| 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
