WATERS EMPLOYEE INVESTMENT PLAN
Notes to Financial Statements
December 31, 2020 and 2019
Investments in the Stock Fund are stated at fair value based on the quoted market price on the last business
day of the year for the Companys common stock and the fair value of short-term liquid investments included in the Stock Fund.
Investments in mutual
funds are stated at fair value based on the quoted net asset value of shares held by the Plan on the last business day of the year.
Investments under the
self-directed brokerage account are stated at fair value based on the quoted market prices on the last business day of the year.
Investments in common
collective trusts are stated at fair value based on the published net asset value (NAV) of its underlying investments at year end. While participant transactions for common collective trusts take place daily, certain events, such as the
premature termination of the contract by the Plan or the termination of the Plan, would require a redemption notice period of up to twelve months.
The
methods described above may produce a fair value that may not be indicative of the net realizable value or reflective of future fair value. Furthermore, while the Plan believes its valuation methods are appropriate and consistent with other market
participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.
4 Related-Party Transactions
Certain Plan investments
are shares of mutual funds or collective trusts managed by an affiliate of Fidelity, a subsidiary of which is the trustee of the Plan and, therefore, these transactions qualify as
party-in-interest transactions. Fees paid by the Plan to Fidelity or its affiliates for administrative services amounted to $466,604 for the year ended December 31,
2020. Transactions with respect to participant loans and the Stock Fund also qualify as party-in-interest transactions.
The Plan has investments in shares of the Companys common stock through the Stock Fund. During the year ended December 31, 2020, the Plan purchased
units in the Stock Fund in the amount of $1,621,314; sold units in the Stock Fund in the amount of $8,436,540; and had net investment appreciation of $2,972,653, administrative expenses of $59,791 and interest and dividend income of $4,413. The
total value of the Plans investment in the Stock Fund was $65,064,279 and $68,960,548 at December 31, 2020 and 2019, respectively.
Certain
operating expenses and management fees are returned to the Plan based on revenue sharing arrangements with Fidelity. As Fidelity is the trustee and custodian of the Plan, these transactions qualify as party-in-interest transactions. The revenue sharing amounts received are recorded as other income in the statement of changes in net assets available for benefits. The Plan received $728,246 in revenue
sharing payments for the year ended December 31, 2020, which was used to offset $466,604 of administrative expenses incurred by the Plan.
5 Plan
Amendment and Termination
The Company expects to continue the Plan indefinitely; however, it has the right to modify, amend or terminate the Plan at
any time subject to the provisions of the Code and ERISA. No such modification or amendment, however, shall have the effect of retroactively changing or depriving participants or beneficiaries of rights already accrued under the Plan. If the Plan is
terminated, participants will remain 100% vested in their account balances.
8