EXHIBIT 99.2
VARIAN MEDICAL SYSTEMS, INC.
2005 OMNIBUS STOCK PLAN
NON-EMPLOYEE DIRECTOR
NONQUALIFIED STOCK OPTION AGREEMENT
Varian Medical Systems, Inc. (the "Company") hereby grants you, [NAME]
(the "Director"), 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 [GRANT DATE] (the "Grant Date"). In
general, the latest date this option will expire is [EXPIRATION DATE] (the
"Expiration Date"). However, as provided in the attached Non-Employee Director,
Terms and Conditions of Nonqualified Stock Option ("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: $
SCHEDULED VESTING DATE: NUMBER OF SHARES*:
*Shares vest in 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 due to Disability 3 years
Termination of Service due to Retirement 3 years
Termination of Service due to death 3 years
Termination of Service due to completion
of term as Director 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 Director).
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
CONTAIN 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. DIRECTOR
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Vice President, Human Resources [DIRECTOR NAME]
APPENDIX A
Non-Employee Director
TERMS AND CONDITIONS OF NONQUALIFIED STOCK OPTION
1. Grant of Option. The Company hereby grants to the Director under the
Plan, as a separate incentive in connection with his or her service and not in
lieu of any 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 [NO. OF SHARES] Shares. This option
is not intended to qualify as an "incentive stock option" under Section 422 of
the Internal Revenue Code of 1986, as amended.
2. Exercise Price. The purchase price per Share for this option (the
"Exercise Price") shall be $[XXXXX XXXXX].
3. Number of Shares. The number and class of Shares specified in
Paragraph 1 above, and/or the Exercise Price, are subject to adjustment by the
Board of Directors of the Company (the "Board") 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.
4. Vesting Schedule. The right to exercise this option is scheduled to
vest fully as of the Grant Date.
5. Expiration of Option. In the event of the Director's Termination of
Service for any reason other than Disability, Retirement, completion of term as
a Director or death, the Director may, within three (3) months after the date of
such Termination, or prior to the Expiration Date, whichever shall first occur,
exercise this option. In the event of the Director's Termination of Service due
to Disability, or completion of term as a Director, Retirement, the Director
may, within three (3) years after the date of such Termination, or prior to the
Expiration Date, whichever shall first occur, exercise this option.
6. Death of Director. In the event that the Director dies while in the
employ of the Company or during the one (1) month, three (3) month or three (3)
year periods referred to in Paragraph 5 above, the Director's designated
beneficiary, or if either no beneficiary survives the Director or the Board does
not permit beneficiary designations, the administrator or executor of the
Director's estate, may, within three (3) years after the date of death, exercise
this 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 shall be exercisable
during the Director's lifetime only by the Director. The option shall not be
transferable by the Director, except by (a) a valid beneficiary designation made
in a form and manner acceptable to the Board, or (b) will or the applicable laws
of descent and distribution.
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8. Exercise of Option. This option may be exercised by 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 Board, 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 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 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 Director (nor 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 Director (or beneficiary).
11. No Effect on Service. 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).
12. Address for Notices. Any notice to be given to the Company under the
terms of this Agreement shall be addressed to the Company, in care of its
Secretary at 0000 Xxxxxx Xxx, Xxxx Xxxx, Xxxxxxxxxx 00000, or at such other
address as the Company may hereafter designate in writing.
13. Option is Not Transferable. Except as otherwise 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 provision of this
Agreement except paragraph 6 above relating to the death of the Director (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 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.
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16. Conditions to Exercise. The Exercise Price for this option must be
paid in the legal tender of the United States (including, in the Board's sole
discretion, by means of a broker-assisted cashless exercise) or, in the Board's
sole discretion, in Shares of equivalent value that (a) were previously issued
to the Director and (b) have been held by the Director for at least six (6)
months prior thereto. 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 Director
fails to remit to the Company such withholding amount within the time period
specified by the Board (in its discretion), the award may be forfeited and in
such case the Director shall not receive any of the Shares subject to this
Agreement.
17. Plan Governs. This Agreement is subject to all of the 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. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California, without reference to its
principles of conflicts of law.
19. Board Authority. The Board shall have all 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 Board in good faith shall be final and binding upon the Director, the
Company and all other interested persons, and shall be given the maximum
deference permitted by law. No member of the Board shall be personally liable
for any action, determination or interpretation made in good faith with respect
to the Plan or this Agreement.
20. Captions. The captions provided herein are for 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 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.
22. Modifications to the Agreement. This Agreement constitutes the
entire understanding of the parties on the subjects covered. The Director
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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