Exhibit 99.2
VARIAN MEDICAL SYSTEMS, INC.
GRANT AGREEMENT - DEFERRED STOCK UNITS
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GRANT AGREEMENT made as of ____________, 2005 (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. 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), 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.
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) 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. 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 8 upon the earlier of (i) the Director's
Termination of Service for any reason, or (ii) the third anniversary of the
Grant Date. Notwithstanding the foregoing, upon a Change in Control prior to the
payment events set forth in the preceding sentence, payment shall be accelerated
to the date of the Change in Control.
Notwithstanding the foregoing, upon the death of the Director prior to
the new payment date, payment shall be accelerated to the date of the Director's
death in accordance with the provisions of Section 9.
8. Form of Payment. Payments pursuant to Section 7 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 7.
9. 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.
10. 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.
11. 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.
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12. 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.
13. 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.
14. 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.
15. 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.
16. 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.
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17. 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.
IN WITNESS WHEREOF, this Agreement has been executed by the Company and
the Director, effective as of the date on the first page of this Agreement.
VARIAN MEDICAL SYSTEMS, INC.
By: ----------------------
Director
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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 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 own 35% of the 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;
(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:
(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
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(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 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. The term "Group" shall have the meaning set forth in Rule13d-5 of the
Securities Exchange Commission, modified to the extent necessary to comply with
Proposed Treasury Regulation Section 1.409A-3(g)(5)(v)(B), or any successor
thereto in effect at the time a determination of whether a Change of Control has
occurred is being made.
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