November 25, 2020
Re: Acceleration of Certain Compensation
Christopher A. Toth
c/o Varian Medical Systems, Inc.
3100 Hansen Way
Palo Alto CA 94304
This letter memorializes our recent discussions concerning tax planning in connection with the anticipated 2021 consummation of the transactions contemplated by the Agreement and Plan and Merger, by and among Siemens Healthineers Holding I GMBH, Falcon Sub Inc., Varian Medical Systems, Inc. (the Company) and Siemens Medical Solutions USA, Inc., dated as of August 2, 2020 (the Merger Agreement).
RSUs. Effective as of December 1, 2020 (the Acceleration Date), you and the Company hereby agree that the 11,594 restricted stock units granted to you by the Company on August 21, 2020 (the RSUs) shall become fully vested. As of the Acceleration Date, the Company shall deliver to you a number of Shares (as defined below) that corresponds to the number of RSUs, less withholding for applicable taxes (which withholding shall be determined based upon the maximum individual rates in each applicable jurisdiction).
Stock Options. Effective as of the Acceleration Date, all Company stock options that you hold that are unvested as of immediately prior to the Acceleration Date (such options, the Accelerated Stock Options) shall become fully vested. You hereby agree that as of the Acceleration Date, all vested stock options that you hold (including the Accelerated Stock Options) shall be deemed immediately exercised, and as soon as reasonably practicable following such date, the Company shall deliver to you a number of shares of Company common stock that corresponds to the number of stock options so exercised, less withholding for applicable taxes (which withholding shall be determined based upon the maximum individual rates in each applicable jurisdiction) and the aggregate exercise price due upon the exercise of such stock options.
2021 LTIP Award. On, or as soon as practicable following, the Acceleration Date, but in no event later than December 31, 2020, the Company will make you a cash payment of $2,500,000, subject to applicable tax withholding. You hereby acknowledge and agree that such payment is being made in lieu of an equity compensation award for the Companys 2021 fiscal year. The Company acknowledges that the amount of such payment represents your annual long-term incentive opportunity for purposes of clause (ii) of the definition of Good Reason set forth in Section 3 of the CIC Agreement.
Damages Upon a Voluntary Termination. You hereby agree that if your employment terminates due to a Voluntary Termination (as defined below), then, within ten business days following the termination of your employment, you shall pay to the Company the Repayment Amount (as defined below); provided that if such Voluntary Termination does not occur prior to the Closing Date, the Repayment Amount shall be limited to the 2021 LTIP Repayment Amount.