Exhibit 99.2
VARIAN MEDICAL SYSTEMS, INC.
2005 OMNIBUS STOCK PLAN
NONQUALIFIED STOCK OPTION AGREEMENT
Varian Medical Systems, Inc. (the "Company") hereby grants you,
<> <> (the "Employee"), a nonqualified stock option under the
Company's 2005 Omnibus Stock Plan (the "Plan"), to purchase shares of common
stock of the Company ("Shares"). The date of this Agreement is <>
(the "Grant Date"). In general, the latest date this option will expire is
<> (the "Expiration Date"). However, as provided in Appendix A
(attached hereto as "2005 Omnibus Stock Plan Appendix A"), this option may
expire earlier than the Expiration Date. Subject to the provisions of Appendix A
and of the Plan, the principal features of this option are as follows:
Maximum Number of Shares
Purchasable with this Option: <> Purchase Price per Share: $<>
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Scheduled Vesting Dates: Number of Shares*:
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<> 1/3rd of shares granted
<> through 1/36th of shares granted
<>
*Shares vest in only whole share increments, fractions of shares vest only when
they equal whole share increments.
EVENT TRIGGERING MAXIMUM TIME TO EXERCISE
TERMINATION OF OPTION: AFTER TRIGGERING EVENT**:
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Termination of Service for cause None
Termination of Service due to Disability 1 year
Termination of Service due to Retirement 3 years
Termination of Service due to death 3 years
All other Terminations of Service 3 months
**However, in no event may this option be exercised after the Expiration Date
(except in certain cases of the death of the Employee).
Your signature below indicates your agreement and understanding that
this option is subject to all of the terms and conditions contained in Appendix
A and the Plan. For example, important additional information on vesting and
termination of this option is contained in Paragraphs 4 through 6 of Appendix A.
ACCORDINGLY, PLEASE BE SURE TO READ ALL OF APPENDIX A AND THE PLAN, WHICH
CONTAINS THE SPECIFIC TERMS AND CONDITIONS OF THIS OPTION. YOU CAN REQUEST A
COPY OF THE PLAN BY CONTACTING THE CORPORATE HUMAN RESOURCES OFFICE IN PALO
ALTO, CALIFORNIA.
VARIAN MEDICAL SYSTEMS, INC. EMPLOYEE
By:
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Vice President, Human Resources <> <>
APPENDIX A
OFFICERS
TERMS AND CONDITIONS OF NONQUALIFIED STOCK OPTION
1. Grant of Option. The Company hereby grants to the
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Employee under the Plan, as a separate incentive in connection with his or her
employment and not in lieu of any salary or other compensation for his or her
services, a nonqualified stock option to purchase, on the terms and conditions
set forth in this Agreement and the Plan, all or any part of an aggregate of
<> Shares.
2. Exercise Price. The purchase price per Share for this
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option (the "Exercise Price") shall be $<> which is the Fair Market
Value of a Share on the Grant Date.
3. Number of Shares. The number and class of Shares
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specified in Paragraph 1 above, and/or the Exercise Price, are subject to
adjustment by the Committee in the event of any merger, reorganization,
consolidation, recapitalization, separation, liquidation, stock dividend,
split-up, Share combination or other change in the corporate structure of the
Company affecting the Shares. In the event an Employee's termination of service
due to the Employee's Retirement within one (1) year following the Grant Date,
then the number of Shares Granted shall be adjusted proportionally by the time
during such one (1) year period that the Employee remained an active, full-time
employee of the Company (based upon a 365 day year). For example, if the
Employee is granted an option for 6,000 shares of Common Stock of the Company
and the Employee terminated service due to the Employee's Retirement 30 days
after the Grant Date, then the Employee's number of Shares Granted would be
reduced from 6,000 shares to 493 shares (6,000 x 30/365) and the balance of the
Shares Granted would be cancelled.
4. Vesting Schedule. Except as otherwise provided in
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this Agreement, the right to exercise this option will vest as to thirty-three
and one-third percent (33-1/3%) of the Shares specified in Paragraph 1 above on
the first anniversary date of the Grant Date, and as to an additional 1/36th of
the shares on each succeeding monthly anniversary date, until the right to
exercise this option shall have vested with respect to one hundred percent
(100%) of such Shares. On any scheduled vesting date, vesting actually will
occur only if the Employee has been continuously employed by the Company or an
Affiliate from the Grant Date until such scheduled vesting date, or the vesting
date occurs within three (3) years following the employees termination of
service due to the Employee's Retirement. Notwithstanding the foregoing, in the
event of the Employee's Termination of Service due to death, if the right to
exercise any of the Shares specified in Paragraph 1 had not yet vested, then the
right to exercise such Shares will vest on the date of the Employee's
Termination of Service.
5. Expiration of Option. In the event of the Employee's
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Termination of Service for any reason other than Retirement, Disability, death
or for cause, the Employee may, within three (3) months after the date of such
Termination, or prior to the Expiration Date, whichever shall first occur,
exercise any vested but unexercised portion of this option. In the event of the
Employee's Termination of Service due to Disability, the Employee may, within
one (1) year after the date of such Termination, or prior to the Expiration
Date, whichever shall first occur, exercise any vested but unexercised portion
of this option. In the event of the Employee's Termination of Service due to
Retirement, the Employee may, within three (3) years from the date of such
Termination, or prior to the Expiration Date, whichever shall first occur,
exercise any vested but unexercised portion of this option. In the event of the
Employee's Termination of Service by the Company for cause (as determined by the
Company), the Employee may not exercise any portion of this option that is
unexercised on the date of such Termination.
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6. Death of Employee. In the event that the Employee
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dies while in the employ of the Company and/or an Affiliate or during the three
(3) month, three (3) year or one (1) year periods referred to in Paragraph 5
above, the Employee's designated beneficiary, or if either no beneficiary
survives the Employee or the Committee does not permit beneficiary designations,
the administrator or executor of the Employee's estate, may, within three (3)
years after the date of death, exercise any vested but unexercised portion of
the option. Any such transferee must furnish the Company (a) written notice of
his or her status as a transferee, (b) evidence satisfactory to the Company to
establish the validity of the transfer of this option and compliance with any
laws or regulations pertaining to such transfer, and (c) written acceptance of
the terms and conditions of this option as set forth in this Agreement.
7. Persons Eligible to Exercise Option. This option
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shall be exercisable during the Employee's lifetime only by the Employee. The
option shall not be transferable by the Employee, except by (a) a valid
beneficiary designation made in a form and manner acceptable to the Committee,
or (b) will or the applicable laws of descent and distribution.
8. Exercise of Option. This option may be exercised by
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the person then entitled to do so as to any Shares which may then be purchased
(a) by giving written notice of exercise to the Secretary of the Company (or his
or her designee), specifying the number of full Shares to be purchased and
accompanied by full payment of the Exercise Price (and the amount of any income
or other taxes the Company determines is required to be withheld by reason of
such exercise), and (b) by giving satisfactory assurances in writing if
requested by the Company, signed by the person exercising the option, that the
Shares to be purchased upon such exercise are being purchased for investment and
not with a view to the distribution thereof. In the absolute discretion of the
Committee, the person entitled to exercise the option may elect to satisfy the
tax-withholding requirement described in subparagraph (a) above by having the
Company withhold Shares or by delivering to the Company already-owned Shares. No
partial exercise of this option may be for less than ten (10) Share lots or
multiples thereof.
9. Suspension of Exercisability. If at any time the
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Company shall determine, in its discretion, that the listing, registration or
qualification of the Shares upon any securities exchange or under any state or
federal law, or the consent or approval of any governmental regulatory
authority, is necessary or desirable as a condition of the purchase of Shares
hereunder, this option may not be exercised, in whole or in part, unless and
until such listing, registration, qualification, consent or approval shall have
been effected or obtained free of any conditions not acceptable to the Company.
The Company shall make reasonable efforts to meet the requirements of any such
state or federal law or securities exchange and to obtain any such consent or
approval of any such governmental authority.
10. No Rights of Stockholder. Neither the Employee (nor
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any beneficiary) shall be or have any of the rights or privileges of a
stockholder of the Company in respect of any of the Shares issuable pursuant to
the exercise of this option, unless and until certificates representing such
Shares shall have been issued, recorded on the records of the Company or its
transfer agents or registrars, and delivered to the Employee (or beneficiary).
11. No Effect on Service. The Employee's employment with
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the Company and its Affiliates is on an at-will basis only. Accordingly, subject
to any written, express employment with the Employee, nothing in this Agreement
or the Plan shall confer upon the Employee any right to continue to be employed
by the Company or any Affiliate or shall interfere with or restrict in any way
the rights of the Company or the Affiliate, which are hereby expressly reserved,
to terminate the employment of the Employee at any time for any reason
whatsoever, with or without good cause. Such reservation of rights can be
modified only in an express written contract executed by a duly authorized
officer of the Company or the Affiliate employing or otherwise engaging the
Employee. For purposes of this Agreement, the transfer of the employment of the
Employee between the Company and any one of its Affiliates (or between
Affiliates) shall not be deemed a Termination of Service. Nothing herein
contained shall affect the Employee's right to participate in and receive
benefits under and in accordance with the then current provisions of any
pension, insurance or other employee welfare plan or program of the Company or
any Affiliate.
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12. Address for Notices. Any notice to be given to the
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Company under the terms of this Agreement shall be addressed to the Company, in
care of its Secretary, at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at
such other address as the Company may hereafter designate in writing.
13. Option is Not Transferable. Except as otherwise
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expressly provided herein, this option and the rights and privileges conferred
hereby may not be transferred, pledged, assigned or otherwise hypothecated in
any way (whether by operation of law or otherwise) and shall not be subject to
sale under execution, attachment or similar process. Upon any attempt to
transfer, pledge, assign, hypothecate or otherwise dispose of this option, or of
any right or privilege conferred hereby, or upon any attempted sale under any
execution, attachment or similar process, this option and the rights and
privileges conferred hereby immediately shall become null and void.
14. Maximum Term of Option. Notwithstanding any other
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provision of this Agreement except Paragraph 6 above relating to the death of
the Employee (in which case this option is exercisable to the extent set forth
therein), this option is not exercisable after the Expiration Date.
15. Binding Agreement. Subject to the limitation on the
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transferability of this option contained herein, this Agreement shall be binding
upon and inure to the benefit of the heirs, legatees, legal representatives,
successors and assigns of the parties hereto.
16. Conditions to Exercise. The Exercise Price for this
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option must be paid in the legal tender of the United States (including, in the
Committee's sole discretion, by means of a broker-assisted cashless exercise)
or, in the Committee's sole discretion, in Shares of equivalent value. Exercise
of this option will not be permitted until satisfactory arrangements have been
made for the payment of the appropriate amount of withholding taxes (as
determined by the Company). If the Employee fails to remit to the Company such
withholding amount within the time period specified by the Committee (in its
discretion), the award may be forfeited and in such case the Employee shall not
receive any of the Shares subject to this Agreement.
17. Plan Governs. This Agreement is subject to all of the
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terms and provisions of the Plan. In the event of a conflict between one or more
provisions of this Agreement and one or more provisions of the Plan, the
provisions of the Plan shall govern. Capitalized terms and phrases used and not
defined in this Agreement shall have the meaning set forth in the Plan.
18. Committee Authority. The Committee shall have all
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discretion, power, and authority to interpret the Plan and this Agreement and to
adopt such rules for the administration, interpretation and application of the
Plan as are consistent therewith. All actions taken and all interpretations and
determinations made by the Committee in good faith shall be final and binding
upon the Employee, the Company and all other interested persons, and shall be
given the maximum deference permitted by law. No member of the Committee shall
be personally liable for any action, determination or interpretation made in
good faith with respect to the Plan or this Agreement.
19. Governing Law. This Agreement shall be governed by
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and construed in accordance with the laws of the State of California, without
reference to its principles of conflicts of law.
20. Captions. The captions provided herein are for
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convenience only and are not to serve as a basis for the interpretation or
construction of this Agreement.
21. Agreement Severable. In the event that any provision
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in this Agreement shall be held invalid or unenforceable, such provision shall
be severable from, and such invalidity or unenforceability shall not be
construed to have any effect on, the remaining provisions of this Agreement.
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22. Retirement Definition and Fortifier. For purposes of
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this Agreement, Retirement shall mean an employee's voluntary termination of
employment at age 65 or above, or at age 55 with a minimum of 10 years
employment with the Company, provided, however, that in the event employee
commences employment with a company which competes with the Company in any of
Company's business, including but not limited to, equipment, software or other
products for the treatment of cancer, X-ray tubes, flat panel imaging devices
and industrial X-ray imaging devices, Company may, in its sole discretion,
terminate this Agreement, including the vesting of any options or other grants
which remain unvested as of the date employee commences employment with the
competitive company.
23. Modifications to the Agreement. This Agreement
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constitutes the entire understanding of the parties on the subjects covered. The
Employee expressly warrants that he or she is not executing this Agreement in
reliance on any promises, representations, or inducements other than those
contained herein. Modifications to this Agreement or the Plan can be made only
in an express written contract executed by a duly authorized officer of the
Company.
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