Item 9A. Controls and Procedures
Item 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our management has evaluated, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, the effectiveness of our disclosure controls and procedures as of October 31, 2020, pursuant to and as required by Rule 13a-15(b) under the Securities Exchange Act of 1934 (“Exchange Act”). Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of October 31, 2020, the company's disclosure controls and procedures, as defined by Rule 13a-15(e) under the Exchange Act, were effective and designed to ensure that (i) information required to be disclosed in the company's reports filed under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and (ii) information is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosures.
Management's Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on the results of this evaluation, our management concluded that our internal control over financial reporting was effective as of October 31, 2020.
The effectiveness of our internal control over financial reporting as of October 31, 2020 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report that appears in Item 8 of this Annual Report on Form 10-K.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting during the fourth quarter of fiscal 2020 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Item 9B. Other Information
None.
PART III
Item 10. Directors, Executive Officers and Corporate Governance
The information required under Item 10 regarding our directors will appear under “Proposal No. 1 - Election of Directors” in our Proxy Statement. The information regarding our executive officers required under Item 10 will appear in Item 1 of this Annual Report on Form 10-K under “Executive Officers of the Registrant.” The information required under Item 10 regarding our Audit and Finance Committee and our Audit and Finance Committee's financial expert will appear under “Committees of the Board of Directors-Audit and Finance Committee” and “Audit and Finance Committee Report” in our Proxy Statement. Those portions of the Proxy Statement are incorporated by reference into this Annual Report on Form 10-K.
There were no material changes to the procedures by which security holders may recommend nominees to our board of directors. The information required under Item 10 regarding our code of ethics applicable to our principal executive officer, our principal financial officer, our controller and other senior financial officers is contained in our SBC and appears in Item 1 of this report under “Investor Information.” We will post amendments to or waivers from a provision of the SBC with respect to those persons on our website at www.investor.keysight.com.
Compliance with Section 16(a) of the Exchange Act
With regard to the information required under Item 10 relating to compliance with Section 16(a) of the Exchange Act, we will provide disclosure of delinquent Section 16(a) reports, if any, in Keysight’s Proxy Statement under “Delinquent Section 16(a) Reports,” and such disclosure, if any, is incorporated herein by reference.
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Item 11. Executive Compensation
The information relating to the compensation of our named executive officers and directors required under Item 11 will appear under “Executive Compensation” and “Compensation of Non-Employee Directors” in the Proxy Statement. The Compensation Committee Report and the information about Compensation Committee interlocks and insider participation required under Item 11, will appear under “Compensation Committee Report” and “Compensation Committee Interlocks and Insider Participation,” respectively, in the Proxy Statement. Those portions of the Proxy Statement are incorporated by reference into this Annual Report on Form 10-K.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The information about the security ownership of certain beneficial owners and management required under Item 12 will appear under "Common Stock Ownership of Certain Beneficial Owners and Management" in the Proxy Statement. That portion of the Proxy Statement is incorporated by reference into this Annual Report on Form 10-K.
EQUITY COMPENSATION PLAN INFORMATION
The following table summarizes information about our equity compensation plans as of October 31, 2020. All outstanding awards relate to our common stock.
Plan Category
Number of Securities to be Issued upon Exercise of Outstanding Options, Warrants and Rights
(a)
Weighted-average Exercise Price of Outstanding Options, Warrants and Right
(b)
Number of Securities Remaining Available for Future Issuance under Equity Compensation Plans (Excluding Securities Reflected in Column (a))
(c)
Equity compensation plans approved by security holders (1)(2)(3)
3,011,600
$
28
26,546,070
Equity compensation plans not approved by security holders
—
$
—
—
Total
3,011,600
$
28
26,546,070
(1)
The number of securities remaining available for future issuance in column (c) includes 19,863,757 shares of common stock authorized and available for issuance under the Keysight Technologies, Inc. employee stock purchase plan under Section 423(b) of the Internal Revenue Code ("ESPP"). The number of shares authorized for issuance under the ESPP is subject to an automatic annual increase of the lesser of one percent of the outstanding common stock of Keysight or an amount determined by the Compensation Committee of our board of directors. Under the terms of the ESPP, in no event shall the aggregate number of shares issued under the ESPP exceed 75 million shares. The number of securities remaining available for future issuance in column (c) is before the issuance of shares of common stock to participants in consideration of the aggregate participant contribution under the ESPP totaling $27 million as of October 31, 2020.
(2)
We issue securities under our equity compensation plans in forms other than options, warrants or rights. Those are issued under the 2014 Stock Plan, which was originally adopted by our board of directors on July 16, 2014, subsequently amended and restated by our board of directors on September 29, 2014 and January 22, 2015 and became effective as of November 1, 2014. The 2014 Stock Plan was further amended and restated by our board of directors on November 16, 2017. The 2014 Stock Plan provides for the grant of awards in the form of stock options, stock appreciation rights, restricted stock, restricted stock units ("RSUs"), performance shares and performance units with performance-based conditions to vesting or exercisability, and cash awards. The 2014 Stock Plan has a term of ten years. As of October 31, 2020, 6,682,313 shares were available for future awards under the 2014 Stock Plan.
(3)
We issue securities under our equity compensation plans in forms that do not require a payment by the recipient to us at the time of exercise or vesting, including restricted stock, RSUs and performance units. Accordingly, the weighted-average exercise price in column (b) does not take these awards into account.
Item 13. Certain Relationships and Related Transactions, and Director Independence
The information about certain relationships and related transactions required under Item 13 will appear under “Related Person Transactions Policy and Procedures” in the Proxy Statement. Information about director independence required under Item 13 will
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appear under the heading "Director Independence” in the Proxy Statement. Each of those portions of the Proxy Statement is incorporated by reference into this Annual Report on Form 10-K.
Item 14. Principal Accounting Fees and Services
The information about principal accountant fees and services and related pre-approval policies appears required under Item 14 will appear under "Fees Paid to PricewaterhouseCoopers LLP" and "Audit and Finance Committee Preapproval Policy" in the Proxy Statement. Those portions of the Proxy Statement are incorporated by reference into this Annual Report on Form 10-K.
PART IV
Item 15. Exhibits and Financial Statement Schedules
(a)
The following documents are filed as part of this Annual Report on Form 10-K:
1.
Financial Statements.
See Index to Consolidated Financial Statements under Item 8 of this Annual Report on Form 10-K.
2.
Financial Statement Schedule.
The following additional financial statement schedule should be considered in conjunction with our consolidated financial statements. All other schedules have been omitted because the required information is either not applicable or not sufficiently material to require submission of the schedule.
SCHEDULE II
VALUATION AND QUALIFYING ACCOUNTS
Description
Balance at
Beginning
of Period
Additions Charged to
Expenses or
Other Accounts*
Deductions Credited to Expenses or Other Accounts**
Balance at
End of
Period
(in millions)
2020
Tax valuation allowance
$
240
$
12
$
( 5
)
$
247
2019
Tax valuation allowance
$
79
$
169
$
( 8
)
$
240
2018
Tax valuation allowance
$
63
$
18
$
( 2
)
$
79
* Additions include current-year additions charged to expense and current-year build due to increases in net deferred tax assets, return to provision true-ups, other adjustments and Other Comprehensive Income ("OCI") impact to deferred taxes. As disclosed in the deferred tax assets and liabilities table in Note 6, "Income taxes," we have increased the 2019 net operating loss deferred tax asset balance by $167 million. There is an offsetting increase in the 2019 valuation allowance, which is reflected in the table above. This change is the result of the correction of an error that has no impact on the balance sheet or statement of operations. Accordingly, we have concluded that this 2019 error is not material.
** Deductions include current-year releases credited to expense and current-year reductions due to decreases in net deferred tax assets, return to provision true-ups, other adjustments and OCI impact to deferred taxes.
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3.
Exhibits.
Exhibits are incorporated herein by reference or are filed with this Annual Report on Form 10-K as indicated below (numbered in accordance with Item 601 of Regulation S-K):
Incorporation by Reference
Exhibit
Number
Description
Form
Date
Exhibit
Number
Filed
Herewith
2.1
Separation and Distribution Agreement, dated August 1, 2014, by and between Agilent Technologies, Inc. and Keysight Technologies, Inc.**
10-12B/A
8/13/2014
2.1
2.2
Agreement and Plan of Merger, dated January 30, 2017, by and between Keysight Technologies, Inc. and Ixia
8-K
2/1/2017
2.1
3.1
Amended and Restated Certificate of Incorporation of Keysight Technologies, Inc.
8-K
11/3/2014
3.1
3.2
Amended and Restated Bylaws of Keysight Technologies, Inc.
8-K
11/3/2014
3.2
4.1
Indenture, dated as of October 15, 2014, between Keysight Technologies, Inc. and U.S. Bank National Association, as Trustee
8-K
10/17/2014
4.1
4.2
First Supplemental Indenture, dated as of October 15, 2014, to the Indenture dated as of October 15, 2014, between Keysight Technologies, Inc. and U.S. Bank National Association, as Trustee
8-K
10/17/2014
4.2
4.3
Second Supplemental Indenture, dated as of April 6, 2017, to the Indenture dated as of October 15, 2014, between Keysight Technologies, Inc. and U.S. Bank National Association, as Trustee.
8-K
4/6/2017
4.2
4.4
Third Supplemental Indenture, dated as of October 22, 2019, to the Indenture dated as of October 15, 2014 between Keysight Technologies, Inc. and U.S. Bank National Association, as Trustee
8-K
10/22/2019
4.2
4.5
Description of Keysight Technologies, Inc. Registered Securities
X
10.1
Services Agreement, dated August 1, 2014, by and between Agilent Technologies, Inc. and Keysight Technologies, Inc.
10-12B/A
8/13/2014
10.1
10.2
Tax Matters Agreement, dated August 1, 2014, by and between Agilent Technologies, Inc. and Keysight Technologies, Inc.
10-12B/A
8/13/2014
10.2
10.3
Employee Matters Agreement, dated August 1, 2014, by and between Agilent Technologies, Inc. and Keysight Technologies, Inc.
10-12B/A
8/13/2014
10.3
10.4
Intellectual Property Matters Agreement, dated August 1, 2014, by and between Agilent Technologies, Inc. and Keysight Technologies, Inc.
10-12B/A
8/13/2014
10.4
10.5
Trademark License Agreement, dated August 1, 2014, by and between Agilent Technologies, Inc. and Keysight Technologies, Inc.
10-12B/A
8/13/2014
10.5
10.6
Real Estate Matters Agreement, dated August 1, 2014, by and between Agilent Technologies, Inc. and Keysight Technologies, Inc.
10-12B/A
8/13/2014
10.6
10.7
Form of Indemnification Agreement
10-12B/A
7/18/2014
10.7
10.8
Keysight Technologies, Inc. Employee Stock Purchase Plan*
10-12B/A
7/18/2014
10.8
10.9
Form of Keysight Technologies, Inc. Global Performance Award Agreement*
10-12B/A
7/18/2014
10.11
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10.10
Form of Keysight Technologies, Inc. Global Stock Option Award Agreement*
10-12B/A
7/18/2014
10.12
10.11
Form of Keysight Technologies, Inc. Non-Employee Director Stock Option Award Agreement*
10-12B/A
7/18/2014
10.13
10.12
Form of Keysight Technologies, Inc. Non-Employee Director Stock Award Agreement*
10-12B/A
7/18/2014
10.14
10.13
Form of Keysight Technologies, Inc. 2014 Deferred Compensation Plan*
10-12B/A
7/18/2014
10.15
10.14
Form of Keysight Technologies, Inc. 2014 Frozen Deferred Compensation Plan*
10-12B/A
7/18/2014
10.16
10.15
Form of Keysight Technologies, Inc. Excess Benefit Retirement Plan*
10-12B/A
7/18/2014
10.17
10.16
Form of Keysight Technologies, Inc. Supplemental Benefit Retirement Plan*
10-12B/A
7/18/2014
10.18
10.17
Form of Change of Control Severance Agreement*
8-K
11/3/2014
10.1
10.18
Form of Keysight Technologies, Inc. Deferral Election for Stock Award*
8-K
11/3/2014
10.3
10.19
Keysight Technologies, Inc. Officer and Executive Severance Plan (Established Effective March18, 2015)*
8-K
3/24/2015
10.1
10.20
Keysight Technologies, Inc. 2015 Performance-based Compensation Plan for covered employees (As Adopted on September 29, 2014)*
DEF 14A
2/6/2015
APPENDIX B
10.21
Keysight Technologies, Inc. 401(k) Plan (Effective as of August 1, 2014)*
10-K
12/21/2015
10.27
10.22
Keysight Technologies, Inc. Deferred Profit-Sharing Plan (Effective as of August 1, 2014)*
10-K
12/21/2015
10.28
10.23
Keysight Technologies, Inc. Retirement Plan (Effective as of August 1, 2014)*
10-K
12/21/2015
10.29
10.24
First Amendment to the Keysight Technologies, Inc. 401(k) Plan (Effective as of August 1, 2015)*
10-K
12/21/2015
10.30
10.25
First Amendment to the Keysight Technologies, Inc. Retirement Plan (Effective as of August 1, 2015)*
10-K
12/21/2015
10.31
10.26
Form of Keysight Technologies, Inc. Global Stock Award Agreement as Amended on November 15, 2016*
10-K
12/19/2016
10.32
10.27
Amended and Restated Credit Agreement, dated February 15, 2017, between Keysight Technologies, Inc. and the Lenders Party Thereto*
8-K
2/22/2017
10.1
10.28
Keysight Technologies, Inc. 2014 Equity and Incentive Compensation Plan (As Amended and Restated on November 16, 2017)*
DEF 14A
2/9/2018
APPENDIX A
21.1
Subsidiaries of Keysight Technologies, Inc.
X
23.1
Consent of Independent Registered Public Accounting Firm.
X
24.1
Powers of Attorney. Contained in the signature page of this Annual Report on Form 10-K.
X
31.1
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes‑Oxley Act of 2002.
X
31.2
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes‑Oxley Act of 2002.
X
32.1
Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes‑Oxley Act of 2002.
X
32.2
Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes‑Oxley Act of 2002.
X
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99.1
Information Statement of Keysight Technologies, Inc., dated October 8, 2014.
8-K
11/3/2014
99.1
101.INS
Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
X
101.SCH
Inline XBRL Schema Document
X
101.CAL
Inline XBRL Calculation Linkbase Document
X
101.LAB
Inline XBRL Labels Linkbase Document
X
101.PRE
Inline XBRL Presentation Linkbase Document
X
101.DEF
Inline XBRL Definition Linkbase Document
X
104
Inline XBRL Cover Page Interactive Data File
X
*
Indicates management contract or compensatory plan, contract or arrangement.
**
Certain schedules and exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K. Keysight will furnish supplemental copies of any such schedules or exhibits to the U.S. Securities and Exchange Commission upon request.
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Item 16. Form 10-K Summary
None.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
KEYSIGHT TECHNOLOGIES, INC.
BY
/s/ Neil Dougherty
Neil Dougherty
Senior Vice President and Chief Financial Officer
Date: December 17, 2020
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POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Jeffrey K. Li and JoAnn Juskie, or any of them, his or her attorneys-in-fact, for such person in any and all capacities, to sign any amendments to this report and to file the same, with exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that any of said attorneys-in-fact, or substitute or substitutes, may do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature
Title
Date
/s/ RONALD S. NERSESIAN
Chairman of the Board, President and
Chief Executive Officer
December 17, 2020
Ronald S. Nersesian
(Principal Executive Officer)
/s/ NEIL P. DOUGHERTY
Senior Vice President and Chief Financial Officer
December 17, 2020
Neil P. Dougherty
(Principal Financial Officer)
/s/ JOHN C. SKINNER
Vice President and Corporate Controller
December 17, 2020
John C. Skinner
(Principal Accounting Officer)
/s/ PAUL N. CLARK
Lead Independent Director
December 17, 2020
Paul N. Clark
/s/ JAMES G. CULLEN
Director
December 17, 2020
James G. Cullen
/s/ CHARLES J. DOCKENDORFF
Director
December 17, 2020
Charles J. Dockendorff
/s/ JEAN M. HALLORAN
Director
December 17, 2020
Jean M. Halloran
/s/ RICHARD P. HAMADA
Director
December 17, 2020
Richard P. Hamada
/s/ PAUL A. LACOUTURE
Director
December 17, 2020
Paul A. Lacouture
/s/ JOANNE B. OLSEN
Director
December 17, 2020
Joanne B. Olsen
/s/ ROBERT A. RANGO
Director
December 17, 2020
Robert A. Rango
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