EXHIBIT 10.1
--------------------------------------------------------------------------------
EMPLOYEE BENEFITS ALLOCATION AGREEMENT
AMONG
VARIAN ASSOCIATES, INC.,
VARIAN SEMICONDUCTOR EQUIPMENT ASSOCIATES, INC.
AND
VARIAN, INC.
Dated as of
_______________, 1999
--------------------------------------------------------------------------------
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS........................................................................................ 1
Section 1.01. Definitions..................................................................................... 1
ARTICLE II GENERAL EMPLOYMENT MATTERS......................................................................... 2
Section 2.01. General Obligations............................................................................. 2
Section 2.02. Initial Compensation of Active Employees........................................................ 2
Section 2.03. No Additional Employment Rights Created......................................................... 2
Section 2.04. Corporate and Transition Employees.............................................................. 2
Section 2.05. Retiree Payments................................................................................ 2
ARTICLE III UNITED STATES RETIREMENT AND PROFIT-SHARING PLAN BENEFITS.......................................... 2
Section 3.01. Varian Associates, Inc. Retirement and Profit-Sharing Program................................... 2
Section 3.02. Establishment of Varian Semiconductor Equipment Associates, Inc. Defined Contribution Plan...... 2
Section 3.03. Establishment of Varian, Inc. Defined Contribution Plan......................................... 3
Section 3.04. Reimbursement and Indemnification............................................................... 3
ARTICLE IV EMPLOYEE BENEFITS MATTERS OUTSIDE THE UNITED STATES................................................ 3
Section 4.01. Employee Benefits Matters Outside the United States............................................. 3
ARTICLE V EXECUTIVE COMPENSATION............................................................................. 3
Section 5.01. Supplemental Retirement Plan.................................................................... 3
Section 5.02. Management Incentive Plan....................................................................... 4
Section 5.03. Long-Term Incentives............................................................................ 4
Section 5.04. Deferred Cash Compensation...................................................................... 4
Section 5.05. Restricted Stock Program........................................................................ 4
Section 5.06. Options......................................................................................... 4
Section 5.07. Restricted Stock................................................................................ 6
ARTICLE VI WELFARE BENEFITS................................................................................... 6
Section 6.01. Welfare Plans................................................................................... 6
Section 6.02. Allocation and Discharge of Welfare Plan Liabilities............................................ 6
ARTICLE VII GENERAL............................................................................................ 6
Section 7.01. Post-Distribution Administration of Plans....................................................... 6
Section 7.02. Costs and Expenses.............................................................................. 6
Section 7.03. Sharing of Participant Information.............................................................. 6
ARTICLE VIII INDEMNIFICATION.................................................................................... 7
Section 8.01. Rights and Obligations.......................................................................... 7
ARTICLE IX DISPUTE RESOLUTION................................................................................. 7
Section 9.01. Distribution Agreement to Control............................................................... 7
ARTICLE X MISCELLANEOUS...................................................................................... 7
-i-
TABLE OF CONTENTS
(CONTINUED)
PAGE
Section 10.01. Complete Agreement; Construction................................................................ 7
Section 10.02. Other Agreements................................................................................ 7
Section 10.03. Counterparts.................................................................................... 7
Section 10.04. Survival of Agreements.......................................................................... 7
Section 10.05. Expenses........................................................................................ 7
Section 10.06. Notices......................................................................................... 7
Section 10.07. Waivers......................................................................................... 8
Section 10.08. Amendments...................................................................................... 9
Section 10.09. Assignment...................................................................................... 9
Section 10.10. Successors and Assigns.......................................................................... 9
Section 10.11. Termination..................................................................................... 9
Section 10.12. No Third Party Beneficiaries.................................................................... 9
Section 10.13. Titles and Headings; Interpretation............................................................. 9
Section 10.14. Governing Law................................................................................... 9
Section 10.15. Severability.................................................................................... 9
-ii-
EMPLOYEE BENEFITS ALLOCATION AGREEMENT
THIS EMPLOYEE BENEFITS ALLOCATION AGREEMENT is made and entered into as of
this _______ day of _________, 1999 by and among Varian Associates, Inc., a
Delaware corporation ("Varian" or "HCS"), Varian Semiconductor Equipment
Associates, Inc., a Delaware corporation ("SEB"), and Varian, Inc., a Delaware
corporation ("IB").
WHEREAS, pursuant to the terms of that certain Distribution Agreement by
and among Varian, SEB and IB and dated as of January 14, 1999 (the "Distribution
Agreement"), the parties have entered into this Agreement regarding certain
employment, compensation and benefit matters occasioned by the Distributions.
NOW, THEREFORE, in consideration of the mutual agreements, provisions and
covenants contained in this Agreement and the Distribution Agreement, each of
the parties hereto, on behalf of itself and each other member of its Group,
hereby agrees as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. The following terms, when capitalized herein,
-----------
shall have the meanings set forth below in this Article I. All other capitalized
terms which are used but are not otherwise defined herein shall have the
meanings ascribed to them in the Distribution Agreement.
"Active Employees" means, with respect to each Group, all employees
----------------
actively engaged in the performance of services to, for or on behalf of any
member of such Group as of the Effective Time, including any employee who
is not actively performing services because of (a) PPL, (b) leave of
absence within a job protection period, or (c) disability within a job
protection period, and the dependents of such persons (and, as applicable,
the alternate payees of such persons). "Active Employees" includes, with
respect to a Group, non-employee directors of Varian Associates, Inc.
providing services as a director to any member of the Group as of the
Effective Time.
"Former Employees" means, with respect to each Group, all former
----------------
employees and former non-employee directors of Varian and/or its
Subsidiaries as of the Effective Time (including, but not limited to, such
employees who, as of the Effective Time, are (a) on leave of absence
outside of a job protection period, (b) on disability outside of a job
protection period, (c) in RIF status, (d) on salary continuation, or (f)
within termination notice periods, and the dependents and, as applicable,
the alternate payees, of those persons, and including retirees but
excluding the Retirees) who, if they were actively engaged in the
performance of services to, for or on behalf of Varian or any of its
Subsidiaries at the Effective Time, would be an Active Employee of such
Group, determined on a basis consistent with the determination of the
Active Employees of such Group and shall, with respect to the Health Care
Systems Group, include former employees of previously disposed of
businesses, discontinued operations and the corporate office of Varian.
"Retirees" means J. Xxxxx X'Xxxxxx, Xxxxxx X. Xxxxx, Xxxxxx X. Xxxxx,
--------
Xxxxx X. Xxxxxx, Xxxxxx X. Xxxxxx, Xxxxxx X. Xx Xxxxx and Xxxxx Xxxxxxxx,
and the dependents and, as applicable, the alternate payees of such
persons.
"Varian Welfare Plans" means, collectively, the Varian Business Travel
--------------------
Accident Plan, the Varian Dental Plan, the Varian Dependent Care Assistance
Plan, Varian Dependent Life Insurance, the Varian Disability Plan, the
Varian HMO Plans, Varian Life and AD&D Insurance, the Varian Major Medical
Plan, the Varian Out-of-Area Medical Plans, the Varian Personal Paid Leave
Plan, the Varian Retiree Medical Plans and the Varian Vision Plan.
1
ARTICLE II
GENERAL EMPLOYMENT MATTERS
Section 2.01. General Obligations. Except as specifically provided herein,
-------------------
from and after the Distribution Date, each of HCS, SEB and IB shall, as
applicable, cause each of the other members of its respective Group to (a)
continue the employment of all of the Active Employees of its respective Group,
subject, however to the terms of Section 2.03 below and (b) except as otherwise
specifically provided herein, assume, pay, perform and discharge any and all
labor, employment, compensation and benefit Liabilities with respect to all
Active Employees of its respective Group. Except as otherwise specifically
provided herein, all labor, employment, compensation and benefit Liabilities of
HCS, IB or SEB, as the case may be, with respect to Former Employees of all
Groups and Retirees shall constitute Shared Liabilities.
Section 2.02. Initial Compensation of Active Employees. The initial base
----------------------------------------
salary or wage level of each Active Employee of each Group shall be no less than
the base salary or wage level of such Active Employee immediately prior to the
Distribution Date.
Section 2.03. No Additional Employment Rights Created. Nothing in this
---------------------------------------
Agreement shall give any Active Employee of any Group any right to continued
employment by any member of that Group or any other Group beyond the
Distribution Date, which is in addition to or supplemental to any such right he
or she may have arising under contract or otherwise.
Section 2.04. Corporate and Transition Employees. Costs associated with
----------------------------------
the termination or severance of Corporate Employees (listed on Schedule 1) and
Transition Employees (listed on Schedule 2), including the cost of any claim,
suit or dispute relating to such severance or termination, shall constitute
Transaction Expenditures. Costs associated with the termination or severance of
all Former Employees not terminated in connection with the Distributions,
including the cost of any claim, suit or dispute relating to such severance or
termination, shall constitute Shared Liabilities.
Section 2.05. Retiree Payments. All payments made to the Retirees pursuant
----------------
to their severance agreements shall constitute Transaction Expenditures.
ARTICLE III
UNITED STATES RETIREMENT AND PROFIT-SHARING PLAN BENEFITS
Section 3.01. Varian Associates, Inc. Retirement and Profit-Sharing
-----------------------------------------------------
Program. The active participation in the Varian Associates, Inc. Retirement and
-------
Profit-Sharing Program (the "Varian Profit-Sharing Plan") by persons other than
the Active Employees of the Health Care Systems Group will cease, effective as
of the Distribution Date. In addition, as of the Distribution Date, all members
of the Semiconductor Equipment Group and all members of the Instruments Group
will cease to be participating employers in the Varian Profit Sharing Plan and
the members of the Health Care Systems Group will become the only participating
employers in the Varian Profit-Sharing Plan. All payments to or on behalf of
Active Employees and Former Employees under the Varian Profit-Sharing Plan with
respect to pre-Distribution service shall constitute Transaction Expenditures.
Section 3.02. Establishment of Varian Semiconductor Equipment Associates,
----------------------------------------------------------
Inc. Defined Contribution Plan.
------------------------------
(a) Varian Semiconductor Equipment Associates, Inc. DC Plan. SEB will
-------------------------------------------------------
establish or make available, effective as of the Distribution Date, a
defined contribution plan for the benefit of the United States Active
Employees of the Semiconductor Equipment Group (the "SEB DC Plan").
(b) Transfer of Account Balances to Varian Semiconductor Associates,
---------------------------------------------------------------
Inc. DC Plan. As promptly as practicable after the Distribution Date (but
------------
in no event later than December 31 of the second calendar year after the
Distribution Date), HCS shall cause the trustee of the Varian Profit-
Sharing Plan to
2
transfer to the trustee of the SEB DC Plan, as a direct rollover, the
account balance of those Active Employees of the Semiconductor Equipment
Group who elect direct rollovers and with respect to whom the Varian
Profit-Sharing Plan maintains an account as of the Effective Time. In
addition, at two times to be mutually agreed by the parties (but in no
event later than 12 months following the Distribution Date), HCS shall
cause the trustee of the Varian Profit-Sharing Plan to transfer to the
trustee of the SEB DC Plan, as a direct rollover, the current balance of
those Active Employees of the Semiconductor Equipment Group who elect to
participate in such batch rollover and with respect to whom the Varian
Profit-Sharing Plan maintains an account as of the Effective Time. The
trustee of the SEB DC Plan shall accept such rollovers in accordance with
its standard procedures, except that the trustee shall accept the direct
rollovers described in the preceding sentence on an in kind basis.
Section 3.03. Establishment of Varian, Inc. Defined Contribution Plan.
-------------------------------------------------------
(a) Varian, Inc. DC Plan. IB will establish or make available,
--------------------
effective as of the Distribution Date, a defined contribution plan for the
benefit of the United States Active Employees of the Instruments Group (the
"IB DC Plan").
(b) Transfer of Account Balances to Varian, Inc. DC Plan. As promptly
----------------------------------------------------
as practicable after the Distribution Date (but in no event later than
December 31 of the second calendar year after the Distribution Date), HCS
shall cause the trustee of the Varian Profit-Sharing Plan to transfer to
the trustee of the IB DC Plan as a direct rollover, the account balance of
those Active Employees of the Instruments Group who elect direct rollovers
and with respect to whom the Varian Profit-Sharing Plan maintains an
account as of the Effective Time. In addition, at two times to be mutually
agreed by the parties (but in no event later than 12 months following the
Distribution Date), HCS shall cause the trustee of the Varian Profit-
Sharing Plan to transfer to the trustee of the IB DC Plan, as a direct
rollover, the current balance of those Active Employees of the Instruments
Group who elect to participate in such batch rollover and with respect to
whom the Varian Profit-Sharing Plan maintains an account as of the
Effective Time. The trustee of the IB DC Plan shall accept such rollovers
in accordance with its standard procedures, except that the trustee of the
IB DC Plan shall accept the direct rollovers described in the preceding
sentence on an in kind basis.
Section 3.04. Reimbursement and Indemnification. IB and SEB, respectively,
---------------------------------
shall assume all direct and indirect administrative costs associated with the
Varian Profit-Sharing Plan with respect to Active Employees of the Instruments
Group and the Semiconductor Equipment Group, respectively, which would otherwise
be borne by HCS, and such costs shall constitute Instruments Liabilities and
Semiconductor Equipment Liabilities, respectively. All direct and indirect
administrative costs associated with the Varian Profit-Sharing Plan with respect
to Former Employees and Retirees of all Groups shall constitute Shared
Liabilities.
ARTICLE IV
EMPLOYEE BENEFITS MATTERS OUTSIDE THE UNITED STATES
Section 4.01. Employee Benefits Matters Outside the United States. With
---------------------------------------------------
respect to the business and operations of each Group in jurisdictions outside
the United States, each of the parties hereto shall (and, as applicable, shall
cause each other member of its Group over which it has direct or indirect legal
or effective control to) assume, or retain, as the case may be, any and all
employee benefits Liabilities and attendant plans and their assets related to
the Active Employees of its Group. Except as otherwise provided on Schedule 3,
all non-United States employee benefits Liabilities of HCS, IB or SEB with
respect to Former Employees shall constitute Shared Liabilities.
ARTICLE V
EXECUTIVE COMPENSATION
Section 5.01. Supplemental Retirement Plan. At or promptly after the
----------------------------
Distribution Date, Varian Associates, Inc. will distribute the account balances
existing as of the Distribution Date of all current and former
3
participants in the Supplemental Retirement Plan of Varian Associates, Inc. (the
"SRP"). Such distributions shall constitute Transaction Expenditures. As of the
Distribution Date, only Active Employees of the Health Care Systems Group will
be eligible to accrue benefits under the SRP.
Section 5.02. Management Incentive Plan. None of the Active Employees of
-------------------------
the Semiconductor Equipment Group or the Instruments Group will accrue any
benefits under the Varian Associates, Inc. Management Incentive Plan (the "MIP")
from and after the Distribution Date. All payments made under the MIP to United
States employees with respect to pre-Distribution service shall constitute
Transaction Expenditures.
Section 5.03. Long-Term Incentives. None of the Active Employees of the
--------------------
Semiconductor Equipment Group or the Instruments Group will accrue any benefits
under the "long-term incentive" feature ("LTI") of the Varian Associates, Inc.
Omnibus Stock Plan from and after the Distribution Date. All payments made
under the LTI to United States employees with respect to pre-Distribution
service shall constitute Transaction Expenditures.
Section 5.04. Deferred Cash Compensation. At or promptly after the
--------------------------
Distribution Date, all deferred cash compensation with respect to pre-
Distribution service of current and former employees and non-employee directors
will be distributed. Such distributions shall constitute Transaction
Expenditures.
Section 5.05. Restricted Stock Program. None of the Active Employees of
------------------------
the Semiconductor Equipment Group or the Instruments Group will receive grants
of restricted stock under the "restricted stock program" of the Varian
Associates, Inc. Omnibus Stock Plan from and after the Distribution Date.
Section 5.06. Options. SEB and IB have established, respectively, the
-------
Varian Semiconductor Equipment Associates, Inc. Omnibus Stock Plan (the "SEB
Stock Plan") and the Varian, Inc. Omnibus Stock Plan (the "IB Stock Plan"). For
purposes of this Section 5.06, if the markets upon which VAI Common Stock, HCS
Common Stock, IB Common Stock or SEB Common Stock are open for trading on the
Distribution Date but no trade is made, the average of the last high bid and the
last low ask price reported on the Distribution Date shall govern with respect
to the Common Stock so affected. If such markets are not open for trading on the
Distribution Date, then the closing prices of the VAI Common Stock, the HCS
Common Stock, the IB Common Stock and the SEB Common Stock on the trading day
immediately preceding the Distribution Date shall govern (unless there is no
trade on such date, in which case the average of the last high bid and the last
low ask price reported on such date shall govern with respect to the Common
Stock so affected).
(a) Active Employees of HCS. Effective as of the Distribution Date,
-----------------------
all outstanding options in respect of VAI Common Stock ("Current Options")
held immediately prior to the Effective Time by Active Employees of the
Health Care Systems Group (other than non-employee directors of Varian
Associates, Inc.) will be adjusted as follows to reflect the Distributions
("Adjusted Options"): The option exercise price for Adjusted Options will
be determined by multiplying the Current Option exercise price by a
fraction, the numerator of which is the closing price of HCS Common Stock
on the Distribution Date and the denominator of which is the closing price
of VAI Common Stock on the Distribution Date. The number of shares of HCS
Common Stock subject to an Adjusted Option will be determined by
multiplying the number of shares of VAI Common Stock subject to the
corresponding Current Option by a fraction, the numerator of which is the
closing price of VAI Common Stock on the Distribution Date and the
denominator of which is the closing price of HCS Common Stock on the
Distribution Date. Adjusted Options shall be subject to the same vesting
and expiration terms and substantially the same other terms applicable to
the Current Options to which they relate.
(b) Active Employees of IB. Effective as of the Distribution Date,
----------------------
Current Options held immediately prior to the Effective Time by Active
Employees of the Instruments Group (other than non-employee directors of
Varian Associates, Inc.) who so elect prior to the Distribution Date will
be replaced with substitute options in respect of IB Common Stock ("Spinoff
IB Options"). The option exercise price for Spinoff IB Options will be
determined by multiplying the Current Option exercise price by a fraction,
the numerator of which is the closing price of IB Common Stock on the
Distribution Date and the denominator of which is the closing price of VAI
Common Stock on the Distribution Date. The number of shares of IB Common
Stock subject to a Spinoff IB Option will be determined by multiplying the
number of shares of VAI Common Stock subject to the corresponding Current
Option by a fraction, the numerator
4
of which is the closing price of VAI Common Stock on the Distribution Date
and the denominator of which is the closing price of IB Common Stock on the
Distribution Date. Active Employees of IB who do not elect to receive
Spinoff IB Options will receive Adjusted Options, which will terminate
pursuant to their terms. Spinoff IB Options shall be subject to the same
vesting and expiration terms and substantially the same other terms
applicable to the Current Options to which they relate.
(c) Active Employees of SEB. Effective as of the Distribution Date,
-----------------------
Current Options held immediately prior to the Effective Time by Active
Employees of the Semiconductor Group (other than non-employee directors of
Varian Associates, Inc.) who so elect prior to the Distribution Date will
be replaced with substitute options in respect of SEB Common Stock
("Spinoff SEB Options" and, together with Spinoff IB Options, "Spinoff
Options"). The option exercise price for Spinoff SEB Options will be
determined by multiplying the Current Option exercise price by a fraction,
the numerator of which is the closing price of SEB Common Stock on the
Distribution Date and the denominator of which is the closing price of VAI
Common Stock on the Distribution Date. The number of shares of SEB Common
Stock subject to a Spinoff SEB Option will be determined by multiplying the
number of shares of VAI Common Stock subject to the corresponding Current
Option by a fraction, the numerator of which is the closing price of VAI
Common Stock on the Distribution Date and the denominator of which is the
closing price of SEB Common Stock on the Distribution Date. Active
Employees of SEB who do not elect to receive Spinoff SEB Options will
receive Adjusted Options, which will terminate pursuant to their terms.
Spinoff SEB Options shall be subject to the same vesting and expiration
terms and substantially the same other terms applicable to the Current
Options to which they relate.
(d) Retirees. Effective as of the Distribution Date, Current Options
--------
held immediately prior to the Effective Time by Retirees will be replaced
with options in respect of each of HCS Common Stock, IB Common Stock and
SEB Common Stock ("Converted Options"). The option exercise price and
number of shares subject to Converted Options will be calculated by
subjecting 1/3 of the shares subject to the relevant Current Option to each
of the calculations described above for Adjusted Options, Spinoff IB
Options and Spinoff SEB Options. Current Options held by Retirees will be
fully vested as of the Effective Time.
(e) Non-Employee Directors. Effective as of the Distribution Date,
----------------------
Current Options held by non-employee directors of Varian Associates, Inc.
who so elect prior to the Distribution Date will be exchanged for Converted
Options. Non-employee directors of Varian Associates, Inc. who do not elect
to receive Converted Options will receive Adjusted Options. Converted
Options shall be subject to the same vesting and expiration terms and
substantially the same other terms applicable to the Current Options to
which they relate.
(f) Former Employees. Effective as of the Distribution Date, Current
----------------
Options held immediately prior to the Effective Time by Former Employees
not terminated in connection with the Distributions will be replaced with
Adjusted Options.
(g) Employees Terminated in Connection with the Distributions.
---------------------------------------------------------
Effective as of the Distribution Date, Current Options held by Former
Employees whose employment is terminated on or before the Distribution Date
in connection with the Distributions (as determined by the employer) and
who so elect will be replaced with Converted Options. Options held by
Active Employees whose employment terminates after the Distribution Date
but in connection with the Distributions (as determined by the employer)
and who so elect will be replaced with options in respect of each of HCS,
IB and SEB. The number and exercise price of such options shall be
calculated consistent with the principles governing Converted Options,
using the respective prices as of the Distribution Date. Current Options
and Adjusted Options held by employees whose employment was or is
terminated in connection with the Distributions and who elect a conversion
pursuant to this Section 5.06(g) will be fully vested as of the Effective
Time or, if later, the employee's final work day. Current Options and
Adjusted Options held by employees whose employment was or is terminated in
connection with the Distributions but who do not elect a conversion
pursuant to this Section 5.06(g) will terminate according to their terms
without any accelerated vesting of Current Options or Adjusted Options not
vested as of the Distribution Date or the employee's last work day, as
applicable.
5
(h) Transition Employees Transferred Subsequent to the Distributions.
----------------------------------------------------------------
Transition Employees transferred from employment with HCS, IB or SEB to
employment with another of HCS, IB or SEB following the Distribution who so
elect will have their Adjusted Options or Spinoff Options replaced with
options in the entity to which they are transferred. The number and
exercise price of such options shall be calculated consistent with the
principles governing Spinoff Options, using the respective prices as of the
Distribution Date.
(i) Survivors of Former Employees. Effective as of the Distribution
-----------------------------
Date, persons who hold Current Options granted to Former Employees who are
deceased as of the Effective Time will receive Converted Options, if the
holder so elects. Holders who do not so elect will receive Adjusted
Options.
Section 5.07. Restricted Stock. All unvested Restricted Stock held by
----------------
employees and non-employee directors of the Health Care Systems Group, the
Semiconductor Equipment Group and the Instruments Group shall be fully vested
immediately prior to the Distributions.
ARTICLE VI
WELFARE BENEFITS
Section 6.01. Welfare Plans. As of the Effective Time, HCS shall serve as
-------------
the sole sponsor of the Varian Welfare Plans from and after the Distribution
Date.
Section 6.02. Allocation and Discharge of Welfare Plan Liabilities. As of
----------------------------------------------------
the Effective Time, all Liabilities under the Varian Welfare Plans (including
administrative expenses) with respect to Active Employees of the Semiconductor
Equipment Group and their dependents shall be assumed by the Semiconductor
Equipment Group and shall constitute Semiconductor Equipment Liabilities. As of
the Effective Time, all Liabilities (including administrative expenses) under
the Varian Welfare Plans with respect to Active Employees of the Instruments
Group and their dependents shall be assumed by the Instruments Group and shall
constitute Instruments Liabilities. As of the Effective Time, all Varian Welfare
Plan Liabilities (including administrative expenses) with respect to Active
Employees of the Health Care Systems Group and their dependents shall constitute
Health Care Systems Liabilities. As of the Effective Time, all Varian Welfare
Plan Liabilities with respect to (a) Retirees and (b) Former Employees not
terminated in connection with the Distributions shall constitute Shared
Liabilities. As of the Effective Time, all Varian Welfare Plan Liabilities with
respect to other employees terminated in connection with the Distributions shall
constitute Transaction Expenditures.
ARTICLE VII
GENERAL
Section 7.01. Post-Distribution Administration of Plans. The parties
-----------------------------------------
hereto will administer all plans consistently herewith, and to the extent
necessary will amend their respective employee benefit plans accordingly.
Section 7.02. Costs and Expenses. Each party shall bear all costs and
------------------
expenses, including but not limited to legal and actuarial fees, incurred from
and after the Distribution Date in the design, drafting and implementation of
any and all plans and compensation structures which it establishes or creates
and the amendment of its existing plans or compensation structures.
Section 7.03. Sharing of Participant Information. From and after the
----------------------------------
Distribution Date, HCS, IB and SEB shall share, and shall cause each member of
their respective Groups to share, with each other and with their respective
agents and vendors all participant information necessary and appropriate for the
efficient and accurate administration of each party's respective employee
benefit plans and performance of their respective obligations under this
Agreement. HCS, IB and SEB shall, subject to all applicable laws concerning
confidentiality, be given reasonable and timely access to, and may make copies
of, all information relating to the subjects of this Agreement in the custody of
another party, to the extent necessary and appropriate for such administration
and performance.
6
ARTICLE VIII
INDEMNIFICATION
Section 8.01. Rights and Obligations. Article VII of the Distribution
----------------------
Agreement shall govern the rights and obligations of HCS, IB, SEB and the
members of their respective Groups with respect to indemnification for any and
all Indemnifiable Losses related to the subject matter of this Agreement. The
term "Third Party Claim" in that Article shall be read to include all claims or
demands made by any Person who is not a party to this Agreement or a Subsidiary
of the party concerning the subject matter of this Agreement.
ARTICLE IX
DISPUTE RESOLUTION
Section 9.01. Distribution Agreement to Control. Any and all
---------------------------------
controversies, disputes or claims arising out of, relating to, in connection
with or resulting from this Agreement (or any amendment thereto or any
transaction contemplated hereby or thereby), including as to its existence,
interpretation, performance, non-performance, validity, breach or termination,
including any claim based on contract, tort, statute or constitution and any
claim raising questions of law, whether arising before or after termination of
this Agreement, shall be deemed an Agreement Dispute as defined in Section 9.01
of the Distribution Agreement and shall be resolved exclusively by, in
accordance with, and subject to the limitations set forth in, Article IX of the
Distribution Agreement.
ARTICLE X
MISCELLANEOUS
Section 10.01. Complete Agreement; Construction. This Agreement, and the
--------------------------------
Schedules hereto, the Distribution Agreement and the other Ancillary Agreements
shall constitute the entire agreement among the parties with respect to the
subject matter hereof and shall supersede all prior agreements, negotiations,
commitments and writings with respect to such subject matter. In the event of
any inconsistency between this Agreement and the Distribution Agreement, this
Agreement shall prevail except for inconsistencies with respect to Sections 5.05
and 6.07 and Article IX of the Distribution Agreement, which sections shall
prevail over any inconsistent provision of this Agreement.
Section 10.02. Other Agreements. This Agreement is not intended to
----------------
address, and should not be interpreted to address, the matters expressly covered
by the Distribution Agreement and/or the other Ancillary Agreements.
Section 10.03. Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute but one and the same Agreement.
Section 10.04. Survival of Agreements. All covenants and agreements of the
----------------------
parties contained in this Agreement shall survive the Distribution Date except
as expressly provided herein and shall not be merged into any other transfer or
closing instruments or documents, including the Conveyancing and Assumption
Instruments.
Section 10.05. Expenses. Except as otherwise expressly provided in this
--------
Agreement or the Distribution Agreement, all costs and expenses incurred or
accrued on or before the Distribution Date (whether or not paid on or before the
Distribution Date) in connection with the preparation, execution, delivery and
implementation of this Agreement and the consummation of the transactions
contemplated hereby shall be charged to and paid by Varian.
Section 10.06. Notices. All Notices required or permitted under this
-------
Agreement shall be in writing and shall be sufficiently given or made (a) if
hand delivered or sent by telecopy (with delivery confirmed by voice or
otherwise), (b) if sent by nationally recognized overnight courier or (c) if
sent by registered or certified mail, postage prepaid, return receipt requested,
and in each case addressed as follows:
7
If to HCS:
Varian Medical Systems, Inc.
0000 Xxxxxx Xxx
Xxxx Xxxx, Xxxxxxxxxx 00000-0000
Attn: Chief Financial Officer
Telecopy (650) ___-____
with a copy to:
Varian Medical Systems, Inc.
0000 Xxxxxx Xxx
Xxxx Xxxx, Xxxxxxxxxx 00000-0000
Attn: General Counsel
Telecopy: (650) ___-____
If to IB:
Varian, Inc.
0000 Xxxxxx Xxx
Xxxx Xxxx, Xxxxxxxxxx 00000-0000
Attn: Chief Financial Officer
Telecopy (650) ___-____
with a copy to:
Varian, Inc.
0000 Xxxxxx Xxx
Xxxx Xxxx, Xxxxxxxxxx 00000-0000
Attn: General Counsel
Telecopy: (650) ___-____
If to SEB:
Varian Semiconductor Equipment Associates, Inc.
00 Xxxx Xxxx
Xxxxxxxxxx, Xxxxxxxxxxxxx 00000
Attn: Chief Financial Officer
Telecopy (978) ___-____
with a copy to:
Varian Semiconductor Equipment Associates, Inc.
00 Xxxx Xxxx
Xxxxxxxxxx, Xxxxxxxxxxxxx 00000
Attn: General Counsel
Telecopy: (978) ___-____
or at such other address as shall be furnished by any of the parties in a
Notice. Any Notice shall be deemed to have been duly given or made when the
Notice is received.
Section 10.07. Waivers. The failure of any party to require strict
-------
performance by any other party of any provision of this Agreement shall not
waive or diminish that party's right to demand strict performance thereafter of
that or any other provision hereof.
8
Section 10.08. Amendments. This Agreement may be amended or supplemented,
----------
or its provisions waived, only by an agreement in writing signed by each of the
parties.
Section 10.09. Assignment.
----------
(a) No party to this Agreement shall (i) consolidate with or merge
into any Person or permit any Person to consolidate with or merge into such
party (other than a merger or consolidation in which the party is the
surviving or continuing corporation), or (ii) sell, assign, transfer, lease
or otherwise dispose of, in one transaction or a series of related
transactions, all or substantially all of its Assets, unless the resulting,
surviving or transferee Person expressly assumes, by instrument in form and
substance reasonably satisfactory to the other parties, all of the
obligations of the party under this Agreement.
(b) Except as expressly provided in paragraph (a) above, neither this
Agreement nor any of the rights, interests or obligations hereunder shall
be assignable, directly or indirectly, by any party without the prior
written consent of the other parties, and any attempt to so assign without
such consent shall be void.
Section 10.10. Successors and Assigns. This Agreement shall be binding
-------------
upon, inure to the benefit of and be enforceable by the successors and permitted
assigns of the parties.
Section 10.11. Termination. This Agreement may be terminated at any time
-----------
before the Distributions by Varian in its sole discretion without the approval
of SEB or IB or the Varian stockholders. In the event of such termination, no
party shall have any Liability of any kind to any other party. After the
Distributions, this Agreement may not be terminated except by an agreement in
writing signed by each of the parties.
Section 10.12. No Third Party Beneficiaries. This Agreement is solely for
----------------------------
the benefit of the parties and the members of their respective Groups and
Affiliates and should not be deemed to confer upon third parties any remedy,
claim, liability, right of reimbursement, claim of action or other right in
excess of those existing without reference to this Agreement.
Section 10.13. Titles and Headings; Interpretation. Titles and headings to
-----------------------------------
sections herein are inserted for convenience of reference only and are not
intended to be part of or to affect the meaning or interpretation of this
Agreement. References in this Agreement to any gender include references to all
genders, and references to the singular include references to the plural and
vice versa. The words "include," "includes" and "including" when used in this
Agreement shall be deemed to be followed by the phrase "without limitation."
Unless the context otherwise requires, references in this Agreement to Articles,
Sections, and Schedules shall be deemed references to Articles and Sections of,
and Schedules to, this Agreement. Unless the context otherwise requires, the
words "hereof," "hereby" and "herein" and words of similar meaning when used in
this Agreement refer to this Agreement in its entirety and not to any particular
Article, Section or provision of this Agreement.
Section 10.14. Governing Law. This Agreement shall be governed by, and
-------------
construed and enforced in accordance with, the Law of the State of Delaware
without regard to the principles of conflicts of Laws thereunder, to the extent
not preempted by the Employee Retirement Income Security Act of 1974.
Section 10.15. Severability. If any provision of this Agreement or the
------------
application thereof to any Person or circumstance is determined to be invalid,
void or unenforceable in any respect, the remaining provisions hereof, of the
application of such provision to Persons or circumstances other than those as to
which it has held invalid," void or unenforceable, shall remain in full force
and effect and in no way be affected, impaired or invalidated thereby, so long
as the economic or legal substance of the transaction contemplated hereby is not
affected in any manner adverse to any party.
9
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
VARIAN SEMICONDUCTOR EQUIPMENT
ASSOCIATES, INC.
By:____________________________________
Name: [NAME]
Title: [TITLE]
VARIAN ASSOCIATES, INC.
By:____________________________________
Name: [NAME]
Title: [TITLE]
VARIAN, INC.
By:____________________________________
Name: [NAME]
Title: [TITLE]
10
