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AMENDED RESTATED CHANGE OF CONTROL SEVERANCE AGREEMENT

Change of Control Agreement

AMENDED  RESTATED

CHANGE OF CONTROL SEVERANCE AGREEMENT | Document Parties: AGILENT TECHNOLOGIES INC You are currently viewing:
This Change of Control Agreement involves

AGILENT TECHNOLOGIES INC

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Title: AMENDED RESTATED CHANGE OF CONTROL SEVERANCE AGREEMENT
Governing Law: California     Date: 4/10/2008
Industry: Electronic Instr. and Controls     Sector: Technology

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EXHIBIT 10.2

 

[FORM OF CHIEF EXECUTIVE OFFICER AGREEMENT]

 

AMENDED & RESTATED

CHANGE OF CONTROL SEVERANCE AGREEMENT

 

This Change of Control Severance Agreement (the “Agreement”) is entered into this          day of                         , 2008 (the “Effective Date”) between                                (“Executive”) and Agilent Technologies, Inc., a Delaware corporation (the “Company”).  This Agreement supersedes and replaces all prior agreements and understandings on the matters set forth herein, including but not limited to the Change of Control Severance Agreement dated                        , 200       (as further amended on                        , 2004 and on                        , 2005) between Executive and the Company.  This Agreement is intended to provide Executive with the compensation and benefits described herein upon the occurrence of specific events following a change of control of the ownership of the Company (defined as “Change of Control”).

 

RECITALS

 

A.             As is the case with most, if not all, publicly-traded businesses, it is expected that the Company from time to time may consider or may be presented with the need to consider the possibility of an acquisition by another company or other change in control of the ownership of the Company.  The Board of Directors of the Company (the “Board”) recognizes that such considerations can be a distraction to Executive and can cause the Executive to consider alternative employment opportunities or to be influenced by the impact of a possible change in control of the ownership of the Company on Executive’s personal circumstances in evaluating such possibilities.  The Board has determined that it is in the best interests of the Company and its shareholders to assure that the Company will have the continued dedication and objectivity of Executive, notwithstanding the possibility, threat or occurrence of a Change of Control of the Company.

 

B.             The Board believes that it is in the best interests of the Company and its shareholders to provide Executive with an incentive to continue his or her employment and to motivate Executive to maximize the value of the Company upon a Change of Control for the benefit of its shareholders.

 

C.             The Board believes that it is important to provide Executive with certain benefits upon Executive’s termination of employment in certain instances upon or following a Change of Control that provide Executive with enhanced financial security and incentive and encouragement to Executive to remain with the Company notwithstanding the possibility of a Change of Control.

 

D.             At the same time, the Board expects the Company to receive certain benefits in exchange for providing Executive with this measure of financial security and incentive under the Agreement.  Therefore, the Board believes that the Executive should provide various specific commitments which are intended to assure the Company that Executive will not direct

 

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Executive’s skills, experience and knowledge to the detriment of the Company for a period not to exceed the period during which payments are being made to Executive under this Agreement.

 

E.              Certain capitalized terms used in this Agreement are defined in Article VII.

 

The Company and Executive hereby agree as follows:

 

ARTICLE I.

EMPLOYMENT BY THE COMPANY

 

1.1           Executive is currently employed as Chief Executive Officer of the Company.

 

1.2           Executive shall be entitled to the rights and benefits  of this Agreement and this Agreement may not be terminated, except as otherwise provided in Section 4.5, if Executive is the CEO of the Company on the date of the occurrence of any event set forth in Section 2.1(a) or Section 2.2(a) hereof (the “Section 1.2 Date.”) The rights and obligations of the parties hereto contained in Articles III through VIII shall survive any termination for the longer of (i) thirty-six (36) months following a Termination Event (as hereinafter defined) (the “Term”) or (ii) such longer period provided for in this Agreement.

 

1.3           The Company and Executive each agree and acknowledge that Executive is employed by the Company as an “at-will” employee and that either Executive or the Company has the right at any time to terminate or to change Executive’s employment with the Company, including a change to a position that is no longer the Chief Executive Officer, with or without cause or advance notice, for any reason or for no reason.  The Company and Executive wish to set forth the compensation and benefits which Executive shall be entitled to receive in the event that Executive’s employment with the Company terminates under the circumstances described in Article II of this Agreement.

 

1.4           The duties and obligations of the Company to Executive under this Agreement shall be in consideration for Executive’s past services to the Company, Executive’s continued employment with the Company, Executive’s compliance with the obligations described in Section 4.2, and Executive’s execution of the general waiver and release described in Section 4.3.  The Company and Executive agree that Executive’s compliance with the obligations described in Section 4.2 and Executive’s execution of the general waiver and release described in Section 4.3 are preconditions to Executive’s entitlement to the receipt of benefits under this Agreement and that these benefits shall not be earned unless all such conditions have been satisfied through the scheduled date of payment.  The Company hereby declares that it has relied upon Executive’s commitments under this Agreement to comply with the requirements of Article IV, and would not have been induced to enter into this Agreement or to execute this Agreement in the absence of such commitments.

 

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ARTICLE II.

TERMINATION EVENTS

 

2.1                                Involuntary Termination Upon or Following Change of Control .

 

(a)                                   In the event Executive’s employment with the Company and its subsidiaries is involuntarily terminated at any time by the Company without Cause either (i) at the time of or within twenty-four (24) months following the occurrence of a Change of Control, (ii) within three (3) months prior to a Change of Control, whether or not such termination is at the request of an “Acquiror”, or (iii) at any time prior to a Change of Control, if such termination is at the request of an Acquiror, then, upon such Change of Control,  such termination of employment will be a Termination Event and the Company shall pay Executive the compensation and benefits described in  and at the times provided under Article III.   For all purposes of this Agreement the term “Acquiror” is either a person or a member of a group of related persons representing such group that in either case obtains effective control of the Company in the transaction or a group of related transactions constituting the Change of Control.

 

(b)                                  In the event Executive’s employment with the Company and its subsidiaries is either involuntarily terminated by the Company with Cause at any time, or is involuntarily terminated by the Company without Cause at any time other than under the circumstances described in Section 2.1(a), then such termination of employment will not be a Termination Event, Executive will not be entitled to receive any payments or benefits under the provisions of this Agreement, and the Company will cease paying compensation or providing benefits to Executive as of Executive’s termination date.

 

2.2                                Voluntary Termination Upon or Following Change of Control .

 

(a)                                   Executive may voluntarily terminate his employment with the Company and its subsidiaries at any time.  In the event Executive voluntarily terminates his employment within three (3) months of the occurrence of an event constituting Good Reason and on account of an event constituting Good Reason, which event occurs either (i) at the time of or within twenty-four (24) months following the occurrence of a Change of Control, (ii) within three (3) months prior to a Change of Control, whether or not such termination is at the request of an “Acquiror”, or (iii) at any time prior to a Change of Control, if such triggering event or Executive’s termination is at the request of an Acquiror, then, upon such Change of Control,  such termination of employment will be a Termination Event and the Company shall pay Executive the compensation and benefits described in and at the times provided under Article III.

 

(b)                                  In the event (i) Executive voluntarily terminates his employment for any reason other than on account of an event constituting Good Reason under the circumstances described in Section 2.2(a), or (ii) Executive’s employment terminates on account of either death or physical or mental disability, then such termination of employment will not be a Termination Event, Executive will not be entitled to receive any payments or benefits under the provisions of this Agreement, and the Company will cease paying compensation or providing benefits to Executive as of the Executive’s termination date.

 

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ARTICLE III.

COMPENSATION AND BENEFITS PAYABLE

 

3.1           Right to Benefits .  If a Termination Event occurs, Executive shall be entitled to receive the benefits described in this Agreement so long as Executive complies with the restrictions and limitations set forth in Article IV; provided, further, that the Executive must execute the employee Release (as described in Section 4.3) and the time period for revocation of such Release must have elapsed (an “Effective Release”), within sixty (60) days of the Termination Event, which Release shall remain in effect at the time that the benefits of this Article III are paid.  If a Termination Event does not occur, Executive shall not be entitled to receive any benefits described in this Agreement, except as otherwise specifically set forth herein.

 

3.2           Salary Continuation .  Upon the occurrence of a Termination Event, Executive shall receive three times the sum of Executive’s Base Salary plus Target Bonus, less any applicable withholding of federal, state or local taxes.  Amounts to be paid under this section shall be paid in a lump sum no later than the later of thirty (30) days after the date of the Termination Event or the date of an Effective Release.

 

3.3           Health Insurance Coverage .

 

Upon the occurrence of a Termination Event, Executive shall be entitled to receive a payment equal to Eighty-Thousand U.S. Dollars ($80,000) (the “Health Expense Benefit”).  The purpose of the Health Expense Benefit is to assist Executive with health¬care expenses, including additional health plan premium payments that may result from the occurrence of a Termination Event.  Amounts to be paid under this section shall be paid in a lump sum no later than the later of thirty (30) days after the date of the Termination Event or the date of an Effective Release.

 

This Section 3.3 provides only for the Company’s payment of the Health Expense Benefit.  This Section 3.3 does not affect the rights of Executive or Executive’s covered dependents under any applicable law with respect to health insurance continuation coverage.

 

3.4           Stock Award Acceleration .  Executive’s stock options which are outstanding as of the date of the Termination Event (the “Stock Options”) shall become fully vested upon the occurrence of the Termination Event and exercisable so long as Executive complies with the restrictions and limitations set forth in Article IV.  The maximum period of time during which the Stock Options shall remain exercisable, and all other terms and conditions of the Stock Options, shall be as specified in the relevant Stock Option agreements and relevant stock plans under which the Stock Option were granted.  The term “Stock Options” shall not include any rights of the Executive under the Company’s employee stock purchase plan.

 

Executive’s restricted stock awards that are outstanding as of the date of the Termination Event (“Restricted Stock”) and that are not subject to performance-based vesting shall become fully vested and free from any contractual rights of the Company to repurchase or otherwise reacquire the Restricted Stock as a result of Executive’s termination of employment.  All shares of Restricted Stock which have not yet been delivered to Executive or his designee

 

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(whether because subject to joint escrow instructions or otherwise) shall be delivered to Executive or his designee as soon as administratively feasible after the occurrence of a Termination Event.  Executive’s restricted stock awards that are subject to performance-based vesting shall be covered by the terms of the applicable award agreement.

 

The treatment of Executive’s other awards, if any, outstanding under the 1999 Stock Plan of the Company, or any successor plan thereto (together the “Stock Plan”), at the time of the Termination Event shall be governed by the respective award agreement.  This includes but is not limited to restricted stock units, awards under the long-term performance program, and includes awards made pursuant to the Stock Plan which may be settled in cash.

 

3.5           Bonus.   If a Termination Event occurs, Executive shall receive a pro-rated bonus under any bonus plan applicable to Executive, which is in place at the time of the Termination Event for the performance period in which the Termination Event occurs.  The amount of the bonus shall be calculated under the terms of such bonus program as established by the Company, including whether or not, or to what degree any performance-based conditions have been met, and shall be equal to the amount of the bonus the Executive would have been paid under the terms of such bonus programs had the Executive continued his employment with the Company until the end of such performance period multiplied by a fraction in which (i) the numerator is the number of days from and including the first day of the performance period until and including the date of the Termination Event, and (ii) the denominator is the number of days in the performance period.  Such bonus shall be paid on the date Executive would have received the bonus if the Termination Event had not occurred during such performance period; provided, however, that in any event such bonus will be paid no later than two and one-half (2 ½) months after the end of the calendar year in which the Termination Event occurs.  Executive’s rights to the payment provided in this Section 3.5 shall not be terminated by the application of Section 4.2 of this Agreement.  This Section 3.5 shall not apply to awards pursuant to the Stock Plan.

 

3.6           Mitigation .  Except as otherwise specifically provided herein, Executive shall not be required to mitigate damages or the amount of any payment provided under this Agreement by seeking other employment or otherwise, nor shall the amount of any payment provided for under this Agreement be reduced by any compensation earned by Executive as a result of employment by another employer or by retirement benefits after the date of the Termination Event, or otherwise.

 

3.7           Compliance with Section 409A .  In the event that (i) one or more payments of compensation or benefits received or to be received by Executive pursuant to this Agreement (“Agreement Payment”) would constitute deferred compensation subject to Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and (ii) Executive is deemed at the time of such termination of employment to be a “specified employee” under Section 409A(a)(2)(B)(i) of the Code, then such Agreement Payment shall not be made or commence until the earlier of (i) the expiration of the six (6)-month period measured from the date of Executive’s “separation from service” (as such term is at the time defined in Treasury Regulations under Section 409A of the Code) with the Company or (ii) such earlier time permitted under Section 409A of the Code and the regulations or other authority promulgated thereunder; provided, however, that such deferral shall only be effected to the extent required to avoid adverse tax treatment to Executive under Section 409A of the Code, including (without limitation) the additional twenty percent (20%) tax for which Executive would otherwise be

 

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liable under Section 409A(a)(1)(B) of the Code in the absence of such deferral.  During any period in which an Agreement Payment to Executive is deferred pursuant to the foregoing, Executive shall be entitled to interest on the deferred Agreement Payment at a per annum rate equal to the highest rate of interest applicable to six (6)-month non-callable certificates of deposit with daily compounding offered by the following institutions: Citibank N.A., Wells Fargo Bank, N.A. or Bank of America, on the date of such separation from service.  Upon the expiration of the applicable deferral period, any Agreement Payment which would have otherwise been made during that period (whether in a single sum or in installments) in the absence of this paragraph shall be paid to Executive or his beneficiary in one lump sum, including all accrued interest.

 

ARTICLE IV.

LIMITATIONS AND CONDITIONS ON BENEFITS; AMENDMENT OF AGREEMENT

 

4.1           Reduction in Payments and Benefits; Withholding Taxes .  The benefits provided under this Agreement are in lieu of any benefit provided under any other severance plan, program or arrangement of the Company in effect at the time of a Termination Event.  The Company shall withhold appropriate federal, state or local income, employment and other applicable taxes from any payments hereunder.

 

4.2           Obligations of the Executive .

 

(a)            For two years following the Termination Event, Executive agrees not to personally solicit any of the employees either of the Company or of any entity in which the Company directly or indirectly possesses the ability to determine the voting of 50% or more of the voting securities of such entity (including two-party joint ventures in which each party possesses 50% of the total voting power of the entity) to become employed elsewhere or provide the names of such employees to any other company which Executive has reason to believe will solicit such employees.

 

(b)            Following the occurrence of a Termination Event, Executive agrees to continue to satisfy his obligations under the terms of the Company’s standard form of Proprietary Information and Non-Disclosure Agreement previously executed by Executive (or any comparable agreement subsequently executed by Executive in substitution or supplement thereto).  Executive’s obligations under this Section 4.2(b) shall not be limited to the Term.

 

(c)            It is expressly understood and agreed that although Executive and the Company consider the restrictions contained in this Section 4 to be reasonable, if a final judicial determination is made by a court of competent jurisdiction that the time or territory or any other restriction contained in this Agreement is an unenforceable restriction against Executive, the provisions of this Agreement shall not be rendered void, but shall be deemed amended to apply as to such maximum time or territory and to such maximum extent as such court may judicially determine or indicate to be enforceable.  Alternatively, if any court of competent jurisdiction finds that any restriction contained in this Agreement is unenforceable, and such restriction cannot be amended so as to make it enforceable, such finding shall not affect the enforceability of any of the other restrictions contained herein.

 

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(d)            Executive acknowledges and agrees that the Company’s remedies at law for a breach or threatened breach of any of the provisions of Section 4.2(a) or Section 4.2(b) would be inadequate and, in recognition of this fact, Executive agrees that, in the event of such a breach or threatened breach, in addition to any remedies at law, the Company, without posting any bond, shall, with respect to a breach or threatened breach of Section 4.2(a) or Section 4.2(b) only, obtain equitable relief in the form of specific performance, temporary restraining order, temporary or permanent injunction, or any other equitable remedy which may then be available.

 

4.3           Employee Release Prior to Receipt of Benefits.  Upon the occurrence of a Termination Event, and prior to the receipt of any benefits under this Agreement on account of the occurrence of a Termination Event, Executive shall, as of the date of a Termination Event, execute an employee release substantially in the form attached hereto as Exhibit A (“Release”) as shall be determined by the Company.  Such employee Release shall specifically relate to all of Executive’s rights and claims in existence at the time of such execution relating to Executive’s employment with the Company, but shall not include (i) Executive’s rights under this Agreement; (ii) Executive’s rights under any employe













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