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Exhibit 10.17
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DEFERRED COMPENSATION PLAN
VARIAN MEDICAL SYSTEMS, INC.
MASTER PLAN DOCUMENT
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EFFECTIVE SEPTEMBER 30, 2000
(PRINTED NOVEMBER 1, 2000)
COPYRIGHT (C) 2000
BY WESTPORT WORLDWIDE, LLC
ALL RIGHTS RESERVED
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TABLE OF CONTENTS
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Purpose..................................................................................................... 1
ARTICLE 1 Definitions............................................................................ 1
ARTICLE 2 Selection, Enrollment, Eligibility..................................................... 7
2.1 Selection by Committee................................................................. 7
2.2 Enrollment Requirements................................................................ 7
2.3 Eligibility; Commencement of Participation............................................. 7
2.4 Termination of Participation and/or Deferrals.......................................... 7
ARTICLE 3 Deferral Commitments/Company Matching/Crediting/Taxes.................................. 9
3.1 Minimum Deferral....................................................................... 10
3.2 Maximum Deferral...................................................................... 10
3.3 Election to Defer; Effect of Election Form............................................ 11
3.4 Withholding of Annual Deferral Amounts................................................ 11
3.5 Annual Company Contribution Amount.................................................... 11
3.6 Annual Company Matching Account....................................................... 11
3.7 Investment of Trust Assets............................................................. 11
3.8 Vesting................................................................................ 12
3.9 Crediting/Debiting of Account Balances................................................. 12
3.10 FICA and Other Taxes................................................................... 14
3.11 Distributions.......................................................................... 15
3.12 Deferrals from Other Plans..............................................................15
3.13 Prior Plan..............................................................................15
ARTICLE 4 Short-Term Payout; Unforeseeable Financial Emergencies; Withdrawal Election............ 16
4.1 Short-Term Payout...................................................................... 16
4.2 Other Benefits Take Precedence Over Short-Term Payout.................................. 16
4.3 Withdrawal Payout/Suspensions for Unforeseeable Financial Emergencies.................. 16
4.4 Withdrawal Election.................................................................... 17
ARTICLE 5 Retirement Benefit..................................................................... 17
5.1 Retirement Benefit..................................................................... 17
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5.2 Payment of Retirement Benefit.......................................................... 17
5.3 Death Prior to Completion of Retirement Benefit........................................ 18
ARTICLE 6 Pre-Retirement Survivor Benefit........................................................ 18
6.1 Pre-Retirement Survivor Benefit........................................................ 18
6.2 Payment of Pre-Retirement Survivor Benefit............................................. 18
ARTICLE 7 Termination Benefit.................................................................... 19
7.1 Termination Benefit.................................................................... 19
7.2 Payment of Termination Benefit......................................................... 19
ARTICLE 8 Disability Waiver and Benefit.......................................................... 19
8.1 Disability Waiver...................................................................... 19
8.2 Continued Eligibility; Disability Benefit.............................................. 20
ARTICLE 9 Beneficiary Designation................................................................ 20
9.1 Beneficiary............................................................................ 20
9.2 Beneficiary Designation; Change; Spousal Consent....................................... 20
9.3 Acknowledgment......................................................................... 20
9.4 No Beneficiary Designation............................................................. 20
9.5 Doubt as to Beneficiary................................................................ 20
9.6 Discharge of Obligations............................................................... 21
ARTICLE 10 Leave of Absence....................................................................... 21
10.1 Paid Leave of Absence.................................................................. 21
10.2 Unpaid Leave of Absence................................................................ 21
ARTICLE 11 Termination, Amendment or Modification................................................. 21
11.1 Termination............................................................................ 21
11.2 Amendment.............................................................................. 22
11.3 Plan Agreement......................................................................... 22
11.4 Effect of Payment...................................................................... 22
ARTICLE 12 Administration......................................................................... 22
12.1 Committee Duties....................................................................... 22
12.2 Agents................................................................................. 23
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12.3 Binding Effect of Decisions............................................................ 23
12.4 Indemnity of Committee................................................................. 23
12.5 Employer Information................................................................... 23
ARTICLE 13 Other Benefits and Agreements.......................................................... 23
13.1 Coordination with Other Benefits....................................................... 23
ARTICLE 14 Claims Procedures...................................................................... 23
14.1 Presentation of Claim.................................................................. 24
14.2 Notification of Decision............................................................... 24
14.3 Review of a Denied Claim............................................................... 24
14.4 Decision on Review..................................................................... 24
14.5 Legal Action........................................................................... 25
ARTICLE 15 Trust.................................................................................. 25
15.1 Establishment of the Trust............................................................. 25
15.2 Interrelationship of the Plan and the Trust............................................ 25
15.3 Distributions from the Trust........................................................... 25
ARTICLE 16 Miscellaneous.......................................................................... 25
16.1 Status of Plan......................................................................... 25
16.2 Unsecured General Creditor............................................................. 26
16.3 Employer's Liability................................................................... 26
16.4 Nonassignability....................................................................... 26
16.5 Not a Contract of Employment........................................................... 26
16.6 Furnishing Information................................................................. 26
16.7 Terms.................................................................................. 26
16.8 Captions............................................................................... 27
16.9 Governing Law.......................................................................... 27
16.10 Notice................................................................................. 27
16.11 Successors............................................................................. 27
16.12 Spouse's Interest...................................................................... 27
16.13 Validity............................................................................... 27
16.14 Incompetent............................................................................ 27
16.15 Court Order............................................................................ 28
16.16 Distribution in the Event of Taxation.................................................. 28
16.17 Insurance.............................................................................. 28
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16.18 Legal Fees To Enforce Rights After Change in Control................................... 28
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VARIAN MEDICAL SYSTEMS, INC.
DEFERRED COMPENSATION PLAN
Effective September 30, 2000
PURPOSE
The purpose of this Plan is to provide specified benefits to a select
group of management and highly compensated Employees and Directors who
contribute materially to the continued growth, development and future business
success of Varian Medical Systems, Inc. (the "Employer"), a Delaware
corporation, and its subsidiaries, if any, that sponsor this Plan. This Plan
shall be unfunded for tax purposes and for purposes of Title I of ERISA.
ARTICLE 1
DEFINITIONS
For purposes of this Plan, unless otherwise clearly apparent from the
context, the following phrases or terms shall have the following indicated
meanings:
1.1 "Account Balance" shall mean, with respect to a Participant, a credit
on the records of the Employer equal to the sum of (i) the Deferral
Account balance, (ii) the vested Company Contribution Account balance
and (iii) the Company Matching Account balance. The Account Balance,
and each other specified account balance, shall be a bookkeeping entry
only and shall be utilized solely as a device for the measurement and
determination of the amounts to be paid to a Participant, or his or her
designated Beneficiary, pursuant to this Plan.
1.2 "Annual Company Contribution Amount" shall mean, for any one
Plan Year, the amount determined in accordance with Section 3.5.
1.3 "Annual Company Matching Amount" for any one Plan Year shall be the
amount determined in accordance with Section 3.6.
1.4 "Annual Deferral Amount" shall mean that portion of a Participant's
Base Annual Salary, Incentive Payments, Directors Fees,
plus amounts deferred, if any, pursuant to Section 3.12, that a
Participant elects to have, and is deferred, in accordance with Article
3, for any one Plan Year. In the event of a Participant's Retirement,
Disability (if deferrals cease in accordance with Section 8.1), death
or a Termination of Employment prior to the end of a Plan Year, such
year's Annual Deferral Amount shall be the actual amount withheld prior
to such event.
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1.5 "Base Annual Salary" shall mean the annual cash compensation
relating to services performed during any calendar year, whether or not
paid in such calendar year or included on the Federal Income Tax Form
W-2 for such calendar year, excluding bonuses, commissions, overtime,
fringe benefits, stock options, relocation expenses, incentive
payments, non-monetary awards, Directors Fees and other fees,
automobile and other allowances paid to a Participant for employment
services rendered (whether or not such allowances are included in the
Employee's gross income). Base Annual Salary shall be calculated after
reduction for compensation voluntarily deferred or contributed by the
Participant pursuant to all qualified or non-qualified plans of the
Employer and shall be calculated to exclude amounts not otherwise
included in the Participant's gross income under Code Sections 125,
402(e)(3), 402(h), or 403(b) pursuant to plans established by the
Employer.
1.6 "Beneficiary" shall mean one or more persons, trusts, estates or
other entities, designated in accordance with Article 9, that are
entitled to receive benefits under this Plan upon the death of a
Participant.
1.7 "Beneficiary Designation Form" shall mean the form established
from time to time by the Committee that a Participant completes, signs
and returns to the Committee to designate one or more Beneficiaries.
1.8 "Board" shall mean the board of directors of the Company.
1.9 "Change in Control" shall be deemed to have occurred if:
(a) Any individual or group constituting a "person" , as
such term is used in Sections 13(d) and 14(d)(2) of the
Exchange Act (other than (A) the Company or any of its
subsidiaries or (B) any trustee or other fiduciary holding
securities under an employee benefit plan of the Company or of
any of its subsidiaries), is or becomes the beneficial owner,
directly or indirectly, of securities of the Company
representing thirty percent (30%) or more of the combined
voting power of the Company's outstanding securities then
entitled ordinarily (and apart from rights accruing under
special circumstances) to vote for the election of Directors;
or
(b) Continuing Directors cease to constitute at least a majority
of the Board; or
(c) there occurs a reorganization, merger, consolidation or
other corporate transaction involving the Company (a
"Transaction"), in each case with respect to which the
stockholders of the Company immediately prior to such
Transaction do not, immediately after the Transaction, own
more than 50% of the combined voting power of the Company or
other corporation resulting from such Transaction; or
(d) all or substantially all of the assets of the Company are
sold, liquidated or distributed; provided however, that a
"Change in Control" shall not be deemed to have occurred
under this Plan if, prior to the occurrence of a specified
event that would otherwise constitute a Change in Control
hereunder, the disinterested Continuing Directors then in
office, by a majority vote thereof, determine that the
occurrence of such specified event
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shall not be deemed to be a Change in Control with respect
to an Employee hereunder if the Change in Control results
from actions or events in which an Employee is a participant
in a capacity other than solely as an officer, employee or
Director of the Company.
1.10 "Claimant" shall have the meaning set forth in Section 14.1.
1.11 "Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
1.12 "Committee" shall mean the committee described in Section 12.1.
1.13 "Company" shall mean Varian Medical Systems, Inc. a Delaware
corporation, and any successor to all or substantially all of the
Company's assets or business.
1.14 "Company Contribution Account" shall mean (i) the sum of the
Participant's Annual Company Contribution Amounts, plus (ii) amounts
credited in accordance with all the applicable crediting provisions of
this Plan that relate to the Participant's Company Contribution
Account, less (iii) all distributions made to the Participant or his or
her Beneficiary pursuant to this Plan that relate to the Participant's
Company Contribution Account.
1.15 "Company Matching Account" shall mean (i) the sum of all of a
Participant's Annual Company Matching Amounts, plus (ii) amounts
credited in accordance with all the applicable crediting provisions of
this Plan that relate to the Participant's Company Matching Account,
less (iii) all distributions made to the Participant or his or her
Beneficiary pursuant to this Plan that relate to the Participant's
Company Matching Account.
1.16 "Continuing Directors" shall mean the Directors of the Company in
office on the date hereof and any successor to any such Director who
was nominated or selected by a majority of the Continuing Directors in
office at the time of the Director's nomination or selection and who is
not an "affiliate" or "associate" (as defined in Regulation12B under
the Exchange Act) of any person who is the beneficial owner, directly
or indirectly, of securities representing ten percent (10%) or more of
the combined voting power of the Company's outstanding securities then
entitled ordinarily to vote for the election of Directors.
1.17 "Deduction Limitation" shall mean the following described
limitation on a benefit that may otherwise be distributable pursuant to
the provisions of this Plan. Except as otherwise provided, this
limitation shall be applied to all distributions that are "subject to
the Deduction Limitation" under this Plan. If the Employer determines
in good faith prior to a Change in Control that there is a reasonable
likelihood that any compensation paid to a Participant for a taxable
year of the Employer would not be deductible by the Employer solely by
reason of the limitation under Code Section 162(m), then to the extent
deemed necessary by the Employer to ensure that the entire amount of
any distribution to the Participant pursuant to this Plan prior to the
Change in Control is deductible, the Employer may defer all or any
portion of a distribution under this Plan. Any amounts deferred
pursuant to this limitation shall continue to be credited/debited with
additional amounts in accordance with Section 3.9 below, even if such
amount is
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being paid out in installments. The amounts so deferred and
amounts credited thereon shall be distributed to the Participant or his
or her Beneficiary (in the event of the Participant's death) at the
earliest possible date, as determined by the Employer in good faith, on
which the deductibility of compensation paid or payable to the
Participant for the taxable year of the Employer during which the
distribution is made will not be limited by Section 162(m), or if
earlier, the effective date of a Change in Control. Notwithstanding
anything to the contrary in this Plan, the Deduction Limitation shall
not apply to any distributions made after a Change in Control.
1.18 "Deferral Account" shall mean (i) the sum of all of a
Participant's Annual Deferral Amounts, plus (ii) amounts credited in
accordance with all the applicable crediting provisions of this Plan
that relate to the Participant's Deferral Account, less (iii) all
distributions made to the Participant or his or her Beneficiary
pursuant to this Plan that relate to his or her Deferral Account.
1.19 "Director" shall mean any member of the Board.
1.20 "Directors Fees" shall mean the fees paid by the Employer,
including retainer fees and meetings fees, as compensation for serving
on the Board.
1.21 "Disability" shall mean a period of disability during which a
Participant qualifies for permanent disability benefits under the
Participant's Employer's long-term disability plan, or, if a
Participant does not participate in such a plan, a period of disability
during which the Participant would have qualified for permanent
disability benefits under such a plan had the Participant been a
participant in such a plan, as determined in the sole discretion of the
Committee. If the Participant's Employer does not sponsor such a plan,
or discontinues to sponsor such a plan, Disability shall be determined
by the Committee in its sole discretion.
1.22 "Disability Benefit" shall mean the benefit set forth in Article 8.
1.23 "Election Form" shall mean the form established from time to time
by the Committee that a Participant completes, signs and returns to the
Committee to make an election under the Plan.
1.24 "Employee" shall mean a person who is an employee of the Employer.
1.25 "Employer" shall mean the Company and/or any of its subsidiaries
(now in existence or hereafter formed or acquired) that have been
selected by the Board to participate in the Plan and have adopted the
Plan as a sponsor.
1.26 "ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time.
1.27 "First Plan Year" shall mean the period beginning September 30, 2000
and ending December 31, 2000.
1.28 "401(k) Plan" shall be that certain Varian Medical Systems, Inc.
Retirement Plan, dated October 2, 1999 adopted by the Company.
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1.29 "Incentive Payments" shall mean any compensation paid to a
participant under the Management Incentive Plan, Employee Incentive
Plan or any Marketing, Sales or Service Incentive Plan, relating to
services performed during any calendar year, whether or not paid in
such calendar year or included on the Federal Income Tax Form W-2 for
such calendar year.
1.30 "Maximum 401(k) Amount" with respect to a Participant, shall be
the maximum amount of elective contributions that can be made by such
Participant, consistent with Code Section 402(g) and the limitations of
Code Section 401(k)(3), for a given plan year under the 401(k) Plan.
1.31 "Participant" shall mean any Employee or Director (i) who is
selected to participate in the Plan, (ii) who elects to participate in
the Plan, (iii) who signs a Plan Agreement, an Election Form and a
Beneficiary Designation Form, (iv) whose signed Plan Agreement,
Election Form and Beneficiary Designation Form are accepted by the
Committee, (v) who commences participation in the Plan, and (vi) whose
Plan Agreement has not terminated. A spouse or former spouse of a
Participant shall not be treated as a Participant in the Plan or have
an Account Balance under the Plan, even if he or she has an interest in
the Participant's benefits under the Plan as a result of applicable law
or property settlements resulting from legal separation or divorce.
1.32 "Plan" shall mean the Company's Deferred Compensation Plan, which
shall be evidenced by this instrument and by each Plan Agreement, as
they may be amended from time to time.
1.33 "Plan Agreement" shall mean a written agreement, as may be
amended from time to time, which is entered into by and between the
Employer and a Participant. Each Plan Agreement executed by a
Participant and the Employer shall provide for the entire benefit to
which such Participant is entitled under the Plan; should there be more
than one Plan Agreement, the Plan Agreement bearing the latest date of
acceptance by the Employer shall supersede all previous Plan Agreements
in their entirety and shall govern such entitlement. The terms of any
Plan Agreement may be different for any Participant, and any Plan
Agreement may provide additional benefits not set forth in the Plan or
limit the benefits otherwise provided under the Plan; provided,
however, that any such additional benefits or benefit limitations must
be agreed to by both the Employer and the Participant.
1.34 "Plan Year" shall, except for the First Plan Year, mean a period
beginning on January 1 of each calendar year and continuing through
December 31 of such calendar year.
1.35 "Pre-Retirement Survivor Benefit" shall mean the benefit set forth in
Article 6.
1.36 "Retirement", "Retire(s)" or "Retired" shall mean, with respect
to an Employee, severance from employment from the Employer for any
reason other than a leave of absence, death or Disability on or after
the earlier of the attainment of (a) age sixty-five (65) or (b) age
fifty-five (55) with ten (10) Years of Service; and shall mean with
respect to a Director who is not an Employee, severance of his or her
directorships with the Employer on or after the later of (a) the
attainment of age seventy (70), or (b) in the sole discretion of the
Committee, an age later than age seventy (70). If a
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Participant is both an Employee and a Director, Retirement shall not
occur until he or she Retires as both an Employee and a Director,
which Retirement shall be deemed to be a Retirement as a Director;
provided, however, that such a Participant may elect, at least three
years prior to Retirement and in accordance with the policies and
procedures established by the Committee, to Retire for purposes of
this Plan at the time he or she Retires as an Employee, which
Retirement shall be deemed to be a Retirement as an Employee.
1.37 "Retirement Benefit" shall mean the benefit set forth in Article 5.
1.38 "Short-Term Payout" shall mean the payout set forth in Section 4.1.
1.39 "Termination Benefit" shall mean the benefit set forth in Article 7.
1.40 "Termination of Employment" shall mean the severing of employment
with the Employer, or service as a Director of the Employer,
voluntarily or involuntarily, for any reason other than Retirement,
Disability, death or an authorized leave of absence. If a Participant
is both an Employee and a Director, a Termination of Employment shall
occur only upon the termination of the last position held; provided,
however, that such a Participant may elect, at least three years before
Termination of Employment and in accordance with the policies and
procedures established by the Committee, to be treated for purposes of
this Plan as having experienced a Termination of Employment at the time
he or she ceases employment with the Employer as an Employee.
1.41 "Trust" shall mean one or more trusts established pursuant to
that certain Master Trust Agreement, dated as of September 30, 2000
between the Company and the trustee named therein, as amended from time
to time.
1.42 "Unforeseeable Financial Emergency" shall mean an unanticipated
emergency that is caused by an event beyond the control of the
Participant that would result in severe financial hardship to the
Participant resulting from (i) a sudden and unexpected illness or
accident of the Participant or a dependent of the Participant, (ii) a
loss of the Participant's property due to casualty, or (iii) such other
extraordinary and unforeseeable circumstances arising as a result of
events beyond the control of the Participant, all as determined in the
sole discretion of the Committee.
1.43 "Yearly Installment Method" shall be a yearly installment payment
over the number of years selected by the Participant in accordance with
this Plan, calculated as follows: The Account Balance of the
Participant shall be calculated as of the close of business on the last
business day of the year. The yearly installment shall be calculated by
multiplying this balance by a fraction, the numerator of which is one,
and the denominator of which is the remaining number of yearly payments
due the Participant. By way of example, if the Participant elects a 10
year Yearly Installment Method, the first payment shall be 1/10 of the
Account Balance, calculated as described in this definition. The
following year, the payment shall be 1/9 of the Account Balance,
calculated as described in this definition. Each yearly installment
shall be paid on or as soon as practicable after the last business day
of the applicable year.
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1.44 "Years of Service" shall mean the total number of full years in
which a Participant has been employed by one or more Employers. For
purposes of this definition, a year of employment shall be a 365 day
period (or 366 day period in the case of a leap year) that, for the
first year of employment, commences on the Employee's date of hiring
and that, for any subsequent year, commences on an anniversary of that
hiring date. Any partial year of employment shall not be counted.
ARTICLE 2
SELECTION, ENROLLMENT, ELIGIBILITY
2.1 SELECTION BY COMMITTEE. Participation in the Plan shall be
limited to a select group of management and highly compensated
Employees and Directors of the Employer, as determined by the Committee
in its sole discretion. From that group, the Committee shall select, in
its sole discretion, Employees and Directors to participate in the
Plan.
2.2 ENROLLMENT REQUIREMENTS. As a condition to participation, each
selected Employee or Director shall complete, execute and return to the
Committee a Plan Agreement, an Election Form and a Beneficiary
Designation Form, all within 30 days after he or she is selected to
participate in the Plan. In addition, the Committee shall establish
from time to time such other enrollment requirements as it determines
in its sole discretion are necessary.
2.3 ELIGIBILITY; COMMENCEMENT OF PARTICIPATION. Provided an Employee
or Director selected to participate in the Plan has met all enrollment
requirements set forth in this Plan and required by the Committee,
including returning all required documents to the Committee within the
specified time period, that Employee or Director shall commence
participation in the Plan on the first day of the month following the
month in which the Employee or Director completes all enrollment
requirements. If an Employee or a Director fails to meet all such
requirements within the period required, in accordance with Section
2.2, that Employee or Director shall not be eligible to participate in
the Plan until the first day of the Plan Year following the delivery to
and acceptance by the Committee of the required documents.
2.4 TERMINATION OF PARTICIPATION AND/OR DEFERRALS. If the Committee
determines in good faith that a Participant no longer qualifies as a
member of a select group of management or highly compensated employees,
as membership in such group is determined in accordance with Sections
201(2), 301(a)(3) and 401(a)(1) of ERISA, the Committee shall have the
right, in its sole discretion, to (i) terminate any deferral election
the Participant has made for the remainder of the Plan Year in which
the Participant's membership status changes, (ii) prevent the
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Participant from making future deferral elections and/or (iii)
immediately distribute the Participant's then Account Balance as a
Termination Benefit and terminate the Participant's participation in
the Plan.
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ARTICLE 3
DEFERRAL COMMITMENTS/COMPANY MATCHING/CREDITING/TAXES
3.1 MINIMUM DEFERRALS.
(a) BASE ANNUAL SALARY, INCENTIVE PAYMENTS, DIRECTORS FEES,
STOCK OPTION GAIN. For each Plan Year, a Participant may elect
to defer, as his or her Annual Deferral Amount, Base Annual
Salary, Incentive Payments, Directors Fees (in the case of a
Participant who is also a Director), and/or stock option gain,
if any, in the following minimum amounts for each deferral
elected:
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MINIMUM
DEFERRAL AMOUNT
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Base Annual Salary $2,000
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Incentive Payments $2,000
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Directors Fees $ 0
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Stock Option Gain $20,000
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If an election is made for less than stated minimum amounts,
or if no election is made, the amount deferred shall be zero.
(b) SHORT PLAN YEAR. Notwithstanding the foregoing, if a
Participant first becomes a Participant after the first day of
a Plan Year, or in the case of the First Plan Year of the Plan
itself, the minimum Base Annual Salary deferral shall be an
amount equal to the minimum set forth above, multiplied by a
fraction, the numerator of which is the number of complete
months remaining in the Plan Year and the denominator of which
is 12.
Notwithstanding anything in this Plan to the contrary, deferrals of
stock option gains may only take place after the Committee has
determined to permit Participants to make such deferrals to this Plan.
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3.2 MAXIMUM DEFERRAL
(a) BASE ANNUAL SALARY, INCENTIVE PAYMENTS, DIRECTORS FEES,
STOCK OPTION GAIN. For each Plan Year, a Participant may elect
to defer, as his or her Annual Deferral Amount, Base Annual
Salary, Incentive Payments, Directors Fees (in the case of a
Participant who is also a Director) and/or stock option gain,
if any, up to the following maximum percentages for each
deferral elected:
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MAXIMUM
DEFERRAL AMOUNT
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Base Annual Salary 75%
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Incentive Payments 100%
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Directors Fees 100%
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Stock Option Gain 100%
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(b) Notwithstanding the foregoing, if a Participant first
becomes a Participant after the first day of a Plan Year, or
in the case of the First Plan Year of the Plan itself, the
maximum Annual Deferral Amount, with respect to Base Annual
Salary, Incentive Payments, Directors Fees and/or stock option
gain, if any, shall be limited to the amount of compensation
not yet earned by the Participant as of the date the
Participant submits a Plan Agreement and Election Form to the
Committee for acceptance. The preceding sentence is not
intended to limit any deferral accepted under other
arrangements sponsored by the Company pursuant to Section
3.12.
Notwithstanding anything in this Plan to the contrary, deferrals of
stock option gains may only take place after the Committee has
determined to permit Participants to make such deferrals to this Plan.
3.3 ELECTION TO DEFER; EFFECT OF ELECTION FORM.
(a) FIRST PLAN YEAR. In connection with a Participant's
commencement of participation in the Plan, the Participant
shall make an irrevocable deferral election for the Plan Year
in which the Participant commences participation in the Plan,
along with such other elections as the Committee deems
necessary or desirable under the Plan. For these elections to
be valid, the Election Form must be completed and signed by
the Participant, timely delivered to the Committee (in
accordance with Section 2.2 above) and accepted by the
Committee.
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(b) SUBSEQUENT PLAN YEARS. For each succeeding Plan Year, an
irrevocable deferral election for that Plan Year, and such
other elections as the Committee deems necessary or
desirable under the Plan, shall be made by timely delivering
to the Committee, in accordance with its rules and
procedures, before the end of the Plan Year preceding the
Plan Year for which the election is made, a new Election
Form. If no such Election Form is timely delivered for a
Plan Year, the Annual Deferral Amount shall be zero for that
Plan Year.
3.4 WITHHOLDING OF ANNUAL DEFERRAL AMOUNTS. For each Plan Year, the
Base Annual Salary portion of the Annual Deferral Amount shall be
withheld from each regularly scheduled Base Annual Salary payroll in
equal amounts, as adjusted from time to time for increases and
decreases in Base Annual Salary. The Incentive Payments and/or
Directors Fees portion of the Annual Deferral Amount shall be withheld
at the time the Incentive Payments or Directors Fees are or otherwise
would be paid to the Participant, whether or not this occurs during the
Plan Year itself.
3.5 ANNUAL COMPANY CONTRIBUTION AMOUNT. For each Plan Year, an
Employer, in its sole discretion, may, but is not required to, credit
any amount it desires to any Participant's Company Contribution Account
under this Plan, which amount shall be for that Participant the Annual
Company Contribution Amount for that Plan Year. The amount so credited
to a Participant may be smaller or larger than the amount credited to
any other Participant, and the amount credited to any Participant for a
Plan Year may be zero, even though one or more other Participants
receive an Annual Company Contribution Amount for that Plan Year. The
Annual Company Contribution Amount, if any, shall be credited as of the
last day of the Plan Year. If a Participant is not employed by the
Employer as of the last day of a Plan Year other than by reason of his
or her Retirement or death while employed, the Annual Company
Contribution Amount for that Plan Year shall be zero.
3.6 ANNUAL COMPANY MATCHING AMOUNT. A Participant's Annual Company
Matching Amount for any Plan Year shall be equal to 6% of the
Participant's Base Annual Salary and/or the applicable Incentive
Payments that are earned for such Plan Year, reduced by the amount of
any matching contributions that would be made to the 401(k) Plan on his
or her behalf for the plan year of the 401(k) Plan that corresponds to
the Plan Year if the Participant had contributed the Maximum 401(k)
Amount for that Plan Year. If a Participant is not employed by the
Employer, or is no longer providing services as a Director, as of the
last day of the calendar quarter of a Plan Year other than by reason of
his or her Retirement or death, the Annual Company Matching Amount for
such calendar quarter of the Plan Year shall be zero. In the event of
Retirement or death, a Participant shall be credited with the Annual
Company Matching Amount for the calendar quarter of the Plan Year in
which he or she Retires or dies. The Annual Company Matching Amount
shall be credited as of the close of business on the last business day
of each calendar quarter of the Plan Year to which it relates.
3.7 INVESTMENT OF TRUST ASSETS. The trustee of the Trust shall be
authorized, upon written instructions received from the Committee or
investment manager appointed by the Committee, to invest and reinvest
the assets of
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the Trust in accordance with the applicable Master Trust
Agreement, including the disposition of stock and reinvestment of the
proceeds in one or more investment vehicles designated by the
Committee.
3.8 VESTING
(a) A Participant shall at all times be 100% vested in his or her
Deferral Account.
(b) A Participant shall at all times be 100% vested in his
or her Company Contribution Account unless a vesting schedule
is approved and documented by the Committee at the time the
Annual Company Contribution Amount is credited to the
Participant's Company Contribution Account for that Plan Year.
(c) A Participant shall at all times be 100% vested in his or her
Company Matching Account.
(d) Notwithstanding anything to the contrary contained in
this Section 3.8, in the event of a Change in
Control, a Participant's Company Contribution Account shall
immediately become 100% vested (if it is not already vested in
accordance with a vesting schedule).
3.9 CREDITING/DEBITING OF ACCOUNT BALANCES. In accordance with, and
subject to, the rules and procedures that are established from time to
time by the Committee, in its sole discretion, amounts shall be
credited or debited to a Participant's Account Balance in accordance
with the following rules:
(a) ELECTION OF MEASUREMENT FUNDS. A Participant, in connection
with his or her initial deferral election in accordance
with Section 3.3(a) above, shall elect, on the Election
Form, one or more Measurement Fund(s) (as described in
Section 3.9(c) below) to be used to determine the additional
amounts to be credited to his or her Account Balance for the
first calendar month or portion thereof in which the
Participant commences participation in the Plan and
continuing thereafter for each subsequent calendar month in
which the Participant participates in the Plan, unless
changed in accordance with the next sentence. Commencing
with the first calendar month that follows the Participant's
commencement of participation in the Plan and continuing
thereafter for each subsequent calendar month in which the
Participant participates in the Plan, no later than the next
to last business day of the calendar month, the Participant
may (but is not required to) elect, by submitting an
Election Form to the Committee that is accepted by the
Committee, to add or delete one or more Measurement Fund(s)
to be used to determine the additional amounts to be
credited to his or her Account Balance, or to change the
portion of his or her Account Balance allocated to each
previously or newly elected Measurement Fund. If an election
is made in accordance with the previous sentence, it shall
apply to the next calendar month and continue thereafter for
each subsequent calendar month in which the Participant
participates in the Plan, unless changed in accordance with
the previous sentence.
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(b) PROPORTIONATE ALLOCATION. In making any election described
in Section 3.9(a) above, the Participant shall specify on
the Election Form, in increments of five percentage points
(5%), the percentage of his or her Account Balance to be
allocated to a Measurement Fund (as if the Participant was
making an investment in that Measurement Fund with that
portion of his or her Account Balance).
(c) MEASUREMENT FUNDS. The Participant may elect one or more of
the measurement funds set forth on Schedule A (the
"Measurement Funds"), for the purpose of crediting
additional amounts to his or her Account Balance. As
necessary, the Committee may, in its sole discretion,
discontinue, substitute or add a Measurement Fund. Each such
action will take effect as of the first day of the calendar
quarter that follows by thirty (30)days the day on which the
Committee gives Participants advance written notice of such
change.
(d) CREDITING OR DEBITING METHOD. The performance of each
elected Measurement Fund (either positive or negative) will
be determined by the Committee, in its sole discretion,
based on the performance of the Measurement Funds
themselves. A Participant's Account Balance shall be
credited or debited on a daily basis based on the
performance of each Measurement Fund selected by the
Participant, or as otherwise determined by the Committee in
its sole discretion, as though (i) a Participant's Account
Balance were invested in the Measurement Fund(s) selected by
the Participant, in the percentages applicable to such
calendar month, as of the close of business on the first
(1st) business day of such calendar month, at the closing
price on such date; (ii) the portion of the Annual Deferral
Amount that was actually deferred during any calendar month
were invested in the Measurement Fund(s) selected by the
Participant, in the percentages applicable to such calendar
month, no later than the close of business on the third
(3rd) business day after the day on which such amounts are
actually deferred from the Participant's Base Annual Salary,
Incentive Payments, and Directors Fees through reductions in
his or her payroll, at the closing price on such date; and
(iii) any distribution made to a Participant that decreases
such Participant's Account Balance ceased being invested in
the Measurement Fund(s), in the percentages applicable to
such calendar month, no earlier than three (3) business days
prior to the distribution, at the closing price on such
date.
(e) NO ACTUAL INVESTMENT. Notwithstanding any other provision
of this Plan that may be interpreted to the contrary, the
Measurement Funds are to be used for measurement purposes
only, and a Participant's election of any such Measurement
Fund, the allocation to his or her Account Balance thereto,
the calculation of additional amounts and the crediting or
debiting of such amounts to a Participant's Account Balance
shall not be considered or construed in any manner as an
actual investment of his or her Account Balance in any such
Measurement Fund. In the event that the Company or the
trustee (as that term is defined in the Trust), in its own
discretion, decides to invest funds in any or all of the
Measurement Funds, no Participant shall have any rights in
or to such investments themselves. Without limiting the
foregoing, a Participant's Account Balance shall at all
times be a bookkeeping entry only and shall not represent
any investment made on his
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or her behalf by the Company or the Trust; the Participant
shall at all times remain an unsecured creditor of the
Company.
3.10 FICA AND OTHER TAXES.
(a) ANNUAL DEFERRAL AMOUNTS. For each Plan Year in which an
Annual Deferral Amount is being withheld from a Participant,
the Participant's Employer(s) shall withhold from that
portion of the Participant's Base Annual Salary, Incentive
Payments and Directors Fees that is not being deferred, in a
manner determined by the Employer, the Participant's share
of FICA and other employment taxes on such Annual Deferral
Amount. If necessary, the Committee may reduce the Annual
Deferral Amount in order to comply with this Section 3.10.
(b) ANNUAL COMPANY MATCHING AMOUNTS. When a Participant becomes
vested in a portion of his or her Company Matching Account,
the Participant's Employer shall withhold from the
Participant's Base Annual Salary and/or Incentive Payments
that is not deferred, in a manner determined by the
Employer, the Participant's share of FICA and other
employment taxes. If necessary, the Committee may reduce the
vested portion of the Participant's Company Matching Account
in order to comply with this Section 3.10.
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(c) ANNUAL COMPANY CONTRIBUTION AMOUNTS. When a Participant
becomes vested in his or her Company Contribution Account,
the Employer shall withhold from the Participant's Base
Annual Salary and/or Incentive Payments that is not
deferred, in a manner determined by the Employer, the
Participant's share of FICA and other employment taxes. If
necessary, the committee may reduce the vested portion of
the Participant's Company Contribution Account in order to
comply with this Section 3.10.
3.11 DISTRIBUTIONS. The Participant's Employer, or the trustee of the
Trust, shall withhold from any payments made to a Participant under
this Plan all federal, state and local income, employment and other
taxes required to be withheld by the Employer, or the trustee of the
Trust, in connection with such payments, in amounts and in a manner to
be determined in the sole discretion of the Employer and the trustee of
the Trust.
3.12 DEFERRALS FROM OTHER PLANS. The Plan may accept the transfer of
amounts or assets deferred by a Participant under any other deferral
arrangement provided by the Company, including without limitation any
shares of common stock of the Employer which but for such deferral
would (i) be issued to the Participant upon the exercise of a stock
option granted by the Company or (ii) be vested and nonforfeitable in
the case of restricted stock issued to the Participant. Any amounts
deferred representing shares of Company common stock shall be accounted
for on a share by share basis, with appropriate adjustments to reflect
changes in the capital structure of the Company, and shall, when
distributed, be distributed in the form of common stock from the
Company. In addition, any dividends that would have been paid on such
shares of Company common stock if such shares were outstanding, shall
be credited to the Deferral Account. Notwithstanding any of the
provisions of the Plan to the contrary, the Participant shall not have
any right to elect to have any amounts deferred in the form of Company
stock measured by reference to any Measurement Fund.
3.13 PRIOR PLAN. Effective September 30, 2000, participants who are
participants under the Varian Medical Systems, Inc. Amended and
Restated Supplemental Retirement Plan (the "SRP") become Participants
under this Plan and their respective Company Matching Accounts shall be
credited with their respective account balances under the SRP. Such
account balances shall be payable at Retirement and shall not be
treated as Short-Term Payout amounts under Section 4.1 of this Plan.
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ARTICLE 4
SHORT-TERM PAYOUT; UNFORESEEABLE FINANCIAL EMERGENCIES; WITHDRAWAL ELECTION
4.1 SHORT-TERM PAYOUT. In connection with each election to defer an Annual
Deferral Amount, a Participant may irrevocably elect to receive a
future "Short-Term Payout" from the Plan with respect to such Annual
Deferral Amount. Subject to the Deduction Limitation, the Short-Term
Payout shall be a lump sum payment in an amount that is equal to the
Annual Deferral Amount, plus amounts credited or debited in the manner
provided in Section 3.9 above on that amount, plus related Annual
Company Contribution Amounts, determined at the time that the
Short-Term Payout becomes payable (rather than the date of a
Termination of Employment). Subject to the Deduction Limitation and the
other terms and conditions of this Plan, each Short-Term Payout elected
shall be paid out during a period beginning one (1) day and ending
sixty (60) days after the last day of any Plan Year designated by the
Participant that is at least three Plan Years after the Plan Year in
which the Annual Deferral Amount is actually deferred, as specifically
elected by Participant. By way of example, if a three year Short-Term
Payout is elected for Annual Deferral Amounts that are deferred in the
Plan Year commencing January 1, 2001, the three year Short-Term Payout
would become payable during a sixty (60) day period commencing January
1, 2005. Notwithstanding the preceding sentences or any other provision
of this Plan that may be construed to the contrary, a Participant who
is an active Employee may, with respect to each Short-Term Payout, in a
form determined by the Committee, make no more than one additional
deferral election (a "Second Election") to defer payment of such
Short-Term Payout to a Plan Year subsequent to the Plan Year originally
elected; provided, however, any such Second Election will be null and
void unless accepted by the Committee no later than one (1) year prior
to the first day of the Plan Year originally elected by the Participant
for payment of such Short-Term Payout, and such Second Election is at
least two (2) Plan Years from the Plan Year originally elected.
4.2 OTHER BENEFITS TAKE PRECEDENCE OVER SHORT-TERM PAYOUT. Should an
event occur that triggers a benefit under Article 5, 6, 7 or 8, any
Annual Deferral Amount, plus amounts credited or debited thereon, that
is subject to a Short-Term Payout election under Section 4.1 shall not
be paid in accordance with Section 4.1 but shall be paid in accordance
with the other applicable Article.
4.3 WITHDRAWAL PAYOUT/SUSPENSIONS FOR UNFORESEEABLE FINANCIAL
EMERGENCIES. If the Participant experiences an Unforeseeable Financial
Emergency, the Participant may petition the Committee to (i) suspend
any deferrals required to be made by a Participant and/or (ii) receive
a partial or full payout from the Plan. The payout shall not exceed the
lesser of the Participant's Account Balance, calculated as if such
Participant were receiving a Termination Benefit, or the amount
reasonably needed to satisfy the Unforeseeable Financial Emergency. If,
subject to the sole discretion of the Committee, the petition for a
suspension and/or payout is approved, suspension shall take effect upon
the date of approval and any payout shall be made within sixty (60)
days
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of the date of approval. The payment of any amount under this
Section 4.3 shall not be subject to the Deduction Limitation.
4.4 WITHDRAWAL ELECTION. A Participant (or, after a Participant's
death, his or her Beneficiary) may elect, at any time, to withdraw all
of his or her Account Balance, calculated as if there had occurred a
Termination of Employment as of the day of the election, less a
withdrawal penalty equal to 10% of such amount (the net amount shall be
referred to as the "Withdrawal Amount"). This election can be made at
any time, before or after Retirement, Disability, death or Termination
of Employment, and whether or not the Participant (or his or her
Beneficiary) is in the process of being paid pursuant to an installment
payment schedule. If made before Retirement, Disability or death, a
Participant's Withdrawal Amount shall be his or her Account Balance
calculated as if there had occurred a Termination of Employment as of
the day of the election. No partial withdrawals of the Withdrawal
Amount shall be allowed. The Participant (or his or her Beneficiary)
shall make this election by giving the Committee advance written notice
of the election in a form determined from time to time by the
Committee. The Participant (or his or her Beneficiary) shall be paid
the Withdrawal Amount within sixty (60) days of his or her election.
Once the Withdrawal Amount is paid, the Participant's participation in
the Plan shall terminate and the Participant shall not be eligible to
participate in the Plan for one year from the date of the withdrawal
election. The payment of this Withdrawal Amount shall not be subject to
the Deduction Limitation.
ARTICLE 5
RETIREMENT BENEFIT
5.1 RETIREMENT BENEFIT. Subject to the Deduction Limitation, a
Participant who Retires shall receive, as a Retirement Benefit, his
or her Account Balance.
5.2 PAYMENT OF RETIREMENT BENEFIT. A Participant, in connection with
his or her commencement of participation in the Plan, shall elect on an
Election Form to receive the Retirement Benefit in a lump sum or
pursuant to a Yearly Installment Method of five (5), ten (10) or
fifteen (15) years. The Participant may annually change his or her
election to an allowable alternative payout period by submitting a new
Election Form to the Committee, provided that any such Election Form is
submitted at least one (1) year prior to the Participant's Retirement
and is accepted by the Committee in its sole discretion. The Election
Form most recently accepted by the Committee shall govern the payout of
the Retirement Benefit. If a Participant does not make any election
with respect to the payment of the Retirement Benefit, then such
benefit shall be payable in a lump sum. The lump sum payment shall be
made, or installment payments shall commence, no later than 60 days
after the last day of the Plan Year in which the Participant Retires.
Any payment made shall be subject to the Deduction Limitation.
5.3 DEATH PRIOR TO COMPLETION OF RETIREMENT BENEFIT. If a Participant dies
after Retirement but before the Retirement Benefit is paid in full,
the Participant's unpaid Retirement Benefit payments shall continue
and shall be paid to the Participant's Beneficiary (a) over the
remaining number of
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years and in the same amounts as that benefit
would have been paid to the Participant had the Participant survived,
or (b) in a lump sum, if requested by the Beneficiary and allowed in
the sole discretion of the Committee, that is equal to the
Participant's unpaid remaining Account Balance.
ARTICLE 6
PRE-RETIREMENT SURVIVOR BENEFIT
6.1 PRE-RETIREMENT SURVIVOR BENEFIT. Subject to the Deduction
Limitation, the Participant's Beneficiary shall receive a
Pre-Retirement Survivor Benefit equal to the Participant's Account
Balance if the Participant dies before he or she Retires, experiences a
Termination of Employment or suffers a Disability.
6.2 PAYMENT OF PRE-RETIREMENT SURVIVOR BENEFIT. A Participant, in
connection with his or her commencement of participation in the Plan,
shall elect on an Election Form whether the Pre-Retirement Survivor
Benefit shall be received by his or her Beneficiary in a lump sum or
pursuant to a Yearly Installment Method of five (5), ten (10) or
fifteen (15) years. The Participant may annually change this election
to an allowable alternative payout period by submitting a new Election
Form to the Committee, which form must be accepted by the Committee in
its sole discretion. The Election Form most recently accepted by the
Committee prior to the Participant's death shall govern the payout of
the Participant's Pre-Retirement Survivor Benefit. If a Participant
does not make any election with respect to the payment of the
Pre-Retirement Survivor Benefit, then such benefit shall be paid in a
lump sum. Despite the foregoing, if the Participant's Account Balance
at the time of his or her death is less than $50,000, payment of the
Pre-Retirement Survivor Benefit may be made, in the sole discretion of
the Committee, in a lump sum or pursuant to a Yearly Installment Method
of not more than five (5) years. The lump sum payment shall be made, or
installment payments shall commence, no later than 60 days after the
last day of the Plan Year in which the Committee is provided with proof
that is satisfactory to the Committee of the Participant's death. Any
payment made shall be subject to the Deduction Limitation.
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ARTICLE 7
TERMINATION BENEFIT
7.1 TERMINATION BENEFIT. Subject to the Deduction Limitation, the
Participant shall receive a Termination Benefit, which shall be equal
to the Participant's Account Balance if a Participant experiences a
Termination of Employment prior to his or her Retirement, death or
Disability.
7.2 PAYMENT OF TERMINATION BENEFIT. If the Participant's Account
Balance at the time of his or her Termination of Employment is less
than $50,000, payment of his or her Termination Benefit shall be paid
in a lump sum. If his or her Account Balance at such time is equal to
or greater than that amount, the Committee, in its sole discretion, may
cause the Termination Benefit to be paid in a lump sum or pursuant to a
Yearly Installment Method of not more than five (5) years. The lump sum
payment shall be made, or installment payments shall commence, no later
than 60 days after the last day of the Plan Year in which the
Participant experiences the Termination of Employment. Any payment made
shall be subject to the Deduction Limitation.
ARTICLE 8
DISABILITY WAIVER AND BENEFIT
8.1 DISABILITY WAIVER.
(a) WAIVER OF DEFERRAL. A Participant who is determined by
the Committee to be suffering from a Disability shall be
excused from fulfilling that portion of the Annual Deferral
Amount commitment that would otherwise have been withheld from
a Participant's Base Annual Salary, Incentive Payments and/or
Directors Fees for the Plan Year during which the Participant
first suffers a Disability. During the period of Disability,
the Participant shall not be allowed to make any additional
deferral elections, but will continue to be considered a
Participant for all other purposes of this Plan.
(b) RETURN TO WORK. If a Participant returns to employment,
or service as a Director, with the Employer, after a
Disability ceases, the Participant may elect to defer an
Annual Deferral Amount for the Plan Year following his or her
return to employment or service and for every Plan Year
thereafter while a Participant in the Plan; provided such
deferral elections are otherwise allowed and an Election Form
is delivered to and accepted by the Committee for each such
election in accordance with Section 3.3 above.
8.2 CONTINUED ELIGIBILITY; DISABILITY BENEFIT. A Participant
suffering a Disability shall, for benefit purposes under this Plan,
continue to be considered to be employed, or in the service of the
Employer as a Director, and shall be eligible for the benefits provided
for in Articles 4, 5, 6 or 7 in accordance with the provisions of those
Articles. Notwithstanding the above, the Committee shall have the right
to, in its sole and absolute discretion and for purposes of this Plan
only, and must in the case of a Participant who is otherwise eligible
to Retire, deem the
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Participant to have experienced a Termination of Employment, or in the
case of a Participant who is eligible to Retire, to have Retired, at
any time (or in the case of a Participant who is eligible to Retire, as
soon as practicable) after such Participant is determined to be
suffering a Disability, in which case the Participant shall receive a
Disability Benefit equal to his or her Account Balance at the time of
the Committee's determination; provided, however, that should the
Participant otherwise have been eligible to Retire, he or she shall be
paid in accordance with Article 5. The Disability Benefit shall be paid
in a lump sum within sixty (60) days of the Committee's exercise of
such right. Any payment made shall be subject to the Deduction
Limitation.
ARTICLE 9
BENEFICIARY DESIGNATION
9.1 BENEFICIARY. Each Participant shall have the right, at any time,
to designate his or her Beneficiary(ies) (both primary as well as
contingent) to receive any benefits payable under the Plan to a
beneficiary upon the death of a Participant. The Beneficiary designated
under this Plan may be the same as or different from the Beneficiary
designation under any other plan of the Employer in which the
Participant participates.
9.2 BENEFICIARY DESIGNATION; CHANGE; SPOUSAL CONSENT. A Participant
shall designate his or her Beneficiary by completing and signing the
Beneficiary Designation Form, and returning it to the Committee or its
designated agent. A Participant shall have the right to change a
Beneficiary by completing, signing and otherwise complying with the
terms of the Beneficiary Designation Form and the Committee's rules and
procedures, as in effect from time to time. If the Participant names
someone other than his or her spouse as a Beneficiary, a spousal
consent, in the form designated by the Committee, must be signed by
that Participant's spouse and returned to the Committee. Upon the
acceptance by the Committee of a new Beneficiary Designation Form, all
Beneficiary designations previously filed shall be canceled. The
Committee shall be entitled to rely on the last Beneficiary Designation
Form filed by the Participant and accepted by the Committee prior to
his or her death.
9.3 ACKNOWLEDGMENT. No designation or change in designation of a
Beneficiary shall be effective until received and acknowledged in
writing by the Committee or its designated agent.
9.4 NO BENEFICIARY DESIGNATION. If a Participant fails to designate
a Beneficiary as provided in Sections 9.1, 9.2 and 9.3 above or, if all
designated Beneficiaries predecease the Participant or die prior to
complete distribution of the Participant's benefits, then the
Participant's designated Beneficiary shall be deemed to be his or her
surviving spouse. If the Participant has no surviving spouse, the
benefits remaining under the Plan to be paid to a Beneficiary shall be
payable to the executor or personal representative of the Participant's
estate.
9.5 DOUBT AS TO BENEFICIARY. If the Committee has any doubt as to
the proper Beneficiary to receive payments pursuant to this Plan, the
Committee shall have the right, exercisable in its discretion, to cause
the Participant's Employer to withhold such payments until this matter
is resolved to the Committee's satisfaction.
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9.6 DISCHARGE OF OBLIGATIONS. The payment of benefits under the Plan
to a Beneficiary shall fully and completely discharge the Employer and
the Committee from all further obligations under this Plan with respect
to the Participant, and that Participant's Plan Agreement shall
terminate upon such full payment of benefits.
ARTICLE 10
LEAVE OF ABSENCE
10.1 PAID LEAVE OF ABSENCE. If a Participant is authorized by the
Participant's Employer for any reason to take a paid leave of absence
from the employment of the Employer, the Participant shall continue to
be considered employed by the Employer and the Annual Deferral Amount
shall continue to be withheld during such paid leave of absence in
accordance with Section 3.4.
10.2 UNPAID LEAVE OF ABSENCE. If a Participant is authorized by the
Participant's Employer for any reason to take an unpaid leave of
absence from the employment of the Employer, the Participant shall
continue to be considered employed by the Employer and the Participant
shall be excused from making deferrals until the earlier of the date
the leave of absence expires or the Participant returns to a paid
employment status. Upon such expiration or return, deferrals shall
resume for the remaining portion of the Plan Year in which the
expiration or return occurs, based on the deferral election, if any,
made for that Plan Year. If no election was made for that Plan Year, no
deferral shall be withheld.
ARTICLE 11
TERMINATION, AMENDMENT OR MODIFICATION
11.1 TERMINATION. Although the Employer anticipates that it will
continue the Plan for an indefinite period of time, there is no
guarantee that the Employer will continue the Plan or will not
terminate the Plan at any time in the future. Accordingly, the Employer
reserves the right to discontinue its sponsorship of the Plan and/or to
terminate the Plan at any time with respect to any or all of its
participating Employees and Directors, by action of its Board. Upon the
termination of the Plan with respect to the Employer, the Plan
Agreements of the affected Participants who are employed by the
Employer, or in the service of the Employer as Directors, shall
terminate and their Account Balances, determined as if they had
experienced a Termination of Employment on the date of Plan termination
or, if Plan termination occurs after the date upon which a Participant
was eligible to Retire, then with respect to that Participant as if he
or she had Retired on the date of Plan termination, shall be paid to
the Participants as follows: Prior to a Change in Control, if the Plan
is terminated with respect to all of its Participants, the Employer
shall have the right, in its sole discretion, and notwithstanding any
elections made by the Participant, to pay such benefits in a lump sum
or pursuant to a Yearly Installment Method of up to fifteen (15) years,
with amounts credited and debited during the installment period as
provided herein. If the Plan is terminated with respect to less than
all of its Participants, the Employer shall be required to pay such
benefits in a lump sum. After a Change in Control, the Employer shall
be
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required to pay such benefits in a lump sum. The termination of the
Plan shall not adversely affect any Participant or Beneficiary who has
become entitled to the payment of any benefits under the Plan as of the
date of termination; provided however, that the Employer shall have the
right to accelerate installment payments without a premium or
prepayment penalty by paying the Account Balance in a lump sum or
pursuant to a Yearly Installment Method using fewer years (provided
that the present value of all payments that will have been received by
a Participant at any given point of time under the different payment
schedule shall equal or exceed the present value of all payments that
would have been received at that point in time under the original
payment schedule).
11.2 AMENDMENT. The Employer may, at any time, amend or modify the
Plan in whole or in part with respect to the Employer by the action of
its Board; provided, however, that no amendment or modification shall
be effective to decrease or restrict the value of a Participant's
Account Balance in existence at the time the amendment or modification
is made, calculated as if the Participant had experienced a Termination
of Employment as of the effective date of the amendment or modification
or, if the amendment or modification occurs after the date upon which
the Participant was eligible to Retire, the Participant had Retired as
of the effective date of the amendment or modification. The amendment
or modification of the Plan shall not affect any Participant or
Beneficiary who has become entitled to the payment of benefits under
the Plan as of the date of the amendment or modification; provided,
however, that the Employer shall have the right to accelerate
installment payments by paying the Account Balance in a lump sum or
pursuant to a Yearly Installment Method using fewer years (provided
that the present value of all payments that will have been received by
a Participant at any given point of time under the different payment
schedule shall equal or exceed the present value of all payments that
would have been received at that point in time under the original
payment schedule).
11.3 PLAN AGREEMENT. Despite the provisions of Sections 11.1 and 11.2
above, if a Participant's Plan Agreement contains benefits or
limitations that are not in this Plan document, the Employer may only
amend or terminate such provisions with the consent of the Participant.
11.4 EFFECT OF PAYMENT. The full payment of the applicable benefit
under Articles 4, 5, 6, 7 or 8 of the Plan shall completely discharge
all obligations to a Participant and his or her designated
Beneficiaries under this Plan and the Participant's Plan Agreement
shall terminate.
ARTICLE 12
ADMINISTRATION
12.1 COMMITTEE DUTIES. This Plan shall be administered by a Committee
which shall consist of a Committee of the Board which initially shall
be the Organization and Compensation Committee, or such committee as
the Board shall designate or appoint from time to time. Members of the
Committee may be Participants under this Plan. The Committee shall also
have the discretion and authority to (i) make, amend, interpret, and
enforce all appropriate rules and regulations for the administration of
this Plan and (ii) decide or resolve any and all questions including
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interpretations of this Plan, as may arise in connection with the Plan.
Any individual serving on the Committee who is a Participant shall not
vote or act on any matter relating solely to himself or herself. When
making a determination or calculation, the Committee shall be entitled
to rely on information furnished by a Participant or the Company.
12.2 AGENTS. In the administration of this Plan, the Committee may,
from time to time, employ agents and delegate to them such
administrative duties as it sees fit (including acting through a duly
appointed representative) and may from time to time consult with
counsel who may be counsel to the Employer.
12.3 BINDING EFFECT OF DECISIONS. The decision or action of the
Committee with respect to any question arising out of or in connection
with the administration, interpretation and application of the Plan and
the rules and regulations promulgated hereunder shall be final and
conclusive and binding upon all persons having any interest in the
Plan.
12.4 INDEMNITY OF COMMITTEE. The Employer shall indemnify and hold
harmless the members of the Committee, and any Employee to whom the
duties of the Committee may be delegated, against any and all claims,
losses, damages, expenses or liabilities arising from any action or
failure to act with respect to this Plan, except in the case of willful
misconduct by the Committee or any of its members or any such Employee.
12.5 EMPLOYER INFORMATION. To enable the Committee to perform its
functions, each Employer shall supply full and timely information to
the Committee on all matters relating to the compensation of its
Participants, the date and circumstances of the Retirement, Disability,
death or Termination of Employment of its Participants, and such other
pertinent information as the Committee may reasonably require.
ARTICLE 13
OTHER BENEFITS AND AGREEMENTS
13.1 COORDINATION WITH OTHER BENEFITS. The benefits provided for a
Participant or a Participant's Beneficiary under the Plan are in
addition to any other benefits available to such Participant under any
other plan or program for employees of the Participant's Employer. The
Plan shall supplement and shall not supersede, modify or amend any
other such plan or program except as may otherwise be expressly
provided.
ARTICLE 14
CLAIMS PROCEDURES
14.1 PRESENTATION OF CLAIM. Any Participant or Beneficiary of a
deceased Participant (such Participant or Beneficiary being referred to
below as a "Claimant") may deliver to the Committee a written claim for
a determination
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with respect to the amounts distributable to such Claimant from the
Plan. If such a claim relates to the contents of a notice received by
the Claimant, the claim must be made within sixty (60) days after such
notice was received by the Claimant. All other claims must be made
within one hundred and eighty (180) days of the date on which the
event that caused the claim to arise occurred. The claim must state
with particularity the determination desired by the Claimant.
14.2 NOTIFICATION OF DECISION. The Committee shall consider a Claimant's
claim within a reasonable time, and shall notify the Claimant in
writing: (a) that the Claimant's requested determination has been
made, and that the claim has been allowed in full; or
(b) that the Committee has reached a conclusion contrary,
in whole or in part, to the Claimant's requested
determination, and such notice must set forth in a manner
calculated to be understood by the Claimant:
(i) the specific reason(s) for the denial of the claim, or
any part of it;
(ii) specific reference(s) to pertinent provisions of the
Plan upon which such denial was based;
(iii) a description of any additional material or information
necessary for the Claimant to perfect the claim, and an
explanation of why such material or information is
necessary; and
(iv) an explanation of the claim review procedure set forth
in Section 14.3 below.
14.3 REVIEW OF A DENIED CLAIM. Within sixty (60) days after receiving
a notice from the Committee that a claim has been denied, in whole or
in part, a Claimant (or the Claimant's duly authorized representative)
may file with the Committee a written request for a review of the
denial of the claim. Thereafter, but not later than thirty (30) days
after the review procedure began, the Claimant (or the Claimant's duly
authorized representative):
(a) may review pertinent documents;
(b) may submit written comments or other documents; and/or
(c) may request a hearing, which the Committee, in its sole
discretion, may grant.
14.4 DECISION ON REVIEW. The Committee shall render its decision on
review promptly, and not later than sixty (60) days after the filing of
a written request for review of the denial, unless a hearing is held or
other special circumstances require additional time, in which case the
Committee's decision must be rendered within one hundred and twenty
(120) days after such date. Such decision must be written in a manner
calculated to be understood by the Claimant, and it must contain:
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(a) specific reasons for the decision;
(b) specific reference(s) to the pertinent Plan provisions upon
which the decision was based; and
(c) such other matters as the Committee deems relevant.
14.5 LEGAL ACTION. A Claimant's compliance with the foregoing provisions
of this Article 14 is a mandatory prerequisite to a Claimant's right
to commence any legal action with respect to any claim for benefits
under this Plan.
ARTICLE 15
TRUST
15.1 ESTABLISHMENT OF THE TRUST. The Company shall establish the
Trust, and the Employer shall at least annually transfer over to the
Trust such assets as the Employer determines, in its sole discretion,
are necessary to provide, on a present value basis, for its respective
future liabilities created with respect to the Annual Deferral Amounts,
Annual Company Contribution Amounts, and Company Matching Amounts for
the Employer's Participants for all periods prior to the transfer, as
well as any debits and credits to the Participants' Account Balances
for all periods prior to the transfer, taking into consideration the
value of the assets in the Trust at the time of the transfer.
15.2 INTERRELATIONSHIP OF THE PLAN AND THE TRUST. The provisions of
the Plan and the Plan Agreement shall govern the rights of a
Participant to receive distributions pursuant to the Plan. The
provisions of the Trust shall govern the rights of the Employers,
Participants and the creditors of the Employers to the assets
transferred to the Trust. The Employer shall at all times remain liable
to carry out its obligations under the Plan.
15.3 DISTRIBUTIONS FROM THE TRUST. The Employer's obligations under
the Plan may be satisfied with Trust assets distributed pursuant to the
terms of the Trust, and any such distribution shall reduce the
Employer's obligations under this Plan.
ARTICLE 16
MISCELLANEOUS
16.1 STATUS OF PLAN. The Plan is intended to be a plan that is not
qualified within the meaning of Code Section 401(a) and that "is
unfunded and is maintained by an employer primarily for the purpose of
providing deferred compensation for a select group of management or
highly compensated employee" within the meaning of ERISA Sections
201(2), 301(a)(3) and 401(a)(1). The Plan shall be administered and
interpreted to the extent possible in a manner consistent with that
intent.
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16.2 UNSECURED GENERAL CREDITOR. Participants and their Beneficiaries,
heirs, successors and assigns shall have no legal or equitable rights,
interests or claims in any property or assets of the Employer. For
purposes of the payment of benefits under this Plan, any and all of the
Employer's assets shall be, and remain, the general, unpledged
unrestricted assets of the Employer. The Employer's obligation under
the Plan shall be merely that of an unfunded and unsecured promise to
pay money in the future.
16.3 EMPLOYER'S LIABILITY. The Employer's liability for the payment of
benefits shall be defined only by the Plan and the Plan Agreement, as
entered into between the Employer and a Participant. The Employer shall
have no obligation to a Participant under the Plan except as expressly
provided in the Plan and his or her Plan Agreement.
16.4 NONASSIGNABILITY. Neither a Participant nor any other person
shall have any right to commute, sell, assign, transfer, pledge,
anticipate, mortgage or otherwise encumber, transfer, hypothecate,
alienate or convey in advance of actual receipt, the amounts, if any,
payable hereunder, or any part thereof, which are, and all rights to
which are expressly declared to be, unassignable and non-transferable.
No part of the amounts payable shall, prior to actual payment, be
subject to seizure, attachment, garnishment or sequestration for the
payment of any debts, judgments, alimony or separate maintenance owed
by a Participant or any other person, be transferable by operation of
law in the event of a Participant's or any other person's bankruptcy or
insolvency or be transferable to a spouse as a result of a property
settlement or otherwise.
16.5 NOT A CONTRACT OF EMPLOYMENT. The terms and conditions of this
Plan shall not be deemed to constitute a contract of employment between
the Employer and the Participant. Such employment is hereby
acknowledged to be an "at will" employment relationship that can be
terminated at any time for any reason, or no reason, with or without
cause, and with or without notice, unless expressly provided in a
written employment agreement. Nothing in this Plan shall be deemed to
give a Participant the right to be retained in the service of the
Employer, either as an Employee or a Director, or to interfere with the
right of the Employer to discipline or discharge the Participant at any
time.
16.6 FURNISHING INFORMATION. A Participant or his or her Beneficiary
will cooperate with the Committee by furnishing any and all information
requested by the Committee and take such other actions as may be
requested in order to facilitate the administration of the Plan and the
payments of benefits hereunder, including but not limited to taking
such physical examinations as the Committee may deem necessary.
16.7 TERMS. Whenever any words are used herein in the masculine, they
shall be construed as though they were in the feminine in all cases
where they would so apply; and whenever any words are used herein in
the singular or in the plural, they shall be construed as though they
were used in the plural or the singular, as the case may be, in all
cases where they would so apply.
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16.8 CAPTIONS. The captions of the articles, sections and paragraphs
of this Plan are for convenience only and shall not control or affect
the meaning or construction of any of its provisions.
16.9 GOVERNING LAW. Subject to ERISA, the provisions of this Plan
shall be construed and interpreted according to the internal
laws of the State of California without regard to its conflicts
of laws principles.
16.10 NOTICE. Any notice or filing required or permitted to be given to
the Committee under this Plan shall be sufficient if in writing and
hand-delivered, or sent by registered or certified mail, to the address
below:
Vice President, Human Resources
3100 Hansen Way
Palo Alto, California 94304
With Copy To:
General Counsel
3100 Hansen Way
Palo Alto, California 94304
Such notice shall be deemed given as of the date of delivery or, if
delivery is made by mail, as of the date shown on the postmark on the
receipt for registration or certification.
Any notice or filing required or permitted to be given to a Participant
under this Plan shall be sufficient if in writing and hand-delivered,
or sent by mail, to the last known address of the Participant.
16.11 SUCCESSORS. The provisions of this Plan shall bind and inure to
the benefit of the Participant's Employer and its successors and
assigns and the Participant and the Participant's designated
Beneficiaries.
16.12 SPOUSE'S INTEREST. The interest in the benefits hereunder of a
spouse of a Participant who has predeceased the Participant shall
automatically pass to the Participant and shall not be transferable by
such spouse in any manner, including but not limited to such spouse's
will, nor shall such interest pass under the laws of intestate
succession.
16.13 VALIDITY. In case any provision of this Plan shall be illegal or
invalid for any reason, said illegality or invalidity shall not affect
the remaining parts hereof, but this Plan shall be construed and
enforced as if such illegal or invalid provision had never been
inserted herein.
16.14 INCOMPETENT. If the Committee determines in its discretion that a
benefit under this Plan is to be paid to a minor, a person declared
incompetent or to a person incapable of handling the disposition of
that person's property, the Committee may direct payment of such
benefit to the guardian, legal representative or person having the care
and custody of such minor, incompetent or incapable person. The
Committee may require proof of minority, incompetence,
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incapacity or guardianship, as it may deem appropriate prior to
distribution of the benefit. Any payment of a benefit shall be a
payment for the account of the Participant and the Participant's
Beneficiary, as the case may be, and shall be a complete discharge of
any liability under the Plan for such payment amount.
16.15 COURT ORDER. The Committee is authorized to make any payments
directed by court order in any action in which the Plan or the
Committee has been named as a party. In addition, if a court determines
that a spouse or former spouse of a Participant has an interest in the
Participant's benefits under the Plan in connection with a property
settlement or otherwise, the Committee, in its sole discretion, shall
have the right, notwithstanding any election made by a Participant, to
immediately distribute the spouse's or former spouse's interest in the
Participant's benefits under the Plan to that spouse or former spouse.
16.16 DISTRIBUTION IN THE EVENT OF TAXATION.
(a) IN GENERAL. If, for any reason, all or any portion of a
Participant's benefits under this Plan becomes
taxable to the Participant prior to receipt, a Participant
may petition the Committee before a Change in Control, or
the trustee of the Trust after a Change in Control, for a
distribution of that portion of his or her benefit that has
become taxable. Upon the grant of such a petition, which
grant shall not be unreasonably withheld (and, after a
Change in Control, shall be granted), a Participant's
Employer shall distribute to the Participant immediately
available funds in an amount equal to the taxable portion of
his or her benefit (which amount shall not exceed a
Participant's unpaid Account Balance under the Plan). If the
petition is granted, the tax liability distribution shall be
made within ninety (90) days of the date when the
Participant's petition is granted. Such a distribution shall
affect and reduce the benefits to be paid under this Plan.
(b) TRUST. If the Trust terminates in accordance with
Section 3.6(e) of the Trust and benefits are distributed
from the Trust to a Participant in accordance with that
Section, the Participant's benefits under this Plan shall be
reduced to the extent of such distributions.
16.17 INSURANCE. The Employer, on its own behalf or on behalf of the
trustee of the Trust, and, in its sole discretion, may apply for and
procure insurance on the life of the Participant, in such amounts and
in such forms as the Trust may choose. The Employer or the trustee of
the Trust, as the case may be, shall be the sole owner and beneficiary
of any such insurance. The Participant shall have no interest
whatsoever in any such policy or policies, and at the request of the
Employer shall submit to medical examinations and supply such
information and execute such documents as may be required by the
insurance company or companies to whom the Employer has applied for
insurance.
16.18 LEGAL FEES TO ENFORCE RIGHTS AFTER CHANGE IN CONTROL. The Company
and the Employer is aware that upon the occurrence of a Change in
Control, the Board or the board of directors of a
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Participant's Employer (which might then be composed of new members) or
a shareholder of the Company or the Participant's Employer, or of any
successor corporation might then cause or attempt to cause the Company,
the Participant's Employer or such successor to refuse to comply with
its obligations under the Plan and might cause or attempt to cause the
Company or the Participant's Employer to institute, or may institute,
litigation seeking to deny Participants the benefits intended under the
Plan. In these circumstances, the purpose of the Plan could be
frustrated. Accordingly, if, following a Change in Control, it should
appear to any Participant that the Company, the Participant's Employer
or any successor corporation has failed to comply with any of its
obligations under the Plan or any agreement thereunder or, if the
Company, the Employer or any other person takes any action to declare
the Plan void or unenforceable or institutes any litigation or other
legal action designed to deny, diminish or to recover from any
Participant the benefits intended to be provided, then the Company and
the Participant's Employer irrevocably authorize such Participant to
retain counsel of his or her choice at the expense of the Company and
the Participant's Employer (who shall be jointly and severally liable)
to represent such Participant in connection with the initiation or
defense of any litigation or other legal action, whether by or against
the Company, the Participant's Employer or any Director, officer,
shareholder or other person affiliated with the Company, the
Participant's Employer or any successor thereto in any jurisdiction.
IN WITNESS WHEREOF, the Company has signed this Plan document as of
September 30, 2000.
"Company"
Varian Medical Systems, Inc., a Delaware corporation By: _______________________
Title: _______________________
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SCHEDULE A
MEASUREMENT FUNDS
Pursuant to Section 3.9(c), the Participant may elect one or more of the
Measurement Funds:
<TABLE>
<S><C>
-------------------------- -----------------------------------------------------------------------
FUND CLASS MEASUREMENT FUND
-------------------------- -----------------------------------------------------------------------
Money Market Fidelity (VIP) Money Market
-------------------------- -----------------------------------------------------------------------
Intermediate-Term Bond PIMCO (VIT) Total Return Bond
-------------------------- -----------------------------------------------------------------------
Large Blend Deutsche Asset Management (formerly Bankers Trust) Equity 500 Index
-------------------------- -----------------------------------------------------------------------
Large Growth Fidelity (VIP) Growth
-------------------------- -----------------------------------------------------------------------
Large Growth INVESCO (VIF) Blue Chip Growth
-------------------------- -----------------------------------------------------------------------
Large Growth Janus Aspen Series Capital Appreciation
-------------------------- -----------------------------------------------------------------------
Mid Cap Growth INVESCO VIF Dynamics
-------------------------- -----------------------------------------------------------------------
Small Growth INVESCO (VIF) Small Company Growth
-------------------------- -----------------------------------------------------------------------
World Stock Janus Aspen Series Worldwide Growth
-------------------------- -----------------------------------------------------------------------
Company Stock Company Phantom Stock Shares
-------------------------- -----------------------------------------------------------------------
</TABLE>
