8-KLeadership ChangesMaterial AgreementsExhibits & Filings

AGILENT TECHNOLOGIES, INC. 8-K Report, Material Agreement (Apr 10, 2008)

Filed April 10, 2008For Securities:A

Summary

Agilent Technologies, Inc. filed a Form 8-K on April 10, 2008, reporting on material definitive agreements entered into on April 9, 2008. The company amended and restated its Indemnification Agreements for directors, Section 16 executive officers, and other board-elected officers. These new agreements will indemnify covered individuals to the fullest extent permitted by Delaware law, incorporating updated provisions regarding advance expense payments and limiting recovery to "actually and reasonably" incurred expenses. Additionally, Agilent amended and restated its Change of Control Severance Agreements for its CEO, Section 16 officers, and specified non-Section 16 executives. These updated agreements maintain similar conditions for severance pay eligibility, generally requiring a change of control coupled with involuntary termination without cause or constructive termination. Key changes include the elimination of non-compete provisions, allowing for non-adverse amendments without executive consent, and the inclusion of excise tax gross-ups to address potential tax consequences.

Key Highlights

  • 1Agilent Technologies entered into new Indemnification Agreements for its directors and key officers, enhancing legal protections.
  • 2The new Indemnification Agreements provide indemnification to the maximum extent allowed under Delaware law.
  • 3Changes to Indemnification Agreements include updated rules on advance expense payments and limitations on expense recovery.
  • 4Agilent amended and restated Change of Control Severance Agreements for its top executives, including the CEO.
  • 5Severance benefits under these agreements are triggered by a change of control combined with specific termination events (involuntary or constructive).
  • 6Key amendments to severance agreements include removing non-compete clauses and adding excise tax gross-ups for executives.
  • 7The severance multiples for the CEO, Section 16 officers, and other executives remain at three, two, and one times annual salary and target bonus, respectively.

Frequently Asked Questions

The new Indemnification Agreements commit Agilent to indemnify its directors and officers to the fullest extent permitted by Delaware law. Key updates include changes to the conditions for advancing expenses (requiring an undertaking to repay if not permitted by law) and limiting the recovery of expenses to those that are "actually and reasonably" incurred.

Severance benefits are generally triggered if a 'change of control' occurs AND either the executive's employment is involuntarily terminated without cause, or the executive resigns due to a constructive termination. Terminations must occur within a specified window before or after the change of control event (3 months prior to 24 months following).

The severance benefits include a cash payment based on multiples of annual base salary and target bonus (3x for CEO, 2x for Section 16 Officers, 1x for other specified executives), a lump sum in lieu of COBRA, vesting of all non-performance-based stock options and restricted stock, and a prorated amount of any variable pay.

Yes, a significant change is the elimination of the non-compete provision from these agreements. Additionally, the agreements now include an excise tax gross-up to help executives mitigate potential tax consequences related to change of control payments.