UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to SectionPROXY STATEMENT PURSUANT TO SECTION 14(a) ofOF THE
SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by theSecurities Exchange Act of 1934 (Amendment No. ) Registrant ☒
Filed by a Party other than the Registrant ☐
Check the appropriate box:
☐ | Preliminary Proxy Statement | ||||
☐ | |||||
Confidential, Commission Only (as permitted by Rule 14a-6(e)(2)) | |||||
☒ | Definitive Proxy Statement | ||||
☐ | Definitive Additional Materials |
☐ | Soliciting Material Pursuant to §240.14a-12 |
AGILENT TECHNOLOGIES, INC. | ||
(Name of Registrant as Specified In Its Charter) | ||
(Name of Person(s) Filing Proxy Statement, if |
Payment of Filing Fee (Check the appropriate box):
No fee required. | ||||||
☐ | Fee computed on table below per Exchange Act Rules 14a-6(i) | |||||
(1) | Title of each class of securities to which transaction applies: | |||||
Aggregate number of securities to which transaction applies: | ||||||
Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): | ||||||
Proposed maximum aggregate value of transaction: | ||||||
Total fee paid: | ||||||
☐ | Fee paid previously with preliminary | |||||
☐ | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the | |||||
(1) | Amount Previously Paid: | |||||
(2) | Form, Schedule or Registration Statement No.: | |||||
Filing Party: | ||||||
Date Filed: | ||||||
Persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number. |
Agilent Technologies, Inc.
|
February 20142015
To our Stockholders:
I am pleased to invite you to attend the annual meeting of stockholders of Agilent Technologies, Inc. (“Agilent”) to be held on Wednesday, March 19, 201418, 2015 at 8:00 a.m., Pacific Standard Time, at Agilent’s headquarters located at 5301 Stevens Creek Blvd., Building No. 5, Santa Clara, California (U.S.A.). Details regarding admission to the annual meeting and the business to be conducted are more fully described in the accompanying Notice of Annual Meeting and Proxy Statement.
If you are unable to attend the annual meeting in person, you may listen through the Internet or by telephone. To listen to the live webcast, log on at www.investor.agilent.com and select the link for the webcast. To listen by telephone, please call (855) 447-3590(877) 312-5529 (international callers should dial (678) 809-1055.(253) 237-1147). The meeting pass codeidentification number is 18709457.45043300. The webcast will begin at 8:00 a.m. and will remain on Agilent’s website for one year. You cannot record your vote or ask questions on this website or at this phone number.
We have elected to take advantage of Securities and Exchange Commission rules that allow issuers to furnish proxy materials to their stockholders on the Internet. We believe that the rules will allow us to provide our stockholders with the information they need, while lowering the costs of delivery and reducing the environmental impact of the annual meeting.
Your vote is important. Whether or not you plan to attend the annual meeting, I hope that you will vote as soon as possible. Please review the instructions on each of your voting options described in the Proxy Statement and the Notice of Internet Availability of Proxy Materials you received in the mail.
Thank you for your ongoing support of, and continued interest in, Agilent.
Sincerely,
Admission to the annual meeting will be limited to stockholders. You are entitled to attend the annual meeting only if you are a stockholder of record as of the close of business on January 21, 2014,20, 2015, the record date, or hold a valid proxy for the meeting. In order to be admitted to the annual meeting, you must present proof of ownership of Agilent stock on the record date. This can be a brokerage statement or letter from a bank or broker indicating ownership on January 21, 2014,20, 2015, the Notice of Internet Availability of Proxy Materials, a proxy card, or legal proxy or voting instruction card provided by your broker, bank or nominee. Any holder of a proxy from a stockholder must present the proxy card, properly executed, and a copy of the proof of ownership. Stockholders and proxyholders may also be asked to present a form of photo identification such as a driver’s license or passport. Backpacks, cameras, cell phones with cameras, recording equipment and other electronic recording devices will not be permitted at the annual meeting. Agilent reserves the right to inspect any persons or proposals prior to their admission to the annual meeting. Failure to follow the meeting rules or permit inspection will be grounds for exclusion from the annual meeting.
AGILENT TECHNOLOGIES, INC.
5301 Stevens Creek Blvd.
Santa Clara, California 95051
(408) 553-2424
Notice of Annual Meeting of Stockholders
TIME | 8:00 a.m., Pacific Standard Time, on Wednesday, March | |
PLACE | Agilent’s Headquarters | |
Santa Clara, California (U.S.A.) | ||
ITEMS OF BUSINESS | (1) To elect | |
●Robert J. Herbold ●Koh Boon Hwee; and ●Michael R. McMullen | ||
| ||
(2) To ratify the Audit and Finance Committee’s appointment | ||
(3) To | ||
Performance-Based Compensation Plan for Covered Employees. (4) To approve amendments to our Amended and Restated Certificate of Incorporation and Bylaws to declassify the Board. (5) To approve, on a non-binding advisory basis, the compensation of Agilent’s named executive officers. | ||
(6) To consider such other business as may properly come before the annual meeting. | ||
RECORD DATE | You are entitled to vote at the annual meeting and at any adjournments or postponements thereof if you were a stockholder at the close of business on Tuesday, January | |
ANNUAL MEETING | To be admitted to the annual meeting, you must present proof of ownership of Agilent stock as of the record date. This can be a brokerage statement or letter from a bank or broker indicating ownership on January | |
VOTING | ||
For instructions on voting, please refer to the instructions on the Notice of Internet Availability of Proxy Materials you received in the mail or, if you received a hard copy of the Proxy Statement, on your enclosed proxy card. |
By Order of the Board, |
|
Senior Vice President, General Counsel and |
This Proxy Statement and the accompanying proxy card are being sent or made available
on or about February 5, 2014.6, 2015.
SUMMARY INFORMATION |
PROXY SUMMARY
The following is a summary which highlights information contained elsewhere in this Proxy Statement. This summary does not contain all of the information you should consider, and you are urged to read the entire Proxy Statement carefully before voting.
Voting Matters and Vote Recommendations
There are fourfive items of business which Agilent currently expects to be considered at the 2014 Annual Meeting. The following table lists those items of business and the Agilent Board’s vote recommendation.
PROPOSAL | BOARD VOTE RECOMMENDATION | |
(1) | Election of Directors | For each director nominee |
(2) | Ratification of the Independent Registered Public Accounting Firm | For |
(3) | Re-approval and amendment of the | For |
(4) | Amendments to our Amended and Restated Certificate of | For |
(5) | Advisory | For |
Proposal 1 - Director Nominees
Agilent’s Board is currently divided into three classes serving staggered three-year terms. Dr. Lawrence’sOn September 17, 2014, Mr. Sullivan notified the Company that he would retire as Chief Executive Officer and as a member of the Company’s board of directors effective March 18, 2015. Mr. McMullen, Agilent’s current term expires atPresident and Chief Operating Officer, is being nominated to fill the Annual Meeting,board vacancy left by Mr. Sullivan’s retirement and he will not stand for re-election ashe has reached retirement age as set forth in our Corporate Governance Standards.assume the title of Chief Executive Officer on March 18, 2015. The following table provides summary information about each of the twothree director nominees who are being voted on at the Annual Meeting.
COMMITTEE | OTHER | ||||||||
DIRECTOR | INDE- | MEMBERSHIPS | PUBLIC | ||||||
NAME | AGE | SINCE | OCCUPATION | PENDENT | AC | CC | NCG | EC | BOARDS |
Heidi Fields | 59 | 2000 | Former Executive | Yes | C | M | 1 | ||
Vice President and | |||||||||
Chief Financial | |||||||||
Officer of Blue Shield | |||||||||
of California | |||||||||
A. Barry Rand | 69 | 2000 | Chief Executive | Yes | M | M | 1 | ||
Officer of AARP |
COMMITTEE | OTHER | ||||||||
DIRECTOR | INDE- | MEMBERSHIPS | PUBLIC | ||||||
NAME | AGE | SINCE | OCCUPATION | PENDENT | AC | CC | NCG | EC | BOARDS |
Robert J. Herbold | 72 | 2000 | Managing Director of The Herbold Group, LLC | Yes | M | M | 1 | ||
Koh Boon Hwee | 64 | 2003 | Managing Partner, Credence Capital Fund II | Yes | C | M | 4 | ||
Michael R. McMullen | 53 | — | President and Chief | No | — |
Key: | AC: Audit Committee; CC: Compensation Committee; NCG: Nominating/Corporate Governance Committee; EC: Executive Committee; C: Chairperson; M: Member |
SUMMARY INFORMATION |
Proposal 2 - Independent Registered Public Accounting Firm
We ask that our stockholders ratify the selection of PricewaterhouseCoopers LLP as Agilent’s independent registered public accounting firm for fiscal year 2014.2015. Below is summary information about PricewaterhouseCoopers’ fees for services performed during fiscal years 20132014 and 2012:2013:
% of | % of | |||||||||||
Fee Category: | Fiscal 2013 | Total | Fiscal 2012 | Total | ||||||||
Audit Fees | $ | 4,984,000 | 83.1 | $ | 6,296,000 | 94.1 | ||||||
Audit-Related Fees | 762,000 | 12.7 | 105,000 | 1.6 | ||||||||
Tax Fees: | ||||||||||||
Tax compliance/preparation | 245,000 | 4.1 | 285,000 | 4.3 | ||||||||
Other tax services | 0 | 0 | 0 | 0.0 | ||||||||
Total Tax Fees | 245,000 | 4.1 | 285,000 | 4.3 | ||||||||
All Other Fees | 4,000 | 0.01 | 4,000 | 0.0 | ||||||||
Total Fees | $ | 5,995,000 | 100 | $ | 6,690,000 | 100 |
% of | % of | |||||||||||
Fee Category: | Fiscal 2014 | Total | Fiscal 2013 | Total | ||||||||
Audit Fees | $ | 7,791,000 | 76.8 | $4,984,000 | 83.1 | |||||||
Audit-Related Fees | 1,695,000 | 16.7 | 762,000 | 12.7 | ||||||||
Tax Fees: | ||||||||||||
Tax compliance/preparation | 265,000 | 2.6 | 245,000 | 4.1 | ||||||||
Other tax services | 0 | 0 | 0 | 0 | ||||||||
Total Tax Fees | 265,000 | 2.2 | 245,000 | 4.1 | ||||||||
All Other Fees | 392,000 | 3.9 | 4,000 | 0.01 | ||||||||
Total Fees | $ | 10,143,000 | 100 | $5,995,000 | 100 |
ReapprovalProposal 3 - Re-approval and Amendment of the Performance-Based Compensation Plan for Covered Employees
At the Annual Meeting, Agilent is requesting that stockholders approve the material terms of the Agilent Technologies, Inc. Performance-Based Compensation Plan for Covered Employees (the “Performance Plan”) and approve an amendment to the Performance GoalsPlan that will provide the ability to pay awards under the 2009 StockPerformance Plan
This proposal does not seek any amendment in the form of cash and/or Agilent common stock. Subject to stockholder approval, the existing provisions of, or performance goals contained within, the 2009 Stock Plan. Rather, this proposal is being presented to stockholders solely to address the periodic approval requirements ofPerformance Plan, as amended, will be effective commencing with fiscal year 2015. Section 162(m) of the Internal Revenue Code.
Code requires that the stockholders approve the material terms of the Performance Plan at least every five years. The performance goals set forth in the 2009 StockPerformance Plan were lastwas most recently approved by our stockholders five years ago,at the 2010 annual meeting.
As proposed for approval, and there have been no changes to that listwith the exception of potential performance goals since that time. In order to continue to provide us with the ability to deductpay awards under the performance-based compensation that we structure to comply with Section 162(m) and we payPerformance Plan in the form of cash and/or Agilent common stock, the Performance Plan is substantially the same as the version approved by the stockholders in 2010.
Proposal 4 - Amendments to our ChiefAmended and Restated Certificate of Incorporation and Bylaws to Declassify the Board
As part of the Company’s commitment to effective governance practices, management and the Board undertook a review of current corporate governance trends and considered the view held by many institutional stockholders that transitioning to an annually elected board is preferable to maintaining a classified board. After careful consideration the Board has determined that it is appropriate to propose for stockholder consideration amendments to our Amended and Restated Certificate of Incorporation and Bylaws that, if adopted, would eliminate the classified structure of our Board over a three-year period.
If this proposal is approved by the requisite percentage of stockholders, the Company will transition to a declassified structure under which current directors will serve out their remaining terms prior to standing for election and the entire Board will stand for election annually beginning in 2018. As part of the transition, at the Annual Meetings of Stockholders in 2016 and 2017, each of the Class I and Class II directors, respectively, will begin standing for annual election. The proposed amendments will not affect the unexpired term of any director elected prior to the Annual Meeting of Stockholders in 2016.
SUMMARY INFORMATION |
Proposal 5 - Approve Named Executive Officer and our otherCompensation
We are requesting your non-binding vote to approve the compensation of the Company’s named executive officers (other than our Chief Financial Officer) for an additional five years, we are submittingas described in the list of performance goalsCompensation Discussion and related provisions under our Plan to our stockholders for reapproval.
Analysis and Executive Compensation Matters
sections of the proxy statement. The proxy statement contains information about Agilent’s executive compensation programs. In particular, you will find detailed information in the Compensation Discussion and Analysis starting on page 41 and the Executive Compensation tables starting on page 59.tables.
Our executive officers are compensated in a manner consistent with Agilent’s business strategy, competitive practice, sound compensation governance principles, and stockholder interests and concerns. Our compensation policies and decisions are focused on pay-for-performance. As you can read, our executive compensation programs have remained substantially the same for several years, and weWe believe that our programs are well aligned with the interests of our shareholders and are instrumental to achieving our business strategy.
In determining executive compensation for fiscal year 2013,2014, the Compensation Committee considered the overwhelming stockholder support (94%(97% approval of votes cast) that the “Say-on-Pay” proposal received at our March 21, 201220, 2013 annual meeting of stockholders. As a result, theThe Compensation Committee continued to applybelieves that the same effective principlesshareholder vote confirms the philosophy and philosophy it has used in previous years in determiningobjective of linking our executive compensation to our operating and strategic objectives and the enhancement of shareholder value. We view this level of shareholder support as an affirmation of our current pay practices for fiscal year 2014. The Compensation Committee will continue to consider stockholder concerns and feedback in the future. Fiscal year 2013 was successful for Agilent despite uncertainties in the economy. Consistent with our philosophy to pay for performance, our CEO’s total direct compensation for the fiscal year was aligned with our annual total shareholder return.
We are requesting your non-binding vote to approve the compensationoutcome of the Company’s say-on-pay votes when making future compensation decisions for the named executive officers as described on pages 41 to 72, including the Summary Compensation Table and subsequent tables on pages 59 to 72 of the proxy statement.officers.
TABLE OF CONTENTS |
20142015 ANNUAL MEETING OF STOCKHOLDERS
NOTICE OF ANNUAL MEETING AND PROXY STATEMENT
TABLE OF CONTENTS
TABLE OF CONTENTS |
20142015 ANNUAL MEETING OF STOCKHOLDERS
NOTICE OF ANNUAL MEETING AND PROXY STATEMENT
TABLE OF CONTENTS
TABLE OF CONTENTS |
20142015 ANNUAL MEETING OF STOCKHOLDERS
NOTICE OF ANNUAL MEETING AND PROXY STATEMENT
TABLE OF CONTENTS
ELECTION OF DIRECTORS |
PROPOSAL 1 – ELECTION OF DIRECTORS
Director Nomination Criteria: Qualifications and Experience
The Nominating/Corporate Governance Committee (the “Nominating Committee”) performs an assessment of the skills and the experience needed to properly oversee the interests of the Company. Generally the Nominating Committee reviews both the short and long term strategies of the Company to determine what current and future skills and experience are required of the Board in exercising its oversight function. The Nominating Committee then compares those skills to the skills of the current directors and potential director candidates. The Nominating Committee conducts targeted efforts to identify and recruit individuals who have the qualifications identified through this process. The Nominating Committee looks for its current and potential directors collectively to have a mix of skills and qualifications, some of which are described below:
In addition to these minimum requirements, the Nominating Committee will also consider whether the candidate’s skills are complementary to the existing Board members’ skills; the diversity of the Board in factors such as age, experience in technology, manufacturing, finance and marketing, international experience and culture; and the Board’s needs for specific operational, management or other expertise. The Nominating Committee from time to time reviews the appropriate skills and characteristics required of board members, including factors that it seeks in board members such as diversity of business experience, viewpoints and, personal background, and diversity of skills in technology, finance, marketing, international business, financial reporting and other areas that are expected to contribute to an effective Board of Directors. In evaluating potential candidates for the Board of Directors, the Nominating Committee considers these factors in the light of the specific needs of the Board of Directors at that time.
Current Director Terms
Agilent’s Board is divided into three classes serving staggered three-year terms. Directors for each class are elected at the annual meeting of stockholders held in the year in which the term for their class expires. Agilent’s Bylaws, as amended, allow the Board to fix the number of directors by resolution. Our Board currently consists of nine directors divided into three classes.
If Proposal 4 is approved by the requisite percentage of stockholders at the Annual Meeting, the Company will transition to a declassified structure under which the entire Board will stand for election annually beginning in 2018. As part of the transition, at the Annual Meetings of Stockholders in 2016 and 2017, each of the Class I and Class II directors, respectively, will begin standing for annual election. The proposed amendments will not affect the unexpired term of any director elected prior to the Annual Meeting of Stockholders in 2016.
ELECTION OF DIRECTORS |
The terms of the two current director nominees will expire at this Annual Meeting. Dr. Lawrence’s term expires at this Annual Meeting,On September 17, 2014, Mr. Sullivan notified the Company that he would retire as Chief Executive Officer and he willas a member of the Company’s board of directors effective March 18, 2015 and would not stand for re-election as he has reachedat this Annual Meeting. Mr. McMullen, Agilent’s current President and Chief Operating Officer is being nominated to fill the vacancy left by Mr. Sullivan’s retirement age as set forth in our Corporate Governance Standards. Pursuant to resolutions passed byand will assume the Board, Agilent’s bylaws will be amended effective immediately after the timetitle of the annual meeting to reduce the authorized number of directors to eight. Chief Executive Officer on March 18, 2015.
The current composition of the Board and the term expiration dates for each director is as follows:
Class | Directors | Term Expires |
III | Robert J. Herbold, Koh Boon Hwee and William P. Sullivan | 2015 |
I | Paul N. Clark, James G. Cullen and Tadataka Yamada, M.D. | 2016 |
II | Heidi Fields, | |
|
Directors elected at the 20142015 annual meeting will hold office for a three-year term expiring at the annual meeting in 20172018 (or until their respective successors are elected and qualified, or until their earlier death, resignation or removal). All of the nominees, except Mr. McMullen, are currently directors of Agilent. Information regarding each of the nomineesnominee is provided below as of December 31, 2013.2014. There are no family relationships among Agilent’s executive officers and directors.
Director Nominees for Election to New Three-Year Terms That Will Expire in 20172018
Age: | Agilent Committees: | Public Directorships: |
Director Since: |
| ●Neptune Orient Lines Limited |
June 2000 | ●Nominating/Corporate Governance |
|
Former Public Directorships Held During the Past Five Years: | ||
|
Ms. Fields served as Executive Vice President and Chief Financial Officer of Blue Shield of California from September 2003 through December 2012. She served as Executive Vice President and the Chief Financial Officer of Gap, Inc. from 1999 to January 2003. Prior to assuming that position, Ms. Fields served as the Chief Financial Officer of ITT Industries, Inc. from 1995 to 1999. From 1979 to 1995, she held senior financial management positions at General Motors Corporation, including Vice President and Treasurer.
Ms. Fields possesses significant experience and experience in management and financial matters, having served as the Chief Financial Officer of both public and private companies, including at Blue Shield of California, Gap, Inc. and ITT Industries, Inc. Ms. Fields is the chairperson of our Audit and Finance Committee and is qualified as a financial expert under SEC guidelines. In addition, Ms. Fields has considerable experience and expertise with Agilent having been a member of Agilent’s board of directors for over 10 years.
|
|
|
|
|
|
| ||
None |
Mr. Rand has served as the Chief Executive Officer of AARP since April 2009. He served as Chairman and Chief Executive Officer of Equitant from February 2003 to April 2005 and as Non-Executive Chairman of Aspect Communications from February 2003 to October 2005. Mr. Rand was the Chairman and Chief Executive Officer of Avis Group Holdings, Inc. from November 1999 to April 2001. Prior to joining Avis Group, Mr. Rand was Executive Vice President, Worldwide Operations, for Xerox Corporation from 1992 to 1999. Mr. Rand is Chairman of the Board of Trustees of Howard University and holds a MBA from Stanford University where he also was a Stanford Sloan Executive Fellow. Mr. Rand also holds several honorary doctorate degrees.
Mr. Rand possesses a strong mix of organizational and operational management skills having served as the chairman and/or chief executive officer of numerous companies, including past roles with Equitant, Avis Group Holdings and Aspect Communications, and his current position with the AARP. He brings public company director experience and perspective from his membership on the Campbell Soup board of directors and has considerable expertise with Agilent having served as a director for over 10 years.
Agilent’s Board recommends a vote FOR the election to the Board of each of theforegoing nominees.
|
Continuing Directors Not Being Considered for Election at this Annual Meeting
The Agilent directors whose terms are not expiring this year are listed below. They will continue to serve as directors for the remainder of their terms or such other date, in accordance with Agilent’s Bylaws. Information regarding each of such directors is provided below.
Directors Whose Terms Will Expire in 2015
|
|
|
|
|
|
| ||
|
Mr. Herbold has served as the Managing Director of the consulting firm The Herbold Group, LLC since 2003. He served as Executive Vice President and Chief Operating Officer of Microsoft Corporation from 1994 to April 2001 and served as an Executive Vice President (part-time) of Microsoft Corporation until June 2003. Prior to joining Microsoft, Mr. Herbold was employed by The Procter & Gamble Company for twenty-six years, and served as a Senior Vice President at The Procter & Gamble Company from 1990 to 1994.
Mr. Herbold possesses significant leadership experience and business expertise from his executive leadership positions with Microsoft Corporation and The Procter & Gamble Company. Having been a member of the Agilent board for over 10 years, Mr. Herbold has a strong knowledge of Agilent’s business. In addition, Mr. Herbold brings considerable public and private company director experience and perspective on public company management and governance issues and practices.
ELECTION OF DIRECTORS |
KOH BOON HWEE | ||
Age:64 | Agilent Committees: | Public Directorships: |
Director Since: | ●Compensation (Chair) | ●AAC Technologies Holdings, Inc. |
May 2003 | ●Nominating/Corporate Governance | ●Sunningdale Tech, Ltd. |
●Yeo Hiap Seng Ltd. | ||
●Far East Orchard Ltd. | ||
|
|
|
|
|
|
Former Public Directorships Held During the Past Five Years: | ||
| ||
●DBS Bank Ltd. | ||
●Yeo Hiap Seng (Malaysia) Bhd |
Mr. Koh is the managing partner of Credence Capital Fund II (Cayman) Ltd., a private equity fund. Mr. Koh has served as the non-Executive Chairman of Sunningdale Tech Ltd. since January 2009 and previously served as its Executive Chairman and Chief Executive Officer from July 2005 to January 2009. He has served as the non-Executive Chairman of Yeo Hiap Seng Ltd. since April 2010, the non-Executive Chairman of Rippledot Capital Advisers Pte. Ltd. since February 2011 and the non-Executive Chairman of Far East Orchard Ltd. since April 2013. He served as Executive Director of MediaRing Limited from February 2002 to August 2009; Chairman of DBS Bank Ltd. from January 2006 to April 2010; Chairman of Singapore Airlines from July 2001 to December 2005 and Chairman of Singapore Telecom from April 1992 to August 2001. Mr. Koh spent fourteen years with Hewlett-Packard Company in its Asia Pacific region.
Mr. Koh possesses a strong mix of leadership and operational experience from his various senior positions with Sunningdale Tech, AAC Technologies, MediaRing Limited, DBS Bank, Singapore Airlines and Singapore Telecom. In addition, Mr. Koh has deep experience in the Asia Pacific region and brings that knowledge and perspective to the Board. Mr. Koh has extensive experience with Agilent and its predecessor, Hewlett-Packard, having served on the Agilent board for over 910 years and having spent 14 years with Hewlett-Packard.
|
Age: | Agilent Committees: | Public Directorships: | |
Director Since: |
| None | |
New Nominee | Executive Committee |
| |
Former Public Directorships Held During the Past Five Years: | |||
None |
Mr. SullivanMcMullen has served as Agilent’s Chief Executive Officer since March 2005 and served as President since September 2013. He previously served as President from March 2005 to November 2012.Before being named as Agilent’s Chief Executive Officer, Mr. Sullivan served as Executive Vice President and Chief Operating Officer from March 2002 to March 2005. In that capacity, he sharedsince September 2014 and will assume the responsibilitiestitle of the president’s office with Agilent’s former President and Chief Executive Officer Edward W. Barnholt. Mr. Sullivan also had overall responsibility for Agilent’s Electronic Productseffective as of March 18, 2015. From September 2009 to September 2014 he served as Senior Vice President, Agilent and President, Chemical Analysis Group. From January 2002 to September 2009, he served as our Vice President and General Manager of the Chemical Analysis Solutions Group,Unit of the company’s largest business group.Life Sciences and Chemical Analysis Group. Prior to assuming thatthis position, from March 1999 to December 2001, Mr. McMullen served as Country Manager for Agilent’s China, Japan and Korea Life Sciences and Chemical Analysis Group. Prior to this position, Mr. SullivanMcMullen served as our Senior Vice President, Semiconductor Products Group,Controller for the Hewlett-Packard Company and Yokogawa Electric Joint Venture from August 1999July 1996 to March 2002. Before that, 1999.
Mr. Sullivan held various management positions at Hewlett-Packard Company.
Mr. SullivanMcMullen has broad and deep experience with Agilent and its businesses having been an employee of Agilent and its predecessor, Hewlett-Packard, for over 3020 years. During the course of his career, he has developed considerable expertise in, and in-depth knowledge of, Agilent’s businesses, having seen them as an individual contributor and at numerous levels of management. This perspective gives valuable insight to the Agilent board. Mr. Sullivan also brings public company director experience and perspective from his current positions on
Agilent’s Board recommends a vote FOR the URS Corporation and Avnet boards.election to the Board of each of the
foregoing nominees.
ELECTION OF DIRECTORS |
Continuing Directors Not Being Considered for Election at this Annual Meeting
The Agilent directors whose terms are not expiring this year are listed below. They will continue to serve as directors for the remainder of their terms or such other date, in accordance with Agilent’s Bylaws. Information regarding each of such directors is provided below.
Directors Whose Terms Will Expire in 2016
PAUL N. CLARK | ||
Age: | Agilent Committees: | Public Directorships: |
Director Since:May 2006 |
| ●Biolase, Inc. |
●Nominating/Corporate Governance |
●Keysight Technologies, Inc. | |
Former Public Directorships Held During the Past Five Years: | ||
●Amylin Pharmaceuticals, Inc. | ||
��Talecris Biotherapeutics Holdings Corp |
Mr. Clark has been a Strategic Advisory Board member of Genstar Capital, LLC since August 2007 and was an Operating Partner from August 2007 to January 2013. Genstar Capital LLC is a middle market private equity firm that focuses on investments in selected segments of life sciences and healthcare services, industrial technology, business services and software. Prior to that, Mr. Clark was the Chief Executive Officer and President of ICOS Corporation, a biotherapeutics company, from June 1999 to January 2007, and the Chairman of the Board of Directors of ICOS from February 2000 to January 2007. From 1984 to December 1998, Mr. Clark worked in various capacities for Abbott Laboratories, a health care products manufacturer, retiring from Abbott Laboratories as Executive Vice President and a board member. His previous experience included senior positions with Marion Laboratories, a pharmaceutical company, and Sandoz Pharmaceuticals (now Novartis Corporation), a pharmaceutical company.
Mr. Clark has significant experience in the pharmaceutical and biotechnology industries, including his experience serving in senior management positions with ICOS Corporation (where he served as Chief Executive Officer and President), Abbott Laboratories, Marion Laboratories and Sandoz Pharmaceuticals. In addition, Mr. Clark brings considerable public company director experience and perspective on company management and governance issues and practices.
|
JAMES G. CULLEN | ||
Age: | Agilent Committees: | Public Directorships: |
Director Since: |
|
|
April 2000 | Governance (Chair) | ●Prudential Financial, Inc. |
●Executive (Chair) | ●Neustar, Inc. | |
●Keysight Technologies, Inc. | ||
Former Public Directorships Held During the Past Five Years: | ||
None |
Mr. Cullen has been a director of Agilent since April 2000 and theserved as Non-Executive Chairman of theour Board since March 2005. Mr. Cullen was President and Chief Operating Officer of Bell Atlantic Corporation (now known as Verizon) from 1997 to June 2000 and a member of the office of chairman from 1993 to June 2000. Prior to this appointment, Mr. Cullen was the President and Chief Executive Officer of the Telecom Group of Bell Atlantic from 1995 to 1997. Prior to the creation of Bell Atlantic on January 1, 1984, Mr. Cullen held management positions with New Jersey Bell from 1966 to 1981 and AT&T from 1981 to 1983.
ELECTION OF DIRECTORS |
Mr. Cullen has considerable managerial and operational experience and expertise from his senior leadership position with Bell Atlantic and its predecessors. In addition, Mr. Cullen brings significant public company director experience and perspective on public company management and governance. Mr. Cullen has a strong understanding of Agilent having served on the board for over 10 years, including more than 5 years as the non-executive chairman.
TADATAKA YAMADA, M.D. | |||
Age: | Agilent Committees: | Public Directorships: | |
Director Since: |
|
| |
January 2011 | ●Nominating/Corporate Governance | ||
Former Public Directorships Held During the Past Five Years: | |||
|
Dr. Yamada currently serves as the Chief Medical and Scientific Officer of Takeda Pharmaceuticals International, Inc., a research-based global pharmaceutical company. Dr. Yamada previously served as President of the Global Health Program of the Bill & Melinda Gates Foundation from June 2006 to June 2011. From 2000 to 2006, Dr. Yamada was Chairman of Research and Development for GlaxoSmithKline Inc. and prior to that, he held research and development positions at SmithKline Beecham. Prior to joining SmithKline Beecham, Dr. Yamada was Chairman of the Department of Internal Medicine at the University of Michigan Medical School and Physician-in-Chief of the University of Michigan Medical Center.
Dr. Yamada brings to our Board a unique perspective with his experience as the former President of the Global Health Program of the Bill & Melinda Gates Foundation as well as his significant research and development experience. Dr. Yamada’s extensive pharmaceutical industry knowledge gives him an insight into a number of issues facing Agilent that other directors might not possess.
Directors Whose Terms Will Expire in 2017
HEIDI FIELDS | ||
Age:60 | Agilent Committees: | Public Directorships: |
Director Since: | ●Audit and Finance (Chair) | ●Financial Engines, Inc. |
February 2000 | ●Nominating/Corporate Governance | ●Halyard Health, Inc. |
Former Public Directorships Held During the Past Five Years: | ||
None |
Ms. Fields served as Executive Vice President and Chief Financial Officer of Blue Shield of California from September 2003 through December 2012. She served as Executive Vice President and the Chief Financial Officer of Gap, Inc. from 1999 to January 2003. Prior to assuming that position, Ms. Fields served as the Chief Financial Officer of ITT Industries, Inc. from 1995 to 1999. From 1979 to 1995, she held senior financial management positions at General Motors Corporation, including Vice President and Treasurer.
Ms. Fields possesses significant experience and experience in management and financial matters, having served as the Chief Financial Officer of both public and private companies, including at Blue Shield of California, Gap, Inc. and ITT Industries, Inc. Ms. Fields is the chairperson of our Audit and Finance Committee and is qualified as a financial expert under SEC guidelines. In addition, Ms. Fields has considerable experience and expertise with Agilent having been a member of Agilent’s board of directors for over 10 years.
ELECTION OF DIRECTORS |
A. BARRY RAND | ||
Age:70 | Agilent Committees: | Public Directorships: |
Director Since: | ●Compensation | ●Campbell Soup Company |
November 2000 | ●Nominating/Corporate Governance | |
Former Public Directorships Held During the Past Five Years: | ||
None |
Mr. Rand served as the Chief Executive Officer of AARP from April 2009 to August 2014. He served as Chairman and Chief Executive Officer of Equitant from February 2003 to April 2005 and as Non-Executive Chairman of Aspect Communications from February 2003 to October 2005. Mr. Rand was the Chairman and Chief Executive Officer of Avis Group Holdings, Inc. from November 1999 to April 2001. Prior to joining Avis Group, Mr. Rand was Executive Vice President, Worldwide Operations, for Xerox Corporation from 1992 to 1999. Mr. Rand is Chairman of the Board of Trustees of Howard University and holds a MBA from Stanford University where he also was a Stanford Sloan Executive Fellow. Mr. Rand also holds several honorary doctorate degrees.
Mr. Rand possesses a strong mix of organizational and operational management skills having served as the chairman and/or chief executive officer of numerous companies, including past roles with Equitant, Avis Group Holdings, Aspect Communications and AARP. He brings public company director experience and perspective from his membership on the Campbell Soup board of directors and has considerable expertise with Agilent having served as a director for over 10 years.
GEORGE A. SCANGOS, Ph.D. | ||
Age:66 | Agilent Committees: | Public Directorships: |
Director Since: | ●Compensation | ●Biogen Idec, Inc. |
September 2014 | ●Nominating/Corporate Governance | ●Exelixis, Inc. |
Former Public Directorships Held During the Past Five Years: | ||
●Anadys Pharmaceuticals, Inc. |
Dr. Scangos has served as the Chief Executive Officer and a director of Biogen Idec Inc. since July 2010. From 1996 to July 2010, Dr. Scangos served as the President and Chief Executive Officer of Exelixis, Inc., a drug discovery and development company. From 1993 to 1996, Dr. Scangos served as President of Bayer Biotechnology, where he was responsible for research, business development, process development, manufacturing, engineering and quality assurance of Bayer’s biological products. Before joining Bayer in 1987, Dr. Scangos was a Professor of Biology at Johns Hopkins University for six years. Dr. Scangos served as non-executive Chairman of Anadys Pharmaceuticals, Inc., a biopharmaceutical company, from 2005 to July 2010 and was a director of the company from 2003 to July 2010. Dr. Scangos served as the Chair of the California Healthcare Institute in 2010 and was a member of the Board of the Global Alliance for TB Drug Development from 2006 until 2010. He is also a member of the National Board of Visitors of the University of California, Davis School of Medicine and is currently an Adjunct Professor of Biology at Johns Hopkins University.
Dr. Scangos has extensive training as a scientist, significant knowledge and experience with respect to the biotechnology, healthcare and pharmaceutical industries, and a comprehensive leadership background resulting from service on various boards of directors and as an executive in the pharmaceutical industry.
CORPORATE GOVERNANCE |
Corporate Governance Matters
Agilent has had formal corporate governance standards in place since the Company’s inception in 1999. We have reviewed internally and with the Board the provisions of the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley Act”), the rules of the SEC and the NYSE’s corporate governance listing standards regarding corporate governance policies and processes and are in compliance with the rules and listing standards.
We have adopted charters for our Compensation Committee, Audit and Finance Committee, Nominating/Corporate Governance Committee and Executive Committee consistent with the applicable rules and standards. Our committee charters, Amended and Restated Corporate Governance Standards and Standards of Business Conduct are located in the Investor Relations section of our website and can be accessed by clicking on “Governance Policies” in the “Corporate Governance” section of our web page at www.investor.agilent.com.
Board Leadership Structure
Agilent currently separates the positions of chief executive officer and chairman of the Board. Since March 2005, Mr. Cullen, one of our independent directors, has served as our chairman of the Board. The responsibilities of the chairman of the Board include: setting the
the agenda for each Board meeting, in consultation with the chief executive officer; chairing the meetings of independent directors; and facilitating and conducting, with the Nominating/Corporate Governance Committee, the annual self-assessments by the Board and each standing committee of the Board, including periodic performance reviews of individual directors.
Separating the positions of chief executive officer and chairman of the Board allows our chief executive officer to focus on our day-today business, while allowing the chairman of the Board to lead the Board in its fundamental role of providing advice to and independent oversight of management. The Board believes that having an independent director serve as chairman of the Board is the appropriate leadership structure for Agilent at this time.
However, our Corporate Governance Standards permit the roles of the chairperson of the Board and the chief executive officer to be filled by the same or different individuals. This provides the boardBoard with flexibility to determine whether the two roles should be combined in the future based on Agilent’s needs and the Board’s assessment of Agilent’s leadership from time to time. Our Corporate Governance Standards provide that, in the event that the chairperson of the Board is also the chief executive officer, the Board may consider the election of an independent Board member as a lead independent director.
In 2014, we amended the Corporate Governance Standards to raise the mandatory retirement age for directors from 72 to 75. The Board made the change in recognition of the contribution that experienced directors, with knowledge of the Company, bring to effective board oversight.
Board’s Role in Risk Oversight
The Board executes its risk management responsibility directly and through its committees. The Audit and Finance Committee has primary responsibility for overseeing Agilent’s enterprise risk management process. The Audit and Finance Committee receives updates and discusses individual and overall risk areas during its meetings, including the Company’s financial risk assessments, risk
CORPORATE GOVERNANCE |
management policies and major financial risk exposures and the steps management has taken to monitor and control such exposures. The Compensation Committee oversees risks associated with our compensation policies and practices with respect to both executive compensation and compensation generally.
|
The Compensation Committee receives reports and discusses whether Agilent’s compensation policies and practices create risks that are reasonably likely to have a material adverse effect on the Company.
The full Board is kept abreast of its committees’ risk oversight and other activities via reports of the committee chairpersons to the full Board during Board meetings.
Majority Voting for Directors
Our Bylaws provide for majority voting of directors regarding director elections. In an uncontested election, any nominee for director shall be elected by the vote of a majority of the votes cast with respect to the director. A “majority of the votes cast” means that the number of shares voted “FOR” a director must exceed 50% of the votes cast with respect to that director. The “votes cast” shall include votes to withhold authority and exclude votes to “ABSTAIN” with respect to that director’s election. If a director is not elected due to a failure to receive a majority of the votes cast and his or her successor is not otherwise elected and qualified, the director shall promptly tender his or her resignation following certification of the stockholder vote.
The Nominating/Corporate Governance Committee will consider the resignation offer and recommend to the Board whether to accept or reject it, or whether other action should be taken. The Board will act on the Nominating/Corporate Governance Committee’s recommendation within 90 days following certification of the stockholder vote. Thereafter, the Board will promptly disclose their decision and the rationale behind it in a press release to be disseminated in the same manner as Company press releases typically are distributed. Any director who tenders his or her resignation pursuant to this provision shall not participate in the Nominating/Corporate
Governance Committee recommendation or Board action regarding whether to accept the resignation offer.
Board Communications
Stockholders and other interested parties may communicate with the Board and Agilent’s Non-Executive Chairperson of the Board of
Directors by filling out the form at “Contact Chairman” under “Corporate Governance” at www.investor.agilent.com or by writing to James G. Cullen, c/o Agilent Technologies, Inc., General Counsel, 5301 Stevens Creek Blvd., MS 1A-11, Santa Clara, California 95051. The General Counsel will perform a legal review in the normal discharge of her duties to ensure that communications forwarded to the Non-Executive Chairperson preserve the integrity of the process. For example, items that are unrelated to the duties and responsibilities of the Board such as spam, junk mail and mass mailings, product complaints, personal employee complaints, product inquiries, new product suggestions, resumes and other forms of job inquiries, surveys, business solicitations or advertisements (the “Unrelated Items”) will not be forwarded to the Non-Executive Chairperson. In addition, material that is unduly hostile, threatening, illegal or similarly unsuitable will not be forwarded to the Non-Executive Chairperson.
Any communication that is relevant to the conduct of Agilent’s business and is not forwarded will be retained for one year (other than Unrelated Items) and made available to the Non-Executive Chairperson and any other independent director on request. The independent directors grant the General Counsel discretion to decide what correspondence shall be shared with Agilent management and specifically instruct that any personal employee complaints be forwarded to Agilent’s Human Resources Department.
Director Independence
Agilent adopted the following standards for director independence in compliance with the NYSE corporate governance listing standards:
1. No director qualifies as “independent” unless the Board affirmatively determines that the director has no material relationship with Agilent or any of its subsidiaries (either
CORPORATE GOVERNANCE |
directly, or as a partner, stockholder or officer of an organization that has a relationship with Agilent). Agilent or any of its subsidiaries must identify which directors are independent and disclose the basis for that determination.
|
In addition, a director is not independent if:
2. The director is, or has been within the last three years, an employee of Agilent or any of its subsidiaries, or an immediate family member is, or has been within the last three years, an executive officer of Agilent or any of its subsidiaries.
3. The director has received, or has an immediate family member who has received, during any twelve-monthtwelvemonth period within the last three years, more than $120,000 in direct compensation from Agilent or any of its subsidiaries, other than director and committee fees and pension or other forms of deferred compensation for prior service (provided such compensation is not contingent in any way on continued service).
4. (A) The director is a current partner or employee of a firm that is Agilent’s internal or external auditor; (B) the director has an immediate family member who is a current partner of such a firm; (C) the director has an immediate family member who is a current employee of such a firm and personally works on Agilent’s audit; or (D) the director or an immediate family member was within the last three years a partner or employee of such a firm and personally worked on Agilent’s or any of its subsidiaries’ audit within that time.
5. The director or an immediate family member is, or has been within the last three years, employed as an executive officer of another company where any of Agilent’s or any of its subsidiaries’ current executive officers at the same time serves or served on that company��scompany’s compensation committee.
6. The director is a current employee, or an immediate family member is a current executive officer, of a company that has made payments to, or received payments from, Agilent or any of its subsidiaries for property or services in an amount which, in any of the last three fiscal years, exceeds the greater of $1 million, or 2% of such other company’s consolidated gross revenues.
The Board determined that Paul N. Clark, James G. Cullen, Heidi Fields, Robert J. Herbold, Koh Boon Hwee, David M. Lawrence, M.D.George A. Scangos, Ph.D., A. Barry Rand and Tadataka Yamada, M.D. met the aforementioned independence
standards. William P. Sullivan did not meet the aforementioned independence standards because he is Agilent’s current President and Chief Executive Officer and an employee of Agilent.Agilent and Michael R. McMullen, a board nominee at the 2015 Annual Meeting also did not meet the aforementioned independence standards as he is Agilent’s President and Chief Operating Officer and will become Agilent’s Chief Executive Officer on March 18, 2015.
Agilent’s non-employee directors meet at regularly scheduled executive sessions without management. As the Non-Executive Chairman of the Board, James G. Cullen was chosen to preside at executive sessions of the non-management directors.
Compensation Committee Member
Independence
Agilent has adopted standards for compensation committee member independence in compliance with the NYSE corporate governance listing standards. In affirmatively determining the independence of any director who will serve on the compensation committee, the board of directors must consider all factors specifically relevant to determining whether such director has a relationship to Agilent or any of its subsidiaries which is material to such director’s ability to be independent from management in connection with the duties of a compensation committee member, including, but not limited to:
(A) | the source of compensation of such director, including any consulting, advisory or other compensatory fee paid by Agilent to such director; and | ||
(B) | whether such director is affiliated with Agilent, a subsidiary of Agilent or an affiliate of a subsidiary of Agilent. |
CORPORATE GOVERNANCE |
COMMITTEES OF THE BOARD OF DIRECTORS
The Board has four standing committees as set forth in the table below. Each director attended at least 75% of the aggregate number of Board and applicable committee meetings held when the director was serving on the Board.
Nominating/ | ||||||||||
Audit and | Corporate | |||||||||
Director | Board | Finance | Compensation | Governance | Executive | Board | Audit and Finance | Compensation | Nominating/ Corporate Governance | Executive |
Paul N. Clark | ü | ü | ✓ | ✓ | ||||||
James G. Cullen | CHAIR | CHAIR | CHAIR | CHAIR | CHAIR | CHAIR | ||||
Heidi Fields | ü | CHAIR | ü | ✓ | CHAIR | ✓ | ||||
Robert J. Herbold | ü | ü | ✓ | ✓ | ||||||
Koh Boon Hwee(1) | ü | CHAIR | ü | |||||||
David M. Lawrence, M.D(1) | ü | ü | ||||||||
Koh Boon Hwee | ✓ | CHAIR | ✓ | |||||||
George A. Scangos, Ph.D.(1) | ✓ | ✓ | ||||||||
A. Barry Rand | ü | ü | ü | ✓ | ✓ | |||||
Tadataka Yamada, M.D. | ü | ü | ü | ✓ | ✓ | |||||
William P. Sullivan | ü | ü | ||||||||
No. of Meetings in FY2013 | 7 | 12 | 4 | 6 | 0 | |||||
William P. Sullivan(2) | ✓ | ✓ | ||||||||
No. of Meetings in FY2014 | 6 | 12 | 5 | 6 | 0 |
(1) | Dr. Scangos joined our Board on September 17, 2014. | |
| ||
(2) | Mr. Sullivan will retire from the |
Agilent encourages, but does not require, its Board members to attend the annual stockholders meeting.meeting of stockholders. Last year, all of our directors who were serving at such time, attended the annual stockholders meeting.meeting of stockholders.
Audit and Finance Committee
The Audit and Finance Committee is responsible for the oversight of the quality and integrity of Agilent’s consolidated financial statements, its compliance with legal and regulatory requirements, the qualifications and independence of its independent registered public accounting firm, the performance of its internal audit function and independent registered public accounting firm and other significant financial matters. In discharging its duties, the Audit and Finance Committee is expected to:
● | have the sole authority to appoint, retain, compensate, oversee, evaluate and replace theindependent registered public accounting firm; |
● | review and approve the scope of the annual internal and external audit; |
● | review and pre-approve the engagement of Agilent’s independent registered public accountingfirm to perform audit and non-audit services and the related fees; |
● | meet independently with Agilent’s internal auditing staff, independent registered public accounting firm and senior management; |
● | review the adequacy and effectiveness of the system of internal control over financial reporting and any significant changes in internal control over financial reporting; |
● | review Agilent’s consolidated financial statements and disclosures including “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s reports on Form 10-K or Form 10-Q; |
● | establish and oversee procedures for (a) the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters, and (b) the confidential anonymous submission by employees of the Company of concerns regarding questionable accounting or auditing matters; |
CORPORATE GOVERNANCE |
● | review funding and investment policies, implementation of funding policies and investment performance of Agilent’s benefit plans; |
● | monitor compliance with Agilent’s Standards of Business Conduct; and |
● | review disclosures from Agilent’s independent registered public accounting firm required by the applicable requirements of the Public Company Accounting Oversight Board regarding the independence of accountant’s communications with the audit committee. |
Compensation Committee
The Compensation Committee reviews the performance of Agilent’s elected officers and other key employees and determines, approves and reports to the Board on the elements of their compensation, including total cash compensation and long-term equity based incentives. In addition, the Compensation Committee:
● | approves and monitors Agilent’s benefit plan offerings; |
● | supervises and oversees the administration of Agilent’s incentive compensation, variable pay and stock programs, including the impact of Agilent’s compensation programs and arrangements on Company risk; |
● | recommends to the Board the annual retainer fee as well as other compensation for non-employee directors; |
● | establishes comparator peer group and compensation targets based on this peer group for the Company’s named executive officers; and |
● | has sole authority to retain and terminate executive compensation consultants. |
For more information on the responsibilities and activities of the Compensation Committee, including the committee’s processes for determining executive compensation, see “Compensation Discussion and Analysis,” “Compensation Committee Report,” “Executive Compensation” and the Compensation Committee’s charter.
The Compensation Committee also helps determine compensation for non-employee directors. The process the Compensation Committee undertakes for setting non-employee director compensation is similar to that of setting executive officer compensation. The Compensation Committee is aided by an independent consultant, currently Frederic W. Cook & Co., Inc. (“F.W. Cook”), who is selected and retained by the Compensation Committee. The role of the independent consultant is to measure and benchmark our non-employee director compensation against a certain peer group of companies with respect to appropriate compensation levels for positions comparable in the market. The independent consultant recommends appropriate retainers, committee chair retainers, grant values and stock ownership guidelines to the Compensation Committee. This information is reviewed, discussed and finalized at a Compensation Committee meeting and a recommendation is made to the full Board. The full Board makes the final determination on non-employee director compensation.
Nominating/Corporate Governance Committee
The Nominating/Corporate Governance Committee proposes a slate of directors for election by Agilent’s stockholders at each annual meeting and recommends to the Board candidates to fill any vacancies on the Board. It is also responsible for reviewing management succession plans, recommending to the Board the appropriate Board size and committee structure and developing and reviewing corporate governance principles applicable to Agilent.
CORPORATE GOVERNANCE |
The Nominating/Corporate Governance Committee will consider director candidates recommended for nomination by stockholders, provided that the recommendations are made in accordance with the procedures described in the section entitled “General Information About the Meeting” located at the end of this Proxy Statement. Candidates recommended for nomination by stockholders that comply with these procedures will receive the same consideration as other candidates recommended by the Nominating/Corporate Governance Committee.
Agilent typically hires a third party search firm to help identify and facilitate the screening and interview process of candidates for director. To be considered by the Nominating/Corporate Governance Committee, a director nominee must have:
● | a reputation for personal and professional integrity and ethics; |
● | executive or similar policy-making experience in relevant business or technology areas or national prominence in an academic, government or other relevant field; |
● | breadth of experience; |
● | soundness of judgment; |
● | the ability to make independent, analytical inquiries; |
● | the willingness and ability to devote the time required to perform Board activities adequately; |
● | the ability to represent the total corporate interests of Agilent; and |
● | the ability to represent the long-term interests of stockholders as a whole. |
In addition to these minimum requirements, the Nominating/Corporate Governance Committee will also consider whether the candidate’s skills are complementary to the existing Board members’ skills; the diversity of the Board in factors such as age, experience in technology, manufacturing, finance and marketing, international experience and culture; and the Board’s needs for specific operational, management or other expertise. The Nominating/Corporate Governance Committee from time to time reviews the appropriate skills and characteristics required of board members, including factors that it seeks in board members such as diversity of business experience, viewpoints and, personal background, and diversity of skills in technology, finance, marketing, international business, financial reporting and other areas that are expected to contribute to an effective Board of Directors. In evaluating potential candidates for the Board of Directors, the Nominating/Corporate Governance Committee considers these factors in the light of the specific needs of the Board of Directors at that time. The search firm screens the candidates, does reference checks, prepares a biography for each candidate for the Nominating/Corporate Governance Committee to review and helps set up interviews. The Nominating/Corporate Governance Committee and Agilent’s Chief Executive Officer interview candidates that meet the criteria, and the Nominating/Corporate Governance Committee selects candidates that best suit the Board’s needs. We do not use a third party to evaluate current Board members.
The Nominating/Corporate Governance Committee also administers Agilent’s Related Person Transactions Policy and Procedures. See “Related Person Transactions Policy and Procedures” for more information.
Executive Committee
The Executive Committee meets or takes written action when the Board is not otherwise meeting. The Committee has full authority to act on behalf of the Board, except that it cannot amend Agilent’s Bylaws, recommend any action that requires the approval of the stockholders, fill vacancies on the Board or any Board committee, fix director compensation, amend or repeal any non-amendable or
|
non-repealable resolution of the Board, declare a distribution to the stockholders except at rates determined by the Board, appoint other committees or take any action not permitted under Delaware law to be delegated to a committee.
CORPORATE GOVERNANCE |
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Compensation Committee are set forth in the table on page 16.Koh Boon Hwee, A. Barry Rand, George A. Scangos, Ph.D. and Tadataka Yamada, M.D. During the most recent fiscal year, no Agilent executive officer served on the compensation committee (or equivalent), or the board of directors, of another entity whose executive officer(s) served on Agilent’s Compensation Committee.
The members of the Compensation Committee are considered independent under the Company’s Board of Directors and Compensation Committee Independence Standards as set forth in the Company’s Amended and Restated Corporate Governance Guidelines.
RELATED PERSON TRANSACTIONS POLICY AND PROCEDURES
The Company’s Standards of Business Conduct and Director Code of Ethics require that all employees and directors avoid conflicts of interests that interfere with the performance of their duties or the best interests of the Company. In addition, the Company has adopted a written Related Person Transactions Policy and Procedures (the “Related Person Transactions Policy”) that prohibits any of the Company’s executive officers, directors or any of their immediate family members from entering into a transaction with the Company, except in accordance with the policy. For purposes of the policy, a “related person transaction” includes any transaction (within the meaning of Item 404(a) of the Securities and Exchange Commission’s Regulation S-K) involving the Company and any related person that would be required to be disclosed pursuant to Item 404(a) of the Securities and Exchange Commission’s Regulation S-K.
Under our Related Person Transactions Policy, the General Counsel must advise the Nominating/Corporate Governance Committee of any related person transaction of which she becomes aware. The Nominating/Corporate Governance Committee must then either approve or reject the transaction in accordance with the terms of the policy. In the course of making this determination, the Nominating/Corporate Governance Committee shall consider all relevant information available to it and, as appropriate, must take into consideration the following:
● | the size of the transaction and the amount payable to the related person; |
● | the nature of the interest of the related person in the transaction; |
● | whether the transaction may involve a conflict of interest; and |
● | whether the transaction involved the provision of goods or services to the Company that are available from unaffiliated third parties and, if so, whether the transaction is on terms and made under circumstances that are at least as favorable to the Company as would be available in comparable transactions with or involving unaffiliated third parties. |
Under the Related Person Transactions Policy, Company management screens for any potential related person transactions, primarily through the annual circulation of a Directors and Officers Questionnaire (“D&O Questionnaire”) to each member of the Board of Directors and each officer of the Company that is a reporting person under Section 16 of the Securities Exchange Act of 1934. The D&O Questionnaire contains questions intended to identify related persons and transactions between the Company and related persons. If a related person transaction is identified, such transaction is brought to the attention of the Nominating/Corporate Governance Committee for its approval, ratification, revision, or rejection in consideration of all of the relevant facts and circumstances.
|
The Nominating/Corporate Governance Committee must approve or ratify each related person transaction in accordance with the policy. Absent this approval or ratification, no such transaction may be entered into by the Company with any related person.
CORPORATE GOVERNANCE |
In March 2008, the Nominating/Corporate Governance Committee amended the Related Person Transactions Policy to provide for standing pre-approval of limited transactions with related persons. Pre-approved transactions include:
(a) | Any transaction with another company at which a related person’s only relationship is as an employee (other than an executive officer or an equivalent), director or beneficial owner of less than 10% of that company’s shares, if the aggregate amount involved does not exceed the greater of (i) $1,000,000, or (ii) 2 percent of that company’s total annual revenues. | ||
(b) | Any charitable contribution, grant or endowment by the Company to a charitable organization, foundation or university at which a related person’s only relationship is as an employee (other than an executive officer or an equivalent), a director or a trustee, if the aggregate amount involved does not exceed the lesser of $500,000, or 2 percent of the charitable organization’s total annual receipts. |
Agilent will disclose the terms of related person transactions in its filings with the SEC to the extent required.
Transactions with Related Persons
We purchase services, supplies, and equipment in the normal course of business from many suppliers and sell or lease products and services to many customers. In some instances, these transactions occur with companies with which members of our management or Board of Directors have relationships as directors or executive officers. For transactions entered into during fiscal year 2013,2014, no related person had or will have a direct or indirect material interest and noneinterest. None of the fiscal year 2014 transactions exceeded or fell outside of the pre-approved thresholds set forth in our Related Party Transaction Policy.Policy except for the transactions with Biogen Idec Inc. (“Biogen”). George A. Scangos, Ph.D. is the Chief Executive Officer of Biogen and joined our board in September 2014. The Nominating/Corporate Governance Committee reviewed, approved and ratified the transactions with Biogen in accordance with the policy.
The following list identifies which of these companies purchased from Agilent, or sold to Agilent, more than $120,000 in products andand/or services from us in fiscal 2013.2014.
● | AAC Technologies Holdings Inc. (“AAC”). Mr. Koh Boon Hwee is the Chairman of AAC. AAC, or its affiliates, purchased from Agilent an aggregate of approximately $1.8 million of products and/or services. |
● | Avnet, Inc. (“Avnet”). Mr. William P. Sullivan served as a director of Avnet until May 2014. Avnet, or its affiliates, purchased from Agilent an aggregate of approximately $1.3 million of products and/or services and Agilent purchased from Avnet an aggregate of approximately $913,000 in products and/or services. |
● | Biogen Idec Inc. (“Biogen”). Mr. George A. Scangos, Ph.D. is the Chief Executive Officer and a director of Biogen. Biogen, or its affiliates, purchased from Agilent an aggregate of approximately $2.7 million in products and/or services. |
● | Campbell Soup Company (“Campbell”). Mr. A. Barry Rand is a director of Campbell. Campbell, or its affiliates, purchased from Agilent an aggregate of approximately $208,000 of products and/or services. |
● | Catalent Pharma Solutions (“Catalent”). Mr. Paul N. Clark served as a director of Catalent until September 2014. Catalent, or its affiliates, purchased from Agilent an aggregate of approximately $2.7 million of products and/or services. |
CORPORATE GOVERNANCE |
● | Harlan Laboratories, Inc. (“Harlan”). Mr. Paul N. Clark served as a director of Harlan until March 2014. Harlan, or its affiliates, purchased from Agilent an aggregate of approximately $627,000 of products and/or services. |
● | International Rectifier Corp. (“IRC”). Mr. Didier Hirsch is a director of IRC. IRC, or its affiliates, purchased from Agilent an aggregate of approximately $124,000 of products and/or services. |
● | Johns Hopkins University (“JHU”). Mr. George A. Scangos, Ph.D. is an adjunct professor with the JHU Department of Biology. JHU, or its affiliates, purchased from Agilent an aggregate of approximately $5.9 million in products and/or services. |
● | Johnson & Johnson (“J&J”). Mr. James G. Cullen is a director of J&J. J&J, or its affiliates, purchased from Agilent an aggregate of approximately $12.4 million of products and/or services. |
● | Nanyang Technological University (“Nanyang”). Mr. Koh Boon Hwee is the Chair of the Board of Trustees of Nanyang. Nanyang, or its affiliates, purchased from Agilent an aggregate of approximately $1.2 million of products and/or services. |
● | Takeda Pharmaceutical Co. Ltd. and Takeda Pharmaceuticals International, Inc. (collectively, “Takeda”). Dr. Tadataka Yamada is a director of Takeda Pharmaceutical Co. Ltd. and the Chief Medical and Scientific Officer of Takeda Pharmaceuticals International, Inc. Takeda or its affiliates, purchased from Agilent an aggregate of approximately $2.0 million of products and/or services. |
● | URS Corporation (“URS”). Mr. William P. Sullivan served as a director of URS until May 2014. URS, or its affiliates, purchased from Agilent an aggregate of approximately $184,000 of products and/or services. |
Agreements with Keysight
On November 1, 2014, we completed the spin-off of Keysight Technologies, Inc. (“Keysight”), our electronic measurement business (the “Spin-off”). Following the Spin-off, Agilent and Keysight have operated as separate publicly-traded companies and neither entity has any ownership interest in the other. However, two of our directors, James G. Cullen is a director of J&J. J&J, or its affiliates,purchased from Agilent an aggregate of approximately $10 million of products and services.
Effective as of November 1, 2014, Agilent and Keysight each operate separately as independent publicly-traded companies. Agilent has entered into a separation and distribution agreement with Keysight, which is referred to in this proxy statement as the “separation agreement” or the “separation and distribution agreement.” In connection with the Spin-off, Agilent also entered into various other agreements to effect the Spin-off and provide a directorframework for its relationship with Keysight after the Spin-off, including a services agreement, a tax matters agreement, an employee matters agreement, an intellectual property matters agreement, a trademark license agreement and a real estate matters agreement (collectively, the “Agreements”).
These Agreements provide for the allocation between Agilent and Keysight of Catalent. Catalent, or
|
RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM |
PROPOSAL 2 — | RATIFICATION OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM |
The Audit and Finance Committee of the Board has appointed PricewaterhouseCoopers LLP as Agilent’s independent registered public accounting firm to audit its consolidated financial statements for the 20142015 fiscal year. During the 20132014 fiscal year, PricewaterhouseCoopers LLP served as Agilent’s independent registered public accounting firm and also provided certain tax and other non-audit services. Although Agilent is not required to seek stockholder approval of this appointment, the Board believes it to be sound corporate governance to do so. If the appointment is not ratified, the Audit and Finance Committee will investigate the reasons for stockholder rejection and will reconsider the appointment.
Representatives of PricewaterhouseCoopers LLP are expected to attend the annual meeting where they will be available to respond to questions and, if they desire, to make a statement.
Agilent’s Board recommends a vote FOR the ratification of the
Audit and Finance Committee’s appointment of
PricewaterhouseCoopers LLP as Agilent’s Independent Registered Public Accounting Firm.
Fees Paid to PricewaterhouseCoopers LLP
The following table sets forth the aggregate fees charged to Agilent by PricewaterhouseCoopers LLP for audit services rendered in connection with the audited consolidated financial statements and reports for the 20132014 and 20122013 fiscal years and for other services rendered during the 20132014 and 20122013 fiscal years to Agilent and its subsidiaries, as well as all out-of-pocket costs incurred in connection with these services:
% of | % of | |||||||||||||
Fee Category: | Fiscal 2013 | Total | Fiscal 2012 | Total | ||||||||||
Audit Fees | $ | 4,984,000 | 83.1 | $ | 6,296,000 | 94.1 | ||||||||
Audit-Related Fees | 762,000 | 12.7 | 105,000 | 1.6 | ||||||||||
Tax Fees: | ||||||||||||||
Tax compliance/preparation | 245,000 | 4.1 | 285,000 | 4.3 | ||||||||||
Other tax services | 0 | 0.0 | 0 | 0.0 | ||||||||||
Total Tax Fees | 245,000 | 4.1 | 285,000 | 4.3 | ||||||||||
All Other Fees | 4,000 | 0.01 | 4,000 | 0.0 | ||||||||||
Total Fees | $ | 5,995,000 | 100 | $ | 6,690,000 | 100 |
Fee Category: | Fiscal 2014 | % of Total | Fiscal 2013 | % of Total | ||||||||||||
Audit Fees | $ | 7,791,000 | 76.8 | $ | 4,984,000 | 83.1 | ||||||||||
Audit-Related Fees | 1,695,000 | 16.7 | 762,000 | 12.7 | ||||||||||||
Tax Fees: | ||||||||||||||||
Tax compliance/preparation | 265,000 | 2.6 | 245,000 | 4.1 | ||||||||||||
Other tax services | 0 | 0 | 0 | 0 | ||||||||||||
Total Tax Fees | 265,000 | 2.2 | 245,000 | 4.1 | ||||||||||||
All Other Fees | 392,000 | 3.9 | 4,000 | 0.01 | ||||||||||||
Total Fees | $ | 10,143,000 | 100 | $ | 5,995,000 | 100 |
Audit Fees: Consists of fees billed for professional services rendered for the integrated audit of Agilent’s consolidated financial statements and its internal control over financial reporting and review of the interim condensed consolidated financial statements included in quarterly reports. Fiscal 20132014 and 20122013 fees also consist of fees billed for services that are normally provided by PricewaterhouseCoopers LLP in connection with statutory reporting and regulatory filings or engagements, and attest services, except those not required by statute or regulation. Fiscal 2014 audit fees reflect additional fees of $2,800,000 for services performed by PricewaterhouseCoopers LLP in connection with the separation and spin-off of Keysight.
Audit-Related Fees: Consists of fees billed for assurance and related services that are reasonably related to the performance of the audit or review of Agilent’s consolidated financial statements and are not reported under “Audit Fees.” These services include employee benefit plan audits, accounting consultations in connection with acquisitions and divestitures, attest services
RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM |
that are not required by statute or regulation, and consultations concerning financial accounting and reporting standards. Fiscal 2014 audit related fees reflect additional fees of $1,670,000 for services performed by PricewaterhouseCoopers LLP in connection with the separation and spin-off of Keysight.
|
Tax Fees: Consists of fees billed for professional services for tax compliance, tax advice and tax planning. These services include assistance regarding federal, state and international tax compliance, tax audits and appeals, customs and duties, mergers and acquisitions and international tax planning.
All Other Fees: Consists of fees for all other services other than those reported above. These services include a license for specialized accounting research software. Agilent’s intent is to minimize services in this category. The increase in this category for fiscal 2014 reflects additional fees of $388,000 for marketing consulting work provided by BGT Partners, an affiliate of PricewaterhouseCoopers LLP.
In making its recommendation to ratify the appointment of PricewaterhouseCoopers LLP as Agilent’s independent registered public accounting firm for the fiscal year ending October 31, 2014,2015, the Audit and Finance Committee has considered whether services other than audit and audit-related services provided by PricewaterhouseCoopers LLP are compatible with maintaining the independence of PricewaterhouseCoopers LLP.
Policy on Audit and Finance Committee Preapproval of Audit and Permissible Non-Audit Services of Independent Registered Public Accounting Firm
The Audit and Finance Committee’s policy is to preapprove all audit and permissible non-audit services provided by the independent registered public accounting firm. These services may include audit services, audit-related services, tax services and other services. Preapproval is generally provided for up to one year and any preapproval is detailed as to the particular service or category of services and is subject to a specific budget. The Audit and Finance Committee has delegated its preapproval authority up to a specified maximum to the Chairperson of the Audit and Finance Committee, Heidi Fields, who may preapprove all audit and permissible non-audit services so long as her preapproval decisions are reported to the Audit and Finance Committee at its next scheduled meeting.
AUDIT AND FINANCE COMMITTEE REPORT |
AUDIT AND FINANCE COMMITTEE REPORT |
The Audit Committee Report does not constitute soliciting material, and shall not be deemed to be filed or incorporated by reference into any other Company filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that the Company specifically incorporates the Audit Committee Report by reference therein. AUDIT AND FINANCE COMMITTEE REPORT During fiscal year The Audit and Finance Committee’s work is guided by a written charter that the Board has approved. The Audit and Finance Committee regularly reviews its charter to ensure that it is meeting all relevant audit committee policy requirements of the U.S. Securities and Exchange Commission, the Public Company Accounting Oversight Board and the New York Stock Exchange. You can access the latest Audit and Finance Committee charter by clicking on “Governance Policies” in the “Corporate Governance” section of the Web page at www.investor.agilent.com or by writing to us at Agilent Technologies, Inc., 5301 Stevens Creek Blvd., Santa Clara, California 95051, Attention: Investor Relations. The Audit and Finance Committee has reviewed and discussed with management and PricewaterhouseCoopers LLP, Agilent’s independent registered public accounting firm, Agilent’s audited consolidated financial statements and Agilent’s internal control over financial reporting. The Audit and Finance Committee has discussed with PricewaterhouseCoopers LLP, during the The Audit and Finance Committee has received and reviewed the written disclosures and the letter from PricewaterhouseCoopers LLP required by the applicable requirements of the Public Company Accounting Oversight Board regarding the independent accountant’s communications with the Audit and Finance Committee concerning independence, and has discussed with PricewaterhouseCoopers LLP its independence from Agilent. Based on the review and discussions noted above, the Audit and Finance Committee recommended to the Board that Agilent’s audited consolidated financial statements be included in Agilent’s Annual Report on Form 10-K for the fiscal year ended October 31, Submitted by: Audit and Finance Committee Heidi Fields, Chairperson |
|
PROPOSAL 3 — |
|
In 2009, our Board of Directors adopted and ourAt the 2015 annual meeting, Agilent is requesting that stockholders approvedapprove the Agilent Technologies, Inc. 2009 Stock Plan (the “Plan”), including the list of potential performance goals and related provisions set forth in suchPerformance-Based Compensation Plan for awards that are intendedCovered Employees (the “Performance Plan”) which was amended by the Compensation Committee of the Board on November 19, 2014, subject to qualify for the performance-based compensation exception understockholder approval and will be effective commencing with fiscal 2015. Section 162(m) of the Internal Revenue Code and to satisfy New York Stock Exchange (“NYSE”) guidelines relating to equity compensation.
This proposal does not seek any amendmentrequires that the stockholders approve the material terms of the existing provisionsPerformance Plan at least every five years. The Performance Plan was most recently approved by our stockholders at the 2010 annual meeting.
As proposed for approval, and with the exception of the ability to pay awards under the Performance Plan in the form of cash and/or Agilent common stock, the Performance Plan is substantially the same as the version approved by the stockholders in 2010.
Purpose of the Request for Approval
The Board believes that a well-designed incentive compensation plan is a significant factor in improving operating and financial performance goals contained within, the 2009 Stock Plan. Rather, this proposal is being presentedof Agilent, thereby enhancing stockholder value. Important elements of such a plan include:
● | pre-established goals and objectives for each performance period; |
● | objective, measurable factors bearing on reported financial results and other metrics as the basis for any payments made under the plan; and |
● | administrative oversight of the plan by the Compensation Committee. |
The Board also believes that all amounts paid pursuant to stockholders solely to address the periodic approval requirementssuch a plan should be deductible as a business expense of Agilent. Code Section 162(m) described below.
limits the deductibility of bonuses paid to Agilent’s CEO and certain other executive officers, unless the plan under which they are paid meets specified criteria, including stockholder approval. Code Section 162(m) generally does not allow a publicly-held corporation to deduct from its U.S. federal taxable income compensation above $1,000,000 that is paid in any taxable year to its chief executive officer or other named executive officers (excluding its chief financial officer). Compensation above $1,000,000 may be deducted if, among other things, it is payable upon the attainment of performance goals whose material terms are approved by the company’s stockholders. If the company’s compensation committee retains discretion to select which performance goals will apply to a particular performance period, Code Section 162(m) requires that the material terms of such performance goals be reapproved by the company’s stockholders every five years. For purposes of Code Section 162(m), the material terms include (a) the employees eligible to receive compensation, (b) a description of the business criteria on which the performance goal may be based, and (c) the maximum amount of compensation that can be paid to an employee under the performance goal. Each of these terms is discussed below. Stockholder approval of this proposal is intended to constitute reapproval
The Board believes the amendment and continuation of the performance goalsPerformance Plan to be in the best interest of stockholders and recommends its approval. If the Performance Plan is not approved by Agilent’s stockholders, commencing with fiscal 2015, bonuses shall no longer be paid officers and key employees of Agilent under the Plan for purposesPerformance Plan.
The complete text of the approval requirementsPerformance Plan, marked to show the proposed amendment, is attached to this proxy statement asAnnex A. The following description of Section 162(m).
The performance goals set forth in the proposed amended Performance Plan were last approved by our stockholders five years ago, and there have been no changes to that list of potential performance goals since that time. In order to continue to provide us with the ability to deduct the performance-based compensation that we structure to comply with Section 162(m) and we pay to our Chief Executive Officer and our other named executive officers (other than our Chief Financial Officer) for an additional five years, we are submitting the list of performance goals and related provisions under our Plan to our stockholders for reapproval.
Below is a summary of the material features of the Plancertain provisions and its operation. This summary does not purport to be a complete description of all of the provisions of the Plan. It is qualified in its entirety by the reference to the full textAnnex A.
RE-APPROVAL AND AMENDMENT OF THE PERFORMANCE-BASED |
Summary of the Plan. A copy of thePerformance-Based Compensation Plan, has been filed with the Securities and Exchange Commission with the Proxy Statement filed on January 27, 2009, and any stockholder who wishes to obtain a copy of the Plan may do so by written request to the Secretary at Agilent’s headquarters in Santa Clara, California.
Purpose of the Planas amended
General
The purpose of the Performance Plan is to encourage ownership in the Companymotivate and reward eligible employees by its employees, directors and consultants whose long-term employment by or involvement with the Company is considered essential to the Company’s continued progress and, thereby, aligning the interestsmaking a portion of the award recipients and stockholders and permitting the award recipients to share in the Company’s success. The Plan provides an essential component of the totaltheir cash compensation package offered to the Company’s key employees. It reflects the importance placed by the Company on motivating employees to achieve superior results over the long term and paying employees based on that kind of achievement. The
|
Company strongly believes that its equity compensation programs and emphasis on employee stock ownership have been integral to the Company’s progress and that a continuation of those programs and that emphasis is necessary for the Company to achieve superior performance in the future.
Certain awards under the Plan are intended to qualify as performance-based compensation under the Code, provided that such grants are made in the form of option grants, stock appreciation rights (“SARs”), or are performance shares or performance units based on one or more of the performance measures specified below. However, in the event that the Administrator (as defined below in “Administration of the Plan”) of the Plan determines that it is advisable to grant awards that use measures other than those specified below, any such awards will not qualify for the performance-based exception under Section 162(m) of the Code.
Key Features of the Plan
The Plan contains features that the Board believes are consistent with the interests of stockholders and sound governance principles. These features include the following:
|
Qualifying Performance-Based Compensation
The Administrator may specify that the grant, retention, vesting, or issuance of any award, (whether in the form of a stock option, SAR, restricted stock, RSU or a performance award) or the amount to be paid out under any award, be subject to or based on performance objectives or other standards of financial performance and/or personal performance evaluations, whether or not established and administered in accordance with the requirements of Section 162(m) of the Code for awards intended to qualify as “performance-based compensation” thereunder. The number of shares issued or the amount paid under an award may, to the extent specified in the award agreement, be reduced by the Administrator on the basis of such further considerations as the Administrator in its sole discretion shall determine.
Establishment of Performance Goals
At the beginning of each performance period the Administrator will establishcertain objective performance goals applicablerelated to the performance awards. To the extent that performance conditions under the Plan are applied to awards intended to qualify as performance-based compensation under Section 162(m) of the Code, such performance goals will be objectively measurableAgilent and will be based upon the achievement of a specified percentage or level in one or more of the following criteria and any objectively verifiable adjustment(s) thereto permitted and preestablished by the Administrator in accordance with Section 162(m) of the Code, as determined by the Administrator in its sole discretion:
|
|
The performance goals may be based on one or more business criteria, one or more business units or divisions of the Company, its subsidiaries or affiliates, or the Company as a whole, and if so desired by the Administrator, by comparison with a peer group of companies. Performance awards granted under the Plan may contain such additional terms and conditions, not inconsistent with the terms of the Plan, as the Administrator may determine, provided that, if the performance awards are intended to qualify as performance-based compensation under Section 162(m) of the Code, such additional terms and conditions are also not inconsistent with Section 162(m) of the Code.
Administration of the Plan
The Plan may be administered by the Board or any of its committees (“Administrator”) and, it is currently administered by the Compensation Committee, which committee satisfies the requirements of Section 162(m) regarding a committee of two or more “outside directors”, as well as a committee of “non-employee directors” for purposes of Rule 16b-3. The Administrator has the power in its discretion to grant awards under the Plan, to determine the terms of such awards, to interpret the
|
provisions of the Plan and to take action as it deems necessary or advisable for the administration of the Plan.affiliates. In accordance with the termsAgilent’s compensation policy that cash compensation should vary with company performance, a substantial part of the Plan, the Planeach executive’s total cash compensation may be administeredtied to Agilent’s performance by different committees with respect to different groupsway of participants in the Plan.
Number of Authorized Shares
The total number of shares authorized and available for issuanceperformance-based bonuses under the Plan is 25,000,000, plus any shares subject to awards previously granted under the 1999 Plan for which such awards are forfeited, expired or become unexercisable without having been exercised in full. Using Agilent’s closing stock price on December 31, 2013, we anticipate that the remaining share reserve will be sufficient to cover all Company stock awards through fiscal 2015. Shares granted as options or SARs will be counted against this limit as one share for every one share granted. Shares granted as awards other than options or SARs will be counted against this limit as two shares for every one share granted. The maximum number of options or SARs under the Plan that may be granted in any one fiscal year to an individual participant may not exceed 1,500,000 shares. Notwithstanding the foregoing, in connection with a participant’s initial service, such participant may be granted awards for up to an additional 1,000,000 shares that will not count against this limit. Shares issued under the Plan may be currently authorized but unissued shares, or shares currently held or subsequently acquired by the Company as treasury shares, including shares purchased in the open market or in private transactions.Performance Plan.
In the event of certain changes in the capitalization of the Company the Administrator will adjust the number and class of shares available for issuance under the Plan and to prevent dilution or enlargement of rights. Except as described below, shares subject to an award under the Plan or under the 1999 Plan that are terminated, expire unexercised, or are forfeited, or repurchased by the Company at their original purchase price shall be available for subsequent awards under the Plan. Any shares that again become available for issuance under the Plan will be added back on a one to one basis for shares subject to options or SARs (as defined below in “Types of Awards under the Plan”), or on a two to one basis for awards other than options or SARs.
Awards granted in assumption of, or in substitution for, awards previously granted by a company acquired by, or merged into, the Company or a Subsidiary (“Substitute Awards”) will not reduce the shares authorized for issuance under the Plan or authorized for grant to a participant in any calendar year. Further, shares available for grant under stock plans assumed by the Company in an acquisition may be added to the available share reserve under the Plan.
Payments of the exercise price or applicable taxes made by delivery of shares to, or withholding of shares by, the Company in satisfaction of a participant’s obligations, or shares repurchased on the open market with the proceeds of an option exercise price, will not result in additional shares becoming available for subsequent awards under the Plan.
Eligibility and Participation
Eligibility to participate in the Plan is limited to employees (including officers), directors and consultants of Agilent, its affiliates or subsidiaries, as determined by the Administrator. Participation in the Plan is at the discretion of the Administrator. As of November 1, 2013, there were approximately 20,600 eligible employees.
|
Types of Awards under the Plan
The Plan authorizes the Administrator to grant awards, individually or collectively, to participants in any of the following forms, subject to such terms, conditions, and provisions as the Administrator may determine to be necessary or desirable:
Options and SARs
Stock options entitle the option holder to purchase shares at a price established by the Administrator. Options may be either ISOs or NSOs, provided that only employees may be granted ISOs. SARs entitle the SAR holder to receive cash equal to the positive difference (if any) between the fair market value of shares on the trading date and the exercise price. The Company currently awards only NSOs to its executives, employees and nonemployee directors. In fiscal year 2013, approximately 105 employees were classified as executives and there were eight nonemployee directors. The Company does not currently have a practice of awarding ISOs or SARs.
Exercise Price
The Administrator will determine the exercise price of an option and a SAR at the date of grant, which price, except in the case of Substitute Awards, may not be less than 100% of the fair market value of the underlying shares on the date of grant. The Plan prohibits any repricing, replacement, regrant or modification of stock options or SARs that would reduce the exercise price of the stock options or SARs without stockholder approval, other than in connection with a change in the Company’s capitalization or Substitute Awards.
Vesting/Expiration of Options
The Administrator may determine the terms under which options and SARs will vest and become exercisable. The Company’s current practice is to vest options at 25% per year over 4 years, with a 10-year option term, except where different vesting or option terms are required or are advisable under local law.
Special Limitations on ISOs
If options were to be granted as ISOs, these options would be subject to certain additional restrictions imposed on ISOs by the Code including, but not limited to, restrictions on the post-termination exercise period of such options, the status of the individual receiving the grant and the number of options that could become exercisable for the first time by a participant in a given calendar year. In addition, to receive the favorable tax treatment afforded ISOs described below, these options would be required to comply with certain post-termination exercise periods. Furthermore, if shares acquired upon exercise of an ISO are disposed of by a participant prior to the expiration of two years from the date of grant or one year from the date of exercise, or otherwise in a “disqualifying disposition” under the Code, the participant would have federal income tax consequences as described under “—U.S. Federal Income Tax Consequences”.
|
Exercise of Options
An option holder may exercise his or her option by giving written notice to the Company or a duly authorized agent of the Company stating the number of shares for which the option is being exercised and tendering payment for such shares. The Administrator may, in its discretion, accept cash, check or wire transfer, previously acquired shares (valued at their fair market value on the date of exercise) and consideration under a cashless exercise program, or a combination thereof as payment.
Surrender or Exchange of SARs
Upon surrender of a SAR, a participant will be entitled to receive cash, shares or a combination thereof, as specified in the award agreement, having an aggregate fair market value equal to the excess of (i) the fair market value of one share as of the date on which the nontandem SAR is exercised over (ii) the base price of the shares covered by the nontandem SAR, multiplied by the number of shares covered by the SAR, or the portion thereof being exercised.
Termination of Options and SARs
In the event that a participant’s service with the Company or its subsidiaries terminates prior to the expiration of an option or SAR, the Participant’s right to exercise vested options or SARS shall be governed by the terms of the applicable award agreement approved by the Administrator at the time of grant.
Stock Awards and Performance Shares
Stock awards, including restricted stock, RSUs, performance shares and performance units, may be issued either alone, in addition to, or in tandem with other awards granted under the Plan. Stock awards may be denominated in shares or units payable in shares (e.g. RSUs), and may be settled in cash, shares, or a combination of cash and shares. Restricted stock granted to participants may not be sold, transferred, pledged or otherwise encumbered or disposed of during the restricted period established by the Administrator. The Administrator may also impose additional restrictions on a participant’s right to dispose of or to encumber restricted stock, including the satisfaction of performance objectives.
The Company currently grants RSUs to certain employees who are not executives of the Company (the company did make one RSU grant to its CEO in fiscal year 2014). Grants are typically made once a year and vest 25% per year over 4 years unless different vesting is required or advisable under local law. The Company currently grants performance-based RSUs annually to its executives pursuant to the Long Term Performance Program (“LTP” or the “LTP Program”). LTP awards are generally designed to meet the criteria of a performance award with the performance metrics and peer group comparison set at the beginning of the performance period and are not thereafter modified. LTP awards are paid out based upon a 3-year performance period and only if the established performance criteria have been met, as determined by the Administrator. The Company also makes New Executive Stock Awards to newly hired or promoted executives, which are RSUs that mirror the LTP performance criteria for a 3-year performance period that is already in progress when an executive is first hired or is first promoted to an executive position.
In addition, the Company grants RSUs to nonemployee directors (referred to in the Plan as “Deferred Shares”) which are subject to payment and deferral rules intended to comply with Section 409A of the Code.
|
Termination of Stock Awards
In the event that a participant’s service with the Company or its subsidiaries terminates prior to the vesting of a stock award, that award will be forfeited unless the terms of the award, as approved by the Administrator at the time of grant, provide for accelerated vesting or provide for continued vesting for retirees.
Cash Incentive Awards
The Administrator may grant “cash incentive awards” under the Plan, which is the grant of a right to receive a payment of cash (or in the discretion of the Administrator, shares of common stock having value equivalent to the cash otherwise payable) that are contingent on achievement of performance objectives over a specified period established by the Administrator. The grant of cash incentive awards may also be subject to such other conditions, restrictions and contingencies, as determined by the Administrator, including provisions relating to deferred payment.
Limited Transferability of Awards
The Administrator retains the authority and discretion to permit an award (other than an ISO) to be transferable as long as such transfers are made by a participant to the participant’s immediate family or trusts established solely for the benefit of one or more members of the participant’s immediate family. Awards may otherwise not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner other than by the beneficiary designation, will or by the laws of descent or distribution and may be exercised, during the lifetime of the participant, only by the participant.
Tax Withholding
The Administrator may require payment, or withhold payments made by the Plan, to satisfy applicable withholding tax requirements.
Change in Control
Unless otherwise determined by the Administrator and set forth in the applicable award agreement, in the event of certain transactions described in the Plan constituting a change in control or the sale of substantially all of the assets of the Company for which a participant is performing services, all awards will fully vest immediately prior to the closing of the transaction. The foregoing shall not apply where such awards are assumed, converted or replaced in full by the successor corporation or a parent or subsidiary of the successor; provided, however, that in the event of a change of control in which one or more of the successor or a parent or subsidiary of the successor has issued publicly traded equity securities, the assumption, conversion, replacement or continuation shall be made by an entity with publicly traded securities and shall provide that the holders of such assumed, converted, replaced or continued stock options and SARs shall be able to acquire such publicly traded securities.
In the event of the dissolution or liquidation of the Company, the Administrator in its sole discretion may provide for an option or SAR to be fully vested and exercisable until ten days prior to such transaction, or such shorter reasonable period of time as the Administrator may establish in its discretion. In addition, the Administrator may provide that any restrictions on any award shall lapse prior to the transaction, provided the proposed dissolution or liquidation takes place at the time and in the manner contemplated. To the extent it has not been previously exercised, an award will terminate immediately prior to the consummation of such proposed transaction.
|
Termination and Amendment of the Plan
The Board may amend, suspend or terminate the Plan or the Administrator’s authority to grant awards under the Plan without the consent of stockholders or participants; provided, however, that any amendment to the Plan will be submitted to the Company’s stockholders for approval if such stockholder approval is required by any federal or state law or regulation or the rules of any stock exchange or automated quotation system on which the shares may then be listed or quoted and the Board may otherwise, in its sole discretion, determine to submit other amendments to the Plan to stockholders for approval. Except in the event of certain changes in the capitalization of the Company, the total number of shares authorized and available for issuance under the Plan may not be increased by the Company without stockholder approval. Any such amendment, suspension, or termination may not materially and adversely affect the rights of a participant under any award previously granted without such participant’s consent.
It is the intention of the Company that, to the extent that any provisions of the Plan or any awards granted under the Plan are subject to Section 409A of the Code (relating to nonqualified deferred compensation), the Plan and the awards comply with requirements of Section 409A of the Code. Further, it is the intention of the Company that the Plan and awards granted under it that are subject to Section 409A of the Code will be interpreted and administered in good faith in accordance with such requirements and that the Administrator will have the authority to amend any outstanding awards to conform to the requirements of Section 409A.
Term of Plan
Unless earlier terminated by the Board, the Plan will terminate on March 11, 2019, ten years after its initial approval by the stockholders of the Company at the 2009 Annual Meeting.
U.S. Federal Income Tax Consequences
Stock options. There will be no federal income tax consequences to a participant or the Company upon the grant of either an ISO or an NSO under the Plan. Upon exercise of an NSO, the option holder generally will recognize ordinary income in an amount equal to: (i) the fair market value, on the date of exercise, of the acquired shares, less (ii) the exercise price of the NSO. Provided the Company satisfies applicable reporting requirements, it will be entitled to a tax deduction in the same amount.
Upon the exercise of an ISO, an option holder generally recognizes no immediate ordinary taxable income. Provided that certain holding periods are met, income recognition is deferred until the option holder sells the shares. If the ISO is exercised no later than three months after the termination of the option holder’s employment, and the option holder does not dispose of the shares so acquired within two years from the date the ISO was granted and within one year after the exercise of the ISO, the gain on the sale will be treated as long-term capital gain. Certain of these employment requirements are liberalized in the event of an option holder’s death or disability while employed by the Company.
Generally, the Company will not be entitled to any tax deduction for the grant or exercise of an ISO. If, however, the shares are not held for the full term of the holding period outlined above, the gain on the sale of such shares, being the lesser of: (i) the fair market value of the shares on the date of exercise minus the option price, or (ii) the amount realized on disposition minus the exercise price, will be taxed to the participant as ordinary income, and provided the Company satisfies applicable reporting requirements, the Company will be entitled to a deduction in the same amount. The excess of the fair market value of the shares acquired upon exercise of an ISO over the exercise price therefor constitutes a tax preference item for purposes of computing the “alternative minimum tax” under the Code.
|
SARs. There will be no federal income tax consequences to either a participant or the Company upon the grant of a SAR. However, the participant generally will recognize ordinary income upon the exercise of a SAR in an amount equal to the aggregate amount of cash and the fair market value of the shares received upon exercise. Provided the Company satisfies applicable reporting requirements, the Company will be entitled to a deduction equal to the amount included in the participant’s income.
RSUs & Restricted Stock. Except as otherwise provided below, there will be no federal income tax consequences to either a participant or the Company upon the grant of restricted stock or an RSU. When an RSU is settled, the participant will recognize ordinary income in an amount equal to the fair market value of the shares received or, if the RSU is paid in cash, the amount payable. With respect to restricted stock, the participant will recognize ordinary income in an amount equal to the excess, if any that the participant paid for the shares over the fair market value of the shares on the earlier of (i) the date of vesting; and (ii) the date the shares become transferable. Subject to Section 162(m) of the Code, and the Company satisfies applicable reporting requirements, the Company will be entitled to a corresponding deduction. Notwithstanding the above, a recipient of a restricted stock grant may make an election under Section 83(b) of the Code, within thirty days after the date of the grant, to recognize ordinary income as of the date of grant and the Company will be entitled to a corresponding deduction at that time.
Performance Awards. There will be no federal income tax consequences to a participant or the Company upon the grant of qualifying performance-based compensation awards. Participants will generally recognize taxable income upon the payment of an award, and subject to Section 162(m) of the Code, the Company generally will be entitled to a deduction equal to the amount includible in the participant’s income.
Golden Parachute Payments. Awards that are granted, accelerated or enhanced upon the occurrence of, or in anticipation of, a change in control may give rise, in whole or in part, to “excess parachute payments” under Section 280G and Section 4999 of the Code. Under these provisions, the participant would be subject to a 20% excise tax on, and the Company would be denied a deduction with respect to, any “excess parachute payments.”
As part of certain change of control agreements with us, we offer our officers gross ups related to this excise tax under Section 4999 of the Code. For more information, see “Compensation Discussion and Analysis” and “Termination and Change of Control Table” below.
Section 162(m) of the Code. Section 162(m) of the Code (“Section 162(m)”) generally provides that publicly held companies may not deduct compensation paid to certain of its top executive officers to the extent such compensation exceeds $1 million per officer in any year. However, pursuant to regulations issued by the Treasury Department, certain limited exceptions to Section 162(m) apply with respect to “performance-based compensation,” that complies with conditions imposed by Section 162(m) rules and the material terms of such compensation are disclosed to and approved by stockholders (e.g., see “—Qualifying Performance-Based Compensation” above). Stock options, SARs and performance awards granted under the Plan and described above are intended to constitute qualified performance-based compensation eligible for such exceptions. Because of the fact-based nature of the performance-based compensation exception under Code Section 162(m) and the limited availability of binding guidance thereunder, Agilent cannot guarantee that the awardawards under the Performance Plan to covered employees will qualify for exemption under Code Section 162(m). The AdministratorHowever, the intention of Agilent and the Compensation Committee is to administer the Performance Plan in compliance with Code Section 162(m) with respect to covered employees or participants who may become covered employees. If any provision of the Performance Plan does not comply with the requirements of Code Section 162(m), then such provision will in general, seek to qualify compensation paidbe construed or deemed amended to the Company’sextent necessary to conform to such requirements.
Administration
The Performance Plan will be administered by the Compensation Committee, which will have the authority to interpret the Performance Plan, to establish performance targets and to establish the amounts of awards payable under the Performance Plan.
Participation and Eligibility
Individuals eligible for Performance Plan awards are officers and key employees of Agilent (as determined by the Compensation Committee), which include Agilent’s covered employees (within the meaning of Code Section 162(m)) and executive officersofficers. Each executive officer has an interest in Proposal No. 3. The number of key employees who will participate in the Performance Plan and the amount of Performance Plan awards are not presently determinable.
Plan Operation
The Performance Plan provides Agilent with a competitive bonus plan reflecting the more prevalent customs and practices for deductibilitybonus plans among its peer group. The payment of awards to each participant is based on an individual bonus target for the performance period set by the Compensation Committee in writing and related to the satisfaction of the applicable performance goal(s) pre-established by the Compensation Committee for such performance period. The performance goals available under the Performance Plan are listed below:
Performance Goals under the Performance-Based Compensation Plan | ||||
I. | Pre-tax income or after-tax income | |||
II. | Income or earnings including operating income, earnings before or after taxes, interest, depreciation and/or amortization | |||
III. | Net income excluding amortization of intangible assets, depreciation and impairment of goodwill and intangible assets and/or excluding charges attributable to the adoption of new accounting pronouncements | |||
IV. | Earnings or book value per share (basic or diluted) | |||
V. | Return on assets (gross or net), return on investment, return on invested capital, or return on equity |
RE-APPROVAL AND AMENDMENT OF THE PERFORMANCE-BASED |
Performance Goals under the Performance-Based Compensation Plan | ||||
VI. | Return on revenues | |||
VII. | Cash flow, free cash flow, cash flow return on investment (discounted or otherwise), net cash provided by operations, or cash flow in excess of cost of capital | |||
VIII. | Economic value created | |||
IX. | Operating margin or profit margin | |||
X. | Stock price or total stockholder return | |||
XI. | Income or earnings from continuing operations | |||
XII. | Capital expenditures, cost targets, reductions and savings and expense management | |||
XIII. | Strategic business criteria, consisting of one or more objectives based on meeting specified market penetration or market share, geographic business expansion, objective customer satisfaction or information technology goals, and objective goals relating to divestitures, joint ventures, mergers, acquisitions and similar transactions |
Under the Performance Plan, a performance goal is an objective formula or standard utilizing one or more of the factors in the table above and any objectively verifiable adjustment(s) thereto permitted and pre-established by the Compensation Committee in accordance with Code Section 162(m), although.
Under the Administrator believes it is appropriate to retainPerformance Plan, the Compensation Committee has the flexibility to authorizedetermine the duration of a performance period as any period not exceeding 36 months. The performance period(s)’ individual bonus target(s) and performance goal(s) will be adopted by the Compensation Committee in its sole discretion with respect to each performance period and must be adopted no later than the latest time permitted by the Internal Revenue Code in order for bonus payments pursuant to the Performance Plan to be deductible under Code Section 162(m). Additionally, the Compensation Committee may establish different performance periods for different participants, and the Committee may establish concurrent or overlapping performance periods.
Payment of compensationAwards
The Performance Plan will allow the Compensation Committee to pay awards in either cash and/or Agilent common stock issued from Agilent’s 2009 Stock Plan. The actual amount of future bonus payments under the Performance Plan is not presently determinable. However, the Performance Plan provides that the maximum amount of any awards that can be paid under the Performance Plan to any participant with respect to any 12-month performance cycle is $10,000,000. The $10,000,000 maximum award with respect to any 12-month performance period is better aligned with current competitive maximums of Agilent’s peer group and gives the Compensation Committee greater flexibility to award incentives based on need pursuant to prevalent practices by members of Agilent’s peer group and pursuant to potential concurrent or overlapping performance periods. Further, the Compensation Committee, in its sole discretion, may exercise negative discretion to reduce or eliminate the amount of a participant’s bonus under the Performance Plan to an amount below the amount otherwise payable pursuant to the Performance Plan formula.
The payment of an award for a given performance period generally requires the participant to be employed by Agilent as of the last day of the performance period. Prior to the payment of any award under the Performance Plan, the Compensation Committee must make a determination, certified in writing, that the conditions to payment for the applicable performance period have been satisfied. The payment of awards under the Performance Plan must be made in cash or Agilent common stock and occur within a reasonable period of time after the end of the applicable performance period. Payment
RE-APPROVAL AND AMENDMENT OF THE PERFORMANCE-BASED |
of an award under the Performance Plan may also be deferred for payment at a future date under the terms of the 2005 Deferred Compensation Plan (see the “Non-Qualified Deferred Compensation in Last Fiscal Year” table below).
Federal Income Tax Considerations
All amounts paid pursuant to the Performance Plan are taxable income to the employee when paid. Agilent will be entitled to a federal income tax deduction for all amounts paid under the Performance Plan if it is approved by stockholders and meets the other requirements of Code Section 162(m). However, if the proposal is not qualifyapproved by stockholders and the Compensation Committee implements alternative methods of paying bonuses in lieu of the Performance Plan beginning in fiscal 2015, the future deductibility by Agilent of any such bonuses may be limited by Code Section 162(m).
Amendment and Term of the Plan
The Performance Plan will first become available for deductibilityperformance periods beginning in fiscal 2015. The Performance Plan does not have a fixed termination date and may be terminated by the Compensation Committee at any time, provided that such termination will not affect the payment of any award accrued prior to the time of termination. The Compensation Committee may amend or suspend, and reinstate, the Performance Plan at any time, provided that any such amendment or reinstatement shall be subject to shareholder approval if required by Code Section 162(m), or any other applicable laws, rules or regulations.
Plan Benefits
All awards under the Performance Plan to the Agilent officers named in the Administrator’s judgment, it isSummary Compensation Table on page 55 and all current executive officer participants as a group during fiscal 2015 will be based on Agilent’s actual performance during fiscal 2015 and will be made at the discretion of the Compensation Committee. Therefore, the benefits and amounts that will be received or allocated under the Performance Plan to Agilent’s executive officers during fiscal 2015 are not determinable at this time. Cash bonuses paid to our named executive officers during fiscal 2014 are shown in this Proxy Statement in the Company’s best interestSummary Compensation Table included in the section entitled “Executive Compensation” below and discussed in more detail in the section entitled “Compensation Discussion and Analysis—Short-Term Cash Incentives” below. Bonuses under the Performance Plan are subject to do so.the Executive Compensation Recoupment Policy, which is described in the section entitled “Compensation Discussion and Analysis—Compensation Philosophy” below.
|
Equity Compensation Plan InformationVote Required
The following table summarizes information about our equity compensation plans asaffirmative vote of October 31, 2013. All outstanding awards relate to our common stock.
Number of Securities | ||||||||||||
Weighted-average | Remaining Available for | |||||||||||
Number of Securities | Exercise Price of | Future Issuance under | ||||||||||
to be Issued upon | Outstanding | Equity Compensation Plans | ||||||||||
Exercise of | Options, | (Excluding Securities | ||||||||||
Outstanding Options, | Warrants and | Reflected in Column | ||||||||||
Plan Category | Warrants and Rights | Rights | (a)) | |||||||||
(a) | (b) | (c) | ||||||||||
Equity compensation plans approved | ||||||||||||
by security holders(1) (2) (3) | 13,155,214 | $ | 32 | 50,231,877 | ||||||||
Equity compensation plans not | ||||||||||||
approved by security holders | — | — | — | |||||||||
Total | 13,155,214 | $ | 32 | 50,231,877 | ||||||||
____________________ |
For additional information about the 2009 Stock Plan, we encourage you to review the entire texta majority of the plan,shares of Agilent common stock present or represented by proxy and voting at the annual meeting, together with the affirmative vote of a copy of which was filed as partmajority of the Company’s Proxy Statement filed with the Securities and Exchange Commissionrequired quorum, is required for approval of this proposal. If you own shares through a bank, broker or other holder of record, you must instruct your bank, broker or other holder of record how to vote in order for them to vote your shares so that your vote can be counted on January 27, 2009.this proposal.
Agilent’s Board recommends a vote FOR the reapprovalapproval of the material terms of the
performance goals and related provisions under the 2009 StockPerformance Plan
for purposes of
Code Section 162(m) and of the Internal Revenue Code.amendment to the Performance Plan.
APPROVAL OF AMENDMENTS TO OUR AMENDED AND RESTATED CERTIFICATE |
PROPOSAL 4 — | APPROVAL OF AMENDMENTS TO OUR AMENDED AND RESTATED CERTIFICATE OF INCORPORATION ANDBYLAWS TO DECLASSIFY THE BOARD |
The Company’s Amended and Restated Certificate of Incorporation (“Certificate”) and Amended and Restated Bylaws (the “Bylaws”) currently provide that the Board will be classified into three classes, as nearly equal in number as possible, with one class to be elected by the stockholders each year. As part of the Company’s commitment to effective governance practices, management and the Board undertook a review of current corporate governance trends and considered the view held by many institutional stockholders that transitioning to an annually elected board is preferable to maintaining a classified board. After careful consideration the Board has determined that it is appropriate to propose for stockholder consideration amendments to our Certificate and Bylaws that, if adopted, would eliminate the classified structure of our Board over a three-year period.
If this proposal is approved by the requisite percentage of stockholders, the Company will transition to a declassified structure under which current directors will serve out their remaining terms prior to standing for election and the entire Board will stand for election annually beginning in 2018. As part of the transition, at the Annual Meetings of Stockholders in 2016 and 2017, each of the Class I and Class II directors, respectively, will begin standing for annual election. The proposed amendments will not affect the unexpired term of any director elected prior to the Annual Meeting of Stockholders in 2016.
The proposed amendments to Article VII of the Certificate and Article III of the Bylaws are attached hereto asAnnexes B andC, respectively.
If the requisite percentage of stockholders approve the amendments, the Company anticipates filing the amended Certificate with the Delaware Secretary of State promptly following the Annual Meeting. Additionally, the Bylaws will be amended and restated to reflect these changes thereafter.
Vote Required
The affirmative vote of the holders of at least eighty percent (80%) of the outstanding voting stock of the Company is required for approval of this proposal.
Agilent’s Board recommends a vote FOR the approval of the proposed amendments to our
Certificate and Bylaws to declassify the Board.
COMMON STOCK OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT |
COMMON STOCK OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information, as of December 31, 2013,2014, concerning each person or group known by Agilent, based on filings pursuant to Section 13(d) or (g) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), to own beneficially more than 5% of the outstanding shares of our Common Stock
Name and Address of Beneficial Owner | Amount and Nature | Percent of Class | ||||
BlackRock, Inc. | 25,383,216 | (1) | 7.6% | |||
40 East 52nd Street | ||||||
New York, NY 10022 | ||||||
T. Rowe Price Associates, Inc. | 20,141,678 | (2) | 5.7% | |||
100 E. Pratt Street | ||||||
Baltimore, MD 21202 |
Name and Address of Beneficial Owner | Amount and Nature | Percent of Class | ||||||||||||
T. Rowe Price Associates, Inc. | 34,580,955 | (1) | 10.3 | % | ||||||||||
100 E. Pratt Street | ||||||||||||||
Baltimore, MD 21202 | ||||||||||||||
BlackRock, Inc. | 22,918,085 | (2) | 6.8 | % | ||||||||||
40 East 52nd Street | ||||||||||||||
New York, NY 10022 |
(1) | Based solely on information contained in a Schedule 13G/A filed with the SEC on November 10, 2014 by T. Rowe Price Associates, Inc. The Schedule 13G/A indicates that T. Rowe Price Associates, Inc. has sole voting power with respect to 8,551,483 shares and sole dispositive power with respect to 34,580,955 shares. These securities are owned by various individual and institutional investors including T. Rowe Price International Ltd. and T. Rowe Price Mutual Funds which T. Rowe Price Associates, Inc. serves as an investment adviser with power to direct investments and/or sole power to vote the securities. For purposes of the reporting requirements of the Securities Exchange Act of 1934, T. Rowe Price Associates, Inc. is deemed to be a beneficial owner of such securities; however, T. Rowe Price Associates, Inc. expressly disclaims that it is, in fact, the beneficial owner of such securities. | |
(2) | Based solely on information contained in a Schedule 13G/A filed with the SEC on January | |
The following table sets forth information, as of December 31, 2013,2014, concerning:
● | the beneficial ownership of Agilent’s common stock by each director and each of the named executive officers included in the Summary Compensation Table herein; and |
● | the beneficial ownership of Agilent’s common stock by all directors and executive officers as a group. |
The number of shares beneficially owned by each entity, person, director or executive officer is determined under the rules of the SEC, and the information is not necessarily indicative of beneficial ownership for any other purpose. Under such rules, beneficial ownership includes any shares as to which the individual has the sole or shared voting power or investment power and also any shares that the individual has the right to acquire as of March 1, 2014,2015, 60 days after December 31, 2013,2014, through the exercise of any stock option or other right. Unless otherwise indicated, each person has sole investment and voting power, or shares such powers with his or her spouse, with respect to the shares set forth in the following table.
Number of | Number of | Total Number | Total Shares | |||||||||||||||||||||||||
Shares of | Shares Subject | of Shares | Director | Beneficially Owned | ||||||||||||||||||||||||
Common | to Exercisable | Beneficially | Deferred | Plus Underlying | ||||||||||||||||||||||||
Name of Beneficial Owner | Stock | Options(1) | Owned(2) | Stock(3) | Units | |||||||||||||||||||||||
William P. Sullivan | 243,244 | 957,485 | 1,200,729 | 0 | 1,200,729 | |||||||||||||||||||||||
Paul N. Clark | 764 | 27,746 | (4) | 28,510 | 51,441 | 79,951 | ||||||||||||||||||||||
James G. Cullen | 13,590 | (5) | 29,993 | 43,583 | 51,197 | 94,780 | ||||||||||||||||||||||
Heidi Fields | 14,703 | 38,489 | 53,192 | 36,837 | 90,029 | |||||||||||||||||||||||
Robert J. Herbold | 33,259 | (6) | 35,025 | 68,284 | 0 | 68,284 | ||||||||||||||||||||||
Didier Hirsch | 4,236 | (7) | 181,654 | 185,890 | 0 | 185,890 | ||||||||||||||||||||||
Koh Boon Hwee | 38,422 | 29,993 | 68,415 | 8,853 | 77,269 | |||||||||||||||||||||||
Lars Holmkvist(8) | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||
David M. Lawrence, M.D. | 3,858 | (9) | 38,489 | 42,347 | 37,599 | 79,946 | ||||||||||||||||||||||
Michael R. McMullen | 76,213 | 298,513 | 374,726 | 0 | 374,726 | |||||||||||||||||||||||
Ronald S. Nersesian | 48,935 | 0 | 48,935 | 0 | 48,935 | |||||||||||||||||||||||
A. Barry Rand | 11,198 | 38,489 | 49,687 | 37,018 | 86,705 | |||||||||||||||||||||||
Nicolas Roelofs(10) | 71,876 | 0 | 71,876 | 0 | 71,876 | |||||||||||||||||||||||
Tadataka Yamada, M.D. | 8,175 | 0 | 8,175 | 6,425 | 14,600 | |||||||||||||||||||||||
All directors and executive officers as a group (18) persons(11) | 620,146 | 2,186,376 | 2,806,522 | 229,370 | 3,035,892 |
COMMON STOCK OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT |
Name of Beneficial Owner | Number of Shares of Common Stock | Deferred Stock(1) | Total Number of Shares Beneficially Owned(2) | Number of Shares Subject to Exercisable Options(3) | Total Shares Beneficially Owned Plus Underlying Units | ||||||||||||
William P. Sullivan | 239,825 | 218,342 | 458,167 | 720,836 | 1,179,003 | ||||||||||||
Paul N. Clark | 764 | 77,836 | 78,600 | 37,973 | (4) | 116,573 | |||||||||||
James G. Cullen | 16,767 | (5) | 70,727 | 87,494 | 41,049 | 128,543 | |||||||||||
Heidi Fields | 17,861 | 50,889 | 68,750 | 41,049 | 109,799 | ||||||||||||
Robert J. Herbold | 41,449 | (6) | — | 41,449 | 41,049 | 82,498 | |||||||||||
Didier Hirsch | 4,620 | (7) | 91,975 | 96,595 | 286,213 | 382,808 | |||||||||||
Marie Oh Huber | 38,506 | — | 38,506 | 169,667 | 208,173 | ||||||||||||
Koh Boon Hwee | 40,633 | 12,231 | 52,864 | 41,049 | 93,913 | ||||||||||||
Michael R. McMullen | 73,700 | — | 73,700 | 428,012 | 501,712 | ||||||||||||
Ronald S. Nersesian | 3,083 | — | 3,083 | — | 3,083 | ||||||||||||
A. Barry Rand | 19,388 | 53,316 | 72,704 | 41,049 | 113,753 | ||||||||||||
George A. Scangos, Ph.D. | 2,353 | — | 2,353 | — | 2,353 | ||||||||||||
Tadataka Yamada, M.D. | 8,175 | 15,405 | 23,580 | — | 23,580 | ||||||||||||
All directors and executive officers as a group (19) persons(8) | 548,502 | 597,123 | 1,145,625 | 2,033,718 | 3,179,343 |
(1) | ||
(2) | Individual directors and executive officers as well as all directors and executive officers as a group beneficially own less than 1% of the | |
(3) | ||
(4) | Consists of vested options gifted to Mr. Clark’s Family LLC. | |
(5) | Includes 3,000 shares held by Mr. Cullen’s Family Limited Partnership. | |
(6) | Includes | |
(7) | Includes 100 shares held by Mr. Hirsch’s | |
(8) | ||
Includes | ||
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act, requires Agilent’s directors, executive officers and holders of more than 10% of Agilent common stock to file reports with the SEC regarding their ownership and changes in ownership of Agilent stock. Agilent believes that during the 20132014 fiscal year, its executive officers, directors and holders of 10% or more of our common stock complied with all Section 16(a) filing requirements with the following exceptions:requirements.
In making these statements, Agilent has relied upon examination of copies of Forms 3, 4 and 5 provided to Agilent and the written representations of its directors and officers.
COMPENSATION OF NON-EMPLOYEE DIRECTORS |
COMPENSATION OF NON-EMPLOYEE DIRECTORS
Directors who are employed by Agilent do not receive any compensation for their Board services. As a result, Mr. Sullivan, an employee of Agilent, received no additional compensation for his Board services. The general policy of the Board is that compensation for non-employee directors should be a mix of cash and equity-based compensation that is competitive with the compensation paid to non-employee directors within Agilent’s peer group. The non-employee director’s compensation plan year begins on March 1 of each year (the “Plan Year”).
The table below sets forth the annual retainer, equity grants and committee premiums for the non-employee directors and the Non-Executive Chairman for the 20132014 Plan Year:
Summary of Non-Employee Director Annual Compensation for the 20132014 Plan Year
Committee Chair | Audit Committee | |||||
Cash Retainer(1) | Equity Grant(2) | Premium(3) | Member Premium(4) | |||
Non-employee director | $90,000 | $180,000 in value of a stock grant | $15,000 | $10,000 | ||
Non-Executive | ||||||
Chairman | $245,000 | $180,000 in value of a stock grant | Not eligible | $10,000 |
Cash Retainer(1) | Equity Grant(2) | Committee Chair Premium(3) | Audit Committee Member Premium(4) | |||
Non-employee director | $90,000 | $180,000 in value of a stock grant | $15,000 | $10,000 | ||
Non-Executive Chairman | $245,000 | $180,000 in value of a stock grant | Not eligible | $10,000 |
(1) | Each non-employee director may elect to defer all or part of the cash compensation to the 2005 Deferred Compensation Plan for Non-Employee Directors. Any deferred cash compensation is converted into shares of Agilent common stock. | |
(2) | The stock will be granted on the later of (i) March 1 or (ii) the first trading day after each Annual Meeting of Stockholders. The number of shares underlying the stock grant is determined by dividing $180,000 by the average fair market value of Agilent’s common stock over 20 consecutive trading days up to and including the day prior to the grant date. The stock grant vests immediately upon grant. Voluntary deferral is available as an option for the non-employee directors. | |
(3) | Non-employee directors (excluding the Non-Executive Chairman) who serve as the chairperson of a Board committee receive a “committee chair premium” of $15,000 in cash, paid at the beginning of each Plan Year. | |
(4) | Non-employee directors (including the Non-Executive Chairman) who serve as a member of the Audit and Finance Committee receive an additional $10,000 in cash, paid at the beginning of each Plan Year. |
A non-employee director who joins the Board of Directors after the start of the Plan Year will have his or her cash retainer, equity grant and committee chair premium pro-rated based upon the remaining days in the Plan Year that the director will serve.
In September 2013,2014, the Compensation Committee and the Board, based on the recommendation of the Compensation Committee’s independent compensation consultant, F.W. Cook, concluded that the current non-employee director compensation is competitive with Agilent’s peer group and would remain unchanged for the 20142015 Plan Year.
COMPENSATION OF NON-EMPLOYEE DIRECTORS |
Non-Employee Director Compensation for Fiscal Year 20132014
The table below sets forth information regarding the compensation earned by each of Agilent’s non-employee directors during the fiscal year ended October 31, 2013:2014:
Non-Employee Director Compensation for Fiscal Year 2013 | |||||||||||||||||
Cash | Committee | Stock | |||||||||||||||
Retainer | Fees | Awards | Total | ||||||||||||||
Name | ($)(1) | ($)(1) | ($)(2) (3) | ($) | |||||||||||||
Paul N. Clark | $ | 90,000 | $ | 10,000 | (5) | $177,013 | $277,013 | ||||||||||
James G. Cullen(4) | $ | 245,000 | — | $177,013 | $422,013 | ||||||||||||
Heidi Fields | $ | 90,000 | $ | 25,000 | (5) (6) | $177,013 | $292,013 | ||||||||||
Robert J. Herbold | $ | 90,000 | $ | 10,000 | (5) | $177,013 | $277,013 | ||||||||||
Koh Boon Hwee | $ | 90,000 | — | $177,013 | $267,013 | ||||||||||||
David M. Lawrence, M.D. | $ | 90,000 | $ | 15,000 | (7) | $177,013 | $282,013 | ||||||||||
A. Barry Rand | $ | 90,000 | — | $177,013 | $267,013 | ||||||||||||
Tadataka Yamada, M.D. | $ | 90,000 | — | $177,013 | $267,013 |
Non-Employee Director Compensation for Fiscal Year 2014 | |||||||
Name | Cash Retainer ($)(1) | Committee Fees ($)(1) | Stock Awards ($)(2) (3) | Total ($) | |||
Paul N. Clark | $ | 90,000 | $ | 10,000 | (5) | $180,000 | $280,000 |
James G. Cullen(4) | $ | 245,000 | $ | — | $180,000 | $425,000 | |
Heidi Fields | $ | 90,000 | $ | 25,000 | (5) (6) | $180,000 | $295,000 |
Robert J. Herbold | $ | 90,000 | $ | 10,000 | (5) | $180,000 | $280,000 |
Koh Boon Hwee | $ | 90,000 | $ | 15,000 | (7) | $180,000 | $285,000 |
George A. Scangos, Ph.D. | $ | 15,123 | $ | — | $ 90,739 | $105,862 | |
A. Barry Rand | $ | 90,000 | $ | — | $180,000 | $270,000 | |
Tadataka Yamada, M.D. | $ | 90,000 | $ | — | $180,000 | $270,000 |
(1) | Reflects all cash compensation earned during fiscal year | |
(2) | Reflects the aggregate grant date fair value for stock awards granted in fiscal year | |
(3) | A supplemental table following these footnotes sets forth: (i) the aggregate number of stock awards and option awards outstanding at fiscal year-end; (ii) the aggregate number of stock awards granted during fiscal year | |
(4) | Mr. Cullen has served as the Non-Executive Chairman of the Board since March 1, 2005. | |
(5) | Ms. Fields and Messrs. Clark and Herbold served as members of the Audit and Finance Committee during fiscal year | |
(6) | Includes $15,000 paid to Ms. Fields for chairing the Audit and Finance Committee during fiscal year | |
(7) |
COMPENSATION OF NON-EMPLOYEE DIRECTORS |
Additional Information With Respect to Director Equity Awards
The following table provides additional information on the outstanding equity awards at fiscal year-end and awards granted during fiscal year 20132014 for non-employee directors.
Grant Date Fair Value of | |||||||||||||||||
Stock Awards | Option Awards | Stock Awards | Stock | ||||||||||||||
Outstanding at | Outstanding at | Granted During | Awards Granted in | ||||||||||||||
Fiscal Year-End | Fiscal Year-End | Fiscal Year 2013 | Fiscal Year 2013 | ||||||||||||||
Name | (#)(1) | (#) | (#) | ($)(1) (2) | Stock Awards Outstanding at Fiscal Year-End (#)(1) | Option Awards Outstanding at Fiscal Year-End (#) | Stock Awards Granted During Fiscal Year 2014 (#) | Grant Date Fair Value of Stock Awards Granted in Fiscal Year 2014 ($)(1) (2) | |||||||||
Paul N. Clark | — | 27,746 | 4,250 | $177,013 | — | 27,746 | 3,158 | $ | 179,059 | ||||||||
James G. Cullen | — | 38,489 | 4,250 | $177,013 | — | 29,993 | 3,158 | $ | 179,059 | ||||||||
Heidi Fields | — | 38,489 | 4,250 | $177,013 | — | 29,993 | 3,158 | $ | 179,059 | ||||||||
Robert J. Herbold | — | 38,489 | 4,250 | $177,013 | — | 29,993 | 3,158 | $ | 179,059 | ||||||||
Koh Boon Hwee | — | 38,489 | 4,250 | $177,013 | — | 29,993 | 3,158 | $ | 179,059 | ||||||||
David M. Lawrence, M.D. | — | 38,489 | 4,250 | $177,013 | |||||||||||||
George A. Scangos, Ph.D. | — | — | 1,569 | $ | 93,988 | ||||||||||||
A. Barry Rand | — | 38,489 | 4,250 | $177,013 | — | 29,993 | 3,158 | $ | 179,059 | ||||||||
Tadataka Yamada, M.D. | — | — | 4,250 | $177,013 | — | — | 3,158 | $ | 179,059 |
(1) | Stock awards granted to non-employee directors vest immediately upon grant. | |
(2) | Reflects the aggregate grant date fair value of stock awards granted in fiscal year |
Non-Employee Director Reimbursement Practice for Fiscal Year 20132014
Non-employee directors are reimbursed for travel and other out-of-pocket expenses connected to Board travel.
Non-Employee Director Stock Ownership Guidelines
In 2005, the company adopted a policy that requires each non-employee director to own Agilent shares having a value of at least three times the annual cash retainer. In May 2010, the Compensation Committee, based on the recommendation of the Committee’s independent compensation consultant, F.W. Cook, amended the guidelines to increase the alignment of the non-employee directors’ interest with stockholder interests by requiring each non-employee director to own Agilent shares having a value of at least six times an amount equal to $90,000 (for the 20132014 Plan Year). The shares counted toward the ownership guidelines include shares owned outright and the shares of Agilent stock in the non-employee director’s deferred compensation account. For recently appointed non-employee directors, these ownership levels must be attained within five years from the date of their initial election or appointment to the board of directors. As of September 2013,2014, all of our incumbent non-employee directors had achieved the recommended ownership level except for Dr. Yamada who was appointed to the Board in January 2011 and has until January 2016 to meet the ownership requirements and Dr. Scangos who was appointed to the Board in September 2014 and has until September 2019 to meet the ownership requirements.
ADVISORY VOTE TO APPROVE NAMED EXECUTIVE OFFICER COMPENSATION |
PROPOSAL | NON-BINDING ADVISORY VOTE TO APPROVE THE COMPENSATION OF AGILENT’S NAMED EXECUTIVE OFFICERS |
The stockholders of Agilent are entitled to cast an advisory vote at the Annual Meeting to approve the compensation of the Company’s named executive officers, as disclosed in this proxy statement. The stockholder vote is an advisory vote only and is not binding on Agilent or its Board of Directors. The Company currently intends to submit the compensation of the Company’s named executive officers annually, consistent with the advisory vote of the stockholders at the Company’s 2011 Annual Meeting.
Although the vote is non-binding, the Compensation Committee and the Board of Directors value your opinions and will consider the outcome of the vote in establishing compensation philosophy and making future compensation decisions.
As described more fully in the “Compensation Discussion &and Analysis” on pages 41 to 59 and in “Executive Compensation” sections of the Summary Compensation Table and subsequent tables on pages 59 to 72,proxy statement, the Company’s named executive officers, as identified on page 4138 are compensated in a manner consistent with our business strategy, competitive practice, sound compensation governance principles, and stockholder interests and concerns. Our compensation policies and decisions are focused on pay-for-performance.
Fiscal year 2013 was successful for Agilent despite uncertainties in the economy. Consistent with our philosophy to pay for performance, our CEO’s total direct compensation for the fiscal year was aligned with our annual total shareholder return.2014 Highlights
● | Successful completion of the strategy to separate the Company to enhance shareholder value |
● | Strong fiscal year 2014 financial performance |
● | CEO pay increase aligned with strategic and financial performance |
● | Fiscal year 2014 NEO annual compensation targeted at market median |
● | Commencement of CEO succession plan |
● | Compensation governance and risk safeguards including waiver of the CEOs grandfathered change of control excise tax gross-up benefit |
Agilent also has several compensation governance programs in place as described on pages 43 to 44, and 56 to manage compensation risk and align Agilent’s executive compensation with long-term stockholder interests. These programs include:
● | a compensation recoupment policy; |
● | an independent compensation committee and compensation consultant; |
● | a hedging and insider trading policy; |
● | stock ownership guidelines; and |
● | an annual risk assessment. |
We are requesting your non-binding vote to approve the compensation of the Company’s named executive officers as described on pages 41 to 72, includingin the Summary Compensation Table“Compensation Discussion and subsequent tables on pages 59 to 72Analysis” and “Executive Compensation” sections of the proxy statement.
ADVISORY VOTE TO APPROVE NAMED EXECUTIVE OFFICER COMPENSATION |
Vote Required
The affirmative vote of a majority of the shares of Agilent common stock present or represented by proxy and voting at the annual meeting, together with the affirmative vote of a majority of the required quorum, is required for approval of this proposal. If you own shares through a bank, broker or other holder of record, you must instruct your bank, broker or other holder of record how to vote in order for them to vote your shares so that your vote can be counted on this proposal.
Agilent’s Board recommends a vote FOR the approval of the compensation of
Agilent’s named executive officers for fiscal 2013.2014.
COMPENSATION DISCUSSION AND ANALYSIS |
COMPENSATION DISCUSSION AND ANALYSIS
Introduction
The Compensation Committee is responsible for Agilent’s executive compensation program as well as the program’s underlying philosophy and related policies. The “Executive Compensation”This section of thisthe Proxy Statement presentsdescribes the detailed compensation arrangements for our named executive officers (“NEOs”)NEOs for fiscal year 2013,2014, which were exclusively determined by theour independent Compensation Committee.
In this Compensation Discussion and Analysis, we first provide anExecutive Summary. We next discuss the Compensation Committee’s process for deciding the compensation of our NEOs and the role of management in such decisions. Finally, we discuss and analyze the Compensation Committee’s specific decisions regarding fiscal year 2013 compensation for the NEOs and other related matters.
For the fiscal year ended October 31, 2013,2014, our NEOs and their titles were as follows:
● | William P. Sullivan,
____________________
In this Compensation Discussion and Analysis, we first provide an executive summary. We next discuss the Compensation Committee’s philosophy and process for determining the compensation of our NEOs. We then summarize and analyze the Compensation Committee’s specific decisions regarding fiscal year 2014 compensation for the NEOs. Executive Summary
Pay for Performance-Agilent’s Fiscal Year 2014 Financial Performance and Executive Compensation The year over year increase in our CEO’s annual total direct compensation is consistent with our strong financial results, our year over year increase in stock price and reflects our strong commitment to pay for performance. The core of Agilent’s executive compensation philosophy continues to be pay for performance, as discussed in greater detail below.
The chart below demonstrates how the historical compensation of our CEO compares to our absolute TSR during the same period. Fiscal Year 2014, a Year of Transition and the Effect of the Spin-Off of Keysight Technologies Fiscal year 2014 was a year of transition and continued building of shareholder value for Agilent. On September 19, 2013, In September 2014 following the operational separation of Keysight from Agilent Mr. McMullen’s Fiscal Year 2015 Compensation Approach On November 19, 2014, the Compensation Committee met to determine NEO annual compensation and Mr. McMullen’s compensation for fiscal year 2015. No increase was made to either Mr. McMullen’s base salary of $700,000 or his target award of 100% under the Performance Based Compensation Plan. However, the Compensation Committee granted to Mr. McMullen long-term incentive equity awards with a target value of approximately $3,600,000, with approximately half of the target value in a stock option award and half of the target value in performance stock units. The stock option award vests 25% per year over four years, and the performance stock unit award vests 100% at the conclusion of the three-year performance period.
The Compensation Committee anticipates that effective upon Mr. McMullen’s promotion to CEO on March 18, 2015, it will Mr. McMullen has entered into the Company’s Tier II Change of Mr. Sullivan’s Fiscal Year 2015 Compensation Approach On November 19, 2014, the Compensation Committee also met to determine Mr. Sullivan’s compensation for fiscal year 2015. For fiscal year 2015, Mr. Sullivan Listening to Our Shareholders and Say On Pay Our programs are well aligned with the interests of our shareholders and are instrumental to achieving our business strategy. In determining executive compensation for fiscal year
As set forth above, the primary focus of our compensation philosophy is to pay for performance. This philosophy is executed with the following compensation governance provisions:
Compensation Philosophy The main objectives of our executive compensation program are to pay for performance while aligning executives’ interests with shareholder interests. Our pay levels are reasonable and competitive to attract and retain the best talent and structure pay to support our business objectives with appropriate rewards for short-term operating results and long-term shareholder value creation. Accordingly, we structure our executive compensation program with three basic direct elements: Base Salary.Base salaries have historically accounted for 20% or less of total compensation for our NEOs. This element is intended to establish the minimum or base-line competitive compensation level that sits beneath the variable compensation components. The remaining 80% or more of our total compensation is performance-based as described below. Short-Term Cash Incentives. We use financial metrics such as revenue growth and operating Long-Term Incentives. Our long-term incentives consist of a combination of (1) stock options that vest over four years and have a 10-year term and (2) performance shares that vest at the end of a three-year period based on continued employment and our relative Total Shareholder Return (“TSR”) versus peer companies. The purpose of the long-term incentives is to provide a competitive element of total direct compensation, enable employment retention, facilitate executive stock ownership, and reward for multi-year shareholder value creation through the performance of our stock as measured against (1) historical prices and (2) the shareholder return of our peers. Our
Compensation
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Hedging and Insider | In 2010, our insider trading policy was updated to expressly bar ownership of financial instruments or participation in investment strategies that hedge the economic risk of owning Agilent stock. We also prohibit officers and directors from pledging Agilent securities as collateral for loans. In addition, we prohibit our officers, directors and employees from purchasing or selling Agilent securities while in possession of material, non-public information, or otherwise using such information for their personal benefit. Our executives and directors are permitted to enter into trading plans that are intended to comply with the requirements of Rule 10b5-1 of the Securities Exchange Act of 1934 so that they can prudently diversify their asset portfolios and exercise their stock options before their scheduled expiration dates. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
A Culture of Ownership | Our stock ownership guidelines are designed to encourage our NEOs and other executive officers to achieve and maintain a significant equity stake in Agilent and more closely align their interests with those of our stockholders. The guidelines provide that the CEO should accumulate and hold, within five years from election to his or her position, an investment level in our stock equal to a multiple of six times his or her annual base salary. The guidelines further provide that the COO, CFO and other executive officers should accumulate and hold, within five years from appointment to their executive officer positions, an investment level in our stock equal to the lesser of either (1) a multiple of three times their annual base salary or (2) direct ownership of a certain level of shares of Agilent stock. The investment level as a multiple of annual base salary or direct ownership guidelines is set forth below:
Process For fiscal year To determine total compensation for the upcoming fiscal year, the Compensation Committee considers 1) the performance of each individual executive for the last fiscal year, 2) the most recent peer group data from F.W. Cook, and 3) our business and strategic goals for the coming fiscal year. F.W. Cook presents and analyzes market data, for benchmarking each individual position, and provides insight to market practices for the Compensation Committee’s actions, but it does not make any specific compensation recommendations on the individual NEOs. The Compensation Committee determines the form and amount of compensation for all executive officers after considering the market data and company, business unit and individual performance. For fiscal year
The Compensation Committee also reviews detailed tally sheets for the CEO and other NEOs. Tally sheets used for The Compensation Committee, which is composed solely of independent members of the Board, operates under a Board-approved charter that spells out the Committee’s major duties and responsibilities. This charter is available on Agilent’s website at http://www.investor.agilent.com/phoenix.zhtml?c=103274&p=irol-govhighlights. Role of Management The CEO and the Senior Vice President, Human Resources consider the responsibilities, performance and capabilities of each of the Company’s executive officers, including the NEOs, other than the CEO, and what compensation package they believe will
Benchmarking NEO Compensation Peer Group At the beginning of each fiscal year, the Compensation Committee meets with F.W. Cook to review and approve the peer group companies that satisfy our selection criteria. F.W. Cook has been the Compensation Committee’s consultant for a number of years. The peer group used for setting fiscal year 2013 NEO target compensation consisted of 29 product, capital market and labor market competitors with revenues between $1.8 billion and $18 billion or between 0.25x and 2.5x times Agilent’s revenue of approximately $7 billion for fiscal year 2013. Using the same criteria as noted above, the peer group used for setting fiscal year 2014 NEO target compensation, as noted below, consists of 28 companies. The range of annual revenues for peer group members was determined so that Agilent’s size measured in annual revenue would be at the median of the peer group. The 28 companies are all in the S&P 500 Information Technology, Health Care and Industrials Sector. A comparison between the old and new comparator groups showed an insignificant statistical impact on compensation levels between the two groups. F.W. Cook used the compensation information reported in the public filings of our peer group companies and survey data to make our comparisons and adjusted the data to reflect the age of the reported information. We used this peer group data, targeting the market median, to set each NEO’s compensation for FY14. FISCAL YEAR 2014 NEO COMPENSATION PEER GROUP(1)
____________________
In anticipation of the company separation on November 1, 2014, the Compensation Committee and F.W. Cook reviewed and approved the future peer group selection criteria for Agilent and Keysight. For Agilent, the peer group to be used for setting fiscal year 2015 NEO compensation will consist of product, capital market and labor market competitors in the S&P 500 Health Care Sector with revenues between $1.8 billion and $10 billion or between 0.25x and 2.5x times Agilent’s projected revenue. Keysight’s new peer group will consist of product, capital market and labor market competitors in the following Russell 3000 GICS sub-industries; Communications Equipment, Computer Storage & Peripherals, Electrical Components & Equipment, Electronic Components, Electronic Equipment & Instruments, Electronic Manufacturing Services and Semiconductor Equipment; with revenues between $1 billion and $9 billion or between 0.33x and 3x Keysight’s projected revenue.
The new peer groups identified by each company’s new selection criteria will take effect for fiscal year 2015 when Agilent and Keysight are separate companies. However, the Compensation Committee considered these future peer groups when making NEO compensation decisions for fiscal year 2014. The Committee found that the new peer groups for Agilent and Keysight had similar executive compensation philosophies and programs, and that compensation for Agilent’s NEOs was in line with the peer groups identified for each company following the separation on November 1, 2014. For Agilent, this new peer group consisted of 30 companies in the S&P 500 Health Care sector listed in the table below.
For Keysight, the new peer group consisted of 27 companies in the Russell 3000 Information Technology sector listed below. This peer group was considered when determining pay for Mr. Nersesian.
Peer Group for the Long-Term Performance Program The Compensation Committee CEO Compensation The Compensation Committee establishes the CEO’s compensation based on a thorough review of the CEO’s performance that includes: (i) an objective assessment against agreed-to metrics set by the Compensation Committee; (ii) tally sheets, (iii) market data from F.W. Cook, (iv) a self-evaluation by the CEO that the Compensation Committee discusses with the independent directors; and (v) a qualitative evaluation of the CEO’s performance that is developed by the independent directors, including each member of the Compensation Committee, in executive session. The CEO’s total direct compensation package is reviewed annually by the Compensation Committee, which then presents its recommendation to the other independent directors for review and comment. The Compensation Committee then makes the final determinations on compensation for the CEO.
Fiscal Year For
Our executives’ total compensation packages reflect Agilent’s philosophy of aligning pay with performance and rewarding top talent. Accordingly, long-term incentive awards, which for fiscal year For fiscal year
Base Salary Our salaries reflect the responsibilities of each NEO, the competitive market for comparable professionals in our industry, and are set to create an incentive for executives to remain with Agilent. Base salaries and benefits packages are the fixed components of our NEOs’ compensation and do not vary with company performance. NEOs’ base salaries are set by considering benchmark market data as well as the performance of each NEO. Our NEOs’ base salaries for fiscal year Short-Term Cash Incentives The Performance-Based Compensation Plan applies to our NEOs and provides the opportunity for cash awards every six months linked to specific
beginning of the period, based on recommendations from
of performance against the goals for each period, payouts, if any, are made in cash. Metrics and goals cannot be changed after they have been approved by the Compensation Committee. The Performance-Based Compensation Plan reflects our pay-for-performance philosophy and directly ties short-term incentives to short-term business performance. Our NEOs’ target bonus amounts 50th percentile. For fiscal year
The payouts under the Performance-Based Compensation Plan for fiscal year 2014 are provided in the table below and in the “Non-Equity Incentive Plan Compensation” column in the “Summary Compensation Table”.
Target Award Percentages Our Compensation Committee set the monetary value of the fiscal year 2014 short-term incentive targets based on a percent of base salary pre-established for each NEO. The Compensation Committee also considered the relative responsibility of each NEO. Each NEO’s short-term incentive target for fiscal year 2014 was set between 75% and 150% of base salary (depending on his/her position), as follows: Fiscal Year 2014 Short-Term Incentive Payout Table*
____________________
Mr. Sullivan’s fiscal year 2014 bonus of $1,631,089 reflects our below target fiscal year 2014 financial results and the successful spin-off of Keysight resulting in above target performance for Mr. Sullivan’s strategic objective for the fiscal year. Financial Target Metrics and Fiscal Year 2014 Operational Results The Performance-Based Compensation Plan financial target metrics were based on (1) Agilent’s The Compensation Committee chose those metrics because:
Operating Profit (segment level) is a non-GAAP measure defined as revenue less the sum
To determine earned awards, we use payout matrices that link the metrics and reflect threshold-to-maximum opportunities based on various achievement levels of the metrics. No awards are paid unless the
COMPENSATION DISCUSSION AND ANALYSIS Strategic Component and Fiscal Year 2014 Results For fiscal year Non-GAAP pre-tax earnings is defined as earnings before income taxes that exclude primarily the impact of integration costs, acquisition fair value adjustments, restructuring and asset impairment charges, business acquisition and separation costs, non-cash intangibles amortization as well as gains and losses from the sale of investments and disposals of businesses.
Long-Term Incentives – Stock Options and Performance Stock Units For fiscal year
Targeting approximately half of the long-term incentive value in a stock option and half of the value in performance The Compensation Committee concluded that 2014 LTP Program awards were not appropriate for Mr. Nersesian given the performance period would extend two years beyond the planned November 2014 separation date for Keysight Technologies. As such, Mr. Nersesian received restricted stock units in lieu of performance stock units in 2014. These restricted stock units vest 25% each year over the next four years. The target value of the long-term incentive awards is determined at the beginning of the then-current fiscal year for each NEO and is partially derived from the peer group data provided by In addition to their annual long-term incentive awards, the Compensation Committee awarded Mr. Sullivan and Ms. Huber restricted stock units in the amounts of 40,000 shares and 5,000 shares, respectively. Mr. Sullivan’s award which vests 33% in the first year, 33% in the second year and 34% in the third year, was in recognition of the value of his almost ten years’ experience as a seasoned CEO
and the extraordinary demand being made on his time as the company embarked on its year-long separation work, as well as to provide the stability and leadership required to assemble Agilent’s and Keysight’s respective executive teams and make the spin-off a success. Ms. Huber’s award, which vests 25% per year over 4 years, was in recognition of her significant current and anticipated contributions for the separation of Keysight.
____________________
The performance stock units granted in fiscal year
Performance stock units are completely “at-risk” compensation because Agilent’s performance
The Compensation Committee has established rolling three-year performance periods for determining earned awards under our LTP Program and uses relative TSR as a single metric. This metric aligns with shareholder interests as higher TSR results in higher potential returns for shareholders as well as ensuring a correlation between performance and payouts. As noted above, our short-term incentive program focuses on For purposes of determining the awards, relative TSR reflects (i) the aggregate change in the 20-day average closing price of Agilent’s stock versus each of the companies in Agilent’s LTP Program peer group, each as measured at the beginning and end of the three-year performance period plus (ii) the value (if any) returned to shareholders in the form of dividends or similar distributions, assumed to be reinvested quarterly on a pre-tax basis.
Performance Stock Units Earned in Fiscal Year The performance
Agilent’s TSR performance relative to peers and the payout percentages for the LTP Program for the past 5 years are set forth in the following table:
The table below sets forth the targeted number of Fiscal Year
____________________
Equity Grant Practices The Compensation Committee generally makes grants of stock awards to our NEOs at the first Compensation Committee meeting of our fiscal year. Awards are neither timed to relate to the price of Agilent’s stock nor to correspond with the release of material non-public information, although grants are generally made when Agilent’s trading window is open. Grants to current employees are generally effective on the date of the Compensation Committee meeting approving such grants. Grants to new employees, including potential NEOs, are typically made at the next regularly scheduled Compensation Committee meeting following the employee’s start date.
If an Benefits Agilent’s global benefits philosophy is to provide NEOs with protection and security through health and welfare, retirement, disability insurance and life insurance programs. During fiscal year In addition to the company-wide benefits, Agilent’s NEOs have company-paid financial counseling through a third party service to assist with their personal finances. We believe that providing this service gives our NEOs a better understanding of their pay and benefits, allowing them to concentrate on Agilent’s future success. NEOs are also provided executive physical examinations, for which we cover the costs that are not otherwise covered under each NEO’s chosen health plan. We believe that the executive physical is a prudent measure to help ensure the health of our executives. Both the financial counseling and the executive physicals are benefits generally provided by our peer companies and are available at a reasonable group cost to Agilent. Generally, it is our Compensation Committee’s philosophy to not provide perquisites to our NEOs except in limited circumstances. For example, in fiscal year
Deferred Compensation Our NEOs are eligible to voluntarily defer base salary, short-term incentives in the form of awards under the Performance-Based Compensation Plan and long-term incentives in the form of stock awards under the LTP Program. The deferrals are made through our 2005 Deferred Compensation Plan. This is a common benefit arrangement offered by our peer companies.
Payouts are distributed to eligible participants in January of the year following termination of employment, if termination occurs during the first six months of the calendar year. Otherwise, payouts are distributed to eligible participants in July of the year following termination. No early distributions or withdrawals are allowed. If an election is made to defer performance shares earned under the LTP Program, shares are deferred in the form of Agilent common stock only. At the end of the deferral period, the LTP Program shares are simply released to the executive.
These benefits and an additional description of plan features are set forth in the section entitled “Non-Qualified Deferred Compensation in Last Fiscal Year” below and the narrative descriptions accompanying this section. Pension Plans We provide a pension plan, the Agilent Technologies, Inc. Retirement Plan (“Retirement Plan”), to our current NEOs, as well as other eligible Agilent employees, who were hired before November 1, 2014 for long-term employment retention and to support our career-employment strategy, as well as to provide employee retirement savings. Additionally, we provide the Agilent Technologies, Inc. Deferred Profit-Sharing Plan (the “Deferred Profit-Sharing Plan”) that provides certain amounts to our NEOs and other Agilent employees who provided services to our predecessor company, Hewlett-Packard Company (“Hewlett-Packard”), prior to November 1, 1993. None of these plans provide any credit of benefits prior to the date of hire or where there is a break in service. Retirement benefits are set forth in the table entitled “Pension Benefits” Policy Regarding Compensation in Excess of $1 Million a Year Section 162(m) of the Internal Revenue Code generally disallows a tax deduction for compensation in excess of $1 million paid to our CEO, CFO and the three other most highly compensated NEOs Our Compensation Committee considers the impact of Section 162(m) in setting and determining executive compensation because it is concerned with the net cost of executive compensation to Agilent (i.e., taking into account the tax treatment of the compensation), and its ability to effectively administer executive compensation in the long-term interests of stockholders. For fiscal year
Termination and Change of Control Consistent with the practice of many of our peers, the Compensation Committee adopted change-of-control agreements designed to provide protection to the NEOs so they are not distracted by their personal, professional and financial situations at a time when Agilent needs them to remain focused on their responsibilities, Agilent’s best interests and those of all its stockholders. These agreements provide for a “double-trigger” payout only in the event of a change in control and the executive officer
is either terminated from his-or-her position or moved into a position that represents a substantial change in responsibilities within a limited period of time after the transaction (these agreements do not become operative unless both events occur). We have eliminated excise tax gross-ups for officers entering into newly executed change-of-control agreements after July 14, 2009. Meanwhile, our current CEO, Mr. Sullivan, has relinquished the tax gross-up in his new change-of-control agreement and Mr. McMullen, our future CEO, does not have tax gross-up in his current change-of-control agreement, nor will he when he becomes CEO. Potential payments to our NEOs in the event of a change of control under our existing agreements are reported in the “Termination and Change of Control Table.” In addition, we have a Workforce Management Program in place that is applicable to all Agilent employees, including NEOs. Employment security is tied to competitive realities as well as individual results and performance, but from time to time, business circumstances could dictate the need for Agilent to reduce its workforce. The Workforce Management Program is intended to assist employees affected by restructuring by providing transition income in the form of severance benefits.
Summary Compensation Table Agilent’s NEOs for fiscal
____________________
The following table itemizes the full grant date fair value of equity grants made during the
FASB ASC Topic 718 Assumptions The following table sets forth the weighted average FASB ASC Topic 718 assumptions used in
of Directors approved the initiation of quarterly cash dividends to the company’s shareholders. The fair value of all the awards granted prior to the declaration of quarterly cash dividends was measured based on an expected dividend yield of
Grants of Plan-Based Awards in Last Fiscal Year The following table sets forth certain information regarding grants of plan-based awards to each of our NEOs during fiscal year
____________________
Outstanding Equity Awards at Fiscal Year-End The following table provides information on the current holdings of options, performance-based stock awards and restricted stock units, by our NEOs as of October 31,
____________________
Option Exercises and Stock Vested at Fiscal Year-End The following table sets forth information on stock option exercises and stock vesting in fiscal year
____________________
Pension Benefits The following table shows the estimated present value of accumulated benefits,
Retirement Plan The Retirement Plan, which was closed to new participants as of November 1, 2014, guarantees a minimum retirement benefit payable at normal retirement age (the later of age 65 or termination). Benefits are accrued on a monthly basis as a lump sum payable at normal retirement age based on For participants who have fewer than 15 years of service: 11% × target pay at the end of the month PLUS 5% × target pay at the end of the month in excess of 50% of the Social Security Wage Base For participants who have 15 or more years of service: 14% × target pay at the end of the month PLUS 5% × target pay at the end of the month in excess of 50% of the Social Security Wage Base Benefits under the Retirement Plan are payable as either (a) a single life annuity for single participants or as (b) a 50% joint and survivor annuity for married participants. Participants may elect to receive payments at any time following termination or retirement and in the above forms or as an actuarially equivalent 75% or 100% joint and survivor annuity, or as a one-time lump sum. Payments made prior to normal retirement age will be reduced in accordance with the plan provisions. All regular full-time or regular part-time employees who were employees of Agilent prior to November 1, 2014 automatically become participants in the Retirement Plan on the May 1 or November 1 following completion of two years of service. Deferred Profit-Sharing Plan The Deferred Profit-Sharing Plan is a closed, defined contribution plan. The Deferred Profit-Sharing Plan was created by Hewlett-Packard and covers participants’ service with Hewlett-Packard before November 1, 1993 and is used as a floor offset for the Retirement Plan for service prior to November 1, 1993. There have been no contributions into the plan since October 31, 1993. For service prior to November 1, 1993 (if any), the benefit due is the greater of (i) the benefit defined by the Retirement Plan formula, Benefits under the Deferred Profit-Sharing Plan are payable at normal retirement age as either (i) a single life annuity for single participants, or (ii) a 50% joint and survivor annuity for married participants. Participants may elect to receive payments at any time following termination or retirement and in the above forms or as 75% or 100% joint and survivor annuity, or as a one-time lump sum.
Supplemental Benefit Retirement Plan The Supplemental Benefit Retirement Plan, which was closed to new participants as of November 1, 2014, is an unfunded, non-qualified deferred compensation plan. Benefits payable under this plan are equal to the excess of the combined qualified Retirement Plan and Deferred Profit-Sharing Plan amount that would be payable in accordance with the terms of the Retirement Plan disregarding the benefit and compensation limitations imposed pursuant to sections 415 and 401(a)(17) of the Internal Revenue Code. Benefits under the Supplemental Benefit Retirement Plan are payable upon termination or retirement as follows:
Non-Qualified Deferred Compensation in Last Fiscal Year For fiscal year There are three types of earnings that may be deferred under the program:
Deferral elections may be made annually and are part of overall tax planning for many executives. There are several investment options available under the Plan, most of which mirror the investment choices under our tax-qualified 401(k) At the time participation is elected, employees must also elect payout in one of three forms, which can commence upon termination or be delayed by an additional one, two or three years following termination:
Payouts are distributed to eligible participants in January of the year following termination, if termination occurs during the first six months of the calendar year. Otherwise, payouts are distributed to eligible participants in July of the year following termination where termination occurs during the second half of the calendar year. No early distributions or withdrawals are allowed. When and if received, a participant in the LTP Program may elect to defer his or her shares through our 2005 Deferred Compensation Plan. The LTP Program shares are deferred in the form of Agilent common stock only. At the end of the deferral period, the LTP Program shares are simply released to the executive. We have established a rabbi trust as a source of funds to make payments under the non-qualified deferred compensation plan. As of October 31, The table below provides information on the non-qualified deferred compensation of the NEOs for fiscal year
____________________
Agilent Technologies, Inc. France Pension Plan The Agilent Technologies France Pension Plan is a defined contribution plan created by Hewlett-Packard in 1982 and is open to all exempt employees in France. Since Mr. Hirsch was originally employed by Hewlett-Packard France, he is the only NEO participating in this plan. The French Pension Scheme is not a tax-qualified defined contribution plan under the U.S. Internal Revenue Code. Eligible employees must have Pensionable Salary above eight times the French Social Security Ceiling (“Tranche C” threshold) to be a participant of this plan. Agilent contributes 5% of Pensionable Salary and eligible employees contribute 3% of Pensionable Salary. Agilent no longer contributes to this plan on Mr. Hirsch’s behalf. Benefits under this plan are payable at the plan’s normal retirement age (age 65) or from age 60 with a 5% reduction per annum as a lifetime annuity resulting from the accumulated contributions and actual return on investments. Should the participant die prior to receiving benefits, the surviving spouse would receive 60% of the annuity accrued at the time of the participant’s death (death in service) or 60% of the actual annuity (death in retirement). In case of employment termination the accrued benefit retirement annuity and, where appropriate, contingent spouse’s pension is deferred to normal retirement age.
The Agilent Technologies, Inc. International Relocation Benefit Plan The Agilent Technologies, Inc. International Relocation Benefit Plan (“IRBP”) is an unfunded program that was created by Hewlett-Packard in 1989 and was open to employees who transferred from one country payroll to another at the Company’s request prior to December 1, 2001. Mr. Hirsch transferred from France to the United States at the Company’s request in September 1999. Upon transfer to the US payroll, he became eligible to participate in the Company’s US retirement programs and was no longer eligible to accrue benefits under the France Pension Plan. As he transferred at the Company’s request, he became eligible for the IRBP. The objective of the IRBP is to mitigate the possible estimated retirement income loss under country social security plans, governmental programs and Agilent retirement schemes to an employee who has transferred internationally on a permanent, company-sponsored basis. The plan was closed to new participants effective November 30, 2001. Effective May 1, 2012, the IRBP benefit was frozen for all participants. Mr. Hirsch’s benefit was Termination and Change of Control Arrangements Set forth below is a description of the plans and agreements that could result in potential payments to the NEOs in the case of their termination of employment and/or a change of control of Agilent. Change of Control Agreements Each NEO has signed a Change of Control Agreement. Under these agreements, in the event that within 24 months after a change of control of Agilent, Agilent or its successor terminates the employment of such executive without cause or an event constituting good reason occurs and the executive resigns within three months after such an event, the executive will be entitled to: (i) two times, or solely with respect to the CEO, three times, the sum of such executive’s base salary and target bonus, (ii) payment of $80,000 for medical insurance premiums, (iii) full vesting of all outstanding options and stock awards not subject to performance-based vesting, and (iv) a prorated portion of any bonus. The Committee amended our forms of Change of Control Agreement to remove tax gross-ups of parachute payments. These amended forms of agreements are used with any newly executed agreements after July 14, 2009. In September 2014, the Committee further amended these agreements to expand the Change of Control definition, add anticipatory termination language, more clearly define how the prorated bonus is calculated and clarify treatment of LTPP awards. For agreements entered into before
that the payment of these benefits triggers the excise tax under Section 4999 of the Code or any comparable federal, state, local or foreign excise tax, Agilent will be responsible for payment of any additional tax liability arising from the application of such excise tax, subject to certain exceptions for all of the named executives officers except the CEO. Only one officer has an agreement entered into prior to July 14, 2009 that contains a tax gross-up. In exchange for such consideration, each executive has agreed to execute a release of all of the executive’s rights and claims relating to his or her employment. Under
(iii) the acquisition of beneficial ownership of at least 25% of the total voting power of the outstanding voting securities of Agilent by a third “Good reason” means (i) the reduction of the officer’s rate of pay, other than reductions that apply to employees generally and variable and performance reductions; (ii) reduction in benefits or failure to receive the same benefits as similarly situated employees; (iii) a change in the officer’s duties, responsibilities, authority, job title, or reporting relationships resulting in a significant diminution of position, subject to certain exceptions; (iv) the relocation to a worksite that is more than 35 miles from his prior Under these agreements, “cause” means misconduct, including: (i) conviction of any felony or any crime involving moral turpitude or dishonesty which has a material adverse effect on Agilent’s business or reputation; (ii) repeated unexplained or unjustified absences from Agilent; (iii) refusal or willful failure to act in accordance with any specific directions, orders or policies of Agilent that has a material adverse effect on Agilent’s business or reputation; (iv) a material and willful violation of any state or federal law that would materially injure the business or reputation of Agilent as reasonably determined by the Board; (v) participation in a fraud or act of dishonesty against Agilent which has a material adverse effect on Agilent’s business or reputation; (vi) conduct by the officer which the Board determines demonstrates gross unfitness to serve; or (vii) intentional, material violation by the officer of any contract between the officer and Agilent or any statutory duty of the officer to Agilent that is not corrected within thirty days after written notice to the officer. In addition, in the event of a change of control:
Termination and Change of Control Table For each of the NEOs, the table below estimates the amount of compensation that would be paid in the event that (i) a change of control of Agilent occurs and executive is terminated without cause or voluntarily terminates at a time when an event constituting good reason has occurred either within 24 months following the change of control or within 3 months prior to such change of control, involuntary termination with or without cause, voluntary termination, or death, disability or retirement occurs. The amounts shown assume that each of the terminations was effective October 31,
____________________
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION The members of the Compensation Committee are set forth in “Board Structure and Compensation.” During the most recent fiscal year, no Agilent executive officer served on the compensation committee (or equivalent), or the board of directors, of another entity whose executive officer(s) served on Agilent’s Compensation Committee.
You may receive a copy of Agilent’s Annual Report on Form 10-K for the fiscal year ended October 31,
DIRECTIONS TO AGILENT’S HEADQUARTERS From the South (San Jose) Take Highway 280 North towards San Francisco. Take the Stevens Creek/Lawrence Expressway exit and turn left onto Stevens Creek Blvd. for approximately 0.1 miles and then turn right into Agilent’s parking lot at the second stop light. From the North (San Francisco) Take Highway 280 South towards San Jose. Take the Stevens Creek Blvd/Lawrence Expressway exit. Turn left on Stevens Creek Blvd. for approximately 0.2 miles and turn left into Agilent’s parking lot at the first stop light. Parking Parking will be designated as you enter the parking lot.
Admission to the annual meeting will be limited to stockholders. You are entitled to attend the annual meeting only if you are a stockholder of record as of the close of business on January
Annex A AGILENT TECHNOLOGIES, INC. 1. PURPOSE The purpose of the Agilent Technologies, Inc. Performance-Based Compensation Plan for Covered Employees (as amended from time to time, the “Plan”) is to reward and recognize eligible employees for their contributions towards the achievement by Agilent Technologies, Inc. (the “Company”) of certain Performance Goals (as defined below). The Plan is designed with the intention that the incentives paid hereunder to certain executive officers of the Company are deductible under Section 162(m) of the Internal Revenue Code of 1986, as amended, and the regulations and interpretations promulgated thereunder (the “Code”). However, the Company can not guarantee that awards under the Plan will qualify for exemption under Code Section 162(m) and circumstances may present themselves under which awards under the Plan do not comply with Code Section 162(m). The adoption of the Plan is subject to the approval of the Company’s shareholders. 2. DEFINITIONS The following definitions shall be applicable throughout the Plan: (a) “Affiliate” shall mean (i) any entity that, directly or indirectly, is controlled by the Company and (ii) any entity in which the Company has a significant equity interest, in either case, as determined by the Committee. (b) “Award” means the amount of a cash incentive payable under the Plan to a Participant with respect to a Performance Period. (c) “Board” means the Board of Directors of the Company, as constituted from time to time. (d) “Committee” means the Compensation Committee of the Board or another Committee designated by the Board which is comprised of two or more “outside directors” as defined in Code Section 162(m). (e) “Participant” means any employee of the Company or its Affiliates who is designated as a Participant (either by name or by position) by the Committee. (f) “Performance Goal” means an objective formula or standard determined by the Committee with respect to each Performance Period based on one or more of the following criteria and any objectively verifiable adjustment(s) thereto permitted and pre-established by the Committee in accordance with Code Section 162(m): (i) pre-tax income or after-tax income; (ii) income or earnings including operating income, earnings before or after taxes, interest, depreciation and/or amortization; (iii) net income excluding amortization of intangible assets, depreciation and impairment of goodwill and intangible assets and/or excluding charges attributable to the adoption of new accounting pronouncements; (iv) earnings or book value per share (basic or diluted); (v) return on assets (gross or net), return on investment, return on invested capital, or return on equity; (vi) return on revenues; (vii) cash flow, free cash flow, cash flow return on investment (discounted or otherwise), net cash provided by operations, or cash flow in excess of cost of capital; (viii) economic value created; (ix) operating margin or profit margin; (x) stock price or total stockholder return; (xi) income or earnings from continuing operations; (xii) capital expenditures, cost targets, reductions and savings and expense management; and (xiii) strategic business criteria, consisting of one or more objectives
based on meeting specified market penetration or market share, geographic business expansion, objective customer satisfaction or information technology goals, and objective goals relating to divestitures, joint ventures, mergers, acquisitions and similar transactions, each with respect to the Company and/or one or more of its Affiliates or operating units. (g) “Performance Period” means any period not exceeding 36 months as determined by the Committee, in its sole discretion. The Committee may establish different Performance Periods for different Participants, and the Committee may establish concurrent or overlapping Performance Periods. 3. ADMINISTRATION The Plan shall be administered by the Committee, which shall have the discretionary authority to interpret the provisions of the Plan, including all decisions on eligibility to participate, the establishment of Performance Goals, the amount of Awards payable under the Plan, and the payment of Awards. The Committee shall also have the discretionary authority to establish rules under the Plan so long as such rules do not explicitly conflict with the terms of the Plan and any such rules shall constitute part of the Plan. The decisions of the Committee shall be final and binding on all parties making claims under the Plan. 4. ELIGIBILITY Employees of the Company shall be eligible to participate in the Plan as determined at the sole discretion of the Committee. 5. AMOUNT OF AWARDS (a) With respect to each Participant, the Committee will establish one or more Performance Periods, an individual Participant incentive target for each Performance Period and the Performance Goal(s) to be met during such Performance Period(s). In order to qualify as performance-based compensation, the establishment of the Performance Period(s), the applicable Performance Goals and the targets must occur in compliance with and to the extent required by the rules and regulations of Code Section 162(m). (b) The maximum amount of any Awards that can be paid under the Plan to any Participant with respect to any 12-month performance cycle is $10,000,000. (c) The Committee reserves the right, in its sole discretion, to reduce or eliminate the amount of an Award otherwise payable to a Participant with respect to any Performance Period. The reduction of an Award otherwise payable to a Participant with respect to a Performance Period shall have no effect on the Award payable to any other Participant for such Performance Period. 6. PAYMENT OF AWARDS Any distribution made under the Plan shall be made in cash and/or stock awards (as defined in the Company’s 2009 Stock Plan, as amended) andoccur within a reasonable period of time after the end of the Performance Period in which the Participant has earned the Award;provided that no Award shall become payable to a Participant with respect to any Performance Period until the Committee has certified in writing that the terms and conditions underlying the payment of such Award have been satisfied. Notwithstanding the foregoing, in order to comply with the short-term deferral exception under Section 409A of the Code, payment shall occur no later than the 15th day of the third month following the end of the Company’s taxable year in which the payment was earned.
7. CHANGES IN STATUS (a) Except as may be otherwise determined by the Committee in its sole discretion, the payment of an Award with respect to all or a portion of a specific Performance Period, as applicable, requires that the employee be on the Company’s payroll in active service as of the end of such Performance Period unless the Participant is not in active service on the last day of the Performance Period due to retirement, workforce management, total and permanent disability or death, in which case the Participant will be eligible to receive a prorated Award for days worked with respect to the Performance Period to the extent that the relevant Performance Goals have been met. A Participant who becomes ineligible for this Plan after the start of the Performance Period is eligible to receive a prorated Award for days worked, except as provided in Section 7(b). (b) A Participant will forfeit any Award for a Performance Period during which a Participant is involuntarily terminated for cause or voluntarily terminates his employment with the Company for reasons other than death, total and permanent disability, workforce management or retirement, at the age and service-year level set by the Company or the local law requirements where the Participant is employed. 8. RECOUPMENT Any Award paid under the Plan is subject to the terms of the Agilent Technologies Executive Compensation Recoupment Policy, or any successor policy thereto, in the form approved by the Committee as the date of grant (the “Policy”), if and to the extent that the Policy by its terms applies to the Award and the Participant. 9. GENERAL (a) TAX WITHHOLDING. The Company shall have the right to deduct from all Awards any federal, state or local income and/or payroll taxes required by law to be withheld with respect to such payments. The Company also may withhold from any other amount payable by the Company or any affiliate to the Participant an amount equal to the taxes required to be withheld from any Award. (b) CLAIM TO AWARDS AND EMPLOYMENT RIGHTS. Nothing in the Plan shall confer on any Participant the right to continued employment with the Company or any of its affiliates, or affect in any way the right of the Company or any affiliate to terminate the Participant’s employment at any time, and for any reason, or change the Participant’s responsibilities. Awards represent unfunded and unsecured obligations of the Company and a holder of any right hereunder in respect of any Award shall have no rights other than those of a general unsecured creditor to the Company. (c) BENEFICIARIES. To the extent the Committee permits beneficiary designations, any payment of Awards under the Plan to a deceased Participant shall be paid to the beneficiary duly designated by the Participant in accordance with the Company’s practices. If no such beneficiary has been designated or survives the Participant, payment shall be made to the Participant’s legal representative. A beneficiary designation may be changed or revoked by a Participant at any time, provided the change or revocation is filed with the Committee prior to the Participant’s death. (d) NONTRANSFERABILITY. A person’s rights and interests under the Plan, including any Award previously made to such person or any amounts payable under the Plan, may not be sold, assigned, pledged, transferred or otherwise alienated or hypothecated except, in the event of a Participant’s death, to a designated beneficiary as provided in the Plan, or in the absence of such designation, by will or the laws of descent and distribution.
(e) INDEMNIFICATION. Each person who is or shall have been a member of the Committee and each employee of the Company or an affiliate who is delegated a duty under the Plan shall be indemnified and held harmless by the Company from and against any loss, cost, liability or expense that may be imposed upon or reasonably incurred by him in connection with or resulting from any claim, action, suit or proceeding to which he may be a party or in which he may be involved by reason of any action or failure to act under the Plan and against and from any and all amounts paid by him in satisfaction of judgment in any such action, suit or proceeding against him, provided such loss, cost, liability or expense is not attributable to such person’s willful misconduct. Any person seeking indemnification under this provision shall give the Company prompt notice of any claim and shall give the Company an opportunity, at its own expense, to handle and defend the same before the person undertakes to handle and defend such claim on his or her own behalf. The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such persons may be entitled, including under the Company’s Articles of Incorporation or By-Laws, as a matter of law, or otherwise, or any power that the Company may have to indemnify them or hold them harmless. (f) EXPENSES. The expenses of administering the Plan shall be borne by the Company. (g) TITLES AND HEADINGS. The titles and headings of the sections in the Plan are for convenience of reference only, and in the event of any conflict, the text of the Plan, rather than such titles or headings, shall control. (h) INTENT. The intention of the Company and the Committee is to administer the Plan in compliance with Code Section 162(m) so that the Awards paid under the Plan to Participants who are or may become subject to Code Section 162(m) will be treated as performance-based compensation under Code Section 162(m)(4)(C). If any provision of the Plan does not comply with the requirements of Code Section 162(m), then such provision shall be construed or deemed amended to the extent necessary to conform to such requirements. (i) GOVERNING LAW. The validity, construction, and effect of the Plan, any rules and regulations relating to the Plan, and any Award shall be determined in accordance with the laws of the State of California (without giving effect to principles of conflicts of laws thereof) and applicable federal law. No Award made under the Plan shall be intended to be deferred compensation under Code Section 409A and will be interpreted accordingly. (j) AMENDMENTS AND TERMINATION. The Committee may terminate the Plan at any time, provided such termination shall not affect the payment of any Awards accrued under the Plan prior to the date of the termination. The Committee may, at any time, or from time to time, amend or suspend and, if suspended, reinstate, the Plan in whole or in part; provided, however, that any amendment of the Plan shall be subject to the approval of the Company’s shareholders to the extent required to comply with the requirements of Code Section 162(m), or any other applicable laws, regulations or rules.
Annex B PROPOSED AMENDMENTS TO Article VII of the Amended and Restated Certificate of Incorporation shall be amended and restated to read as follows: ARTICLE VII For the management of the business and for the conduct of affairs of the Corporation, and in further definition, limitation and regulation of powers of the Corporation, of its directors and of its stockholder or any class thereof, as the case may be, it is further provided that: A. The management of the business and the conduct of the affairs of the Corporation shall be vested in its Board of Directors. The number of directors of this Corporation shall be fixed and may be changed from time to time by resolution of the Board of Directors. B.Until the election of directors at the 2018 annual meeting of stockholders,t
C. Notwithstanding the foregoing provisions of this Article VII, each director shall serve until his or her successor is duly elected and qualified or until his or her death, resignation or removal. No decrease in the number of directors constituting the Board of Directors shall shorten the term of any incumbent director. D. Any vacancies on the Board of Directors resulting from death, resignation, disqualification, removal, or other causes unless the Board of Directors determines by resolution that any such vacancies or newly created directorships shall be filled by stockholders, except as otherwise provided by law, shall be filled only by the affirmative vote of a majority of the remaining directors then in office, even though less than a quorum of the Board of Directors and not by the stockholders. E. In furtherance and not in limitation of the powers conferred by the laws of the State of Delaware, the Board of Directors is expressly authorized to make, alter, amend or repeal the Bylaws of the Corporation. F. The directors of the Corporation need not be elected by written ballot unless the Bylaws of the Corporation so provide. G. Advance notice of stockholder nomination for the election of directors and of any other business to be brought by stockholders before any meeting of the stockholders of the Corporation shall be given in the manner provided in the Bylaws of the Corporation.
Annex C PROPOSED AMENDMENTS TO Sections 3.3, 3.4 and 3.5 of Article III of the Amended and Restated Bylaws shall be amended and restated as follows: 3.3Election and Term of Office of Directors. Except as provided in the Certificate of Incorporation or Section 3.4 of these Bylaws,until the election of directors at the 2018 annual meeting of stockholders, directors shall be classified, with respect to the time for which they severally hold office, into three classes, as nearly equal in number as possible, one class to be originally elected for a term expiring at the annual meeting of stockholders to be held in 2000, another class to be originally elected for a term expiring at the annual meeting of stockholders to be held in 2001, and another class to be originally elected for a term expiring at the annual meeting of stockholders to be held in 2002, with each class to hold office until its successor is duly elected and qualified. At each succeeding annual meeting of stockholdersprior to the 2016 annual meeting of stockholders, directors elected to succeed those directors whose terms then expire shall be elected for a term of office to expire at the third succeeding annual meeting of stockholders after their election, with each director to hold office until such person’s successor shall have been elected and qualified or until such person’s earlier resignation or removal. Each director, including a director elected or appointed to fill a vacancy, shall hold office until his successor is elected and qualified or until his earlier resignation or removal.Commencing at the 2016 annual meeting of stockholders, directors, other than those who may be elected by the holders of any class or series of stock having a preference over the Common Stock as to dividends or upon liquidation, shall be elected to hold office for a term expiring at the next annual meeting of stockholders following their election and until their successors are duly elected and qualified. Accordingly, at the 2016 annual meeting of stockholders, directors in the class whose terms expire at that meeting shall be elected to hold office for a term expiring at the 2017 annual meeting of stockholders and until their successors are duly elected and qualified; at the 2017 annual meeting of stockholders, directors in the class whose terms expire at that meeting shall be elected to hold office for a term expiring at the 2018 annual meeting of stockholders and until their successors are duly elected and qualified; and at the 2018 annual meeting of stockholders and at each annual meeting of stockholders thereafter, all directors shall be elected to hold office for a term expiring at the next annual meeting of stockholders following their election and until their successors are duly elected and qualified. All directors, subject to such director’s earlier death, resignation, retirement, disqualification or removal from office, shall hold office until the expiration of the term for which he or she was elected, and until his or her successor is duly elected and qualified. Except as provided in Section 3.4 of these Bylaws, each director shall be elected by the vote of a majority of the votes cast with respect to the director at any meeting for the election of directors at which a quorum is present, provided that if the number of nominees exceeds the number of directors to be elected, the directors shall be elected by the vote of a plurality of the shares represented in person or by proxy at any such meeting and entitled to vote on the election of directors. For purposes of this paragraph, a majority of the votes cast means that the number of shares voted “for” a director must exceed 50% of the votes cast with respect to that director. The votes cast shall include votes to withhold authority in each case and exclude abstentions with respect to that director’s election. If an incumbent director is not elected due to a failure to receive a majority of the votes cast as described above and his or her successor is not otherwise elected and qualified, the director shall offer to tender his or her resignation to the Board of Directors promptly following the certification of the stockholder vote. The Nominating/Corporate Governance Committee will consider the offer to resign and make a recommendation to the Board of Directors on whether to accept or reject the resignation, or whether
other action should be taken. The Board of Directors will act on the Committee’s recommendation and publicly disclose its decision and the rationale behind it within 90 days from the date of the certification of the election results. Any director who tenders his or her offer to resign shall not participate in either the Nominating/Corporate Governance Committee’s or Board of Directors’ consideration or other actions regarding whether to accept the resignation offer. However, if each member of the Nominating/Corporate Governance Committee failed to receive a majority of the votes cast at the same election, then the independent directors who did receive a majority of the votes cast shall appoint a committee amongst themselves to consider the resignation offers and recommend to the Board of Directors whether to accept them. However, if the only directors who received a majority of the votes cast in the same election constitute three or fewer directors, all directors may participate in the action regarding whether to accept the resignation offers. If an incumbent director offers to resign pursuant to the foregoing paragraph and the resignation offer is not accepted by the Board of Directors, such director shall continue to serve until the next annual meeting and until his or her successor is duly elected, or his or her earlier resignation or removal. If a director’s resignation is accepted by the Board of Directors, or if a nominee for director is not elected and the nominee is not an incumbent director, then the Board of Directors, in its sole discretion, may fill any resulting vacancy pursuant to the provisions of Section 3.4 hereof or may decrease the size of the Board of Directors pursuant to the provisions of Section 3.2 hereof. Except as otherwise provided in the foregoing two paragraphs, each director, including a director elected or appointed to fill a vacancy, shall hold office until his successor is elected and qualified or until his earlier resignation or removal. Directors need not be stockholders unless so required by the Certificate of Incorporation or by these Bylaws; wherein other qualifications for directors may be prescribed. Election of directors need not be by written ballot unless so required by the Certificate of Incorporation or by these Bylaws; wherein other qualifications for directors may be prescribed. 3.4Resignation and Vacancies. Any director may resign effective on giving written notice to the chairman of the board, the chief executive officer, the secretary or the board of directors, unless the notice specifies a later time for that resignation to become effective. If the resignation of a director is effective at a future time, the board of directors may elect a successor to take office when the resignation becomes effective. Unless otherwise provided in the Certificate of Incorporation or these Bylaws:
If at any time, by reason of death or resignation or other cause, the corporation should have no directors in office, then any officer or any stockholder or an executor, administrator, trustee or guardian of a stockholder, or other fiduciary entrusted with like responsibility for the person or estate of a stockholder, may call a special meeting of stockholders solely for the purpose of electing directors in accordance with the provisions of the Certificate of Incorporation or these Bylaws, or may apply to the Court of Chancery for a decree summarily ordering an election as provided in Section 211 of the General Corporation Law of Delaware. If, at the time of filling any vacancy or any newly created directorship, the directors then in office constitute less than a majority of the whole board (as constituted immediately prior to any such increase), then the Court of Chancery may, upon application of any stockholder or stockholders holding at least ten percent (10%) of the total number of the then outstanding shares having the right to vote for such directors, summarily order an election to be held to fill any such vacancies or newly created directorships, or to replace the directors chosen by the directors then in office as aforesaid, which election shall be governed by the provisions of Section 211 of the General Corporation Law of Delaware as far as applicable. 3.5Removal. Unless otherwise restricted by statute, by the Certificate of Incorporation or by these Bylaws,prior to the election of directors at the 2018 annual meeting of stockholders,any director or the entire board of directors may be removed from office only for cause by the holders of a majority of the shares then entitled to vote at an election of directors. From and after the election of directors at the 2018 annual meeting of stockholders, any director or the entire board of directors may be removed from office for cause or without cause by the holders of a majority of the shares then entitled to vote at an election of directors.
Electronic Voting Instructions VALIDATION DETAILS ARE LOCATED BELOW IN THE TITLE BAR. Proxies submitted by the Internet or telephone must be received by 1:00 a.m., Central Time, on March 18, 2015.
Annual Meeting of Stockholders—March This Proxy is solicited on The undersigned hereby appoints William P. Sullivan and Marie Oh Huber, and each of them, as proxies for the undersigned, with full power of substitution, to act and to vote all the shares of Common Stock of Agilent Technologies, Inc. held of record by the undersigned on January IMPORTANT—This Proxy must be signed and dated on the reverse side. THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR ITEMS 1, 2, 3, 4 AND In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the Annual Meeting. THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED If you vote by telephone or the Internet, please DO NOT mail back this proxy card. (Continued and to be voted on reverse side.) |