Exhibit 10.34


 


AGILENT
TECHNOLOGIES, INC. PERFORMANCE-BASED COMPENSATION 


PLAN
FOR COVERED EMPLOYEES


 


Amended
and Restated Effective December 18, 2008


 


1.                                      Purpose.  The purpose of the Agilent Technologies, Inc.
Performance-Based Compensation Plan for Covered Employees is to provide certain
employees of Agilent Technologies, Inc. and its subsidiaries with
incentive compensation based upon the level of achievement of financial,
business and other performance criteria. 
Effective December 18, 2008 the Plan was amended pursuant to Section 10(e) by
the Assistant Secretary of the Company to make a minor administrative change
made desirable by Section 409A of the Code.


 


2.                                      Definitions.  As used in the Plan, the following terms
shall have the meanings set forth below:


 


(a)            “Affiliate” shall mean (i) any entity that, directly or
indirectly, is controlled by the Company and (ii) any entity in which the
Company has a significant equity interest, in either case as determined by the
Committee.


 


(b)           “AFM” shall mean the Company’s Accounting and Financial
Manual, as posted from time to time on the Company’s internal web site.


 


(c)            “Base Pay” shall mean the annual base rate of cash
compensation, excluding bonuses, commissions, overtime pay, Variable Payments,
Target Variable Payments, shift differential, payments under the Agilent
Technologies, Inc. Disability Plan and the Agilent Technologies, Inc.
Supplemental Income Protection Plan, or any other additional compensation.


 


(d)           “Board” shall mean the Board of Directors of the Company.


 


(e)            “Code” shall mean the Internal Revenue Code of 1986 and the
regulations promulgated thereunder, all as amended from time to time and any
successors thereto.


 


(f)              “Committee” shall mean the Committee designated pursuant to Section 4
of the Plan.


 


(g)           “Company” shall mean Agilent Technologies, Inc., a
Delaware corporation.


 


(h)           “Covered Officer” shall mean at any date (i) any
individual who with respect to the previous taxable year of the Company, was a “covered
employee” of the Company within the meaning of Section 162(m); 


 


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(i)               provided,
however that the term “Covered Officer” shall not include any such individual
who is designated by the Committee, in its sole discretion, at the time of any
Variable Payment or at any subsequent time, as reasonably expected not to be
such a “covered employee” with respect to the then current taxable year of the
Company, and (ii) any individual who is designated by the Committee, in
its sole discretion, at the time of any Variable Payment or at any subsequent
time, as reasonably expected to be such a “covered employee” with respect to
the then current taxable year of the Company or with respect to the taxable
year of the Company in which any applicable Variable Payment will be paid.


 


(j)               “Fiscal Year” shall mean the twelve-month period from November 1
through October 31.


 


(k)            “Net Order Dollars” shall be as defined in the Company’s
Corporate Marketing Policy, as posted on the Company’s internal web site at the
start of the Performance Period.


 


(l)               “Net Profit Dollars” shall be as defined in the AFM at the
start of the Performance Period.


 


(m)         “Net Profit Growth” shall be defined with respect to any
Performance Period as determined by the Committee, in its sole discretion.


 


(n)           “Net Revenue Dollars” shall be as defined in the AFM at the
start of the Performance Period.


 


(o)           “Participant” shall mean each salaried employee of the
Company or its Affiliates in active service whose position is designated by the
Committee as eligible for participation in the Plan and who is selected by the
Committee for participation in the Plan prior to the Predetermination Date.


 


(p)           “Performance Measure” shall mean any measurable criteria
tied to the Company’s success that the Committee may determine, including Net
Order Dollars, Net Profit Dollars, Net Profit Growth, Net Revenue Dollars,
Revenue Growth, individual performance, earnings per share, return on assets,
return on equity, return on invested capital, other Company and business unit
financial objectives, customer satisfaction indicators and operational
efficiency measures.


 


(q)           “Performance Period” shall mean a six-month period of time
based upon the halves of the Company’s Fiscal Year, or such other time period
as shall be determined by the Committee.


 


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(r)              “Plan” shall mean the Agilent Technologies, Inc.
Performance-Based Compensation Plan for Covered Employees, as amended from time
to time.


 


(s)            “Predetermination Date” shall mean (i) the earlier of,
a date 90 days after the commencement of the Performance Period, or a date not
later than the expiration of 25% of the Performance Period, provided that the
satisfaction of selected Performance Measures is substantially uncertain at such
time, or (ii) such other date on which a performance goal is considered to
be pre-established pursuant to Section 162(m).


 


(t)              “Revenue Growth” shall be defined with respect to any
Performance Period as determined by the Committee, in its sole discretion.


 


(u)           “Section 162(m)” shall mean Section 162(m) of
the Code.


 


(v)           “Target Variable Payment” shall mean a Variable Payment
amount that may be paid if 100% of all applicable Performance Measures are
achieved in the Performance Period.  The
Target Variable Payment shall be equal to a fixed percentage of the Participant’s
Base Pay for such Performance Period. 
Except as otherwise provided in Section 6, the Committee shall
determine such percentage prior to the Predetermination Date.


 


(w)         “Threshold Variable Payment Percentage” shall mean a
Variable Payment amount that may be paid if the minimum level (or percentage)
of applicable Performance Measures is achieved for a Performance Period.


 


(x)             “Variable Payment” shall mean a cash payment, which may be
an addition to Base Pay, made pursuant to the Plan with respect to a particular
Performance Period.  The amount of a
Variable Payment may be less than, equal to or greater than the Target Variable
Payment; provided, however, that a Variable Payment shall not be
greater than an amount equal to two hundred percent (200%) of the Target
Variable Payment.


 


3.                                      Eligibility.  Persons employed by the Company or any of
its Affiliates during a Performance Period and in active service are eligible
to be Participants under the Plan for such Performance Period, whether or not
so employed or living at the date a Variable Payment is paid, and may be
considered by the Committee for a Variable Payment.  A Participant is not rendered ineligible to
be a Participant by reason of being a member of the Board.  Notwithstanding anything herein to the
contrary, the Committee shall have sole discretion to designate or approve the
Participants for any given Performance Period.


 


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4.                                      Administration.


 


(a)            Unless
otherwise designated by the Board, the Compensation Committee of the Board
shall be the Committee under the Plan.  A
director may serve as a member or an alternate member of the Committee only
during periods in which the director is an “outside director” as described in Section 162(m).  Subsequent determination that a member or
alternate member of the Committee was not an “outside director” shall not
invalidate the actions taken by the Committee during such period.  The Committee shall have full power and
authority to construe, interpret and administer the Plan.  It may issue rules and regulations for
administration of the Plan and shall meet at such times and places as it may
determine.  A majority of the members of
the Committee shall constitute a quorum and all decisions of the Committee
shall be final, conclusive and binding upon all parties, including the Company,
its stockholders, employees and Participants.


 


(b)           The
expenses of the administration of the Plan shall be borne by the Company.


 


5.                                      Term.  Subject to Section 10(l), the amended and restated Plan shall be effective as of December 18,
2008, and shall be applicable for future Performance Periods unless amended or
terminated by the Board or the Committee pursuant to Section 10(e).


 


6.                                      Determination
of Plan Participants, Variable Payment Factors and Performance Measures.


 


(a)            In General.  Prior to the Predetermination Date, the
Committee shall designate or approve (A) the positions eligible for
participation in the Plan; (B) the employees in those positions who have
been selected for participation in the Plan for a Performance Period; (B) the
applicable Performance Measures, the Threshold Variable Payment Percentage, the
Target Variable Payment, and the maximum Variable Payments for each
Participant; (iii) the percentages allocated to each Participant for each
Performance Measure, and (iv) the Performance Period.  In addition, notwithstanding the foregoing,
all Performance Measures pertaining to any Covered Officer shall be of such a
nature that an objective third party having knowledge of all the relevant facts
could determine at the end of the Performance Period whether performance
results with respect to such Performance Measures have been achieved.


 


(b)           Effect of Corporate
Transactions.  Effective with the
Performance Period commencing May 1, 2007, unless the Committee determines



 


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otherwise prior to
the Predetermination Date with respect to a Performance Period, the Variable
Payment shall be adjusted to take into account: (i) acquisitions,
divestitures, and investments that (A) closed in the applicable
Performance Period, and (B) were not already taken into account in the
Participant’s Performance Measures for such period.  Any such adjustment shall be applied equally
to all Participants.


 


7.                                      Amount
of Variable Payment.


 


(a)            Calculation.  Within 60 days after the end of the relevant
Performance Period, the Committee shall determine the amount of the Variable
Payment for each Participant by:


 


(i)           Determining
the actual performance results for each Performance Measure;


 


(ii)          Determining
the amount to which each Participant is entitled based on the percentage
allocated by the Committee to each Performance Measure against the Target
Variable Payment for each Participant; and


 


(iii)         Certifying
by resolution duly adopted by the Committee the value of the Variable Payment
for each Participant so determined.


 


(b)         Committee
Discretion.  Notwithstanding any
other provision of this Plan, the Committee may, in the exercise of its sole
discretion and based on any factors the Committee deems appropriate, reduce or
eliminate to zero the amount of a Variable Payment to a Participant otherwise
calculated in accordance with the provisions of Section 7(a) prior to
payment thereof.  The Committee shall
make a determination of whether and to what extent to reduce Variable Payments
under the Plan for each Performance Period at such time or times following the
close of the Performance Period as the Committee shall deem appropriate.  The reduction in the amount of a Variable
Payment to a Participant for a Performance Period shall have no effect on the
amount of the Variable Payment to any other Participant for such period.


 


(c)          Maximum.  Notwithstanding any
other provision of this Plan, the maximum Variable Payment that may be paid to
a Covered Officer under the Plan with respect to a particular Performance
Period is $1.5 million.  To the extent
the period of time defining a Performance Period is changed by the Committee,
then the maximum Variable Payment that may be paid to a Covered Officer under
the Plan with respect to the Performance Period is an amount that bears the
same pro 


 


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rata relationship
to the new period of time as the above amount does to the current six-month
Performance Period as set by the Committee.


 


8.                                      Payment
of Variable Payment.


 


(a)          Payment
of a Variable Payment to a Participant shall be made in a cash payment after
determination of the amount of the Variable Payment under Section 7 above,
except to the extent a Participant has made a timely election to defer the
payment of all or any part of such Variable Payment under the Agilent
Technologies, Inc. Deferred Compensation Plan.


 


(b)         The
payment of a Variable Payment with respect to a specific Performance Period
requires that the employee be on the Company’s payroll as of the end of such
Performance Period.


 


(c)          Payments
of Variable Payments to Participants who are on the payroll of Affiliates of the
Company shall be paid directly by such entities.


 


9.                                      Changes
in Status.


 


(a)          If
during a Performance Period an employee is newly hired or promoted into a
position previously designated by the Committee as eligible for participation
under the Plan, such employee is eligible for selection as a Participant as of
the effective date of hire or  promotion.
The payment of Variable Pay with respect to all or a portion of a specific
Performance Period, as applicable, requires that the employee be on the Company’s
payroll in active service as of the end of such Performance Period unless the
Participant is not in active service on the last day of the Performance Period
due to retirement or death, in which case the Participant will be eligible to
receive a prorated Variable Payment for days worked with respect to the
Performance Period. A Participant who becomes ineligible for this Plan after
the start of the Performance period is eligible to receive a prorated Variable
Payment for days worked, except as provided in Section 9(b).


 


(b)         A
Participant will forfeit any Variable Payment for a Performance Period during
which a Participant is involuntarily terminated for cause or voluntarily
terminates his employment with the Company for reasons other than death,
permanent and total disability or retirement, at the age and service-year level
set by the Company or the local law requirements where the Participant is
employed.


 


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10.                               Miscellaneous.


 


(a)          No
Assignment.  No portion of any
Variable Payment under the Plan may be assigned or transferred otherwise than
by will or the laws of descent and distribution prior to the payment thereof.


 


(b)         Tax
Requirements.  All payments made
pursuant to the Plan or deferred pursuant to Section 8(a) shall be
subject to all applicable taxes or contributions required by U.S. federal or
state law or by non-U.S. local law to be withheld, in accordance with the
procedures to be established by the Committee.


 


(c)          No
Additional Participant Rights.  The
selection of an individual for participation in the Plan shall not give such
Participant any right to be retained in the employ of the Company or any of its
Affiliates, and the right of the Company and any such Affiliate to dismiss such
Participant or to terminate any arrangement pursuant to which any such
Participant provides services to the Company, with or without cause, is
specifically reserved.  No person shall
have claim to a Variable Payment under the Plan, except as otherwise provided
for herein, or to continued participation under the Plan.  There is no obligation for uniformity of
treatment of Participants under the Plan. 
The benefits provided for Participants under the Plan shall be in
addition to and shall in no way preclude other forms of compensation to or in
respect of such Participants.  It is
expressly agreed and understood that the employment is terminable at the will
of either party and, if such Participant is a party to an employment contract
with the Company or one of its Affiliates, in accordance with the terms and
conditions of the Participant’s employment contract.


 


(d)         Liability.  The Board and the Committee shall be entitled
to rely on the advice of counsel and other experts, including the independent
auditors for the Company.  No member of
the Board or of the Committee, any officers of the Company or its Affiliates or
any of their designees shall be liable for any act or failure to act under the
Plan, except in circumstances involving bad faith on the part of such member,
officer or designee.


 


(e)          Amendment;
Suspension; Termination.  The Board
or Committee may, at any time and from time to time, amend, suspend or
terminate the Plan or any part of the Plan as it may deem proper and in the
best interests of the Company.  In the
case of Participants employed outside the United States, the Board, the
Committee or their designees may vary the provisions of the Plan as deemed
appropriate to conform with local laws, practices and procedures.  In addition, the Executive Committee of the
Board or any of the General Counsel, Secretary or 


 


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Assistant
Secretary of the Company is authorized to make certain minor or administrative
changes required by or made desirable by government regulation.  Any modification of the Plan may affect
present and future Participants and the amount of any Variable Payment
hereunder.


 


(f)            Other
Compensation Arrangements.  Nothing
contained in the Plan shall prevent the Company or any Affiliate of the Company
from adopting or continuing in effect other compensation arrangements, which
arrangements may be either generally applicable or applicable only in specific
cases.


 


(g)         Governing
Law.  The validity, construction and
effect of the Plan and any rules and regulations relating to the Plan
shall be determined in accordance with the laws of the State of Delaware and
applicable federal law.


 


(h)         No
Trust.  Neither the Plan nor any
Variable Payments shall create or be construed to create a trust or separate
fund of any kind or a fiduciary relationship between the Company and any
Participant.  To the extent that the
Participant acquires a right to receive payments from the Company in respect of
any Variable Payment, such right shall be no greater than the right of any
unsecured general creditor of the Company.


 


(i)             Section 162(m).
All payments under this Plan are designed to satisfy the special requirements
for performance-based compensation set forth in Section 162(m)(4)(C) of
the Code, and the Plan shall be so construed. 
Furthermore, if a provision of the Plan causes a payment to fail to
satisfy these special requirements, it shall be deemed amended to satisfy the
requirements to the extent permitted by law and subject to Committee approval.


 


(j)             Designation
of Beneficiaries.  A Participant may,
if the Committee permits, designate a beneficiary or beneficiaries to receive
all or part of the Variable Payments which may be paid to the Participant, or
may be payable, after such Participant’s death. 
A designation of beneficiary shall be made in accordance with procedures
specified by the Company and may be replaced by a new designation or may be
revoked by the Participant at any time. 
In case of the Participant’s death, a Variable Payment with respect to
which a designation of beneficiary has been made (to the extent it is valid and
enforceable under applicable law) shall be paid to the designated beneficiary
or beneficiaries.  Any Variable Payment
granted or payable to a Participant who is deceased and not subject to such a
designation shall be distributed to the Participant’s estate.  If there shall be any question 


 


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as to the legal
right of any beneficiary to receive a Variable Payment under the Plan, the
amount in question may be paid to the estate of the Participant, in which event
the Company or its Affiliates shall have no further liability to anyone with
respect to such amount.


 


(k)          Effect
on Company Benefit Plans.  With the
exception of the Agilent Technologies, Inc. Deferred Compensation Plan, it
is the intent of the Company that Company benefits payable or accruable to
Participants, to the extent such benefits are based on earnings or compensation
level, shall be based on Base Pay.  Notwithstanding
the foregoing, this paragraph (k) shall apply to Participants outside of
the United States to the extent permissible under applicable local laws.


 


(l)             Stockholder
Approval.  Shareholders of the
Company will be asked to approve the Plan to the extent necessary to allow the
Company under Section 162(m) to preserve the tax deductibility of
payments for performance-based compensation made under the plan to Covered
Officers.  Plan amendments shall require
stockholder approval to the extent required by applicable law or the applicable
rules of any stock exchange.


 


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