Item 5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
On November 25, 2020, Varian Medical Systems, Inc., a Delaware corporation
("Varian"), entered into letter agreements with each of J. Michael Bruff,
Varian's Chief Financial Officer, and Christopher A. Toth, Varian's President
and Chief Operating Officer, that provide, subject to the potential repayment
obligations described below, for (1) accelerated vesting of all unvested stock
options held by each of Messrs. Bruff and Toth, (2) exercise of all stock
options held by each of Messrs. Bruff and Toth, (3) accelerated vesting of a
portion of the restricted stock units held by Mr. Toth, (4) a cash payment to
each of Messrs. Bruff and Toth equal to such executive officer's target
long-term incentive target amount, in lieu of grant of an annual equity
compensation award for Varian's 2021 fiscal year, and (5) removal of the
provision of the Change in Control Agreements between Varian and each of Messrs.
Bruff and Toth that would provide for a payment reduction, rather than a tax
equalization payment, if Mr. Bruff or Mr. Toth, as applicable, receives payments
subject to the golden parachute excise tax that do not exceed 110% of the
maximum amount payable without triggering the golden parachute excise tax.
These actions are intended, by accelerating tax realization events into the 2020
calendar year, to reduce or eliminate golden parachute excise taxes and
resulting equalization payments that could become payable by Varian in
connection with the consummation of the transactions contemplated by the
Agreement and Plan of Merger, dated as of August 2, 2020, by and among Varian,
Siemens Healthineers Holding I GmbH, Falcon Sub Inc., and, with respect to
certain provisions, Siemens Medical Solutions USA, Inc. The letter agreements
provide that if Mr. Bruff's or Mr. Toth's, as applicable, employment is
terminated by Varian for cause or if Mr. Bruff or Mr. Toth, as applicable,
voluntarily terminates employment prior to the date upon which the right to the
accelerated amount of compensation would have otherwise vested, such executive
officer will generally be required to pay to Varian the then-current value of
the after-tax proceeds that would not have ultimately been realized absent the
accelerations.
The foregoing description of the letter agreements does not purport to be
complete and is qualified in its entirety by reference to the text of each of
the agreements, copies of which are filed as Exhibits 10.1 and 10.2,
respectively, to this Current Report on Form 8-K and incorporated by reference
herein.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
10.1 Letter Agreement between Varian Medical Systems, Inc. and J. Michael
Bruff, effective as of November 25, 2020
10.2 Letter Agreement between Varian Medical Systems, Inc. and Christopher A.
Toth, effective as of November 25, 2020
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