UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
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AGILENT TECHNOLOGIES, INC. |
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Agilent Technologies, Inc.
5301 Stevens Creek Blvd.
Boulevard
Santa Clara, California 95051
Michael R. McMullenChief Executive Officer
February 2016
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 16, 2016 at 8:00 a.m., Pacific 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 (877) 312-5529 (international callers should dial (253) 237-1147). The meeting identification number is 94999805. 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 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 19, 2016, 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 19, 2016, 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 Time, on Wednesday, March |
PLACE | : | Corporate Headquarters |
5301 Stevens Creek Boulevard, Building No. 5 | ||
Santa Clara, California | ||
AGENDA | : | 1. To elect three directors to a |
• • • | ||
2. To approve the amendment and restatement of our 2009 Stock Plan. | ||
3. To approve, on a non-binding advisory basis, the compensation of our named executive officers. | ||
4. To ratify the Audit and Finance Committee’s appointment of PricewaterhouseCoopers LLP as | ||
5. 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, postponements or |
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. |
ADMISSION | : | To be admitted to the annual meeting, you must present proof of ownership of |
WEBCAST | : | If you are unable to attend the annual meeting in person, you may listen through the Internet or by telephone. To listen to the |
By Order of the Board of Directors | |
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M ICHAELTANG | |
Senior Vice President, General Counsel and Secretary | |
This Proxy Statement and the accompanying proxy card are being sent or made available
on or about February 4, 2016.7, 2018.
| SUMMARY INFORMATION |
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This proxy statement contains forward-looking statements as defined in the Securities Exchange Act of 1934 and is subject to the safe harbors created therein. The forward-looking statements contained herein are generally identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “future,” “opportunity,” “plan,” “may,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. Forward-looking statements are based on the beliefs and assumptions of Agilent’sour management and on currently available information. A detailed discussion of risks and uncertainties that could cause actual results and events to differ materially from such forward-looking statements is included in our annual report on Form 10-K for the fiscal year ended October 31, 2015. Agilent undertakes2017. We undertake no responsibility to publicly update or revise any forward-looking statement.
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 areWe currently expect to consider four items of business which Agilent currently expects to be considered at the Annual Meeting.2018 annual meeting. The following table lists those items of business and the Agilentour Board’s vote recommendation.
| PROPOSAL | BOARD RECOMMENDATION | REASONS FOR RECOMMENDATION | MORE INFORMATION |
(1) | Election of three directors to a three-year term | FOR | The Board and the Nominating/Corporate Governance Committee believe our nominees possess the skills, experience and qualifications to effectively monitor performance, provide oversight and support management’s execution of our long-term strategy. | 5
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(2) | Approval of the Amendment and Restatement of 2009 Stock Plan | FOR | The Board strongly believes that its equity compensation programs and emphasis on employee stock ownership have been integral to the Company’s success and that a continuation of those programs is necessary for the Company to achieve superior performance in the future. | 18 |
(3) | Advisory vote to approve the compensation of our named executive officers | FOR | Our executive compensation program incorporates a number of compensation governance best practices and reflects our commitment to pay for performance. | 55 |
(4) | Ratification of the independent registered public accounting firm | FOR | Based on its assessment, the Board and the Audit and Finance Committee believe that the appointment of PricewaterhouseCoopers LLP is in the best interests of the company and our stockholders. | 56 |
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SUMMARY INFORMATION |
Agilent’sOur Board is currently divided into three classes serving staggered three-year terms. Robert J. Herbold’s current term expires at the annual meeting and he will not stand for re-election as he has reached the mandatory retirement age as set forth in our Corporate Governance Standards. The following table provides summary information about each of the three director nominees who are being voted on at the Annual Meeting.annual meeting.
| COMMITTEE | OTHER | ||||||||
| DIRECTOR | INDE- | MEMBERSHIPS | PUBLIC | ||||||
| NAME | AGE | SINCE | OCCUPATION | PENDENT | AC | CC | NCG | EC | BOARDS |
| Paul N. Clark | 68 | 2006 | Strategic Advisory Board | Yes | M | M | 2 | ||
| Member of Genstar | |||||||||
| Capital, LLC | |||||||||
| James G. Cullen | 73 | 2000 | Retired President and | Yes | C | C | 4 | ||
| Chief Operating Officer of | |||||||||
| Bell Atlantic Corporation | |||||||||
| (now known as Verizon) | |||||||||
| Tadataka Yamada, M.D. | 70 | 2011 | Venture Partner, Life | Yes | M | M | — | ||
| Sciences Team, and Senior | |||||||||
| Advisor, Growth Buyout | |||||||||
| Team, Frazier Healthcare | |||||||||
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| DIRECTOR SINCE |
| COMMITTEE MEMBERSHIPS |
NAME | AGE | OCCUPATION | ||
Koh Boon Hwee | 67 | 2003 | Managing Partner | • Executive (Chair) |
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| Credence Capital Fund II (Cayman) Ltd. | • Nominating/Corporate Governance (Chair) |
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Michael R. McMullen | 56 | 2015 | President and Chief Executive Officer | • Executive |
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Daniel K. Podolsky, M.D. | 64 | 2015 | President | • Audit and Finance |
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| University of Texas Southwestern | • Nominating/Corporate Governance |
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TableCorporate Governance Highlights
The Board is committed to sound and effective governance practices that promote long-term stockholder value and strengthen Board and management accountability to our stockholders, customers and other stakeholders. The following table highlights many of Contents
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New Executive Officer Compensation Program
Listening to Our Shareholders
Agilent has historically received over 90% shareholder supportour key governance practices. Specific details on our “Say-on-Pay” proposals along with support from the major shareholder advisory firms. However, early in 2015 the major shareholder advisory firms recommended an “Against” votegovernance practices can be found starting on our fiscal year 2014 Say on Pay proposal. In response, our Compensation Committee Chair and members of management met with 15 of our largest shareholders who own more than 40% of Agilent’s outstanding shares to hear their concerns. While our fiscal year 2014 Say on Pay proposal passed with 60% shareholder support, we were disappointed with this result and commenced a full review of our programs. Following these meetings, the Compensation Committee, our independent Compensation Committee consultant, and Agilent management considered the feedback received from shareholders and proposed a number of changes to our executive compensation programs for fiscal year 2016. In August 2015, our Compensation Committee Chair and members of management met again with 8 of our largest shareholders to preview our proposed program design changes. The feedback on our proposals was positive and in September, the Compensation Committee approved the design changes set forth below and as more fully described in the Compensation Discussion and Analysis and Executive Compensation sections of the proxy statement to take effect in fiscal year 2016.page 12.
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The Compensation Committee will continue to consider the outcome of the Company’s say-on-pay votes when making future compensation decisions for the named executive officers.
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Business Highlights
Fiscal Year 2015 was a momentous year for Agilent. We entered the year as a stand-alone Life Sciences, Diagnostics and Applied Markets company, having just completed the spin-off of Keysight Technologies. On March 18, 2015, we appointed Mike McMullen as Agilent’s 3rd Chief Executive Officer, succeeding Bill Sullivan who announced his decision to retire last year. This year also marks Agilent’s 50th anniversary in analytical instrumentation.
Agilent is a global leader in life sciences, diagnostics and applied chemical markets and the premier laboratory partner for a better world. Ultimately, our fiscal year 2015 results reflect the dedication and passion of over 12,000 employees worldwide, in more than 100 countries providing instruments, software, services and consumables for the entire laboratory workflow. A few of our most notable performance highlights include the following:
| ✓ | Annual board self-assessment process, including peer evaluations | ||||
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| Independent standing board committees | ✓ | Majority voting and director resignation policy in | ||
✓ |
| Strong independent lead director | ✓ | Continued assessment of highly qualified, diverse and | ||
✓ | Regular meetings of | ✓ | Strong focus on pay-for-performance | |||
✓ | Diverse board with an effective mix of skills, experience and perspectives | ✓ | Proactive stockholder engagement | |||
✓ |
| Four new independent directors added during the past four years | ✓ | Policies prohibiting hedging, short selling and | ||
✓ | Varied lengths of Board tenure with | ✓ | Stock ownership guidelines for executive officers and |
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20162018 ANNUAL MEETING OF STOCKHOLDERS
NOTICE OF ANNUAL MEETING AND PROXY STATEMENT
TABLE OF CONTENTS
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2016 ANNUAL MEETING OF STOCKHOLDERSNOTICE OF ANNUAL MEETING AND PROXY STATEMENTTABLE OF CONTENTS
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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’sOur 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’sOur Bylaws, as amended, allow the Board to fix the number of directors by resolution. Our Board currently consists of teneleven 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 2019. As part of the transition, at the Annual Meetings of Stockholders in 2017 and 2018, each of the Class II and Class III 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 2017.
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The terms of the three director nomineesfour directors will expire at this annual meeting. However, Robert J. Herbold will not stand for re-election at the annual meeting as he has reached the mandatory retirement age as set forth in our Corporate Governance Standards. In addition, James G. Cullen has also reached the mandatory retirement age as set forth in our Corporate Governance Standards and will retire immediately before the annual meeting.
On January 17, 2018, the Board, upon the recommendation of its Nominating/Corporate Governance Committee, increased the size of the Board from 11 to 12 members and appointed Dow R. Wilson to fill the vacancy so created, both effective March 20, 2018. Mr. Wilson was appointed to serve as a Class II director and will stand for re-election at the 2020 Annual Meeting of Stockholders. Mr. Wilson will serve on the Audit and Finance Committee and Nominating/Corporate Governance Committee of our Board.
Mr. Wilson, age 58, has served as president, chief executive officer and a member of the Board of Directors of Varian Medical Systems, Inc. (“Varian Medical”) since September 2012. Prior to that, Mr. Wilson served in various capacities with Varian, including executive vice president and chief operating officer from October 2011 to September 2012 and vice president Varian Medical and president of Varian Medical Oncology Systems business from January 2005 to September 2011. Prior to joining Varian Medical in 2005, Mr. Wilson held various senior management positions with GE Healthcare, a diversified industrial company. Mr. Wilson serves on the board of directors of Varex Imaging Corporation, a manufacturer of X-ray imaging components.
As a result of the retirements of Messrs. Cullen and Herbold and the appointment of Mr. Wilson, the Board intends to reduce the authorized number of directors to ten, effective immediately upon the adjournment of the Annual Meeting. 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, Michael R. McMullen and Daniel K. Podolsky, M.D. | 2018 | |
I | Hans E. Bishop, Paul N. Clark, James G. Cullen and Tadataka Yamada, M.D. | 2019 | |
Heidi | |||
2020 |
Director Nominees for Election to New Three-Year Terms That Will Expire in 2021
Directors elected at the 20162018 annual meeting will hold office for a three-year term expiring at the annual meeting in 20192021 (or until their respective successors are elected and qualified, or until their earlier death, resignation or removal). All nominees are currently directorsserving as our directors. To the best knowledge of Agilent.the Board, all of the nominees are able and willing to serve. Each nominee has consented to be named in this proxy statement and to serve if elected. Information regarding each nominee is provided below as of December 31, 2015.2017. There are no family relationships among Agilent’sour executive officers and directors.
Director Nominees for Election to New Three-Year Terms That Will Expire in 2019
KOH BOON HWEE | ||||||
Age: 67 | Board Committees: | Other Public Directorships: | ||||
| Executive (Chair) Nominating/Corporate Governance (Chair) |
• • • | AAC Technologies Holdings, Inc. Sunningdale Tech, Ltd. Yeo Hiap Seng Ltd. | |||
Far East Orchard Ltd. | ||||||
Former Public Directorships Held During the Past Five Years: | ||||||
| Yeo Hiap Seng (Malaysia) Bhd. | |||||
Mr. Koh has served as non-Executive Chairman of our Board since March 2017. 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
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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.
Qualifications
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 our company and its predecessor, Hewlett-Packard, having served on our board for over 10 years and having spent 14 years with Hewlett-Packard.
MICHAEL R. MCMULLEN | |||||||
Age: 56 | Board Committees: | Other Public Directorships: | |||||
• | Executive | • | None | ||||
Former Public Directorships Held During the Past Five Years: | |||||||
None | |||||||
Mr. McMullen has served as our Chief Executive Officer since March 2015 and as President since September 2014. From September 2014 to March 2015 he also served as our Chief Operating Officer. 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 Unit of the Life Sciences and Chemical Analysis Group. Prior to assuming this position, from March 1999 to December 2001, Mr. McMullen served as Country Manager for our China, Japan and Korea Life Sciences and Chemical Analysis Group. Prior to this position, Mr. McMullen served as the Controller for the Hewlett-Packard Company and Yokogawa Electric Joint Venture from July 1996 to March 1999.
Qualifications
Mr. McMullen has broad and deep experience with the company and its businesses having been an employee of the company and its predecessor, Hewlett-Packard, for over 20 years. During the course of his career, he has developed considerable expertise in, and in-depth knowledge of, our businesses from the perspective of an individual contributor and at numerous levels of management. This perspective gives valuable insight to our board.
DANIEL K. PODOLSKY, M.D. |
Age: 64 | Board Committees: | Other Public Directorships: | ||||
• • | Audit and Finance Nominating/Corporate Governance | • | None | |||
Former Public Directorships Held During the Past Five Years: | ||||||
• | GlaxoSmithKline PLC | |||||
Dr. Podolsky has served as President of the University of Texas Southwestern Medical Center, a leading academic medical center, patient care provider and research institution, since September 2008. Previously Dr. Podolsky also served concurrently as Mallinckrodt Professor of Medicine at Harvard Medical School and the Chief of Gastroenterology at Massachusetts General Hospital. From 2005 to 2008, Dr. Podolsky served as Chief Academic Officer and Faculty Dean, Academic Programs of Partners Healthcare System, Inc., a non-profit health care system committed to patient care, research, teaching and service. Dr. Podolsky holds the Philip O’Bryan Montgomery, Jr., M.D. Distinguished Presidential Chair in Academic Administration, and the Doris and Bryan Wildenthal Distinguished Chair in Medical Science. He is a member of the National Academy of Medicine of the US National Academy of Sciences, member of the Board of the Southwestern Medical Foundation and is a member of the Scientific Advisory Board of Antibe Therapeutics, Inc., a company focused on the treatment of diseases characterized by inflammation, pain and/or vascular dysfunction. Dr. Podolsky is also a member of the National Academies of Sciences Board on Army Science and Technology.
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Dr. Podolsky’s current responsibilities in leading a large academic medical center give him relevant insight into healthcare delivery and bring scientific expertise to the Board.
Vote Required
Under our majority voting standard, in uncontested elections of directors, such as this election, each director must be elected by the affirmative vote of a majority of the votes cast by the shares present in person or represented by proxy and entitled to vote. A “majority of the votes cast” means that the number of votes cast “FOR” a director must exceed 50% of the votes cast with respect to that director. Abstentions and broker non-votes will not count as a vote “FOR” or “AGAINST” a nominee’s election and thus will have no effect in determining whether a director nominee has received a majority of the votes cast.
The Board of Directors recommends a vote FOR the election to the Board of each of the
foregoing nominees.
The directors whose terms are not expiring this year and who will continue to serve as a director are listed below. They will continue to serve as directors for the remainder of their terms or such other date, in accordance with our Bylaws. Information regarding each of such directors is provided below as of December 31, 2017.
Directors Whose Terms Expire in 2019
HANS E. BISHOP |
Age: 53 | Board Committees: | Other Public Directorships: | ||||
• • | Compensation Nominating/Corporate Governance | • | Juno Therapeutics, Inc. | |||
Former Public Directorships Held During the Past Five Years: | ||||||
• | Avanir Pharmaceuticals, Inc. | |||||
Mr. Bishop has served as president, chief executive officer and a member of the Board of Directors of Juno Therapeutics, Inc. since September 2013. From February 2012 until October 2012, Mr. Bishop was the chief operating officer of Photothera Inc., a late-stage medical device company owned by Warburg Pincus, and he continued working with Warburg Pincus as an Executive in Residence until October 2013. Prior to joining Photothera Inc., Mr. Bishop served as executive vice president and chief operating officer at Dendreon Corporation, a publicly-traded biopharmaceutical company, from January 2010 to September 2011. Mr. Bishop has also served as the president of the specialty medicine business at Bayer Healthcare Pharmaceuticals Inc. from December 2006 to January 2010, where he was responsible for a diverse portfolio of neurology, oncology and hematology products.
Qualifications
Mr. Bishop brings a valuable set of skills to our Board through his broad experience as an operating officer within the pharmaceutical industry and executive experience in the biotechnology industry.
PAUL N. CLARK |
Age: 70 | Board Committees: | Other Public Directorships: | ||||
• • | Audit and Finance (Chair) Nominating/Corporate Governance | • | Keysight Technologies, Inc. | |||
Former Public Directorships Held During the Past Five Years: | ||||||
• • | Amylin Pharmaceuticals, Inc. | |||||
Biolase, Inc. | ||||||
Mr. Clark has beenwas a Strategic Advisory Board member of Genstar Capital, LLC sincefrom August 2007 to December 2016 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.
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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.
Qualifications
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 as well as his extensive experience within our industry and perspective on company managementexpertise in business finance. Mr. Clark is the chairperson of our Audit and governance issuesFinance Committee and practices.is qualified as a financial expert under SEC guidelines.
TADATAKA YAMADA, M.D. |
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Age: | Board Committees: | Other��Public Directorships: | ||||
• | Compensation (Chair) Nominating/Corporate Governance |
| CSL Limited | |||
Former Public Directorships Held During the Past Five Years: | ||||||
Mr. Cullen has served as Non-Executive Chairman of our 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.
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.
• | Takeda Pharmaceutical Co. Ltd. | |||||
Dr. Yamada is currently a Venture Partner on the Life Sciences team of Frazier Healthcare Partners, a healthcare-focused investment firm. From June 2011 to June 2015, Dr. Yamada served 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.
Qualifications
Dr. Yamada brings a unique perspective 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 ana unique insight into a number of issues facing Agilent that other directors might not possess.we face.
Agilent’s Board recommends a vote FOR the election to the Board of each of theforegoing nominees.
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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 20172020
HEIDI KUNZ |
Age: | Board Committees: | Other Public Directorships: | ||||
| Compensation Nominating/Corporate Governance |
| Financial Engines, Inc. | |||
Halyard Health, Inc. | ||||||
Former Public Directorships Held During the Past Five Years: | ||||||
None | ||||||
Ms. FieldsKunz served as Executive Vice President and Chief Financial Officer of Blue Shield of California from September 2003 through December 2012. She served2012 and as Executive Vice President and the Chief Financial Officer of Gap, Inc. from 1999 to January 2003. Prior to assuming that position,thereto, Ms. FieldsKunz 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.
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| PROPOSAL 1 - ELECTION OF DIRECTORS |
Ms. FieldsKunz 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.companies. Ms. Fields isKunz previously served as the chairperson of our Audit and Finance Committee and iswas qualified as a financial expert under SEC guidelines. In addition, Ms. FieldsKunz has considerable experience and expertise with Agilentour company having been a member of Agilent’s board of directorsour Board for over 10 years.
SUE H. RATAJ |
Age: 60 | Board Committees: | Other Public Directorships: | ||||
• | Audit and Finance Nominating/Corporate Governance |
| Cabot Corporation | |||
Former Public Directorships Held During the Past Five Years: | ||||||
• | Bayer A.G. | |||||
Ms. Rataj was Chief Executive, Petrochemicals for BP, a global energy company, until she retired in April 2011. In this role, she held responsibility for all of BP’s global petrochemical operations. Prior to that,thereto, Ms. Rataj held a variety of senior management positions with BP, most recently serving as Group Vice President, Health, Safety, Operations and Technology for the Refining and Marketing Segment.
Qualifications
Ms. Rataj possesses significant leadership experience and business expertise from her executive positions with BP. Ms. Rataj has lived and worked extensively in the Asia Pacific and European regions and brings a global perspective to the Agilentour Board. In addition, Ms. Rataj brings public company director experience and knowledge of public company management and governance practices.
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| GEORGE A. SCANGOS, |
Age: 69 | Board Committees: | Other Public Directorships: | ||||
• | Compensation Nominating/Corporate Governance |
| Exelixis, Inc. | |||
Former Public Directorships Held During the Past Five Years: | ||||||
• | ||||||
Dr. Scangos has served as Chief Executive Officer and a director of Vir Biotechnology, Inc. since January 2017. From July 2010 to January 2017, Dr. Scangos served as the Chief Executive Officer and a director of Biogen Inc. since July 2010., a biopharmaceutical company. 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.
Qualifications
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.
Directors Whose Terms will Expire in 2018
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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.
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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 10 years and having spent 14 years with Hewlett-Packard.
Mr. McMullen has served as Chief Executive Officer since March 2015 and as President since September 2014. From September 2014 to March 2015 he also served as Chief Operating Officer. 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 Unit of the Life Sciences and Chemical Analysis Group. Prior to assuming this 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. McMullen served as our Controller for the Hewlett-Packard Company and Yokogawa Electric Joint Venture from July 1996 to March 1999.
Mr. McMullen has broad and deep experience with Agilent and its businesses having been an employee of Agilent and its predecessor, Hewlett-Packard, for over 20 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.
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Dr. Podolsky has served as President of the University of Texas Southwestern Medical Center, a leading academic medical center, patient care provider and research institution, since September 2008. Previously Dr. Podolsky also served concurrently as Mallinckrodt Professor of Medicine at Harvard Medical School, the Chief of Gastroenterology at Massachusetts General Hospital. From 2005 to 2008, Dr. Podolsky served as Chief Academic Officer and Faculty Dean, Academic Programs of Partners Healthcare System, Inc., a non-profit health care system committed to patient care, research, teaching and service. Dr. Podolsky holds the Philip O’Bryan Montgomery, Jr., M.D. Distinguished Presidential Chair in Academic Administration, and the Doris and Bryan Wildenthal Distinguished Chair in Medical Science. He is a member of the Institute of Medicine of the US National Academy of Sciences, member of the Board of the Southwestern Medical Foundation and is a member of the Scientific Advisory Board of Antibe Therapeutics, Inc., a company focused on the treatment of diseases characterized by inflammation, pain and/or vascular dysfunction. Dr. Podolsky is also a member of the National Academies of Sciences Board on Army Science and Technology.
Dr. Podolsky’s current responsibilities in leading a large academic medical center give him relevant insight into healthcare delivery and bring scientific expertise to the Board.
| COMPENSATION OF NON-EMPLOYEE DIRECTORS |
COMPENSATION OF NON-EMPLOYEENON-EMPLOYEE DIRECTORS
Directors who are employed by Agilentus do not receive any compensation for their Board services. As a result, Mr. McMullen, an employee of Agilent,our Chief Executive Officer, received no additional compensation for his Board services.services as a director. 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’sour 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 20152017 Plan Year:
Summary of Non-Employee Director Annual Compensation for the 20152017 Plan Year
| Committee Chair | Audit Committee | |||
| Cash Retainer(1) | Equity Grant(2) | Premium(3) | Member Premium(4) | |
| Non-employee director | $90,000 | Stock Grant with a value equivalent to $180,000 | $15,000 - Audit and Finance Committee and Nominating/ Corporate Governance Committee Chair $20,000 - Compensation Committee Chair | $10,000 |
| Non-Executive Chairman | $245,000 | Stock Grant with a value equivalent to $180,000 | Not eligible | $10,000 |
The following table sets forth the compensation that we provide to non-employee directors. 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 (“Director Deferral Plan”). Any deferred cash compensation is converted into shares of our common stock.
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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 In September 10
Non-Employee Director The table below sets forth information regarding the compensation earned by each of
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Non-Employee Director Reimbursement Non-employee directors are reimbursed for travel and other out-of-pocket expenses Non-Employee Director Stock Ownership Guidelines
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We have adopted charters for our
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 Board with flexibility to determine whether the two roles should be combined in the future based on 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 Board’s Role in Risk Oversight The Board executes its risk management responsibility directly and through its committees. The full Board is kept abreast of risk oversight and other activities of its committees through reports of the committee chairpersons to the full Board during Board meetings. The Audit and Finance Committee has primary responsibility for overseeing 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
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. 12
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 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. Stockholders and other interested parties may communicate with the Board and in the normal discharge of 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 Director Stockholder Meeting Attendance We encourage, but do not require, our Board members to attend the annual meeting of stockholders. Last year, all of our directors who were serving at such time, attended the annual meeting of stockholders.
our Corporate Governance Standards. The Board has affirmatively determined that
Compensation Committee Member Independence
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The Nominating/Corporate Governance Committee will consider director candidates
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 the company; 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
Compensation Committee
The
The members of the Compensation Committee are considered independent under the 14
Our Board met six times in fiscal 2017. Each director attended at least 75% of the
Sue H. Rataj
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Our 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, we have adopted a Under our Related Person Transactions Policy, the General Counsel must advise the Nominating/Corporate Governance Committee of any related person transaction of which he 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 Director and Officer 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. The Related Person Transactions Policy provides for standing pre-approval of the following transactions with related persons:
We will disclose the terms of related person transactions in our 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 have relationships as directors or executive officers. For transactions entered into during fiscal year 2017, no related person had or will have a direct or indirect material interest. None of the fiscal year 2017 transactions exceeded or fell outside of the pre-approved thresholds set forth in our Related Person Transactions Policy except for 16
George A. Scangos, PhD served as Below is a summary of the aggregate transactions between Agilent and each of Biogen, UTSW and Juno that occurred in fiscal 2017 or during the time such Agilent director served as an officer of Biogen, UTSW or Juno. Biogen Inc. (“Biogen”). Mr. George A. Scangos, PhD served as the Chief Executive Officer and a director of Biogen until January 2017. Biogen, or its affiliates, purchased an aggregate of approximately $313,000 of products and/or services from us between November 2016 and January 2017. University of Texas Southwestern Medical Center (“UTSW”). Daniel K. Podolsky, PhD is the President of UTSW. UTSW, or its affiliates, purchased an aggregate of approximately $600,000 of products and/or services from us during fiscal 2017. Juno Therapeutics, Inc. (“Juno”). Hans E. Bishop is the Chief Executive Officer of Juno. Juno, or its affiliates, purchased an aggregate of approximately $294,000 of products and/or services from us between July 2017 (when Mr. Bishop joined our Board) and October 2017. 17
PROPOSAL NO. 2 - APPROVAL OF THE AMENDMENT AND RESTATEMENT OF THE 2009 STOCK PLAN On November 15, 2017, the Board of Directors approved the 2018 Stock Plan (the “2018 Plan”), which is an amendment and restatement of the Agilent Technologies, Inc. 2009 Stock Plan (the “2009 Plan”), subject to The 2009 Stock Plan was adopted by the Board on November 19, 2008 and was subsequently approved by stockholders at our annual meeting held on March 11, 2009. The 2009 Plan is scheduled to expire on March 11, 2019 which is before our regularly scheduled 2019 annual meeting of stockholders. If the 2018 Plan is not approved by the stockholders, no new awards may be granted under the 2009 Plan after March 11, 2019 and our ability to provide future awards to attract, provide incentives to and retain key personnel and non-employee directors would be limited significantly. As described in more detail below, approval of the 2018 Stock Plan will accomplish the following: Rename the 2009 Stock Plan to the 2018 Stock Plan; Extend the term of the 2009 Plan to March 21, 2028; Maintain the 2009 Plan’s strong governance features; Continue the grant of awards that are intended to qualify as tax-deductible under Section 162(m) (“Section 162(m)”) of the Internal Revenue Code (the “Code”); and Reestablish certain award limitations for non-employee directors and performance-based compensation under Section 162(m). Stockholders are asked to approve the 2018 Plan to qualify stock options as incentive stock options for purposes of Section 422 of the Code, to qualify certain compensation under the Plan as performance‑based compensation for purposes of Section 162(m), and to satisfy New York Stock Exchange (“NYSE”) guidelines relating to equity compensation. Below is a summary of the material features of the 2018 Plan and its operation. This summary does not purport to be a complete description of all of the provisions of the 2018 Plan. It is qualified in its entirety by reference to the full text of the 2018 Plan. A copy of the 2018 Plan is attached as Appendix B to this Proxy Statement. Purpose of the 2018 Plan The purpose of the 2018 Plan is to encourage ownership in the Company 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 interests of the award recipients and stockholders and permitting the award recipients to share in the Company’s success. The 2018 Plan provides an essential component of the total 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 success and that a continuation of those programs is necessary for the Company to achieve superior performance in the future. Certain awards under the 2018 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 18
below in “Administration of the 2018 Plan”) of the 2018 Plan determines that it is advisable to grant awards that use measures other than Key Features of the 2018 Plan The 2018 Plan contains features that the Board believes are consistent with Flexibility and Performance Ties. The variety of equity and cash awards permitted under the 2018 Plan affords flexibility with respect to the design of long-term incentives that are responsive to evolving regulatory changes and compensation best practices and incorporate tailored, performance‑based measures. No Discount Options. Stock options or SARs may not be granted or awarded with a then-established exercise price of less than the fair market value (“FMV”) of Agilent’s common stock on the date of grant or award. FMV is the quoted closing sales price on the stock exchange or a national market system with the highest trading volume. No Repricing. The repricing of stock options and stock appreciation rights is prohibited without stockholder approval. This prohibition applies both to repricings that involve lowering the exercise price of a stock option or SAR as well as repricings that are accomplished by canceling an existing award and replacing it with a lower‑priced award. Fungible Share Pool. The 2018 Plan design recognizes the greater intrinsic value of a full share award including Clawback Feature. The 2018 Plan allows the Company to cancel or freeze unvested awards, or require the return of amounts received pursuant to plan awards, if the award recipient has engaged in behavior that is detrimental to the business or reputation of the Company.
Compensation Committee Oversight. The 2018 Plan will be administered by Agilent’s Compensation Committee as the Administrator, which is comprised solely of non-employee, independent directors. No Annual “Evergreen” Provision. The 2018 Plan provides for a specific number of shares of Agilent common stock available for awards and does not contain an annual or automatic increase in the Performance‑Based Compensation. The 2018 Plan is structured to permit awards that satisfy the performance‑based compensation requirements of Section 162(m) so as to enhance deductibility of compensation provided under the 2018 Plan. Limitation on Share-based Awards to Non-Employee Directors. The 2018 Plan provides that the maximum total grant date fair value of share-based awards granted to non-employee director in any single calendar year may not exceed $750,000. Administration of the 2018 Plan The 2018 Plan may be administered by the Board or any of its committees (“Administrator”) and, it is currently the intent of the Board that the 2018 Plan be 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 19
The total number of shares authorized and available for issuance under the 2018 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. It is anticipated that this share reserve will be sufficient to cover all Company stock awards through fiscal 2028. 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 2018 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 2018 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. On January 23, 2018, the per share closing price of Agilent’s common stock as reported on the NYSE was $73.44. 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 2018 Plan and to prevent dilution or enlargement of rights. Except as described below, shares subject to an award under the 2018 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 2018 Plan. Any shares that again become available for issuance under the 2018 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 2018 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 2018 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 2018 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 2018 Plan. Eligibility and Participation Eligibility to participate in the 2018 Plan is limited to employees (including officers), directors and consultants of Agilent, its affiliates or subsidiaries, as determined by the Administrator. Participation in the 2018 Plan is at the discretion of the Administrator. As of January 23, 2018, there were Types of Awards under the 2018 Plan The 2018 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: incentive stock options (“ISOs”); nonstatutory stock options (“NSOs”); stock appreciation rights; restricted stock; restricted stock units (“RSUs”); performance shares and performance units with cash awards. 20
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 2018, approximately 76 employees were classified as executives and there were ten 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 2018 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. 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 non-tandem SAR is exercised over (ii) the base price of the shares covered by the non-tandem 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. 21
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 2018 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. 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 In addition, the Company grants RSUs to 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, Cash Incentive Awards The Administrator may grant “cash incentive awards” under the 2018 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. 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) 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 establish performance goals applicable to the performance awards. To the extent that performance conditions under the 2018 Plan are applied to awards intended to qualify as performance‑based compensation under Section 162(m), such performance goals will be objectively measurable and will be based upon the achievement of a specified percentage or level in one or more criteria of the following criteria and any objectively verifiable adjustment(s) thereto permitted and pre-established by the Administrator in accordance with Section 162(m), as determined by the Administrator in its sole discretion: (i) revenue; (ii) margin; (iii) income; (iv) earnings or income measures (including earnings before interest, taxes and depreciation and amortization); (v) pre-tax profit; (vi) expenses; (vii) share price 22
performance; (viii) earnings per share; (ix) return measures (including return on assets, capital, invested capital, equity, sales or revenue); (x) economic value added; (xi) market share; (xii) safety; (xiii) total stockholder return; (xiv) cash flow (including free cash flow); (xv) size-adjusted growth in earnings; (xvi) net order dollars; (xvii) contract bookings; (xviii) contract awards; (xix) book to bill; (xx) backlog; (xxi) customer metrics (including service, satisfaction, retention or profitability); (xxii) productivity; (xxiii) expense targets; (xxiv) market share; (xxv) cost control measures; (xxvi) balance sheet metrics; (xxvii) strategic initiatives; (xxviii) implementation, completion or attainment of measurable objectives with respect to recruitment or retention of personnel or employee satisfaction; (xxix) successful completion of, or achievement of milestones or objectives related to financing or capital raising transactions, strategic acquisitions or divestitures, joint ventures, partnerships, collaborations or other transactions; (xxx) debt levels or debt ratios; (xxxi) operating efficiency; (xxxii) working capital targets, including days working capital; (xxxiii) quantifiable, objective measures of individual performance relevant to the particular individual’s job responsibilities; (xxxiv) any combination or the foregoing business criteria; and (xxxv) such other criteria as determined by the Committee. Any criteria that are financial metrics may be determined in accordance with United States Generally Accepted Accounting Principles (“GAAP”) or may be adjusted when established (or to the extent permitted under Section 162(m), at any time thereafter) to include or exclude any items otherwise includable or excludable under GAAP. The performance goals may be based on one or more business criteria, one or more business units, divisions, subsidiaries or business segments of the Company and/or one or more product lines or products of the company, or the Company as a whole, and if so desired by the Administrator, on an absolute or relative basis. Performance awards granted under the 2018 Plan may contain such additional terms and conditions, not inconsistent with the terms of the 2018 Plan, as the Administrator may determine, provided that, if the performance awards are intended to qualify as performance‑based compensation under Section 162(m), such additional terms and conditions are also not inconsistent with Section 162(m). 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 2018 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 2018 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. 23
Termination and Amendment of the 2018 Plan The Board may amend, suspend or terminate the 2018 Plan or the Administrator’s authority to grant awards under the 2018 Plan without the consent of stockholders or participants; provided, however, that any amendment to the 2018 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 2018 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 2018 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 2018 Plan or any awards granted under the 2018 Plan are subject to Section 409A of the Code (relating to nonqualified deferred compensation), the 2018 Plan and the awards comply with requirements of Section 409A of the Code. Further, it is the intention of the Company that the 2018 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 2018 Plan Unless earlier terminated by the Board, the 2018 Plan will terminate ten years after its approval by the stockholders of the Company. 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 2018 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 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 exercise 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. 24
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), and provided 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), 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.” 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 that currently apply to the Company, 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. Stock options, SARs and performance awards granted under the 2018 Plan and described above are intended to constitute qualified performance‑based compensation eligible for such exceptions. The Administrator will, in general, seek to qualify compensation paid to the Company’s executive officers for deductibility under Section 162(m), although the Administrator believes it is appropriate to retain the flexibility to authorize payments of compensation that may not qualify for deductibility if, in the Administrator’s judgment, it is in the Company’s best interest to do so. Under the Tax Cuts and Jobs Act of 2017, effective for our taxable year beginning November 1, 2018, the exception for performance-based compensation will no longer be available, subject to transition relief for certain grandfathered arrangements in effect as of November 2, 2017. New Plan Benefits A new plan benefits table for the 2018 Plan and the benefits or amounts that would have been received by or allocated to participants for the last completed fiscal year under the 2018 Plan if the 2018 Plan was then in effect, as described in the federal proxy rules, are not provided because all awards made under the 2018 Plan will be made at the Committee’s discretion, subject to the terms of the 2018 Plan. Therefore, the benefits and amounts that will be received or allocated under the 2018 Plan are not determinable at this time. The equity grant program for our non-employee directors is described under the Director Compensation section in this proxy statement. 25
Equity Compensation Plan Information The following table summarizes information about our equity compensation plans as of October 31, 2017. All outstanding awards relate to our common stock.
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Agilent’s Board recommends a vote FOR the approval of the adoption of the Agilent Technologies, Inc. 2018 Stock Plan 26
We are very pleased with our
In the Compensation Discussion and Analysis that follows, we discuss our
Compensation Committee Tadataka Yamada, M.D., Chairperson Hans E. Bishop George A. Scangos, 27
COMPENSATION DISCUSSION AND ANALYSIS This section of the
Michael R. McMullen, President and Chief Executive Didier Hirsch, Senior Vice President, Chief Financial Officer (CFO) Mark Doak, Senior Vice President, President Cross-Lab Group (ACG) Patrick Kaltenbach, Senior Vice President, President Life Sciences and Applied Markets Group (LSAG) Jacob Thaysen, Senior Vice President, President Diagnostics and Genomics Group (DGG) In this CD&A, we provide the following: Executive Summary Determining Executive Pay Fiscal Year 2017 Compensation Additional Information 28
Fiscal
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The chart below demonstrates how the historical compensation of our CEO compares to our three-year indexed TSR. The TSR shown below assumes reinvestment of the Keysight spin-off dividend on
Aligning CEO and NEO Pay with For fiscal year
We received a 96% stockholder support on our 2017 Say-on-Pay proposal, along with support from the major stockholder advisory firms. While pleased with these results, our Compensation Committee and members of management Fiscal Year 2017 Program Changes For fiscal year 2017, we Our executive pay decisions are grounded in a core philosophy that applies to all elements of compensation. Our compensation philosophy is intended to: Align executive interests with stockholders; Support our short- and long-term business strategy;
Provide pay for performance. The following principal elements of compensation are provided under our executive compensation program:
Our actual total compensation for each NEO varies based on (i) company performance measured against external metrics that correlate to long-term stockholder value, (ii) performance of the business organizations against specific targets, and (iii) individual performance. These three factors are considered in positioning salaries, determining earned short-term incentives and determining long-term incentive grant values.
Our executive compensation program is supported by a set of strong governance provisions and pay practices.
The Compensation Committee is composed solely of independent members of the Board and operates under a Board-approved charter which outlines the Committee’s major duties and responsibilities. This charter is available on our Investor Relations website. In May 2017, the Compensation Committee For fiscal year 2017, our independent compensation consultants advised the Compensation Committee on several compensation matters, including but not limited to: Criteria used to identify peer companies for executive compensation and performance metrics; Evaluation of our total direct compensation levels and mix for the NEOs and four other senior officers; Mix of long-term incentives, grant types and allocation of equity awards; Review of the short- and long-term incentive programs for fiscal year 2018; Review of various other proposals presented to the Compensation Committee by management; and Support for stockholder outreach campaign. 32
Process for Determining Compensation To determine total target compensation for the upcoming fiscal year, the Compensation Committee the performance of each individual executive for the last fiscal the most recent peer group data from our short-and long-term business and strategic detailed tally sheets for the CEO and each NEO. Our independent compensation consultant presents and analyzes market data for benchmarking each individual position and provides insight Peer Group for Executive Compensation Each year, the Compensation Committee meets with our independent compensation consultant to review and approve the peer group companies that satisfy our selection criteria. For fiscal year
Peer Group for the Long-Term Performance Program The Compensation Committee believes that an expanded peer group is more appropriate for determining relative TSR under the company’s LTPP, as an expanded peer group provides a broader index for comparison. Therefore, the Compensation Committee
Role of Management The CEO and the Senior Vice President, Human Resources consider the responsibilities, performance and capabilities of each of
The Compensation Committee establishes the CEO’s compensation based on a thorough review of the CEO’s performance that includes: An objective assessment against Tally sheets; Market data from A self-evaluation by the CEO that the Compensation Committee discusses with the independent directors; and 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 Compensation Committee reviews the CEO’s total direct compensation package Fiscal Year
Base Salary Our salaries reflect the responsibilities of each NEO and the competitive market for comparable professionals in our industry and are set to create an incentive for executives to remain with
Short-Term Cash Incentives The Performance-Based Compensation Plan
2017 financial plan established by the Board of For fiscal year
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Target Award Percentages and FY17 Actual Payouts Our Compensation Committee set the fiscal year 2017 short-term incentive target amounts based on a percent of base salary pre-established for each NEO considering the relative responsibility of each NEO. For fiscal year 2017, short-term incentive target bonuses were set at 130% of base salary for the CEO and 80% of base salary for the other NEOs. The payouts under the Performance-Based Compensation Plan for fiscal year
Financial The Performance-Based Compensation Plan financial
business units. The Compensation Committee chose those metrics because:
operating margin keeps focus on expense discipline and meeting efficiency measures; and revenue places focus on delivering strong top-line growth results. The 35
To determine earned awards, we use payout matrices
Payout Matrices to Measure Financial Metrics
Note: This specific payout matrix was used to determine the company level payout percentage. The payout
Key Business Initiatives – Targets and For fiscal year
Actual payout tables for Long-Term Incentives –
The performance stock units granted in fiscal year
Our TSR performance relative to peers and the payout percentages for the LTPP for the past
Relative TSR Performance Stock Units – FY16 to FY18 Performance Period Fifty percent of the performance stock units granted in fiscal year 2016 for the FY16 to FY18 performance period had financial goals based on relative TSR versus all companies in the S&P 500 Health Care and Materials Indexes for fiscal year 2016 through fiscal year 2018. Relative TSR performance stock units are completely “at-risk” compensation because our performance must be at or above the 25th percentile in order for the individuals to receive a payout. The final and only payout will be at the end of fiscal year 2018 based on the relative TSR for the three-year performance period. Operating Margin Performance Stock Units – FY16 to FY18 Performance Period Fifty percent of the performance stock units granted in fiscal year 2016 for the FY16 to FY18 performance period had financial goals based on adjusted operating margin. The number of shares earned under these performance stock units will be determined by calculating the operating margin percentage attained at the end of each of the three fiscal years in the performance period compared to the targets (which were set at the beginning of the three-year performance period). We use non-GAAP operating margin adjusted to exclude material M&A during the performance period, subject to Compensation Committee approval. The final and only payout at the end of fiscal year 2018 will be an average of the payout percentage for each fiscal year. The threshold, target and maximum numbers are set forth in the
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Long-Term Incentives Granted in Fiscal Year
The target value of the long-term incentive awards is determined at the beginning of the then-current fiscal year for each
Performance The Compensation Committee has established rolling three-year performance periods for determining earned performance stock awards. The financial goals for the performance stock units for fiscal year 2017 are based on relative TSR and earnings per share. Relative TSR aligns with stockholder interests as higher TSR results in higher potential returns for stockholders as well as ensuring a correlation between performance and payouts. Earnings per share ensures our executives are focused on long-term superior earnings growth. As noted above, our fiscal year 2017 short-term incentive program focuses on adjusted operating margin and revenue, which drive internal business strategies that in turn impact our TSR. 39
Relative TSR Performance Stock Units The performance stock units granted in fiscal year
price data to be used in the final relative TSR calculation. The company does not establish an absolute TSR target as we believe performance is best measured on a relative basis against our selected LTPP peer group. The
Relative TSR performance stock units are completely “at-risk” compensation because
For purposes of determining the relative TSR awards, relative TSR reflects (i) the aggregate change in the 20-day average closing price of Earnings Per Share Performance The earnings per share performance awards will be determined by calculating the earnings per share attained at the end of each of the three fiscal years in
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 40
When an employee retires after age 55 with 15 years of
Semler Brossy, our independent compensation consultant, collaborates with management to conduct an annual review of Recoupment Policy We maintain an Executive Compensation Recoupment Policy that applies to all our executive officers covered by Section 16 of the Securities Exchange Act. Under this Policy, in the event of (1) a material restatement of financial results (wherein results were incorrect at the time published due to mistake, fraud or other misconduct) or (2) fraud or misconduct by an executive officer, the Compensation Committee will, in the case of a restatement, review all short and long-term incentive compensation awards that were paid or awarded to executive officers for performance periods beginning after July 14, 2009 that occurred, in whole or in part, during the restatement period. In the case of fraud or misconduct, the Compensation Committee will consider actions to remedy the misconduct, prevent its recurrence, and impose discipline on the wrongdoers, in each case, as the Compensation Committee deems appropriate. These actions may include, without limitation: • requiring reimbursement of compensation; • the cancellation of outstanding restricted stock or deferred stock awards, stock options, and other equity incentive awards; • limiting future awards or compensation; and • requiring the disgorgement of profits realized from the sale of our stock to the extent such profit resulted from fraud or misconduct. Insider Trading Policy Our insider trading policy expressly prohibits: • ownership of financial instruments or participation in investment strategies that hedge the economic risk of owning our stock; • officers and directors from pledging our securities as collateral for loans; and • officers, directors and employees from purchasing or selling our 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 so that they can prudently diversify their asset portfolios and exercise their stock options before expiration. 41
Shares directly owned by the executive officer and their household family members, deferred shares and vested restricted stock units are considered in complying with these guidelines. An annual review is conducted to assess compliance with the guidelines and at the end of fiscal year 2017, all of our NEOs had either met or were on track to reach their stock ownership guideline requirements within the applicable timeframe. Benefits Our 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,
Deferred Compensation NEOs on the U.S. payroll 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 LTPP. The deferrals are made through our 2005 Deferred Compensation Plan, which is available to all active employees on the US payroll 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. Retirement and Pension
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Policy Regarding Compensation in Excess of $1 Million Section 162(m) 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 For fiscal year Under the Tax Cuts and Jobs Act of 2017 (“TCIA), effective for our taxable year beginning November 1, 2018, the exception under Section 162(m) for performance-based compensation will no longer be available, subject to transition relief for certain grandfathered arrangements in effect as of November 2, 2017. In addition, the covered employees will be expanded to include our CFO, and once one of our NEOs is considered a covered employee, the NEO will remain a covered employee so long as he or she receives compensation from us. Given the lack of regulatory guidance to date, the Compensation Committee is not yet able to determine the full impact of the TCIA’s changes to Section 162(m) on the Company and our compensation programs. 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 We haveeliminated excise tax gross-ups for our CEO, Mr. McMullen, and all officers entering into newly executed change-of-control agreements after July 14, In addition, we have a Workforce Management Program in place that is applicable to all 43
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The following table sets forth information regarding compensation earned by our NEOs for fiscal
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a) Amounts reflect company contributions to the Agilent Technologies, Inc. 401(k) Plan in fiscal year 2017. In addition to the company match, Mr. Hirsch also received a transitional company contribution which was provided to all eligible employees as a result of the freeze of our pension plan. b) Amounts reflect company contributions to the Agilent Technologies Deferred Compensation Plan in fiscal year 2017. Amounts include matching contributions on deferred base salary and /or transitional company contributions, both of which were provided to all eligible employees as a result of the freeze of our pension plan. c) Amounts reflect the cost to the company of financial counseling and tax preparation services. d) Amounts reflect imputed income expenses for the use of our drivers and vehicles for personal travel, including spouses and family; and expenses related to spousal travel to our annual President’s Club meeting to recognize the highest performing sales people in the company. The amounts include tax gross-ups on the expenses related to spousal travel to our President’s Club of $3,954 for Mr. McMullen, $4,059 for Mr. Hirsch, $3,443 for Mr. Doak, $3,538 for Mr. Kaltenbach and $4,158 for Mr. Thaysen. Gross-ups on spousal travel to our President’s Club is provided for all attendees, not just the named executive officers. e) Our relocation program is available to all employees including officers, and is designed to facilitate employee relocations that support our business priorities. Our relocation program does not provide any payments for loss on the sale of a home or special tax gross ups. When Mr. McMullen was named CEO, and once his management team had been identified, it was decided that it would be in the best interest of the company and its stockholders for Messrs.’ McMullen, Kaltenbach and Thaysen to relocate to the Bay Area and work at our corporate headquarters located in Santa Clara, one of the costliest housing areas in the U.S. For Messrs. Kaltenbach and Thaysen, this entailed permanent relocation from their home countries of Germany and Denmark, respectively. To facilitate these moves, each of these NEOs participated in our relocation program. For fiscal year 2017, relocation costs for Mr. McMullen were $109,368 in total for his expenses related to his relocation from New Jersey to the San Francisco Bay Area. This amount covered expense related to the purchase of a home. The total relocation costs for Mr. Kaltenbach’s relocation from Germany for 2017 was $506,594. This included his second of two installments of $447,500, payable under our Global Relocation Supplement Program that is available to all international transferees (see below); $32,320 for tax preparation / consultation and host authority tax payment; $10,421 for miscellaneous allowances; and $16,353 for expenses related to the sale and purchase of a home. The total relocation costs for 2017 for Mr. Thaysen were $155,687 for his relocation from Denmark. These expenses included $83,500, payable under our Global Relocation Supplement Program; $4,305 for tax preparation / consultation and host authority tax payment; $57,273 for cost of living adjustments; and $10,609 for expenses related to shipping of household goods. Grants of Plan-Based Awards The following table sets forth certain information regarding grants of plan-based awards to each of our NEOs during fiscal year
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Outstanding Equity 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,
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Option Exercises and Stock Vested The following table sets forth information on restricted stock units and performance awards which vested during fiscal year 2017 and stock option exercises
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The following table shows the estimated present value of accumulated benefits, including years of service, payable at normal retirement age (65) to our NEOs under
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, or (ii) the annuity value of the Deferred Profit-Sharing Plan account balance. Therefore, for service prior to November 1, 1993, the Retirement Plan guarantees a minimum retirement benefit. 50
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. The Retirement Plan, which was frozen for all participants as of
Supplemental Benefit Retirement Plan The Supplemental Benefit Retirement Plan, which was Benefits under the Supplemental Benefit Retirement Plan are payable upon termination or retirement as follows:
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 our 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 $105,356 as of October 31, 2017. The frozen IRBP benefit will accrue interest at 2% annum until his retirement. Any loss of retirement income resulting from Mr. Hirsch’s no longer accruing benefits under the foregoing French arrangements will be paid to Mr. Hirsch in a single lump sum upon retirement from the company’s general assets as soon as administratively feasible. Agilent Technologies, Inc. German Pension Plan The Agilent Technologies German Pension Plan (PPL) is a Defined Benefit plan inherited from Hewlett-Packard and has been closed to new entrants since Dec 31, 1994. Mr. Kaltenbach is the only NEO participating in this plan. The plan offers retirement, disability and death benefits. Benefits under the plan are calculated as 0.5% of the last two years Pensionable Salary up to the SSC (Social Security Ceiling) plus 2% of the last 2 years Pension Salary in excess of the SSC, multiplied by the pensionable service (max 40 years). There is no employee contribution. Benefits are payable at age 65 with accrual reductions before age 60. The plan also provides death and disability coverage (60% for widow and widower and 15% for orphans).
For fiscal year 2017, the 2005 Deferred Compensation Plan
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) plan. All investment choices are made by the participant. Based on market performance, dividends and interest are credited to participants’ accounts from the funds that the participant has elected. 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:
The company currently provides two types of employer contributions. The first is a matching contribution up to 6% of deferred base pay amounts above the IRS qualified plan limit. The second is a transitional company contribution (DCPTCC) which is a formulaic contribution put in place due to the freeze of the U.S. pension and supplemental benefit retirement plans respectively. Contributions made by the company to our NEOs are detailed in the 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 52
where termination occurs during the second half of the calendar year. No early distributions or withdrawals are allowed. When and We have established a rabbi trust as a source of funds to make payments under the The
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 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
For agreements entered into before July 14, 2009 and to the extent 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, Under the current agreements, a “change of control” means the occurrence of any of the following events: (i) the sale, exchange, lease or other disposition or transfer of all or substantially all of the assets of 53
by a third person; or (iv) Individuals who, as of Effective Date, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board. “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 worksite and which increases the distance between such executive’s home and principal office by more than 35 miles, unless executive accepts such relocation opportunity; (v) the failure or refusal of a successor to 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 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 of a change of control of the The amounts shown assume that each of the terminations was effective October 31,
54
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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” and in “Executive Compensation” sections of the proxy statement, We are requesting your non-binding vote to approve the compensation of Vote Required The
56
The Representatives of PwC are expected to
Vote Required The appointment of PwC as our independent registered public accounting firm requires the affirmative vote of a majority of shares present at the
57
Audit Matters The following table sets forth the aggregate fees charged to the company by PwC for audit services rendered in connection with the audited consolidated financial statements and reports for the 2017 and 2016 fiscal years and for other services rendered during the 2017 and 2016 fiscal years to the company and its subsidiaries, as well as all out-of-pocket costs incurred in connection with these services:
Audit Fees: Consists of fees billed for professional services rendered for the integrated audit of our consolidated financial statements and its internal control over financial reporting and review of the interim condensed consolidated financial statements included in quarterly reports. Fiscal 2017 and 2016 fees also consist of fees billed for services that are normally provided by PwC in connection with statutory reporting and regulatory filings or engagements and attest services, except those not required by statute or regulation. 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 our 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 that are not required by statute or regulation, and consultations concerning financial accounting and reporting standards. Fiscal 2017 and fiscal 2016 audit-related fees reflect additional fees of $150,000 and $300,000, respectively, for services performed by PwC. Fiscal 2017 audit-related fees were related to system integration of the Dako acquisition while fiscal 2016 audit-related fees were related to the implementation of a new financial system. 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. In making its recommendation to ratify the appointment of PwC as our independent registered public accounting firm for the fiscal year ending October 31, 2018, the Audit and Finance Committee has considered whether services other than audit and audit-related services provided by PwC are compatible with maintaining the independence of PwC. Policy on 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, Paul N. Clark, who may preapprove all audit and permissible non-audit services so long as his preapproval decisions are reported to the Audit and Finance Committee at its next scheduled meeting. 58
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Stock Ownership of Certain Beneficial Owners The following table sets forth information, as of _______________________
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Stock Ownership of Directors and Officers The following table sets forth information, as of
___________________
Section 16(a) Beneficial Ownership Reporting Compliance Section 16(a) of the Exchange Act, requires In making these statements, 61
our Proxy Statement for our annual meeting; and our 2017 Annual Report to Stockholders, which includes our audited consolidated financial statements. If you requested printed versions of these materials by mail, these materials also include the proxy card for the annual meeting.
On the Record Date, we had 322,717,303 shares of common stock issued and outstanding. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Q: |
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| What is the difference between holding shares as a stockholder of record and as a beneficial owner? |
A: | Most or our stockholders |
62
| GENERAL INFORMATION |
If your shares are registered directly in your name with our transfer agent Computershare, you are considered, with respect to those shares, the stockholder of record, and the Notice, or if requested, these proxy materials are being sent directly to you. As the stockholder of record, you have the right to grant your voting proxy directly to the persons named as proxy holders, Michael R. McMullen, Chief Executive Officer and Michael Tang, Senior Vice President, General Counsel and Secretary, or to vote in person at the annual meeting. If you requested printed copies of the proxy materials, we have enclosed a proxy card for you to use. You may also vote on the Internet or by telephone, as described below under the heading “How can I vote my shares without attending the annual meeting?”
Beneficial Owner
If your shares are held in a stock brokerage account or by a bank or other nominee, you are considered the beneficial owner of shares held in “street name”, and these proxy materials are being forwarded to you by your broker or nominee who is considered, with respect to those shares, the stockholder of record. As the beneficial owner, you are invited to attend the annual meeting. You also have the right to direct your broker on how to vote these shares. Your broker or nominee should have enclosed a voting instruction card for you to direct your broker or nominee how to vote your shares. You may also vote by Internet or by telephone, as described below under “How can I vote my shares without attending the annual meeting?” However, shares held in “street name” may be voted in person by you only if you obtain a signed proxy from the record holder (stock brokerage, bank, or other nominee) giving you the right to vote the shares.
Q: | What identification is required for admission to the annual meeting? |
proposals prior to their admission to the annual |
Q: | How can I vote my shares in person at the annual meeting? |
A: | Shares held directly in your name as the stockholder of record may be voted in person at the annual meeting. If you choose to vote your shares in person at the annual meeting, please bring proof of ownership of |
Q: | How can I vote my shares without attending the annual meeting? |
A: | Whether you hold your shares directly as the stockholder of record or beneficially in “street name”, you may direct your vote without attending the annual meeting by proxy. You can vote by proxy over the Internet or by telephone. Please follow the instructions provided in the Notice, or, if you request printed copies of proxy materials, on the proxy card or voting instruction card. |
Q: | Can I revoke my proxy or change my vote? |
A: | You may revoke your proxy or change your voting instructions prior to the vote at the annual meeting. You may enter a new vote by using the Internet or the telephone or by mailing a new proxy card or new voting instruction card bearing a later date (which will automatically revoke your earlier voting instructions) or by attending the annual meeting and voting in person. Your |
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| attendance at the annual meeting in person will not cause your previously granted proxy to be revoked unless you specifically so request. | ||
Q: | How are votes counted? |
A: | In the election of directors, your vote may be cast “FOR” or “AGAINST” one or more of the nominees, or you may “ABSTAIN” from voting with respect to one or more of the nominees. Shares voting “ABSTAIN” have no effect on the election of directors. |
63
| GENERAL INFORMATION | |
For proposals 2, 3 and 4 your vote may be cast “FOR” or, “AGAINST” or you may “ABSTAIN.” If you “ABSTAIN”, it has the same effect as a vote “AGAINST.” If you sign your proxy card or broker voting instruction card with no further instructions, your shares will be voted as described below in “Abstentions and Broker Non-Votes
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committee’s determination regarding the tendered resignation and the rationale behind the decision in a Current Report on Form 8-K filed with the SEC.
Proposal 2, Ratification of the Independent Registered Public Accounting Firm: The appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm requires the affirmative vote of a majority of shares present at the annual meeting, in person or by proxy, and entitled to vote on the proposal. Abstentions will have the same effect as a vote against“AGAINST.” If you sign your proxy card or broker voting instruction card with no further instructions, your shares will be voted as described below in “Abstentions and Broker Non-Votes.
Abstentions and Broker Non-Votes
Any shares represented by proxies that are marked to “ABSTAIN” from voting on a proposal will be counted as present in determining whether we have a quorum. They will also be counted in determining the total number of shares entitled to vote on a proposal. Abstentions and, if applicable, broker non-votes will not be counted as votes “FOR” or “AGAINST” a director nominee. Accordingly, abstentions are not counted for the purpose of determining the number of votes cast in the election of directors.
If your shares are held in street name and you do not instruct your broker on how to vote your shares, your broker, in its discretion, may either leave your shares unvoted or vote your shares on routine matters. Only Proposal 2. The approval4 (ratifying the appointment of Proposal 2our independent registered public accounting firm) is considered a routine proposal on whichmatter. If your broker returns a broker or other nominee is generally empowered toproxy card but does not vote your shares, this results in a “broker non-vote.” Broker non-votes will be counted as present for the absencepurpose of voting instructions from the beneficial owner, so broker non-votes are unlikely to result from this proposal.determining a quorum.
Proposal 3, ApprovalProposals 1 (election of directors), 2 (approval of the Compensationamendment and restatement of Agilent’s Named Executive Officers: The advisory vote regarding approvalour 2009 Stock Plan) and 3 (approval of the compensation of Agilent’sour named executive officers requires the affirmativeofficers) are not considered routine matters, and without your instruction, your broker cannot vote of a majority of shares present at the annual meeting, in person or by proxy, and entitledyour shares. Because brokers do not have discretionary authority to vote on the proposal. Abstentions will have the same effect as votes against this proposal.Brokerthese proposals, broker non-votes will have no effectnot be counted for the purpose of determining the number of votes cast on this proposal as brokers are not entitled to vote on such proposal in the absence of voting instructions from the beneficial owner.these proposals.
Proposal 4, Approval of amendments to the Amended and Restated Certificate of Incorporation and Bylaws to declassify the Board: The vote regarding amendment of the Amended and Restated Certificate of Incorporation and Bylaws to declassify the board requires the affirmative vote of eighty percent (80%) of the outstanding voting stock. Abstentions will have the same effect as votes against this proposal.Broker non-votes will have no effect on this proposal as brokers are not entitled to vote on such proposal in the absence of voting instructions from the beneficial owner
Q: | What does it mean if I receive more than one Notice, proxy or voting instruction card? |
A: | It means your shares are registered differently or are in more than one account. For each Notice you receive, please |
Q: |
A: | We will announce preliminary voting results at the annual meeting and publish preliminary, or final results if available, in a Current Report on Form 8-K within four business days of the annual meeting. |
Q: | What happens if additional proposals are presented at the annual meeting? |
A: | Other than the four proposals described in this Proxy Statement, |
Q: | What is the quorum requirement for the annual meeting? |
A: | The quorum requirement for holding the annual meeting and transacting business is a majority of the outstanding shares |
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| entitled to be voted. The shares may be present in person or represented by proxy at the annual meeting. Both abstentions and broker non-votes are counted as present for the purpose of determining the presence of a quorum. Broker non-votes, however, are not counted as shares present and entitled to be voted with respect to the matter on which the broker has expressly not voted. Thus, broker non-votes will not affect the outcome of any of the matters being voted on at the annual meeting. |
Q: | Who will count the vote? |
A: | A representative of Computershare will tabulate the votes and act as the inspector of election. |
Q: | Is my vote confidential? |
A: | Proxy instructions, ballots and voting tabulations that identify individual stockholders are handled in a manner that protects your voting privacy. Your vote will not be disclosed either within |
64
| GENERAL INFORMATION |
Q: | Who will bear the cost of soliciting votes for the annual meeting? |
A: | We will pay the entire cost of preparing, assembling, printing, mailing and distributing these proxy materials. |
In addition to the mailing of these proxy materials, the solicitation of proxies or votes may be made in person, by telephone or by electronic communication by our directors, officers and employees, who will not receive any additional compensation for such solicitation activities. In addition, we may reimburse brokerage firms and other persons representing beneficial owners of shares for their expenses in forwarding solicitation material to such beneficial owners.
Q: | May I propose actions for consideration at next year’s annual meeting of stockholders or nominate individuals to serve as directors? |
A: | You may submit proposals for consideration at future annual stockholder meetings, including director nominations. |
Nomination of Director Candidates: Our Bylaws permit stockholders to nominate directors at a stockholder meeting. In order to make a director nomination at an annual stockholder meeting, it is necessary that you notify us not less than 120 days before the first anniversary of the date that the proxy statement for the preceding year’s annual meeting was first sent to stockholders.
Our 2018 Proxy Statement was first sent to stockholders on February 7, 2018. Thus, in order for any such nomination notice to be timely for next year’s annual meeting, it must be received by us no later than October 5, 2018. In addition, the notice must meet all other requirements contained in our Bylaws and include any other information required pursuant to Regulation 14A under the Exchange Act.
Copy of Bylaw Provisions: You may contact our Corporate Secretary at our corporate headquarters for a copy of the relevant Bylaw provisions regarding the requirements for making stockholder proposals and nominating director candidates. Additionally, a copy of our Bylaws can be accessed on the Agilent Investor Relations Web site under “Corporate Governance.”
Q: |
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A: | To reduce expenses, in some cases, we are delivering one set of the proxy materials or, where applicable, one Notice to certain stockholders who share an address, unless otherwise requested by one or more of the stockholders. For stockholders receiving hard copies of the proxy materials, a separate proxy card is included with the proxy materials for each stockholder. For |
| stockholders receiving a Notice, the Notice will instruct you as to how you may access and review all of the proxy materials on the Internet. The Notice also instructs you as to how you may submit your proxy on the Internet. If you have only received one set of the proxy materials or one Notice, you may request separate copies at no additional cost to you by | |
Agilent Technologies, Inc.
Attn: Stockholder Records
5301 Stevens Creek Blvd.
Santa Clara, California 95051
(408) 553-2424
If you received a Notice and you would like to receive a paper or email copy of our proxy materials, you should follow the instructions for requesting such materials in the Notice.
You may also request separate paper proxy materials or a separate Notice for future annual meetings by following the instructions for requesting such materials in the Notice, or by contacting us by calling or writing.
Q: | If I share an address with other stockholders of |
A: | You may request that we send you and the other stockholders who share an address with you only one Notice or one set of proxy materials by |
Agilent Technologies, Inc.
Attn: Stockholder Records
5301 Stevens Creek Blvd.
Santa Clara, California 95051
(408) 553-2424
65
| GENERAL INFORMATION |
You may receive a copy of Agilent’sour Annual Report on Form 10-K for the fiscal year ended October 31, 20152017 without charge by sending a written request to to:
Agilent Technologies, Inc.,
Attn: Investor Relations
5301 Stevens Creek Blvd., Boulevard
Santa Clara, California 95051 Attn: Investor Relations.
By Order of the Board,
Michael
TMangICHAEL TANG
Senior Vice President, General Counsel
and Secretary
Dated: February 4,7, 2018
APPENDIX A TO PROXY STATEMENT
OF
AGILENT TECHNOLOGIES, INC.
The reconciliation of non-GAAP net income and diluted EPS for the years ended October 31, 2017, 2016 and 2015 follows:
NON-GAAP INCOME FROM CONTINUING OPERATIONS AND DILUTED EPS RECONCILIATIONS
(In millions, except per share amounts)
(Unaudited)
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| Year Ended |
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| Year Ended |
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| Year Ended |
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| October 31, 2017 |
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| October 31, 2016 |
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| October 31, 2015 |
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| Net income |
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| Diluted EPS |
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| Net income |
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| Diluted EPS |
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| Net income |
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| Diluted EPS |
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| GAAP net income |
| $ | 684 |
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| $ | 2.10 |
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| $ | 460 |
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| $ | 1.40 |
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| $ | 438 |
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| $ | 1.31 |
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| Non-GAAP adjustments: |
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| Asset impairments |
| — |
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| — |
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| 4 |
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| 0.01 |
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| 3 |
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| 0.01 |
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| Acceleration of share-based compensation expense related to workforce reduction |
| — |
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| — |
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| — |
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| — |
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| 2 |
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| 0.01 |
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| Intangible amortization |
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| 117 |
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| 0.36 |
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| 152 |
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| 0.46 |
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| 156 |
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| 0.47 |
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| Business exit and divestiture costs |
| — |
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| — |
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| 10 |
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| 0.03 |
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| 14 |
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| 0.04 |
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| Transformational initiatives |
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| 12 |
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| 0.04 |
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| 38 |
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| 0.12 |
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| 56 |
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| 0.17 |
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| Acquisition and integration costs |
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| 32 |
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| 0.10 |
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| 41 |
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| 0.12 |
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| 13 |
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| 0.04 |
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| Pension settlement gain |
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| (32 | ) |
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| (0.10 | ) |
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| (1 | ) |
| — |
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| — |
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| — |
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| Pension curtailment gain |
| — |
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| — |
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| (15 | ) |
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| (0.05 | ) |
| — |
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| — |
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| Impairment of investment and loans |
| — |
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| — |
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| 25 |
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| 0.08 |
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| — |
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| — |
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| Other |
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| 5 |
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| 0.02 |
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| 6 |
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| 0.02 |
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| 5 |
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| 0.01 |
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| Adjustment for taxes (a) |
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| (50 | ) |
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| (0.16 | ) |
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| (69 | ) |
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| (0.21 | ) |
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| (104 | ) |
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| (0.32 | ) |
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| Non-GAAP net income |
| $ | 768 |
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| $ | 2.36 |
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| $ | 651 |
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| $ | 1.98 |
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| $ | 583 |
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| $ | 1.74 |
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(a) | The adjustment for taxes excludes tax benefits that management believes are not directly related to on-going operations and which are either isolated or cannot be expected to occur again with any regularity or predictability. For the years ended October 31, 2017, October 31, 2016 and October 2015, management used a non-GAAP effective tax rate of 18.0%, 19.0% and 20%, respectively. |
Historical amounts are reclassified to conform with current presentation.
We provide non-GAAP net income and non-GAAP net income per share amounts in order to provide meaningful supplemental information regarding our operational performance and our prospects for the future. These supplemental measures exclude, among other things, charges related to amortization of intangibles, business exit and divestiture costs, transformational initiatives, acquisition and integration costs, pension settlement gain and impairment of investment and loans.
Asset impairments include assets that have been written-down to their fair value.
Business exit and divestiture costs include costs associated with the exit of the NMR business and other business divestitures.
Transformational initiatives include expenses associated with targeted cost reduction activities such as manufacturing transfers, site consolidations, legal entity and other business reorganizations, insourcing or outsourcing of activities. Such costs may include move and relocation costs, one-time termination benefits and other one-time reorganization costs. Included in this category are also expenses associated with the post-separation resizing of the IT infrastructure and streamlining of IT system as well as company programs to transform our product lifecycle management (PLM) system and financial systems.
TableAcquisition and Integration costs include all incremental expenses incurred to effect a business combination. Such acquisition costs may include advisory, legal, tax, accounting, valuation, and other professional or consulting fees. Such integration costs may include expenses directly related to integration of Contentsbusiness and facility operations, the transfer of assets and intellectual property, information technology systems and infrastructure and other employee-related costs.
Pension settlement gain resulted from transfer of the substitutional portion of our Japanese pension plan to the government.
Pension curtailment gain resulted from transfer of the substitutional portion of our Japanese pension plan to the government.
Impairment of investment and loans include investments and their related convertible loans that have been written down to their fair value.
Other includes certain legal costs and settlements in addition to other miscellaneous adjustments.
Our management uses non-GAAP measures to evaluate the performance of our core businesses, to estimate future core performance and to compensate employees. Since management finds this measure to be useful, we believe that our investors benefit from seeing our results “through the eyes” of management in addition to seeing our GAAP results. This information facilitates our management’s internal comparisons to our historical operating results as well as to the operating results of our competitors.
Our management recognizes that items such as amortization of intangibles can have a material impact on our cash flows and/or our net income. Our GAAP financial statements including our statement of cash flows portray those effects. Although we believe it is useful for investors to see core performance free of special items, investors should understand that the excluded items are actual expenses that may impact the cash available to us for other uses. To gain a complete picture of all effects on the company’s profit and loss from any and all events, management does (and investors should) rely upon the GAAP income statement. The non-GAAP numbers focus instead upon the core business of the company, which is only a subset, albeit a critical one, of the company’s performance.
Readers are reminded that non-GAAP numbers are merely a supplement to, and not a replacement for, GAAP financial measures. They should be read in conjunction with the GAAP financial measures. It should be noted as well that our non-GAAP information may be different from the non-GAAP information provided by other companies.
The reconciliation of adjusted non-GAAP income from operations and operating margins for the year ended October 31, 2017 follows:
RECONCILIATION OF ADJUSTED NON-GAAP INCOME FROM OPERATIONS AND OPERATING MARGINS
(In millions, except margin data)
(Unaudited)
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| Operating |
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| |
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| FY17 |
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| Margin % |
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| Revenue: |
| $ | 4,472 |
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|
|
|
|
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| Income from operations: |
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|
|
|
|
|
|
|
|
| GAAP Income from operations |
| $ | 841 |
|
|
| 18.8 | % |
|
| Add: |
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|
|
|
|
|
|
|
|
| Intangible amortization |
|
| 117 |
|
|
|
|
|
|
| Transformational initiatives |
|
| 12 |
|
|
|
|
|
|
| Acquisition and integration costs |
|
| 30 |
|
|
|
|
|
|
| Pension settlement gain |
|
| (32 | ) |
|
|
|
|
|
| Other |
|
| 6 |
|
|
|
|
|
|
| Non-GAAP income from operations |
| $ | 974 |
|
|
| 21.8 | % |
|
| Reimbursement from Keysight for services (a) |
|
| 12 |
|
|
|
|
|
|
| Adjusted non-GAAP income from operations |
| $ | 986 |
|
|
| 22.0 | % |
|
(a) |
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We provide non-GAAP net income and non-GAAP net income per share amounts in order to provide meaningful supplemental information regarding our operational performance and our prospects for the future. These supplemental measures exclude, among other things, charges related to amortization of intangibles, transformational initiatives, acquisition and integration costs, and pension settlement gain.
Our management recognizes that items such as amortization of intangibles can have a material impact on our cash flows and/or our net income. Our GAAP financial statements including our statement of cash flows portray those effects. Although we believe it is useful for investors to see core performance free of special items, investors should understand that the excluded items are actual expenses that may impact the cash available to us for other uses. To gain a complete picture of all effects on the company’s profit and loss from any and all events, management does (and investors should) rely upon the GAAP income statement. The non-GAAP numbers focus instead upon the core business of the company, which is only a subset, albeit a critical one, of the company’s performance.
Readers are reminded that non-GAAP numbers are merely a supplement to, and not a replacement for, GAAP financial measures. They should be read in conjunction with the GAAP financial measures. It should be noted as well that our non-GAAP information may be different from the non-GAAP information provided by other companies.
DIRECTIONS TO AGILENT’S HEADQUARTERSAppendix B
(Marked to Show Changes)
AGILENT TECHNOLOGIES, INC.
(formerly the South (San Jose)“2009 Stock Plan”)
Take Highway 280 North towards San Francisco. Take1.Purpose and Background of the Stevens Creek/Lawrence Expressway exitPlan. The purpose of this 2018 Stock Plan (formerly known as the 2009 Stock Plan, as amended and turn left onto Stevens Creek Blvd.restated) (the “Plan”) is to encourage ownership in the Company by key personnel whose long-term employment is considered essential to the Company’s continued progress and, thereby, encourage recipients to act in the stockholder’s interest and share in the Company’s success. The Plan is intended to permit the grant of Awards that qualify as performance-based compensation under Section 162(m) of the Code. ThePrior to the Effective Date (as hereinafter defined), the Plan was formerly known as the 2009 Stock Plan wasas adopted by the Board on November 19, 2008 (the “Adoption Date”) and shall become effective upon its approval by the stockholders of the Company (the “2008. All references to the 2009 Stock Plan contained in any (i) future award agreements, other grant materials or correspondence to participants or (ii) other Company plans, after the Effective Date”), shall also be deemed to refer to this Plan.
2.Definitions. As used herein, the following definitions shall apply:
(a)“Administrator” means the Board or any of its Committees as shall be administering the Plan, in accordance with Section 4 of the Plan.
(b)“Affiliate” means any entity that is directly or indirectly controlled by the Company or any entity in which the Company has a significant ownership interest as determined by the Administrator.
(c)“Applicable Laws” means the requirements relating to the administration of stock option plans under U.S. federal and state laws, any stock exchange or quotation system on which the Common Stock is listed or quoted and the applicable securities laws of any foreign jurisdiction where Awards are, or will be, granted under the Plan.
(d)“Award” means a Cash Award, dividend equivalent, SAR, Stock Award, or Option granted in accordance with the terms of the Plan.
(e)“Award Agreement” means a written or electronic agreement between the Company and an Awardee evidencing the terms and conditions of an individual Award. The Award Agreement is subject to the terms and conditions of the Plan.
(f)“Awardee” means the holder of an outstanding Award.
(g)“Awardee Eligible to Vest” means the holder of an outstanding Award who is providing Service.
(h)“Board” means the Board of Directors of the Company.
(i)“Cash Awards” means cash awards granted pursuant to Section 13 of the Plan.
(j)“Code” means the United States Internal Revenue Code of 1986, as amended.
(k)“Committee” means a committee of Directors appointed by the Board in accordance with Section 4 of the Plan.
(l)“Common Stock” means the common stock of the Company.
(m)“Company” means Agilent Technologies, Inc., a Delaware corporation.
(n)“Consultant” means any person, including an advisor, engaged by the Company, a Subsidiary or Affiliate to render services to such entity as an independent contractor but who is neither an Employee nor a Director.
(o)“Deferred Share” shall mean the grant of a Stock Award to a Non-Employee Director consisting of a contractual right to receive a Share in the future after attainment of the vesting criteria established by the Committee in accordance with Section 15 of the Plan and the Award Agreement.
(p)“Director” means a member of the Board.
(q)“Employee” means a full time or part time employee of the Company or any Subsidiary or Affiliate, including Officers and Directors, who is treated as an employee in the personnel records of the Company or its Subsidiary or Affiliate for approximately 0.1 milesthe relevant period, but shall exclude individuals who are classified as (i) leased from or otherwise employed by a third party, (ii) independent contractors, or (iii) intermittent or temporary, even if any such classification is changed retroactively as a result of an audit, litigation or otherwise. An Awardee shall not cease to be an Employee in the case of (A) any leave of absence approved by the Company or its Subsidiary or Affiliate, or (B) transfers between locations of the Company or between the Company and/or any Subsidiary or Affiliate. Neither Service as a Director nor payment of a director’s fee by the Company shall be sufficient to constitute “employment” by the Company.
(r)“Exchange Act” means the Securities Exchange Act of 1934, as amended.
(s)“Fair Market Value” means, as of any date, the quoted closing sales price for such Common Stock as of such date (or if no sales were reported on such date, the closing price on the last preceding day a sale was made) as quoted on the stock exchange or a national market system, with the highest trading volume, as reported in such source as the Administrator shall determine consistent with the requirements of Section 409A of the Code.
(t)“Grant Date” means the date selected by the Administrator, from time to time, upon which Awards are granted to Participants pursuant to this Plan.
(u)“Incentive Stock Option” means an Option intended to qualify as an incentive stock option within the meaning of Section 422 of the Code and the regulations promulgated thereunder.
(v)“Non-Employee Director” means a Director who is not an Employee.
(w)“Nonstatutory Stock Option” means an Option not intended to qualify as an Incentive Stock Option.
(x)“NYSE” means the New York Stock Exchange.
(y)“Officer” means a person who is an officer of the Company within the meaning of Section 16 of the Exchange Act and the rules and regulations promulgated thereunder.
(z)“Option” means a conditional opportunity granted pursuant to the Plan to purchase shares of the Company’s common stock at some point in the future at a price that is fixed on the date of grant. Options granted under the Plan may be Incentive Stock Options or Nonstatutory Stock Options.
(aa)“Participant” means an Employee, Director (including a Non-Employee Director) or Consultant.
(bb)“Performance Award” means a Stock Award or Cash Award granted pursuant to Section 14.
(cc)“Performance Criteria” means the following: (i) sales revenue; (ii) gross margin; (iii) operating marginincome; (iv) operatingearnings or income; (v) pre-tax profit; (vi) measures (including earnings before interest, taxes and depreciation and amortization; (g) net income; (h); (v) pre-tax profit; (vi) expenses; (vii) the marketshare price of the sharesperformance; (viii) earnings per share; (ix) return on stockholdermeasures (including return on assets, capital, invested capital, equity, sales or revenue); (x) return on capital; (xi) return on net assets; (xii) economic value added; (xi) market share; (xii) safety; (xiii) market share; (xiv) customer service; (xv) customer satisfaction; (xvi) safety; (xvii) total stockholder return; (xviii)xiv) cash flow (including free cash flow); (xixxv) size-adjusted growth in earnings; and (xx(xvi) net order dollars; (xvii) contract bookings; (xviii) contract awards; (xix) book to bill; (xx) backlog; (xxi) customer metrics (including service, satisfaction, retention or profitability); (xxii) productivity; (xxiii) expense targets; (xxiv) market share; (xxv) cost control measures; (xxvi) balance sheet metrics; (xxvii) strategic initiatives; (xxviii) implementation, completion or attainment of measurable objectives with respect to recruitment or retention of personnel or employee satisfaction; (xxix) successful completion of, or achievement of milestones or objectives related to financing or capital raising transactions, strategic acquisitions or divestitures, joint ventures, partnerships, collaborations or other transactions; (xxx) debt levels or debt ratios; (xxxi) operating efficiency; (xxxii) working capital targets, including days working capital; (xxxiii)
quantifiable, objective measures of individual performance relevant to the particular individual’s job responsibilities; (xxxiv) any combination or the foregoing business criteria; and (xxxv) such other criteria as determined by the Committee, each with respect to the Company and/or any operating unit(s), one or more operating units, divisions, subsidiaries or business segments of the Company and/or one or more product lines or products of the Company, as determined by the Committee in its sole discretion.; provided, however, that such criteria shall include any derivations of criteria listed above (e.g., income shall include pre-tax income, net income, or operating income). Any criteria that are financial metrics may be determined in accordance with United States Generally Accepted Accounting Principles (“GAAP”) or may be adjusted when established (or to the extent permitted under Section 162(m), at any time thereafter) to include or exclude any items otherwise includable or excludable under GAAP. Further, any Performance Criteria may be applied on an absolute or relative basis.
(dd)“Performance Share” means a Share acquired pursuant to a grant of a Stock Award that is subject to vesting based upon the attainment of one or more Performance Criteria.
(ee)“Performance Unit” means the grant of a Stock Award consisting of a contractual right to receive a Share based in whole or in part, upon the attainment of one or more Performance Criteria.
(ff)“Plan” means this 20092018 Stock Plan effective as of the date of its approval by the stockholders of the Company pursuant to Section 24.
(gg)“Restricted Stock” means a Share acquired pursuant to a grant of a Stock Award under Section 12 of the Plan that is subject to certain restrictions as set forth in Section 12 and in the Award Agreement.
(hh)“Restricted Stock Unit” means the grant of a Stock Award consisting of a contractual right to receive a Share (or the cash equivalent of a Share) in the future after attainment of vesting criteria established by the Committee in accordance with Section 12 of the Plan and the Award Agreement.
(ii)“Service” means service as an Employee, Director, Non-Employee Director or Consultant. A Participant’s Service does not terminate when continued service crediting is required by applicable law. However, for purposes of determining whether an Option is entitled to continuing Incentive Stock Option status, a common-law employee’s Service will be treated as terminating ninety (90) days after such Employee went on leave, unless such Employee’s right to return to active work is guaranteed by law or by a contract. Service terminates in any event when the approved leave ends, unless such Employee’s right to return to active work is guaranteed by law or by a contract. Service terminates in any event when the approved leave ends, unless such Employee immediately returns to active work. The Committee determines whichwhen leaves count toward Service, and when Service terminates for all purposes under the Plan. Further, unless otherwise determined by the Committee, a Participant’s Service shall not be deemed to have terminated merely because of a change in the capacity in which the Participant provides service to the Company, a Subsidiary or an Affiliate, or a transfer between entities (the Company or any Subsidiary or Affiliate); provided there is no interruption or other termination of Service.
(jj)“Share” means a share of the Common Stock, as adjusted in accordance with Section 1518 of the Plan.
(kk)“SAR” means a stock appreciation right granted pursuant to Section 11 of the Plan.
(ll)“Stock Award” means a right to purchase or receive Common Stock pursuant to an Award described in Section 12.
(mm)“Subsidiary” means a “subsidiary corporation”, whether now or hereafter existing, as defined in Section 424(f) of the Code.
3.Stock Subject to the Plan. Subject to the provisions of Section 18 of the Plan, the maximum aggregate number of Shares that may be issued under the Plan is 25,000,000 Shares. The Shares may be authorized, but unissued, or reacquired Common Stock. In addition, if an award previously granted under the Agilent Technologies, Inc. 1999 Stock Plan or the 2009 Stock Plan is forfeited, expires or becomes unexercisable without having been exercised in full, the Shares which were subject to such award shall again be available to be the subject of an Award under the Plan.
For purposes of the total number of Shares available for grant under this Plan, any Shares that are subject to Awards of Options or Stock Appreciation Rights shall be counted against the limit stated in this Section 3 as one (1) Share issued, and any shares issued in connection with Stock Awards shall be counted against the limit stated in this Section 3 as two (2.0) Shares for
every one (1) Share issued. Further, if a SAR or a Restricted Stock Unit is settled in cash on a net basis, then turn rightonly the equivalent number of Shares which would have actually been distributed to the Participant shall be taken into Agilent’s parking lotaccount for purposes of reducing the number of Shares available for grant under the Plan.
If an Award is forfeited, expires or becomes unexercisable without having been exercised in full, the Shares which expire or are forfeited, shall become available for future grant or sale under the Plan (unless the Plan has terminated) based on the same ratio as the Shares were treated in the preceding paragraph. The following Shares may not again be made available for issuance as Awards under the Plan: (a) Shares not issued or delivered as a result of the net settlement of an outstanding Award (with the exception of cash settled SARs and Restricted Stock Units described in the second paragraph of this Section 3), (b) Shares used to pay the exercise price or withholding taxes related to an outstanding Award, or (c) Shares repurchased on the open market with the proceeds of the option exercise price. Notwithstanding the foregoing, if Shares issued pursuant to a Stock Award are repurchased by the Company at their original purchase price, such Shares shall become available for future grant under the Plan.
Notwithstanding the foregoing, Shares issued pursuant to awards (including, but not limited to Conversion Options described in Section 4(c)(x)) assumed or issued in substitution of other awards in connection with the acquisition by the Company or a Subsidiary of an unrelated entity shall not reduce the maximum number of Shares issuable under this Section 3. In addition., to the extent the Company assumes ShareShares originally reserved for issuance from a plan that was previously maintained by an acquired company, those Shares shall be available for Award under this Plan and shall not reduce the maximum number of Shares issuable under this Section 3; provided, however, that this sentence shall not apply to any plan which was not previously approved by the stockholders of the acquired company.
(a)The Board or a Committee appointed by the Board shall be the Administrator. To the extent the Board acts as the Administrator, references herein to “Committee” shall include the Board.
(b)Procedure.
(i)Multiple Administrative Bodies. The Plan may be administered by different Committees with respect to different groups of Participants.
(ii)Section 162(m). To the extent that the Administrator determines it to be desirable to qualify Awards granted hereunder as “performance-based compensation” within the meaning of Section 162(m) of the Code, the Plan shall be administered with respect to “covered employees” as defined by Section 162(m) of the Code by a Committee of two or more “outside directors.”
(iii)Rule 16b-3. To the extent desirable to qualify transactions hereunder as exempt under Rule 16b-3 promulgated under the Exchange Act (“Rule 16b-3”), the transactions contemplated hereunder shall be structured to satisfy the requirements for exemption under Rule 16b-3.
(iv)Independent Directors. To the extent necessary to satisfy the rules of the applicable U. S. national securities exchange that is the principal trading market for the Common Stock, the members of the Committee shall qualify as “independent directors.”
(v)Other Administration. Subject to applicable law and the rules of the U.S. national securities exchange that is the principal trading market for the Common Stock, the Board may delegate to the Executive Committee of the Board (the “Executive Committee”) or other officer(s) of the Company the power to approve Awards to Participants who are not (A) subject to Section 16 of the Exchange Act or (B) at the second stop light.time of such approval, “covered employees” under Section 162(m) of the Code.
(c)FromPowers of the North (San Francisco)Administrator
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.
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Admission. Subject to the annual meeting willprovisions of the Plan, and in the case of a Committee, subject to the specific duties delegated by the Board to such Committee, the Administrator shall have the authority, in its discretion:
(i)to select the Participants to whom Awards may be granted hereunder;
(ii)to determine the number of shares of Common Stock to be covered by each Award granted hereunder;
(iii)to approve forms of agreement for use under the Plan;
(iv)to determine the terms and conditions, not inconsistent with the terms of the Plan, of any Award granted hereunder. Such terms and conditions include, but are not limited to, stockholders. You are entitledthe exercise price, the time or times when an Award may be exercised (which may or may not be based on performance criteria), any vesting acceleration or waiver of forfeiture restrictions, and any restriction or limitation regarding any Award or the Shares relating thereto, based in each case on such factors as the Administrator, in its sole discretion, shall determine; to attendconstrue and interpret the annual meeting only if you areterms of the Plan and Awards granted pursuant to the Plan;
(v)to adopt rules and procedures relating to the operation and administration of the Plan to accommodate the specific requirements of local laws and procedures. Without limiting the generality of the foregoing, the Administrator is specifically authorized (A) to adopt the rules and procedures regarding the conversion of local currency, withholding procedures and handling of stock certificates which vary with local requirements, (B) to adopt sub-plans and Plan addenda as the Administrator deems desirable, to accommodate foreign tax laws, regulations and practice;
(vi)to prescribe, amend and rescind rules and regulations relating to the Plan, including rules and regulations relating to sub-plans and Plan addenda;
(vii)to make all determinations whether an individual is an Awardee Eligible to Vest and when such eligibility ceases;
(viii)to modify or amend each Award, provided, however, that any such amendment is subject to Section 19(c) of the Plan and may not impair any outstanding Award unless agreed to in writing by the Awardee;
(ix)to allow Awardees to satisfy withholding tax obligations by electing to have the Company withhold from the Shares to be issued upon exercise of an Award that number of Shares having a stockholdervalue (as determined solely by the Plan Administrator or its delegate(s)) equal to the minimum amount required to be withheld. The value of recordthe Shares to be withheld shall be determined solely by the Plan Administrator or its delegate(s) on the date that the amount of tax to be withheld is to be determined. All elections by an Awardee to have Shares withheld for this purpose shall be made in such form and under such conditions as the Administrator may deem necessary or advisable;
(x)to authorize conversion or substitution under the Plan of any or all outstanding stock options held by Awardees of an entity acquired by the Company (the “Conversion Options”). Any conversion or substitution shall be effective as of the close of the merger or acquisition. The Conversion Options may be Nonstatutory Stock Options or Incentive Stock Options, as determined by the Administrator. Unless otherwise determined by the Administrator at the time of conversion or substitution, all Conversion Options shall have the same terms and conditions as Options generally granted by the Company under the Plan;
(xi)to authorize any person to execute on behalf of the Company any instrument required to effect the grant of an Award previously granted by the Administrator;
(xii)to delegate day-to-day administration and operation of the Plan and the authority to make administrative decisions and adopt rules and procedures relating to the operation and administration of the Plan to an officer of the Company and his or her delegates;
(xiii)to make all other determinations deemed necessary or advisable for administering the Plan and any Award granted hereunder; and
(xiv)to specify in an Award Agreement at the time of the Award, or later pursuant to an amendment of an outstanding Award, that the Participant’s rights, payments and benefits with respect to an Award (including amounts received upon the settlement or exercise of an Award) shall be subject to reduction, cancellation, forfeiture or clawback upon the occurrence of certain specified events, in addition to any otherwise applicable vesting or performance conditions of an Award. Such events may include, but shall not be limited to, violation of material Company policies, breach of noncompetition, confidentiality or other restrictive covenants that may apply to the Participant or other conduct by the Participant that is detrimental to the business or reputation of the Company or its Affiliates.
(d)Effect of Administrator’s Decision. The Administrator’s decisions, determinations and interpretations shall be final and binding on Januaryall Awardees.
5.Eligibility. Awards may be granted to Participants, provided, however, that Incentive Stock Options may be granted only to Employees of the Company or a Subsidiary.
(a)Each Option shall be designated in the Award Agreement as either an Incentive Stock Option or a Nonstatutory Stock Option. However, notwithstanding such designation, to the extent that the aggregate Fair Market Value of the Shares with respect to which Incentive Stock Options are exercisable for the first time by the Awardee during any calendar year (under all plans of the Company and any Subsidiary) exceeds $100,000, such Options shall be treated as Nonstatutory Stock Options. For purposes of this Section 6(a), Incentive Stock Options shall be taken into account in the order in which they were granted. The Fair Market Value of the Shares shall be determined as of the time the Option with respect to such Shares is granted.
(b)For purposes of Incentive Stock Options, no leave of absence may exceed ninety (90) days, unless reemployment upon expiration of such leave is guaranteed by statute or contract. If reemployment upon expiration of a leave of absence approved by the Company is not so guaranteed, on the 91st day of such leave an Awardee’s employment with the Company shall be deemed terminated for Incentive Stock Option purposes and any Incentive Stock Option held by the Awardee shall cease to be treated as an Incentive Stock Option and shall be treated for tax purposes as a Nonstatutory Stock Option three (3) months thereafter.
(c)No Participant shall have any claim or right to be granted an Award and the grant of any Award shall not be construed as giving a Participant the right to continue in the employ of or service to the Company, its Subsidiaries or Affiliates. Further, the Company, its Subsidiaries and Affiliates expressly reserve the right, at any time, to dismiss a Participant at any time without liability or any claim under the Plan, except as provided herein or in any Award Agreement entered into hereunder.
(d)The following limitations shall apply to grants of Awards under this Plan:
(i)No Participant shall be granted, in any fiscal year of the Company, Options to purchase or SARs for more than 1,500,000 Shares. No Participant shall be granted in any fiscal year of the Company, Stock Awards for more than 1,000,000 Shares.
(ii)In connection with his or her initial service, a Participant may be granted Options to purchase or SARs for up to an additional 1,000,000 Shares that shall not count against the limit set forth in subsection (i) above.
(iii)Notwithstanding the provisions of (i) above, an additional 1,000,000 Shares may be granted to a Participant as “New Executive Stock Awards.” New Executive Grants are performance based Stock Awards that are granted to newly hired executives of the Company.
(iv)The maximum number of Options which may be granted as Incentive Stock Options under the Plan is 25,000,000 shares.
(v)The maximum amount payable to a Participant pursuant to a Cash Award for each fiscal year of the Company shall be $10,000,000.
(vi)The limitations in Sections 6(d)(i)-(iv) shall be adjusted proportionately in connection with any change in the Company’s capitalization as described in Section 18.
(vii)If an Option or SAR is cancelled in the same fiscal year of the Company in which it was granted (other than in connection with a transaction described in Section 18 the cancelled Option or SAR will be counted against the limits set forth in subsections (i), (ii) and (iii) above.
(viii)Other then in connection with a change in the Company’s capitalization (as described in Section 18(a)) or a Change of Control as described in Section 18(c)), Options and SARs may not be repriced, replaced, regranted through cancellation or modification without stockholder approval if the effect of such repricing, replacement, regrant or modification would be to reduce the exercise price of such Option or SAR. In addition, without stockholder approval, Options and SARs having exercise prices per share greater than the Fair Market Value of a Share may not be substituted for or replaced by any other Stock Award or be cancelled in exchange for cash. Nothing in this Section 6(d)(viii) shall be construed to apply to the issuance or assumption of an Option or SAR in connection with the acquisition by the Company or a subsidiary of an unrelated entity provided such actions are taken in a manner that complies with the requirements of Section 409A of the Code.
7.Term of Plan. Subject to Section 24 of the Plan, the Plan shall become effective on its Effective Date. It shall continue in effect for a term of ten (10) years unless terminated earlier under Section 19 2016,of the Plan.
8.Term of Award. The term of each Award shall be determined by the Administrator and stated in the Award Agreement. In the case of an Option or SAR, the maximum term shall be ten (10) years from the Grant Date or such shorter term as may be provided in the Award Agreement except to the extent necessary or desireable to comply with any foreign law.
9.Option Exercise Price and Consideration.
(a)Exercise Price. The per share exercise price for the Shares to be issued pursuant to the exercise of an Option shall be determined by the Administrator and shall be no less than 100% of the Fair Market Value per Share on the Grant Date. Notwithstanding the foregoing, the per share exercise price for Shares to be issued pursuant to an Option which is assumed or substituted for in connection with the acquisition by the Company or a Subsidiary of an unrelated entity may be less than the Fair Market Value of a Share on the date of the assumption or substitution provided the exercise price is determined in a manner that complies with the requirements of Sections 409A and 424 of the Code, as applicable.
(b)Vesting Period and Exercise Dates. At the time an Option is granted, the Administrator shall fix the period within which the Option may be exercised and shall determine any conditions that must be satisfied before the Option may be exercised.
(c)Form of Consideration. The Administrator shall determine the acceptable form of consideration for exercising an Option, including the method of payment. In the case of an Incentive Stock Option, the Administrator shall determine the acceptable form of consideration at the Grant Date. Acceptable forms of consideration may include:
(ii)check or wire transfer (denominated in U.S. Dollars);
(iii)other Shares which (A) in the case of Shares acquired upon exercise of an Option, have been owned by the Awardee for more than six months on the date of surrender, and (B) have a value (as determined solely by the Plan Administrator or its delegate(s) based upon the NYSE closing price of the underlying shares on the trading day prior to the date of exercise) on the date of surrender equal to the aggregate exercise price of the Shares as to which said Option shall be exercised;
(iv)consideration received by the Company under a cashless exercise program implemented by the Company in connection with the Plan;
(v)any combination of the foregoing methods of payment; or
(vi)such other consideration and method of payment for the issuance of Shares to the extent permitted by Applicable Laws.
(a)Procedure for Exercise; Rights as a Stockholder. Any Option granted hereunder shall be exercisable according to the terms of the Plan and at such times and under such conditions as determined by the Administrator and set forth in the respective Award Agreement. An Option shall continue to vest during any authorized leave of absence and such Option may be exercised to the extent vested during such leave, unless otherwise terminated in accordance with its terms. An Option may not be exercised for a fraction of a Share.
An Option shall be deemed exercised when the Company or its duly authorized agent receives: (i) an executed exercise agreement, where required by the Plan Administrator or its delegate(s), (ii) full payment for the Shares with respect to which the related Option is exercised, and (iii) with respect to Nonstatutory Stock Options, payment of all applicable withholding taxes due upon such exercise.
Shares issued upon exercise of an Option shall be issued in the name of the Awardee or, if requested by the Awardee, in the name of the Awardee and his or her spouse. Until the Shares are issued (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), no right to vote or receive dividends or any other rights as a stockholder shall exist with respect to the Shares subject to an Option, notwithstanding the exercise of the Option. The Company shall issue (or cause to be issued) such Shares promptly after the Option is exercised. No adjustment will be made for a
dividend or other right for which the record date or hold a valid proxyis prior to the date the Shares are issued, except as provided in Section 16 of the Plan.
(b)Cessation of Eligibility to Vest. Unless otherwise provided for by the meeting. In orderAdministrator in the Award Agreement, if an individual ceases to be admittedan Awardee Eligible to Vest, such Awardee’s unvested Option shall terminate immediately. On the date such individual ceases to be an Awardee Eligible to Vest, the Shares covered by the unvested portion of his or her Option shall revert to the annual meeting, you must present proofPlan.
(a)General. The Administrator may grant SARs to Participants subject to the terms and conditions not inconsistent with the Plan and determined by the Administrator. The terms and conditions shall be provided for in the Award Agreement which may be delivered in writing or electronically. SARs shall be exercisable, in whole or in part, at such times as the Administrator shall specify in the Award Agreement.
(b)Exercise. Upon the exercise of ownershipa SAR, in whole or in part, an Awardee shall be entitled to a payment in an amount equal to the difference between the value (as determined solely by the Plan Administrator or its delegate(s) based upon the NYSE closing price of Agilent stockthe underlying shares on the record date. This can be a brokerage statement or letter from a bank or broker indicating ownership on January 19, 2016,trading day prior to the Noticedate of Internet Availability of Proxy Materials, a proxy card, or legal proxy or voting instruction card provided by your broker, bank or nominee. Any holderexercise) of a proxy from a stockholder must presentfixed number of shares of Common Stock covered by the proxy card, properly executed, and a copyexercised portion of the proofSAR on the date of ownership. Stockholders and proxyholderssuch exercise, over the Fair Market Value of the Common Stock covered by the exercised portion of the SAR on the Grant Date; provided, however, that the Administrator may alsoplace limits on the aggregate amount that may be askedpaid upon the exercise of a SAR. The Company’s obligation arising upon the exercise of a SAR will be paid in cash or Shares of Common Stock (or a combination thereof), as determined by the applicable Award Agreement.
(c)Method of Exercise. A SAR shall be deemed to present a formbe exercised when written or electronic notice 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 items prior to their admissionexercise has been given to the annual meeting. Failure to followCompany or its duly authorized agent in accordance with the meeting rules or permit inspection will be grounds for exclusion from the annual meeting.
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Annex A
PROPOSED AMENDMENTS TOAMENDED AND RESTATED CERTIFICATE OF INCORPORATION OFAGILENT TECHNOLOGIES, INC.(Additions are underlined, deletions are struck-out)
Article VIIterms of the AmendedSAR by the person entitled to exercise the SAR. The SAR shall cease to be exercisable to the extent it has been exercised.
(d)Cessation of Eligibility to Vest. Unless otherwise provided for by the Administrator in the Award Agreement, if an Awardee ceases to be an Awardee Eligible to Vest, the Awardee’s unvested SAR, shall terminate immediately upon the date such individual ceases to be an Awardee Eligible to Vest.
(a)General. The Administrator may grant Stock Awards including, but not limited to Deferred Shares, Restricted Stock, Restricted Stock Units, Performance Shares and Restated CertificatePerformance Units to Participants. Such Stock Awards may be issued either alone, in addition to, or in tandem with other Awards granted under the Plan. After the Administrator determines that it will offer a Stock Award under the Plan, it shall advise the Awardee in writing or electronically, by means of Incorporationan Award Agreement, of the terms, conditions and restrictions related to the offer, including the number of Shares that the Awardee shall be amendedentitled to receive or purchase, the price to be paid, if any, and, restatedif applicable, the time within which the Awardee must accept such offer. The offer shall be accepted by execution of an Award Agreement in the form determined by the Administrator. The Administrator will require that all Shares subject to read as follows:a right of repurchase or forfeiture be held in escrow until such repurchase right or risk of forfeiture lapses.
ARTICLE VII
For the management(b)The grant or vesting 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 casea Stock Award may be it is further provided that:
A. The managementmade contingent on achievement 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 fixedperformance conditions and may be changeddesignated as a Performance Award subject to Section 14.
(c)Forfeiture. Unless otherwise provided for by the Administrator in the Award Agreement determines otherwise, any unvested Stock Award shall be forfeited immediately after the date upon which an individual ceases to be an Awardee Eligible to Vest. To the extent that the Awardee purchased the Stock Award, the Company shall have a right to repurchase the unvested Stock Award at the original price paid by the Awardee upon the Awardee ceasing to be a Participant for any reason.
(d)Rights as a Stockholder. Unless otherwise provided for by the Administrator, once a Stock Award which is Restricted Stock or Performance Stock is accepted, the Awardee shall have the rights equivalent to those of a stockholder, and shall be a stockholder when his or her acceptance of such a Stock Award is entered upon the records of the duly authorized transfer agent of the Company. An Awardee of a Restricted Stock Unit or Performance Unit shall not have rights equivalent to those of a stockholder until such Awards are settled and Shares are entered upon the records of the duly authorized transfer agent of the Company.
13.Cash Awards. Cash Awards may be granted either alone, in addition to, or in tandem with other Awards granted under the Plan. After the Administrator determines that it will offer a Cash Award, it shall advise the Awardee in writing or electronically, by means of an Award Agreement, of the terms, conditions and restrictions related to the Cash Award. The grant or vesting of a Cash Award may be made contingent on achievement of performance conditions and may be designated as a Performance Award subject to Section 14.
14.Performance Awards. Performance Awards shall be evidenced by Award Agreements in such form as the Committee shall from time to time by resolutionestablish.
Performance Awards intended to comply with the provisions of Section 162(m) of the BoardCode may be granted pursuant to the provisions of Directors.
B. Untila program established pursuant to the electionrequirements of directorsSection 162(m) of the Code regarding performance based compensation, including, but not limited to, the Agilent Technologies, Inc. Long-Term Performance Program (or its successor). Other Performance Awards intended to comply with the requirements of Section 162(m) of the Code shall be granted pursuant to, and be subject to, such terms and conditions as established by the Committee at the 2019 annual meetingtime of stockholders, tgrant based, in whole or in part, upon the attainment of one or more of the Performance Criteria. Such Awards shall be based on (a) an individual target set by the Committee in writing with respect to the Performance Period and (b) Performance Criterion or Criteria for the Performance PeriodT (increased or decreased, in each case in accordance with factors adopted by the Committee with respect to the Performance Period that relate to unusual items). he Directors,. To the extent consistent with the requirements of Section 162(m), the Committee may determine at the time that targets under this Section 14 are established, the extent to which measurement of Performance Criteria may include or exclude certain unusual or non-recurring events, including, without limitation, the following: the impact of charges for restructuring, discontinued operations, debt redemption or retirement, asset write downs, litigation or claim judgments or settlement, acquisitions or divestitures, foreign exchange gains and losses and other unusual non-recurring items and the cumulative effects of tax or accounting changes. With respect to each Performance Period, Awards shall not be paid unless and until the Committee certifies in writing the extent to which the Performance Criterion/Criteria applicable to a Participant have been achieved or exceeded; provided, however, that the Committee may reduce an individual’s Award calculated pursuant to the preceding sentence in its sole discretion. For this purpose, a “Performance Period” shall be, with respect to a Participant, any period not exceeding three (3) yearsof time as determined by the Committee in its sole discretion. In this case, the selection and adjustment of applicable Performance Criteria, and the establishment of targets, shall occur in compliance with the rules of Section 162(m) of the Code.
In addition, the Committee may grant Performance Awards, including, but not limited to New Executive Stock Awards (as defined in Section 6(d)), which are not intended to qualify as “performance based awards” for purposes of Section 162(m) of the Code.
15.Non-Employee Director Awards. Awards may be granted to a Non-Employee Director in the form of Cash Awards, Options, SARs or Stock Awards (including, but not limited to Deferred Shares). The maximum total grant date fair value of share-based Awards (as measured by the Company for financial accounting purposes) granted to any Non-Employee Director in any single calendar year shall not exceed $750,000.00. If an Award is made in the form of Deferred Shares, such Deferred Shares shall be credited to the Non-Employee Director’s account under the Agilent Technologies, Inc. 2005 Non-Employee Director Compensation Plan, or any successor or similar plan. Awards granted to a Non-Employee Director shall be subject to such conditions as established by the Committee at the time of grant and in accordance with the applicable provisions of this Plan.
16.Dividends Withwith Respect to Stock Awards. Subject to the provisions of the Plan and any Award Agreement, the recipient of a Stock Award may, if so determined by the Administrator, be entitled to receive, currently or on a deferred basis, cash or stock regular cash dividends, or cash payments or stock units in amounts equivalent to cash or stock dividends on Shares (“dividend equivalents”), with respect to the number of Shares covered by the Stock Award, as determined by the Administrator, in its sole discretion, and the Administrator may provide that such amounts (if any) shall be deemed to have been reinvested in additional Shares or otherwise reinvested. SuchAny such regular cash dividends or dividend equivalents shall be subject to the same vesting and forfeiture provisions as the underlying Stock Award. The applicable Award Agreement evidencing the Stock Award shall provide that such For the avoidance of doubt, in no event will regular cash dividends or dividend equivalents will be forfeitable to the same extent as the underlying Stock Awardbe currently payable on unvested Stock Awards or on earned Stock Awards subject to Performance Criteria.
17.Non-Transferability of Awards. Unless the agreement or other document evidencing an Award (or an amendment thereto authorized by the Committee) expressly states that the Award is transferable as provided hereunder, no Award granted
under this Plan, nor any interest in such Award, may be sold, assigned, conveyed, gifted, pledged, hypothecated or otherwise transferred in any manner, other than those whoby will or the laws of descent and distribution. The Committee may grant an Award or amend an outstanding Award to provide that the Award is transferable or assignable (a) in the case of a transfer without the payment of any consideration, to any “family member” as such term is defined in Section 1(a)(5) of the General Instructions to Form S-8 under the Securities Act of 1933, as such may be electedamended from time to time, and (b) in any transfer described in clause (ii) of Section 1(a)(5) of the General Instructions to Form S-8 under the 1933 Act as amended from time to time. Any Award transferred pursuant to the preceding sentence shall remain subject to substantially the same terms applicable to the Award while held by the holdersParticipant to whom it was granted, as modified as the Committee shall determine appropriate, and as a condition to such transfer the transferee shall execute an agreement agreeing to be bound by such terms. In addition, an Incentive Stock Option may be transferred or assigned only to the extent consistent with Section 422 of the Code. Any purported assignment, transfer or encumbrance that does not qualify under this Section 17 shall be void and unenforceable against the Company.
18.Adjustments Upon Changes in Capitalization, Dissolution, Change of Control.
(a)Changes in Capitalization. Subject to any required action by the stockholders of the Company, if any change is made to the Common Stock subject to the Plan, or subject to any Award (including but not limited to the number and kind of shares of Common Stock), which change results from a stock split, reverse stock split, stock dividend, merger, consolidation, reorganization, recapitalization, reincorporation, spinoff, dividend in property other than cash, liquidation dividend, extraordinary cash dividend, exchange of shares, combination or reclassification of the Common Stock, or any other increase, decrease or change in the number or characteristics of outstanding shares of Common Stock effected without receipt of consideration by the Company), the Plan will be appropriately adjusted in the class(es) and maximum number of securities subject to the Plan, the maximum number of securities subject to award to any person under the Plan as provided in order to comply with the requirements of Section 162(m) of the Code or otherwise, and the outstanding Awards will be appropriately adjusted in the class(es) and number of securities and price per share of the securities subject to such outstanding Awards; provided, however, that conversion of any convertible securities of the Company shall not be deemed to have been “effected without receipt of consideration.” Such adjustment shall be made by the Board, whose determination in that respect shall be final, binding and conclusive. Except as expressly provided herein, no issuance by the Company of shares of stock of any class, or seriessecurities convertible into shares of stock having a preference over the Common Stock as to dividends or upon liquidation,of any class, shall affect, and no adjustment by reason thereof shall be classified,made with respect to, the securities subject to an Award.
(b)Dissolution or Liquidation. In the event of the proposed dissolution or liquidation of the Company, the Administrator shall notify each Awardee as soon as practicable prior to the effective date of such proposed transaction. The Administrator in its discretion may provide for an Option or SAR to be fully vested and exercisable until ten (10) days prior to such transaction, or such shorter administratively 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.
(c)Change of Control. In the event there is a Change of Control, as defined below, all Options and SARs will fully vest immediately prior to the closing of the transaction and all restrictions on Cash Awards or Stock Awards will lapse immediately prior to the closing of the transaction. The foregoing shall not apply where such Options, SARs, Cash Awards and Stock 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.
For the purposes of this Section 18(c), “Change of Control” means the occurrence of any of the following events:
(i)The sale, exchange, lease or other disposition or transfer of all or substantially all of the consolidated assets of the Company to a person or group (as such terms are defined or described in Sections 3(a)(9) and 13(d)(3) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) which will continue the business of the Company in the future; or
(ii)A merger or consolidation (or similar form of reorganization) involving the Company in which the stockholders of the Company immediately prior to such merger or consolidation are not the beneficial owners (within the meaning of Rules 13d-3 and 13d-5 promulgated under the Exchange Act) of more than 75% of the total voting power of the outstanding voting securities of the corporation resulting from such transaction in substantially the same proportion as their ownership of the total voting power of the outstanding voting securities of the Company immediately prior to such merger or consolidation; or
(iii)A merger or consolidation (or similar form of reorganization) involving the Company in which occurs the acquisition of beneficial ownership (within the meaning of Rules 13d-3 and 13d-5 promulgated under the Exchange Act) of at least 25% of the total voting power of the outstanding voting securities of the Company by a person or group (as such terms are defined or described in Sections 3(a)(9) and 13(d)(3) of the Exchange Act).
(iv)Notwithstanding the foregoing, to the extent that any amount constituting nonqualified deferral compensation subject to Section 409A of the Code would become payable under the Plan by reason of a Change of Control, such amount shall become payable only if the event constituting a Change of Control would also constitute a change in ownership or effective control of the Company, or a change in the ownership of a substantial portion of the assets of the Company, within the meaning of Section 409A of the Code.
19.Amendment and Termination of the Plan.
(a)Amendment and Termination. The Committee may at any time amend, alter, suspend or terminate the Plan.
(b)Stockholder Approval. The Company shall obtain stockholder approval of any Plan amendment which would increase the maximum number of Shares for which they severally hold office, into three classes, as nearly equalAwards may be granted under this Plan (other than an increase pursuant to Section 1618 of this Plan), and otherwise to the extent necessary and desirable to comply with Applicable Laws.
(c)Effect of Amendment or Termination. No amendment, alteration, suspension or termination of the Plan shall impair the rights of any Award, unless mutually agreed otherwise between the Awardee and the Administrator, which agreement must be in number as possible,writing and signed by the Awardee and the Company. Termination of the Plan shall not affect the Administrator’s ability to exercise the powers granted to it hereunder with respect to Awards granted under the Plan prior to the date of such termination.
20.Designation of Beneficiary.
(a)AnIf authorized in the applicable Award Agreement, an Awardee may file a written designation of a beneficiary who is to receive the Awardee’s rights pursuant to Awardee’s Award or the Awardee may include his or her Awards in an omnibus beneficiary designation for all benefits under the Plan. To the extent that Awardee has completed a prior designation of beneficiary, such beneficiary designation shall remain in effect with respect to any Award hereunder until changed by the Awardee. Such designations may be subject to local law and accordingly may be unenforceable in certain jurisdictions.
(b)Such designation of beneficiary may be changed by the Awardee at any time by written notice. In the event of the death of an Awardee and in the absence of a beneficiary validly designated under the Plan who is living at the time of such Awardee’s death, the Company shall, subject to local law, allow the executor or administrator of the estate of the Awardee to exercise the Award, or if no such executor or administrator has been appointed (to the knowledge of the Company), the Company, in its discretion, may allow the spouse or one classor more dependents or relatives of the Awardee to exercise the Award.
21.Legal Compliance. Shares shall not be issued pursuant to a Stock Award or the exercise of an Option unless the Stock Award or the exercise of such Option and the issuance and delivery of such Shares shall comply with Applicable Laws and shall be further subject to the approval of counsel for the Company with respect to such compliance.
22.Inability to Obtain Authority. To the extent the Company is unable to or the Administrator deems it infeasible to obtain authority from any regulatory body having jurisdiction, which authority is deemed by the Company’s counsel to be necessary to the lawful issuance and sale of any Shares hereunder, the Company shall be relieved of any liability with respect to the failure to issue or sell such Shares as to which such requisite authority shall not have been obtained.
23.Reservation of Shares. The Company, during the term of this Plan, will at all times reserve and keep available such number of Shares as shall be sufficient to satisfy the requirements of the Plan.
24.Stockholder Approval. The Plan shall bewas originally elected for a term expiring adopted by the Board on November 19, 2008, and this amendment and restatement was adopted by the Board on November 15, 2017, subject to approval by the stockholders of the Company within twelve (12) months of the date the Plan is adoptedat 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 2017 annual meeting of stockholders, directors elected to succeed those directors whose terms then expireon March 21, 2018 (the “Effective Date”). Such stockholder approval 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. Commencing at the 2017 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 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; at the 2018 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 2019 annual meeting of stockholders and until their successors are duly elected and qualified; and at the 2019 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. From and after the election of directors at the 2019 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.
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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 givenobtained in the manner provided in the Bylaws of the Corporation.
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Annex B
PROPOSED AMENDMENTS TOAMENDED AND RESTATED BYLAWSOF AGILENT TECHNOLOGIES, INC.(Additions are underlined, deletions are struck-out)
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 2019 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 2017 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 2017 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 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; at the 2018 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 2019 annual meeting of stockholders and until their successors are duly elected and qualified; and at the 2019 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
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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 sodegree 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.under Applicable Laws.
3.425.Resignation and VacanciesNotice. Any director may resign effective on giving written notice to the chairmanCompany required by any provisions of this Plan shall be addressed to the Secretary 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 isCompany and shall be effective at a future time, the board of directors may elect a successor to take office when the resignation becomes effective.received.
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
26.Table of ContentsGoverning Law; Forum
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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. This Plan and all determinations made and actions taken pursuant hereto shall be governed by the provisionssubstantive laws, but not the choice of law rules, of the state of Delaware. Any proceeding arising out of or relating to this Plan may be brought only in the state or federal courts located in the Northern District of California. The Company and the Participants irrevocably submit to the exclusive jurisdiction of such courts in any such proceeding, waive any objection to venue or to convenience of forum, agree that all claims in respect of any proceeding shall be heard and determined only in such courts and agree not to bring any proceeding arising out of or relating to the Plan in any other court, whether inside or outside of the United States
27.Unfunded Plan. Insofar as it provides for Awards, the Plan shall be unfunded. Although bookkeeping accounts may be established with respect to Participants who are granted Awards of Shares under this Plan, any such accounts will be used merely as a bookkeeping convenience. Except for the holding of Restricted Stock in escrow pursuant to Section 12, the Company shall not be required to segregate any assets which may at any time be represented by Awards, nor shall this Plan be construed as providing for such segregation, nor shall the Company nor the Administrator be deemed to be a trustee of stock or cash to be awarded under the Plan. Any liability of the Company to any Awardee with respect to an Award shall be based solely upon any contractual obligations which may be created by the Plan; no such obligation of the Company shall be deemed to be secured by any pledge or other encumbrance on any property of the Company. Neither the Company nor the Administrator shall be required to give any security or bond for the performance of any obligation, which may be created by this Plan.
28.Section 409A of the Code. This Plan is intended to comply with, or otherwise be exempt from, Section 409A of the Code and shall be construed, administered and interpreted with that intent. Restricted Stock Units, Performance Units and Deferred Shares which are settleable, and Cash Awards which are payable, as a result of a Participant’s termination of Service which constitute a “deferral of compensation” for purposes of Section 211409A of the General Corporation LawCode shall not be paid unless and until the Participant incurs a “separation from service” for purposes of Delaware as far as applicable.
3.5Removal. Unless otherwise restricted by statute, bySection 409A of the CertificateCode. In addition, to the extent an Award constituting a deferral of Incorporationcompensation is distributable to a Participant who is a “specified employee” (as defined in Section 409A of the Code), such Award shall not be distributed to the Participant before the date (the “Delayed Payment Date”) which is the first day of the seventh month after the date of the Participant’s separation from service or, by these Bylaws,if earlier, the date of the Participant’s death following such separation from service. All such amounts that would, but for this Section 28, become distributable prior to the electionDelayed Payment Date will be accumulated and paid on the Delayed Payment Date. To the extent that the Committee, in its sole discretion, provides that the settlement, or payment, of directors at the 2019 annual meeting of stockholders, any director or the entire board of directorsan Award may be removed from office only for cause by the holders of a majority of the shares then entitled to votedeferred at an election of directors.From and after the election of directors at the 2019 annual meeting of stockholders,a Participant, then any director or the entire board of directors maysuch deferral election shall be removed from office for cause or without causesubject to such rules and procedures as determined by the holdersCommittee in its sole discretion, and such deferrals shall be structured to comply with the requirements of a majoritySection 409A of the shares then entitled to vote at an election of directors.Code.
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Agilent Technologies ltMPORTANTANNUALMEETINGINFORMATION I 0 0 0 0 0 4 ENDORSEMENT_LINE SACKPACK, _ l...ll..l.l..ll• •l• •l.t.t....tl..l.l..ll• • l..lll...l MRASAMPLE DESIGNATION (IF ANY) ADD1 ADD2 ADD 3 ADD 4 ADD 5 ADD 6 111111111111111111111111111111111111111111111111111111111111 IIWIIWIIWrn rn rn rn IIWIIWIIWIIWIIWIIWIIWrn 2M 7M 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext C123456789 Electronic Voting Instructions
Available 24 hours a day, 7 days a week!
Instead of mailing your proxy, you may choose one of the voting methods outlined below to vote your proxy.
VALIDATION DETAILS ARE LOCATED BELOW IN THE TITLE BAR.
BAR Proxies submitted by the Internet or telephone must be received by 1:00 a.m., Central Time, on March 16, 2016.
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| 1. | Election of Directors: To elect three directors to a 3-year term. At the annual meeting, the Board of Directors intends to present the following nominees for election as directors: |  | ||||||||||||||||||||
| For | Against | Abstain | For | Against | Abstain | For | Against | Abstain | ||||||||||||||
| 01 - | Paul N. Clark | ☐ | ☐ | ☐ | 02 - | James G. Cullen | ☐ | ☐ | ☐ | 03 - | Tadataka Yamada, M.D. | ☐ | ☐ | ☐ | ||||||||
| For | Against | Abstain | For | Against | Abstain | |||||||
| 2. | To ratify the Audit and Finance Committee’s appointment of PricewaterhouseCoopers LLP as Agilent’s independent registered public accounting firm. | ☐ | ☐ | ☐ | 3. | To approve, on a non-binding advisory basis, the compensation of Agilent’s named executive officers. | ☐ | ☐ | ☐ | |||
| 4. | To approve amendments to our Amended and Restated Certificate of Incorporation and Bylaws to declassify the Board. | ☐ | ☐ | ☐ | 5. | To consider such other business as may properly come before the annual meeting. |
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Annual MeetingDirectors recommends a vote FOR all the listed nominees and FOR Proposals 2, 3 and 4. 1. Election of Stockholders—March 16, 2016
This Proxy is solicited on behalf ofDirectors: To elect three directors to a three-year term. At the annual meeting, the Board of Directors.Directors intends to present the following nominees for election as directors: + For Against Abstain For Against Abstain For Against Abstain 01 •
The undersigned hereby appoints Michael R.Koh Boon Hwee D D D 02 •Michael R McMullen 0 0 0 03 •Daniel K. Podolsky, M.D. 0 0 0 For Against Abstain For Against Abstain 2. To approve the amendment and Michael Tang,restatement of our 2009 Stock Plan. 3. To approve, on a non-binding advisory basis, the compensation of our named executive officers. 4. To ratify the Audit and eachFinance Committee's appointment of them,PricewaterhouseCoopers LLP 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 19, 2016, at the Annual Meeting of Stockholders to be held on Wednesday, March 16, 2016, or any postponement or adjournment thereof.
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 Agilent's independent registered public accounting firm. 1]1 2, 3 AND 4.
In their discretion, the Proxies are authorized to vote uponNon-Voting Items DOD 5. To consider such other business as may properly come before the annual meeting. Mark the box to the right if you plan to attend the Annual Meeting.
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED
If Mark the box to the right D Change of Address- Please print your new address below. Comments- Please print your comments below. Meeting Attendance Annual Meeting I.... .II.... . if you vote by telephone orplan to attend the Internet, please DO NOT mail back this proxy card.
(Continued andB Authorized Signatures -This section must be completed for your vote to be voted on reverse side.counted. -Date and Sign Below Please sign exactly as name(s) appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, corporate officer, trustee, guardian, or custodian, please give full title. Date (mm/dd/yyyy)- Please print date below. Signature 1 -Please keep signature within the box. Signature 2- Please keep signature within the box. I I II......__ .II......__ . c 1234567890 JNT MR A SAMPLE (THIS AREA IS SET UP TO ACCOMMODATE • 1111111111111111111111111111 1 U PX 3 5 5 6 2 2 1 140 CHARACTERS) MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND 02QMFC
