Exhibit 10.17

Final 2014            

WATERS CORPORATION

MANAGEMENT INCENTIVE PLAN

--------------------------------------------------------------------------------

WATERS CORPORATION

MANAGEMENT INCENTIVE PLAN

 

1. Purpose

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.

 

2. Definitions

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
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, semi-annually, 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 set by the Committee in accordance with
Section 5.3(d) of the Plan 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.

 

- 2 -

--------------------------------------------------------------------------------

3. Administration

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 determines otherwise, to achievement of the Performance Goal or Goals
within the applicable Performance Period.

(b) In the event of the retirement (as determined by the Committee) of a
Participant who is not a Covered Employee during the Performance Period, 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 determines otherwise, to achievement of the
Performance Goal or Goals within the applicable Performance Period.

(c) In the event of the retirement (as determined by the Committee) during the
Performance Period of a Participant who is a Covered Employee, 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 so long as
the Committee has determined that the applicable Performance Goal or Goals were
achieved within the applicable Performance Period.

 

- 3 -

--------------------------------------------------------------------------------

5. Terms of Awards

5.1. General Terms. A Participant’s eligibility for an Award shall be subject to
all applicable terms and conditions of the Plan and such other terms and
conditions, not inconsistent with the terms of the Plan, as the Committee may
prescribe. No prospective Participant shall have any rights with respect to an
Award, unless and until such Participant shall have complied with the applicable
terms and conditions of such Award. The Committee shall set Performance Goals or
other business objectives in its discretion which, depending on the extent to
which they are met within the applicable Performance Period, will determine the
payment to be made to the Participant pursuant to the terms of his or her Award.
After the applicable Performance Period has ended, the Participant shall be
entitled to payment pursuant to the terms of his or her Award, to be determined
as a function of the extent to which the corresponding Performance Goals or
other business objectives have been achieved. This Plan and all Awards granted
hereunder are subject to all applicable Company policies duly adopted by the
Board, the Committee or any other committee of the Board and as in effect from
time to time including the Policy for Recoupment of Incentive Compensation
effective March 3, 2010 (the “Recoupment Policy”), and any other policies
intended to avoid or recover compensation payable or paid on a basis similar to
the Recoupment Policy.

5.2. Payments. Payment pursuant to an Award which is subject to U.S. taxation
shall be made in a single lump sum on or before the March 15th next following
the close of the applicable Performance Period. Payment pursuant to an Award
which is not subject to U.S. taxation shall be made in a single lump sum on or
about the March 15th next following the close of the applicable Performance
Period or as soon as practicable thereafter.

5.3. Qualified Performance-Based Awards.

(a) Purpose. The purpose of this Section 5.3 is to provide the Committee the
ability (but not the obligation) to qualify Awards as “performance-based
compensation” under Section 162(m) of the Code. If the Committee, in its
discretion, decides to grant an Award as a Qualified Performance-Based Award,
the provisions of this Section 5.3 will control over any contrary provision
contained in the Plan. In the course of granting any Award, the Committee may
specifically designate the Award as intended to qualify as a Qualified
Performance-Based Award. However, no Award shall be considered to have failed to
qualify as a Qualified Performance-Based Award solely because the Award is not
expressly designated as a Qualified Performance-Based Award, if the Award
otherwise satisfies the provisions of this Section 5.3 and the requirements of
Section 162(m) of the Code and the regulations promulgated thereunder applicable
to “performance-based compensation.”

(b) Authority. All grants of Awards intended to qualify as Qualified
Performance-Based Awards and determination of terms applicable thereto shall be
made by the Committee or, if not all of the members thereof qualify as “outside
directors” within the meaning of applicable IRS regulations under Section 162 of
the Code, a subcommittee of the Committee consisting of such of the members of
the Committee as do so qualify. Any action by such a subcommittee shall be
considered the action of the Committee for purposes of the Plan.

(c) Applicability. This Section 5.3 will apply only to those Covered Employees,
or to those persons who the Committee determines are reasonably likely to become
Covered Employees in the period covered by an Award, selected by the Committee
to receive Qualified Performance-Based Awards. The Committee may, in its
discretion, grant Awards to Covered Employees that do not satisfy the
requirements of this Section 5.3.

 

- 4 -

--------------------------------------------------------------------------------

(d) Discretion of Committee with Respect to Qualified Performance-Based Awards.
Each Award intended to qualify as a Qualified Performance-Based Award shall be
subject to satisfaction of one or more Performance Goals. The Committee will
have full discretion to select the length of any applicable Performance Period,
the kind and/or level of the applicable Performance Goal, and whether the
Performance Goal is to apply to the Company, an Affiliate or any division or
business unit, or to the individual. Any Performance Goal or Goals applicable to
Qualified Performance-Based Awards shall be objective, shall be established not
later than ninety (90) days after the beginning of any applicable Performance
Period (or at such other date as may be required or permitted for
“performance-based compensation” under Section 162(m) of the Code) and shall
otherwise meet the requirements of Section 162(m) of the Code, including the
requirement that the outcome of the Performance Goal or Goals be substantially
uncertain (as defined in the regulations under Section 162(m) of the Code) at
the time established.

(e) Payment of Qualified Performance-Based Awards. Except as otherwise provided
in Section 4.2(a), a Participant will be eligible to receive payment under a
Qualified Performance-Based Award which is subject to achievement of a
Performance Goal or Goals only if the applicable Performance Goal or Goals are
achieved within the applicable Performance Period, as determined by the
Committee. In determining the actual size of an individual Qualified
Performance-Based Award, the Committee may reduce or eliminate the amount of the
Qualified Performance-Based Award earned for the Performance Period, if in its
sole and absolute discretion, such reduction or elimination is appropriate.

(f) Maximum Amount Payable. The maximum amount payable pursuant to Qualified
Performance-Based Awards to any one Participant under the Plan for any
Performance Period is $7,500,000.

(g) Limitation on Adjustments for Certain Events. Unless otherwise approved by
the Committee, no adjustment of any Qualified Performance-Based Award pursuant
to Section 6 shall be made except on such basis, if any, as will not cause such
Award to provide other than “performance-based compensation” within the meaning
of Section 162(m) of the Code.

 

6. Adjustment Provisions

6.1. Adjustment of Awards Upon the Occurrence of Certain Unusual or Nonrecurring
Events. In the event of any corporate action including but not limited to a
merger or consolidation of the Company with or into another entity, a sale,
transfer, or other disposition of all or substantially all of the Company’s
assets to one or more other persons in a single transaction or series of related
transactions, a liquidation or dissolution of the Company, a reorganization, a
recapitalization, a reclassification, a stock dividend, a stock split, a reverse
stock split, or other similar distribution, the Committee may make such
adjustment of outstanding Awards and their terms, if any, as it, in its sole
discretion, may deem equitable and appropriate in the circumstances. In
addition, the Committee may make adjustments in the terms and conditions of, and
the Performance Criteria included in Awards in recognition of unusual or
nonrecurring events (including, without limitation, the events described in this
Section) affecting the Company or the financial statements of the Company or of
changes in applicable laws, regulations, or accounting principles, whenever the
Committee determines that such adjustments are appropriate in order to prevent
dilution or enlargement of the benefits or potential benefits intended to be
made available under the Plan.

 

- 5 -

--------------------------------------------------------------------------------

6.2. Related Matters. Any adjustment in Awards made pursuant to Section 6.1
shall be determined and made, if at all, by the Committee, acting in its sole
discretion, and shall include any correlative modification of terms, including
Performance Goals and other financial objectives which the Committee may deem
necessary or appropriate so as to ensure the rights of the Participants in their
respective Awards are not substantially diminished nor enlarged as a result of
the adjustment and corporate action other than as expressly contemplated in this
Section 6.

 

7. No Special Service Rights

Nothing contained in the Plan or in any Award Agreement shall confer upon any
Participant any right with respect to the continuation of his or her employment
with the Company (or any Affiliate), or interfere in any way with the right of
the Company (or any Affiliate), subject to the terms of any separate employment
agreement or provision of law or corporate articles or by-laws to the contrary,
at any time to terminate such employment relationship or to increase or
decrease, or otherwise adjust, the other terms and conditions of the
Participant’s employment with the Company and its Affiliates.

 

8. Section 409A; Unfunded Status of Plan

This Plan is intended to be exempt from Section 409A of the Code and the rules
and regulations promulgated thereunder (collectively, “Section 409A”). By
participating in the Plan, each Participant acknowledges that he or she bears
the entire risk of any adverse federal and State tax consequences and penalty
taxes in the event any payment pursuant to this Plan is deemed to be subject to
Section 409A and that no representations have been made to Participant relating
to the tax treatment of any payment pursuant to this Plan under Section 409A of
the Code and the corresponding provisions of any applicable State income tax
laws.

The Plan is intended to constitute an “unfunded” plan for incentive
compensation, and the Plan is not intended to constitute a plan subject to the
provisions of the Employee Retirement Income Security Act of 1974, as amended.
With respect to any payments not yet made to a Participant by the Company,
nothing contained herein shall give any such Participant any rights that are
greater than those of a general creditor of the Company. In its sole discretion,
the Committee may authorize the creation of trusts or other arrangements to meet
the obligations created under the Plan, provided, however, that the existence of
such trusts or other arrangements is consistent with the unfunded status of the
Plan.

 

9. Termination and Amendment of the Plan

9.1. Termination or Amendment of the Plan. The Board may at any time terminate
the Plan or make such modifications of the Plan as it shall deem advisable.
Unless the Board otherwise expressly provides, no amendment of the Plan shall
affect the terms of any Award outstanding on the date of such amendment.

9.2. Amendment of Outstanding Awards. The Committee may amend the terms of any
Award theretofore granted, prospectively or retroactively, provided that the
Award as amended is consistent with the terms of the Plan.

 

- 6 -

--------------------------------------------------------------------------------

9.3. Limitations on Amendments, Etc. Except as otherwise provided herein, no
amendment or modification of the Plan by the Board, or of an outstanding Award
by the Committee, shall impair the rights of the recipient of any Award
outstanding on the date of such amendment or modification of such Award, as the
case may be, without the Participant’s consent; provided, however, that no such
consent shall be required if (i) the Board or Committee, as the case may be,
determines in its sole discretion and prior to the date of any change of control
that such amendment or alteration either is required or advisable in order for
the Company, the Plan or the Award to satisfy any law or regulation, including
without limitation the provisions of Section 409A of the Code, or to meet the
requirements of or avoid adverse financial accounting consequences under any
accounting standard, or (ii) the Board or Committee, as the case may be,
determines in its sole discretion and prior to the date of any change of control
that such amendment or alteration is not reasonably likely to significantly
diminish the benefits provided under the Award, or that any such diminution has
been adequately compensated.

 

10. Notices and Other Communications

Any notice, demand, request or other communication hereunder to any party shall
be deemed to be sufficient if contained in a written instrument delivered in
person or duly sent by first class registered, certified or overnight mail,
postage prepaid, or telecopied with a confirmation copy by regular, certified or
overnight mail, addressed or telecopied, as the case may be, (i) if to a
Participant, at his or her residence address last filed with the Company and
(ii) if to the Company, at its principal place of business, addressed to the
attention of its Treasurer, or to such other address or telecopier number, as
the case may be, as the addressee may have designated by notice to the
addressor. All such notices, requests, demands and other communications shall be
deemed to have been received: (i) in the case of personal delivery, on the date
of such delivery; (ii) in the case of mailing, when received by the addressee;
and (iii) in the case of facsimile transmission, when confirmed by facsimile
machine report.

 

11. Governing Law

The Plan and all Awards and actions taken thereunder shall be governed,
interpreted and enforced in accordance with the laws of the State of Delaware
without regard to the conflict of laws principles thereof.

 

- 7 -