<PAGE>
[PRELIMINARY COPIES]
DRAFT: 3/18/98
[WATERS CORPORATION LETTERHEAD]
April 1, 1998
Dear Stockholder:
On behalf of the Board of Directors, I cordially invite you to attend the
Annual Meeting of Stockholders of Waters Corporation (the "Company") on May 12,
1998 at 11:00 o'clock a.m., eastern standard time. The meeting will be held at
Waters Corporation, 34 Maple Street, Milford, Massachusetts 01757.
The matters scheduled to be considered at the meeting are (i) the election
of directors of the Company, (ii) the ratification of auditors for the Company
and (iii) the reservation of an additional two million shares of the Company's
common stock for issuance upon the exercise of stock options granted under the
Company's Long-Term Performance Incentive Plan for senior executives of the
Company. These matters are more fully explained in the attached Proxy Statement
which you are encouraged to read.
The Board of Directors values and encourages stockholder participation. It
is important that your shares be represented, whether or not you plan to attend
the meeting. Please take a moment to sign, date and return your Proxy in the
envelope provided even if you plan to attend the meeting.
We hope you will be able to attend the meeting.
Sincerely,
Douglas A. Berthiaume
Chairman, President and
Chief Executive Officer
<PAGE>
WATERS CORPORATION
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
Notice is hereby given that the Annual Meeting of Stockholders of Waters
Corporation (the "Company") will be held at Waters Corporation, 34 Maple Street,
Milford, Massachusetts 01757 on May 12, 1998, at 11:00 o'clock a.m., eastern
standard time, for the following purposes:
1. To elect directors to serve for the ensuing year and until their
successors are elected;
2. To ratify the selection of the firm of Coopers & Lybrand L.L.P., the
present auditors, as auditors for the fiscal year of 1998;
3. To ratify the reservation of an additional two million shares of the
Company's common stock for issuance upon the exercise of stock options granted
under the Company's Long-Term Performance Incentive Plan for senior executives
of the Company and
4. To consider and act upon any other matters which may properly come
before the meeting or any adjournment thereof.
In accordance with the provisions of the Company's bylaws, the Board of
Directors has fixed the close of business on March 23, 1998 as the record date
for the determination of the holders of Common Stock entitled to notice of and
to vote at the Annual Meeting.
By order of the Board of Directors
Douglas A. Berthiaume
Chairman, President and
Chief Executive Officer
Milford, Massachusetts
April 1, 1998
<PAGE>
WATERS CORPORATION
34 MAPLE STREET
MILFORD, MASSACHUSETTS 01757
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
MAY 12, 1998, 11:00 O'CLOCK A.M.
The Proxy is solicited by the Board of Directors of Waters Corporation (the
"Company") for use at the 1998 Annual Meeting of Stockholders to be held on May
12, 1998 at 11:00 o'clock a.m. at the Company's headquarters located at 34 Maple
Street, Milford, Massachusetts, 01757. Solicitation of the Proxy may be made
through officers and regular employees of the Company by telephone or by oral
communications with some stockholders following the original solicitation
period. No additional compensation will be paid to such officers and regular
employees for Proxy solicitation. Corporate Investor Communications, Inc. has
been hired by the Company to do a broker solicitation for a fee of $4,500.00
plus reasonable out-of-pocket expenses. Expenses incurred in the solicitation
of Proxies will be borne by the Company.
VOTING MATTERS
The representation in person or by proxy of a majority of the outstanding
shares of common stock of the Company, par value $.01 per share (the "Common
Stock"), entitled to a vote at the meeting is necessary to provide a quorum for
the transaction of business at the meeting. Shares can only be voted if the
stockholder is present in person or is represented by a properly signed proxy (a
"Proxy"). Each stockholder's vote is very important. Whether or not you plan to
attend the meeting in person, please sign and promptly return the enclosed Proxy
card, which requires no postage if mailed in the United States. All signed and
returned Proxies will be counted towards establishing a quorum for the meeting,
regardless of how the shares are voted.
Shares represented by Proxy will be voted in accordance with your
instructions. You may specify your choice by marking the appropriate box on the
Proxy card. If your Proxy card is signed and returned without specifying
choices, your shares will be voted in favor of the proposals made by the Board
of Directors, and as the individuals named as Proxy holders on the Proxy deem
advisable on all other matters as may properly come before the meeting.
For all matters to be voted upon at the meeting, the affirmative vote of a
majority of shares present in person or represented by Proxy, and entitled to
vote on the matter, is necessary for approval. Withholding authority to vote or
an instruction to abstain from voting on a proposal will be treated as shares
present and entitled to vote and, for purposes of determining the outcome of the
vote, will have the same effect as a vote against the proposal. A broker "non-
vote" occurs when a nominee holding shares for a beneficial holder does not have
discretionary voting power and does not receive voting instructions from the
beneficial owner. Broker "non-votes" will not be treated as
<PAGE>
shares present and entitled to vote on a voting matter and will have no effect
on the outcome of the vote.
Any stockholder giving the enclosed Proxy has the power to revoke such
Proxy prior to its exercise either by voting by ballot at the meeting, by
executing a later-dated Proxy or by delivering a signed written notice of the
revocation to the office of the Secretary of the Company before the meeting
begins. The Proxy will be voted at the meeting if the signer of the Proxy was a
stockholder of record on March 23, 1998 (the "Record Date").
On the Record Date, there were ______________ shares of Common Stock
outstanding and entitled to vote at the meeting. Each outstanding share of
Common Stock is entitled to one vote. This Proxy Statement is first being sent
to the stockholders on or about April 1, 1998. A list of the stockholders
entitled to vote at the meeting will be available for inspection at the meeting
for purposes relating to the meeting.
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<PAGE>
MATTERS TO BE ACTED UPON
1. ELECTION OF DIRECTORS
The Board of Directors recommends that the stockholders vote FOR each
nominee for director set forth below. Seven directors are to be elected at the
meeting, each to hold office until his successor is elected and qualified or
until his earlier resignation, death or removal. Each nominee listed below is
currently a director of the Company. It is intended that the Proxies in the
form enclosed with this Proxy Statement will be voted for the nominees set forth
below unless stockholders specify to the contrary in their Proxies or
specifically abstain from voting on this matter.
The following information pertains to the nominees, their principal
occupations for the preceding five-year period, certain directorships and their
ages as of April 1, 1998:
Douglas A. Berthiaume, 49, has served as Chairman of the Board of Directors
of the Company since February 1996 and has served as President, Chief Executive
Officer and a Director of the Company since August 1994. From 1990 to 1994, Mr.
Berthiaume served as President of the Waters Chromatography Division of
Millipore (the "Predecessor"). Mr. Berthiaume is a Director of Genzyme
Corporation and the Chairman of the Analytical and Life Science Systems
Association.
Joshua Bekenstein, 39, has served as a Director of the Company since August
1994. He has been a Managing Director of Bain Capital, Inc. ("Bain") since
January 1993 and a General Partner of Bain Venture Capital since its inception
in 1987. Mr. Bekenstein is a Director of Stage Stores Inc., Totes Inc., Small
Fry Snack Foods, Inc. and Bright Horizons Children's Center, Inc.
Philip Caldwell, 78, has served as a Director of the Company since August
1994. Mr. Caldwell spent 32 years at Ford Motor Company where he served as
Chairman of the Board of Directors and Chief Executive Officer from 1980 to 1985
and as a Director from 1973 through 1990. He served as a Director and Senior
Managing Director of Lehman Brothers Inc. and its predecessor, Shearson Lehman
Brothers Holdings Inc. from 1985 to February 1998. Mr. Caldwell also served as a
Director of CasTech Aluminum Group, Inc., The Chase Manhattan Bank Corporation,
The Chase Manhattan Bank, N.A., Digital Equipment Corporation, Federated
Department Stores, Inc., Kellogg Company, Specialty Coatings International,
Inc., Zurich Reinsurance Centre Holdings, Inc., and American Guarantee &
Liability Insurance Company (a Zurich affiliate). Mr. Caldwell is the Chairman
of Mettler-Toledo International Inc. and a Director of Zurich Holding Company of
America, Inc., The Mexico Fund and Russell Reynolds Associates, Inc.
Edward Conard, 41, has served as a Director of the Company since August
1994. Mr. Conard has been a Managing Director of Bain since March 1993. Mr.
Conard was previously a Managing Director of Wasserstein Perella and Company, an
investment banking firm that specializes in mergers and acquisitions, and a Vice
President of Bain & Company heading up the firm's operations practice area. Mr.
Conard is a Director of Medical Specialties Group, Inc.
-3-
<PAGE>
Dr. Laurie H. Glimcher, 46, has served as a Director of the Company since
January 1998 pending election by the stockholders at an annual meeting. Dr.
Glimcher has been a Professor of Immunology and Medicine at the Harvard School
of Public Health and Harvard Medical School since 1990. Dr. Glimcher is a
Director of Bristol-Myers Squibb Company.
William J. Miller, 51, has served as a Director of the Company since
January 1998 pending election by the stockholders at an annual meeting. Since
April 1996, Mr. Miller has served as Chief Executive Officer and Chairman of the
Board of Avid Corporation and since September 1996, he has served as President.
From March 1992 to September 1995, Mr. Miller served as Chief Executive Officer
of Quantum Corporation. From May 1992, Mr. Miller served as a member of the
Board of Directors of Quantum Corporation and from September 1993 to August
1995, he served as Chairman of the Board of Directors. From 1981 to March 1992,
he served in various positions at Control Data Corporation, most recently as
Executive Vice President and President, Information Services. Mr. Miller is a
Director of NVidia Corporation and Innovex, Inc.
Thomas P. Salice, 38, has served as a Director of the Company since July
1994. Mr. Salice is a Managing Director of AEA Investors Inc. ("AEA") and has
served with AEA since May 1989. Mr. Salice is a Director of Mettler-Toledo
International, Inc. and Manchester Tank & Equipment Company.
2. RATIFICATION OF AUDITORS
The Board of Directors recommends that the stockholders vote FOR the
ratification of the firm of Coopers & Lybrand L.L.P. as the auditors to audit
the financial statements of the Company and certain of its subsidiaries for the
fiscal year ending December 31, 1998. It is intended that the Proxies in the
form enclosed with this Proxy Statement will be voted for such firm unless
stockholders specify to the contrary in their Proxies or specifically abstain
from voting on this matter.
Representatives of Coopers & Lybrand L.L.P. are expected to be present at
the Annual Meeting of Stockholders. They will have the opportunity to make
statements if they desire to do so and will be available to respond to
appropriate questions.
3. RESERVATION OF SHARES
The Board of Directors recommends that the stockholders vote FOR the
ratification of the reservation (the "Reservation") of an additional two million
shares of the Common Stock for issuance upon the exercise of stock options
granted under the Company's Long-Term Performance Incentive Plan (the "Plan")
for senior executives of the Company.
The Plan provides for the granting to employees and other key individuals
who perform services for the Company and its subsidiaries ("Participants") the
following types of incentive awards: stock options, stock appreciation rights,
restricted stock, performance units, performance grants and other types of
awards that the Compensation Committee of the Board of Directors deems to be
consistent with the purposes of the Plan. In 1996, the Plan was approved, and
an aggregate
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<PAGE>
of 1,000,000 shares of Common Stock was reserved for issuance under the Plan.
If the Reservation is ratified, an additional 2,000,000 shares of Common Stock
will be reserved for issuance under the Plan. The Participants are chosen at
the discretion of the Compensation Committee and currently number approximately
150.
4. OTHER BUSINESS
The Board of Directors does not know of any other business to be presented
at the Annual Meeting of Stockholders. If any other matters properly come before
the meeting, however, it is intended that the persons named in the enclosed form
of Proxy will vote said Proxy in accordance with their best judgment.
DIRECTORS MEETINGS AND COMPENSATION
DIRECTORS MEETINGS
The Board of Directors held five meetings during the year ended December
31, 1997. The Audit Committee, which currently consists of Messrs. Bekenstein,
Caldwell and Salice, oversees the activities of the Company's independent
auditors and recommends the engagement of auditors. The Compensation Committee,
which currently consists of Messrs. Conard and Salice, approves the compensation
of executives of the Company, makes recommendations to the Board of Directors
with respect to standards for setting compensation levels and administers the
Company's incentive plans. There is no standing nominating committee. During
fiscal year 1997, all of the Company's directors participated in excess of 75%
of the aggregate of the meetings of the Board of Directors and the meetings of
committees of the Board of Directors of which such director was a member.
During fiscal year 1997, the Compensation Committee and the Audit Committee each
met two times.
Marc Wolpow resigned on December 19, 1997 as a Director of the Company.
Pursuant to the provisions of the Company's Bylaws, the Board of Directors
resolved to fix the number of members of the Board of Directors at seven and
elected Dr. Laurie H. Glimcher and William J. Miller to fill the vacant director
positions until such time as they or their successors are elected by the
stockholders at an annual meeting.
COMPENSATION OF DIRECTORS
Directors who are full-time employees of the Company receive no additional
compensation for serving on the Board or its committees. Outside Directors each
receive a retainer of $17,500 per year (other than the Chairman who, if an
Outside Director, will receive an annual fee of $30,000), $1,000 for each Board
meeting, $750 for each committee meeting that they attend and an annual grant of
1,000 options under the Company's 1996 Non-Employee Director Stock Option Plan.
All directors are reimbursed for expenses incurred in connection with their
attendance at meetings.
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<PAGE>
MANAGEMENT COMPENSATION
SUMMARY COMPENSATION TABLE
The following Summary Compensation Table discloses, for the fiscal
years indicated, individual compensation information on Mr. Berthiaume and the
four other most highly compensated executive officers (collectively, the "named
executives") who were serving as executive officers at the end of fiscal year
1997.
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<PAGE>
<TABLE>
<CAPTION>
Annual Compensation
-------------------
Securities
Underlying
Options
Name and Principal (#) of
- ------------------ Fiscal Salary Bonus ------ All Other
Position Year ($) ($) Shares Compensation ($)
-------- ---- --- --- ------ ----------------
<S> <C> <C> <C> <C> <C> <C>
Douglas A. Berthiaume
Chairman, President 1997 400,000 490,000 (1) 45,000 29,484 (2)(3)(4)
and Chief Executive 1996 299,990 352,200 (5) 38,500 22,696
Officer 1995 275,002 548,414 (6)(7) - 26,914
Arthur G. Caputo 1997 184,990 200,836 (1) 27,000 12,967 (2)(3)(4)
Senior Vice President, 1996 160,004 164,480 (5) 22,000 11,446
Sales and Marketing 1995 149,994 345,714 (6)(7) - 15,685
Thomas W. Feller 1997 184,990 200,836 (1) 27,000 15,310 (2)(3)(4)
Senior Vice President, 1996 160,004 164,480 (5) 22,000 13,655
Operations 1995 155,012 352,714 (6)(7) - 16,236
John R. Nelson 1997 190,008 206,264 (1) 27,000 12,712 (2)(3)(4)
Senior Vice President, 1996 164,996 169,620 (5) 22,000 11,053
Research and 1995 160,004 359,714 (6)(7) - 18,086
Development
Philip S. Taymor 1997 184,990 200,836 (1) 27,000 12,289 (2)(3)(4)
Senior Vice President,
Finance and 1996 160,004 164,480 (5) 22,000 10,582
Administration and
Chief Financial 1995 149,994 395,714 (6)(7) - 16,799
Officer
</TABLE>
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<PAGE>
(1) Reflects bonus earned under the Company's Pay for Performance Plan in 1997
which was paid in 1998.
(2) Includes amounts contributed for the benefit of the named executive under
the Waters 401(k) Restoration Plan in 1997 as follows: Mr. Berthiaume
$22,131, Mr. Caputo $6,890, Mr. Feller $6,844, Mr. Nelson $7,227 and Mr.
Taymor $6,890.
(3) Includes amounts contributed for the benefit of the named executive under
the Waters Employee Investment Plan in 1997 as follows: Mr. Berthiaume
$4,569, Mr. Caputo $4,685, Mr. Feller $4,731, Mr. Nelson $4,662 and Mr.
Taymor $4,685.
(4) Includes amounts contributed for the benefit of the named executive under
Group Term Life Insurance in 1997 as follows: Mr. Berthiaume $2,784, Mr.
Caputo $1,392, Mr. Feller $3,735, Mr. Nelson $824 and Mr. Taymor $714.
(5) Reflects bonus earned under the Company's Pay for Performance Plan in 1996
which was paid in 1997.
(6) Reflects bonus earned under the Company's Pay for Performance Plan in 1995
which was paid in 1996 as follows: Mr. Berthiaume $412,700, Mr. Caputo
$210,000, Mr. Feller $217,000, Mr. Nelson $224,000 and Mr. Taymor $210,000.
(7) Reflects one-time cash bonus earned in 1995 and paid in 1996 in connection
with certain productivity programs implemented by senior management as
follows: Mr. Berthiaume $135,714, Mr. Caputo $135,714, Mr. Feller $135,714,
Mr. Nelson $135,714 and Mr. Taymor $185,714.
OPTION GRANTS IN FISCAL YEAR 1997
The following table shows information regarding stock option grants to the
named executives in fiscal year 1997.
<TABLE>
<CAPTION>
Potential Realizable Value at
Assumed Annual Rates of Stock
Price Appreciation For
Individual Grants 10-year Option Term
- -----------------------------------------------------------------------------------------------------------
Percent Of
Number Of Total
Securities Options
Underlying Granted Exercise
Options To Employees Price Expiration
Name Granted (#) In Fiscal Year ($/SH) Date 5% ($) 10% ($)
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Douglas A. Berthiaume 45,000 9.01% $42.75 12/02/07 $1,209,829 $ 3,065,957
- -------------------------------------------------------------------------------------------------------
Arthur G. Caputo 27,000 5.41% $42.75 12/02/07 $ 725,897 $ 1,839,574
- -------------------------------------------------------------------------------------------------------
Thomas W. Feller 27,000 5.41% $42.75 12/02/07 $ 725,897 $ 1,839,574
- -------------------------------------------------------------------------------------------------------
John R. Nelson 27,000 5.41% $42.75 12/02/07 $ 725,897 $ 1,839,574
- -------------------------------------------------------------------------------------------------------
Philip S. Taymor 27,000 5.41% $42.75 12/02/07 $ 725,897 $ 1,839,574
- -------------------------------------------------------------------------------------------------------
</TABLE>
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<PAGE>
AGGREGATED OPTION EXERCISES, HOLDINGS AND YEAR END VALUES FOR FISCAL YEAR 1997
The following table shows information regarding (i) the number of shares of
Common Stock acquired upon exercise by the named executives of stock options in
1997 and the value realized thereby and (ii) the number and value of any
unexercised stock options held by such executives as of December 31, 1997:
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised In-the
Shares Underlying Unexercised Money Options at
Acquired on Value Options at FY-End (#) FY-End ($)
Name Exercise (#) Realized ($) Exercisable/Unexercisable Exercisable/Unexercisable (1)
---- ------------ ------------ ------------------------- -----------------------------
<S> <C> <C> <C> <C>
Douglas A. 0 0 915,868/492,872 $23,859,471/$10,613,793
Berthiaume
Arthur G. Caputo 0 0 343,472/196,938 $ 8,985,626/$ 3,937,588
Thomas W. Feller 25,700 $1,100,217 317,772/196,938 $ 8,110,284/$ 3,937,588
John R. Nelson 28,950 $1,229,999 314,522/196,938 $ 7,999,589/$ 3,937,588
Philip S. Taymor 38,700 $1,654,581 304,772/196,938 $ 7,667,504/$ 3,937,588
</TABLE>
(1) Value is based on the closing price of the Common Stock on December 31, 1997
of $38.125.
AMENDMENT OF 1996 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
In 1997, the Compensation Committee adopted, and the Board of Directors
approved, an amendment of the Company's 1996 Non-Employee Director Stock Option
Plan (the "Plan"). The amendment effected the following changes to the Plan:
----
(i) the annual automatic grant of options under the Plan will be made on
December 1 (rather than July 1) of each year; (ii) the exercise price of options
granted under the Plan will be the fair market value of shares of Common Stock
on the date of grant (rather than 115% of fair market value) and (iii) certain
vesting and exercise provisions affecting options granted under the Plan will be
subject to the discretion of the Board of Directors.
COMPENSATION COMMITTEE INTERLOCKS
The Compensation Committee currently consists of Mr. Edward Conard and Mr.
Thomas Salice. Prior to the Company's initial public offering, each of Mr.
Conard and Mr. Salice also served as an officer of the Company.
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<PAGE>
COMPENSATION COMMITTEE REPORT
The Compensation Committee of the Board of Directors is responsible for
administering the compensation of senior executives of the Company and is
comprised of two independent non-employee directors.
The Committee's compensation philosophy is to focus management on achieving
financial and operating objectives which provide long-term stockholder value.
The Company's executive compensation programs are designed to align the interest
of senior management with those of the Company's stockholders. There are three
key components of executive compensation: base salary, pay for performance
(annual incentive), and long-term performance incentive. It is the intent of
these programs to attract, motivate and retain senior executives. It is the
philosophy of the Compensation Committee to allocate a significant portion of
cash compensation to variable performance-based compensation in order to reward
executives for high achievement.
Base Salary
The salaries for senior executives are reviewed annually and are based
upon a combination of factors including past individual performance, competitive
salary levels and an individual's potential for making significant contributions
to future Company performance. Increases to senior executives' base salaries in
fiscal year 1997 were determined by the Committee after consideration of the
Company's financial performance in fiscal year 1996, individual position and
responsibilities, and general and industry market surveys for comparable
positions.
Annual Incentive
The Pay for Performance Plan, an annual incentive award plan, is the
variable pay program for officers and other senior executives of the Company.
The purpose of the Pay for Performance Plan is to provide added motivation and
direction to senior executives to achieve operating results based on operating
budgets established at the beginning of the year. The Compensation Committee
evaluates the audited results of the Company's performance against previously
established performance targets in order to determine the individual bonuses
under the Pay for Performance Plan. The Company achieved a level of performance
required to pay bonuses for fiscal year 1997.
Long-Term Performance Incentive Plan
Stock options are an important component of senior executive
compensation and the Long-Term Performance Incentive Plan has been designed to
motivate senior executives and other key employees to contribute to the long-
term growth of stockholder value. Under the 1994 Amended and Restated Stock
Option Plan, stock options were also granted to the Company's senior executives
and other key individuals. The Compensation Committee authorizes awards under
the plan based upon recommendations from the Company's Chief Executive Officer.
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<PAGE>
Other Compensation
The Company's senior executives are also eligible to participate in
other compensation plans that are generally offered to other employees, such as
the Company's investment and savings plan, retirement plan, employee stock
purchase plan and supplemental employee retirement plan.
Chief Executive Compensation
Mr. Berthiaume's 1997 annual base salary was based on the Compensation
Committee's (the "Committee") evaluation of the Company's overall performance
and the salaries and compensation practices of peer companies of comparable
size. The Committee also considered the unusual circumstances surrounding the
Company which continued from its inception as a private concern in 1994, when it
acquired the predecessor business of its former parent, and its initial public
offering in 1995. Mr. Berthiaume elected to take a salary reduction in 1994 and
no base salary increase in 1995. After considering these factors, the Committee
elected to increase Mr. Berthiaume's annual base salary for fiscal year 1997 to
$400,000 from $300,000. Under the Pay for Performance Plan, the Compensation
Committee awarded Mr. Berthiaume a bonus of $490,000 for fiscal year 1997 based
upon the Company's performance as compared to pre-established criteria and
targets. Mr. Berthiaume received a stock option grant of 45,000 shares based on
the considerations described under the Long Term Performance Incentive Plan.
Limit on Deductible Compensation
The Compensation Committee has considered the application of Section
162(m) of the Internal Revenue Code to the Company's compensation practices.
Section 162(m) limits the tax deduction available to public companies for annual
compensation paid to senior executives in excess of $1 million unless the
compensation qualifies as performance-based. The annual cash compensation paid
to individual executives does not reach the $1 million threshold, and it is
believed that the stock incentive plans of the Company qualify as performance-
based. Therefore, the Committee does not believe any further action is
necessary in order to comply with Section 162(m). From time to time, the
Committee will reexamine the Company's compensation practices and the effect of
Section 162(m).
Mr. Edward Conard Mr. Thomas Salice
PERFORMANCE GRAPH
The following graph compares the cumulative total return on $100 invested
on November 17, 1995 (the first day of public trading of the Common Stock)
through December 31, 1997 (the last day of public trading of the Common Stock in
fiscal year 1996) in the Common Stock of the Company, the NYSE Market Index and
the SIC Code 3826 Index. The return of the indices is calculated assuming
reinvestment of dividends during the period presented. The Company has not paid
any dividends since its initial public offering. The stock price performance
shown on the graph below is not necessarily indicative of future price
performance.
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<PAGE>
COMPARISON OF CUMULATIVE TOTAL RETURN SINCE
THE DATE OF THE COMPANY'S INITIAL PUBLIC OFFERING,
NOVEMBER 17, 1995, AMONG WATERS CORPORATION
NYSE MARKET INDEX AND SIC CODE INDEX
[GRAPH]
11/17/95 12/31/95 12/31/96 12/31/97
- --------------------------------------------------------------------------------
Waters 100 120.66 200.83 252.07
- --------------------------------------------------------------------------------
SIC Code
Index 3826 100 108.68 130.06 154.29
- --------------------------------------------------------------------------------
NYSE Market
Index 100 102.31 123.24 162.13
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<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The table below sets forth certain information regarding beneficial
ownership of Common Stock as of March 23, 1998, by each person or entity known
to the Company who owns of record or beneficially five percent or more of the
Common Stock, by each named executive officer and director nominee and all
executive officers and director nominees as a group.
<TABLE>
<CAPTION>
NUMBER OF
SHARES PERCENTAGE OF
OF OUTSTANDING
COMMON COMMON
NAME STOCK(1) STOCK(1)
---- -------- --------
5% STOCKHOLDERS
<S> <C> <C>
Pilgrim Baxter & Associates, Ltd........................ 3,137,900
825 Duportail Road
Wayne, Pennsylvania 19087
FMR Corp................................................ 3,734,000
82 Devonshire Street
Boston, Massachusetts 02109
DIRECTORS AND EXECUTIVE OFFICERS
Douglas A. Berthiaume (2)(3)............................ 1,569,798
Arthur G. Caputo (2).................................... 415,833
Thomas W. Feller (2)(4)................................. 377,579
John R. Nelson (2)...................................... 342,797
Philip S. Taymor (2)(5)(6).............................. 408,391
Joshua Bekenstein (2)(7)(8) ............................ 1,350 *
Philip Caldwell (2)(7)(8)(9)............................ 33,740 *
Edward Conard (2)(7)(10)................................ 1,790 *
Dr. Laurie H. Glimcher.................................. -- *
William J. Miller....................................... -- *
Thomas P. Salice (2)(7)(8)(10)(11)...................... 31,346 *
All Directors and Executive Officers as a group ([11]
persons)............................................... 3,895,216
</TABLE>
* represents less than 1% of the total.
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<PAGE>
1. Figures are based upon __________ shares of Common Stock outstanding as of
March 23, 1998. The figures assume exercise by only the stockholder or
group named in each row of all options for the purchase of Common Stock
held by such stockholder or group which are exercisable within 60 days of
March 24, 1997.
2. Includes share amounts which the named individuals have the right to
acquire through the ownership of options which are exercisable within 60
days of March 23, 1998 as follows: Mr. Berthiaume 915,868, Mr. Caputo
293,472, Mr. Feller 277,772, Mr. Nelson 283,472, Mr. Taymor 264,772, Mr.
Bekenstein 1,000, Mr. Caldwell 1,000, Mr. Conard 1,000 and Mr. Salice
1,000.
3. Includes 17,250 shares held by Mr. Berthiaume's wife, Diana M. Berthiaume,
6,313 shares held in a family trust, 4,593 shares held in Mr. Berthiaume's
401K Plan and 1,059 shares held in the GST Trust account, for which shares
he disclaims beneficial ownership. The trustees of the GST Trust are his
spouse and another reporting person of the Company. Mr. Berthiaume gifted
100 shares to each of 5 nieces and nephews.
4. Includes 19,917 shares held by Mr. Feller's wife, for which shares he
disclaims beneficial ownership.
5. Includes 19,355 shares held by Mr. Taymor's wife, for which he disclaims
beneficial ownership.
6. Reporting person was named a trustee of a trust established by another
reporting person of the Company. The trust holds 1,059 shares of Company
stock, for which shares he disclaims beneficial ownership.
7. Reporting person elected to received deferred compensation in the form of
phantom stock: Mr. Bekenstein 350.15 shares, Mr. Caldwell 957.82 shares,
Mr. Conard 790.22 shares, Mr. Salice 202.47 shares.
8. Member of the Audit Committee.
9. Includes 31,782 shares held in trust for Mr. Caldwell's wife, for which
shares he disclaims beneficial ownership.
10. Member of the Compensation Committee.
11. Transferred shares to an account held in joint custody with his spouse.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
EMPLOYMENT AGREEMENTS
None of the executive officers have employment agreements with the
Company or any of its affiliates. None of them have any agreements entitling
them to termination or severance payments upon a change in control of the
Company nor a change in the named executive's responsibilities following a
change of control. However, each of the named executive officers is party to a
Management Subscription Agreement with the Company pursuant to which each named
executive officer has purchased shares of Common Stock in the Company. Each
executive officer is also the grantee of certain stock options from the Company
under one or more Stock Option Agreements. Pursuant to the terms of such
agreements the stock purchased under such agreements or available upon exercise
of the options may be subject to repurchase by the Company at the end of such
executive's employment with the Company. The Management Subscription Agreements
and the
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<PAGE>
Stock Option Agreements also impose certain additional restrictions upon the
executive, including confidentiality obligations, assignment of the benefit of
inventions and patents to the Company, a requirement that the executive devote
his or her exclusive business time to the Company, and noncompete restrictions
which extend in certain cases, depending on the basis on which his or her
employment is terminated, for a period of up to 24 months following his or her
termination date.
LOANS TO EXECUTIVE OFFICERS
The Company has made loans, in an aggregate principal amount of
$2,342,332 million, to certain executive officers of the Company. These loans
are full recourse loans and are secured by a pledge of certain of the shares of
Common Stock owned by such executive officers. The following executive officers'
loans are as of December 1, 1995, bear interest at 5.83% and have a maturity
date of December 1, 2000: Douglas A. Berthiaume, Chairman, President and Chief
Executive Officer, $650,919; Arthur G. Caputo, Senior Vice President, Sales and
Marketing, $245,825; Thomas W. Feller, Senior Vice President, Operations,
$245,825; Brian K. Mazar, Vice President, Human Resources and Investor
Relations, $247,843; John R. Nelson, Senior Vice President, Research and
Development, $204,854; Devette Russo, Vice President, Chromatography Chemistry
Division, $211,190; and Philip S. Taymor, Senior Vice President, Finance and
Administration and Chief Financial Officer, $245,825. The following executive
officers' loans are as of January 8, 1996, bear interest at 5.65% and have a
maturity date of January 8, 2001: Mr. Berthiaume $92,939, Mr. Caputo $34,629,
Mr. Feller $34,617, Mr. Mazar $34,629, Mr. Nelson $28,858, Ms. Russo $29,750 and
Mr. Taymor $34,629.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company has entered into agreements to provide indemnification for
its directors and executive officers in addition to the indemnification provided
for in the Company's Amended and Restated Certificate of Incorporation and
Amended and Restated Bylaws.
DIRECTOR AND OFFICER AND TEN PERCENT
STOCKHOLDER SECURITIES REPORTS
The federal securities laws require the Company's directors and
officers, and persons who own more than ten percent of the Company's Common
Stock, to file with the Securities and Exchange Commission, the New York Stock
Exchange and the Secretary of the Company initial reports of ownership and
reports of changes in ownership of the Common Stock of the Company. Four of the
Company's directors Messrs. Conard, Salice, Caldwell and Bekenstein filed
certain reports late during the fiscal year ended December 31, 1997.
Except for the foregoing, to the Company's knowledge, based solely on
review of the copies of such reports furnished to the Company and written
representations that no other reports were required, during the fiscal year
ended December 31, 1997 all of the Company's officers, directors and greater-
than-ten-percent beneficial owners made all required filings.
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<PAGE>
MATERIAL INCORPORATED BY REFERENCE
The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1997 as filed with the Securities and Exchange Commission is hereby
incorporated by reference.
STOCKHOLDER PROPOSALS
Proposals of stockholders to be presented at the 1999 Annual Meeting
of Stockholders must be received by the Secretary of the Company by November 4,
1998 to be considered for inclusion in the Company's Proxy Statement and form of
proxy relating to that meeting. It is anticipated that the 1999 Annual Meeting
will be scheduled on or about May 12, 1999.
[BACK COVER]
[1444-PS-97]
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<PAGE>
WATERS
The Officers and Directors of Waters Corporation
cordially invite you to attend
the Annual Meeting of Stockholders
to be held at Waters Corporation, 34 Maple Street,
Milford, Massachusetts on Tuesday, May 12, 1998 at 11:00 a.m.
Douglas A. Berthiaume
/s/ Douglas A. Berthiaume
Chairman, President and Chief Executive Officer
Please sign, date and return your proxy in the envelope provided even if you
plan to attend the meeting.
DETACH HERE
[X] Please mark votes in this example
1. To elect a Board of Directors for the ensuing year. Nominees: Joshua
Bekenstein, Douglas A. Berthiaume, Philip Caldwell, Edward Conard, Thomas
P. Salice, Dr. Laurie H. Glimcher and William J. Miller.
2. To ratify the selection of the firm of Coopers & Lybrand L.L.P. as auditors
for the fiscal year ended December 31, 1998.
FOR AGAINST ABSTAIN
[_] [_] [_]
3. To ratify the reservation of an additional two million shares of the
Company's common stock for issuance upon the exercise of stock options
granted under the Company's Long-Term Performance Incentive Plan.
FOR AGAINST ABSTAIN
[_] [_] [_]
4. To transact such other business as may properly come before the meeting.
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT [_]
MARK HERE IF YOU PLAN TO ATTEND THE MEETING [_]
(If signing as attorney, executor, trustee or guardian, please give your full
title as such. If shares are held jointly, each holders should sign.)
<PAGE>
Directions to
Waters Corporation
Annual Meeting
Date: May 12, 1998
Meeting Location: Waters Corporation
34 Maple Street
Milford, MA 01757
Tel (508) 478-2000
from Boston - Mass Turnpike West to Route 495, take Route 495 South to exit 19,
(Milford/Medway, Rt. 109), turn right at end of exit onto Route 109 West,
continue approximately 1/2 mile, turn left onto Birch St. (at Richards'
Restaurant). Take right at end of Birch St. and follow the signs to Waters.
from the West - Mass Turnpike East to Route 495, take Route 495 South to exit
19, (Milford/Medway, Rt. 109), turn right at end of exit onto Route 109 West,
continue approximately 1/2 mile, turn left onto Birch St. (at Richards'
Restaurant). Take right at end of Birch St. and follow the signs to Waters.
from the North or South -take Route 495 to exit 19, (Milford/Medway, Rt. 109),
turn at end of exit onto Route 109 West, continue approximately 1/2 mile, turn
left onto Birch St. (at Richards' Restaurant). Take right at end of Birch St.
and follow the signs to Waters.
PLEASE NOTE: THESE DIRECTIONS CAN BE REPEATED BY CALLING A RECORDING AT (508)
482-3314.
DETACH HERE
PROXY
WATERS CORPORATION
FOR ANNUAL MEETING OF STOCKHOLDERS - MAY 12, 1998
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
the undersigned hereby appoints Douglas A. Berthiaume and Philip S.
Taymor, and each or either of them, as the true and lawful attorneys of the
undersigned, with full power of substitution and revocation, and authorizes
them, and each of them, to vote all the shares of capital stock of the
Corporation which the undersigned is entitled to vote at said meeting and any
adjournment thereof upon the matters specified below and upon such other matters
as may be properly brought before the meeting or any adjournments thereof,
conferring authority upon such true and lawful attorneys to vote in their
discretion on such other matters as may properly come before the meeting and
revoking any proxy heretofore given.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO
DIRECTION IS GIVEN, WILL BE VOTED FOR THE ELECTION OF THE DIRECTORS AND FOR THE
PROPOSAL IN ITEM 2 AND ITEM 3, AND AUTHORITY WILL BE DEEMED GRANTED UNDER
PROPOSAL 4.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE [SEE REVERSE SIDE]
