What changed in this filing

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Item 1A. Risk Factors

2026-02-18 compared with 2025-02-19 · 70 added, 59 removed, 173 unchanged (43% of the section changed)

9 unchanged sentences

Our employees and subcontractors, when necessary, often work under potentially hazardous conditions.

These risks expose us to potential liability for pollution and other environmental damages, personal injury, loss of life, business interruption and property damage or destruction.

These risks expose us to potential liability for pollution and other environmental damages, personal injury, loss of life, business interruption, property damage or destruction, reputational damage, loss of operating permits or restrictions placed on our operations.

We must also maintain a solid safety record in order to remain a preferred supplier to our major customers and protect the value of our brand in the marketplace.

While we seek to minimize our exposure to such risks primarily through (i) comprehensive training programs, (ii) utilizing proper equipment and the latest technologies, (iii) our Environmental Compliance Internal Audit Program, (iv) vehicle and equipment maintenance programs, (v) subcontracting with reputable third-parties, (vi) industrial control systems and (vii) insurance, such actions and insurance may not be adequate to cover all of our potential liabilities which could negatively impact our results of operations and cash flows.

We seek to minimize our exposure to such risks primarily through (i) comprehensive training programs, (ii) utilizing proper equipment and the latest technologies, (iii) our Environmental Compliance Internal Audit Program, (iv) vehicle and equipment maintenance programs, (v) subcontracting with reputable third-parties, (vi) industrial control systems and (vii) insurance.

Such actions and insurance though may not be adequate to cover all of our potential liabilities, which could negatively impact our results of operations and cash flows.

Our operations are increasingly dependent upon technology.

Failure of these technologies, failure to upgrade or innovate these technologies or failure to identify and develop new technologies could have an adverse impact on our results.

Failure of these technologies, failure to upgrade or innovate these technologies, failure to property implement and maintain these technologies or failure to identify and develop new technologies could have an adverse impact on our results.

Our information technology systems are critical to our operations, customer experience and financial reporting.

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System failures could also impede our ability to collect and report financial results timely or comply with regulations associated with our operations.

Identification of new and emerging technologies, including the use of artificial intelligence, may be a risk and an opportunity to our business.

Research and development of new technologies may require significant spending which may negatively impact our operating results and cash flows.

In addition to our information technology systems, we rely on operational technology, including industrial control systems, to manage and monitor certain treatment, incineration and transportation activities.

Disruptions, failures or cyber intrusions affecting these systems could impair our ability to operate facilities safely or profitably, comply with permit conditions or respond effectively to incidents, and could increase the risk of environmental releases or personal injury.

The inability to create and implement a governance framework and risk mitigation strategies in relation to emerging technologies, including artificial intelligence, could create potential risks to the Company.

The use of artificial intelligence has the potential to alter how technology is employed within our business and may impact specific areas in ways that remain unpredictable.

Our inability to efficiently leverage the advantages that artificial intelligence offers may weaken our competitiveness.

Furthermore, inadequate risk management regarding technology and artificial intelligence could result in detrimental consequences for both our operational outcomes and competitiveness.

Identification of new and emerging technologies with regard to waste disposal and recycling may be a risk and an opportunity to our business.

Research and development of new technologies may require significant spending that may negatively impact our operating results and cash flows.

Failure to innovate and focus on new technologies that provide superior alternatives to traditional environmental services, waste disposal or oil collection and re-refining service offerings may negatively impact our financial results.

Our industry competitiveness could be affected by the introduction of new technological solutions that offer lower cost alternatives to incineration methods for waste disposal.

A cybersecurity incident could negatively impact our business, operations and relationships with customers.

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Mobile devices and other online technologies connect our employees to our customers and our networks.

Such uses give rise to cybersecurity risks, including security breach, espionage, system disruption, theft, disruption of our business operations, remediation costs for repairs of system damage and inadvertent release of information.

Such uses give rise to cybersecurity risks, including security breach, espionage, ransomware, system disruption, theft, disruption of our business operations, remediation costs for repairs of system damage and inadvertent release of information.

Our business involves operational technology integral to our day-to-day business and the storage and transmission of numerous classes of sensitive and/or confidential information and intellectual property, including, but not limited to, private information about employees and financial and strategic information about our company and our business partners.

Furthermore, as we pursue our strategy to grow through acquisitions and new initiatives that improve our operations and cost structure, we are also expanding and improving our information technologies, resulting in a larger technological presence and corresponding exposure to cybersecurity risk.

We maintain what we believe is sufficient insurance coverage that may (subject to certain policy terms and conditions, including deductibles) cover certain aspects of third-party security and cybersecurity risks and business interruption, however, our insurance coverage may not always cover all related costs or losses.

however, our insurance coverage may not always cover all related costs or losses.

We actively assess our cybersecurity and technology risks and modify our operational response to such risks as circumstances and technology change.

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Despite our best efforts, our preventative measures and incident response efforts may not be entirely effective.

The theft, destruction, loss, misappropriation or release of sensitive and/or confidential information or intellectual property, or interference with our operational technology, information technology systems or the technology systems of third parties on which we rely, could result in business disruption, negative publicity, damage to our assets, brand reputational damage, violation of privacy laws, loss of customers, potential liability and competitive disadvantage, which could have a material adverse effect on our financial position, results of operations or cash flows.

The theft, destruction, loss, misappropriation or release of sensitive and/or confidential information or intellectual property, or interference with our operational technology, information technology systems or the technology systems of third parties on which we rely could result in business disruption, negative publicity, damage to our assets, brand reputational damage, violation of privacy laws, loss of customers, potential liability and competitive disadvantage, which could have a material adverse effect on our financial position, results of operations or cash flows and could subject us to regulatory enforcement actions, contractual liability or increased insurance costs.

Natural disasters or other catastrophic events, as well as their residual macroeconomic effects, could negatively affect our business.

Natural disasters such as hurricanes, tornados, earthquakes, wildfires or other catastrophic events including public health threats could negatively affect our operations and financial performance and harm our reputation.

The direct and indirect impact of such events could include physical damage to one or more of our facilities, equipment or locations in which we operate, the temporary lack of an adequate workforce in a market and the temporary disruption in rail or other modes of transportation upon which we rely.

Natural disasters such as hurricanes, tornados, earthquakes, wildfires or other catastrophic events, including public health threats or the effects of climate change, could negatively affect our operations and financial performance and harm our

The direct and indirect impact of such events could include physical damage to one or more of our facilities, equipment or operating locations;

the temporary lack of an adequate workforce in a market;

and the temporary disruption in rail or other modes of transportation upon which we rely.

These events could prevent or delay shipments to and collections from customers and those from suppliers.

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These impacts could have a material effect on our business, financial condition, results of operations and cash flows.

Weather conditions and other event driven special projects also cause interim variations in our results.

These events could adversely impact the ability of the Company’s suppliers and customers to conduct business activities and could ultimately do so for an indefinite period of time.

Weather conditions and other event-driven special projects could also cause interim variations in our results.

These events could adversely impact the ability of our suppliers and customers to conduct business activities and could ultimately do so for an indefinite period of time.

As a result, we may be required to suspend operations in some or all of our locations, which could have a material adverse effect on our business, financial condition and results of operations.

8 unchanged sentences

The hazardous waste management business is subject to significant environmental liabilities.

As of December 31, 2024, we have recorded closure, post-closure and remedial liabilities valued at $241.5 million, substantially all of which we assumed in connection with certain acquisitions.

As of December 31, 2025, we have recorded closure, post-closure and remedial liabilities valued at $230.7 million, substantially all of which we assumed in connection with acquisitions.

We calculate these environmental liabilities on a present value basis in accordance with generally accepted accounting principles, which take into consideration both the estimated cost to remediate such liabilities and the estimated timing of the remediation.

We anticipate our environmental liabilities will be payable over many years and that cash flows generated from our operations will generally be sufficient to fund the payment of such liabilities when required.

Though we have the ability to perform much of the required remediation efforts internally, which helps to limit the cost exposure, events not now anticipated (including future changes in environmental laws and regulations) could require that such payments be made earlier or in greater amounts than we now estimate, which could adversely affect our financial condition, results of operations and cash flows.

Though we have the ability to perform much of the required remediation efforts internally, which helps to limit the cost exposure, events not now anticipated, including future changes in environmental laws and regulations, including laws, regulations or guidance addressing emerging contaminants such as PFAS, changes to the natural landscape at or surrounding our facilities or remediation sites, or new information identified during remediation, could require that such payments be made earlier or in greater amounts than we now estimate, which could adversely affect our financial condition, results of operations and cash flows.

We may also assume additional environmental liabilities as part of future acquisitions.

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The hazardous waste management industry is subject to significant economic and business risks.

The future operating results may be affected by such factors as our ability to utilize our facilities and workforce profitably in the face of price competition, maintain or increase market share in an industry which has in the past experienced significant downsizing and consolidation, realize benefits from cost reduction programs, collect incremental volumes of waste to be handled through our facilities from existing and acquired sales offices and service centers, obtain sufficient volumes of waste at prices which produce revenue sufficient to offset the operating costs of our facilities, minimize downtime and disruptions of operations and develop our field services business.

Our future operating results may be affected by such factors as our ability to utilize our facilities and workforce profitably in the face of price competition, maintain or increase market share in an industry that has in the past experienced significant downsizing and consolidation, realize benefits from cost reduction programs, collect incremental volumes of waste to be handled through our facilities from existing and acquired sales offices and service centers, obtain sufficient volumes of waste at prices that produce revenue sufficient to offset the operating costs of our facilities, minimize downtime and disruptions of operations and develop our field services business.

In particular, economic downturns or recessionary conditions in North America, and increased outsourcing by North American manufacturers to plants located in countries with lower wage costs and less stringent environmental regulations, have adversely affected and may in the future adversely affect the demand for our services.

Our business is also cyclical to the extent that it is dependent upon a stream of waste from cyclical industries such as chemical and petrochemical.

Our business is also cyclical to the extent that it is dependent upon streams of waste from cyclical industries such as chemical and petrochemical.

If those cyclical industries slow significantly, the business that we receive from them would likely decrease.

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This volatility may lead to reduced profitability and increased operating costs in our oil operations and also may impact the cost of fuels throughout our transportation network and facilities.

These volatility impacts may affect the Company’s financial condition, results of operations and cash flows.

Other businesses, including our Safety-Kleen branches’ core service offerings of containerized waste collection services, parts washer services and vacuum services, are inextricably connected to the automotive industry.

These volatility impacts may affect our financial condition, results of operations and cash flows.

Certain portions of our business, including our Safety-Kleen branches’ core service offerings of containerized waste collection services, parts washer services and vacuum services, are connected to the automotive industry.

Miles driven and routine automotive maintenance, along with other automotive industry trends, impact demand for parts-washer services, containerized waste collections and vacuum services.

Declines in this industry, whether temporary or a lasting trend, may reduce the demand for these core service offerings which may adversely impact our financial results.

Declines in this industry, whether temporary or reflecting longer-term fundamental changes in transportation, energy usage or vehicle technology, may reduce the demand for these core service offerings, which may adversely impact our financial results.

LEGAL, ENVIRONMENTAL AND REGULATORY COMPLIANCE RISKS

Our businesses are subject to numerous statutory and regulatory requirements, which may increase in the future.

Our businesses are subject to numerous statutory and regulatory requirements, which may change in the future.

Our businesses are subject to numerous statutory and regulatory requirements.

Our ability to continue to hold licenses and permits required for our businesses is subject to maintaining satisfactory compliance with such requirements.

Our ability to continue to hold licenses, permits and transportation operating authority required for our businesses is subject to maintaining satisfactory compliance with such requirements.

We may incur significant costs to maintain compliance.

1 unchanged sentence

These requirements may cause us to postpone or cancel our plans.

Additionally, our operations are subject to numerous national, state, provincial and local transportation regulations that have various compliance requirements and associated operational costs.

Future statutory and regulatory requirements, including any legislation focused on combating climate change, may require significant cost to comply or may require changes to our products or services.

Regulators, in addition to investors, customers and the public in general, have been increasingly focused on environmental, social and cybersecurity practices of companies.

Regulators, in addition to investors, customers and the public in general, have been increasingly focused on environmental, governance and cybersecurity practices of companies.

We may be subject to additional regulations and disclosure requirements in the future arising from the increased focus in these areas.

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The extensive environmental regulations to which we are subject, including potential climate change legislation and regulations, may increase our costs and potential liabilities and limit our ability to operate and expand our facilities.

Our operations and those of others in the environmental services industry are subject to extensive federal, state, provincial and local environmental requirements in both the United States and Canada, including those outlined in the

“Government Regulations” section in Item 1 of this report on Form 10-K.

If we fail to comply with regulations governing the transport, handling and disposal of hazardous materials, such failure could negatively impact our ability to collect, process and ultimately dispose of hazardous waste generated by our customers.

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Such liabilities can relate to required cleanup of releases of regulated materials and related natural resource damages.

From time to time, fines and/or penalties have been levied upon the Company in government environmental enforcement proceedings.

From time to time, fines and/or penalties have been levied upon us in government environmental enforcement proceedings.

Such fines typically have related to our waste treatment, storage and disposal operations.

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Even if we comply with all applicable environmental laws, we might not be able to obtain requisite permits from applicable government authorities to extend or modify such permits to fit our business needs.

Environmental laws and regulations have adversely affected and may adversely affect parts cleaning and other solvent related services.

In connection with our parts cleaning and other solvent related services, we have been subject to fines and certain orders requiring us to take environmental remedial action.

Recent and potential changes in environmental laws and regulations may also adversely affect future parts cleaning and other solvent related services.

Interpretation or enforcement of existing laws and regulations, or the adoption of new laws and regulations, may require a modification or curtailment of our parts cleaning operations or replacement or upgrading our facilities or equipment at substantial cost, which we may not be able to pass on to our customers, and we may choose to indemnify our customers from any fines or penalties they may incur as a result of these

new laws and regulations.

On the other hand, in some cases if new laws and regulations are less stringent, our customers or competitors may be able to manage waste more effectively themselves, which could decrease the demand for parts cleaning and other solvent related services or increase competition, which could adversely affect the results of operations, most predominately within the Environmental Services segment.

We are subject to existing and potential product liability lawsuits relating to parts washer services.

Clean Harbors, through its Safety-Kleen branded operations within the Environmental Services segment, from time to time has been named as a defendant in product liability lawsuits in various courts and jurisdictions throughout the United States.

As of December 31, 2024, the Company was involved in 68 such proceedings (including cases which have been settled but not formally dismissed) wherein persons claim personal injury resulting from the use of its parts cleaning equipment or cleaning products.

These proceedings typically involve allegations that the solvents used in the parts cleaning equipment contain contaminants or that the solvent recycling process does not effectively remove the contaminants that become entrained in the solvents during their use.

In addition, certain claimants assert that the Company failed to adequately warn the product user of potential risks, including a historic failure to warn that such solvents contain trace amounts of toxic or hazardous substances such as benzene.

We maintain insurance that we believe will provide coverage for these claims (over amounts accrued for self-insured retentions and deductibles in certain limited cases), though this insurance may not provide coverage for potential awards of punitive damages.

Although we have vigorously defended and will continue to vigorously defend the Company and the safety of its products against all of these claims, these lawsuits are subject to many uncertainties and outcomes that cannot be predicted with assurance.

We are subject to existing and potential product liability lawsuits relating to our parts washer services.

Through our Safety-Kleen branded operations within the Environmental Services segment, we have been from time to time named as a defendant in product liability lawsuits in various courts and jurisdictions throughout the United States.

As of December 31, 2025, we were involved in 76 such proceedings (including cases which have been settled but not formally dismissed) wherein persons claim personal injury resulting from the use of our parts cleaning equipment or cleaning products.

These proceedings typically involve allegations that the solvents used in the parts cleaning equipment contained contaminants or that the solvent recycling process does not effectively remove the contaminants that become entrained in the solvents during their use.

In addition, certain claimants assert that we failed to adequately warn the product user of potential risks, including a historic failure to warn that such solvents contain trace amounts of toxic or hazardous substances such as benzene.

Although we have vigorously defended and will continue to vigorously defend ourselves and the safety of our products against all of these claims, these lawsuits are subject to many uncertainties and outcomes that cannot be predicted with assurance.

We may also be named in additional product liability lawsuits in the future, including claims for which insurance coverage may not be available.

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STRATEGIC TRANSACTION RISKS

Failure to correctly identify and execute upon strategic acquisitions and divestitures could adversely impact our future results.

Failure to correctly identify and execute upon strategic acquisitions and divestitures or effectively execute large-scale capital projects could adversely impact our future results.

We continuously evaluate potential acquisition candidates and from time to time acquire companies that we believe will strategically fit into our business and growth objectives.

If we are unable to successfully identify, integrate and develop acquired businesses, we could fail to achieve anticipated synergies and cost savings, including any expected increases in revenues and operating results, which could have a material adverse effect on our financial results.

If we are unable to successfully integrate and operate acquired businesses, we could fail to achieve anticipated synergies and cost savings, including any expected increases in revenues and operating results, which could have a material adverse effect on our financial results.

We also continually review our portfolio of assets to determine the extent to which assets or groups of assets are contributing to our objectives and growth strategy.

When we decide to sell a business or specific asset group, we may be unable to do so on satisfactory terms and within our anticipated time frame.

If we decide to sell a business or specific asset group, we may be unable to do so on satisfactory terms and within our anticipated time frame.

Significant large-scale capital projects are periodically undertaken by the organization.

The execution of such initiatives often requires comprehensive planning, specialized expertise and significant capital expenditures.

If we are unable to successfully execute these capital projects, it could result in unanticipated project delays or incremental capital requirements that could impact our future financial condition, results of operations or cash flows.

Future acquisitions of companies may expose us to unknown liabilities.

If there are unknown liabilities or other obligations, including contingent liabilities, arising from potential acquisitions, our business could be materially affected.

If there are unknown liabilities or other obligations, including contingent liabilities, environmental remediation costs or unknown legal matters arising from potential acquisitions, our business could be materially affected.

We may learn additional information about potential acquired companies that adversely affects us, such as unknown liabilities or other issues relating to internal controls over financial reporting, issues that could affect our ability to comply with the Sarbanes-Oxley Act or issues that could affect our ability to comply with other applicable laws.

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We are required to provide substantial amounts of financial assurance to government agencies for closure and post-closure care of our licensed hazardous waste treatment facilities and certain other permitted facilities should those facilities cease operation, and we are also occasionally required to post surety, bid and performance bonds in connection with certain customer projects.

We have obtained all of the required financial assurance for our facilities through a combination of surety bonds and insurance from qualified insurance companies.

We have obtained all of the required financial assurance for our facilities through a combination of surety

bonds and insurance from qualified insurance companies.

The financial assurance related to closure and post-closure obligations of our U.S.

and Canadian facilities will renew at various dates throughout 2026.

Our ability to continue operating our facilities and conducting our operations would be adversely affected if we became unable to obtain sufficient insurance, surety bonds, letters of credit and other forms of financial assurance at reasonable

cost to meet our regulatory and other business requirements.

The availability of insurance, surety bonds, letters of credit and other forms of financial assurance is affected by our insurers’, sureties’ and lenders’ assessment of our risk and by other factors outside of our control such as general conditions in the insurance and credit markets.

Our insurance coverage and self-insurance reserves may be inadequate to cover all significant risk exposures, and increasing costs to maintain adequate coverage may significantly impact our financial condition and results of operations.

We carry a range of insurance policies intended to protect our assets and operations, including general liability insurance, property damage, business interruption and environmental risk insurance.

We carry a range of insurance policies intended to protect our assets and operations, including general liability insurance, property damage, business interruption, environmental risk and vehicle liability insurance.

These policies are outlined in the “Insurance and Financial Assurance” section in Item 1 of this Annual Report on Form 10-K.

While we endeavor to purchase insurance coverage appropriate to our risk assessment, we are unable to predict with certainty the frequency, nature or magnitude of claims for direct or consequential damages, and as a result our insurance program may not fully cover us for losses we may incur.

As a result of a number of catastrophic weather and other events, insurance companies have incurred substantial losses and in many cases they have substantially reduced the nature and amount of insurance coverage available to the market, have broadened exclusions and/or have substantially increased the cost of such coverage.

If this trend continues, we may not be able to maintain insurance of the types and coverage we desire at reasonable rates or we may need to take on higher deductibles to obtain such coverage.

If this trend continues, we may not be able to maintain insurance of the types and coverage we desire at reasonable rates or at all, or we may need to take on higher deductibles to obtain such coverage.

In many cases, we have made the decision to increase our policy deductibles in order to address the rising cost of insurance premiums, which may expose us to a higher level of retained risk.

A partially or completely uninsured claim against us (including liabilities associated with cleanup or remediation at our facilities), if successful and of sufficient magnitude, could have a material adverse effect on our business, financial condition and results of operations.

1 unchanged sentence

Any future difficulty in obtaining insurance could also impair our ability to secure future contracts, which may be conditioned upon the availability of adequate insurance coverage.

In addition, claims associated with risks for which we are to some extent self-insured (property, workers’ compensation, employee medical, comprehensive general liability and vehicle liability) may exceed our recorded reserves, which could negatively impact future earnings.

In addition, claims associated with risks for which we are self-insured to some extent (property, workers’ compensation, employee medical, comprehensive general liability and vehicle liability) may exceed our recorded reserves, which could negatively impact future earnings.

Tax interpretations and changes in tax regulations and legislation could adversely affect our results of operations.

We are subject to various taxes in the United States, Canada, India, Mexico, Puerto Rico and certain state and local jurisdictions.

We are subject to various taxes in the United States, Canada, India, Mexico, Puerto Rico and certain state, provincial and local jurisdictions.

Tax interpretations, regulations and legislation, including cross-border tariffs, in the various jurisdictions in which we operate are subject to change and uncertainty and may impact our results of operations and cash flows.

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We earn revenues, pay expenses, own assets and incur liabilities in countries using currencies other than the U.S.

In particular, we recorded approximately 9.1% of our fiscal 2024 revenues in Canada and employ over 7% of our full time active employees at our Global Capabilities Center in India.

In particular, we recorded 9% of our fiscal 2025 revenues in Canada and employ 9% of our full-time active employees at our Global Capabilities Center in India.

Because our consolidated financial statements are presented in U.S.

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We also test our goodwill and indefinite-lived intangible assets for impairment at least annually on December 31, or when events or changes in the business environment indicate that the carrying value of a reporting unit or indefinite lived intangible may exceed its fair value.

The goodwill and indefinite-lived intangible asset impairment analysis is based on estimates of fair value based on cash flow projections that may differ from actual results.

The impairment testing for goodwill and other indefinite-lived intangible assets relies on fair value assessments derived from estimated future cash flows, which are subject to inherent variability and may differ from actual future results.

During each of 2025, 2024 and 2023, we determined that no asset write-downs were required.

However, if conditions in any of the businesses in which we operate were to deteriorate, we could determine that certain of our assets are impaired and we would then be required to write-off all or a portion of the value of such assets.

However, if conditions in any of the businesses in which we operate were

to deteriorate, we could determine that certain of our assets are impaired and we would then be required to write-off all or a portion of the value of such assets.

Any significant write-offs would adversely affect our balance sheet and results of operations.

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The covenants in our debt agreements may restrict our ability to operate our business and might lead to a default under our debt agreements.

Our revolving credit agreement and the indenture and loan agreement governing our other outstanding debt limit, among other things, the extent to which the Company or our restricted subsidiaries can:

Our revolving credit agreement and the indenture and loan agreement governing our other outstanding debt limit, among other things, the extent to which we or our restricted subsidiaries can:

• incur or guarantee additional indebtedness (including, for this purpose, reimbursement obligations under letters of credit) or issue preferred stock;

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Upon the occurrence of an event of default, the lenders could elect to declare all amounts outstanding under such debts, including accrued interest or other obligations, to be immediately due and payable.

If amounts outstanding under such debts were accelerated, our assets might not be sufficient to repay in full those debts.

If amounts outstanding under such debts were accelerated, our assets might not be sufficient to

repay in full those debts.

Our revolving credit agreement and the indentures and loan agreement governing our other outstanding debt also contain cross-default and cross-acceleration provisions.

Under these provisions, a default or acceleration under one instrument

governing our debt may constitute a default under our other debt instruments that contain cross-default and cross-acceleration provisions, which could result in the related debt and the debt under such other instruments becoming immediately due and payable.

Under these provisions, a default or acceleration under one instrument governing our debt may constitute a default under our other debt instruments that contain cross-default and cross-acceleration provisions, which could result in the related debt and the debt under such other instruments becoming immediately due and payable.

In such event, we would need to raise funds from alternative sources, which funds might not be available to us on favorable terms, on a timely basis or at all.

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The Massachusetts Business Corporation Act and our By-Laws contain certain anti-takeover provisions.

Sections 8.06 and 7.02 of the Massachusetts Business Corporation Act provide that Massachusetts corporations which are publicly-held must have a staggered Board of Directors and that written demand by holders of at least 40% of the outstanding shares of each relevant voting group of stockholders is required for stockholders to call a special meeting unless such corporations take certain actions to affirmatively “opt-out” of such requirements.

In accordance with these provisions, our By-Laws provide for a staggered Board of Directors which consists of three classes of directors of which one class is elected each year for a three-year term, and require that written application by holders of at least 25% (which is less than the 40% which would otherwise be applicable without such a specific provision in our By-Laws) of our outstanding shares of common stock is required for stockholders to call a special meeting.

Sections 8.06 and 7.02 of the Massachusetts Business Corporation Act provide that Massachusetts corporations that are publicly-held must have a staggered board of directors and that written demand by holders of at least 40% of the outstanding shares of each relevant voting group of stockholders is required for stockholders to call a special meeting unless such corporations take certain actions to affirmatively “opt-out” of such requirements.

In accordance with these provisions, our By-Laws provide for a staggered Board of Directors, which consists of three classes of directors of which one class is elected each year for a three-year term, and require that written application by holders of at least 25% (which is less than the 40% that would otherwise be applicable without such a specific provision in our By-Laws) of our outstanding shares of common stock is required for stockholders to call a special meeting.

In addition, our By-Laws prohibit the removal by the stockholders of a director except for cause.

These provisions could inhibit a takeover of our Company by restricting stockholders’ action to replace the existing directors or approve other actions which a party seeking to acquire us might propose.

These provisions could inhibit a takeover of our company by restricting stockholders’ action to replace the existing directors or approve other actions that a party seeking to acquire us might propose.

A takeover transaction would frequently afford stockholders an opportunity to sell their shares at a premium over then market prices.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors