þ
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the fiscal year ended December 31, 2008 | ||
or
|
||
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware
(State or other jurisdiction of incorporation or organization) |
13-3668640
(I.R.S. Employer Identification No.) |
Securities registered pursuant to Section 12(b) of the Act: |
Common Stock, par value $0.01 per share
New York Stock Exchange, Inc. |
|
Series A Junior Participating Preferred Stock, par value
$0.01 per share |
||
New York Stock Exchange, Inc. | ||
Securities registered pursuant to Section 12(g) of the Act:
|
None |
Large accelerated filer þ | Accelerated filer o | Non-accelerated filer o | Smaller reporting company o |
2
56
57
64
72
77
Item 1:
Business
3
Table of Contents
4
Table of Contents
5
Table of Contents
6
Table of Contents
7
Table of Contents
8
Table of Contents
9
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Item 1A:
Risk
Factors
10
Table of Contents
11
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12
Table of Contents
Item 1B:
Unresolved
Staff Comments
Item 2:
Properties
Function(1)
Owned/Leased
D
Leased
M, R, S, A
Owned
M, R
Owned
M, R, S, A
Leased
M, S, D, A
Leased
M, R, S, D, A
Leased
M, R, S, D, A
Leased
M, R, S, D, A
Leased
S, D, A
Owned
R, S, D, A
Leased
M, R, D, A
Owned
M, R, S, D, A
Leased
M, R, S, D, A
Leased
M, R, D, A
Leased
M, R, S, A
Leased
R, A
Leased
(1)
M = Manufacturing; R = Research; S = Sales and Service; D =
Distribution; A = Administration
13
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International
Australia
Ireland
Taiwan
Austria
Italy
United Kingdom
Belgium
Japan
Brazil
Korea
Canada
Mexico
Czech Republic
Netherlands
Denmark
Peoples Republic of China
Finland
Poland
France
Puerto Rico
Germany
Spain
Hungary
Sweden
India
Switzerland
(2)
The Company operates more than one office within certain states
and foreign countries.
Item 3:
Legal
Proceedings
14
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Item 4:
Submission
of Matters to a Vote of Security Holders
15
Table of Contents
Item 5:
Market
for Registrants Common Equity, Related Stockholder Matters
and Issuer Purchases of Equity Securities
16
Table of Contents
DECEMBER 31, 2003 AMONG WATERS CORPORATION,
NYSE MARKET INDEX AND SIC CODE 3826 LABORATORY
ANALYTICAL INSTRUMENTS
2003
2004
2005
2006
2007
2008
100.00
141.10
113.99
147.68
238.45
110.52
100.00
112.72
126.57
144.32
183.38
101.78
100.00
112.92
122.25
143.23
150.88
94.76
17
Table of Contents
Price Range
High
Low
$
58.40
$
48.67
$
61.38
$
58.20
$
68.19
$
58.26
$
80.07
$
66.20
$
80.77
$
52.59
$
65.17
$
53.70
$
70.19
$
55.52
$
58.18
$
34.77
Total Number
of Shares
Maximum
Total
Purchased as Part
Dollar Value of
Number of
Average
of Publicly
Shares that May Yet
Shares
Price Paid
Announced
Be Purchased Under
Purchased
per Share
Programs(1)
the Programs(2)
50
$
40.62
50
$
122,805
585
41.64
585
98,446
98,446
635
41.56
635
98,446
(1)
The Company purchased an aggregate of 4.1 million shares of
its outstanding common stock during 2008 in open market
transactions pursuant to a repurchase program that was announced
in February 2007 (the 2007 Program). The 2007
Program authorized the repurchase of up to $500 million of
common stock in open market transactions over a two-year period.
(2)
In February 2009, the Companys Board of Directors
authorized the Company to repurchase up to an additional
$500 million of its outstanding common stock over a
two-year period.
Item 6:
Selected
Financial Data
Item 7:
Managements
Discussion and Analysis of Financial Condition and Results of
Operations
18
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19
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20
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21
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22
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23
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Balance
Balance
December 31,
December 31,
2006
Charges
Utilization
2007
$
1,433
$
$
(667
)
$
766
48
(48
)
$
1,481
$
$
(715
)
$
766
24
Table of Contents
Year Ended December 31,
2008
2007
2006
$
322,479
$
268,072
$
222,200
65,271
53,317
46,159
30,782
28,855
28,813
(19,626
)
5,946
506
21,739
(26,266
)
(7,210
)
(20,618
)
(6,368
)
(29,853
)
(19,970
)
32,309
1,670
1,976
6,244
1,230
36,215
8,398
79
418,248
370,507
263,594
18,811
(167,907
)
(130,374
)
(572,938
)
(119,686
)
(125,906
)
(32,932
)
253
13,264
$
(168,811
)
$
83,167
$
20,578
The change in accounts receivable in 2008 compared to 2007 is
primarily attributable to the timing of payments made by
customers and the higher sales volume in 2008 as compared to
2007. Days-sales-outstanding (DSO) decreased to
63 days at December 31, 2008 from 66 days at
December 31, 2007.
The change in inventories in 2008 and 2007 is attributable to
the increase in sales volume and an increase in ACQUITY UPLC and
new mass spectrometry and TA products.
The 2008 change in accounts payable and other current
liabilities includes a $13 million one-time transition
pension benefit payment into the Waters Employee Investment
Plan. The 2007 change in accounts payable and other current
liabilities includes the accrual related to the one-time
transition benefit. In addition, accounts payable and other
current liabilities changed as a result of the timing of
payments to vendors.
Net cash provided from deferred revenue and customer advances in
both 2008 and 2007 was a result of the installed base of
customers renewing annual service contracts.
Other changes are comprised of the timing of various provisions,
expenditures and accruals in other current assets, other assets
and other liabilities.
25
Table of Contents
The change in accounts receivable in 2007 compared to 2006 is
primarily attributable to the timing of payments made by
customers and the higher sales volume in 2007 as compared to
2006. DSO increased to 66 days at December 31, 2007
from 64 days at December 31, 2006.
Inventory growth was much lower in 2007 compared to 2006
primarily due to 2006 having a higher
ramp-up
of
new products launched later in that year and the increased
levels of Alliance inventory during the 2006 outsourcing
transition to Singapore.
The changes in accounts payable and other current liabilities
and other changes in 2007 compared to 2006 is primarily
attributable to the reclassification within these line items of
certain income tax liabilities from current to long-term
liabilities required by the adoption of Financial Accounting
Standards Board (FASB) Interpretation No. 48,
Accounting for Uncertainty in Income Taxes an
Interpretation of FASB Statement No. 109
(FIN 48). See Note 10, Income
Taxes, in the Notes to Consolidated Financial Statements
for additional information. The overall net change in these
items can be attributed to an increase in accounts payable and
accrued expenses resulting from the timing of payments to
vendors, an increase in income tax liabilities and an increase
in accrued compensation resulting from a $13 million
contribution into the Waters Employee Investment Plan partially
offset by the reduction in the pension liability relating to the
freezing of the U.S. Pension Plans. The one-time
contribution into the Waters Employee Investment Plan was made
in the first quarter of 2008.
The 2006 change in accounts payable and other current
liabilities was also impacted by a $9 million tax payment
related to the distribution and repatriation of cash under the
AJCA, $7 million of severance and other facility-related
payments made in connection with the cost reduction initiative
and a $4 million litigation payment to settle the Agilent
litigation.
Net cash provided from deferred revenue and customer advances in
both 2007 and 2006 was a result of the installed base of
customers renewing annual service contracts.
26
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27
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Payments Due by Year
Total
2009
2010
2011
2012
2013
2014
After 2014
$
36,120
$
36,120
$
$
$
$
$
$
500,000
500,000
90,046
28,031
17,931
13,989
10,057
6,314
5,057
8,667
$
626,166
$
64,151
$
17,931
$
13,989
$
510,057
$
6,314
$
5,057
$
8,667
Amount of Commitments Expiration Per Period
Total
2008
2009
2010
2011
2012
2013
After 2013
$
1,437
$
1,437
$
$
$
$
$
$
(1)
The interest rates applicable to the 2007 Credit Agreement are,
at the Companys option, equal to either the base rate
(which is the higher of the prime rate or the federal funds rate
plus
1
/
2
%)
or the applicable 1, 2, 3, 6, 9 or 12 month LIBOR rate, in
each case, plus an interest rate margin based upon the
Companys leverage ratio, which can range between
33 basis points and 72.5 basis points. At current and
long-term debt levels and interest rates consistent with those
at December 31, 2008, the Companys interest expense
would be approximately $13 million annually, which is not
disclosed in the above table.
(2)
Does not include normal purchases made in the ordinary course of
business.
28
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29
Table of Contents
significant underperformance relative to expected historical or
projected future operating results;
significant negative industry or economic trends; and,
significant changes or developments in strategic technological
collaborations or legal matters which affect the Companys
capitalized patents, trademarks and intellectual properties,
such as licenses.
30
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31
Table of Contents
Unrecognized
Compensation
Weighted-Average
Costs
Life in Years
$
41
3.3
$
25
3.4
$
1
1.6
$
67
3.3
32
Table of Contents
Item 7A:
Quantitative
and Qualitative Disclosures About Market Risk
33
Table of Contents
34
Table of Contents
35
Table of Contents
Item 8:
Financial
Statements and Supplementary Data
36
Table of Contents
37
Table of Contents
38
Table of Contents
December 31
2008
2007
2006
(In thousands, except per share data)
$
1,139,886
$
1,087,592
$
936,269
435,238
385,456
343,960
1,575,124
1,473,048
1,280,229
457,886
441,877
369,008
203,380
189,245
167,177
661,266
631,122
536,185
913,858
841,926
744,044
426,699
403,703
357,664
81,588
80,649
77,306
9,290
8,695
5,439
6,527
8,484
389,754
348,879
295,151
(5,847
)
(38,521
)
(56,515
)
(51,657
)
20,959
30,828
25,312
372,192
323,192
262,959
49,713
55,120
40,759
$
322,479
$
268,072
$
222,200
$
3.25
$
2.67
$
2.16
99,199
100,500
102,691
$
3.21
$
2.62
$
2.13
100,555
102,505
104,240
39
Table of Contents
Year Ended December 31
2008
2007
2006
(In thousands)
$
322,479
$
268,072
$
222,200
3,924
1,382
1,661
10,632
6,024
5,903
5,847
30,782
28,855
28,813
(19,626
)
5,946
506
29,071
27,467
25,896
36,200
25,850
20,263
21,739
(26,266
)
(7,210
)
(20,618
)
(6,368
)
(29,853
)
(4,633
)
(3,032
)
(2,919
)
5,180
(6,600
)
(13,146
)
(19,970
)
32,309
1,670
1,976
6,244
1,230
21,112
10,624
2,733
418,248
370,507
263,594
(69,065
)
(60,342
)
(51,421
)
(7,805
)
(9,076
)
(78,953
)
(3,532
)
(19,738
)
(390,542
)
115,419
294,861
724
18,811
(167,907
)
(130,374
)
469,407
1,131,834
406,844
(817,463
)
(1,151,119
)
(334,629
)
(501
)
(1,081
)
28,646
91,427
39,913
(237,500
)
(200,648
)
(249,203
)
6,669
16,999
16,503
(22,196
)
(7,098
)
(5,334
)
(572,938
)
(119,686
)
(125,906
)
(32,932
)
253
13,264
(168,811
)
83,167
20,578
597,333
514,166
493,588
$
428,522
$
597,333
$
514,166
40,571
29,294
38,049
44,081
49,224
51,853
40
Table of Contents
Accumulated
Number of
Additional
Other
Total
Statements of
Common
Common
Paid-in
Deferred
Retained
Treasury
Comprehensive
Stockholders
Comprehensive
Shares
Stock
Capital
Compensation
Earnings
Stock
Income (Loss)
Equity
Income
(In thousands)
142,287
$
1,423
$
467,681
$
(255
)
$
1,104,557
$
(1,314,446
)
$
24,672
$
283,632
222,200
222,200
$
222,200
27,072
27,072
27,072
(10,575
)
(10,575
)
(10,575
)
4,210
4,210
4,210
20,707
20,707
20,707
$
242,907
70
1
2,636
2,637
1,727
17
37,259
37,276
16,503
16,503
(255
)
255
(1,714
)
(1,714
)
(249,203
)
(249,203
)
8
30,345
30,345
144,092
$
1,441
$
554,169
$
$
1,326,757
$
(1,563,649
)
$
43,665
$
362,383
268,072
268,072
$
268,072
26,276
26,276
26,276
(11,720
)
(11,720
)
(11,720
)
8,852
8,852
8,852
(841
)
(841
)
(841
)
22,567
22,567
22,567
$
290,639
61
1
2,883
2,884
2,844
28
88,515
88,543
16,999
16,999
(3,905
)
(3,905
)
(200,648
)
(200,648
)
64
1
29,180
29,181
147,061
1,471
691,746
1,590,924
(1,764,297
)
66,232
586,076
322,479
322,479
$
322,479
(53,704
)
(53,704
)
(53,704
)
(519
)
(519
)
(519
)
(20,466
)
(20,466
)
(20,466
)
(124
)
(124
)
(124
)
(74,813
)
(74,813
)
(74,813
)
$
247,666
61
1
3,409
3,410
825
8
25,228
25,236
6,669
6,669
(1,732
)
(1,732
)
(237,500
)
(237,500
)
122
1
31,179
31,180
148,069
$
1,481
$
756,499
$
$
1,913,403
$
(2,001,797
)
$
(8,581
)
$
661,005
41
Table of Contents
1
Description
of Business, Organization and Basis of Presentation
2
Summary
of Significant Accounting Policies
42
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43
Table of Contents
Balance at
Balance at
Beginning of Period
Additions
Deductions
End of Period
$
9,634
$
5,470
$
(7,496
)
$
7,608
$
8,439
$
6,617
$
(5,422
)
$
9,634
$
6,550
$
4,254
$
(2,365
)
$
8,439
44
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45
Table of Contents
Quoted Prices
in Active
Significant
Market for
Other
Total
Identical
Observable
Significant
December 31,
Assets
Inputs
Unobservable Inputs
2008
(Level 1)
(Level 2)
(Level 3)
$
223,000
$
$
223,000
$
12,888
12,888
$
235,888
$
$
235,888
$
1,798
1,798
1,595
1,595
$
3,393
$
$
3,393
$
46
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47
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48
Table of Contents
Balance at
Accruals for
Settlements
Balance at
Beginning of Period
Warranties
Made
End of Period
$
13,119
$
9,644
$
(12,487
)
$
10,276
$
12,619
$
19,719
$
(19,219
)
$
13,119
$
11,719
$
17,940
$
(17,040
)
$
12,619
49
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50
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51
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December 31
2008
2007
$
59,957
$
51,426
12,899
16,970
100,195
107,492
$
173,051
$
175,888
December 31
2008
2007
$
9,735
$
8,755
123,278
118,517
222,361
206,361
16,693
13,735
372,067
347,368
(200,479
)
(186,512
)
$
171,588
$
160,856
52
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53
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Year Ended December 31,
2008
2007
2006
$
1,580,936
$
1,482,258
$
1,309,693
$
323,152
$
268,097
$
226,853
$
3.26
$
2.67
$
2.21
$
3.21
$
2.62
$
2.18
December 31, 2008
December 31, 2007
Weighted-
Weighted-
Gross
Average
Gross
Average
Carrying
Accumulated
Amortization
Carrying
Accumulated
Amortization
Amount
Amortization
Period
Amount
Amortization
Period
$
113,526
$
51,662
10 years
$
111,207
$
43,180
10 years
184,434
109,876
4 years
133,215
74,298
4 years
9,345
7,235
9 years
10,522
7,011
9 years
20,918
9,798
8 years
19,182
7,878
8 years
$
328,223
$
178,571
7 years
$
274,126
$
132,367
7 years
54
Table of Contents
Year Ended December 31
2008
2007
2006
$
(6,728
)
$
1,638
$
11,812
378,920
321,554
251,147
$
372,192
$
323,192
$
262,959
55
Table of Contents
Year Ended December 31
2008
2007
2006
$
64,837
$
62,126
$
46,883
(15,124
)
(7,006
)
(6,124
)
$
49,713
$
55,120
$
40,759
$
1,687
$
10,239
$
6,121
2,422
1,700
2,603
45,604
43,181
32,035
$
49,713
$
55,120
$
40,759
$
130,267
$
113,117
$
92,036
(2,676
)
1,575
1,105
1,692
(82,200
)
(59,395
)
(49,568
)
71
293
(725
)
$
49,713
$
55,120
$
40,759
Table of Contents
December 31
2008
2007
$
100,795
$
107,362
5,846
3,824
776
2,106
19,580
13,192
23,262
16,487
11,336
11,458
2,185
1,530
13,463
9,787
10,938
9,733
188,181
175,479
(82,978
)
(81,639
)
105,203
93,840
(5,526
)
(14,149
)
(5,686
)
(6,422
)
(17,660
)
(16,604
)
(159
)
(119
)
(29,031
)
(37,294
)
$
76,172
$
56,546
Table of Contents
December 31
2008
2007
$
68,463
$
62,418
8,832
6,045
$
77,295
$
68,463
58
Table of Contents
$
28,031
17,931
13,989
10,057
20,038
59
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60
Table of Contents
2008
2007
2006
$
2,980
$
3,352
$
4,345
23,164
21,225
19,357
4,638
4,278
5,111
$
30,782
$
28,855
$
28,813
Options Issued and Significant Assumptions Used to Estimate
Option Fair Values
2008
2007
2006
583
516
572
2.1
3.8
4.5
6.0
6.0
6.0
.557
.291
.280
2008
2007
2006
$
42.91
$
75.29
$
48.64
$
22.69
$
27.33
$
18.08
61
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Weighted
Remaining
Weighted
Exercise
Number of Shares
Average
Contractual Life of
Number of Shares
Average
Outstanding
Exercise Price
Options Outstanding
Exercisable
Exercise Price
2,912
$
31.78
4.4
2,687
$
31.19
2,632
$
46.33
7.2
1,362
$
47.46
1,291
$
74.46
4.6
888
$
72.91
6,835
$
45.44
5.5
4,937
$
43.18
Weighted Average
Number of Shares
Price per Share
Exercise Price
7,097
$
19.50 to $80.97
$
43.93
583
$
41.20 to $76.75
$
42.91
(825
)
$
19.50 to $72.06
$
30.57
(20
)
$
32.12 to $72.06
$
49.25
6,835
$
21.05 to $80.97
$
45.44
62
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Weighted-Average
Shares
Price
489
$
48.44
241
$
60.37
(118
)
$
47.46
(15
)
$
49.22
597
$
53.43
Year Ended December 31, 2008
Weighted-Average
Net Income
Shares
Per Share
(Numerator)
(Denominator)
Amount
$
322,479
99,199
$
3.25
1,161
195
$
322,479
100,555
$
3.21
63
Table of Contents
Year Ended December 31, 2007
Weighted-Average
Net Income
Shares
Per Share
(Numerator)
(Denominator)
Amount
$
268,072
100,500
$
2.67
1,445
560
$
268,072
102,505
$
2.62
Year Ended December 31, 2006
Weighted-Average
Net Income
Shares
Per Share
(Numerator)
(Denominator)
Amount
$
222,200
102,691
$
2.16
1,217
332
$
222,200
104,240
$
2.13
Year Ended December 31
2008
2007
2006
$
322,479
$
268,072
$
222,200
(53,704
)
26,276
27,072
(798
)
(18,031
)
(16,269
)
279
6,311
5,694
(519
)
(11,720
)
(10,575
)
(54,223
)
14,556
16,497
(191
)
(1,294
)
67
453
(124
)
(841
)
(20,466
)
8,852
4,210
(74,813
)
22,567
20,707
$
247,666
$
290,639
$
242,907
Table of Contents
65
Table of Contents
2008
2007
U.S.
U.S.
U.S.
Retirement
Non-U.S.
U.S.
Retirement
Non-U.S.
Pension
Healthcare
Pension
Pension
Healthcare
Pension
Plans
Plan
Plans
Plans
Plan
Plans
$
92,311
$
5,416
$
21,716
$
91,413
$
4,941
$
21,084
91
691
1,502
7,122
658
1,224
5,944
329
885
5,271
277
815
(6,448
)
1,402
77
2,227
230
(626
)
(3,016
)
(162
)
(1,279
)
(3,639
)
(318
)
(673
)
(2,108
)
(298
)
(1,476
)
1,002
1,348
$
98,336
$
6,348
$
23,806
$
92,311
$
5,416
$
21,716
2008
2007
U.S.
U.S.
U.S.
Retirement
Non-U.S.
U.S.
Retirement
Non-U.S.
Pension
Healthcare
Pension
Pension
Healthcare
Pension
Plans
Plan
Plans
Plans
Plan
Plans
$
98,022
*
$
18,140
$
91,989
*
$
17,133
*
Not applicable.
2008
2007
U.S.
U.S.
U.S.
Retirement
Non-U.S.
U.S.
Retirement
Non-U.S.
Pension
Healthcare
Pension
Pension
Healthcare
Pension
Plans
Plan
Plans
Plans
Plan
Plans
$
79,544
$
2,134
$
11,283
$
69,380
$
1,753
$
10,750
(23,310
)
(368
)
(95
)
7,886
92
622
4,459
175
1,011
4,309
189
1,016
460
398
(3,639
)
(318
)
(673
)
(2,108
)
(298
)
(1,476
)
1,402
77
(1,457
)
371
$
58,456
$
2,083
$
10,069
$
79,544
$
2,134
$
11,283
66
Table of Contents
2008
2007
U.S.
U.S.
U.S.
Retirement
Non-U.S.
U.S.
Retirement
Non-U.S.
Pension
Healthcare
Pension
Pension
Healthcare
Pension
Plans
Plan
Plans
Plans
Plan
Plans
$
(98,336
)
$
(6,348
)
$
(23,806
)
$
(92,311
)
$
(5,416
)
$
(21,716
)
58,456
2,083
10,069
79,544
2,134
11,283
$
(39,880
)
$
(4,265
)
$
(13,737
)
$
(12,767
)
$
(3,282
)
$
(10,433
)
2008
2007
U.S.
U.S.
U.S.
Retirement
Non-U.S.
U.S.
Retirement
Non-U.S.
Pension
Healthcare
Pension
Pension
Healthcare
Pension
Plans
Plan
Plans
Plans
Plan
Plans
$
$
$
2,589
$
$
$
2,467
(54
)
(56
)
(59
)
(46
)
(39,826
)
(4,265
)
(16,270
)
(12,708
)
(3,282
)
(12,854
)
$
(39,880
)
$
(4,265
)
$
(13,737
)
$
(12,767
)
$
(3,282
)
$
(10,433
)
2008
2007
2006
U.S.
U.S.
U.S.
U.S.
Retirement
Non-U.S.
U.S.
Retirement
Non-U.S.
U.S.
Retirement
Non-U.S.
Pension
Healthcare
Pension
Pension
Healthcare
Pension
Pension
Healthcare
Pension
Plans
Plan
Plans
Plans
Plan
Plans
Plans
Plan
Plans
$
91
$
231
$
1,502
$
7,122
$
260
$
1,224
$
7,916
$
273
$
1,137
5,944
329
885
5,271
277
815
4,529
241
687
(6,128
)
(156
)
(432
)
(5,427
)
(127
)
(400
)
(4,695
)
(95
)
(328
)
148
(54
)
(55
)
(53
)
(82
)
(54
)
86
(27
)
613
20
1,234
13
(466
)
$
141
$
350
$
1,928
$
7,058
$
357
$
1,659
$
8,902
$
365
$
1,509
2008
2007
U.S.
U.S.
U.S.
Retirement
Non-U.S.
U.S.
Retirement
Non-U.S.
Pension
Healthcare
Pension
Pension
Healthcare
Pension
Plans
Plan
Plans
Plans
Plan
Plans
$
(36,863
)
$
(740
)
$
(699
)
$
(5,285
)
$
14
$
30
(148
)
321
(295
)
374
$
(37,011
)
$
(419
)
$
(699
)
$
(5,580
)
$
388
$
30
67
Table of Contents
2008
U.S.
U.S.
Retirement
Non-U.S.
Pension
Healthcare
Pension
Plans
Plan
Plans
$
392
$
11
$
21
148
(54
)
$
540
$
(43
)
$
21
2008
2007
U.S.
U.S.
U.S.
Retirement
Non-U.S.
U.S.
Retirement
Non-U.S.
Pension
Healthcare
Pension
Pension
Healthcare
Pension
Plans
Plan
Plans
Plans
Plan
Plans
58
%
41
%
0
%
72
%
56
%
0
%
34
%
21
%
2
%
26
%
23
%
2
%
4
%
38
%
0
%
2
%
21
%
0
%
4
%
0
%
98
%
0
%
0
%
98
%
100
%
100
%
100
%
100
%
100
%
100
%
U.S. Pension and U.S.
Non-U.S.
Retirement Healthcare Plans
Pension Plans
Policy Target
Range
Policy Target
65
%
40% - 80%
0
%
25
%
20% - 60%
2
%
0
%
0% - 20%
0
%
10
%
0% - 10%
98
%
2008
2007
2006
U.S.
Non-U.S.
U.S.
Non-U.S.
U.S.
Non-U.S.
6.38
%
3.65
%
6.40
%
4.12
%
5.82
%
3.84
%
4.75
%
3.21
%
4.75
%
3.24
%
4.75
%
2.99
%
68
Table of Contents
2008
2007
2006
U.S.
Non-U.S.
U.S.
Non-U.S.
U.S.
Non-U.S.
6.40
%
4.12
%
5.94
%
3.84
%
5.50
%
3.59
%
8.00
%
4.03
%
7.97
%
3.80
%
7.97
%
3.48
%
4.75
%
3.24
%
4.75
%
2.99
%
4.75
%
2.89
%
Non-U.S.
U.S. Pension and
Pension
Retirement Healthcare Plans
Plans
Total
$
3,760
$
212
$
3,972
3,856
765
4,621
4,729
849
5,578
4,785
634
5,419
5,217
885
6,102
40,937
6,627
47,564
69
Table of Contents
2008
2007
2006
$
767,122
$
742,045
$
658,457
243,855
223,593
180,519
128,909
121,954
97,293
1,139,886
1,087,592
936,269
398,409
356,544
320,895
36,829
28,912
23,065
435,238
385,456
343,960
$
1,575,124
$
1,473,048
$
1,280,229
2008
2007
2006
$
476,301
$
473,322
$
405,632
545,620
511,973
437,088
151,685
134,757
135,791
291,639
246,587
205,440
109,879
106,409
96,278
$
1,575,124
$
1,473,048
$
1,280,229
2008
2007
$
129,324
$
115,698
33,243
37,991
1,943
1,364
5,679
4,306
1,399
1,497
$
171,588
$
160,856
70
Table of Contents
First
Second
Third
Fourth
Quarter
Quarter
Quarter
Quarter
Total
$
371,712
$
398,771
$
386,310
$
418,331
$
1,575,124
155,451
175,232
158,520
172,063
661,266
216,261
223,539
227,790
246,268
913,858
105,837
111,935
107,463
101,464
426,699
19,786
22,228
19,946
19,628
81,588
2,272
2,352
2,349
2,317
9,290
6,527
6,527
88,366
87,024
98,032
116,332
389,754
(11,157
)
(9,807
)
(10,570
)
(6,987
)
(38,521
)
6,913
4,952
6,028
3,066
20,959
84,122
82,169
93,490
112,411
372,192
15,647
(979
)
21,987
13,058
49,713
$
68,475
$
83,148
$
71,503
$
99,353
$
322,479
$
0.68
$
0.83
$
0.72
$
1.01
$
3.25
100,401
99,586
98,891
98,029
99,199
$
0.67
$
0.82
$
0.71
$
1.01
$
3.21
101,983
101,035
100,566
98,821
100,555
71
Table of Contents
First
Second
Third
Fourth
Quarter
Quarter
Quarter
Quarter
Total
$
330,777
$
352,630
$
352,638
$
437,003
$
1,473,048
143,232
152,219
153,679
181,992
631,122
187,545
200,411
198,959
255,011
841,926
93,907
102,223
105,577
101,996
403,703
18,722
19,115
21,974
20,838
80,649
2,125
2,133
2,176
2,261
8,695
72,791
76,940
69,232
129,916
348,879
(13,188
)
(13,335
)
(14,783
)
(15,209
)
(56,515
)
6,353
6,939
8,061
9,475
30,828
65,956
70,544
62,510
124,182
323,192
10,019
10,635
9,227
25,239
55,120
$
55,937
$
59,909
$
53,283
$
98,943
$
268,072
$
0.55
$
0.60
$
0.53
$
0.98
$
2.67
101,416
100,327
99,821
100,689
100,500
$
0.54
$
0.59
$
0.52
$
0.96
$
2.62
103,198
102,130
101,712
102,778
102,505
Table of Contents
In thousands, except per share and employees data
2008*
2007*
2006*
2005
2004
$
1,575,124
$
1,473,048
$
1,280,229
$
1,158,236
$
1,104,536
$
372,192
$
323,192
$
262,959
$
274,563
$
285,671
$
322,479
$
268,072
$
222,200
$
201,975
$
224,053
$
3.25
$
2.67
$
2.16
$
1.77
$
1.87
99,199
100,500
102,691
114,023
119,640
$
3.21
$
2.62
$
2.13
$
1.74
$
1.82
100,555
102,505
104,240
115,945
123,069
$
428,522
$
693,014
$
514,166
$
493,588
$
539,077
$
666,796
$
578,628
$
313,846
$
309,101
$
480,894
$
1,622,898
$
1,881,055
$
1,617,313
$
1,428,931
$
1,460,426
$
500,000
$
500,000
$
500,000
$
500,000
$
250,000
$
661,005
$
586,076
$
362,383
$
283,632
$
678,686
5,033
4,956
4,687
4,503
4,271
*
As a result of the adoption of SFAS No. 123(R) as of
January 1, 2006, all share-based payments to employees have
been recognized in the statements of operations based on their
fair values. The Company adopted the modified prospective
transition method permitted under SFAS No. 123(R) and,
consequently, has not adjusted results from prior years.
Stock-based compensation expense related to
SFAS No. 123(R) was $31 million, $29 million
and $29 million for the years ended December 31, 2008,
2007 and 2006, respectively.
**
As result of the adoption of SFAS No. 158 as of
December 31, 2006, the Company was required to recognize
the underfunded status of the Companys retirement plans as
a liability in the consolidated balance sheet. Prior to 2006, a
significant portion of the Companys retirement
contribution accrual was classified in other current liabilities
and included in working capital. In 2006, in accordance with
SFAS No. 158, the majority of the retirement
contribution accrual is included in the long-term retirement
liability. Also, as result of the adoption
SFAS No. 158, stockholders equity decreased by
$2 million after-tax.
**
As a result of the adoption of FIN 48 as of January 1,
2007, the Company is required to measure, report, present and
disclose in its financial statements the effects of any
uncertain tax return reporting positions that a company has
taken or expects to take. Prior to January 1, 2007, these
amounts were included in accrued income taxes in current
liabilities. On January 1, 2007, the Company recorded the
effect of adopting FIN 48 which included a $4 million
charge to beginning retained earnings and a $58 million
reclassification from accrued income taxes, which was included
in working capital, to the long-term income tax liability in the
consolidated balance sheet.
73
Table of Contents
Item 9:
Changes
in and Disagreements with Accountants on Accounting and
Financial Disclosure
Item 9A:
Controls
and Procedures
Item 9B:
Other
Information
Item 10:
Directors,
Executive Officers and Corporate Goverance
74
Table of Contents
Item 11:
Executive
Compensation
Item 12:
Security
Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters
A
B
C
Number of Securities
Number of Securities
Remaining Available for
to be Issued Upon
Weighted-Average
Future Issuance Under
Exercise of
Exercise Price of
Equity Compensation
Outstanding Options,
Outstanding Options,
Plans (excluding securities
Warrants and Rights
Warrants and Rights
reflected in column (A))
6,835
$
45.44
3,911
6,835
$
45.44
3,911
Item 13:
Certain
Relationships and Related Transactions and Director
Independence
Item 14:
Principal
Accountant Fees and Services
75
Table of Contents
Item 15:
Exhibits
and Financial Statement Schedules
Exhibit
3
.1
Second Amended and Restated Certificate of Incorporation of
Waters Corporation.(1)
3
.11
Certificate of Amendment of Second Amended and Restated
Certificate of Incorporation of Waters Corporation, as amended
May 12, 1999.(4)
3
.12
Certificate of Amendment of Second Amended and Restated
Certificate of Incorporation of Waters Corporation, as amended
July 27, 2000.(7)
3
.13
Certificate of Amendment of Second Amended and Restated
Certificate of Incorporation of Waters Corporation, as amended
May 25, 2001.(9)
3
.21
Amended and Restated Bylaws of Waters Corporation dated as of
December 13, 2006.(18)
4
.1
Rights Agreement dated August 9, 2002, between the Waters
Corporation and Equiserve Trust Co.(11)
4
.2
Amendment to Rights Agreement, dated as of March 4, 2005,
between Waters Corporation and The Bank of New York as Rights
Agent.(16)
10
.3
Waters Corporation Second Amended and Restated 1996 Long-Term
Performance Incentive Plan.(6)(*)
10
.4
Waters Corporation 1996 Employee Stock Purchase Plan.(2)(*)
10
.5
Amended and Restated Waters Corporation 1996 Non-Employee
Director Deferred Compensation Plan, Effective January 1,
2008.(*)
10
.6
Waters Corporation Amended and Restated 1996 Non-Employee
Director Stock Option Plan.(6)(*)
10
.10
Waters Corporation Retirement Plan.(3)(*)
10
.17
First Amendment to the Waters Corporation 2003 Equity Incentive
Plan.(13)(*)
10
.27
Form of Director Stock Option Agreement under the Waters
Corporation Amended 2003 Equity Incentive Plan.(14)(*)
10
.28
Form of Director Restricted Stock Agreement under the Waters
Corporation Amended 2003 Equity Incentive Plan.(14)(*)
10
.29
Form of Executive Officer Stock Option Agreement under the
Waters Corporation Amended 2003 Equity Incentive Plan.(14)(*)
10
.31
First Amendment to the Waters Corporation Second Amended and
Restated 1996 Long-Term Performance Incentive Plan.(10)(*)
10
.32
Form of Amendment to Stock Option Agreement under the Waters
Corporation Second Amended and Restated 1996 Long Term
Performance Incentive Plan.(15)(*)
10
.34
Waters Corporation 2003 Equity Incentive Plan.(12)(*)
10
.35
Form of Executive Officer Stock Option Agreement under the
Waters Corporation Second Amended and Restated 1996 Long-Term
Performance Incentive Plan.(15)(*)
10
.36
2008 Waters Corporation Management Incentive Plan.(*)
10
.38
Second Amendment to the Waters Corporation 2003 Equity Incentive
Plan.(17)(*)
10
.41
December 1999 Amendment to the Waters Corporation 1996 Employee
Stock Purchase Plan.(5)(*)
76
Table of Contents
Exhibit
10
.42
March 2000 Amendment to the Waters Corporation 1996 Employee
Stock Purchase Plan.(5)(*)
10
.43
June 1999 Amendment to the Waters Corporation 1996 Employee
Stock Purchase Plan.(8)(*)
10
.44
July 2000 Amendment to the Waters Corporation 1996 Employee
Stock Purchase Plan.(8)(*)
10
.46
Second Amendment to the Waters Corporation Second Amended and
Restated 1996 Long-Term Performance Incentive Plan.(18)(*)
10
.47
Five Year Credit Agreement, dated January 11, 2007 among
Waters Corporation, Waters Technologies Ireland Limited, JP
Morgan Chase Bank, N.A., JP Morgan Europe and other Lenders
party thereto.(18)
10
.48
Third Amendment to the Waters Corporation 2003 Equity Incentive
Plan.(18)(*)
10
.49
Amended and Restated Waters Retirement Restoration Plan,
Effective January 1, 2008.(*)
10
.50
Amended and Restated Waters 401(k) Restoration Plan, Effective
January 1, 2008.(19)(*)
10
.53
Change of Control/Severance Agreement, dated as of
February 27, 2008 between Waters Corporation and Mark T.
Beaudouin.(20)(*)
10
.54
Change of Control/Severance Agreement, dated as of
February 27, 2008 between Waters Corporation and Douglas A.
Berthiaume.(20)(*)
10
.55
Change of Control/Severance Agreement, dated as of
February 27, 2008 between Waters Corporation and Arthur G.
Caputo.(20)(*)
10
.56
Change of Control/Severance Agreement, dated as of
February 27, 2008 between Waters Corporation and William J.
Curry.(20)(*)
10
.57
Change of Control/Severance Agreement, dated as of
February 27, 2008 between Waters Corporation and John
Ornell.(20)(*)
10
.58
Change of Control/Severance Agreement, dated as of
February 27, 2008 between Waters Corporation and Elizabeth
B. Rae.(20)(*)
10
.59
Term Credit Agreement, dated as of March 25, 2008 among
Waters Corporation, JP Morgan Chase Bank, N.A. and other lenders
party thereto.(21)
21
.1
Subsidiaries of Waters Corporation.
23
.1
Consent of PricewaterhouseCoopers LLP, an independent registered
public accounting firm.
31
.1
Chief Executive Officer Certification Pursuant to 18 U.S.C.
Section 1350, as Adopted Pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002.
31
.2
Chief Financial Officer Certification Pursuant to 18 U.S.C.
Section 1350, as Adopted Pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002.
32
.1
Chief Executive Officer Certification Pursuant to 18 U.S.C.
Section 1350, as Adopted Pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002.
32
.2
Chief Financial Officer Certification Pursuant to 18 U.S.C.
Section 1350, as Adopted Pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002.
(1)
Incorporated by reference to the Registrants Report on
Form 10-K
dated March 29, 1996 (File
No. 001-14010).
(2)
Incorporated by reference to Exhibit B of the
Registrants 1996 Proxy Statement (File
No. 001-14010).
(3)
Incorporated by reference to the Registrants Registration
Statement on
Form S-1
(File
No. 333-96934).
(4)
Incorporated by reference to the Registrants Report on
Form 10-Q
dated August 11, 1999 (File
No. 001-14010).
(5)
Incorporated by reference to the Registrants Report on
Form 10-K
dated March 30, 2000 (File
No. 001-14010).
(6)
Incorporated by reference to the Registrants Report on
Form 10-Q
dated May 8, 2000 (File
No. 001-14010).
(7)
Incorporated by reference to the Registrants Report on
Form 10-Q
dated August 8, 2000 (File
No. 001-14010).
(8)
Incorporated by reference to the Registrants Report on
Form 10-K
dated March 27, 2001 (File
No. 001-14010).
Table of Contents
(9)
Incorporated by reference to the Registrants Report on
Form 10-K
dated March 28, 2002 (File
No. 001-14010).
(10)
Incorporated by reference to the Registrants Report on
Form 10-Q
dated August 12, 2002 (File
No. 001-14010).
(11)
Incorporated by reference to the Registrants Report on
Form 8-A12B/A
dated August 27, 2002 (File
No. 001-14010).
(12)
Incorporated by reference to the Registrants Report on
Form S-8
dated November 20, 2003 (File
No. 333-110613).
(13)
Incorporated by reference to the Registrants Report on
Form 10-K
dated March 12, 2004 (File
No. 001-14010).
(14)
Incorporated by reference to the Registrants Report on
Form 10-Q
dated November 10, 2004 (File
No. 001-14010).
(15)
Incorporated by reference to the Registrants Report on
Form 10-K
dated March 15, 2005 (File
No. 001-14010).
(16)
Incorporated by reference to the Registrants Report on
Form 10-Q
dated May 6, 2005 (File
No. 001-14010).
(17)
Incorporated by reference to the Registrants Report on
Form 10-Q
dated August 5, 2005 (File
No. 001-14010).
(18)
Incorporated by reference to the Registrants Report on
Form 10-K
dated March 1, 2007 (File
No. 001-14010).
(19)
Incorporated by reference to the Registrants Report on
Form 10-Q
dated November 2, 2007 (File
No. 001-14010).
(20)
Incorporated by reference to the Registrants Report on
Form 10-K
dated February 29, 2008 (File
No. 001-14010).
(21)
Incorporated by reference to the Registrants Report on
Form 10-Q
dated May 2, 2008 (File
No. 001-14010).
(*)
Management contract or compensatory plan required to be filed as
an Exhibit to this
Form 10-K.
(b)
See Item 15 (a) (3) above.
(c)
Not Applicable.
78
Table of Contents
Chairman of the Board of Directors, President and Chief
Executive Officer (principal executive officer)
Vice President, Finance and Administration and Chief Financial
Officer (principal financial officer and principal accounting
officer)
Director
Director
Director
Director
Director
Director
Director
Director
79
-2-
-3-
-4-
-5-
-6-
-7-
PREAMBLE
|
1 | |||
|
||||
ARTICLE I DEFINITIONS
|
2 | |||
|
||||
ARTICLE II ELIGIBILITY
|
4 | |||
|
||||
2.1
Generally
|
4 | |||
|
||||
ARTICLE III PARTICIPANT ACCOUNTS
|
5 | |||
|
||||
3.1
Generally
|
5 | |||
3.2
Amount Credited to Participant
|
5 | |||
3.3
Termination of Account
|
6 | |||
|
||||
ARTICLE IV FORM AND TIMING OF BENEFITS
|
7 | |||
|
||||
4.1
Distributable Events
|
7 | |||
4.2
Form of Benefit
|
7 | |||
4.3
Timing of Distribution
|
8 | |||
4.4
Small Payments
|
9 | |||
4.5
Restriction on Timing of Distributions
|
9 | |||
|
||||
ARTICLE V VESTING
|
10 | |||
|
||||
ARTICLE VI ADMINISTRATION, AMENDMENT/TERMINATION AND FUNDING
|
11 | |||
|
||||
6.1
Administration
|
11 | |||
6.2
Right to Amend or Terminate
|
11 | |||
6.3
Funding
|
11 | |||
|
||||
ARTICLE VII GENERAL PROVISIONS
|
12 | |||
|
||||
7.1
Compliance with Section 409A
|
12 | |||
7.2
Payment to Minors and Incompetents
|
12 | |||
7.3
No Contract
|
12 | |||
7.4
Use of Masculine and Feminine; Singular and Plural
|
12 | |||
7.5
Non-Alienation of Benefits
|
12 | |||
7.6
Governing Law
|
12 | |||
|
||||
APPENDIX A PROVISIONS APPLICABLE TO CERTAIN EMPLOYEES OF WATERS-TA INSTRUMENTS LLC
|
1 | |||
|
||||
INTRODUCTION
|
2 | |||
ARTICLE A1 DEFINITIONS
|
3 | |||
ARTICLE A2 ELIGIBILITY
|
4 | |||
ARTICLE A3 AMOUNT OF BENEFIT
|
5 |
1
1.1 | Affiliate means any corporation which is a member of a controlled group of corporations (as defined in Section 414(b) of the Code) which includes the Corporation; any trade or business (whether or not incorporated) which is under common control (as defined in Section 414(c) of the Code) with the Corporation; any organization (whether or not incorporated) which is a member of an affiliated service group (as defined in Section 414(m) of the Code) which includes the Corporation; and any other entity required to be aggregated with the Corporation pursuant to regulations under Section 414(o) of the Code. | |
1.2 | Account means the notional account described in Section 3.1 maintained for each Participant. | |
1.3 | Basic Plan means the Waters Retirement Plan as in effect from time to time. | |
1.4 | Beneficiary means the individual designated by a Participant to receive benefits under this Plan in the event of the Participants death. In the event that no Beneficiary has been effectively designated, the Participants spouse shall be deemed the designated Beneficiary, or if the Participant has no spouse, his children, if any, per stirpes, and if none, the estate of the Participant shall be deemed the designated Beneficiary. | |
1.5 | Board means the Board of Directors of Waters Technologies Corporation. | |
1.6 | Code means the Internal Revenue Code of 1986, as amended from time to time, and any regulations issued thereunder. | |
1.7 | Committee means the persons appointed pursuant to Article IX of the Basic Plan to administer the Basic Plan. | |
1.8 | Corporation means Waters Technologies Corporation, a corporation organized and existing under the laws of the State of Delaware, or its successor or successors. | |
1.9 | Disability means a physical or mental incapacity that entitles a Participant to benefits under the Corporations group long-term disability (LTD) plan and either (i) the Participant is unable to engage in any substantial gainful activity by reason of such incapacity that can be expected to result in death or can be expected to last for a continuous period not less than twelve (12) months or (ii) such incapacity is expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months and the Participant has been receiving benefits under the group LTD plan for at least six (6) months. |
2
1.10 | Effective Date means January 1, 1995, except that this amendment and restatement shall be effective January 1, 2008. | |
1.11 | Employee means any person employed on a regular full-time or a regular part-time basis by a Participating Employer. | |
1.12 | Participant means an Employee participating in the Plan pursuant to Article II. | |
1.13 | Participating Employer means Waters Technologies Corporation and any Affiliate which has been authorized by the Board to participate in the Plan and has elected to do so. | |
1.14 | Pay means the annual compensation that would otherwise be recognized under the Basic Plan for benefit accrual purposes without regard to the limit on pensionable compensation under Code Section 401(a)(17). | |
1.15 | Plan means the Waters Retirement Restoration Plan as set forth in this document and as it may be amended from time to time. | |
1.16 | Plan Year means each twelve (12) month period beginning on January 1 and ending on the following December 31. | |
1.17 | Separation from Service means a termination of employment as defined in Treas. Regs. § 1.409A-1(h)(1) using a decrease in the level of bona fide services performed to twenty percent (20%) or less as constituting a Separation from Service. | |
1.18 | Specified Employee means a Participant who is a key employee (as defined in Section 416(i) of the Code without regard to paragraph (5) thereof). A Participant will be considered a key employee for the period commencing April 1 and ending on the March 31 thereafter if he or she was a key employee on the previous December 31 and such designation shall be effective solely for that period. |
3
(a) | his Basic Plan retirement benefit is restricted or reduced by the Code Section 415 limitations on maximum pensions; or | ||
(b) | his Pay is not fully recognized under the Basic Plan because of the limitations imposed by Code Section 401(a)(17), and his annual base salary as of November 1, 2007 is at least $130,232.35 for 2008 Plan Year eligibility (increased each November 1st thereafter to reflect increases in the Consumer Price Index for the twelve-month period ending on the immediately preceding September 30 under section 215(i)(2)(A) of the Social Security Act). |
4
3.1 | Generally . | |
A notional Account shall be established and maintained for each Participant. A Participants Account shall be credited with Annual Pay Credits and Interest Credits, as defined in the Basic Plan, in accordance with Sections 3.2 and 3.3. Notwithstanding the foregoing, in no event will a Participants Account be credited with Annual Pay Credits for any Plan Year beginning on or after December 31, 2007. |
3.2 | Amount Credited to Participant . |
(a) | For Plan Years commencing prior to January 1, 2008, the amount credited to a Participants Account each Plan Year shall be equal to the sum of (i) and (ii), where (i) and (ii) are: |
(i) | An Annual Pay Credit equal to the excess, if any, of (A) over (B), where: |
(ii) | An Interest Credit based on the amount of the Participants Account as of the first day of each Plan Year. The Interest Credit shall be added to each Participants Account as of the last day of the Plan Year. |
(b) | For Plan Years commencing on or after January 1, 2008, an Interest Credit shall be credited to each Participants Account. Such Interest Credit shall be based on the amount of the Participants Account as of the first day of each Plan Year, and shall be added to each Participants Account as of the last day of the Plan Year. | ||
(c) | Except as otherwise provided in paragraph (d), for any year in which a Plan distribution is made to a Participant, his or her Interest Credit shall be based on the amount of the Participants Account as of the first day of the Plan Year for the period from the first day of such Plan Year to the end of the month preceding the month in which he or she receives a distribution from this Plan. In no event will Interest Credits continue after benefits have commenced. | ||
(d) | If a Participant elects to receive his or her Account in installments as set forth in Section 4.2(a)(ii), he or shall continue to receive Interest Credits until the year in |
5
which the final installment is paid. For such year, the Participants Interest Credit shall be based on the amount of the Participants Account as of the first day of the Plan Year for the period from the first day of such Plan Year to the end of the month preceding the month in which he or she receives the final installment payment from the Plan. In no event will Interest Credits continue after the final installment payment has been made. | |||
(e) | The rate of interest used to determine the amount of the Interest Credit shall be the one year constant maturity treasury yield on all actively traded U.S. Treasury Securities that have one-year left to maturity as of the first business day in November preceding the Plan Year (as published in the Wall Street Journal ) plus 1/2%. In no event will the interest rate be less than 5% nor more than 10% for any twelve (12) month Plan Year. For the purposes of this paragraph, the constant maturity Treasury Bill rate shall be determined by calculating the yields on all actively traded U.S. Treasury securities and interpolating the yield for a Treasury Bill with exactly one year to maturity. |
3.3 | Termination of Account . | |
Upon the payment of a Participants Account in full in either a lump sum or installment payments, such Account shall cease to exist. |
6
4.1 | Distributable Events . | |
Benefits shall only be distributable from the Plan upon the occurrence of one of the following events: |
(a) | the Participants Separation from Service, other than due to death or Disability; | ||
(b) | the Participants death; or | ||
(c) | the Participants Disability. |
Benefits shall continue to be paid under this Plan regardless of whether the Participant is reemployed by the Corporation or an Affiliate. | ||
4.2 | Form of Benefit . |
(i) | a single lump sum payment equal to the value of the Participants Account or the Actuarial Equivalent (as that term is defined in the Basic Plan) of the benefits provided in Appendix A; or | ||
(ii) | a series of annual installment payments where a Participant can choose to receive between two (2) and ten (10) such payments. |
If a Participant elects to receive his or her Account in the form described in subparagraph (ii), he or she shall receive an initial installment payment equal to the balance of his or her Account multiplied by a ratio, the numerator of which is one and the denominator of which is the number of installments elected under subparagraph (ii) above. For each following year for which an installment payment is due, the amount of a Participants installment payment shall be equal to the remaining amount in his or her Account, plus the Interest Credit credited for such year, multiplied by a ratio, the numerator of which is one and the denominator of which is equal to the denominator used to calculate the first installment payment reduced by one for each installment payment that has previously been made to the Participant. |
7
(i) | such election shall not take effect for a period of twelve (12) months from the date such election is submitted to Committee in the form required by Committee; and | ||
(ii) | the Participants Account shall not be distributed earlier than the fifth (5 th ) anniversary of the date the Participants Account would have been distributed based on his or her initial election, or, in the absence of an initial election, the default election made on his or her behalf. Notwithstanding the foregoing, a Participants Account shall be payable upon the earlier of the Participants death or Disability. |
4.3 | Timing of Distribution. | |
Except as otherwise provided under Section 4.4 or Section 4.5, a Participants distribution shall occur at the following time: |
(a) | Lump Sum Payment . Lump sum distributions shall be made on or before the ninetieth (90 th ) day immediately following the date on which the Participant incurs a Separation from Service with the Participating Employer. The exact date of such payment within the ninety-day period shall be determined by the Corporation in its discretion. | ||
(b) | Installment Payments . Annual installment payments shall commence within 90 days after the date of the Participants date of Separation from Service, and shall be made on each subsequent anniversary of the date of the Participants Separation from Service until all installment payments have been made. |
8
4.4 | Small Payments . | |
Notwithstanding Section 4.2 above, if the value of a Participants Account under this Plan is not greater than the applicable amount under Code Section 402(g)(1)(B) ($15,500 for 2008), determined as of the date of the Participants Separation from Service with the Participating Employer, an automatic lump sum payment of such amount shall be made to the Participant (or his Beneficiary in the event of the Participants death before commencement of his retirement benefit) on or before the ninetieth (90 th ) day immediately following the date of the Participants Separation from Service. | ||
Notwithstanding any provision of the Plan to the contrary, upon payment of such lump sum distribution, no other benefit shall be payable hereunder to the Participant or his Beneficiary. |
4.5 | Restriction on Timing of Distributions . | |
In the event that any stock of the Corporation or any entity within the same controlled group (as defined in Section 414(b) of the Code), is publicly traded on an established securities market as defined in Section 1.409A-1(i) of the regulations under Section 409A of the Code, distributions to a Specified Employee may not commence before the date that is six (6) months after the Specified Employees date of Separation from Service, or, if earlier than the end of the six-month period, the date of the death of the Specified Employee. | ||
If a Participants distribution is restricted under this Section 4.5, such restricted distribution shall be made on the earlier of the first day of the seventh month following the date of the Participants Separation from Service or the date of the Specified Employees death. All subsequent distributions shall be paid in the manner specified in Section 4.2. |
9
10
6.1 | Administration . | |
This Plan shall be administered by the Corporation through the Committee in a manner consistent with the administration of the Basic Plan as set forth in the Basic Plan, except as specifically provided herein. | ||
The Committee shall have full discretion to interpret and administer this Plan and its decision in any matter involving the interpretation and application of this Plan shall be final and binding on all parties. |
6.2 | Right to Amend or Terminate . | |
The Corporation reserves the right to amend, modify, suspend or terminate this Plan in whole or in part at any time by action of its Board or the Boards duly appointed delegate. No amendment shall reduce a Participants Account under this Plan as of the amendment date, except to the extent that the Participant agrees in writing to such reduction. |
6.3 | Funding . | |
This Plan is unfunded. Benefits under this Plan will be paid from the general assets of the Participating Employer. The rights of a Participant or Beneficiary shall be those of an unsecured creditor of the Corporation and the Participating Employers. |
11
7.1 | Compliance with Section 409A . | |
This Plan is intended to be operated in good faith compliance with the requirements of Section 409A of the Code and its accompanying regulations, and any additional guidance issued under Section 409A. To the extent that any provision of this Plan violates Section 409A, such provision shall be deemed inoperative and the remaining provisions of the Plan shall continue to be fully effective. | ||
7.2 | Payment to Minors and Incompetents . | |
If any Participant or Beneficiary entitled to receive any benefits hereunder is a minor or is deemed by the Committee or is adjudged to be legally incapable of giving valid receipt and discharge for such benefits, they will be paid to such person or institution as the Committee may designate or to the, duly appointed guardian. Such payment shall, to the extent made, be deemed a complete discharge of any such payment under the Plan. | ||
7.3 | No Contract . | |
This Plan shall not be deemed a contract of employment with any Participant, nor shall any provision of the Plan affect the right of the Corporation or any Affiliate to terminate a Participants employment. | ||
7.4 | Use of Masculine and Feminine; Singular and Plural . | |
Wherever used in this Plan, the masculine gender will include the feminine gender and the singular will include the plural, unless the context indicates otherwise. | ||
7.5 | Non-Alienation of Benefits . | |
No amount payable to, or held under the Plan for the account of, any Participant or Beneficiary shall be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, or charge, and any attempt to anticipate, alienate, sell, transfer, assign, pledge, encumber, or charge the same shall be void; nor shall any amount payable to, or held under the Plan for the account of, any Participant be in any manner liable for his debts, contracts, liabilities, engagements, or torts, or be subject to any legal process to levy upon or attach. | ||
7.6 | Governing Law . | |
The provisions of the Plan shall be interpreted, construed, and administered in accordance with the laws of the Commonwealth of Massachusetts. |
12
7.7 | Captions . | |
The captions contained in the Plan are inserted only as a matter of convenience and for reference and in no way define, limit, enlarge, or describe the scope or intent of the Plan, nor in any way affect the construction of any provision of the Plan. |
13
A-1
A-2
A1.1
|
Frozen TA Participant means a Grandfathered TA Participant (as that term is defined in the Basic Plan) who was a participant in the Basic Plan on December 31, 2007 and who ceased to accrue a benefit under the Basic Plan for Plan Years commencing after December 31, 2007 as a result of the freeze of the Basic Plan. | |
|
||
A1.2
|
Special TA Participant means a Protected TA Participant (as that term is defined in the Basic Plan) who was designated by the Corporation to be eligible to participate in the Plan pursuant to Section A2.1(a) and is entitled to a benefit as described in Section A3.1. | |
|
||
A1.3
|
TA means the TA Instruments division of Waters-TA Instruments LLC or its successor or successors. | |
|
||
A1.4
|
TA Plan means the TA Instruments, Inc. Employees Pension Plan in effect as of December 31, 1996. |
A-3
A2.1 | Eligibility |
(a) | A Protected TA Participant (as that term is defined in the Basic Plan) shall become a Participant hereunder if he or she is designated as a Participant hereunder by the Corporation pursuant to a certification signed by the Committee. | ||
(b) | A Frozen TA Participant shall be eligible to participate in the Plan effective January 1, 2008 pursuant to a certification signed by the Committee. |
A-4
A3.1 | Special TA Participant Benefits . |
The benefit payable under this Plan to a Special TA Participant shall equal the excess, if any, of (a) over (b) where: |
(a) | is the benefit such Participant would have been entitled to under the TA Instruments Inc. Employees Pension Plan as in effect as of December 31, 1996 had he continued to actively participate in such plan until the date he terminates employment with TA and determined as if the provisions of such plan were administered without regard to the benefit limitations of Code Section 415 and regulations thereunder and, solely with respect to Pay earned on and after January 1, 1997, the compensation limitations of Code Section 401(a)(17) and regulations thereunder; and | ||
(b) | is the Accrued Benefit which is payable to such Participant under the Basic Plan. |
A3.2 | Frozen TA Participant Benefits . | |
The benefit payable under this Plan to a Frozen TA Participant shall equal the excess, if any, of (a) over (b) where: |
(a) | is the Accrued Benefit (as that term is defined under the Basic Plan) which would have been paid to such Participant under the Basic Plan under the terms of the Basic Plan as if such terms continued to be in effect after December 31, 2007, if the provisions of the Basic Plan were administered without regard to the benefit limitations of Code Section 415 and regulations thereunder and, solely with respect to Pay earned on and after January 1, 1997, the compensation limitations of Code Section 401(a)(17) and regulations thereunder; and | ||
(b) | is the Accrued Benefit which is payable to such Participant under the Basic Plan. |
A-5
Waters Corporation (Delaware)
|
Waters Technologies Corporation (Delaware)
|
Waters Australia PTY LTD. (Australia)
|
Waters A/S (Denmark)
|
Waters AG (Switzerland)
|
Waters NV (Belgium)
|
Waters Cromatografia SA (Spain)
|
Waters SA de CV (Mexico)
|
Waters Technologies do Brasil Ltda (Brazil)
|
Waters Ges.MBH (Austria)
|
Waters Kft (Hungary)
|
Waters Sp.Zo.o (Poland)
|
Waters SAS (France)
|
Waters GmbH (Germany)
|
Waters Srl (Romania)
|
Waters SpA (Italy)
|
Waters Sverige AB (Sweden)
|
Thermometric AB (Sweden)
|
Waters Limited (Canada)
|
TA Instruments-Waters LLC (Delaware)
|
TA Instruments, Inc. (Delaware)
|
Waters France Holding Corp. (Delaware)
|
NuGenesis Technologies Corporation
|
Environmental Resource Assoc., Inc. (Colorado)
|
Pharmaceutical Resource Assoc, Inc. (Colorado)
|
PRA Europe Limited (UK)
|
Calorimetry Sciences Corporation
|
Waters India Pvt. Ltd. (India)
|
Esbee Wire Pvt. Ltd. (India)
|
Waters Asia Limited (Delaware)
|
Waters Korea Limited (Korea)
|
Waters China Ltd. (Hong Kong)
|
Waters Technologies (Shanghai) Ltd
|
Waters Pacific Pte Ltd
|
MM European Holdings LLP
|
Milford International Limited
|
Manchester International Limited
|
Waters Finance III LLC
|
Waters Luxembourg SARL
|
Waters Tech. Holdings Ltd (Ireland)
|
Grand Duchy Finance SARL (Lux)
|
Waters Celtic Holdings Ltd (Ireland)
|
Waters Tech Ireland Ltd
|
Waters Chromatography Ireland Ltd
|
Nihon Waters Limited (Delaware)
|
Nihon Waters K.K. (Japan)
|
TA Instruments Japan, Inc. (Japan)
|
Waters Finance V LLC
|
Microsep Proprietary Ltd (So. Africa) (24.5%)
|
Thar Instruments, Inc. (10%)
|
Thar Instruments Limited
|
Subsidiaries of Waters Luxembourg SARL
|
Micromass Holdings Ltd.
|
Waters Chromatography BV (Netherlands)
|
Waters Chromatography Europe BV (Netherlands)
|
Micromass Ltd. (UK)
|
Waters Ltd. (UK)
|
Phase Sep Limited (UK)
|
Phase Sep Eurl (France)
|
Micromass UK Ltd. (UK)
|
Micromass Investments Ltd. (UK)
|
Mass Analyser Prod Ltd. (UK)
|
Micromass International Ltd. (UK)
|
TA Instruments Ltd. (UK)
|
Sandygrow Ltd. (Ireland)
|
Rodolfo Holding Ltd. (Ireland)
|
* | All subsidiaries are 100% owned unless otherwise indicated. |
1. | I have reviewed this annual report on Form 10-K of Waters Corporation; | |
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 registrants other certifying officer(s) 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 registrants 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 registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of registrants 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 registrants 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 registrants internal control over financial reporting. |
/s/ Douglas A. Berthiaume | ||||
Douglas A. Berthiaume | ||||
Chief Executive Officer |
1. | I have reviewed this annual report on Form 10-K of Waters Corporation; | |
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 registrants other certifying officer(s) 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 registrants 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 registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of registrants 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 registrants 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 registrants internal control over financial reporting. |
/s/ John Ornell | ||||
John Ornell | ||||
Chief Financial Officer |
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By: |
/s/ Douglas A. Berthiaume
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Douglas A. Berthiaume | |||||
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Chief Executive Officer |
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By: |
/s/ John Ornell
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Chief Financial Officer |