8-KMaterial Agreements

AGILENT TECHNOLOGIES, INC. 8-K Report, Material Agreement (Mar 7, 2006)

Filed March 7, 2006For Securities:A

Summary

This Form 8-K filing from Agilent Technologies, Inc. on March 7, 2006, reports on the shareholder approval of the Agilent Technologies, Inc. Long-Term Performance Program (LTP Program) on March 1, 2006. This program is designed to incentivize key employees through awards tied to multi-year performance targets, payable in Agilent common stock. The program outlines specific performance metrics and payout structures, including a minimum threshold for any payout to occur, aiming to align executive compensation with shareholder value creation. Key for investors is the structure of the LTP Program, which links executive compensation to both total shareholder return and earnings growth relative to a defined peer group. The filing details the specific performance criteria for awards ending in fiscal years 2006, 2007, and 2008, including a minimum performance requirement at the 25th percentile for total shareholder return and size-adjusted earnings growth to trigger any payout. The potential maximum payout is set at 200% of the target award, emphasizing the performance-driven nature of the compensation.

Key Highlights

  • 1Shareholder approval of the Agilent Technologies, Inc. Long-Term Performance Program (LTP Program) on March 1, 2006.
  • 2The LTP Program incentivizes key employees with performance-based awards denominated in Agilent common stock.
  • 3Awards are granted over three-fiscal year performance periods.
  • 4Performance targets can be based on a wide range of financial and operational metrics, including total stockholder return and earnings growth.
  • 5Minimum performance thresholds are established for payouts, requiring Agilent to achieve at least the 25th percentile in key metrics compared to a peer group.
  • 6The maximum payout for participants can be up to 200% of the target award, contingent on strong performance.
  • 7Specific payout thresholds and potential awards for named executive officers are detailed for performance periods ending in 2006, 2007, and 2008.

Frequently Asked Questions

The primary purpose of the LTP Program is to attract, retain, and motivate key employees by linking a significant portion of their compensation to the achievement of specific, multi-year performance objectives that are designed to drive long-term shareholder value.

Compensation under the LTP Program is directly tied to Agilent's performance against predetermined metrics, such as total stockholder return and size-adjusted growth in earnings, relative to a specified peer group. Payouts are contingent on meeting minimum performance thresholds, with higher performance potentially leading to greater awards, up to a maximum of 200% of the target award.

For the performance periods ending October 31, 2006, and October 31, 2007, payouts require Agilent to achieve at least the 25th percentile in both total stockholder return and size-adjusted growth in earnings compared to a peer group. For the period ending October 31, 2008, the requirement is at least the 25th percentile in total stockholder return compared to an expanded peer group.

No, awards are not guaranteed. Payouts are entirely performance-based. If the specified performance targets are not met, participants may receive no payout or only a portion of the target amount, depending on the level of performance achieved.