VARIAN MEDICAL SYSTEMS, INC. Grant Agreement – Deferred Stock Units
Exhibit
99.2
VARIAN
MEDICAL SYSTEMS, INC.
Grant Agreement – Deferred
Stock Units
GRANT AGREEMENT made as
of ____________,
20__ (the “Grant Date”) between Varian Medical Systems, Inc., a Delaware
corporation (the “Company”), and ______________ (the “Director”).
1. Grant of
Deferred Stock Deferred Stock Units. The Company
hereby grants to the Director _____ Deferred Stock Units. Each
Deferred Stock Unit shall be deemed to be the equivalent of one
Share.
2. Subject
to the Plan. The Agreement is
subject to, and governed by, the provisions of the Varian Medical Systems, Inc.
Second Amended and Restated 2005 Omnibus Stock Plan (the "Plan”) and, unless the
context requires otherwise, terms used herein shall have the same meaning as in
the Plan. In the event of a conflict between the provisions of the
Plan and this Agreement, the Plan shall control.
3. Account. The Company shall
credit to a bookkeeping account (the “Account”) maintained by the Company for
the Director’s benefit the Deferred Stock Units. On each date that
cash dividends are paid on the Shares, the Company will credit the Account with
a number of additional Deferred Stock Units equal to the result of dividing
(i) the product of the total number of Deferred Stock Units credited to the
Account on the record date for such dividend and the per Share amount of such
dividend by (ii) the Fair Market Value of one Share on the date such
dividend is paid by the Company to shareholders. The additional
Deferred Stock Units shall be or become vested to the same extent as the
Deferred Stock Units that resulted in the crediting of such additional Deferred
Stock Units.
4. Vesting. All of the
Deferred Stock Units shall initially be unvested. During the 12-month
period following the Grant Date, 25% of the Deferred Stock Units shall become
vested as of the end of each 3-month period following the Grant Date, provided the Director
has continued on the Board until the end of such 3-month period. All
of the Deferred Stock Units credited to the Account shall become fully vested
upon the occurrence of a Change in Control (as defined in Appendix A) or the
Director’s death, provided the Director is then serving on the
Board.
5. Termination
of Service. In the event of
the Director’s Termination of Service, other than as a result of death,
Disability or Retirement, the Deferred Stock Units credited to the Account that
were not vested on the date of such Termination of Service shall be immediately
forfeited. In the event of the Director’s death, Disability or
Retirement while serving on the Board, all of the Deferred Stock Units credited
to the Account shall become fully vested. For purposes of this
Agreement, “Termination of Service” shall mean “separation from service” as that
term is defined in Section 409A of the Code and the applicable guidance issued
by the Secretary of the Treasury thereunder.
6. Forfeiture
upon Engaging in Detrimental Activities. If, at any time
within one (1) year after the Director’s Termination of Service for any reason,
the Director engages in any activity in competition with any activity of the
Company, or inimical, contrary or harmful to the interests of the Company,
including, but not limited to: (i) conduct related to the Director’s service on
the Board for which either criminal or civil penalties against the Director may
be sought, (ii) violation of the Company’s policies, or (iii) disclosure or
misuse of any confidential information or material concerning the Company, then
(A) the Deferred Stock Units shall be forfeited effective as of the date on
which the Director enters into such activity, and (B) the Director shall within
ten (10) days after written notice from the Company return to the Company the
Shares paid by the Company to the Director with respect to the Deferred Stock
Units and, if the Director has previously sold all or a portion of the Shares
paid to the Director by the Company, the Director shall pay the proceeds of such
sale to the Company.
7. Service
Acknowledgments. Nothing in this Agreement or the Plan shall
confer upon the Director any right to continue service on the Board of the
Company or its Subsidiaries (as the case may be). In addition, the
Director acknowledges and agrees to the following:
(j) The
Plan is discretionary in nature and the Company may amend, suspend, or terminate
it at any time;
(k) The
grant of the Deferred Stock Units is voluntary and occasional and does not
create any contractual or other right to receive future grants of Deferred Stock
Units, or benefits in lieu of the Deferred Stock Units even if the Deferred
Stock Units have been granted repeatedly in the past;
(l) All
determinations with respect to such future Deferred Stock Units, if any,
including but not limited to, the times when the Deferred Stock Units shall be
granted or when the Deferred Stock Units shall vest, will be at the sole
discretion of the Board;
(m) The
Director’s participation in the Plan is voluntary;
(n) The
value of the Deferred Stock Units is an extraordinary item of compensation,
which is outside the scope of the Director’s service contract (if any), except
as may otherwise be explicitly provided in the Director’s service contract (if
any);
(o) The
Deferred Stock Units are not part of normal or expected compensation for any
purpose, including, but not limited to, calculating termination, severance,
resignation, redundancy, end of service, or similar payments, or bonuses,
long-service awards, pension or retirement benefits;
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(p) The
future value of the Shares is unknown and cannot be predicted with
certainty;
(q) No
claim or entitlement to compensation or damages arises from the termination of
the Deferred Stock Units or diminution in value of the Deferred Stock Units or
Shares and the Director irrevocably release the Company and its Subsidiaries
from any such claim that may arise;
(r) Neither
the Plan nor the Deferred Stock Units shall be construed to create an employment
or service relationship where any such relationship did not otherwise already
exist.
8. Payment
of Deferred Stock Units. The Company shall
make a payment to the Director of the vested Deferred Stock Units credited to
the Account as provided in Section 9 upon the earliest of (i) the Director’s
Termination of Service for any reason, (ii) the third anniversary of the Grant
Date, (iii) a Change in Control, or (iv) the Director’s death (in accordance
with the provisions of Section 10); provided that if payment is made pursuant to
Section 7(i) and the Director is deemed at the time of such Termination of
Service to be a “specified” employee under Section 409A of the Code, then
payment shall not be made or commence until the earliest of (i) the expiration
of the six (6)-month period measured from the date of Director's Termination of
Service; or (ii) the date of Director's death following such Termination of
Service; provided, however, that such deferral shall only be effected to the
extent required to avoid adverse tax treatment to Director, including (without
limitation) the additional twenty percent (20%) tax for which Director would
otherwise be liable under Section 409A(a)(1)(B) of the Code in the absence of
such deferral.
9. Form of
Payment. Payments pursuant
to Section 8 shall be made in Shares equal to the number of vested Deferred
Stock Units credited to the Account. Payment shall be made as soon as
practicable after the applicable payment date, but in no event later than 30
days after the date established pursuant to Section 8.
10.
Beneficiary. In the event of the
Director’s death prior to payment of the Deferred Stock Units credited to the
Account, payment shall be made to the last beneficiary designated in writing
that is received by the Company prior to the Director’s death or, if no
designated beneficiary survives the Director, such payment shall be made to the
Director’s estate.
11.
Source of
Payments. The Director’s
right to receive payment under this Agreement shall be an unfunded entitlement
and shall be an unsecured claim against the general assets of the
Company. The Director has only the status of a general unsecured
creditor hereunder, and this Agreement constitutes only a promise by the Company
to pay the value of the Account on the payment date.
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12. Tax
Liability. The Company or any of its Subsidiaries shall assess
tax and social insurance contribution liability and requirements in connection
with the Director’s participation in the Plan, including, without limitation,
tax liability and social insurance contribution liability associated with the
grant exercise or payment of the Deferred Stock Units or sale of the underlying
Shares (the “Tax Liability”). These requirements may change from time
to time as laws or interpretations change. Regardless of the
Company’s or any Subsidiary’s actions in this regard, the Director hereby
acknowledges and agrees that the Tax Liability shall be the Director’s ultimate
responsibility and liability. The Director agrees as a condition of
his or her participation in the Plan to make arrangements satisfactory to the
Company and its Subsidiary to enable it to satisfy any withholding, payment
and/or collection requirements associated with the satisfaction of the Tax
Liability, including authorizing the Company or the Subsidiary to: (i) withhold
all applicable amounts from the Director’s wages or other cash compensation due
to the Director, in accordance with any requirements under the laws, rules, and
regulations of the country of which the Director is a resident, and (ii) act as
the Director’s agent to sell sufficient Shares for the proceeds to settle such
requirements. Furthermore, the Director agrees to pay the Company or
the Subsidiary any amount the Company or any Subsidiary may be required to
withhold, collect or pay as a result of the Director’s participation in the Plan
or that cannot be satisfied by deduction from the Director‘s wages or other cash
compensation paid to the Director by the Company or the Subsidiary or sale of
the Shares acquired under the Plan. The Director acknowledges that he or she may
not participate in the Plan and the Company and the Subsidiary shall have no
obligation to deliver Shares until the Tax Liability has been satisfied by the
Director.
13.
Data
Protection. The Director hereby explicitly and unambiguously
consents to the collection, use and transfer, in electronic or other form, of
his or her personal data by and among, as applicable, the Company and any
Subsidiary for the exclusive purpose of implementing, administering
and managing the Director’s participation in the Plan. The Director understands
that the Company and its Subsidiaries may hold certain personal information
about the Director including, but not limited to, the Director’s
name, home address and telephone number, date of birth, social security number
(or any other social or national identification number), salary, nationality,
job title, number of Shares held and the details of the Deferred Stock Units or
any other entitlement to Shares awarded, cancelled, vested, unvested or
outstanding for the purpose of implementing, administering and managing the
Director’s participation in the Plan (the “Data”). The Director
understands that the Data may be transferred to the Company or any Subsidiaries,
or to any third parties assisting in the implementation, administration and
management of the Plan, that these recipients may be located in the Director’s
country or elsewhere, and that the recipients’ country (e.g., the United States)
may have different data privacy laws and protections than the Director’s
country. The Director understands that he or she may request a list
with the names and addresses of any potential recipients of the Data by
contacting the Company. The Director authorizes the recipients to
receive, possess, use, retain and transfer the Data, in electronic or other
form, for the sole purpose of implementing, administering and managing his or
her participation in the Plan, including any requisite transfer of such Data to
a broker or other third party assisting with the administration of the Deferred
Stock Units under the Plan or with whom Shares acquired pursuant to the Deferred
Stock Units or cash from the sale of such Shares may be
deposited. Furthermore, the Director acknowledges and understands
that the transfer of the Data to the Company or Subsidiaries or to any third
parties is necessary for his or her participation in the Plan. The
Director understands that Data will be held only as long as is necessary to
implement, administer and manage his or her participation in the
Plan. The Director understands that he or she may, at any time, view
the Data, request additional information about the storage and processing of the
Data, require any necessary amendments to the Data or refuse or withdraw the
consents herein by contacting the Company in writing. The Director
further acknowledges that withdrawal of consent may affect his or her ability to
vest in, exercise or realize benefits from the Deferred Stock Units, and his or
her ability to participate in the Plan. For more information on the
consequences of refusal to consent or withdrawal of consent, the Director
understands that he or she may contact the Company.
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14. Nontransferability. Except as
otherwise permitted under the Plan, this Agreement shall not be assignable or
transferable by the Director or by the Company (other than to successors of the
Company) and no amounts payable under this Agreement, or any rights therein,
shall be subject in any manner to any anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, levy, lien, attachment, garnishment, debt or
other charge or disposition of any kind.
15. Notices. All notices
required or permitted under this Agreement shall be in writing and shall be
delivered personally or by mailing the same by registered or certified mail
postage prepaid, to the other party. Notice given by mail shall be
deemed delivered at the time and on the date the same is
postmarked.
Notices to the Company should be
addressed to:
Varian Medical Systems,
Inc.
0000 Xxxxxx Xxx
Xxxx Xxxx, Xxxxxxxxxx
00000
Attention: General
Counsel
Notices to the Director should be
addressed to the Director at the Director’s address as it appears on the
Company’s records. The Company or the Director may by writing to the
other party, designate a different address for notices.
16.
Successors
and Assigns. This Agreement
shall inure to the benefit of and be binding upon the heirs, legatees,
distributees, executors and administrators of the Director and the successors
and assigns of the Company.
17.
Governing
Law. This Agreement
shall be governed by, and interpreted in accordance with, the laws of the State
of Delaware, other than its conflict of laws principles.
18. Compliance
with Laws and Regulations. The Director understands that the
grant, vesting and payments of the Deferred Stock Units under the Plan and the
issuance, transfer, assignment, sale, or other dealings of the Shares shall be
subject to compliance by the Company (and its Subsidiaries) and the Director
with all applicable laws, rules, and regulations. Furthermore, the
Director agrees that he or she will not acquire Shares pursuant to the Plan
except in compliance with all applicable laws, rules and
regulations.
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19. Entire
Agreement; Modification. This Agreement and the Plan
constitute the entire agreement between the parties relative to the subject
matter hereof, and supersede all proposals, written or oral, and all other
communications between the parties relating to the subject matter of this
Agreement. This Agreement may be modified, amended or rescinded only
by a written agreement executed by both parties.
20. Compliance
with Section 409A of the Code. This Agreement is intended
to comply and shall be administered in a manner that is intended to comply with
section 409A of the Code and shall be construed and interpreted in accordance
with such intent. Payment under this Agreement shall be made in a
manner that will comply with section 409A of the Code, including regulations or
other guidance issued with respect thereto, as determined by the
Committee. Any provision of this Agreement that would cause the
payment or settlement thereof to fail to satisfy section 409A of the Code shall
be amended to comply with section 409A of the Code on a timely basis, which may
be made on a retroactive basis, in accordance with regulations and other
guidance issued under section 409A of the Code.
21. Severability. The invalidity,
illegality or unenforceability of any provision of this Agreement shall in no
way affect the validity, legality or enforceability of any other
provision.
22. Electronic
Delivery and Execution. The Company may, in its sole
discretion, decide to deliver any documents related to Deferred Stock Units
awarded under the Plan or future Deferred Stock Units that may be awarded under
the Plan by electronic means or request Director’s consent to participate in the
Plan by electronic means. The Director hereby consents to receive
such documents by electronic delivery and agrees to participate in the Plan
through an on-line or electronic system established and maintained by the
Company or another third party designated by the Company. Electronic execution
of this Agreement and/or other documents shall have the same binding effect as a
written or hard copy signature and accordingly, shall bind the Director and the
Company to all of the terms and conditions set forth in the Plan, this Agreement
and/or such other documents.
Your signature below indicates your
agreement and understanding that this grant of Deferred Stock Units is subject
to all of the terms and conditions contained in this Agreement. YOU CAN REQUEST A COPY OF THE PLAN BY
CONTACTING THE CORPORATE HUMAN RESOURCES OFFICE IN PALO ALTO,
CALIFORNIA.
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VARIAN MEDICAL SYSTEMS, INC.
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DIRECTOR
|
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Vice
President, Human Resources
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«FNAME»
«LNAME»
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APPENDIX
A
“Change
in Control” means and shall be deemed to have occurred as of the date of the
first to occur of the following events:
(a) Any
Person or Group (other than a Person or Group who effectively controls the
Company within the meaning of Treasury Regulation Section 1.409A-3(i)(5)(vi))
acquires stock of the Company that, together with stock held by such Person or
Group, constitutes more than 50% of the total fair market value or total voting
power of the stock of the Company. However, if any Person or Group is
considered to own more than 50% of the total fair market value or total voting
power of the stock of the Company, the acquisition of additional stock by the
same Person or Group is not considered to cause a Change in
Control. An increase in the percentage of stock owned by any Person
or Group as a result of a transaction in which the Company acquires its stock in
exchange for property will be treated as an acquisition of stock for purposes of
this subsection. This subsection applies only when there is a
transfer of stock of the Company (or issuance of stock of the Company) and stock
in the Company remains outstanding after the transaction;
(b) Any
Person or Group acquires (or has acquired during the 12-month period ending on
the date of the most recent acquisition by such Person or Group) ownership of
stock of the Company possessing 35% or more of the total voting power of the
stock of the Company. However, if any Person or Group is considered
to effectively control the Company within the meaning of Treasury Regulation
Section 1.409A-3(i)(5)(vi), the acquisition of additional stock by the same
Person or Group is not considered to cause a Change in Control;
(c) A
majority of members of the Company’s Board is replaced during any 12-month
period by Directors whose appointment or election is not endorsed by a majority
of the members of the Company’s Board prior to the date of the appointment or
election; or
(d) Any
Person or Group acquires (or has acquired during the 12-month period ending on
the date of the most recent acquisition by such Person or Group) assets from the
Company that have a total gross fair market value equal to or more than 40% of
the total gross fair market value of all of the assets of the Company
immediately prior to such acquisition or acquisitions. For this
purpose, gross fair market value means the value of the assets of the Company,
or the value of the assets being disposed of, determined without regard to any
liabilities associated with such assets. However, no Change in
Control shall be deemed to occur under this subsection (d) as a result of a
transfer to an entity that is controlled by the shareholders of the Company
immediately after the transfer as follows:
(i)
A shareholder of the Company (immediately before the asset transfer)
in exchange for or with respect to its stock;
(ii) An
entity, 50% or more of the total value or voting power of which is owned,
directly or indirectly, by the Company;
(iii) A
Person or Group that owns, directly or indirectly, 50% or more of the total
value or voting power of all the outstanding stock of the Company;
or
(iv) An
entity, at least 50% of the total value or voting power of which is owned,
directly or indirectly, by a person described in clause (iii)
above.
For
purposes of clauses (ii), (iii), and (iv) above, a Person’s or a Group’s status
is determined immediately after the transfer of assets.
For these
purposes, the term “Person” shall mean an individual, Company, association,
joint stock company, business trust or other similar organization, partnership,
limited liability company, joint venture, trust, unincorporated organization or
government or agency, instrumentality or political subdivision thereof or any
other person, in each case, to the extent consistent with Treasury Regulation
Section 1.409A-3(i)(5). The term “Group” shall have the meaning set
forth in Treasury Regulation Section 1.409A-3(i)(5), or any successor thereto in
effect at the time a determination of whether a Change of Control has occurred
is being made.
