8-KMaterial AgreementsExhibits & Filings

AGILENT TECHNOLOGIES, INC. 8-K Report, Material Agreement (Sep 28, 2009)

Filed September 28, 2009For Securities:A

Summary

Agilent Technologies, Inc. filed an 8-K on September 28, 2009, reporting the entry into a new Change of Control Severance Agreement for Section 16 officers (excluding the CEO) effective September 22, 2009. This new agreement, approved by the Compensation Committee, replaces prior agreements for officers newly hired, promoted, or elected after July 14, 2009. Notably, the new agreement removes tax gross-up benefits previously offered. The severance package under this agreement is triggered by a change of control coupled with involuntary termination without cause, constructive termination resignation, or termination/constructive termination at the acquirer's request. Benefits include two times the officer's annual base salary and target bonus, a lump-sum payment in lieu of COBRA, and accelerated vesting of non-performance-based stock options and awards. Similar changes, including the removal of tax gross-ups, were also made to new change of control agreements for the CEO and other executive officers hired or promoted after July 14, 2009.

Key Highlights

  • 1Agilent Technologies entered into a new Change of Control Severance Agreement for Section 16 officers (excluding CEO) effective September 22, 2009.
  • 2This new agreement replaces prior agreements for newly hired, promoted, or elected Section 16 officers after July 14, 2009.
  • 3The updated severance agreement eliminates tax gross-up benefits.
  • 4Severance is payable if a change of control occurs AND employment is terminated involuntarily without cause or due to constructive termination (or similar scenarios initiated by an acquirer).
  • 5Severance includes two times annual salary and target bonus, COBRA continuation payment, and accelerated vesting of certain stock awards.
  • 6New change of control agreements for the CEO and other executives also remove tax gross-ups.

Frequently Asked Questions

The primary purpose of this 8-K filing is to announce Agilent Technologies, Inc.'s entry into a new Change of Control Severance Agreement for its Section 16 officers (excluding the CEO). This new agreement updates terms and conditions for executive compensation in the event of a change of control.

The most significant change in the new change of control severance agreements is the removal of tax gross-up benefits. This means that executives will not receive additional payments to cover excise taxes on their severance packages.

Severance benefits are payable only if two conditions are met: first, a 'change of control' (as defined in the agreement) must occur, and second, the executive's employment must be terminated involuntarily without cause, or the executive resigns due to a constructive termination, within a specified period (3 months before to 24 months after the change of control). Terminations or constructive terminations requested by an acquirer also trigger benefits.

The severance benefits include a cash payment equal to two times the officer's annual base salary plus target bonus, a lump-sum payment in lieu of continued COBRA health benefits, and the vesting of all outstanding non-performance-based stock options and stock awards.