousands)
|
Interest Rate Swap
Agreements
|
Forward Currency-
Exchange
Contracts
|
Total
|
|||||||||
Unrealized loss, net of tax, at December 28, 2013
|
$
|
(618
|
)
|
$
|
(15
|
)
|
$
|
(633
|
)
|
|||
Loss reclassified to earnings
|
54
|
–
|
54
|
|||||||||
Gain recognized in OCI
|
–
|
38
|
38
|
|||||||||
Unrealized (loss) gain, net of tax, at March 29, 2014
|
$
|
(564
|
)
|
$
|
23
|
$
|
(541
|
)
|
11. | Fair Value Measurements |
• | 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 March 29, 2014
|
|||||||||||||||
(In thousands)
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
|
|
|
|
|
||||||||||||
Assets:
|
|
|
|
|
||||||||||||
Money market funds and time deposits
|
$
|
15,665
|
$
|
–
|
$
|
–
|
$
|
15,665
|
||||||||
Banker's acceptance drafts (a)
|
$
|
–
|
$
|
6,947
|
$
|
–
|
$
|
6,947
|
||||||||
Forward currency-exchange contracts
|
$
|
–
|
$
|
44
|
$
|
–
|
$
|
44
|
||||||||
|
||||||||||||||||
Liabilities:
|
||||||||||||||||
Forward currency-exchange contracts
|
$
|
–
|
$
|
8
|
$
|
–
|
$
|
8
|
||||||||
Interest rate swap agreement
|
$
|
–
|
$
|
690
|
$
|
–
|
$
|
690
|
||||||||
Contingent consideration (b)
|
$
|
–
|
$
|
–
|
$
|
1,377
|
$
|
1,377
|
|
Fair Value as of December 28, 2013
|
|||||||||||||||
(In thousands)
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
|
|
|
|
|
||||||||||||
Assets:
|
|
|
|
|
||||||||||||
Money market funds and time deposits
|
$
|
17,090
|
$
|
–
|
$
|
–
|
$
|
17,090
|
||||||||
Banker's acceptance drafts (a)
|
$
|
–
|
$
|
10,765
|
$
|
–
|
$
|
10,765
|
||||||||
Forward currency-exchange contracts
|
$
|
–
|
$
|
97
|
$
|
–
|
$
|
97
|
||||||||
|
||||||||||||||||
Liabilities:
|
||||||||||||||||
Forward currency-exchange contracts
|
$
|
–
|
$
|
23
|
$
|
–
|
$
|
23
|
||||||||
Interest rate swap agreement
|
$
|
–
|
$
|
773
|
$
|
–
|
$
|
773
|
(a) | Included in accounts receivable in the accompanying condensed consolidated balance sheet. |
(b) | Included in other current liabilities in the accompanying condensed consolidated balance sheet. |
|
March 29, 2014
|
December 28, 2013
|
||||||||||||||
|
Carrying
|
Fair
|
Carrying
|
Fair
|
||||||||||||
(In thousands)
|
Value
|
Value
|
Value
|
Value
|
||||||||||||
|
|
|
|
|
||||||||||||
Long-term debt obligations
|
$
|
42,290
|
$
|
42,290
|
$
|
38,010
|
$
|
38,010
|
12. | Business Segment Information |
|
Three Months Ended
|
|||||||
|
March 29,
|
March 30,
|
||||||
(In thousands)
|
2014
|
2013
|
||||||
|
|
|
||||||
Revenues:
|
|
|
||||||
Papermaking Systems
|
$
|
78,184
|
$
|
72,397
|
||||
Wood Processing Systems
|
11,273
|
–
|
||||||
Fiber-based Products
|
3,910
|
3,807
|
||||||
|
$
|
93,367
|
$
|
76,204
|
||||
|
||||||||
Income from Continuing Operations Before Provision for Income Taxes:
|
||||||||
Papermaking Systems
|
$
|
9,410
|
$
|
9,944
|
||||
Wood Processing Systems
|
1,354
|
–
|
||||||
Corporate and Fiber-based Products (a)
|
(3,143
|
)
|
(2,572
|
)
|
||||
Total Operating Income
|
7,621
|
7,372
|
||||||
Interest Expense, Net
|
(84
|
)
|
(56
|
)
|
||||
|
$
|
7,537
|
$
|
7,316
|
||||
|
||||||||
Capital Expenditures:
|
||||||||
Papermaking Systems
|
$
|
517
|
$
|
1,172
|
||||
Other
|
22
|
6
|
||||||
|
$
|
539
|
$
|
1,178
|
13. | Contingencies and Litigation |
|
-
|
Stock-Preparation: custom-engineered systems and equipment, as well as standard individual components, for pulping, de-inking, screening, cleaning, and refining primarily recycled fiber for preparation for entry into the paper machine; recausticizing and evaporation equipment and systems used in the production of virgin pulp;
|
|
-
|
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; and
|
|
-
|
Doctoring, Cleaning, & Filtration: 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; profiling systems that control moisture, web curl, and gloss during paper converting; and systems and equipment used to continuously clean paper machine fabrics and rolls, drain water from pulp mixtures, form the sheet or web, and filter the process water for reuse.
|
|
-
|
Stranders: disc and ring stranders that cut trees into strands for OSB production;
|
|
-
|
Rotary Debarkers: rotary debarkers that employ a combination of mechanical abrasion and log-to-log contact to efficiently remove bark from logs of all shapes and species; and
|
|
-
|
Chippers: disc, drum, and veneer chippers that are high quality, robust chipper systems for waste-wood and whole-log applications found in pulp woodrooms, chip plants, sawmill, and planer mill sites.
|
|
Three Months Ended
|
|||||||
|
March 29,
|
March 30,
|
||||||
|
2014
|
2013
|
||||||
|
|
|
||||||
Revenues
|
100
|
%
|
100
|
%
|
||||
|
||||||||
Costs and Operating Expenses:
|
||||||||
Cost of revenues
|
55
|
53
|
||||||
Selling, general, and administrative expenses
|
35
|
35
|
||||||
Research and development expenses
|
2
|
2
|
||||||
Restructuring costs
|
–
|
–
|
||||||
|
92
|
90
|
||||||
|
||||||||
Operating Income
|
8
|
10
|
||||||
|
||||||||
Interest Income
|
–
|
–
|
||||||
Interest Expense
|
–
|
–
|
||||||
|
||||||||
Income from Continuing Operations Before Provision for Income Taxes
|
8
|
10
|
||||||
Provision for Income Taxes
|
2
|
3
|
||||||
|
||||||||
Income from Continuing Operations
|
6
|
%
|
7
|
%
|
|
Three Months Ended
|
|||||||
|
March 29,
|
March 30,
|
||||||
(In thousands)
|
2014
|
2013
|
||||||
|
|
|
||||||
Revenues:
|
|
|
||||||
Papermaking Systems
|
$
|
78,184
|
$
|
72,397
|
||||
Wood Processing Systems
|
11,273
|
–
|
||||||
Fiber-based Products
|
3,910
|
3,807
|
||||||
|
$
|
93,367
|
$
|
76,204
|
|
Three Months Ended
|
Increase
Excluding
Effect of
|
||||||||||||||
(In millions)
|
March 29,
2014
|
March 30,
2013
|
Increase
|
Currency
Translation
|
||||||||||||
|
|
|
|
|
||||||||||||
Papermaking Systems Product Lines:
|
|
|
|
|
||||||||||||
Doctoring, Cleaning, & Filtration
|
$
|
27.0
|
$
|
25.9
|
$
|
1.1
|
$
|
1.0
|
||||||||
Stock-Preparation
|
26.2
|
23.0
|
3.2
|
2.8
|
||||||||||||
Fluid-Handling
|
25.0
|
23.5
|
1.5
|
1.5
|
||||||||||||
|
$
|
78.2
|
$
|
72.4
|
$
|
5.8
|
$
|
5.3
|
|
Three Months Ended
|
|||||||
|
March 29,
|
March 30,
|
||||||
|
2014
|
2013
|
||||||
|
|
|
||||||
Gross Profit Margin:
|
|
|
||||||
Papermaking Systems
|
47.5
|
%
|
46.9
|
%
|
||||
Wood Processing Systems
|
28.3
|
–
|
||||||
Fiber-based Products
|
46.7
|
54.7
|
||||||
|
45.2
|
%
|
47.3
|
%
|
|
–
|
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 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.
|
|
–
|
competition with other prospective buyers resulting in our inability to complete an acquisition or in us paying a substantial premium over the fair value of the net assets of the acquired business,
|
|
–
|
inability to obtain regulatory approvals, 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,
|
|
–
|
inability to retain key management of the acquired business,
|
|
–
|
diversion of management's attention from other business concerns,
|
|
–
|
inability to improve the revenues and profitability or realize the cost savings and synergies expected of 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.
|
|
–
|
strengthening our presence in selected geographic markets, including emerging markets and existing markets where we see opportunities;
|
|
–
|
focusing on parts and consumables sales;
|
|
–
|
using low-cost manufacturing bases, such as China and Mexico;
|
|
–
|
allocating research and development funding to products with higher growth prospects;
|
|
–
|
developing new applications for our technologies;
|
|
–
|
combining sales and marketing operations in appropriate markets to compete more effectively;
|
|
–
|
finding new markets for our products; and
|
|
–
|
continuing to develop cross-selling opportunities for our products and services to take advantage of our depth of product offerings.
|
|
–
|
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.
|
–
|
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 process industries we serve,
|
|
–
|
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,
|
|
–
|
changes in the estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, or expenses,
|
|
–
|
the impact of 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.
|
Issuer Purchases 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 (1)
|
Approximate Dollar
Value of Shares that
May Yet Be
Purchased
Under the Plans
|
||||||||||||
12/29/13 – 1/31/14
|
–
|
–
|
–
|
$
|
18,113,497
|
|||||||||||
2/1/14 – 2/28/14
|
–
|
–
|
–
|
$
|
18,113,497
|
|||||||||||
3/1/14 – 3/29/14
|
50,000
|
$
|
38.35
|
50,000
|
$
|
16,195,995
|
||||||||||
Total:
|
50,000
|
$
|
38.35
|
50,000
|
(1)
|
On November 4, 2013, we announced that our board of directors approved the repurchase by us of up to $20 million of our equity securities during the period from November 8, 2013 to November 8, 2014. Repurchases may be made in public or private transactions, including under Securities Exchange Act Rule 10b-5-1 trading plans. In the first quarter of 2014, we repurchased 50,000 shares of our common stock for $1.9 million under this authorization.
|
|
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
|
|
Form of Performance-Based Restricted Stock Unit Award Agreement between the Company and its executive officers used for restricted stock unit awards on or after March 5, 2014.
|
|
|
|
10.2
|
|
Form of Time-Based Restricted Stock Unit Award Agreement between the Company and its executive officers used for restricted stock unit awards on or after March 5, 2014.
|
|
|
|
10.3
|
|
Amended and Restated 2006 Equity Incentive Plan of the Registrant effective as of March 6, 2014.
|
|
|
|
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.
|
|
|
|
101.INS
|
|
XBRL Instance Document.*
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document.*
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Calculation Linkbase Document.*
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Label Linkbase Document.*
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Presentation Linkbase Document.*
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Definition Linkbase Document.*
|
1.
|
Preamble.
On the date shown on the first page of this Award Agreement ("Award Date"), the Company granted to the Recipient named on the first page (the "Recipient") restricted stock units ("RSUs") with respect to the number of shares of common stock of the Company identified on the first page of this Award Agreement ("Award Shares"), subject to the terms, conditions and restrictions set forth in this Award Agreement and the provisions of the Company's 2006 Equity Incentive Plan ("Plan"). The RSUs represent a promise by the Company to deliver the Award Shares upon vesting. Any consideration due to the Company on the issuance of Award Shares pursuant to this Award Agreement will be deemed to have been satisfied by services rendered by the Recipient to the Company during the vesting period.
|
2.
|
Restrictions on Transfer
. Unless and until the Award Shares shall have vested as provided in Section 3 below, the Recipient shall not sell, transfer, pledge, hypothecate, assign or otherwise dispose of, by operation of law or otherwise, any RSUs, or any interest therein.
|
3.
|
Vesting
.
|
(a)
|
Vesting Schedule.
Subject to the terms, conditions and restrictions of this Award Agreement, including the Forfeiture provisions described in Section 4 below, the Recipient shall vest in all RSUs in accordance with the schedule set forth below (the "Vesting Date"), provided that the performance measure set forth in this Section 3(b) has been met.
|
(b)
|
Performance Measure.
The Company has established as the performance measure earnings before interest, taxes, depreciation and amortization (EBITDA) generated by its continuing operations during the [year] fiscal year (beginning [date] and ending [date] (the "Measurement Period"), equal to the amount set forth in Exhibit A to this Award Agreement and as such amount may be adjusted as set forth in such Exhibit A (the "Target EBITDA"). Upon the conclusion of the Measurement Period, the Company shall calculate and determine the actual EBITDA generated by its continuing operations during the Measurement Period as determined in Exhibit A ("Actual EDITDA"). The number of Award Shares deliverable to the Recipient will be adjusted and determined by a continuous line graph based on the following data points, which graph is included as Exhibit B:
|
4.
|
Forfeiture
.
|
(a)
|
Definitions
. For purposes of this Award Agreement, "Forfeiture" shall mean any forfeiture of RSUs pursuant to Section 4(b) below. For purposes of this Award Agreement, "employ" or "employment" with the Company shall include employment with a parent or subsidiary of the Company, which controls, is controlled by, or under common control of the Company.
|
(b)
|
Termination of Employment; Death and Disability
. In the event that the Recipient ceases to be employed by the Company prior to a Vesting Date for any reason or for no reason (other than upon a "Change in Control" as provided in Section 4(c) or upon death or disability meeting the requirements set forth in this Section 4(b)), with or without cause, then any of the Recipient's RSUs that have not previously vested shall be automatically and immediately forfeited and returned to the Company as of the date employment ceases. In the event of the Recipient's death or disability that occurs prior to a Vesting Date and before the last day of the Measurement Period, then 100% of the Recipient's RSUs that have not previously been forfeited or vested shall become immediately vested and no longer subject to the Forfeiture provisions in this Section 4, and the Company shall immediately deliver to the Recipient (or his or her beneficiary in the event of death), as soon as administratively feasible but no later than 30 days after the vesting thereof that number of Award Shares to the Recipient equal to the number shown on the first page of this Award Agreement without adjustment. In the event of the Recipient's death or disability that occurs prior to a Vesting Date and on or after the last day of the Measurement Period, then 100% of the Recipient's RSUs that have not previously been forfeited or vested shall become immediately vested and no longer subject to the Forfeiture provisions in this Section 4, and the Company shall immediately deliver to the Recipient (or his or her beneficiary in the event of death), as soon as administratively feasible but no later than 30 days after the vesting thereof that number of Award Shares to the Recipient equal to the number of Award Shares deliverable based on the achievement of the performance measures, as adjusted and determined in Section 3 (less any Award Shares that have been previously forfeited or vested and issued). For purposes of this Award Agreement, "disability" means that you are receiving disability benefits under the Company's Long Term Disability Coverage, as then in effect, on the date employment ceases.
|
(c)
|
Change in Control
. In the event of a "Change in Control" that occurs (i) prior to the Vesting Date and before the last day of the Measurement Period and (ii) on a date on which the Recipient is employed by the Company, then 100% of the Recipient's RSUs that have not previously been forfeited shall become immediately vested and shall no longer be subject to the Forfeiture provisions in this Section 4, and the Company shall deliver as soon as administratively feasible but no later than 30 days after the Vesting Date that number of Award Shares to the Recipient equal to the number shown on the first page of this Award Agreement, without adjustment. In the event of a "Change in Control" that occurs (i) prior to the Vesting Date and on or after the last day of the Measurement Period and (ii) on a date on which the Recipient is employed by the Company, then 100% of the Recipient's RSUs that have not previously been forfeited shall become immediately vested and shall no longer be subject to the Forfeiture provisions in this Section 4, and the Company shall deliver as soon as administratively feasible but no later than 30 days after the Vesting Date that number of Award Shares to the Recipient equal to the number of Award Shares deliverable based on the achievement of the performance measures, as adjusted and determined in Section 3. A "Change in Control" shall have the same meaning for the purposes of this Award Agreement as set forth in Section 8 of the Plan, as the same may be amended from time to time.
|
5.
|
No Stockholder Rights.
Except as set forth in the Plan, neither the Recipient nor any person claiming under or through the Recipient shall be, or have any rights or privileges of, a stockholder of the Company in respect of the Award Shares issuable pursuant to the RSUs until the Award Shares are issued in the name of the Recipient. In particular, a Recipient holding an unvested Award shall have no ownership interest in the shares of Common Stock to which the Award relates until the Award Shares have vested, payment with respect to such Award has actually been made in shares of Common Stock, and the underlying shares of Common Stock have been issued.
|
6.
|
Withholding Taxes.
The Company's obligation to deliver Award Shares to the Recipient upon the vesting of the RSUs shall be subject to the satisfaction of all income tax (including federal, state, local and foreign taxes), social insurance, payroll tax, payment on account or other tax-related withholding requirements of any applicable jurisdiction, based on minimum statutory withholding rates for all tax purposes, including payroll and social security taxes ("Withholding Taxes"). In order to satisfy all Withholding Taxes due in connection with the award or vesting of the RSUs or the delivery of the Award Shares, the Recipient hereby irrevocably agrees to the following actions by the Company, at the Company's sole election:
|
(a) | The Company may sell, or arrange for the sale of, such number of the Award Shares that the Recipient is entitled to receive on the Vesting Date, with no further action by the Recipient, as is sufficient to generate net proceeds at least equal to the value of the Withholding Taxes, and the Company shall retain such net proceeds in satisfaction of such Withholding Taxes. The Company shall remit to the Recipient in cash any portion of such net proceeds in excess of the value of such Withholding Taxes. |
(b) | The Company may retain such number of the Award Shares that the Recipient is otherwise entitled to receive on the Vesting Date, with no further action by the Recipient, by deducting and retaining from the number of Award Shares to which the Recipient is entitled that number of Award Shares as is equal to the value of the Withholding Taxes. The Recipient understands that the fair market value of the surrendered Award Shares will be determined in accordance with the Company's Stock Option and Equity Award Grant and Exercise Procedures as then in effect. |
(c) | The Recipient hereby appoints each of the Chief Financial Officer, General Counsel and the Secretary of the Company as his or her attorney in fact to sell or transfer the Recipient's Award Shares in accordance with this Section 6. The Recipient agrees to execute and deliver such documents, instruments and certificates as may reasonably be required in connection with the sale, transfer or retention of Award Shares pursuant to this Section 6, including an irrevocable order to sell shares authorizing a brokerage firm selected by the Company to sell the Recipient's Award Shares. |
7.
|
No Compensation Deferral.
Neither the Plan nor this Award Agreement is intended to provide for any deferral of compensation that would be subject to Section 409A ("Section 409A") of the U.S. Internal Revenue Code of 1986, as amended. The Company reserves the right, to the extent the Company deems necessary or advisable in its sole discretion, to unilaterally amend or modify the Plan and/or this Award Agreement to ensure that all awards (including, without limitation, the RSUs) are either exempt from or complaint with the requirements of Section 409A.
|
8.
|
Dilution and Other Adjustments
. In the event a stock dividend, stock split or combination of shares, or other distribution with respect to holders of common stock other than normal cash dividends, occurs while the Award is outstanding (after the Grant Date and before the date the Award is vested), the committee appointed by the Company's Board of Directors to administer the Plan (the "Committee") shall in the manner determined in its sole discretion adjust the number of shares for which the Award may be issued to reflect such event. In the event any recapitalization, merger or consolidation involving the Company, any transaction in which the Company becomes a subsidiary of another entity, any sale or other disposition of all or a substantial portion of the assets of the Company or any similar transaction, as determined by the Committee, (any of the foregoing, a "covered transaction") occurs while the Award is outstanding, the Committee in its discretion may (i) accelerate the vesting of the Award, (ii) adjust the terms of the Award, (iii) if there is a survivor or acquiror entity, provide for the assumption of the Award by such survivor or acquiror or an affiliate thereof or for the grant of one or more replacement awards by such survivor or acquiror or an affiliate thereof, in each case on such terms as the Committee may determine, (iv) terminate the Award (provided, that if the Committee terminates the Award, it shall, in connection therewith, either (A) accelerate the vesting of the Award prior to such termination, or (B) provide for a payment to the holder of the Award of cash or other property or a combination of cash or other property in an amount reasonably determined by the Committee to approximate the value of the Award assuming it vested immediately prior to the transaction, or (C) if there is a survivor or acquiror entity, provide for the grant of one or more replacement awards pursuant to clause (iii) above), or (v) provide for none of, or any combination of, the foregoing. No fraction of a share or fractional shares shall be purchasable or deliverable under this Award Agreement.
|
9.
|
Administration.
The Compensation Committee of the Company's Board of Directors or other committee designated in the Plan, shall have the authority to manage and control the operation and administration of this Award Agreement. Any interpretation of the Award Agreement by any of the entities specified in the preceding sentence and any decision made by any of them with respect to the Award Agreement is final and binding.
|
10.
|
Plan Definitions.
Notwithstanding anything in this Award Agreement to the contrary, the terms of this Award Agreement shall be subject to the terms of the Plan, a copy of which has already been provided to the Recipient.
|
11.
|
Recipient's Undertakings.
In signing this Award Agreement and accepting the RSU, the Recipient acknowledges that:
|
(a)
|
The Plan and this Award were established voluntarily by the Company, each is discretionary in nature, and each may be modified, amended, suspended or terminated by the Company at any time, unless otherwise provided in the Plan and this Award Agreement;
|
(b)
|
The grant of RSUs is voluntary and occasional and does not create any contractual or other right to receive future awards of RSUs, or benefits in lieu of RSUs even if RSUs have been awarded repeatedly in the past or future;
|
(c)
|
All decisions with respect to future grants of RSUs, if any, will be at the sole discretion of the Company;
|
(d)
|
The Recipient's participation in the Plan and receipt and acceptance of the Award is voluntary;
|
(e)
|
RSUs are an extraordinary item that do not constitute compensation of any kind for services of any kind rendered to the Company or to the Recipient's employer, and RSUs are outside the scope of the Recipient's employment contract, if any;
|
(f)
|
RSUs are not part of normal or expected compensation or salary for any purpose, including, but not limited to, calculation of any severance, resignation, termination, redundancy, end of service payments, bonuses, long-service awards, pension or retirement benefits or similar payments and in no event should be considered as compensation for, or relating in any way to, past services for the Company or the Recipient's employer;
|
(g)
|
The future value of the underlying Award Shares is unknown and cannot be predicted with certainty;
|
(h)
|
The value of the Award Shares underlying the RSUs may increase or decrease in value during the period from the Award Date to the Vesting Date;
|
(i)
|
In consideration of the grant of RSUs, no claim or entitlement to compensation or damages arises from termination of the RSUs or diminution in value of the RSUs or Award Shares received upon vesting of RSUs resulting from termination of the Recipient's employment by the Company or the Recipient's employer (for any reason whatsoever and whether or not in breach of local labor laws) and the Recipient irrevocably releases the Company and his or her employer from any such claim that may arise; and if, notwithstanding the foregoing, any such claim is found by a court of competent jurisdiction to have arisen, then, by signing this Award Agreement, the Recipient shall be deemed irrevocably to have waived his or her entitlement to pursue such claim; and
|
(j)
|
Further, if the Recipient ceases to be an employee (whether or not in breach of local labor laws), the Recipient's right to receive RSUs and vest under the Award Agreement or Plan, if any, will terminate effective as of the date that the Recipient is no longer actively employed by the Company and will not be extended by any notice period mandated under local law (e.g., active employment would not include a period of "garden leave" or similar period pursuant to local law); and the Compensation Committee of the Company's Board of Directors shall have the exclusive discretion to determine when the Recipient is no longer actively employed for purposes of this Award Agreement and the Plan.
|
12.
|
Data Privacy Notice and Consent
. The Recipient hereby explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of his or her personal data as described in this paragraph, by and among, as applicable, the Recipient's employer and the Company and its subsidiaries and affiliates for, among other purposes, implementing, administering and managing the Recipient's participation in the Plan. The Recipient understands that the Company and its subsidiaries hold or will hold certain personal information about the Recipient, including the Recipient's name, home address and telephone number, date of birth, social security number or identification number, salary, nationality, job title, any shares or directorships held in the Company, details of all options or awards or any other interests in shares awarded, canceled, exercised, vested, unvested or outstanding in the Recipient's name, for the purposes of managing and administering the Plan ("Data"). The Recipient further understands that the Company and its subsidiaries will transfer Data amongst themselves as necessary for employment purposes, including implementation, administration and management of the Recipient's participation in the Plan, and that the Company and any of its subsidiaries may each further transfer Data to a broker or other stock plan service provider or other third parties assisting the Company with the processing of Data. The Recipient understands that these third parties may be located in the United States, and that the third party's country may have different data privacy laws and protections than in the Recipient's country. The Recipient authorizes them to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes described in this Section, including any requisite transfer to a broker or other stock plan service provider or other third party as may be required for the administration of the Plan and the subsequent holding of Award Shares on the Recipient's behalf. The Recipient understands that he or she may, at any time, request access to the Data, request any necessary amendments to it or refuse or withdraw the consents herein, in any case without cost, by contacting in writing the Company's Stock Option Manager at the Company's headquarters address. The Recipient understands, however, that withdrawal of consent may affect the Recipient's ability to participate in or realize the benefits of the Plan and this Award Agreement. For more information on the consequences of refusal to consent or withdrawal of consent, the Recipient understands that he or she may contact the Company's Stock Option Manager.
|
13.
|
Miscellaneous
.
|
(a)
|
No Rights to Employment
. The Recipient acknowledges and agrees that the vesting of the RSUs pursuant to this Award Agreement is earned only in accordance with the terms hereof. The Recipient further acknowledges and agrees that the transactions contemplated hereunder and the vesting schedule set forth herein do not constitute an express or implied promise of continued engagement as an employee for the vesting period, for any period, or at all.
|
(b)
|
Unfunded Rights
. The right of the Recipient to receive Award Shares pursuant to this Award Agreement is an unfunded and unsecured obligation of the Company. The Receipient shall have no rights under this Award Agreement other than those of an unsecured general creditor of the Company.
|
(c)
|
Severability
. The invalidity or unenforceability of any provision of this Award Agreement shall not affect the validity or enforceability of any other provision of this Award Agreement, and each other provision of this Award Agreement shall be severable and enforceable to the extent permitted by law.
|
(d)
|
Waiver
. Any provision for the benefit of the Company contained in this Award Agreement may be waived, either generally or in any particular instance, by the Compensation Committee of the Board of Directors of the Company.
|
(e)
|
Binding Effect
. This Award Agreement shall be binding upon and inure to the benefit of the Company and the Recipient and their respective heirs, executors, administrators, legal representatives, successors and assigns, subject to the restrictions on transfer set forth in this Award Agreement.
|
(f)
|
Language
. The English version of this Award Agreement, the Plan and any other document delivered pursuant to either the Award Agreement or the Plan, will control over any translated version of any such document in the event such translated version is different from the English version.
|
(g)
|
Entire Agreement
. This Award Agreement and the Plan constitute the entire agreement between the parties, and supercedes all prior agreements and understandings, relating to the subject matter of this Award Agreement.
|
(h)
|
Governing Law
. This Award Agreement shall be construed, interpreted and enforced in accordance with the internal laws of the State of Delaware without regard to any applicable conflicts of laws.
|
(i)
|
Amendment
.
This Award Agreement may be amended only by written agreement between the Recipient and the Company, without the consent of any other person.
|
·
|
Results from the date of sale related to any operation that was sold during the Measurement Period
|
(1)
|
Operating Income from continuing operations
|
(2)
|
Operating Income shall be adjusted to exclude the effects of the following items:
|
·
|
Depreciation and amortization expense
|
·
|
Restructuring costs or other expense (income) which is presented on a separate line item in the Company's income statement as included in its earnings release and SEC filings
|
·
|
Non-cash compensation expense from equity compensation
|
·
|
Results from any operations acquired during the Measurement Period
|
(3)
|
The result shall be Actual EBITDA
|
1.
|
Preamble.
On the effective date shown on the first page of this Award Agreement ("Award Date"), the Company granted to the Recipient named on the first page (the "Recipient") restricted stock units ("RSUs") with respect to the number of shares of common stock of the Company identified on the first page of this Award Agreement ("Award Shares"), subject to the terms, conditions and restrictions set forth in this Award Agreement and the provisions of the Company's Amended and Restated Equity Incentive Plan, as amended from time to time ("Plan"). The RSUs represent a promise by the Company to deliver the Award Shares upon vesting. Any consideration due to the Company on the issuance of Award Shares pursuant to this Award Agreement will be deemed to have been satisfied by services rendered by the Recipient to the Company during the vesting period.
|
2.
|
Restrictions on Transfer
. Unless and until the Award Shares shall have vested as provided in Section 3 below, the Recipient shall not sell, transfer, pledge, hypothecate, assign or otherwise dispose of, by operation of law or otherwise, any RSUs, or any interest therein.
|
3.
|
Vesting Date
. Subject to the terms, conditions and restrictions of this Award Agreement, including the Forfeiture provisions described in Section 4 below, the Recipient shall vest in all RSUs in accordance with the schedule set forth below (a "Vesting Date):
|
4.
|
Forfeiture
.
|
(a)
|
Definitions
. For purposes of this Award Agreement, "Forfeiture" shall mean any forfeiture of RSUs pursuant to Section 4(b) below. For purposes of this Award Agreement, "employ" or "employment" with the Company shall include employment with a parent or subsidiary of the Company, which controls, is controlled by, or under common control of the Company.
|
(b)
|
Termination of Employment; Death and Disability
. In the event that the Recipient ceases to be employed by the Company prior to a Vesting Date for any reason or for no reason (except for death or disability meeting the requirements set forth in this Section 4(b)), with or without cause, then any of the Recipient's RSUs that have not previously vested shall be automatically and immediately forfeited and returned to the Company as of the date employment ceases. In the event of the Recipient's death or disability that occurs prior to a Vesting Date and prior to the Recipient ceasing to be employed by the Company, then 100% of the Recipient's RSUs that have not previously been forfeited or vested shall become immediately vested and no longer subject to the Forfeiture provisions in this Section 4, and the Company shall immediately deliver to the Recipient (or his or her beneficiary in the event of death), the vested Award Shares (less any Award Shares that have been previously forfeited or vested and issued) as soon as administratively feasible but no later than 30 days after the vesting thereof. For purposes of this Award Agreement, "disability" means that you are receiving disability benefits under the Company's Long Term Disability Coverage, as then in effect, on the date employment ceases."
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(c) | Change in Control . In the event of a "Change in Control" that occurs prior to a Vesting Date and on a date on which the Recipient is employed by the Company, then 100% of the Recipient's RSUs that have not previously been forfeited or vested shall become immediately vested and no longer be subject to the Forfeiture provisions in this Section 4, and the Company shall immediately deliver as soon as administratively feasible but no later than 30 days after the vesting date the Award Shares to the Recipient, as shown on the first page of this Award Agreement, less any Award Shares that have been previously forfeited or vested and issued. A "Change in Control" shall have the same meaning for the purposes of this Award Agreement as set forth in Section 9 of the Plan, as the same may be amended from time to time. |
5.
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No Stockholder Rights.
Except as set forth in the Plan, neither the Recipient nor any person claiming under or through the Recipient shall be, or have any rights or privileges of, a stockholder of the Company in respect of the Award Shares issuable pursuant to the RSUs until the Award Shares are issued in the name of the Recipient. In particular, a Recipient holding an unvested Award shall have no ownership interest in the shares of Common Stock to which the Award relates until the Award Shares have vested, payment with respect to such Award has actually been made in shares of Common Stock, and the underlying shares of Common Stock have been issued.
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6.
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Withholding Taxes.
The Company's obligation to deliver Award Shares to the Recipient upon the vesting of the RSUs shall be subject to the satisfaction of all income tax (including federal, state, local and foreign taxes), social insurance, payroll tax, payment on account or other tax-related withholding requirements of any applicable jurisdiction, based on minimum statutory withholding rates for all tax purposes, including payroll and social security taxes ("Withholding Taxes"). In order to satisfy all Withholding Taxes due in connection with the award or vesting of the RSUs or the delivery of the Award Shares, the Recipient hereby irrevocably agrees to the following actions by the Company, at the Company's sole election:
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(a) | The Company may sell, or arrange for the sale of, such number of the Award Shares that the Recipient is entitled to receive on the Vesting Date, with no further action by the Recipient, as is sufficient to generate net proceeds at least equal to the value of the Withholding Taxes, and the Company shall retain such net proceeds in satisfaction of such Withholding Taxes. The Company shall remit to the Recipient in cash any portion of such net proceeds in excess of the value of such Withholding Taxes. |
(b) | The Company may retain such number of the Award Shares that the Recipient is otherwise entitled to receive on the Vesting Date, with no further action by the Recipient, by deducting and retaining from the number of Award Shares to which the Recipient is entitled that number of Award Shares as is equal to the value of the Withholding Taxes. The Recipient understands that the fair market value of the surrendered Award Shares will be determined in accordance with the Company's Stock Option and Equity Award Grant and Exercise Procedures as then in effect. |
(c) | The Recipient hereby appoints each of the Chief Financial Officer, General Counsel and the Secretary of the Company as his or her attorney in fact to sell or transfer the Recipient's Award Shares in accordance with this Section 6. The Recipient agrees to execute and deliver such documents, instruments and certificates as may reasonably be required in connection with the sale, transfer or retention of Award Shares pursuant to this Section 6, including an irrevocable order to sell shares authorizing a brokerage firm selected by the Company to sell the Recipient's Award Shares. |
7.
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No Compensation Deferral.
Neither the Plan nor this Award Agreement is intended to provide for any deferral of compensation that would be subject to Section 409A ("Section 409A") of the U.S. Internal Revenue Code of 1986, as amended. Notwithstanding the provisions of Section 12 (i), the Company reserves the right, to the extent the Company deems necessary or advisable in its sole discretion, to unilaterally amend or modify the Plan and/or this Award Agreement to ensure that all awards (including, without limitation, the RSUs) are either exempt from or compliant with the requirements of Section 409A.
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8.
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Administration.
The Compensation Committee of the Company's Board of Directors or other committee designated in the Plan, shall have the authority to manage and control the operation and administration of this Award Agreement. Any interpretation of the Award Agreement by any of the entities specified in the preceding sentence and any decision made by any of them with respect to the Award Agreement is final and binding.
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9.
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Plan Definitions.
Notwithstanding anything in this Award Agreement to the contrary, the terms of this Award Agreement shall be subject to the terms of the Plan, a copy of which has already been provided to the Recipient.
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10.
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Recipient's Undertakings.
In signing this Award Agreement and accepting the RSU, the Recipient acknowledges that:
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(a)
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The Plan and this Award were established voluntarily by the Company, each is discretionary in nature, and each may be modified, amended, suspended or terminated by the Company at any time, unless otherwise provided in the Plan and this Award Agreement;
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(b)
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The grant of RSUs is voluntary and occasional and does not create any contractual or other right to receive future awards of RSUs, or benefits in lieu of RSUs even if RSUs have been awarded repeatedly in the past or future;
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(c)
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All decisions with respect to future grants of RSUs, if any, will be at the sole discretion of the Company;
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(d)
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The Recipient's participation in the Plan and receipt and acceptance of the Award is voluntary;
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(e)
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RSUs are an extraordinary item that do not constitute compensation of any kind for services of any kind rendered to the Company or to the Recipient's employer, and RSUs are outside the scope of the Recipient's employment contract, if any;
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(f)
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RSUs are not part of normal or expected compensation or salary for any purpose, including, but not limited to, calculation of any severance, resignation, termination, redundancy, end of service payments, bonuses, long-service awards, pension or retirement benefits or similar payments and in no event should be considered as compensation for, or relating in any way to, past services for the Company or the Recipient's employer;
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(g)
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The future value of the underlying Award Shares is unknown and cannot be predicted with certainty;
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(h)
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The value of the Award Shares underlying the RSUs may increase or decrease in value during the period from the Award Date to the Vesting Date;
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(i)
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In consideration of the grant of RSUs, no claim or entitlement to compensation or damages arises from termination of the RSUs or diminution in value of the RSUs or Award Shares received upon vesting of RSUs resulting from termination of the Recipient's employment by the Company or the Recipient's employer (for any reason whatsoever and whether or not in breach of local labor laws) and the Recipient irrevocably releases the Company and his or her employer from any such claim that may arise; and if, notwithstanding the foregoing, any such claim is found by a court of competent jurisdiction to have arisen, then, by signing this Award Agreement, the Recipient shall be deemed irrevocably to have waived his or her entitlement to pursue such claim; and
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(j)
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Further, if the Recipient ceases to be an employee (whether or not in breach of local labor laws), the Recipient's right to receive RSUs and vest under the Award Agreement or Plan, if any, will terminate effective as of the date that the Recipient is no longer actively employed by the Company and will not be extended by any notice period mandated under local law (e.g., active employment would not include a period of "garden leave" or similar period pursuant to local law); and the Compensation Committee of the Company's Board of Directors shall have the exclusive discretion to determine when the Recipient is no longer actively employed for purposes of this Award Agreement and the Plan.
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11. | Data Privacy Notice and Consent . The Recipient hereby explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of his or her personal data as described in this paragraph, by and among, as applicable, the Recipient's employer and the Company and its subsidiaries and affiliates for, among other purposes, implementing, administering and managing the Recipient's participation in the Plan. The Recipient understands that the Company and its subsidiaries hold or will hold certain personal information about the Recipient, including the Recipient's name, home address and telephone number, date of birth, social security number or identification number, salary, nationality, job title, any shares or directorships held in the Company, details of all options or awards or any other interests in shares awarded, canceled, exercised, vested, unvested or outstanding in the Recipient's name, for the purposes of managing and administering the Plan ("Data"). The Recipient further understands that the Company and its subsidiaries will transfer Data amongst themselves as necessary for employment purposes, including implementation, administration and management of the Recipient's participation in the Plan, and that the Company and any of its subsidiaries may each further transfer Data to a broker or other stock plan service provider or other third parties assisting the Company with the processing of Data. The Recipient understands that these third parties may be located in the United States, and that the third party's country may have different data privacy laws and protections than in the Recipient's country. The Recipient authorizes them to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes described in this Section, including any requisite transfer to a broker or other stock plan service provider or other third party as may be required for the administration of the Plan and the subsequent holding of Award Shares on the Recipient's behalf. The Recipient understands that he or she may, at any time, request access to the Data, request any necessary amendments to it or refuse or withdraw the consents herein, in any case without cost, by contacting in writing the Company's General Counsel at the Company's headquarters address. The Recipient understands, however, that withdrawal of consent may affect the Recipient's ability to participate in or realize the benefits of the Plan and this Award Agreement. For more information on the consequences of refusal to consent or withdrawal of consent, the Recipient understands that he or she may contact the Company's General Counsel. |
12. | Miscellaneous . |
(a)
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No Rights to Employment
. The Recipient acknowledges and agrees that the vesting of the RSUs pursuant to this Award Agreement is earned only in accordance with the terms hereof. The Recipient further acknowledges and agrees that the transactions contemplated hereunder and the vesting schedule set forth herein do not constitute an express or implied promise of continued engagement as an employee for the vesting period, for any period, or at all.
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(b)
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Unfunded Rights
. The right of the Recipient to receive Award Shares pursuant to this Award Agreement is an unfunded and unsecured obligation of the Company. The Recipient shall have no rights under this Award Agreement other than those of an unsecured general creditor of the Company.
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(c)
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Severability
. The invalidity or unenforceability of any provision of this Award Agreement shall not affect the validity or enforceability of any other provision of this Award Agreement, and each other provision of this Award Agreement shall be severable and enforceable to the extent permitted by law.
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(d)
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Waiver
. Any provision for the benefit of the Company contained in this Award Agreement may be waived, either generally or in any particular instance, by the Compensation Committee of the Board of Directors of the Company.
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(e)
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Binding Effect
. This Award Agreement shall be binding upon and inure to the benefit of the Company and the Recipient and their respective heirs, executors, administrators, legal representatives, successors and assigns, subject to the restrictions on transfer set forth in this Award Agreement.
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(f)
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Language
. The English version of this Award Agreement, the Plan and any other document delivered pursuant to either the Award Agreement or the Plan, will control over any translated version of any such document in the event such translated version is different from the English version.
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(g)
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Entire Agreement
. This Award Agreement and the Plan constitute the entire agreement between the parties, and supersedes all prior agreements and understandings, relating to the subject matter of this Award Agreement.
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(h)
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Governing Law
. This Award Agreement shall be construed, interpreted and enforced in accordance with the internal laws of the State of Delaware without regard to any applicable conflicts of laws.
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(i)
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Amendment
.
This Award Agreement may be amended only by written agreement between the Recipient and the Company, without the consent of any other person.
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·
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prescribe, amend and rescind rules and regulations relating to the Plan and Awards,
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·
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select the persons to whom Awards will be granted ("Participants"),
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·
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determine the type and amount of Awards to be granted to Participants (including any combination of Awards),
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·
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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),
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·
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waive compliance by a Participant with any obligation to be performed by him or her under an Award,
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·
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waive any term or condition of an Award, cancel an existing Award in whole or in part with the consent of a Participant,
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·
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grant replacement Awards,
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·
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accelerate the vesting or lapse of any restrictions of any Award,
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·
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correct any defect, supply any omission or reconcile any inconsistency in the Plan or in any Award, and
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·
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adopt the form of instruments evidencing Awards under the Plan and change such forms from time to time.
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·
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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;
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·
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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");
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·
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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;
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·
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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
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·
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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.
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9 . | General Provisions |
9.1 | Documentation of Awards |
1. | I have reviewed this Quarterly Report on Form 10-Q for the period ended March 29, 2014 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. |
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Date: May 7, 2014
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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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1. | I have reviewed this Quarterly Report on Form 10-Q for the period ended March 29, 2014 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. |
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Date: May 7, 2014
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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 7, 2014
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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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