Exhibit
10.39


 


AGILENT TECHNOLOGIES, INC.


2005 DEFERRED COMPENSATION PLAN FOR NON-EMPLOYEE
DIRECTORS


 


(As Amended Through November 18,
2009)


 


Section 1.                                          Establishment and Purpose of Plan.


 


The
Agilent Technologies, Inc. 2005 Deferred Compensation Plan for Non-Employee
Directors (the “Plan”) was adopted and established effective as of November 1,
2004, was amended and restated effective March 20, 2007, and is hereby amended
and restated effective November 18, 2009. 
The Plan continues the program of deferred compensation embodied in the
document for the Agilent Technologies, Inc. Deferred Compensation Plan for
Non-Employee Directors (the “Prior Plan Document”) in a manner designed to
comply with Section 409A of the Code.


 


The Plan is intended to be an unfunded and unsecured
deferred compensation arrangement between the Non-Employee Director and
Agilent, in which the Non-Employee Director agrees to defer (a) a
percentage of the Non-Employee Director’s cash portion of his or her Annual
Retainer and/or Committee Fees; and/or (b) all or a portion of the Shares
subject to any Equity Award in exchange for Agilent’s unfunded and unsecured
promise to make a payment at a future date, as specified in Section 6.  In addition, this Plan
provides for the election by Non-Employee Directors of the timing of the
settlement of “Deferred Shares” (as that term is defined in the 1999 Agilent
Technologies, Inc. Non-Employee Director Stock Plan and the Agilent
Technologies, Inc. 2009 Stock Plan). 
Agilent retains the right, as provided
in Section 13, to amend or terminate the Plan at any time.  Unless otherwise defined in the Plan,
capitalized terms shall have the meanings set forth in Section 20.


 


Section 2.                                          Participation in the Plan.


 


All Non-Employee Directors are eligible to participate
in the Plan unless the Committee designates such Non-Employee Director as being
ineligible to participate in the Plan.


 


Section 3.                                          Timing and Amounts of Deferred
Compensation.


 


3.1                                        Annual
Retainer/Committee Fees Deferral.


 


(a)                                  Timing of Annual Deferrals. 
With respect to each Plan Year, a Director may elect to defer (i) a
percentage of the cash portion of his or her Annual Retainer payment and/or
Committee Fees otherwise becoming payable during such Plan Year; and/or (ii) all
or a portion of the Shares subject to any Equity Award during such Plan Year.  Such an election must be made on or before December 31,
or such earlier date established by the Committee, of the preceding the Plan
Year.  All such elections shall be made
in accordance with any procedures established by the Committee.  A newly elected or appointed Non-Employee
Director must make an initial deferral election, if any, within 30 days of
becoming a Non-Employee Director.


 


(b)                           Amount of
Annual Deferral.  A Non-Employee
Director may defer with respect to a Plan Year any portion, up to 100%, of any
cash Annual Retainer and/or Committee Fee payments to which he or she may
become entitled during such Plan Year, so long as such 


 

















 


Deferred Amount is expressed in terms of a
dollar amount or a whole percentage point. 
After an effective deferral election is made by a Non-Employee Director,
the appropriate dollar amount will be deducted from the Annual Retainer or Committee
Fee, as the case may be, at the time that this amount would have otherwise been
paid.  In addition, a Director may defer
with respect to a Plan Year all or any portion of the Shares subject to an
Equity Award, so long as the election is made with respect to whole Shares or
such other election method as selected by the Committee and set forth in the
election form for the applicable Plan Year. 
Once an election is made to defer Shares from an Equity Award, the
Shares shall be withheld on the date the Shares would have otherwise been
transferred to the Director.  This Deferred
Amount shall be credited to the Non-Employee Director’s Deferral Account
pursuant to Section 4.


 


3.2                                        Timing of
Deferred Share Payments.  In
addition, with respect to each Plan Year, a Non-Employee Director may elect, on
or before December 31, or such earlier date established by the Committee,
of the preceding Plan Year, the form and timing of the distribution of any
Deferred Shares granted to the Non-Employee Director during that Plan Year.  The procedures for these elections are set
forth in Section 6.2, below.


 


3.3                                        Suspension.  A Non-Employee Director’s participation in
the Plan shall be suspended for any period during which he or she ceases to
qualify as a Non-Employee Director, but is then an employee of Agilent or one
of its affiliates.  However, during such
suspension period, the Non-Employee Director’s Deferral Account shall continue
to share in the Plan.


 


Section 4.                                          Deferral Accounts.


 


Amounts deferred pursuant to Section 3.1
shall be credited to a Deferral Account in the name of the Non-Employee
Director as of the later of (i) the first trading day on or after March 1
of each Plan Year; and (ii) the first trading day following the annual
stockholders meeting (the “Initial Deferral Date”).  The Non-Employee Director’s right with
respect to a deferral of his or her Annual Retainer and/or Committee Fees pursuant
to Section 3.1(a) shall vest on the dates (the “Vesting Dates”) such amounts
would otherwise have been paid to the Non-Employee Director.  The Non-Employee Director’s rights and any
Vesting Dates with respect to a deferral of any Shares under an Equity Award
shall be determined based on the terms of the applicable grant agreement and/or
plan document governing such award.  If
the Non-Employee Director ceases to be a Non-Employee Director for any reason at
any time prior to a Vesting Date, he or she shall forfeit any amounts credited
to his or her Deferral Account which have not become fully vested prior to such
Vesting Date effective as of the date on which the Non-Employee Director ceases
to be a Non-Employee Director.  The Non-Employee
Director’s rights in the Deferral Account shall be no greater than the rights
of an unsecured general creditor of Agilent. 
Deferred Amounts credited hereunder shall for all purposes be part of
the general funds of Agilent.  Any payout
to a Non-Employee Director of amounts credited to a Non-Employee Director’s
Deferral Account is not due until the Payout Commencement Date.


 


Section 5.                                          Investment of Deferred Amounts;
Dividends


 


5.1                                        Investment of
Deferred Amounts.  Amounts deferred
pursuant to Section 3 above shall be deemed to be invested wholly in
Shares.


 


5.2                                        Determination
of Number of Shares.  With respect
to each Plan Year, the number of additional Shares in which a Non-Employee
Director’s Deferral Account is deemed to be 


 


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invested shall be determined
by dividing the dollar value of the Deferred Amount by the Share’s Twenty (20)
Day Average Fair Market Value for the applicable Initial Deferral Date and adding the number of Shares subject
to an Equity Award that were selected for deferral by the Non-Employee Director
pursuant to a completed and timely filed deferral election form.


 


5.3                                        Timing of
Investment.  With
respect to all Plan Years commencing after January 1, 2009, the deemed investment
of the Non-Employee Directors’ Deferred Amounts in Shares will be made
automatically on the Initial Deferral Date and will be subject to the vesting
conditions set forth in Section 4 (and, with respect to the Deferred
Shares, the terms of the agreement (and/or plan document) governing the award
of the Deferred Shares).


 


5.4                                        Dividends.  A Non-Employee Director’s Deferral Account
will be credited with dividend equivalents; provided, however, that Deferred
Shares and/or Shares subject to an Equity Award will be credited with dividend
equivalents in accordance with the terms of the relevant plan and/or agreement
governing such Deferred Shares or Equity Awards.  To the extent that dividend equivalents are
credited with respect to Deferred Amounts, Deferred Shares or Shares subject to
an Equity Award that are deferred under the Plan, such dividend equivalents
shall be credited until such amounts are paid out to the Non-Employee Director
under this Plan as set out in Section 6. 
All dividend equivalents shall be added to the liability of and retained
therein by Agilent.  Any such addition to
the liability shall be appropriately reflected on the books and records of
Agilent and identified as an addition to the total sum owing the Non-Employee Director.  All such dividend equivalents shall be treated
as being automatically reinvested in additional Shares.  However, such additional Shares shall not be
treated as being fully vested until the underlying Shares have vested in
accordance with Section 4.


 


Section 6.                                          Payout to Non-Employee Directors.


 


6.1                                        Payment of
Deferral Account.  If a Non-Employee
Director’s total Deferral Account balance is equal to or greater than $25,000
on the Termination Date, the form and commencement of the portion of the Non-Employee
Director’s Deferral Account shall be made in accordance with the Non-Employee
Director’s election at the time of deferral and this Section 6.1.  If a Non-Employee Director’s total Deferral
Account balance is less than $25,000 on the Termination Date, the form of
payment shall be a lump sum payout in the first pay period in January of
the year following the Termination Year. 
A Non-Employee Director may make a separate payout election prior to the
commencement of each Plan Year with respect to the Deferral Amount (and
earnings) or any Shares subject to an Equity Award attributable to that Plan
Year.  If a valid election under this Section 6.1
is not made with respect to any Plan Year, and the Non-Employee Director’s
total Deferral Account is equal to or greater than $25,000 on the Termination
Date, then the Non-Employee Director shall receive payout of his or her Deferred
Account in annual installments over the fifteen (15) year period beginning in
the first pay period in January following the Termination Year.


 


6.2                                        Payment of
Deferred Shares.  The
Committee may permit a Non-Employee Director to make a separate election to
receive his or her Deferred Shares following the Non-Employee Director’s
Termination Date in either a lump sum or installments over a five (5) to
fifteen (15) year period and commence such payments on a Payout Commencement
Date as described in Sections 6.3(a) and (b).  Such an election must be made in accordance
with the provisions of Section 409A of the Code and the regulations promulgated
thereunder.  If a valid election is not
made in accordance with Section 3.2 and this Section 6.2 with respect
to the time 


 


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and form of payment of Deferred Shares, such
Deferred Shares shall be paid in accordance with the terms of the governing
documents of such award, including, but not limited to the award agreement, plan
document and/or other documents governing the award of the Deferred Shares.


 


6.3                                        Payment
Elections.


 


(a)                                  Form of
Payout.  A Non-Employee Director making
a valid election under this Section 6, may elect to receive his or her
Deferral Account or Deferred Shares (plus applicable dividend equivalents, if
any) as either (i) a lump sum payout, or (ii) a payout in annual
installments over a five (5) to fifteen (15) year period.  Payment shall be made in the form of Shares.


 


(b)                                 Commencement of
Payout.  A Non-Employee Director making
a valid election under this Section 6 may elect his or her Payout
Commencement Date under either the lump sum or installment election method
elected in Section 6.3(a), as the first pay period in January (the “Initial
Potential Payment Date”) following the Termination Year or the first pay period
in January following the first, second or third anniversary of the Initial
Potential Payment Date.


 


6.4                                        Dividend
Equivalents.  Whatever
the form of payout under Section 6, and whatever the timing of the Payout
Commencement Date, the Deferral Account of a Non-Employee Director shall, to
the extent such amounts are entitled to be credited with dividend equivalents, continue
to be credited with dividend equivalents until all amounts in such an account
are paid out to the Non-Employee Director.


 


6.5                                        Death Benefits.  If a Non-Employee Director dies prior to
receipt of his or her Deferral Account and/or Deferred Shares, the Beneficiary
of the Non-Employee Director shall receive payment of the Non-Employee Director’s
Deferral Account and/or Deferred Shares (plus earnings) at the same time and in
the same form as the Non-Employee Director would have received payment.


 


6.6                                        Committee
Discretion. 
Notwithstanding anything in this Section 6 to the contrary, the
Committee shall have the discretion to modify the availability and timing of a
valid election, and the timing, form and amount of any payout, in any manner it
deems appropriate (except that a Non-Employee Director who is then serving as a
member of the Committee may not participate in any such decision that affects
his or her Deferral Account); provided, however, that any alteration must
comply with Section 409A of the Code, and any alteration with respect to a
“covered officer” (within the meaning of Section 162(m) of the Code)
must be consistent with the requirements for deductibility of compensation
under Section 162(m) of the Code.


 


Section 7.                                          Section 409A Compliance.


 


Amounts payable pursuant to this Plan are intended
to comply with, or otherwise be exempt from, Section 409A of the Code and
shall be construed, administered and interpreted with that intent.  Any payment which is payable as a result of a
Non-Employee Director’s termination of service that constitutes a “deferral of
compensation” for purposes of Section 409A of the Code shall not be paid
unless and until the Participant incurs a “separation from service” for purposes
of Section 409A of the Code.  In
addition, to the extent an amount which constitutes a deferral of compensation
which is distributable to a Non-Employee Director who is a 


 


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“specified employee” (as defined in Section 409A of the Code),
such amount shall not be distributed to the Non-Employee Director before the
date (the “Delayed Payment Date”) which is the first day of the seventh month
after the date of the Non-Employee Director’s separation from service or, if
earlier, the date of the Non-Employee Director’s death following such
separation from service.  All such
amounts that would, but for this Section 7, become distributable prior to
the Delayed Payment Date will be accumulated and paid on the Delayed Payment
Date.


 


Section 8.                                          Hardship Provision for
Unforeseeable Emergencies.


 


Neither the Non-Employee Director nor his or her
Beneficiary is eligible to withdraw amounts credited to a Deferral Account
prior to the time specified in Section 6. 
However, such credited amounts may be subject to early withdrawal if (1) an
unforeseeable emergency occurs that is caused by a sudden and unexpected
illness or accident of the Non-Employee Director, the Non-Employee Director’s
spouse, the Beneficiary, or of a dependent (as defined in Section 152(a) of
the Code without regard to Section 152(b)(1), 152(b)(2) or 152(d)(1)(B) of
the Code) of the Non-Employee Director, loss of the Non-Employee Director’s
property due to casualty, or other similar extraordinary and unforeseeable
circumstances arising as a result of events beyond the Non-Employee Director’s control,
(2) such circumstances would result in severe financial hardship to the
individual if early withdrawal is not permitted, and (3) any other
requirements established under the Code and regulations promulgated thereunder,
applying the standards established under Section 457 of the Code and the
regulations promulgated thereunder, are satisfied.  A severe financial hardship exists only when
all other reasonably available financial resources have been exhausted,
including but not limited to (1) reimbursement or compensation by
insurance or otherwise, (2) liquidation of the Non-Employee Director’s
assets, to the extent that liquidation of such assets would not itself cause
severe financial hardship, or (3) cessation of deferrals under the Plan.   Examples of what are not considered to be
unforeseeable emergencies include the need to send a Non-Employee Director’s
child to college or the desire to purchase a home.


 


The Committee shall have sole discretion to
determine whether to approve any hardship withdrawal, which amount will be
limited to the amount necessary to meet the emergency.  The Committee’s decision is final and binding
on all interested parties.  A Non-Employee
Director who is then serving as a member of the Committee shall not vote on
whether or not he or she is eligible for such a hardship withdrawal.


 


Section 9.                                          Designation of Beneficiaries.


 


The Non-Employee Director shall, in
accordance with procedures established by the Committee, (1) designate one
or more Beneficiaries hereunder, and (2) shall have the right thereafter
to change such designation.  No
designation of a Beneficiary shall be effective unless it is provided in
accordance with the procedures established by the Committee and received by
Agilent prior to the Non-Employee Director’s death.  In the case of a Non-Employee Director’s
death, payment due under this Plan shall be made to the designated Beneficiary
or Beneficiaries or, in the absence of such designation, by will or the laws of
descent and distribution in the Non-Employee Director’s state of residence at
the time of his or her death.


 


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Section 10.                                   Limitation on Assignments.


 


Benefits under this Plan are not subject to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance,
attachment or garnishment by creditors of the Non-Employee Director or the Non-Employee
Director’s Beneficiary and any attempt to do so shall be void.  Notwithstanding the foregoing, the Committee
may comply with a valid domestic relations order pursuant to the provisions set
forth in Treasury Regulations § 1.409A-3(j)(4)(ii).


 


Section 11.                                   Administration.


 


11.1                                  Administration
by Committee.  The
Committee shall administer the Plan. 
Notwithstanding any provision of the Plan to the contrary, no member of
the Committee shall be entitled to vote on any matter which would create a
significant risk that such member could be treated as being in constructive
receipt of some or all of his or her Deferral Account.  The Committee shall have the sole  authority to interpret the Plan, to establish and revise rules and
regulations relating to the Plan and to make any other determinations that it
believes necessary or advisable for the administration of the Plan. Decisions
and determinations by the Committee shall be final and binding upon all
parties, including shareholders, Non-Employee Directors,  Beneficiaries  and other employees.  The Committee may delegate
its administrative responsibilities, as it deems appropriate.


 


11.2                                  Books and
Records.  Books and records maintained
for the purpose of the Plan shall be maintained by the officers and employees
of Agilent at its expense and subject to supervision and control of the Committee.


 


Section 12.                                   No Funding Obligation.


 


Agilent is under no
obligation to transfer amounts credited to the Non-Employee Director’s Deferral
Account to any trust or escrow account, and Agilent is under no obligation to
secure any amount credited to a Non-Employee Director’s Deferral Account by any
specific assets of Agilent or any other asset in which Agilent has an
interest.  This Plan shall not be
construed to require Agilent to fund any of the benefits provided hereunder nor
to establish a trust for such purpose. 
Agilent may make such arrangements as it desires to provide for the
payment of benefits, including, but not limited to, the establishment of a
grantor trust or such other equivalent arrangements as Agilent may decide.  No such arrangement shall cause the Plan to
be a funded plan within the meaning of Title I of ERISA, nor shall any such
arrangement change the nature of the obligation of Agilent nor the rights of
the Non-Employee Directors under the Plan as provided in this document.  Neither the Non-Employee Director nor his or
her estate shall have any rights against Agilent with respect to any portion of
the Deferral Account except as a general unsecured creditor.  No Non-Employee Director has an interest in
his or her Deferral Account until the Non-Employee Director actually receives
the deferred payment; provided, that Agilent may, in its sole discretion and in
accordance with applicable law, make arrangements to allow a Non-Employee
Director to direct the voting of Shares deemed to be credited to the Non-Employee
Director’s Deferral Account.


 


Section 13.                                   Amendment and Termination of the
Plan.


 


Agilent, by action of the
Committee, in its sole discretion may suspend or terminate the Plan or revise
or amend it in any respect whatsoever; provided, however, that amounts already 


 


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credited to Deferral Accounts will continue to be owed
to the Non-Employee Directors or Beneficiaries and continue to be a liability
of Agilent.  Any amendment or termination
of the Plan will not affect the entitlement of any Non-Employee Director or the
Beneficiary of a Non-Employee Director who terminates service before the
amendment or termination.  All benefits
to which any Non-Employee Director or Beneficiary may be entitled shall be
determined under the Plan as in effect at the time the Non-Employee Director
terminates service and shall not be affected by any subsequent change in the
provisions of the Plan; provided, however, that Agilent reserves the right to
change the basis of return on investment of the Deferral Account with respect
to any Non-Employee Director or Beneficiary. 
Non-Employee Directors or Beneficiaries will be given notice prior to
the discontinuance of the Plan or reduction of any benefits provided by the
Plan. Notwithstanding any other provision of the Plan, Agilent may without Non-Employee
Director or Beneficiary consent amend the Plan or change the Plan’s
administrative rules and procedures to comply with Section 409A of
the Code.


 


Section 14.                                   Adjustment on Changes in
Capitalization.


 


If
any change, such as a stock split or dividend, is made in Agilent’s
capitalization, and the change results in an increase or decrease in the number
of issued shares of common stock without receipt of consideration by Agilent,
an appropriate adjustment shall be made in the corresponding number of Shares
payable under the Plan.


 


Section 15.                                   Tax Withholding.


 


If Agilent concludes that Tax is owing with
respect to any deferral of income or payment hereunder, Agilent shall withhold
such amounts from any payments due the Non-Employee Director, or otherwise make
appropriate arrangements with the Non-Employee Director or his or her
Beneficiary for satisfaction of such obligation.


 


Section 16.                                   Choice of Law.


 


This Plan shall be interpreted and construed
in accordance with the laws of the State of California, excluding the conflicts
of laws provisions thereof, and is not subject to ERISA.


 


Section 17.                                   Notice.


 


Any written notice to Agilent required by any of the
provisions of this Plan shall be addressed to the chief personnel officer of
Agilent or his or her delegate and shall become effective when it is received.


 


Section 18.                                   No Rights to Continued Service.


 


Nothing in the Plan nor any action of Agilent pursuant
to the Plan, shall be deemed to give any person the right to continued service
as a member of the Board of Non-Employee Directors of Agilent or affect the
right of the Board of Non-Employee Directors of Agilent and/or Agilent’s
shareholders to remove an individual from the Agilent Board of Non-Employee
Directors in accordance with the General Corporation Law of the State of
Delaware, Agilent’s governing documents, including Agilent’s Articles of
Incorporation and Bylaws, and any other applicable law.


 


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Section 19.                                   Severability of Provisions.


 


If
any particular provision of this Plan is found to be invalid or unenforceable,
such provision shall not affect any other provisions of the Plan, but the Plan
shall be construed in all respects as if such invalid provision had been
omitted.


 


Section 20.                                   Definitions.


 


20.1                                  Agilent means Agilent
Technologies, Inc., a Delaware corporation, and any business entity within
the Agilent consolidated group.


 


20.2                                  Annual Retainer shall mean the
amount to which a Non-Employee Director will be entitled to receive for serving
as a Non-Employee Director in a relevant Plan Year, but shall not include
reimbursement for expenses, fees associated with service on any committee of
the Board or fees with respect to any other services to be provided to Agilent.


 


20.3                                  Beneficiary means the
person or persons designated by a Non-Employee Director pursuant to Section 9,
in accordance with and accepted by Agilent, to receive any amounts payable
under the Plan in the event of the Non-Employee Director’s death.


 


20.4                                  Board means the
Board of Directors of Agilent.


 


20.5                                  Code means the
Internal Revenue Code of 1986, as amended from time to time.


 


20.6                                  Committee means the
Compensation Committee of the Board or its delegate.


 


20.7                                  Committee Fee shall mean the
amount to which a Non-Employee Director will be entitled to receive for serving
as the chairperson or member of a committee of the Board in a relevant Plan
Year, but shall not include reimbursement for expenses associated with service
on any such committee of the Board.


 


20.8                                  Deferral
Account means the account balance of a Non-Employee Director in the Plan
created from Deferred Amounts or deferral of Shares subject to an Equity Award.


 


20.9                                  Deferred Amount means the monetary
amount the Non-Employee Director elects to have deferred from his or her Annual
Retainer and Committee Fees.


 


20.10                            Deferred Shares has the meaning set forth in the 1999 Agilent
Technologies, Inc. Non-Employee Director Stock Plan and the 2009 Agilent
Technologies, Inc. Stock Plan.


 


20.11                            Equity Award means any “Award”
(as defined under the Stock Plan) granted and earned during a Plan Year.


 


20.12                            ERISA means the
Employee Retirement Income Security Act of 1974, as amended from time to time.


 


20.13                            Fair Market
Value.  For purposes of this Plan, the
term “Fair Market Value” shall mean, 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) 


 


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as quoted on the stock exchange or a national
market system, with the highest trading volume, as reported in such source as
the Company shall determine.


 


20.14                            Non-Employee
Director means an individual who is serving as a member of
Agilent’s Board of Directors and who is not then an employee of Agilent or any
of Agilent’s affiliates.


 


20.15                            Payout
Commencement Date means the date on which the payout to a Non-Employee
Director of Deferred Shares and/or amounts credited to his or her Deferral
Account first commences.


 


20.16                            Plan means the
Agilent Technologies, Inc. 2005 Deferred Compensation Plan for
Non-Employee Directors.


 


20.17                            Plan Year shall mean the
one-year period beginning on March 1 and ending on the next subsequent February 28,
or February 29, as the case may be.


 


20.18                            Shares mean shares of
the common stock of Agilent Technologies, Inc.


 


20.19                            Stock Plan means the
Agilent Technologies 2009 Stock Plan, and any successor plan thereto.


 


20.20                            Tax or (Taxes) means any
federal, state, local, or any other governmental income tax, employment tax,
payroll tax, excise tax, or any other tax or assessment owing with respect to
amounts deferred, any Earnings thereon, and any payments made to Non-Employee
Directors or Beneficiaries under the Plan.


 


20.21                            Termination
Date means the date on which the Non-Employee Director incurs a “separation
from service” within the meaning of Section 409A of the Code and the
regulations promulgated thereunder.


 


20.22                            Termination
Year means the calendar year within which a Non-Employee Director’s
Termination Date falls.


 


20.23                            Twenty Day
Average Fair Market Value shall be the average Fair Market Value of a Share
for a period of twenty (20) consecutive trading days ending as soon as
practicable immediately preceding the applicable Initial Deferral Date.


 


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