8-KMaterial AgreementsExhibits & Filings

AGILENT TECHNOLOGIES, INC. 8-K Report, Material Agreement (Apr 12, 2006)

Filed April 12, 2006For Securities:A

Summary

Agilent Technologies, Inc. filed an 8-K report on April 12, 2006, detailing a material definitive agreement concerning the hiring of Keith Barnes as the Chief Executive Officer of its wholly owned subsidiary, Verigy Pte. Ltd. This appointment is a key step in the planned Initial Public Offering (IPO) of Verigy. The terms of Mr. Barnes's employment include a base salary, variable compensation opportunities, and significant equity awards tied to the Verigy IPO, emphasizing Agilent's commitment to its subsidiary's independent future. The agreement also outlines severance benefits contingent on the IPO's completion and Mr. Barnes's employment status. Investors should note that this filing signals Agilent's strategic move to spin off and take Verigy public. The compensation package for the new CEO of Verigy is substantial and designed to incentivize performance and retention, especially in the crucial period leading up to and following the IPO. The detailed severance provisions suggest a focus on securing leadership during this transitionary phase. The success of the Verigy IPO will be a critical factor for Agilent shareholders, as it represents a significant divestiture and potential value realization.

Key Highlights

  • 1Agilent Technologies appointed Keith Barnes as CEO of its subsidiary, Verigy Pte. Ltd., effective April 6, 2006.
  • 2The appointment is in preparation for Verigy's planned Initial Public Offering (IPO).
  • 3Mr. Barnes will receive an annual base salary of $500,000 and a target variable compensation bonus of 100% of his base salary.
  • 4Equity awards for Mr. Barnes include restricted stock valued at $800,000 and options for 750,000 shares, both priced at the IPO's public offering price.
  • 5Vesting for Mr. Barnes's equity awards will occur over four years, commencing on the IPO date.
  • 6Comprehensive severance benefits are detailed, including salary continuation, bonus payout, and medical coverage, with terms varying based on the IPO's completion and termination circumstances.
  • 7The filing indicates Agilent's strategy to move forward with the separation and public offering of its Verigy subsidiary.

Frequently Asked Questions

The main purpose of this 8-K filing is to report a material definitive agreement related to the hiring of Keith Barnes as the Chief Executive Officer of Agilent's subsidiary, Verigy Pte. Ltd. This appointment is a significant step towards Verigy's planned Initial Public Offering (IPO).

Mr. Barnes will receive an annual base salary of $500,000, with a target annual bonus opportunity of 100%. He is also granted restricted stock equivalent to $800,000 and options for 750,000 shares, both valued at the IPO's public offering price and vesting over four years.

Severance benefits are triggered under specific conditions. Before the IPO, these include involuntary termination without cause, voluntary termination with good reason, or if the IPO is not completed by December 31, 2006. After the IPO, severance is provided for involuntary termination without cause or voluntary termination for good reason within 24 months post-IPO. The benefits include salary, bonus, and medical coverage continuation.

This hiring signals Agilent's proactive steps in preparing its subsidiary Verigy for an IPO. For Agilent shareholders, it represents a strategic move to potentially unlock value from Verigy as a separate, publicly traded entity. The success of Verigy's IPO will be a key factor in the overall value realization for Agilent.