MANAGEMENT INCENTIVE
PLAN
Management Incentive
Plan
The purpose of
this Plan is to (i) align the interests of eligible employees
with the Company’s shareholders, (ii) motivate eligible
employees to achieve annual financial and operating targets,
(iii) provide increasing levels of incentive plan payout
opportunity consistent with increasing levels of annual financial
performance, (iv) enhance individual accountability for goal
achievement and align employee interests and objectives worldwide,
and (v) attract and retain key employees.
As used in this
Plan, the following terms shall have the following
meanings:
2.1.
Affiliate means any corporation, partnership, limited
liability company, business trust, or other entity controlling,
controlled by or under common control with the Company.
2.2. Award
means a right to receive a cash incentive payment pursuant to the
terms and conditions of the Plan.
2.3. Board
means the Company’s Board of Directors.
2.4. Code
means the Internal Revenue Code of 1986, as amended from time to
time, or any successor statute thereto, and any regulations issued
from time to time thereunder.
2.5.
Committee means the Compensation Committee of the Board,
which in general is responsible for the administration of the Plan,
as provided in Section 3 of this Plan. For any period during
which no such committee is in existence “Committee”
shall mean the Board and all authority and responsibility assigned
to the Committee under the Plan shall be exercised, if at all, by
the Board.
2.6.
Company means Waters Corporation, a corporation organized
under the laws of the State of Delaware.
2.7.
Covered Employee means a Participant who is a
“covered employee” within the meaning of Section 162(m)
of the Code.
2.8.
Participant means an employee who is a holder of an Award
under the Plan.
2.9.
Performance Criteria means the criteria that the
Committee selects for purposes of establishing the Performance Goal
or Performance Goals for a Participant for a Performance Period.
Solely with respect to Awards to Covered Employees, the Performance
Criteria used to establish Performance Goals are limited to:
(i) cash flow (before or after dividends), (ii) earnings
per share (including, without limitation, earnings before interest,
taxes, depreciation and amortization), (iii) stock price,
(iv) return on equity, (v) stockholder return or total
stockholder return, (vi) return on capital (including, without
limitation, return on total capital or return on invested capital),
(vii) return on investment, (viii) return on assets or
net assets, (ix) market
-2-
capitalization,
(x) economic value added, (xi) debt leverage (debt to
capital), (xii) revenue, (xiii) sales or net sales,
(xiv) backlog, (xv) income, pre-tax income or net income,
(xvi) operating income or pre-tax profit,
(xvii) operating profit, net operating profit or economic
profit, (xviii) gross margin, operating margin or profit
margin, (xix) return on operating revenue or return on
operating assets, (xx) cash from operations,
(xxi) operating ratio, (xxii) operating revenue,
(xxiii) market share improvement, (xxiv) general and
administrative expenses and (xxv) customer service. The
Performance Criteria used to establish Performance Goals for
Participants who are not Covered Employees shall not be so limited
solely by reason of this Section.
2.10.
Performance Goals means, for a Performance Period,
the written goal or goals established by the Committee for the
Performance Period based upon the Performance Criteria. The
Performance Goals may be expressed in terms of overall Company
performance or the performance of a division, business unit,
subsidiary, or an individual, either individually, alternatively or
in any combination, applied to either the Company as a whole or to
a business unit or Affiliate, either individually, alternatively or
in any combination, and measured either quarterly, annually or
cumulatively over a period of years, on an absolute basis or
relative to a pre-established target, to previous years’
results or to a designated comparison group, in each case as
specified by the Committee. The Committee will, in the manner and
within the time prescribed by Section 162(m) of the Code in the
case of Qualified Performance-Based Awards, objectively define the
manner of calculating the Performance Goal or Goals it selects to
use for such Performance Period for any Participant. Solely with
respect to Awards to Covered Employees, and to the extent
consistent with Section 162(m) of the Code (in the case of
Qualified Performance-Based Awards), the Committee may
appropriately adjust any evaluation of performance against a
Performance Goal to exclude any of the following events that occurs
during a Performance Period: (i) asset write-downs,
(ii) litigation, claims, judgments or settlements,
(iii) the effect of changes in tax law, accounting principles
or other such laws or provisions affecting reported results,
(iv) accruals for reorganization and restructuring programs
and (v) any extraordinary, unusual, non-recurring or
non-comparable items (A) as described in Accounting Principles
Board Opinion No. 30, (B) as described in
management’s discussion and analysis of financial condition
and results of operations appearing in the Company’s Annual
Report to stockholders for the applicable year, or
(C) publicly announced by the Company in a press release or
conference call relating to the Company’s results of
operations or financial condition for a completed quarterly or
annual fiscal period. With respect to Awards to Participants who
are not Covered Employees, the Committee may exclude or otherwise
take into account such other events that occur during a Performance
Period as it deems appropriate in its sole discretion.
2.11.
Performance Period means a period of one calendar
year over which the attainment of one or more Performance Goals or
other business objectives will be measured for purposes of
determining a Participant’s right to payment pursuant to an
Award.
2.12. Plan
means this Management Incentive Plan of the Company, as amended
from time to time, and including any attachments or addenda
hereto.
2.13.
Qualified Performance-Based Awards means
Awards intended to qualify as “performance-based
compensation” under Section 162(m) of the Code.
-3-
The Plan shall be
administered by the Committee; provided, however , that at
any time and on any one or more occasions the Board may itself
exercise any of the powers and responsibilities assigned the
Committee under the Plan and when so acting shall have the benefit
of all of the provisions of the Plan pertaining to the
Committee’s exercise of its authorities hereunder; and
provided, further , that with respect to Awards to Participants
who are not Covered Employees, the Committee may delegate to an
executive officer, officer or employee the authority to exercise
any of the powers and responsibilities assigned to the Committee
under the Plan including the authority to grant Awards to such
Participants. Subject to the provisions of the Plan, the Committee
shall have complete authority, in its discretion, to make or to
select the manner of making all determinations with respect to the
Plan. In making such determinations, the Committee may take into
account the nature of the services rendered by employees, their
present and potential contributions to the success of the Company
and its Affiliates, and such other factors as the Committee in its
discretion shall deem relevant. Subject to the provisions of the
Plan, the Committee shall also have complete authority to interpret
the Plan, to prescribe, amend and rescind rules and regulations
relating to it, and to make all other determinations necessary or
advisable for the administration of the Plan. The Committee’s
determinations made in good faith on matters referred to in the
Plan shall be final, binding and conclusive on all persons having
or claiming any interest under the Plan or an Award granted
pursuant hereto.
4.
Eligibility for Awards
4.1.
Eligibility . The Committee may from time to time and at any
time prior to the termination of the Plan grant Awards to any
employee of one or more of the Company and its
Affiliates.
4.2. Effect
of Termination of Employment,
Etc . Unless the Committee shall provide otherwise with
respect to any Award, in order to be eligible to receive payment
pursuant to an Award, a Participant must have remained in the
continuous employ of the Company and its Affiliates through the end
of the applicable Performance Period and until date on which the
Award payment is paid, except as follows:
(a) In
the event of a Participant’s termination of employment during
the Performance Period due to death or disability the Committee
may, in its sole discretion, authorize the Company or the
applicable Affiliate to make payment, in full or on a prorated
basis, pursuant to an Award, subject, unless the Committee
dete
|
