☒ |
ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐ |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
94-2359345
| |
(State or other jurisdiction of
incorporation or organization)
|
(I.R.S. Employer
Identification Number)
| |
3100 Hansen WayPalo AltoCalifornia
|
94304-1038
| |
(Address of principal executive offices)
|
(Zip Code)
|
Title of each class
|
Trading Symbol
|
Name of each exchange on which registered
| ||
Common Stock, $1 par value
|
VAR
|
New York Stock Exchange
|
Large accelerated filer | ☒ | Accelerated filer | ☐ | |||
Non-accelerated filer | ☐ | Smaller reporting company | ☐ | |||
Emerging growth company | ☐ |
Item 10.
|
Directors, Executive Officers and Corporate Governance
|
Anat Ashkenazi
Age: 48
Director Since: 2018
Independent
Occupation: Public
Company Executive
|
Principal occupation, business experience and directorships
• Positions at Eli Lilly and Company, a global pharmaceutical company:
• Senior Vice President, Controller and Chief Financial Officer, Lilly Research Labs (September 2016-present)
• Vice President, Finance and Chief Financial Officer, Lilly Diabetes and Lilly Global Manufacturing and Quality (April 2015-September 2016)
• Chief Financial Officer, Lilly Oncology (October 2013-April 2015)
• Other Current Public Company Board Memberships: None
• Prior Public Company Board Memberships in Past Five Years: None
Experience, qualifications, attributes or skills supporting directorship
• Over 20 years of
in-depth
financial management and planning experience including corporate finance and financial services
• Extensive experience in the pharmaceutical industry having worked for Eli Lilly and Company across different therapeutic areas and disciplines
• Experience in global and regional strategic planning, organizational redesign, and Six Sigma implementation
| |
Jeffrey R. Balser
Age: 59
Director Since: 2018
Independent
Occupation: CEO of an
Academic Medical Center
|
Principal occupation, business experience and directorships
• President and Chief Executive Officer of Vanderbilt University Medical Center (May 2016-present)
• Dean, Vanderbilt University School of Medicine (October 2008-present)
• Vice Chancellor for Health Affairs, Vanderbilt University Medical Center (June 2009-April 2016)
• Associate Vice Chancellor for Research, Vanderbilt University Medical Center (January 2004-October 2008)
• Other Current Public Company Board Memberships: None
• Prior Public Company Board Memberships in Past Five Years: None
Experience, qualifications, attributes or skills supporting directorship
• In-depth
knowledge of the healthcare industry, hospital operations and managed care industry
• Experience in management and strategic planning of hospital and physician practice, medical education, clinical and basic research through service as Chief Executive Officer and Dean, and previously as chief research officer, of a leading academic medical institution
• Licensed Medical Doctor, Board certified in Anesthesiology and Critical Care Medicine
|
Judy Bruner
Age: 62
Director Since: 2016
Independent
Occupation: Former
Public Company
Executive
|
Principal occupation, business experience and directorships
• Positions at SanDisk Corporation, a global leader in flash memory storage solutions:
• Executive Vice President, Administration and Chief Financial Officer (June 2004-May 2016)
• Member of Board of Directors (June 2002-July 2004)
• Senior Vice President and Chief Financial Officer, Palm, Inc., a manufacturer of personal digital assistants (September 1999-June 2004)
• Vice President, Finance & Corporate Controller, 3Com Corporation, a digital electronics manufacturer (May 1998-September 1999)
• Other Current Public Company Board Memberships: Applied Materials, Inc., a provider of engineering solutions; Rapid7, a security data and analytics solutions provider; Seagate Technology PLC, a data storage company
• Prior Public Company Board Memberships in Past Five Years: Brocade Communications Systems, Inc., a technology company specializing in data and storage networking products
Experience, qualifications, attributes or skills supporting directorship
• Over 35 years of financial management experience in the high technology industry
• Deep experience with compliance and enterprise risk management
• Audit committee chair experience
• Significant mergers and acquisitions experience
• Membership on boards of other public companies
| |
Jean-Luc
Butel
Age: 64
Director Since: 2017
Independent
Occupation: Former
Public Company
Executive
|
Principal occupation, business experience and directorships
• Positions at Baxter International, a health care company providing a portfolio of renal and hospital products:
• President, International (January 2015-June 2015)
• Corporate Officer, Operating Committee Member, Corporate Vice President and President, International (February 2012-December 2014)
• Positions at Medtronic, Inc., a global leader in medical technology:
• Corporate Officer, Executive Committee Member, Executive Vice President; Group President International (January 2011-January 2012)
• Corporate Officer, Executive Committee Member, Senior Vice President and President, Medtronic International (May 2008-December 2010)
• Corporate Officer, Executive Committee Member, Senior Vice President, Medtronic and President, Medtronic Asia Pacific (August 2003-April 2008)
• Other Senior Management Experience: President, Johnson & Johnson Independence Technology; President, Worldwide Consumer Healthcare, Becton Dickinson
• Other Current Public Company Board Memberships: Takeda Pharmaceutical Company Limited, a global pharmaceuticals company focused on metabolic disorders, gastroenterology, neurology, inflammation and oncology
• Prior Public Company Board Memberships in Past Five Years: Biosensors International Group, Ltd., a medical device company specializing in interventional cardiology procedures and critical care technologies
Experience, qualifications, attributes or skills supporting directorship
• Extensive experience in sales, operations and general management of healthcare companies through his service as an executive of several large U.S. healthcare companies
• Extensive experience leading international business operations of large U.S. healthcare companies, including in Europe, Asia and North and South America
|
Regina E. Dugan
Age: 57
Director Since: 2013
Independent
Occupation: CEO
|
Principal occupation, business experience and directorships
• President and Chief Executive Officer, Wellcome Leap, Inc., a nonprofit focused on accelerating innovations in global human health challenges (March 2020-present)
• Vice President of Engineering, Facebook, Inc., leading Building 8, a team charged with developing and delivering next generation consumer hardware to market (May 2016-January 2018)
• Vice President of Engineering, Google, Inc., leading the Advanced Technology and Products group, a group charged with breakthrough innovations in mobile computing and accelerating the development of promising technologies to market (February 2014-April 2016)
• Senior Vice President, Google owned Motorola Mobility LLC, a mobile technology company Google acquired in May 2012 (March 2012- February 2014)
• Director, Defense Advanced Research Projects Agency (DARPA), a breakthrough product development organization of the U.S. Department of Defense (July 2009-March 2012)
• Co-Founder,
President and Chief Executive Officer, RedXDefense LLC, a security solutions company (2005-July 2009)
• Co-Founder,
President and Chief Executive Officer, Dugan Ventures, an investment firm (currently a
non-voting
partner) (2001-July 2009)
• Other Current Public Company Board Memberships: Zynga Inc., a social game developer
• Prior Public Company Board Memberships in Past Five Years: None
Experience, qualifications, attributes or skills supporting directorship
• Experience leading DARPA, the principal agency within the U.S. Department of Defense responsible for product development, research, demonstration and fielding of high-risk, high-payoff capabilities
• Familiarity with defense, security and commercial industries
• Expertise with a wide range of advanced technologies and demonstrated track record in moving to use new technologies, from sensor systems to big data products
• Years of experience serving in senior executive positions with responsibilities including fostering innovation and developing strategic business relationships across diverse industries and commercial entities large and small
• Experience serving on the board of another public company
|
R. Andrew Eckert
Age: 59
Director Since: 2004
Chairman Since: 2014
Independent
Occupation: CEO
|
Principal occupation, business experience and directorships
• Chief Executive Officer, Zelis, Inc., a financial technology company specializing in healthcare claims and payment solutions (August 2020-Present)
• Chief Executive Officer, Acelity L.P., Inc., a global advanced wound care company (April 2017-October 2019)
• Chief Executive Officer, Valence Health, a healthcare solutions company (August 2015-October 2016)
• Chief Executive Officer, TriZetto Corporation, a healthcare IT solutions firm (March 2014-November 2014)
• Chief Executive Officer, CRC Health Corporation, a provider of substance abuse treatment and adolescent youth services (January 2011-March 2014)
• Managing Director, Symphony Technology Group, a private equity firm (October 2009-January 2011)
• President and Chief Executive Officer, Eclipsys Corporation, a former publicly traded healthcare information management software provider (October 2005-May 2009)
• Chief Executive Officer, SumTotal Systems, Inc., an enterprise software provider (2004-2005)
• Chief Executive Officer, Docent Inc., an enterprise software provider that was acquired by SumTotal Systems (2002-2004)
• Chairman and Chief Executive Officer, ADAC Laboratories, a former publicly traded medical imaging company (1997-2001)
• Other Current Public Company Board Memberships: Becton, Dickinson and Company, a global medical technology company
• Prior Public Company Board Memberships in Past Five Years: None
Experience, qualifications, attributes or skills supporting directorship
• Extensive experience obtained over 15 years serving as an executive officer of several public companies, including a medical imaging company and healthcare information management company
• Deep knowledge of operational, financial, strategic planning, product development and marketing matters
• Experience serving on the board of directors of several public companies in the healthcare industry
| |
Phillip G. Febbo
Age: 54
Director Since: 2019
Independent
Occupation: Public
Company Executive
|
Principal occupation, business experience and directorships
• Chief Medical Officer, Illumina, Inc. (March 2018-present)
• Chief Medical Officer, Genomic Health, Inc. (2013-March 2018)
• Professor of Medicine and Urology at the University of California, San Francisco (UCSF) (2010-2013)
• Service on the board of directors of the American College of Medical Genetics and Genomics Foundation (2018-2019)
• Other Current Public Company Board Memberships: None
• Prior Public Company Board Memberships in Past Five Years: None
Experience, qualifications, attributes or skills supporting directorship
• Broad experience in medical strategy and managing resources strategically on a global scale across areas like product development, evidence generation, product marketing, and sales, gained from service as the Chief Medical Officer of two genomic health companies
• Deep knowledge in cancer research, clinical and academic research programs, including through service as the principal investigator of clinical trials funded by National Institute Institutes of Health, Department of Defense, and various industry and
non-profit
foundation grants
• Critical insights in evaluating data of various cancer treatments and leveraging multidisciplinary care to optimize patient outcomes
|
David J. Illingworth
Age: 67
Director Since: 2011
Independent
Occupation: Former
Public Company CEO
|
Principal occupation, business experience and directorships
• Smith & Nephew plc, a medical devices company
• Chief Executive Officer (July 2007-April 2011)
• Chief Operating Officer and Division President (2002-July 2007)
• Other Senior Management Experience: President, XL Vision, Inc.; Chairman and Chief Executive Officer, VidaMed, Inc.; President, Nellcor Puritan Bennett LLC; and Managing Director, Asia/Pacific, GE Medical Systems
• Other Current Public Company Board Memberships: Domtar, Inc., a manufacturer of fiber-based products
• Prior Public Company Board Memberships in Past Five Years: None.
Experience, qualifications, attributes or skills supporting directorship
• In-depth
knowledge of the medical technology industry
• Extensive experience in sales, operations and general management in the United States, United Kingdom and Asia through his service as an executive of various medical technology companies
• Service on the board of directors and as a member of the audit committee and the environmental, health, safety and sustainability committee, of another public medical device company
| |
Michelle M. Le Beau
Age: 66
Director Since: 2019
Independent
Occupation: Professor and
Director of an Academic
Cancer Center
|
Principal occupation, business experience and directorships
• Positions at the University of Chicago:
• Arthur and Marian Edelstein Professor of Medicine, Section of Hematology/Oncology (1986-present)
• Director, University of Chicago Medicine Comprehensive Cancer Center (2004-present)
• Board Member of the University of Chicago Medicine Cancer Council (2012-present)
• Director, Cancer Cytogenetics Laboratory (1986-present)
• Other Current Public Company Board Memberships: None
• Prior Public Company Board Memberships in Past Five Years: None
Experience, qualifications, attributes or skills supporting directorship
• Extensive experience with cancer research, clinical and research program development, and structure and operation of academic cancer centers
• Deep knowledge of academic and government cancer research priorities, and opportunities across the cancer research and care continuum
• Service on (i) numerous scientific advisory boards for academic cancer centers, including advisory boards and working groups for the National Cancer Institute of the U.S. National Institutes of Health, (ii) the board of directors of professional organizations in oncology and cancer research (e.g. the American Association for Cancer Research and the American Society of Hematology), and (iii) multiple
non-profit
organizations in cancer research, advocacy, outreach and education (e.g. the American Cancer Society)
• Doctoral degree in Genetics, and board-certified in clinical cytogenetics by the American Board of Medical Genetics and Genomics
• In-depth
knowledge of the biology and development of human cancers
|
Dow R. Wilson
Age: 62
Director Since: 2012
Occupation: President and
CEO of Varian
|
Principal occupation, business experience and directorships
• Positions at the Company:
• President and Chief Executive Officer (September 2012-present)
• Corporate Executive Vice President and Chief Operating Officer (October 2011-September 2012)
• Corporate Executive Vice President and President, Oncology Systems (August 2005-September 2011)
• Corporate Vice President and President, Oncology Systems (January 2005-August 2005)
• Prior to joining the Company in January 2005, held various senior management positions in and outside of the United States with General Electric Company, a diversified industrial company
• Other Current Public Company Board Memberships: Agilent Technologies, a research, development and manufacturing company for life science
• Public Company Board Memberships in Past Five Years: Saba Software, an
e-learning
software provider; Varex Imaging Corporation, a leading independent supplier of medical
X-ray
tubes and image processing solutions
• U.S. Government Appointments:
• Presidential appointment to U.S. President's Advisory Council on Doing Business in Africa (November 2014-January 2019)
• Appointed to U.S. Department of Commerce's
US-Brazil
CEO Forum in April 2019
• Board member of the
US-India
Strategic Partnership Forum, a
non-profit
focused on driving economic growth, job creation, innovation, inclusion, and entrepreneurship in the U.S. and India (2018-present)
Experience, qualifications, attributes or skills supporting directorship
• Deep knowledge of our business, strategy and technology gained through serving as President of our Oncology Systems business and Chief Operating Officer before becoming our President and Chief Executive Officer
• Significant knowledge of domestic and international medical and healthcare industries gained from serving in management positions at General Electric
• Critical insight into operational requirements of a company with worldwide reach, knowledge of corporate and business unit strategies, and operational expertise, each gained from executive management experience at two large, global organizations
• Experience serving on the board of directors and as lead director of another public company
|
• |
Oversees our accounting and financial reporting process and audits of financial statements.
|
• |
Assists the Board in oversight and monitoring of (i) the integrity of our financial statements, (ii) our compliance with legal and regulatory requirements, (iii) the independent registered public accounting firm's qualifications and independence, (iv) the performance of our internal audit function and of the independent registered public accounting firm, and (v) the principal risk exposures facing the corporation that are related to financial statements, legal, regulatory and other similar matters, as well as the corporation's related mitigation efforts.
|
• |
Prepares the Audit Committee Report included in our proxy statement.
|
• |
Reviews and approves our foreign exchange exposure management policy, including but not limited to entering swaps thereunder and the exemption of swaps from any execution and clearing requirements.
|
• |
Reviewing cybersecurity risks and incidents and any other risks and incidents relevant to our computerized information system controls and security, and discussing if any such risks and incidents should be disclosed in our periodic filings with the SEC.
|
• |
Reports to the Board the results of its monitoring and recommendations.
|
• |
Provides to the Board any additional information and materials as the committee may determine is necessary to make the Board aware of significant financial matters requiring the Board's attention.
|
Item 11.
|
Executive Compensation
|
Global Radiotherapy Leader |
Global Leader in Multi-Disciplinary, Integrated Cancer Care Solutions |
Priorities
|
FY20 Results
| |
INNOVATE
in Radiation Theraphy
|
• 50%+ share of the global radiation therapy market
• 3% year-over-year growth in linear accelerator installed base (an increase of 221 units), bringing the total to 8,717 units
• 9% of revenue invested in R&D to drive innovation and extend technology leadership
• 510k approval in the US for Ethos and NMPA approval in China for Halcyon 2.0
• 34 Ethos orders and 16 installations across Australia, Denmark, Netherlands, United Kingdom, and the United States
• 4 orders for ProBeam proton therapy systems in the United States and Asia
| |
LEVERAGE
artificial intelligence, machine learning, and cloud solutions |
• 4% year-over-year growth in software revenue with 5,660+ unique software installations globally
• Built data lake of 117,000+ patient records
• 60,000+ patients touched on the Noona
®
platform, providing patient-reported outcomes and extending into the life sciences market
• FDA 510(k) clearance for Eclipse v16.1 treatment planning software for proton therapy
| |
GROW
emerging geographies, businesses and technologies |
• Received Investigational Device Exemption (IDE) and initiated preparation for the first-ever clinical trial of Flash Therapy
• Established direct presence to support customers in Kenya, Turkey, Romania and Bulgaria
• Launched and shipped new Cryotouch product for Interventional Oncology
| |
IMPROVE
operational, financial,
and capital efficiency
|
• $1.6 billion in accessible liquidity
• $484 million in cash flow from operations, up 30% year-over-year, including a record $266 million in cash flow from operations in the fourth quarter of FY20, up 126% year-over-year
• 58% of FY20 revenues from software and services, up from 53% in FY19
|
• |
For awards granted during or prior to fiscal year 2020, all stock option and other stock-based awards granted under the plan (including those held by our executive officers) that are outstanding immediately prior to the effective time of the Merger will become fully vested and be converted into the right to receive a cash payment equal to the product of (i) the Merger Consideration (less the applicable exercise price for stock options or stock appreciation rights) and (ii) the number of shares subject to the award. For outstanding stock options and stock-based awards that vest in whole or in part based on the achievement of performance goals, the number of options and units that vest will be determined based upon target performance.
|
• |
For awards granted during fiscal year 2021, grants will be made in the form of RSUs (including to our executive officers) and outstanding RSUs will convert at the effective time of the Merger to the right to a cash award payable based on the original vesting schedule and terms. The cash amount will be equal to the product of the Merger Consideration and the number of shares subject to the award.
|
• |
90% of our CEO's total target compensation opportunity was performance-based, with 100% of his long-term incentive (equity) awards subject to performance-based vesting.
|
• |
79% of our other Named Executive Officers' total target compensation opportunity was performance-based for our NEOs who served as executive officers for the entire year, with 60% of their regular long-term incentive (equity) awards subject to performance-based vesting. (Excludes a
one-time
retention award granted to Mr. Toth in August 2020.)
|
What We Do:
|
What We DON'T Do:
| |
✓ Independent Compensation Committee
✓ Independent compensation advisor
✓ NEOs employed 'at will'
✓ Robust CEO & NEO stock ownership guidelines
✓ Clawback policy that applies to our annual cash incentive plan and equity incentive plan
✓ Annual compensation review and risk assessment
✓ Annual stockholder 'say on pay' vote
✓ Award 100% of CEO and 60% of other NEO long-term incentive value in performance-vested equity awards
✓ Place caps on maximum payouts from our annual cash incentive plan and our PSU/PSO plans
✓ Require revenue growth to earn a payout for PSU and PSO awards
✓ Solicit detailed feedback regarding our compensation practices from stockholders throughout the year
✓ Annual review of succession plan
|
✗ Target pay to any specified percentile of market
✗ NEO employment contracts
✗ Permit directors and executive officers to engage in common stock margining, pledging or hedging
✗ Permit executive officers to sell Company stock without a
10b5-1
trading plan
✗ Excessive NEO perquisites
✗ Reprice and repurchase options without stockholder approval
✗ Excessive pension/supplemental NEO retirement plan payouts
✗ Single trigger acceleration of equity vesting or change in control payments
✗ Change in control severance payments without involuntary job loss or substantial diminution of duties
|
• |
Attraction and Retention of Key Talent.
The pay program should enable the company to attract and retain individuals with the background, experience, and talent required to lead the development and successful implementation of the Company's business strategy.
|
• |
Performance-Driven Compensation.
A high proportion of total compensation should be at risk and subject to achievement of annual and long-term operating and strategic goals that deliver long-term value creation for both customers and stockholders.
|
• |
Stockholder Alignment
. Long-term incentives should be awarded in Company stock to increase the alignment of executive interests with those of stockholders.
|
• |
Appropriately Balance Short- and Long-term Performance Orientation.
The mix of incentives should place emphasis on achievement of long-term sustainable growth and profitability.
|
• |
Total Compensation Context.
Pay decisions should be made in the context of total compensation relative to pay practices of competitors for key talent and in consideration of individual performance, experience, knowledge, and internal parity among peers.
|
Name
|
Title
| |
Dow R. Wilson
|
Chief Executive Officer
| |
Kolleen T. Kennedy
|
President, Proton Solutions and Chief Growth Officer
| |
J. Michael Bruff.
|
Chief Financial Officer
| |
Christopher A. Toth
(1)
|
President and Chief Operating Officer
| |
Michael Hutchinson
|
Senior Vice President, Chief Legal Officer
| |
Gary E. Bischoping, Jr.
(2)
|
Former President, Interventional Oncology Solutions and Former Chief
Financial Officer
|
(1) |
Mr. Toth was promoted from President, Varian Oncology Systems to President and Chief Operating Officer, effective October 5, 2020 with the start of our fiscal year 2021.
|
(2) |
Mr. Bischoping resigned in March 2020.
|
Component
|
Purpose and Role
| |
Base salary |
• Provide a market competitive, fixed level of cash compensation to attract and retain talented and skilled executives
• Recognize sustained performance, capabilities, job scope, experience, and internal pay equity
| |
Annual cash incentives (Management Incentive Plan, 'MIP') |
• Motivate and reward achievement of annual financial results that drive stockholder value
• Reward achievement of strategic goals that provide the foundation for future growth and profitability
| |
Performance Share Units ('PSU
s
')
|
• Reward achievement of
3-year
financial goals and TSR relative to peers
• Encourage long-term stock price growth and executive retention through
3-year
cliff vesting and TSR metric
• Align executives' interests with stockholders' interests through use of performance-based equity awards
| |
Performance Stock Options ('PSOs') |
• Reward achievement of
3-year
financial goals and TSR relative to peers
• Encourage long-term stock price growth and executive retention through
3-year
cliff vesting, a TSR metric and a seven-year term to exercise the options
• Provide leveraged gains aligned with stockholders through use of performance-based awards and a vehicle that ties gains to increases in stock price
| |
Restricted Stock Units ('RSU
s
')
|
• Encourage stock price growth and executive retention through time-based vesting over three years
• Align executives' interests with stockholders' interests through use of equity awards
|
Time-Based Stock Options ('Options') |
• Encourage stock price growth and executive retention through time-based vesting over three years and a seven-year period to exercise the options
• Provide leveraged gains aligned with stockholders' interests through use of an award that bases gains on increases in the stock price
| |
Executive benefits and perquisites |
• Provide the same health, welfare and 401(k) benefits as other employees
• Provide a competitive benefit by allowing executives to defer compensation through a
non-qualified
deferred compensation plan
• Facilitate executive health and focus on our business by providing reimbursement for annual physical exams and financial counseling
• Encourage support of the communities in which we operate by matching charitable donations (available to all employees)
| |
Executive
change-in-control
agreements
|
• Provide reasonable compensation to executive officers who leave our company under certain circumstances to facilitate their transition to new employment
• 'Double-trigger' provisions encourage executive retention in the event of a change of control
• Require a departing executive officer to sign a separation and release agreement as a condition to receiving post-employment compensation payments or benefits, to mitigate any potential employer liability and avoid future disputes or litigation
|
• |
Risk.
Annually review the risks and rewards associated with the Company's compensation programs. Ensure that the program includes plan design features that mitigate risk without diminishing the incentive nature of the compensation, and encourages and rewards prudent business judgment and appropriate risk-taking over the short term and the long term.
|
• |
Annual Program Assessment
. Assess the program to ensure that it is well aligned with the Company's evolving business strategy and is effective in supporting its talent needs. Solicit recommendations for changes from management and our compensation consultant as appropriate. Determine the specific plan designs to be used for the year.
|
• |
CEO Compensation and Performance Goals
. Annually review and approve corporate goals and objectives relevant to the CEO's compensation; develop the process for evaluating the CEO's performance; and establish a proposal for CEO compensation based on an evaluation of the CEO's performance in light of the foregoing corporate goals and objectives and after discussions with the independent directors of the Board and the Committee's independent advisors.
|
• |
Compensation of Other Executives
. Review, discuss, modify and approve, as appropriate, compensation recommendations made by the CEO for other NEOs.
|
• |
Considerations in Making Compensation Decisions
. Consider, among other factors: the Company's overall performance, stockholder return, the performance of the Company's business segments, the achievement of specific corporate goals and objectives that the Committee established, the achievement of any specific individual goals that have been assigned, individual performance on job duties, executive
|
succession plans, compensation previously provided, compensation of other executives of the Company, and competitive compensation levels. Confer with the independent directors of the Board and consider, as appropriate, views expressed by stockholders on executive compensation matters, including results of stockholder advisory votes on executive compensation.
|
• |
Peer Groups.
Review and establish annually the Company's comparator/peer group for use in assessing the competitive range of compensation provided to individuals in similar positions at comparable companies. Review and establish annually the Company's comparator/peer group for use in assessing total stockholder return relative to business model peers. See additional information on the fiscal year 2020 compensation peer group in 'Peer Group and Market Analysis' below and on the 2020 business model peer group in 'Relative TSR Modifier' below.
|
• |
General Advice to the Board
. Review management and compensation matters having major implications to the long-range development of the Company including plans for succession of the CEO and other executive officers and corporate officers.
|
• |
Compensation Consultant
. Engage an independent advisor and meet with its advisor, as needed, in the Committee's sole discretion.
|
• |
role including the scope and complexity of responsibilities;
|
• |
experience and capabilities;
|
• |
contributions or responsibilities beyond the typical scope of the role;
|
• |
individual performance;
|
• |
internal comparisons; and
|
• |
competitive compensation opportunities as reflected in compensation provided by our peers and other competitors for similar executive talent.
|
• |
U.S. publicly traded companies from the Healthcare Equipment, Healthcare Supplies, Healthcare Technology, Life Sciences Tools & Services, and Biotechnology industries
|
• |
Companies in a relevant range around Varian's revenues and market-capitalization
|
• |
Companies with similar business characteristics and comparable talent requirements, such as complex medical or related electronic devices, alternative healthcare therapies or healthcare-related software, significant
non-U.S.
revenues, and employee headcount generally in a reasonable range around Varian's headcount
|
Varian Medical Systems FY 2020 Compensation Peer Group
| ||||
Healthcare Equipment
|
Life Sciences Tools & Services
|
Healthcare Supplies
| ||
Boston Scientific | Agilent Technologies | Cooper Companies | ||
Edwards Lifesciences |
Bio-Rad
Labs
| Dentsply Sirona | ||
Hill-Rom
Holdings
| Bruker Corporation | West Pharmaceutical Services | ||
Hologic | Mettler-Toledo | |||
IDEXX Labs | PerkinElmer |
Biotechnology
| ||
Intuitive Surgical | Waters Corporation | Alexion Pharmaceuticals | ||
ResMed | ||||
Teleflex |
Healthcare Technology
| |||
Zimmer Biomet Holdings | Cerner Corporation |
Peer Group
| ||||||||||||||||
Company Scope
|
Varian
|
Low
|
Median
|
High
| ||||||||||||
Revenue ($M)
| $ | 3,031 | $ | 1,745 | $ | 2,910 | $ | 9,937 | ||||||||
Market Capitalization ($M)
| $ | 11,903 | $ | 6,972 | $ | 16,461 | $ | 57,325 |
Name
|
FY2019 Annual Salary (effective December 15, 2018) |
FY2020 Annual Salary (effective December 14, 2019)
1
|
% Increase
| |||
Dow R. Wilson
| $1,000,000 | $1,000,000 | 0.0% | |||
Kolleen T. Kennedy
| $722,140 | $722,140 | 0.0% | |||
J. Michael Bruff
| $341,120 | $550,000 | 61.2% | |||
Christopher A. Toth
| $525,000 | $575,000 | 9.5% | |||
Michael D. Hutchinson
| - | $535,000 | - | |||
Gary E. Bischoping
| $566,500 | $566,500 | 0.0% |
(1) |
Salary increase for Mr. Bruff was effective with his promotion on December 1, 2019, and annual salary for Mr. Hutchinson was effective upon his hire date in June 2020. Annual salary for Mr. Wilson reflects his regular annual rate, prior to the temporary 20% reduction for the second half of calendar year 2020.
|
• |
Payment of any cash annual incentives to our NEOs and other eligible executives is conditioned upon achievement of at least $250 million in annual net income, on a
non-GAAP
basis, calculated using the Company's currency rates as of September 2019 and subject to applicable adjustments adopted by the Compensation Committee at the time the MIP goals were set.
|
• |
Total awards paid under the MIP for fiscal year 2020 cannot exceed 8% of fiscal year 2020 EBIT (as defined in the MIP) before incentive compensation. In addition, individual awards payable to each of our NEOs and other eligible executives are capped at the lesser of 200% of target payout or $3,000,000 per individual.
|
• |
The Compensation Committee retained the discretion to reduce each NEO's maximum dollar award amount set forth above based on the formula below and such other factors determined by the Committee in its sole discretion. Specifically for the fiscal year 2020 Financial Results component, in addition to considering economic profit results (both
pre-pandemic
and post-pandemic), the Committee also considered the approved funding for
non-MIP
annual incentive plan participants below the executive level, which was based on second half operating earnings results and other resiliency goals related to navigating the pandemic impact, and capped payouts for the Financial Results component at 100% of target.
|
• |
Target Awards
|
Name
|
Annual
Salary
|
MIP Target
1
|
MIP Maximum
1
| |||||||
% of Salary
|
Amount
|
% of Salary
|
Amount
| |||||||
Dow R. Wilson
|
$1,000,000
|
125%
|
$1,250,000
|
250%
|
$2,500,000
| |||||
Kolleen T. Kennedy
|
$722,140
|
90%
|
$649,926
|
180%
|
$1,299,852
| |||||
J. Michael Bruff
|
$550,000
|
75%
|
$412,500
|
150%
|
$825,000
| |||||
Christopher A. Toth
|
$575,000
|
75%
|
$431,250
|
150%
|
$862,500
| |||||
Michael D. Hutchinson
|
$535,000
|
75%
|
$401,250
|
150%
|
$802,500
| |||||
Gary E. Bischoping
2
|
$566,500
|
75%
|
$424,875
|
150%
|
$849,750
|
(1) |
Amounts reflect annualized targets. Actual MIP payouts are prorated based on new hire, promotion and termination dates during the fiscal year.
|
(2) |
Mr. Bischoping was not eligible for a fiscal year 2020 bonus payment as his employment terminated prior to fiscal year end.
|
•
|
Financial Performance
|
• |
Economic profit results, both
pre-pandemic
and post-pandemic, relative to goals set by the Committee at the beginning of fiscal year 2020
|
• |
Broad-based bonus plan results for participants below the executive level including:
|
• |
Second half Operating Earnings results relative to the second half forecast
|
• |
Resilience results relative to existing goals and additional Company goals approved by the Committee after the onset of the
COVID-19
pandemic
|
Adjusted Gross Cash Earnings
|
- - -Minus- - -
|
Capital Charge on Gross Operating Assets
| ||||||
+ | Operating Earnings | + | Long-term Assets (2) | |||||
+ | Research & Development Expense | + | Other Assets & Liabilities | |||||
+ | Depreciation & Amortization Expense | + | Capitalized R&D | |||||
+ |
Impairments Expense & Other
Adjustments
(1)
| + |
Unusual &
One-Time
(3)
| |||||
=
-
|
Pre-tax Gross Cash Earnings
Taxes (14%)
|
=
x
|
Gross Operating Assets (GOA)
8% Required Rate of Return
| |||||
= |
Gross Cash Earnings (GCE)
| = | Capital Charge |
(1) |
Impairments, restructuring, reserves and currency adjustments
|
(2) |
Net working capital, gross PP&E, goodwill and intangibles
|
(3) |
Unusual and
one-time
items such as accounting and tax rule changes, legal restructuring and impairments
|
FY 2020 MIP Economic Profit Measure
|
FY 2020
|
FY 2020
|
FY 2020
|
FY 2020
|
FY 2020
| |||||
Minimum
|
Target
|
Maximum
|
Actual
|
Pre-Pandemic
| ||||||
Economic Profit ($M)
| $346 | $419 | $506 | $383 | $503 | |||||
Increase in Economic Profit Over FY 2019 Adjusted
|
($73)
| $0 | $87 |
($36)
| $84 | |||||
Percentage of Target Payout
| 0% | 100% | 200% | 49% | 197% |
$Millions
|
Fiscal Year 2020
| |||||||||||
Actual
|
Pre-Pandemic
Estimate
|
Difference
| ||||||||||
Gross Cash Earnings
| 708 | 827 | (119) | |||||||||
Gross Operating Assets (4 quarter average)
| 4,058* | 4,054 | 4 | |||||||||
Required Return
| 8% | 8% | ||||||||||
Capital Charge
| (325) | (324) | (1) | |||||||||
Economic Profit (VVA)
| 383 | 503 | (120) | |||||||||
FY 2020 Target
| 419 | 419 | ||||||||||
Change in Economic Profit (VVA)
| (36) | 84 | ||||||||||
MIP Financial Payout
| 49% | 197% | -148% |
Category
|
Criteria
|
Measures
|
Key Results
|
Points
|
Score
(0x to 2x)
| |||||
Company
performance
during pandemic
| FY20 company goals | Scorecard results covering 7 categories | Met or exceeded goals | 10 | 12 | |||||
Customers
| Customer Satisfaction | Net Promoter Score | NPS improved during pandemic |
5
|
10
| |||||
Innovation to deliver services/
products during pandemic
|
Innovations in online training, remote
support in face of COVID
| No missed customer shipment, installation or service event in 2H; vast majority of service and training delivered virtually | ||||||||
Employees
|
Responsiveness to impact of
pandemic on workforce
| Employee safety, support, resources, and wellness tracking | Employee engagment increased to world class level; including safety, support & wellbeing | 5 | 10 | |||||
Stockholders
| Ensure access to liquidity | Cost savings, net income, working capital | Fiscal year 2020 ending leverage ratio less than 0x with accessible liquidity at >$1.3B | 5 | 10 | |||||
Effectiveness in striking Siemens Healthineers' deal & progressing towards closing | Deal price, multiple & stockholder approval | One of largest all cash multiple in medtech industry with >98% stockholder approval + ability to accelerate strategy | ||||||||
Total
|
25
|
42
|
•
|
Individual Strategic Goals
|
• |
Grow our core radiation therapy business
|
• |
Build software capacity and data capability
|
• |
Expand to new markets
|
• |
Delight customers & patients
|
• |
Inspire people
|
• |
Manage the
COVID-19
pandemic impact, balancing needs of our customers, employees and stockholders
|
• |
Execute on the Merger with Siemens Healthineers
|
Name
|
Grow Core RT
Business
|
Build Software
Capacity &
Data Capability
|
Expand to New
Markets
|
Delight
Customers &
Patients
|
Inspire
People
|
Manage
COVID-19
Impact
|
Execute
Merger w/
Siemens
Heatlhineers
|
Total
| ||||||||||
Dow R. Wilson
| Weight | 20% | 15% | 25% |
40%
| 100% | ||||||||||||
Score | 25% | 15% | 25% |
50%
| 115% | |||||||||||||
Kolleen T. Kennedy
| Weight | 30% | 50% | 10% | 10% | 100% | ||||||||||||
Score | 35% | 60% | 10% | 5% | 110% | |||||||||||||
J. Michael Bruff
| Weight | 60% | 40% | 100% | ||||||||||||||
Score | 65% | 45% | 110% | |||||||||||||||
Christopher A. Toth
| Weight | 25% | 10% | 35% | 10% | 20% | 100% | |||||||||||
Score | 30% | 10% | 40% | 10% | 25% | 115% | ||||||||||||
Miachael D. Hutchinson
| Weight | 10% | 15% | 40% | 15% | 20% | 100% | |||||||||||
Score | 10% | 15% | 40% | 15% | 30% | 110% |
Strategic Goal Category
|
Key Result
| |
Grow Core RT Business | On track for goal of 4.5M patient touches despite pandemic with successful Ethos launch exceeding planned orders/installations and strategic initiatives delivering at or above internal goals. | |
Expand to New Markets | Integration milestones for CTSI and Interventional Oncology Solutions on track or ahead of schedule with strong retention/attraction of critical talent. | |
Inspire People | Fostered increase in employee engagement and diversity, inclusion and belonging, achieving engagement scores in line with top tier companies. Built leadership bench strength and executed internal succession plans for several key senior leadership roles in support of our long-term strategy of transforming into a multi-disciplinary integrated cancer care company. | |
Manage
COVID-19
Impact
| Successfully balanced interests of customers, employees and stockholders, sustaining high employee engagement and safety, and increasing customer net promoter score in the midst of the pandemic. | |
Execute on Merger with
Siemens Healthineers
|
Signed
all-cash
deal valued at $16.4 billion and on track for anticipated close and integration planning.
|
Strategic Goal Category
|
Key Result
| |
Grow Core RT Business | Enabled first human treatment on ProBeam with Flash. | |
Expand to New Markets | Prepared Cardiac RadioAblation multi-institutional clinical trial plan, and achieved acquisition integration milestones for CTSI, Humediq, Interventional Solutions and Noona. | |
Delight Customers & Patients | Ensured successful launch of installed base and service management tools to better support our customers. | |
Inspire People | Expanded relationships and fostered high performing, collaborative executive leadership team. |
Strategic Goal Category
|
Key Result
| |
Inspire People | Built capability and scalability within Finance and IT functions through shared service migrations, functional reorganizations, launch of new financial planning and treasury management tools, stabilization of human capital management and payroll systems, and enhanced process and internal controls. Improved engagement and barriers to execution scores. | |
Manage
COVID-19
Impact
| Exceeded cash flow and liquidity targets, enhanced forecasting accuracy and executed on cost savings measures to ensure continued financial health of the business while navigating the pandemic impact. |
Strategic Goal Category
|
Key Result
| |
Grow Core RT Business | Exceeded revised profitability and inventory goals with sales and operations and cash flow from operations above forecast. | |
Build Software & Data Capability | Leveraged cross organization collaboration to expand global reach and accelerate tech enabled services strategies, including key product launch and expansion of CTSI services business. | |
Expand to New Markets | Achieved acquisition integration milestones for CTSI, with business continuing to outperform. AOI site |
expansion on target providing additional locations of care in India. Established Oncology as a Service (OaaS) program framework. | ||
Delight Customers & Patients | Increased net promoter scores. Launched Unity 2.0 for field service representatives with user adoption increased from 47% in 2018 to 86% in 2020. B2E score greatly exceeded target. | |
Inspire People | Built leadership bench strength and enhanced leadership development to prepare leaders to scale with our continued business growth. Increased engagement survey scores related to leadership and diversity, inclusion and belonging. Continued to build external leadership network focused on driving transformational change. |
Strategic Goal Category
|
Key Result
| |
Grow Core RT Business |
Established protocols for handling customer inquiries and requests relating to potential solvency impacts from
COVID-19.
| |
Expand to New Markets |
Filed new patent applications of strategic importance. Developed and enhanced intellectual property strategies for Noona, cryo and
migrate-to-cloud
initiatives. Assist business with enablement and commercialization of new features for customers in support of new market expansion and also in response to
COVID-19-related
needs.
| |
Inspire People | Updated Company sustainability targets related to energy, greenhouse gases and water. In partnership with human resources, enhanced processes and education related to performance improvement and employee relations. | |
Manage
COVID-19
Impact
|
Helped establish
COVID-19
response initiatives to ensure the health and safety of our employees and the customers they support while ensuring appropriate data privacy.
| |
Execute on Merger with
Siemens Healthineers
|
Helped lead process and negotiations of the Merger with Siemens Healthineers, an
all-cash
deal valued at $16.4 billion and ensure transaction is on track for anticipated close and integration planning.
|
•
|
Calculation of Fiscal Year 2020 MIP Payouts
|
Name
|
MIP
Target
(1)
|
Financial
|
Individual Strategic
|
Total %
Payout
|
MIP
Award
| |||||||||||||
Weight
|
% Payout
|
Weight
|
% Payout
| |||||||||||||||
Dow R. Wilson
| $ | 1,250,000 | 80% | 100% | 20% | 115.0% | 103.0% | $ | 1,287,500 | |||||||||
Kolleen T. Kennedy
| $ | 649,926 | 80% | 100% | 20% | 110.0% | 102.0% | $ | 662,925 | |||||||||
J. Michael Bruff
| $ | 388,780 | 80% | 100% | 20% | 110.0% | 102.0% | $ | 396,556 | |||||||||
Christopher A. Toth
| $ | 431,250 | 80% | 100% | 20% | 115.0% | 103.0% | $ | 444,188 | |||||||||
Michael D. Hutchinson
| $ | 134,111 | 80% | 100% | 20% | 110.0% | 102.0% | $ | 136,793 |
(1)
|
MIP targets are prorated for fiscal year 2020 to reflect December 2019 promotion for Mr. Bruff and June 2020 hire date for Mr. Hutchinson. In addition, Mr. Bischoping was not eligible for a fiscal year 2020 bonus payment as his employment terminated prior to fiscal year end.
|
• |
Grant Types and Mix.
For fiscal year 2020, the Compensation Committee continued to grant equity value in the following mix of long-term equity incentives for ongoing awards:
|
Executive
|
Performance Stock Options
(PSOs)
|
Performance Share Units
(PSUs)
|
Stock Options
(SO)
|
Restricted Stock Units
(RSUs)
| ||||
CEO
| 60% | 40% | ||||||
Other NEOs
| 60% | 20% | 20% |
• |
The number of Mr. Wilson's target PSOs was determined by dividing the intended target PSO grant value by the fair value of a PSO on the grant date, which was equal to (i) the Black-Scholes value per share on the date of grant adjusted by (ii) the grant date fair value of the contingent market condition as determined using Monte Carlo simulation.
|
• |
The number of target PSUs for each NEO was determined by dividing the intended target PSU grant value by the fair value of a PSU on the grant date, which was equal to (i) the closing stock price on the date of grant adjusted by (ii) the grant date fair value of the contingent market condition as determined using Monte Carlo simulation.
|
• |
The number of stock options for each NEO (other than Mr. Wilson who was not granted any time-based stock options) was determined by dividing the intended target grant value of the NEO's stock options by the Black-Scholes value per share on the date of grant.
|
• |
The number of RSUs for each NEO (other than Mr. Wilson who was not granted any RSUs) was determined by dividing the intended target grant value of the NEO's RSUs by the closing stock price on the date of grant.
|
Name
|
Performance Options
(1)
|
Performance Share Units
|
Stock Options
|
Restricted
Stock Units
|
Target
Value of
FY 2020
Awards
| |||||||||||||||||||||||||||||||||||||||
Target
Value
|
Target
PSOs
|
Maximum
PSOs
|
Target
Value
|
Target
PSUs
|
Maximum
PSUs
|
Grant
Value
|
Stock
Options
|
Grant
Value
|
RSUs
| |||||||||||||||||||||||||||||||||||
Dow R. Wilson
| $ | 4,500,000 | 130,095 | 260,190 | $ | 3,000,000 | 20,763 | 41,526 | $ | 7,500,000 | ||||||||||||||||||||||||||||||||||
Kolleen T. Kennedy
| $ | 1,260,000 | 8,859 | 17,718 | $ | 420,000 | 14,122 | $ | 420,000 | 2,859 | $ | 2,100,000 | ||||||||||||||||||||||||||||||||
J. Michael Bruff
| $ | 900,000 | 6,328 | 12,656 | $ | 300,000 | 10,087 | $ | 300,000 | 2,042 | $ | 1,500,000 | ||||||||||||||||||||||||||||||||
Christopher A. Toth
(2)
| $ | 1,200,000 | 8,437 | 16,874 | $ | 400,000 | 13,450 | $ | 2,400,000 | 14,317 | $ | 4,000,000 | ||||||||||||||||||||||||||||||||
Michael D. Hutchinson
| $ | - | - | - | $ | - | - | $ | 1,900,000 | 11,014 | $ | 1,900,000 | ||||||||||||||||||||||||||||||||
Gary E. Bischoping
(3)
| $ | 930,000 | 6,539 | 13,078 | $ | 310,000 | 10,424 | $ | 310,000 | 2,110 | $ | 1,550,000 |
(1) |
The PSOs granted to Mr. Wilson have a seven-year term and an exercise price equal to the Company's closing stock price on the date of grant.
|
(2) |
The RSUs granted to Mr. Toth are comprised of (i) an ongoing grant of 2,723 RSUs with a target value of $400,000 and (ii) a retention grant of 11,594 RSUs with a target value of $2,000,000.
|
(3) |
Mr. Bischoping resigned in March 2020, and as a result, he forfeited all his unvested PSUs, RSUs and options.
|
•
|
Fiscal Year 2020 Performance Share Units (PSUs) and Performance Stock Options (PSOs)
|
3-Year Revenue Compound Annual Growth Rate
| ||||||||||||
>0.0%
|
3.5%
|
7.0%
|
10.5%
|
14.0%
| ||||||||
4.0%
| 100% | 133% | 167% | 200% | 200% | |||||||
2.0%
| 67% | 100% | 133% | 167% | 200% | |||||||
0.0%
| 33% | 67% | 100% | 133% | 167% | |||||||
-2.0%
| 0% | 33% | 67% | 100% | 133% | |||||||
-4.0%
| 0% | 0% | 33% | 67% | 100% |
• |
Reduced by 25 percent if
3-year
TSR ranks below the 25
th
percentile of Business Model peers.
|
• |
Increased by 25 percent if
3-year
TSR ranks above the 75
th
percentile of Business Model peers.
|
• |
Unchanged if
3-year
TSR ranks between 25
th
and 75
th
percentiles of Business Model peers.
|
Varian's Business Model Peers
| ||
Abbott Laboratories | Hologic, Inc. | |
AbbVie Inc. | IDEXX Laboratories, Inc. | |
Agilent Technologies, Inc. | Intuitive Surgical, Inc. | |
Alexion Pharmaceuticals, Inc. | Ion Beam Applications SA | |
Allscripts Healthcare Solutions, Inc. | IQVIA Holdings Inc. | |
Amgen Inc. | Johnson & Johnson | |
athenahealth, Inc.* | Laboratory Corporation of America Holdings | |
C.R. Bard * | LifePoint Health, Inc.* | |
Baxter International Inc. | Medtronic plc | |
Becton, Dickinson and Company | Merck & Co., Inc. | |
Biogen Inc. | Mettler-Toledo International Inc. | |
Bio-Rad
Laboratories, Inc.
| Mylan N.V. | |
Boston Scientific Corporation | Patterson Companies, Inc. | |
Bristol-Myers Squibb Company | PerkinElmer, Inc. | |
Bruker Corporation | Pfizer Inc. | |
Cerner Corporation | QIAGEN N.V. | |
Danaher Corporation | Quest Diagnostics Incorporated | |
DaVita Inc. | ResMed Inc. | |
DENTSPLY SIRONA Inc. | Stryker Corporation | |
Edwards Lifesciences Corporation | Teleflex Incorporated | |
Elekta AB (publ) | Tenet Healthcare Corp. | |
Endo International plc | The Cooper Companies, Inc. | |
Envision Healthcare Corporation * | Universal Health Services, Inc. | |
HCA Holdings, Inc. | Waters Corporation | |
Henry Schein, Inc. | West Pharmaceutical Services, Inc. | |
Hill-Rom
Holdings, Inc.
| Zoetis Inc. |
* |
Approved by the Committee but removed after being acquired or taken private during fiscal year 2018 to 2020.
|
•
|
Settlement of PSUs and PSOs Awarded in Fiscal Year 2018
|
3-Year Revenue Compound Annual Growth Rate
| ||||||||||||
0.0%
|
3.5%
|
7.0%
|
10.5%
|
14.0%
| ||||||||
4.0%
|
100%
|
133%
|
167%
|
200%
|
200%
| |||||||
2.0%
| 67% | 100% | 133% | 167% | 200% | |||||||
0.0%
| 33% | 67% | 100% | 133% | 167% | |||||||
-2.0%
| 0% | 33% | 67% | 100% | 133% | |||||||
-4.0%
| 0% | 0% | 33% | 67% | 100% |
• |
A 100% payout maximum when Varian's
3-year
TSR ranks below 25
th
percentile
|
• |
A 100% payout minimum when Varian's
3-year
TSR ranks above 75
th
percentile
|
• |
The Relative TSR Modifier did not apply if Varian's
3-year
TSR ranked between 25
th
and 75
th
percentiles
|
Name
|
Award
Type
|
Matrix
Payout %
|
TSR
Modifier
|
Total
Payout %
|
2018
Target Shares
|
2018
Shares Earned
| ||||||
Dow R. Wilson
| PSO | 73.8% | - | 73.8% | 215,716 | 159,198 | ||||||
Dow R. Wilson
| PSU | 73.8% | - | 73.8% | 25,681 | 18,952 | ||||||
Kolleen T. Kennedy
| PSU | 73.8% | - | 73.8% | 11,536 | 8,513 | ||||||
J. Michael Bruff
| PSU | - | - | - | - | - | ||||||
Christopher A. Toth
| PSU | 73.8% | - | 73.8% | 2,594 | 1,914 | ||||||
Michael D. Hutchinson
| PSU | - | - | - | - | - | ||||||
Gary E. Bischoping
| PSU | - | - | - | - | - |
•
|
Stock Options (SOs)
|
•
|
Restricted Stock Units (RSUs)
|
Position
|
Stock Ownership Multiple of Salary
| |
CEO
| 6x | |
Next four most highly compensated executive officers
| 3x | |
Other corporate officers
| 2x |
• |
Stock ownership requirements
|
• |
Recoupment policy
|
• |
Prohibitions on executive officers and other employees subject to the quarterly blackout period engaging in any speculative transactions in Company securities, such as hedging
|
• |
Prohibitions on executive officers from pledging Company securities in margin accounts or as collateral for a loan
|
• |
Executive cash incentive payouts and PSU/PSO awards are based on financial performance metrics that drive stockholder value and are capped
|
• |
PSU/PSO awards are also based on multi-year relative TSR goals
|
• |
All equity awards have vesting requirements that align employees' interests with stockholders
|
Name and Principal Position
|
Fiscal Year
(1)
|
Salary ($) |
Bonus ($)
(2)
|
Stock Awards ($)
(3)(4)
|
Option Awards ($)
(4)(5)
|
Non-Equity
Incentive Plan Compensation ($)
(6)
|
Change in Pensions Value and Nonqualified Deferred Compensation Earnings ($) |
All Other Compensation ($)
(7)
|
Total ($) | |||||||||||
Dow R. Wilson
Chief Executive
Officer
(8)
|
2020 2019 2018 |
$965,385 $1,000,000 $1,000,000 |
-
-
-
|
$3,000,046
$2,800,005
$2,800,000
|
$4,499,986 $4,200,011 $4,200,000 |
$1,287,500
$1,403,500
$2,237,500
|
- - - |
$50,056 $42,780 $38,939 |
$9,802,972 $9,446,296 $10,276,439 | |||||||||||
Kolleen T. Kennedy
President, Proton
Solution and Chief
Growth Officer
|
2020 2019 2018 |
$736,027 $721,871 $684,899 |
-
-
-
|
$1,680,032 $1,679,998 $1,680,000 |
$419,847
$419,991
$420,000
|
$662,925
$703,740
$1,126,538
|
- - - |
$23,204
$20,679 $22,530 |
$3,522,035 $3,546,279 $3,933,967 | |||||||||||
J. Michael Bruff
Senior Vice President,
Finance and Chief
Financial Officer
(9)
| 2020 | $524,425 | - | $1,200,021 | $299,887 | $396,556 | - | $18,996 | $2,439,885 | |||||||||||
Christopher A. Toth
President and Chief
Operating Officer
(10)
|
2020 2019 |
$575,481 $524,269 |
-
-
|
$3,599,996
$1,000,009
|
$399,869
$249,989
|
$444,188 $430,290 |
- - |
$22,240
$18,420
|
$5,041,773 $2,222,977 | |||||||||||
Michael D. Hutchinson
Senior Vice President,
Chief Legal Officer
(11)
| 2020 | $185,192 | $75,000 | $1,899,915 | - | $136,793 | - | $280 | $2,297,180 | |||||||||||
Gary E. Bischoping
Former Senior Vice President,
Finance and Chief Financial
Officer
(12)
|
2020 2019 2018 |
$250,567 $563,009 $550,000 |
-
-
-
|
$1,240,022 $1,240,036 $1,240,000 |
$309,906
$310,000 $310,000 |
-
$451,557 $734,250 |
- - - |
$420
$11,992
$39,626
|
$1,800,915 $2,576,594 $2,873,876 |
(1) |
Fiscal year 2020 spanned from September 28, 2019 through October 2, 2020, which resulted in 371 days in the fiscal year, instead of the typical 364 days; as such, salaries reported in the table above reflect one additional week of pay compared to a typical year.
|
(2) |
Mr. Hutchinson received a signing bonus of $75,000 in connection with joining the Company on June 1, 2020.
|
(3) |
This column represents the aggregate grant date fair value of RSU and PSU awards computed in accordance with Accounting Standards Codification 718,
'Compensation-Stock Compensation'
('
ASC 718
'). The fair value for RSU awards was determined using the closing price of our common stock on the grant date multiplied by the number of shares subject to the award. The fair value for PSU awards granted in fiscal years 2018, 2019, and 2020 was determined using the closing price of our common stock on the grant date adjusted according to the contingent market condition specified in the terms of those awards and multiplied by the number of shares subject to the award. For more information on how the grant date fair value of RSU and PSU awards was determined, please see 'Critical Accounting Estimates' in Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form
10-K
for the fiscal years ended October 2, 2020, September 27, 2019, and September 28, 2018.
|
Name
|
Value of PSOs at Target
($)*
|
Value of PSUs at Target
($)*
|
Value of Stock Options
($)
|
Value of RSUs
($)**
|
Total Combined Value of Equity Awards
($)
| |||||||||||||||
(Granted
11/22/19)
|
(Granted
11/21/19)
|
(Granted
2/13/20)
|
(Granted
2/13/20)
| |||||||||||||||||
Dow R. Wilson
| $ | 4,499,986 | $3,000,046 | - | - | $7,500,032 | ||||||||||||||
Kolleen T. Kennedy
| - | $1,260,016 | $419,847 | $420,016 | $2,099,879 | |||||||||||||||
J. Michael Bruff
| - | $900,031 | $299,887 | $299,990 | $1,499,908 | |||||||||||||||
Christopher A. Toth
| - | $1,199,995 | $399,869 | $2,400,001 | $3,999,864 | |||||||||||||||
Michael D. Hutchinson
| - | - | - | $1,899,915 | $1,899,915 | |||||||||||||||
Gary E. Bischoping
| - | $930,042 | $309,906 | $309,980 | $1,549,928 |
* |
Assuming the highest level of performance is achieved under the applicable performance conditions, the maximum possible value of the PSOs and/or PSUs granted to Mr. Wilson, Ms. Kennedy, Mr. Bruff, Mr. Toth and Mr. Bischoping on the grant date is $15,000,064, $2,520,032, $1,800,062, $2,399,990 and $1,860,084, respectively. Mr. Wilson was granted his PSUs on November 22, 2019.
|
** |
Mr. Toth was granted a second RSU award and Mr. Hutchinson was granted a new hire RSU award on August 21, 2020.
|
(5) |
This column represents the aggregate grant date fair value of stock option and PSO awards granted to the NEOs computed in accordance with ASC 718. The fair value for stock option awards was determined using the Black-Scholes option-pricing model. The fair value for PSO awards granted in fiscal years 2019 and 2020 was determined using the Black-Scholes option-pricing model and adjusted according to the contingent market condition specified in the terms of those awards. For more information on how the grant date fair value of stock option and PSO awards was determined, please see 'Critical Accounting Estimates' in Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations and the note on Employee Stock Plans in the Notes to Consolidated Financial Statements in our Annual Report on Form
10-K
for the fiscal years ended October 2, 2020, September 27, 2019 and September 28, 2018.
|
(6) |
This column represents annual cash incentives earned under the MIP for the applicable fiscal year. Awards for Mr. Bruff and Mr. Hutchinson were
pro-rated
to reflect time in role in fiscal year 2020. Mr. Bischoping was ineligible for an award payout as his departure date from Varian did not meet the payout requirements. Amounts include the incentive payments deferred under the DCP. Please refer to the Grant of Plan-Based Awards Table below for more information.
|
(7) |
Set forth in the table below are the material components of the 'All Other Compensation' column for fiscal year 2020.
|
Name
|
Company Contributions to 401(k)
(A)
|
Company Match of Charitable Contributions |
Other (B) | |||||||||
Dow R. Wilson
| $21,415 | $10,000 | $18,640 | |||||||||
Kolleen T. Kennedy
| $19,469 | $2,895 | $840 | |||||||||
J. Michael Bruff
| $18,156 | - | $840 | |||||||||
Christopher A. Toth
| $17,100 | $4,300 | $840 | |||||||||
Michael D. Hutchinson
| - | - | $280 | |||||||||
Gary E. Bischoping
| - | - | $420 |
(A) |
Amount represents Company matching contributions to the NEO's contributions to the Company's 401(k) plan, matched at a level of $1.00 for each dollar contributed, up to 6% of eligible earnings through July 16, 2020 when the match was temporarily suspended for all employees.
|
(B) |
For Mr. Wilson, the amount represents reimbursement of financial counseling. For all employees, this also includes company paid Life Insurance for the time they were each actively employed by the Company in fiscal year 2020.
|
(8) |
Mr. Wilson requested a temporary 20% salary reduction, from $1,000,000 to $800,000 effective for the second half of calendar year 2020, as part of company cost saving measures in response to the adverse financial impact from the
COVID-19
pandemic.
|
(9) |
Mr. Bruff was promoted from serving as the Company's Senior Vice President, Finance and Investor Relations to serve as Senior Vice President, Finance and Chief Financial Officer on December 1, 2019, having thereby succeeded Mr. Bischoping.
|
(10) |
Mr. Toth served as the Company's President, Varian Oncology Systems throughout the entirety of fiscal year 2020 and was promoted to a newly created role as President and Chief Operating Officer on October 5, 2020.
|
(11) |
Mr. Hutchinson was hired to serve as the Company's Senior Vice President, Chief Legal Officer on June 1, 2020.
|
(12) |
Mr. Bischoping served as the Company's Senior Vice President, Finance and Chief Financial Officer through December 1, 2019 when he transitioned roles to serve as the Company's President, Interventional Oncology Solutions; Mr. Bischoping served in the latter role until his departure from the Company on March 6, 2020.
|
Name
|
Award Type
|
Grant
Date
|
Estimated Possible Payouts
Under
Non-Equity
Incentive
Plan Awards (1)
|
Estimated Future Payouts
Under Equity Incentive
Plan Awards (2)
|
All Other
Stock
Awards:
Number
of
Shares of
Restricted
Stock
Units (#)
(3)
|
All Other
Option
Awards:
Number of
Securities
Underlying
Options (#)
(4)
|
Exercise
or Base
Price of
Option
Awards
($/Sh)
|
Grant
Date Fair
Value of
Stock
and
Option
Awards
(5)
| ||||||||||||||||||||||||||||||||||||||||
Threshold
($)
|
Target
($)
|
Maximum
($)
|
Threshold (#) |
Target (#) |
Maximum (#) | |||||||||||||||||||||||||||||||||||||||||||
Dow R. Wilson
| MIP Award | N/A | $0 | $1,250,000 | $2,500,000 | - | - | - | - |
-
| - | - | ||||||||||||||||||||||||||||||||||||
PSOs | 11/22/2019 | - | - | - | 0 | 130,095 | 260,190 | - | - | $131.58 | $4,499,986 | |||||||||||||||||||||||||||||||||||||
PSUs | 11/22/2019 | - | - | - | 0 | 20,763 | 41,526 | - | - | - | $3,000,046 | |||||||||||||||||||||||||||||||||||||
Kolleen T. Kennedy
| MIP Award | N/A | $0 | $649,926 | $1,299,852 | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||
PSUs | 11/21/2019 | - | - | - | 0 | 8,859 | 17,718 | - | - | - | $1,260,016 | |||||||||||||||||||||||||||||||||||||
RSUs | 2/13/2020 | - | - | - | - | - | - | 2,859 | - | - | $420,016 | |||||||||||||||||||||||||||||||||||||
Stock Options | 2/13/2020 | - | - | - | - | - | - | - | 14,122 | $146.91 | $419,847 | |||||||||||||||||||||||||||||||||||||
J. Michael Bruff
| MIP Award | N/A | $0 | $388,780 | $777,561 | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||
PSUs | 11/21/2019 | - | - | - | 0 | 6,328 | 12,656 | - | - | - | $900,031 | |||||||||||||||||||||||||||||||||||||
RSUs | 2/13/2020 | - | - | - | - | - | - | 2,042 | - | - | $299,990 | |||||||||||||||||||||||||||||||||||||
Stock Options | 2/13/2020 | - | - | - | - | - | - | - | 10,087 | $146.91 | $299,887 | |||||||||||||||||||||||||||||||||||||
Christopher A. Toth
| MIP Award | N/A | $0 | $431,250 | $862,500 | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||
PSUs | 11/21/2019 | - | - | - | 0 | 8,437 | 16,874 | - | - | - | $1,199,995 | |||||||||||||||||||||||||||||||||||||
RSUs | 2/13/2020 | - | - | - | - | - | - | 2,723 | - | - | $400,036 | |||||||||||||||||||||||||||||||||||||
RSUs | 8/21/2020 | - | - | - | - | - | - | 11,594 | - | - | $1,999,965 | |||||||||||||||||||||||||||||||||||||
Stock Options | 2/13/2020 | - | - | - | - | - | - | - | 13,450 | $146.91 | $399,869 | |||||||||||||||||||||||||||||||||||||
Michael D. Hutchinson
| MIP Award | N/A | $0 | $134,111 | $268,221 | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||
RSUs | 8/21/2020 | - | - | - | - | - | - | 11,014 | - | - | $1,899,915 | |||||||||||||||||||||||||||||||||||||
Gary E. Bischoping (6)
| MIP Award | N/A | $0 | $0 | $0 | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||
PSUs | 11/21/2019 | - | - | - | 0 | 6,539 | 13,078 | - | - | - | $930,042 | |||||||||||||||||||||||||||||||||||||
RSUs | 2/13/2020 | - | - | - | - | - | - | 2,110 | - | - | $309,980 | |||||||||||||||||||||||||||||||||||||
Stock Options | 2/13/2020 | - | - | - | - | - | - | - | 10,424 | $146.91 | $309,906 |
(1) |
These columns represent the potential awards under our MIP as further discussed in 'Compensation Discussion and Analysis-Fiscal Year 2020 Compensation Program and Pay Decisions-Annual Cash Incentives.' For each NEO, the target amount is calculated by multiplying the NEO's target award percentage by the NEO's annual base salary, and prorated for eligible service over the fiscal year. The maximum award is 200% of each NEO's target award. The MIP provided for a threshold amount in fiscal year 2020. The dollar value of the actual cash incentive award earned for fiscal year 2020 for each NEO is set forth in the Summary Compensation Table above. As such, the amounts set forth in these columns do not represent the actual cash incentive earned by any of the NEOs for fiscal year 2020. Mr. Bischoping resigned in March 2020, and as a result, he was not eligible to receive an annual cash incentive under the MIP for fiscal 2020.
|
(2) |
Consists of PSO grants to Mr. Wilson and PSU grants to each NEO under the 2005 Stock Plan. The maximum number of PSOs or PSUs that can be earned is 200% of the target PSOs or PSUs based on achievement of
3-year
revenue growth and change in EBIT as a percent of revenue goals subject to a relative TSR modifier based on a set of Business Model Peers. The determination of the number of PSUs earned is made at the end of the three-year performance period at which time the earned PSUs vest and are settled. The determination of the number of PSOs earned is made at the end of the three-year performance period at which time the earned PSOs vest and become exercisable. Each NEO must be employed by us throughout the performance period for his or her PSOs or PSUs to vest, except in cases involving retirement, death, disability, a qualified termination that occurs in connection with a change in control, or if the award is not assumed in connection with certain corporate transactions, which include the Merger. See the 'Compensation Discussion and Analysis' and 'Potential Payments Upon Termination or Change in Control' for more information regarding these awards.
|
(3) |
Consists of a single RSU grant to each NEO other than Mr. Wilson and Mr. Toth under the 2005 Stock Plan. Each RSU represents a right to one share of our common stock. For Ms. Kennedy, Mr. Bruff, Mr. Toth, and Mr. Bischoping, the RSUs granted on February 13, 2020 vest and are settled in three equal annual increments on February 15th beginning one year after grant. For Mr. Toth and Mr. Hutchinson, the RSUs granted on August 21, 2020 vest and are settled in three equal annual increments on August 10th beginning one year after grant. For each applicable NEO, the vesting of his or her RSUs is subject to the NEO being employed by us through each vesting date, except in cases involving retirement, death, disability, a qualified termination that occurs in connection with a change in control, or if the award is not assumed in connection with certain corporate transactions, which include the Merger. See the 'Compensation Discussion and Analysis' and 'Potential Payments Upon Termination or Change in Control' for more information regarding these awards.
|
(4) |
Consists of a single stock option grant to each NEO other than Mr. Wilson and Mr. Hutchinson under the 2005 Stock Plan at an exercise price equal to the closing price (fair market value) of the underlying shares on the grant date and expiring seven years from the grant date.
One-third
of the award vests one year after the grant date and the remainder vests in equal monthly installments
|
(5) |
Grant date fair value is computed in accordance with ASC 718. Please see footnotes (3), (4) and (5) to the Summary Compensation Table for more information regarding how the grant date fair value was determined for these awards.
|
(6) |
Mr. Bischoping resigned in March 2020, and as a result, he forfeited all his unvested PSUs, RSUs and options.
|
Option Awards (1) (2)
|
Stock Award (2)
| ||||||||||||||||||||||||||||||
Name
|
Option
Grant
Date
|
Number of
Securities
Underlying
Unexercised
Options
Exercisable
(#)
|
Number of Securities Underlying Unexercised Options Unexercisable (#) |
Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) |
Option Exercise Price ($) |
Option Expiration Date |
Number of Shares or Units of Stock That Have Not Vested (#) |
Market Value of Shares or Units of Stock That Have Not Vested ($) (12) |
Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) |
Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) (12) | |||||||||||||||||||||
Dow R. Wilson
| 02/13/2015 | 111,830 | - | $ | 81.97 | 02/13/2022 | |||||||||||||||||||||||||
02/10/2017 | 75,015 | - | $ | 80.40 | 02/10/2024 | ||||||||||||||||||||||||||
11/17/2017 | 159,198 | - | $ | 109.03 | 11/17/2024 | ||||||||||||||||||||||||||
11/16/2018 | - | - | 163,361 | $ | 118.76 | 11/16/2025 | |||||||||||||||||||||||||
11/22/2019 | - | - | 130,095 | $ | 131.58 | 11/22/2026 | |||||||||||||||||||||||||
23,577 |
(9)
| $ | 4,053,594 | ||||||||||||||||||||||||||||
20,763 |
(11)
| $ | 3,569,783 | ||||||||||||||||||||||||||||
Total
|
346,043
|
-
|
293,456
|
-
|
-
|
44,340
|
$
|
7,623,376
| |||||||||||||||||||||||
Kolleen T. Kennedy
| 02/08/2018 | - | 2,716 | $ | 112.82 | 02/08/2025 | |||||||||||||||||||||||||
02/14/2019 | - | 6,802 | $ | 131.77 | 02/14/2026 | ||||||||||||||||||||||||||
02/13/2020 | - | 14,122 | $ | 146.91 | 02/13/2027 | ||||||||||||||||||||||||||
1,241 |
(3)
| $ | 213,365 | ||||||||||||||||||||||||||||
2,125 |
(4)
| $ | 365,351 | ||||||||||||||||||||||||||||
2,859 |
(6)
| $ | 491,548 | ||||||||||||||||||||||||||||
10,777 |
(8)
| $ | 1,852,890 | ||||||||||||||||||||||||||||
8,859 |
(10)
| $ | 1,523,128 | ||||||||||||||||||||||||||||
Total
| - |
23,640
|
6,225
|
$
|
1,070,264
|
19,636
|
$
|
3,376,017
| |||||||||||||||||||||||
J. Michael Bruff
| 08/17/2017 | 3,750 | - | $ | 99.26 | 08/17/2024 | |||||||||||||||||||||||||
02/08/2018 | 819 | 216 | $ | 112.82 | 02/08/2025 | ||||||||||||||||||||||||||
02/14/2019 | 3,016 | 2,700 | $ | 131.77 | 02/14/2026 | ||||||||||||||||||||||||||
08/15/2019 | 3,779 | 6,686 | $ | 107.32 | 08/15/2026 | ||||||||||||||||||||||||||
02/13/2020 | - | 10,087 | $ | 146.91 | 02/13/2027 | ||||||||||||||||||||||||||
197 |
(3)
| $ | 33,870 | ||||||||||||||||||||||||||||
844 |
(4)
| $ | 145,109 | ||||||||||||||||||||||||||||
1,553 |
(5)
| $ | 267,007 | ||||||||||||||||||||||||||||
2,042 |
(6)
| $ | 351,081 | ||||||||||||||||||||||||||||
1,425 |
(8)
| $ | 245,000 | ||||||||||||||||||||||||||||
6,328 |
(10)
| $ | 1,087,973 | ||||||||||||||||||||||||||||
Total
|
11,364
|
19,689
|
4,636
|
$
|
797,067
|
7,753
|
$
|
1,332,973
| |||||||||||||||||||||||
Christopher A. Toth
| 02/10/2017 | 4,823 | - | $ | 80.40 | 02/10/2024 | |||||||||||||||||||||||||
02/08/2018 | 6,961 | 1,833 | $ | 112.82 | 02/08/2025 | ||||||||||||||||||||||||||
02/14/2019 | 4,524 | 4,049 | $ | 131.77 | 02/14/2026 | ||||||||||||||||||||||||||
02/13/2020 | - | 13,450 | $ | 146.91 | 02/13/2027 | ||||||||||||||||||||||||||
837 |
(3)
| $ | 143,905 | ||||||||||||||||||||||||||||
1,265 |
(4)
| $ | 217,491 | ||||||||||||||||||||||||||||
2,723 |
(6)
| $ | 468,165 | ||||||||||||||||||||||||||||
11,594 |
(7)
| $ | 1,993,356 | ||||||||||||||||||||||||||||
6,415 |
(8)
| $ | 1,102,931 | ||||||||||||||||||||||||||||
8,437 |
(10)
| $ | 1,450,573 | ||||||||||||||||||||||||||||
Total
|
16,308
|
19,332
|
16,419
|
$
|
2,822,919
|
14,852
|
$
|
2,553,504
| |||||||||||||||||||||||
Michael D. Hutchinson
| - | - | 11,014 |
(7)
| $ | 1,893,637 | - | - | |||||||||||||||||||||||
Total
|
-
|
-
|
11,014
|
$
|
1,893,637
|
-
|
-
| ||||||||||||||||||||||||
Gary E. Bischoping
| - | - | - | - | - | - | |||||||||||||||||||||||||
Total
| - | - | - | - | - | - | |||||||||||||||||||||||||
(1) | All options are granted at an exercise price equal to the fair market value (i.e., the closing price) of the underlying shares of our common stock on the date of grant. The following table sets forth the vesting dates for the outstanding unvested option awards: | |||
Grant Date
|
Vesting Schedule (based on original option grant)
| |||
2/13/2015 |
33-1/3%
vested on 2/13/2016;
pro-rata
monthly thereafter until fully vested on 2/13/2018.
| |||
2/10/2017 |
33-1/3%
vested on 2/10/2018;
pro-rata
monthly thereafter until fully vested on 2/10/2020.
| |||
8/17/2017 |
33-1/3%
vested on 8/17/2018;
pro-rata
monthly thereafter until fully vested on 8/17/2020.
| |||
11/17/2017 |
The number of shares and the aggregate market value in the table reflect the number of shares earned on 10/2/2020 based on actual performance through the end of a
3-year
performance period.
| |||
2/8/2018 |
33-1/3%
vested on 2/8/2019;
pro-rata
monthly thereafter until fully vested on 2/8/2021.
| |||
11/16/2018 |
100% vest on 10/1/2021, subject to actual performance. The number of shares and the aggregate market value in the table are based on target performance. The actual number of shares that vest may range from 0% to 200% of target shares based on actual performance at the end of the
3-year
performance period.
| |||
2/14/2019 |
33-1/3%
vest on 2/14/2020;
pro-rata
monthly thereafter until fully vested on 2/14/2022.
| |||
8/15/2019 |
33-1/3%
vest on 8/15/2020;
pro-rata
monthly thereafter until fully vested on 8/15/2022.
| |||
2/13/2020 |
33-1/3%
vested on 2/13/2021;
pro-rata
monthly thereafter until fully vested on 2/13/2023.
| |||
11/22/2019 |
100% vest on 9/30/22, subject to actual performance. The number of shares and the aggregate market value in the table are based on target performance. The actual number of shares that vest may range from 0% to 200% of target shares based on actual performance at the end of the
3-year
performance period.
| |||
(2) | Vesting will occur only if the NEO is employed by us throughout each vesting date or in the case of performance awards, the last day of the performance period, except in cases involving retirement, death, disability, a qualified termination that occurs in connection with a change in control, or if the award is not assumed in connection with certain corporate transactions, which include the Merger. In particular, because Mr. Wilson and Ms. Kennedy are eligible for retirement, certain unvested options and unvested stock awards would continue to vest according to the original vesting schedule even if the services of either were terminated for any reason. See 'Potential Payments Upon Termination or Change in Control' for more information regarding these awards. | |||
(3) |
Grant Date
|
Vesting Schedule (based on total number of RSUs originally granted)
| ||
2/8/2018 | 33 1/3% on 2/15/2019; 33 1/3% on 2/15/2020 and 33 1/3% on 2/15/2021. | |||
(4) |
Grant Date
|
Vesting Schedule (based on total number of RSUs originally granted)
| ||
2/14/2019 | 33 1/3% on 2/15/2020; 33 1/3% on 2/15/2021 and 33 1/3% on 2/15/2022. | |||
(5) |
Grant Date
|
Vesting Schedule (based on total number of RSUs originally granted)
| ||
8/15/2019 | 33 1/3% on 8/10/2020; 33 1/3% on 8/10/2021 and 33 1/3% on 8/10/2022. | |||
(6) |
Grant Date
|
Vesting Schedule (based on total number of RSUs originally granted)
| ||
2/13/2020 | 33 1/3% on 2/15/2021; 33 1/3% on 2/15/2022 and 33 1/3% on 2/15/2023. | |||
(7) |
Grant Date
|
Vesting Schedule (based on total number of RSUs originally granted)
| ||
8/21/2020 | 33 1/3% on 8/10/2021; 33 1/3% on 8/10/2022 and 33 1/3% on 8/10/2023. | |||
(8) |
Grant Date
|
Vesting Schedule (based on total number of PSUs originally granted)
| ||
11/15/2018 |
100% on the last day of fiscal year 2021, subject to actual performance through the end of fiscal year 2021. The number of shares and aggregate market value in the table are based on target performance. The actual number of shares that vest may range from 0% to 200% of target shares based on actual performance at the end of the
3-year
performance period.
|
(9) |
Grant Date
|
Vesting Schedule (based on total number of PSUs originally granted)
| ||
11/16/2018 |
100% on the last day of fiscal year 2021, subject to actual performance through the end of fiscal year 2021. The number of shares and aggregate market value in the table are based on target performance. The actual number of shares that vest may range from 0% to 200% of target shares based on actual performance at the end of the
3-year
performance period.
| |||
(10) |
Grant Date
|
Vesting Schedule (based on total number of PSUs originally granted)
| ||
11/21/2019 |
100% on the last day of fiscal year 2022, subject to actual performance through the end of fiscal year 2022. The number of shares and aggregate market value in the table are based on target performance. The actual number of shares that vest may range from 0% to 200% of target shares based on actual performance at the end of the
3-year
performance period.
| |||
(11) |
Grant Date
|
Vesting Schedule (based on total number of PSUs originally granted)
| ||
11/22/2019 |
100% on the last day of fiscal year 2022, subject to actual performance through the end of fiscal year 2022. The number of shares and aggregate market value in the table are based on target performance. The actual number of shares that vest may range from 0% to 200% of target shares based on actual performance at the end of the
3-year
performance period.
| |||
(12) | Based on the closing price of our common stock as of October 2, 2020 ($171.93). |
Option Awards
|
Stock Awards (1)
| |||||||||||||||
Name
|
Number of Shares Acquired on Exercise (#) |
Value Realized Upon Exercise ($) |
Number of Shares Acquired on Vesting (#) |
Value Realized on Vesting ($) | ||||||||||||
Dow R. Wilson
| 116,723 | $9,870,605 | 41,681 | $5,629,052 | ||||||||||||
Kolleen T. Kennedy
| 20,100 | $791,801 | 13,631 | $2,167,052 | ||||||||||||
J. Michael Bruff
| - | - | 2,234 | $370,267 | ||||||||||||
Christopher A. Toth
| 1,597 | $51,391 | 4,284 | $595,613 | ||||||||||||
Michael D. Hutchinson
| - | - | - | - | ||||||||||||
Gary E. Bischoping
| 22,441 | $438,413 | 1,700 | $248,030 |
(1) |
These amounts include fiscal year 2018 PSUs, which were earned at the end of fiscal year 2020 at 73.8% of target shares, and RSUs that vested during fiscal year 2020.
|
Name
|
Executive Contributions in Last Fiscal Year (1) |
Registrant Contributions in Last Fiscal Year |
Aggregate Earnings in Last Fiscal Year (2) |
Aggregate Withdrawals/ Distributions |
Aggregate Balance at Last Fiscal Year End (3) | |||||||||||||||
Dow R. Wilson
| - | - | $23,173 | - | $885,572 | |||||||||||||||
Kolleen T. Kennedy
| - | - | $1,042,667 | - | $10,031,416 | |||||||||||||||
J. Michael Bruff
| - | - | - | - | - | |||||||||||||||
Christopher A. Toth
| - | - | $17,395 | - | $167,991 | |||||||||||||||
Michael D. Hutchinson
| - | - | - | - | - | |||||||||||||||
Gary E. Bischoping
| - | - | - | - | - |
(1) |
There were no executive contributions attributable to fiscal year 2020.
|
(2) |
None of the earnings in this column are included in the Summary Compensation Table for fiscal year 2020 because they were not preferential or above market.
|
(3) |
Balance at last fiscal year end includes the following amounts reported as compensation to the NEOs in the Summary Compensation Table for fiscal years prior to fiscal year 2020: Mr. Wilson, $705,835 and Ms. Kennedy, $3,241,957
|
Intrinsic Value of Accelerated Equity
Awards (3)
| ||||||||||||||||||||||||||||
Name
|
Cash Severance (1) |
Benefits Continuation (2) |
Options
|
Restricted Stock |
PSUs &
PSOs (4)
|
Tax Reimbursement (5) |
Total
| |||||||||||||||||||||
Dow R. Wilson
| $ | 7,853,500 | $ | 56,574 | - | - | $ | 26,270,388 | $ | - | $ | 34,180,462 | ||||||||||||||||
Kolleen T. Kennedy
| $ | 3,826,168 | $ | 20,454 | $ | 787,002 | $ | 1,070,207 | $ | 3,893,664 | - | $ | 9,597,495 | |||||||||||||||
J. Michael Bruff
| $ | 1,925,000 | $ | 56,582 | $ | 805,500 | $ | 796,896 | $ | 1,332,973 | $ | 2,370,664 | $ | 7,287,615 | ||||||||||||||
Christopher A. Toth
| $ | 2,081,542 | $ | 56,574 | $ | 607,396 | $ | 2,822,861 | $ | 2,670,352 | $ | 4,382,087 | $ | 12,620,812 | ||||||||||||||
Michael D. Hutchinson
| $ | 1,872,500 | $ | 56,574 | - | $ | 1,893,637 | - | $ | 1,922,795 | $ | 5,745,506 |
(1) |
Cash Severance
: Cash severance equal to a multiplier times the sum of (i) annual base salary rate, excluding any temporary compensation reductions related to
COVID-19
pandemic, plus (ii) the greater of (a) the most recently established target bonus, (b) the employee's target bonus as of immediately prior to the change in control or (c) the average annual bonus paid over the prior three fiscal years. The multiplier is 3.0 times for Mr. Wilson, 2.5 times for Ms. Kennedy, and 2.0 times for remaining NEOs. Does not include actual bonus for year of termination, which would be payable in the ordinary course under the MIP as the NEO would have been employed through the end of the performance period, and which bonus amounts are reflected in the Summary Compensation Table above in the
'Non-Equity
Incentive Plan Compensation' column.' Does not reflect any reduction due to payments exceeding the maximum amount that could be paid without implicating the excise tax under Section 4999 of the Internal Revenue Code by less than 10%, although some such reduction would have applied in Mr. Wilson's case upon a hypothetical post-change in control severance event on October 2, 2020.
|
(2) |
Benefits Continuation
: Reflects costs for COBRA benefits continuation premiums for 18 months including medical, dental, and vision insurance.
|
(3) |
Based on the closing stock price as of October 2, 2020 ($171.93). Each outstanding equity award that is subject to vesting provisions will vest in full, with PSUs and PSOs vesting at target levels.
|
(4) |
All PSUs and PSOs are included at target number of shares, except that with respect to PSUs and PSOs earned in October 2020 for fiscal year 2018-2020 performance, 26.2% of target value is included, representing the excess of the 100% of target shares that would have been due upon a hypothetical post-change in control severance event over the 73.8% of target shares that was actually earned based on performance results.
|
(5) |
Tax Reimbursement
. Make-whole payments to indemnify the NEOs for any negative economic impact resulting from the application of the excise tax under Section 4999 of the Internal Revenue Code in connection with the Merger. Consistent with SEC guidance, amounts are based on a hypothetical October 2, 2020 Merger consummation date. As discussed more fully in the 'Compensation Discussion and Analysis,' the Company has, in cooperation with the affected executives, engaged in mitigation planning that is expected to result in no such make-whole payments being made to any NEO other than Mr. Bruff, assuming the anticipated 2021 Merger consummation. The projected make-whole payment for Mr. Bruff upon a 2021 Merger consummation is expected to be less than $3,000,000.
|
Other Termination of Employment (Not in Connection with a Change in Control)
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement
|
Death
|
Disability
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Intrinsic Value of
Equity Awards
(1)
|
Intrinsic Value of
Equity Awards
(1)
|
Intrinsic Value of
Equity Awards
(1)
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Name
|
Options
(2a)
|
Restricted Stock/RSUs
(2b)
|
PSUs
(2c)(5)
|
PSOs
(2d)(5)
|
Total
|
Options
(3a)
|
Restricted Stock/RSUs
(3b)
|
PSUs
(3c)(5)
|
PSOs
(3d)(5)
|
Total
|
Options
(4a)
|
Restricted Stock/RSUs
(4b)
|
PSUs
(4c)(5)
|
PSOs
(4d)(5)
|
Total
| |||||||||||||||||||||||||||||||||||||||||||||
Dow R. Wilson
| $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||||||||||||||||||||
Kolleen T. Kennedy
| $ | 658,295 | $ | 578,716 | $ | 0 | $ | 0 | $ | 1,237,011 | $ | 787,044 | $ | 1,070,264 | $ | 0 | $ | 0 | $ | 1,857,308 | $ | 787,044 | $ | 1,070,264 | $ | 0 | $ | 0 | $ | 1,857,308 | ||||||||||||||||||||||||||||||
J. Michael Bruff
| $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 805,519 | $ | 797,067 | $ | 0 | $ | 0 | $ | 1,602,586 | $ | 805,519 | $ | 797,067 | $ | 0 | $ | 0 | $ | 1,602,586 | ||||||||||||||||||||||||||||||
Christopher A. Toth
| $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 607,475 | $ | 2,822,919 | $ | 0 | $ | 0 | $ | 3,430,394 | $ | 607,475 | $ | 2,822,919 | $ | 0 | $ | 0 | $ | 3,430,394 | ||||||||||||||||||||||||||||||
Michael D. Hutchinson
| $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 1,893,637 | $ | 0 | $ | 0 | $ | 1,893,637 | $ | 0 | $ | 1,893,637 | $ | 0 | $ | 0 | $ | 1,893,637 |
(1) |
Based on the closing stock price as of October 2, 2020 ($171.93).
|
(2a) |
For retirement-eligible NEOs, represents continued vesting of outstanding options granted more than a year prior to October 2, 2020 and prorated acceleration of outstanding options granted less than a year prior to October 2, 2020.
|
(2b) |
For retirement-eligible NEOs, represents continued vesting of outstanding RSUs/RSAs granted more than a year prior to October 2, 2020 and after January 1 of the year following the grant year ('Qualifying Retirement'). Excludes value of RSUs granted on February 13, 2020, as the assumed retirement/termination date of October 2, 2020 does not constitute a Qualifying Retirement for that award.
|
(2c) |
For NEOs who shall be retirement-eligible on or prior to the last day of the performance period of each outstanding PSU award, the number of shares subject to such PSU award would be adjusted on a prorated basis (based on the actual amount of time employed within each performance period). However, payouts remain subject to actual performance through the end of each award's applicable performance period, thus awards continue to be subject to risk of forfeiture. $0's are shown as payouts remain subject to performance post-termination. Assuming target performance is met for all outstanding awards, the intrinsic value of each NEO's PSU awards would be as follows:
|
(2d) |
As of October 2, 2020, Mr. Wilson is the only NEO with outstanding PSO awards (granted November 16, 2018 and November 22, 2019).
|
• |
2018 PSO Award: payout remains subject to actual performance through the end of the award's applicable performance period, thus award continues to be subject to risk of forfeiture. $0 is shown as payout remains subject to performance post-termination. Assuming target performance is met for this outstanding award, the intrinsic value of Mr. Wilson's PSO award would be $8,685,904.
|
• |
2019 PSO Award: because Mr. Wilson is retirement-eligible and his outstanding PSO award was granted less than a year prior to October 2, 2020, service obligations would lapse on a prorated basis (based on actual amount of time employed between the grant date and the assumed retirement/termination date of October 2, 2020). However, payout remains subject to actual performance through the end of the award's applicable performance period, thus award continues to be subject to risk of forfeiture. $0 is shown as payout remains subject to performance post-termination. Assuming target performance is met for this outstanding award, the intrinsic value of Mr. Wilson's accelerated PSO award would be $4,530,247.
|
(3a) |
Represents full acceleration of all outstanding options.
|
(3b) |
Represents full acceleration of all outstanding RSUs.
|
(3c) |
Service obligations would lapse fully for all outstanding PSUs, but payouts remain subject to actual performance through the end of each award's applicable performance period, thus awards continue to be subject to risk of forfeiture.
|
(3d) |
As of October 2, 2020, Mr. Wilson is the only NEO with outstanding PSO awards (granted November 16, 2018 and November 22, 2019).
|
(4a) |
Represents full acceleration of all outstanding options.
|
(4b) |
For awards granted prior to August 2020, represents continued vesting of all outstanding RSUs assuming the fiscal year end closing price on each vesting date. For awards granted in August 2020, represents full acceleration of all outstanding RSUs.
|
(4c) |
Service obligations would lapse fully for all outstanding PSUs, but payouts remain subject to actual performance through the end of each award's applicable performance period, thus awards continue to be subject to risk of forfeiture.
|
(4d) |
As of October 2, 2020, Mr. Wilson is the only NEO with outstanding PSO awards (granted November 16, 2018 and November 22, 2019).
|
(5) |
Excludes value of PSUs and PSOs earned in October 2020 for fiscal year 2018-2020 performance (earned at 73.8% of target shares).
|
Corporate Transaction in which Equity Awards
Are Not Assumed, Continued or Substituted
(No Termination of Employment) Intrinsic Value of
Accelerated Equity Awards(1)
| ||||||||||||||||||||
Name
|
Options
|
Restricted Stock |
PSUs(2)
|
PSOs
|
Total(3)
| |||||||||||||||
Dow R. Wilson
| $ | 0 | $ | 0 | $ | 7,623,376 | $ | 13,935,238 | $ | 21,558,614 | ||||||||||
Kolleen T. Kennedy
| $ | 787,044 | $ | 1,070,264 | $ | 3,376,017 | $ | 0 | $ | 5,233,325 | ||||||||||
J. Michael Bruff
| $ | 805,519 | $ | 797,067 | $ | 1,332,973 | $ | 0 | $ | 2,935,560 | ||||||||||
Christopher A. Toth
| $ | 607,475 | $ | 2,822,919 | $ | 2,553,504 | $ | 0 | $ | 5,983,899 | ||||||||||
Michael D. Hutchinson
| $ | 0 | $ | 1,893,637 | $ | 0 | $ | 0 | $ | 1,893,637 |
(1) |
Based on the closing stock price as of October 2, 2020 ($171.93).
|
(2) |
Excludes value of PSUs and PSOs earned in October 2020 for fiscal year 2018-2020 performance (earned at 73.8% of target shares).
|
(3) |
Represents full acceleration of all outstanding equity awards (with payout for PSUs and PSOs at target performance level) per the Fifth Amended & Restated 2005 Omnibus Stock Plan.
|
• |
An annual cash retainer to all
non-employee
directors.
|
• |
An additional annual cash retainer to the Board Chair, committee chairs and committee members, including an increase to the cash retainers for committee chairs beginning with payments made following the annual meeting in February 2020.
|
• |
Company matching of director contributions to charities and educational institutions.
|
• |
An annual restricted stock unit award to all
non-employee
directors, including an increase to the award amount beginning with grants in February 2020.
|
• |
No performance-based equity awards, pension plans or excessive retirement benefits.
|
• |
Meaningful stock ownership requirements and limit on total director compensation.
|
• |
The increases to committee chair retainers and annual RSU awards were approved in November 2019 prior to the onset of the
COVID-19
pandemic. Subsequently, as part of the Company's cost savings measures in response to the pandemic impact, the Board approved a 20 percent reduction in all cash fees paid to members of Varian's Board of Directors for the second half of calendar year 2020.
|
Compensation Element
|
Compensation Amount (prior to reduction in response to pandemic impact)
| |
Annual Cash Board Retainer |
• $100,000
| |
Additional Annual Cash Retainers for Independent Board Chair and Committee Chairs
(1)
|
• $150,000 for Independent Board Chair
• $24,000 for Audit Committee Chair
• $21,000 for Compensation & Leadership Development Committee Chair
• $12,500 for Nominating & Corporate Governance Committee Chair
• $12,500 for Ethics & Compliance Committee Chair
| |
Additional Annual Cash Retainer for
Non-Chair
Committee Members
|
• $14,000 for Audit Committee Member
• $7,500 for Compensation & Leadership Development Committee Member
• $5,000 for Nominating & Corporate Governance Committee Member
• $5,000 for Ethics & Compliance Committee Member
| |
Annual Equity Award
(2)
|
• $180,000 in RSUs
• Grants cliff-vest (100% vest) upon the earlier of one year from the grant date or the next Annual Meeting of Shareholders
• Vesting accelerates in the event of termination due to death, disability, retirement, or upon a change in control, such as the Merger
| |
Charitable Giving |
• Company matching of director contributions to charities and educational institutions up to a maximum of $10,000 per director per calendar year
• Director contributions to Varian's Political Action Committee were matched by a Company contribution to a charity or educational institution, up to a maximum of $5,000 per director per calendar year
|
(1) |
Prior to February 2020, these amounts were $150,000 (unchanged), $20,000, $19,000, $12,000 and $12,000 respectively.
|
(2) |
Prior to February 2020, the annual grant date fair value was $165,000.
|
Name
|
Fees
Earned or
Paid in
Cash (1)
|
Stock Awards
(2)(6)
|
Option Awards |
Non-Equity
Incentive Plan Compensation |
Change in Pension Value and Nonqualified Deferred Compensation Earnings |
All Other Compensation (3) |
Total ($)
| |||||||||||||||||||||
Anat Ashkenazi
| $ | 115,425 | $ | 179,977 | - | - | - | - | $ | 295,402 | ||||||||||||||||||
Jeffrey Balser
| $ | 106,875 | $ | 179,977 | - | - | - | - | $ | 286,852 | ||||||||||||||||||
Judy Bruner
| $ | 121,550 | $ | 179,977 | - | - | - | $ | 10,000 | $ | 311,527 | |||||||||||||||||
Jean-Luc Butel
| $ | 127,750 | $ | 179,977 | - | - | - | - | $ | 307,727 | ||||||||||||||||||
Regina Dugan
| $ | 120,050 | $ | 179,977 | - | - | - | - | $ | 300,027 | ||||||||||||||||||
R. Andrew Eckert
| $ | 249,375 | $ | 179,977 | - | - | - | - | $ | 429,352 | ||||||||||||||||||
Phillip Febbo
(6)
| $ | 113,050 | $ | 249,617 | - | - | - | - | $ | 362,667 | ||||||||||||||||||
Timothy E. Guertin
(4)
| $ | 27,500 | - | - | - | - | - | $ | 27,500 | |||||||||||||||||||
David J. Illingworth
| $ | 111,500 | $ | 179,977 | - | - | - | - | $ | 291,477 | ||||||||||||||||||
Michelle Le Beau
(5)(6)
| $ | 102,000 | $ | 195,844 | - | - | - | $ | 5,000 | $ | 302,844 |
(1) |
This column includes cash compensation paid during fiscal year 2020 (i) under the terms of the director compensation program that was in effect prior to February 2020, (ii) under the terms of the director compensation program that was in effective beginning in February 2020, and (iii) following the temporary 20 percent reduction in cash compensation for payments made during the second half of calendar year 2020 as a result of cost savings measures in response to the
COVID-19
pandemic impact.
|
(2) |
This column represents the aggregate grant date fair value of RSUs granted in fiscal year 2020, computed in accordance with ASC 718. The fair value is determined using the closing price on the grant date multiplied by the number of shares subject to the award. These amounts reflect our calculation of the value of these awards, and do not necessarily correspond to the actual value that may ultimately be realized by the directors.
|
(3) |
Amounts represent charitable contributions made by the Company during the fiscal year on behalf of Ms. Bruner and Ms. Le Beau under our matching gifts program. Contributions span multiple calendar years and therefore may be higher than the applicable calendar year limits outlined above.
|
(4) |
Timothy E. Guertin retired from the Board effective February 13, 2020.
|
(5) |
Michelle Le Beau was appointed to the Board effective November 27, 2019.
|
(6) |
Mr. Febbo and Ms. Le Beau were each granted additional RSUs for their partial year of service prior to the 2020 Annual Meeting.
|
Name
|
RSUs
Outstanding
|
Options Outstanding | ||||||
Anat Ashkenazi
| 1,225 | - | ||||||
Jeffrey Balser
| 1,225 | - | ||||||
Judy Bruner
| 1,225 | - | ||||||
Jean-Luc Butel
| 1,225 | - | ||||||
Regina Dugan
| 1,225 | - | ||||||
R. Andrew Eckert
| 1,225 | - | ||||||
Phillip Febbo
| 1,225 | - | ||||||
David J. Illingworth
| 1,225 | - | ||||||
Michelle Le Beau
| 1,333 | - |
Item 12.
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
|
A
|
B
|
C
| |||||||||
(In millions, except price per share)
|
Number of securities to be issued upon exercise of outstanding options, warrants and rights |
Weighted average
exercise price of
outstanding options,
warrants and
rights
(1)
|
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column A) | ||||||||
Equity compensation plans approved by security holders
| 2.5 |
(2)
| $ | 110.79 | 11.2 |
(3)
| |||||
Total
| 2.5 | $ | 110.79 | 11.2 | |||||||
(1)
|
The weighted average exercise price does not take into account the shares issuable upon vesting of outstanding restricted stock units, deferred stock units and performance units, which have no exercise price.
|
(2)
|
Consists of stock options (including performance-based options), restricted stock units, deferred stock units and performance units granted under the Fifth Amended and Restated 2005 Omnibus Stock Plan (the 'Fifth Amended 2005 Plan'). The number of shares subject to outstanding performance awards assumes the maximum payout with respect to such awards.
|
(3)
|
Includes 5.7 million shares available for future issuance under the Fifth Amended 2005 Plan. Also includes [4.8] million shares available for future issuance under the 2010 Employee Stock Purchase Plan, including shares subject to purchase during the current purchase period, which commenced on November 2, 2020 (the exact number of which will not be known until the purchase date on April 30, 2021, or earlier, depending on the expected closing date of the Merger). Subject to the number of shares remaining in the share reserve, the maximum number of shares purchasable by any participant under the 2010 Employee Stock Purchase Plan on any one purchase date for any purchase period, including the current purchase period may not exceed 1,000 shares.
|
Amount and Nature of Common Stock Beneficially Owned | ||||||||
Number of Shares Beneficially Owned |
Percent of Class | |||||||
Stockholders
| ||||||||
The Vanguard Group, Inc. (1)
| 10,021,104 | 10.91 | % | |||||
100 Vanguard Blvd.
| ||||||||
Malvern, PA 19355
| ||||||||
BlackRock, Inc. (2)
| 9,929,752 | 10.81 | % | |||||
55 East 52nd Street
| ||||||||
New York, NY 10055
| ||||||||
Directors and Named Executive Officers
| ||||||||
Anat Ashkenazi (3)
| 2,574 | * | ||||||
Jeffrey R. Balser (4)
| 2,824 | * | ||||||
Judy Bruner (5)
| 6,779 | * | ||||||
Jean-Luc
Butel (6)
| 4,415 | * | ||||||
Regina E. Dugan (7)
| 12,396 | * | ||||||
R. Andrew Eckert (8)
| 14,273 | * | ||||||
Phillip G. Febbo (9)
| 1,708 | * | ||||||
David J. Illingworth (10)
| 15,369 | * | ||||||
Michelle M. Le Beau (11)
| 1,333 | * | ||||||
Dow R. Wilson
| 104,645 | * | ||||||
J. Michael Bruff (12)
| 7,798 | * | ||||||
Kolleen T. Kennedy (13)
| 38,704 | * | ||||||
Christopher A. Toth (14)
| 16,078 | * | ||||||
Michael Hutchinson
| 5,589 | * | ||||||
Gary Bischoping, Jr. (15)
| 22,230 | * | ||||||
All directors and executive officers as a group (15 persons) (16) | 246,998 | * |
* |
The percentage of shares of common stock beneficially owned does not exceed one percent of the shares of common stock outstanding at January 20, 2021.
|
(1) |
Based on a Schedule 13G/A filed February 12, 2020, The Vanguard Group, Inc. has sole power to vote 141,096 of these shares, shared power to vote 29,809 of these shares, sole power to dispose of 9,858,132 of these shares and shared power to dispose of 162,972 of these shares.
|
(2) |
Based on a Schedule 13G/A filed February 10, 2020, BlackRock, Inc. has sole power to vote 8,803,867 of these shares and sole power to dispose of 9,929,752 of these shares.
|
(3) |
Amount shown includes 1,225 restricted stock units that will vest on February 11, 2021.
|
(4) |
Amount shown includes 1,225 restricted stock units that will vest on February 11, 2021.
|
(5) |
Amount shown includes 1,225 restricted stock units that will vest on February 11, 2021.
|
(6) |
Amount shown includes 1,225 restricted stock units that will vest on February 11, 2021.
|
(7) |
Amount shown includes 1,225 restricted stock units that will vest on February 11, 2021.
|
(8) |
Amount shown includes 1,225 restricted stock units that will vest on February 11, 2021.
|
(9) |
Amount shown includes 1,225 restricted stock units that will vest on February 11, 2021.
|
(10) |
Amount shown includes 1,225 restricted stock units that will vest on February 11, 2021.
|
(11) |
Amount shown includes 1,333 restricted stock units that will vest on February 11, 2021.
|
(12) |
Amount shown includes 1,299 restricted stock units that will vest on February 15, 2021.
|
(13) |
Amount shown includes 3,256 restricted stock units that will vest on February 15, 2021, and includes 8,330 shares that may be acquired under exercisable stock options.
|
(14) |
Amount shown includes 2,376 restricted stock units that will vest on February 15, 2021.
|
(15) |
Amount shown is based on the Company's available records as of March 6, 2020.
|
(16) |
Amount shown includes 18,513 shares that may be acquired under exercisable stock options, 11,133 shares restricted stock units that will vest on February 11, 2021 and 8,459 restricted stock units that will vest on February 15, 2021, held by all persons who are directors and/or executive officers of the Company as of January 20, 2021. The amount shown (i) excludes the holdings of Mr. Bischoping, who is a former executive officer of the Company, and (ii) includes the holdings of Mr. Kevin O'Reilly, who is a current executive officer of the Company as of October 5, 2020.
|
• |
any transaction with another company for which a related person's only relationship is as an employee (other than an executive officer), director, or beneficial owner of less than 10% of that company's shares, if the amount involved does not exceed the greater of $1 million, or 2% of that company's total annual revenue, and the related person is not involved in the decision-making process for such transaction;
|
• |
any charitable contribution, grant or endowment by the Company to a charitable organization, foundation or university for which a related person's only relationship is as an employee (other than an executive officer) or a director, if the amount involved does not exceed the lesser of $1 million, or 2% of the charitable organization's total annual receipts, and the related person is not involved in the decision-making process for such transaction;
|
• |
compensation to executive officers determined by the Compensation Committee;
|
• |
compensation to directors determined by the Board; and
|
• |
transactions in which all security holders receive proportional benefits.
|
• |
Dr. Balser is the Chief Executive Officer of Vanderbilt University Medical Center, which is a customer of ours.
|
• |
Mr. Eckert serves as an outside director of a company from whom we are licensing and with whom we are developing certain technology.
|
Fee Category
|
Fiscal Year 2020
|
Fiscal Year 2019
| ||||||
Audit Fees
| $ | 6,843,334 | $ | 5,793,031 | ||||
Audit-Related Fees
| $ | 389,500 | $ | 160,460 | ||||
Tax Fees
| $ | 711,732 | $ | 1,050,397 | ||||
All Other Fees
| $ | 2,700 | $ | 16,880 | ||||
Total Fees
| $ | 7,947,266 | $ | 7,020,768 |
(a) |
The following documents are filed as part of this report:
|
(1) |
Consolidated Financial Statements:
|
• |
Consolidated Statements of Earnings
|
• |
Consolidated Statements of Comprehensive Earnings
|
• |
Consolidated Balance Sheets
|
• |
Consolidated Statements of Cash Flows
|
• |
Consolidated Statements of Equity
|
• |
Notes to the Consolidated Financial Statements
|
• |
Report of Independent Registered Public Accounting Firm
|
(2) |
Consolidated Financial Statement Schedule:
|
Page
| ||||
Schedule
| ||||
II
| Valuation and Qualifying Accounts |
See page 144of the
Original Form 10-K
|
(3) |
Exhibits:
|
Exhibit
Number
|
Description
| |
2.1
| Amended and Restated Distribution Agreement, dated as of January 14, 1999, by and among Varian Associates, Inc. (which has been renamed Varian Medical Systems, Inc.), Varian, Inc. and Varian Semiconductor Equipment Associates, Inc. (incorporated by reference to Exhibit No. 2 to the Registrant's Form8-K Current Report filed as of April 19, 1999, FileNo. 1-7598). | |
2.2
| Separation and Distribution Agreement, dated as of January 27, 2017, by and between Registrant and Varex Imaging Corporation (incorporated by reference to Exhibit No. 2.1 to the Registrant's Form8-K Current Report filed as of January 30, 2017, FileNo. 1-7598). | |
2.3
| Agreement and Plan of Merger by and among Siemens Healthineers Holding I GmbH, Falcon Sub Inc., Varian Medical Systems, Inc. and, with respect to certain provisions, Siemens Medical Solutions USA, Inc., dated as of August 2, 2020 (incorporated by reference to Exhibit No. 2.1 to the Registrant's Form8-K Current Report filed as of August 3, 2020, FileNo. 1-7598). | |
2.4
| Letter of Support between Siemens Healthineers AG and Varian Medical Systems, Inc., dated August 2, 2020 (incorporated by reference to Exhibit No. 2.2 to the Registrant's Form8-K Current Report filed as of August 3, 2020, FileNo. 1-7598). | |
3.1
| Registrant's Amended and Restated Certificate of Incorporation, as amended (incorporated by reference to Exhibit No. 3.1 to the Registrant's Form8-K Current Report filed as of August 18, 2014, FileNo. 1-7598). | |
3.2
| Registrant'sBy-Laws, as amended, effective September 1, 2018 (incorporated by reference to Exhibit No. 3.1 to the Registrant's Form8-K Current Report filed as of August 21, 2018, FileNo. 1-7598). | |
3.3
| Registrant's Amended and Restated Bylaws, as amended (incorporated by reference to Exhibit No. 3.1 to the Registrant's Form8-K Current Report filed as of March 3, 2020, FileNo. 1-7598) | |
4.1
| Specimen Common Stock Certificate (incorporated by reference to Exhibit No. 4.1 to the Registrant's Form10-Q Quarterly Report for the quarter ended April 2, 1999, FileNo. 1-7598). | |
4.2
| Form of Senior Indenture, between Registrant and one or more trustees to be named (incorporated by reference to Exhibit No. 4.2 to the Registrant's FormS-3, FileNo. 333-221763). | |
4.3
| Form of Subordinated Indenture, between Registrant and one or more trustees to be named (incorporated by reference to Exhibit No. 4.3 to the Registrant'sForm-3, FileNo. 333-221763). | |
4.4
| Description of Securities Registered Under Section 12 of the Exchange Act (incorporated by reference to Exhibit 4.4 to the Registrant's Form10-K Annual Report for the year ended September 27, 2019, FileNo. 1-7598). | |
10.1†
| Form of Registrant's Indemnity Agreement with the directors and executive officers (incorporated by reference to Exhibit No. 10.3 to the Registrant's Form10-Q Quarterly Report for the quarter ended April 2, 1999, FileNo. 1-7598). | |
10.2†
| Form of Registrant's Change in Control Agreement for Chief Executive Officer (incorporated by reference to Exhibit 10.2 to the Registrant's Form10-K Annual Report for the year ended October 2, 2015, FileNo. 1-7598). | |
10.3†
| Form of Registrant's Change in Control Agreement for Senior Executives (Chief Financial Officer and General Counsel) (incorporated by reference to Exhibit 10.3 to the Registrant's Form10-K Annual Report for the year ended October 2, 2015, FileNo. 1-7598). | |
10.4†
| Form of Registrant's Change in Control Agreement for Senior Executives (other than the Chief Executive Officer, the Chief Financial Officer, and the General Counsel) (incorporated by reference to Exhibit 10.4 to the Registrant's Form10-K Annual Report for the year ended October 2, 2015, FileNo. 1-7598). | |
10.5†
| Form of Registrant's Change in Control Agreement for Key Employees (incorporated by reference to Exhibit 10.5 to the Registrant's Form10-K Annual Report for the year ended October 2, 2015, FileNo. 1-7598). |
Exhibit
Number
|
Description
| |
10.6
| Employee Benefits Allocation Agreement, dated April 2, 1999, by and among Varian Associates, Inc. (which has been renamed Varian Medical Systems, Inc.), Varian, Inc. and Varian Semiconductor Equipment Associates, Inc. (incorporated by reference to Exhibit No. 99.1 to the Registrant's Form8-K Current Report filed as of April 19, 1999, FileNo. 1-7598). | |
10.7
| Intellectual Property Agreement, dated April 2, 1999, by and among Varian Associates, Inc. (which has been renamed Varian Medical Systems, Inc.), Varian, Inc. and Varian Semiconductor Equipment Associates, Inc. (incorporated by reference to Exhibit No. 99.2 to the Registrant's Form8-K Current Report filed as of April 19, 1999, FileNo. 1-7598). | |
10.8
| Tax Sharing Agreement, dated April 2, 1999, by and among Varian Associates, Inc. (which has been renamed Varian Medical Systems, Inc.), Varian, Inc. and Varian Semiconductor Equipment Associates, Inc. (incorporated by reference to Exhibit No. 99.3 to the Registrant's Form8-K Current Report filed as of April 19, 1999, FileNo. 1-7598). | |
10.9†
| Registrant's Frozen Deferred Compensation Plan (incorporated by reference to Exhibit No. 10.17 to the Registrant's Form10-K Annual Report for the fiscal year ended September 29, 2000, FileNo. 1-7598). | |
10.10†
| Registrant's Amended and Restated 2005 Deferred Compensation Plan (incorporated by reference to Exhibit No. 10.2 of the Registrant's Form10-Q Quarterly Report for the quarter ended January 2, 2009, FileNo. 1-7598). | |
10.11†
| Registrant's Management Incentive Plan (incorporated by reference to Exhibit 10.12 to the Registrant's Form10-K Annual Report for the year ended October 2, 2015, FileNo. 1-7598). | |
10.12†
| Registrant's 2010 Employee Stock Purchase Plan (incorporated by reference to Exhibit No. 10.1 to the Registrant's Form10-Q Quarterly Report for the quarter ended April 2, 2010, FileNo. 1-7598). | |
10.13†
| Registrant's Third Amended and Restated 2005 Omnibus Stock Plan (incorporated by reference to Exhibit No. 10.1 to the Registrant's Form10-Q Quarterly Report for the quarter ended March 30, 2012, FileNo. 1-7598). | |
10.14†
| Form of Registrant's Nonqualified Stock Option Agreement under the Registrant's Third Amended and Restated 2005 Omnibus Stock Plan (incorporated by reference to Exhibit No. 10.2 to the Registrant's Form10-Q Quarterly Report for the quarter ended March 30, 2012, FileNo. 1-7598). | |
10.15†
| Form of Registrant's Nonqualified Stock Option Agreement under the Registrant's Third Amended and Restated 2005 Omnibus Stock Plan (effective for nonqualified stock option awards granted to executive officers after November 8, 2015) (incorporated by reference to Exhibit No. 10.1 to the Registrant's Form8-K Current Report filed as of November 12, 2015, FileNo. 1-7598). | |
10.16†
| Form of Registrant'sNon-Employee Director Nonqualified Stock Option Agreement under the Registrant's Third Amended and Restated 2005 Omnibus Stock Option Plan (incorporated by reference to Exhibit No. 10.3 to the Registrant's Form10-Q Quarterly Report for the quarter ended March 30, 2012, FileNo. 1-7598). | |
10.17†
| Form of Registrant's Restricted Stock Unit Agreement under the Registrant's Third Amended and Restated 2005 Omnibus Stock Plan (effective for restricted stock unit awards granted to executive officers after November 8, 2015) (incorporated by reference to Exhibit No. 10.2 to the Registrant's Form8-K Current Report filed as of November 12, 2015, FileNo. 1-7598). | |
10.18†
| Form of Registrant's Performance Unit Agreement under the Registrant's Third Amended and Restated 2005 Omnibus Stock Plan (effective for performance unit awards granted to executive officers after November 8, 2015) (incorporated by reference to Exhibit No. 10.3 to the Registrant's Form8-K Current Report filed as of November 12, 2015, FileNo. 1-7598). | |
10.19†
| Form of Registrant's Grant Agreement for Deferred Stock Units under the Registrant's Third Amended and Restated 2005 Omnibus Stock Plan (incorporated by reference to Exhibit No. 10.7 to the Registrant's Form10-Q Quarterly Report for the quarter ended March 30, 2012, FileNo. 1-7598). | |
10.20†
| Form of Registrant'sNon-Employee Grant Agreement for Deferred Stock Units (for use in Singapore) under the Registrant's Third Amended and Restated 2005 Omnibus Stock Plan (incorporated by reference to Exhibit 10.8 of the Registrant's Form10-Q Quarterly Report for the quarter ended March 30, 2012, FileNo. 1-7598). |
Exhibit
Number
|
Description
| |
10.21++
| Loan and Security Agreement (Building Loan) dated as of July 15, 2015 by and among MM PROTON I, LLC, as Borrower; JPMORGAN CHASE BANK, N.A., as Administrative Agent and Collateral Agent; and the Lenders referenced therein. 'Lenders' includes the Registrant (incorporated by reference to Exhibit 10.43 to the Registrant's Form10-K/A filed as of August 18, 2016, FileNo. 1-7598). | |
10.22++
| First Amendment to Loan and Security Agreement (Building Loan) dated as of August 5, 2015 by and among MM PROTON I, LLC, as Borrower; JPMORGAN CHASE BANK, N.A., as Administrative Agent and Collateral Agent; and the Lenders referenced therein. 'Lenders' includes the Registrant (incorporated by reference to Exhibit 10.44 to the Registrant's Form10-K/A filed as of August 18, 2016, FileNo. 1-7598). | |
10.23++
| Loan and Security Agreement (Project Loan) dated as of July 15, 2015 by and among MM PROTON I, LLC, a Borrower; JPMORGAN CHASE BANK, N.A., as Administrative Agent and Collateral Agent, and the Lenders referenced therein (incorporated by reference to Exhibit 10.45 to the Registrant's Form10-K/A filed as of August 18, 2016, FileNo. 1-7598). 'Lenders' includes the Registrant. | |
10.24++
| Amendment No. One to Loan and Security Agreement (Project Loan) dated as of July 31, 2015 by and among MM PROTON I, LLC, as Borrower; JPMORGAN CHASE BANK, N.A., as Administrative Agent and Collateral Agent, and the Lenders referenced therein. (incorporated by reference to Exhibit 10.46 to the Registrant's Form10-K/A filed as of August 18, 2016, FileNo. 1-7598). 'Lenders' includes the Registrant. | |
10.25
| Transition Services Agreement, dated as of January 27, 2017, by and between Registrant and Varex Imaging Corporation (incorporated by reference to Exhibit No. 10.1 to the Registrants Form8-K Current Report filed as of January 30, 2017, FileNo. 1-7598). | |
10.26
| Tax Matters Agreement, dated as of January 27, 2017, by and between Registrant and Varex Imaging Corporation (incorporated by reference to Exhibit No. 10.2 to the Registrants Form8-K Current Report filed as of January 30, 2017, FileNo. 1-7598). | |
10.27
| Employee Matters Agreement, dated as of January 27, 2017, by and between Registrant and Varex Imaging Corporation (incorporated by reference to Exhibit No. 10.3 to the Registrant's Form8-K Current Report filed as of January 30, 2017, FileNo. 1-7598). | |
10.28
| Intellectual Property Matters Agreement, dated as of January 27, 2017, by and between Registrant and Varex Imaging Corporation (incorporated by reference to Exhibit No. 10.4 to the Registrant's Form8-K Current Report filed as of January 30, 2017, FileNo. 1-7598). | |
10.29
| Trademark License Agreement, dated as of January 27, 2017, by and between Registrant and Varex Imaging Corporation (incorporated by reference to Exhibit No. 10.5 to the Registrant's Form8-K Current Report filed as of January 30, 2017, FileNo. 1-7598). | |
10.30†
| Registrant's Fourth Amended and Restated 2005 Omnibus Stock Plan (incorporated by reference to Appendix A of the Registrant's Proxy Statement for its 2017 Annual Meeting of Stockholders filed as of December 30, 2016, FileNo. 1-7598). | |
10.31†
| Offer Letter between Registrant and Gary Bischoping, dated March 20, 2017 (incorporated by reference to Exhibit 10.1 to the Registrant's From8-K Current Report filed as of April 5, 2017, FileNo. 1-07598). | |
10.32†
| Form of Registrant's Performance-based Nonqualified Stock Option Agreement under the Registrant's Fourth Amended and Restated 2005 Omnibus Stock Plan for Section 16 officers (incorporated by reference to Exhibit No. 10.1 to the Registrant's Form8-K Current Report filed as of November 15, 2017, FileNo. 1-7598). | |
10.33†
| Form of Registrant's Time-based Nonqualified Stock Option Agreement under the Registrant's Fourth Amended and Restated 2005 Omnibus Stock Plan for Section 16 officers (incorporated by reference to Exhibit No. 10.2 to the Registrant's Form8-K Current Report filed as of November 15, 2017, FileNo. 1-7598). | |
10.34†
| Form of Registrant's Restricted Stock Unit Agreement under the Registrant's Fourth Amended and Restated 2005 Omnibus Stock Plan for Section 16 officers (incorporated by reference to Exhibit No. 10.3 to the Registrant's Form8-K Current Report filed as of November 15, 2017, FileNo. 1-7598). |
Exhibit
Number
|
Description
| |
10.35†
| Form of Registrant's Performance Unit Agreement under the Registrant's Fourth Amended and Restated 2005 Omnibus Stock Plan for Section 16 officers (incorporated by reference to Exhibit No. 10.4 to the Registrant'sForm 8-K Current Report filed as of November 15, 2017, FileNo. 1-7598). | |
10.36†
| Credit Agreement, dated as of April 3, 2018, among Registrant, Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer and each lender from time to time party thereto (incorporated by reference to Exhibit No. 10.1 to the Registrant's Form8-K Current Report filed as of April 4, 2018, FileNo. 1-7598). | |
10.37†
| Registrant's Fifth Amended and Restated 2005 Omnibus Stock Plan (incorporated by reference to Appendix A of the Registrant's Proxy Statement for its 2018 Annual Meeting of Stockholders filed as of December 29, 2017, FileNo. 1-7598). | |
10.38†
| Form of Registrant's Time-based Nonqualified Stock Option Agreement under the Registrant's Fifth Amended and Restated 2005 Omnibus Stock Plan (incorporated by reference to Exhibit 10.52 to the Registrant's Form 10-K Annual Report for the year ended September 28, 2018, File No. 1-7598). | |
10.39†
| Form of Registrant's Time Based Restricted Stock Unit Agreement under the Registrant's Fifth Amended and Restated 2005 Omnibus Stock Plan (effective for grants made prior to August 21, 2020) (incorporated by reference to Exhibit 10.53 to the Registrant's Form 10-K Annual Report for the year ended September 28, 2018, File No. 1-7598). | |
10.40†
| Form of Registrant Performance Units Agreement under the Registrant's Fifth Amended and Restated 2005 Omnibus Stock Plan (incorporated by reference to Exhibit 10.54 to the Registrant's Form 10-K Annual Report for the year ended September 28, 2018, File No. 1-7598). | |
10.41
| Amendment No.2 to Credit Agreement, dated November 1, 2019, by and among Registrant, Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer and each lender from time to time party thereto (incorporated by reference to Exhibit 10.41 to the Registrant's Form10-K filed as of November 25, 2019, FileNo. 1-7598). | |
10.42†
| Form of Registrant'sNon-Employee Director Restricted Stock Unit Agreement under the Registrant's Fifth Amended and Restated 2005 Omnibus Stock Plan (incorporated by reference to Exhibit No. 10.1 to the Registrant's Form10-Q Quarterly Report filed as of February 11, 2020, FileNo. 1-7598). | |
10.43†
| Executive Separation Agreement by and between Registrant and John Kuo dated April 22, 2020 (incorporated by reference to Exhibit No. 10.1 to the Registrant's Form10-Q Quarterly Report filed as of August 11, 2020, FileNo. 1-7598). | |
10.44†
| Change in Control Agreement between Varian Medical Systems, Inc. and Dow R. Wilson, effective as of August 1, 2020 (incorporated by reference to Exhibit No. 10.1 to the Registrant's Form8-K Current Report filed as of August 3, 2020, FileNo. 1-7598). | |
10.45†
| Change in Control Agreement between Varian Medical Systems, Inc. and J. Michael Bruff, effective as of August 1, 2020 (incorporated by reference to Exhibit No. 10.2 to the Registrant's Form8-K Current Report filed as of August 3, 2020, FileNo. 1-7598). | |
10.46†
| Change in Control Agreement between Varian Medical Systems, Inc. and Kolleen T. Kennedy, effective as of August 1, 2020 (incorporated by reference to Exhibit 10.3 to the Registrant's Form8-K Current Report filed as of August 3, 2020, FileNo. 1-7598). | |
10.47†
| Change in Control Agreement between Varian Medical Systems, Inc. and Christopher A. Toth, effective as of August 1, 2020 (incorporated by reference to Exhibit No. 10.4 to the Registrant's Form8-K Current Report filed as of August 3, 2020, FileNo. 1-7598). | |
10.48†
| Form of Registrant's Time Based Restricted Stock Unit Agreement under the Registrant's Fifth Amended and Restated 2005 Omnibus Stock Plan (effective for grants made on and after August 21, 2020) (incorporated by reference to Exhibit 10.48 to the Registrant's Annual Report on Form10-K for the period ended October 2, 2020, filed on November 25, 2020). | |
21
| List of Subsidiaries as of November 5, 2020 (incorporated by reference to Exhibit 21 to the Registrant's Annual Report on Form10-K for the period ended October 2, 2020, filed on November 25, 2020). |
Exhibit
Number
|
Description
| |
23
| Consent of Independent Registered Public Accounting Firm (incorporated by reference to Exhibit 23 to the Registrant's Annual Report on Form10-K for the period ended October 2, 2020, filed on November 25, 2020). | |
31.1*
| Chief Executive Officer Certification Pursuant to Rule13a-14(a) of the Securities Exchange Act. | |
31.2*
| Chief Financial Officer Certification Pursuant to Rule13a-14(a) of the Securities Exchange Act. | |
32.1
| Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (incorporated by reference to Exhibit 32.1 to the Registrant's Annual Report on Form10-K for the period ended October 2, 2020, filed on November 25, 2020). | |
32.2
| Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (incorporated by reference to Exhibit 32.2 to the Registrant's Annual Report on Form10-K for the period ended October 2, 2020, filed on November 25, 2020). | |
101
|
The following financial statements from the Company's Annual Report on Form
10-K
for the year ended October 2, 2020: (i) Consolidated Statements of Earnings, (ii) Consolidated Statements of Comprehensive Earnings, (iii) Consolidated Balance Sheets, (iv) Consolidated Statements of Cash Flows, (v) Consolidated Statements of Equity, and (vi) Notes to the Consolidated Financial Statements, tagged as blocks of text and including detailed tags (incorporated by reference to Exhibit 101 to the Registrant's Annual Report on Form
10-K
for the period ended October 2, 2020, filed on November 25, 2020).
| |
104
|
The cover page from the Company's Annual Report on Form
10-K
for the year ended October 2, 2020, formatted in Inline XBRL and contained in Exhibit 101.
|
† |
Management contract or compensatory arrangement.
|
* |
Filed herewith.
|
++ |
Confidential treatment has been granted as to certain portions of this exhibit pursuant to Rule
24b-2
of the Securities Exchange Act of 1934, as amended.
|
VARIAN MEDICAL SYSTEMS, INC.
| ||
By: |
/s/
J. MICHAEL BRUFF
| |
J. Michael Bruff
Senior Vice President, Finance and
Chief Financial Officer
|
☒ |
ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐ |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
94-2359345
| |
(State or other jurisdiction of
incorporation or organization)
|
(I.R.S. Employer
Identification Number)
| |
3100 Hansen WayPalo AltoCalifornia
|
94304-1038
| |
(Address of principal executive offices)
|
(Zip Code)
|
Title of each class
|
Trading Symbol
|
Name of each exchange on which registered
| ||
Common Stock, $1 par value
|
VAR
|
New York Stock Exchange
|
Large accelerated filer | ☒ | Accelerated filer | ☐ | |||
Non-accelerated filer | ☐ | Smaller reporting company | ☐ | |||
Emerging growth company | ☐ |
Item 10.
|
Directors, Executive Officers and Corporate Governance
|
Anat Ashkenazi
Age: 48
Director Since: 2018
Independent
Occupation: Public
Company Executive
|
Principal occupation, business experience and directorships
• Positions at Eli Lilly and Company, a global pharmaceutical company:
• Senior Vice President, Controller and Chief Financial Officer, Lilly Research Labs (September 2016-present)
• Vice President, Finance and Chief Financial Officer, Lilly Diabetes and Lilly Global Manufacturing and Quality (April 2015-September 2016)
• Chief Financial Officer, Lilly Oncology (October 2013-April 2015)
• Other Current Public Company Board Memberships: None
• Prior Public Company Board Memberships in Past Five Years: None
Experience, qualifications, attributes or skills supporting directorship
• Over 20 years of
in-depth
financial management and planning experience including corporate finance and financial services
• Extensive experience in the pharmaceutical industry having worked for Eli Lilly and Company across different therapeutic areas and disciplines
• Experience in global and regional strategic planning, organizational redesign, and Six Sigma implementation
| |
Jeffrey R. Balser
Age: 59
Director Since: 2018
Independent
Occupation: CEO of an
Academic Medical Center
|
Principal occupation, business experience and directorships
• President and Chief Executive Officer of Vanderbilt University Medical Center (May 2016-present)
• Dean, Vanderbilt University School of Medicine (October 2008-present)
• Vice Chancellor for Health Affairs, Vanderbilt University Medical Center (June 2009-April 2016)
• Associate Vice Chancellor for Research, Vanderbilt University Medical Center (January 2004-October 2008)
• Other Current Public Company Board Memberships: None
• Prior Public Company Board Memberships in Past Five Years: None
Experience, qualifications, attributes or skills supporting directorship
• In-depth
knowledge of the healthcare industry, hospital operations and managed care industry
• Experience in management and strategic planning of hospital and physician practice, medical education, clinical and basic research through service as Chief Executive Officer and Dean, and previously as chief research officer, of a leading academic medical institution
• Licensed Medical Doctor, Board certified in Anesthesiology and Critical Care Medicine
|
Judy Bruner
Age: 62
Director Since: 2016
Independent
Occupation: Former
Public Company
Executive
|
Principal occupation, business experience and directorships
• Positions at SanDisk Corporation, a global leader in flash memory storage solutions:
• Executive Vice President, Administration and Chief Financial Officer (June 2004-May 2016)
• Member of Board of Directors (June 2002-July 2004)
• Senior Vice President and Chief Financial Officer, Palm, Inc., a manufacturer of personal digital assistants (September 1999-June 2004)
• Vice President, Finance & Corporate Controller, 3Com Corporation, a digital electronics manufacturer (May 1998-September 1999)
• Other Current Public Company Board Memberships: Applied Materials, Inc., a provider of engineering solutions; Rapid7, a security data and analytics solutions provider; Seagate Technology PLC, a data storage company
• Prior Public Company Board Memberships in Past Five Years: Brocade Communications Systems, Inc., a technology company specializing in data and storage networking products
Experience, qualifications, attributes or skills supporting directorship
• Over 35 years of financial management experience in the high technology industry
• Deep experience with compliance and enterprise risk management
• Audit committee chair experience
• Significant mergers and acquisitions experience
• Membership on boards of other public companies
| |
Jean-Luc
Butel
Age: 64
Director Since: 2017
Independent
Occupation: Former
Public Company
Executive
|
Principal occupation, business experience and directorships
• Positions at Baxter International, a health care company providing a portfolio of renal and hospital products:
• President, International (January 2015-June 2015)
• Corporate Officer, Operating Committee Member, Corporate Vice President and President, International (February 2012-December 2014)
• Positions at Medtronic, Inc., a global leader in medical technology:
• Corporate Officer, Executive Committee Member, Executive Vice President; Group President International (January 2011-January 2012)
• Corporate Officer, Executive Committee Member, Senior Vice President and President, Medtronic International (May 2008-December 2010)
• Corporate Officer, Executive Committee Member, Senior Vice President, Medtronic and President, Medtronic Asia Pacific (August 2003-April 2008)
• Other Senior Management Experience: President, Johnson & Johnson Independence Technology; President, Worldwide Consumer Healthcare, Becton Dickinson
• Other Current Public Company Board Memberships: Takeda Pharmaceutical Company Limited, a global pharmaceuticals company focused on metabolic disorders, gastroenterology, neurology, inflammation and oncology
• Prior Public Company Board Memberships in Past Five Years: Biosensors International Group, Ltd., a medical device company specializing in interventional cardiology procedures and critical care technologies
Experience, qualifications, attributes or skills supporting directorship
• Extensive experience in sales, operations and general management of healthcare companies through his service as an executive of several large U.S. healthcare companies
• Extensive experience leading international business operations of large U.S. healthcare companies, including in Europe, Asia and North and South America
|
Regina E. Dugan
Age: 57
Director Since: 2013
Independent
Occupation: CEO
|
Principal occupation, business experience and directorships
• President and Chief Executive Officer, Wellcome Leap, Inc., a nonprofit focused on accelerating innovations in global human health challenges (March 2020-present)
• Vice President of Engineering, Facebook, Inc., leading Building 8, a team charged with developing and delivering next generation consumer hardware to market (May 2016-January 2018)
• Vice President of Engineering, Google, Inc., leading the Advanced Technology and Products group, a group charged with breakthrough innovations in mobile computing and accelerating the development of promising technologies to market (February 2014-April 2016)
• Senior Vice President, Google owned Motorola Mobility LLC, a mobile technology company Google acquired in May 2012 (March 2012- February 2014)
• Director, Defense Advanced Research Projects Agency (DARPA), a breakthrough product development organization of the U.S. Department of Defense (July 2009-March 2012)
• Co-Founder,
President and Chief Executive Officer, RedXDefense LLC, a security solutions company (2005-July 2009)
• Co-Founder,
President and Chief Executive Officer, Dugan Ventures, an investment firm (currently a
non-voting
partner) (2001-July 2009)
• Other Current Public Company Board Memberships: Zynga Inc., a social game developer
• Prior Public Company Board Memberships in Past Five Years: None
Experience, qualifications, attributes or skills supporting directorship
• Experience leading DARPA, the principal agency within the U.S. Department of Defense responsible for product development, research, demonstration and fielding of high-risk, high-payoff capabilities
• Familiarity with defense, security and commercial industries
• Expertise with a wide range of advanced technologies and demonstrated track record in moving to use new technologies, from sensor systems to big data products
• Years of experience serving in senior executive positions with responsibilities including fostering innovation and developing strategic business relationships across diverse industries and commercial entities large and small
• Experience serving on the board of another public company
|
R. Andrew Eckert
Age: 59
Director Since: 2004
Chairman Since: 2014
Independent
Occupation: CEO
|
Principal occupation, business experience and directorships
• Chief Executive Officer, Zelis, Inc., a financial technology company specializing in healthcare claims and payment solutions (August 2020-Present)
• Chief Executive Officer, Acelity L.P., Inc., a global advanced wound care company (April 2017-October 2019)
• Chief Executive Officer, Valence Health, a healthcare solutions company (August 2015-October 2016)
• Chief Executive Officer, TriZetto Corporation, a healthcare IT solutions firm (March 2014-November 2014)
• Chief Executive Officer, CRC Health Corporation, a provider of substance abuse treatment and adolescent youth services (January 2011-March 2014)
• Managing Director, Symphony Technology Group, a private equity firm (October 2009-January 2011)
• President and Chief Executive Officer, Eclipsys Corporation, a former publicly traded healthcare information management software provider (October 2005-May 2009)
• Chief Executive Officer, SumTotal Systems, Inc., an enterprise software provider (2004-2005)
• Chief Executive Officer, Docent Inc., an enterprise software provider that was acquired by SumTotal Systems (2002-2004)
• Chairman and Chief Executive Officer, ADAC Laboratories, a former publicly traded medical imaging company (1997-2001)
• Other Current Public Company Board Memberships: Becton, Dickinson and Company, a global medical technology company
• Prior Public Company Board Memberships in Past Five Years: None
Experience, qualifications, attributes or skills supporting directorship
• Extensive experience obtained over 15 years serving as an executive officer of several public companies, including a medical imaging company and healthcare information management company
• Deep knowledge of operational, financial, strategic planning, product development and marketing matters
• Experience serving on the board of directors of several public companies in the healthcare industry
| |
Phillip G. Febbo
Age: 54
Director Since: 2019
Independent
Occupation: Public
Company Executive
|
Principal occupation, business experience and directorships
• Chief Medical Officer, Illumina, Inc. (March 2018-present)
• Chief Medical Officer, Genomic Health, Inc. (2013-March 2018)
• Professor of Medicine and Urology at the University of California, San Francisco (UCSF) (2010-2013)
• Service on the board of directors of the American College of Medical Genetics and Genomics Foundation (2018-2019)
• Other Current Public Company Board Memberships: None
• Prior Public Company Board Memberships in Past Five Years: None
Experience, qualifications, attributes or skills supporting directorship
• Broad experience in medical strategy and managing resources strategically on a global scale across areas like product development, evidence generation, product marketing, and sales, gained from service as the Chief Medical Officer of two genomic health companies
• Deep knowledge in cancer research, clinical and academic research programs, including through service as the principal investigator of clinical trials funded by National Institute Institutes of Health, Department of Defense, and various industry and
non-profit
foundation grants
• Critical insights in evaluating data of various cancer treatments and leveraging multidisciplinary care to optimize patient outcomes
|
David J. Illingworth
Age: 67
Director Since: 2011
Independent
Occupation: Former
Public Company CEO
|
Principal occupation, business experience and directorships
• Smith & Nephew plc, a medical devices company
• Chief Executive Officer (July 2007-April 2011)
• Chief Operating Officer and Division President (2002-July 2007)
• Other Senior Management Experience: President, XL Vision, Inc.; Chairman and Chief Executive Officer, VidaMed, Inc.; President, Nellcor Puritan Bennett LLC; and Managing Director, Asia/Pacific, GE Medical Systems
• Other Current Public Company Board Memberships: Domtar, Inc., a manufacturer of fiber-based products
• Prior Public Company Board Memberships in Past Five Years: None.
Experience, qualifications, attributes or skills supporting directorship
• In-depth
knowledge of the medical technology industry
• Extensive experience in sales, operations and general management in the United States, United Kingdom and Asia through his service as an executive of various medical technology companies
• Service on the board of directors and as a member of the audit committee and the environmental, health, safety and sustainability committee, of another public medical device company
| |
Michelle M. Le Beau
Age: 66
Director Since: 2019
Independent
Occupation: Professor and
Director of an Academic
Cancer Center
|
Principal occupation, business experience and directorships
• Positions at the University of Chicago:
• Arthur and Marian Edelstein Professor of Medicine, Section of Hematology/Oncology (1986-present)
• Director, University of Chicago Medicine Comprehensive Cancer Center (2004-present)
• Board Member of the University of Chicago Medicine Cancer Council (2012-present)
• Director, Cancer Cytogenetics Laboratory (1986-present)
• Other Current Public Company Board Memberships: None
• Prior Public Company Board Memberships in Past Five Years: None
Experience, qualifications, attributes or skills supporting directorship
• Extensive experience with cancer research, clinical and research program development, and structure and operation of academic cancer centers
• Deep knowledge of academic and government cancer research priorities, and opportunities across the cancer research and care continuum
• Service on (i) numerous scientific advisory boards for academic cancer centers, including advisory boards and working groups for the National Cancer Institute of the U.S. National Institutes of Health, (ii) the board of directors of professional organizations in oncology and cancer research (e.g. the American Association for Cancer Research and the American Society of Hematology), and (iii) multiple
non-profit
organizations in cancer research, advocacy, outreach and education (e.g. the American Cancer Society)
• Doctoral degree in Genetics, and board-certified in clinical cytogenetics by the American Board of Medical Genetics and Genomics
• In-depth
knowledge of the biology and development of human cancers
|
Dow R. Wilson
Age: 62
Director Since: 2012
Occupation: President and
CEO of Varian
|
Principal occupation, business experience and directorships
• Positions at the Company:
• President and Chief Executive Officer (September 2012-present)
• Corporate Executive Vice President and Chief Operating Officer (October 2011-September 2012)
• Corporate Executive Vice President and President, Oncology Systems (August 2005-September 2011)
• Corporate Vice President and President, Oncology Systems (January 2005-August 2005)
• Prior to joining the Company in January 2005, held various senior management positions in and outside of the United States with General Electric Company, a diversified industrial company
• Other Current Public Company Board Memberships: Agilent Technologies, a research, development and manufacturing company for life science
• Public Company Board Memberships in Past Five Years: Saba Software, an
e-learning
software provider; Varex Imaging Corporation, a leading independent supplier of medical
X-ray
tubes and image processing solutions
• U.S. Government Appointments:
• Presidential appointment to U.S. President's Advisory Council on Doing Business in Africa (November 2014-January 2019)
• Appointed to U.S. Department of Commerce's
US-Brazil
CEO Forum in April 2019
• Board member of the
US-India
Strategic Partnership Forum, a
non-profit
focused on driving economic growth, job creation, innovation, inclusion, and entrepreneurship in the U.S. and India (2018-present)
Experience, qualifications, attributes or skills supporting directorship
• Deep knowledge of our business, strategy and technology gained through serving as President of our Oncology Systems business and Chief Operating Officer before becoming our President and Chief Executive Officer
• Significant knowledge of domestic and international medical and healthcare industries gained from serving in management positions at General Electric
• Critical insight into operational requirements of a company with worldwide reach, knowledge of corporate and business unit strategies, and operational expertise, each gained from executive management experience at two large, global organizations
• Experience serving on the board of directors and as lead director of another public company
|
• |
Oversees our accounting and financial reporting process and audits of financial statements.
|
• |
Assists the Board in oversight and monitoring of (i) the integrity of our financial statements, (ii) our compliance with legal and regulatory requirements, (iii) the independent registered public accounting firm's qualifications and independence, (iv) the performance of our internal audit function and of the independent registered public accounting firm, and (v) the principal risk exposures facing the corporation that are related to financial statements, legal, regulatory and other similar matters, as well as the corporation's related mitigation efforts.
|
• |
Prepares the Audit Committee Report included in our proxy statement.
|
• |
Reviews and approves our foreign exchange exposure management policy, including but not limited to entering swaps thereunder and the exemption of swaps from any execution and clearing requirements.
|
• |
Reviewing cybersecurity risks and incidents and any other risks and incidents relevant to our computerized information system controls and security, and discussing if any such risks and incidents should be disclosed in our periodic filings with the SEC.
|
• |
Reports to the Board the results of its monitoring and recommendations.
|
• |
Provides to the Board any additional information and materials as the committee may determine is necessary to make the Board aware of significant financial matters requiring the Board's attention.
|
Item 11.
|
Executive Compensation
|
Global Radiotherapy Leader |
Global Leader in Multi-Disciplinary, Integrated Cancer Care Solutions |
Priorities
|
FY20 Results
| |
INNOVATE
in Radiation Theraphy
|
• 50%+ share of the global radiation therapy market
• 3% year-over-year growth in linear accelerator installed base (an increase of 221 units), bringing the total to 8,717 units
• 9% of revenue invested in R&D to drive innovation and extend technology leadership
• 510k approval in the US for Ethos and NMPA approval in China for Halcyon 2.0
• 34 Ethos orders and 16 installations across Australia, Denmark, Netherlands, United Kingdom, and the United States
• 4 orders for ProBeam proton therapy systems in the United States and Asia
| |
LEVERAGE
artificial intelligence, machine learning, and cloud solutions |
• 4% year-over-year growth in software revenue with 5,660+ unique software installations globally
• Built data lake of 117,000+ patient records
• 60,000+ patients touched on the Noona
®
platform, providing patient-reported outcomes and extending into the life sciences market
• FDA 510(k) clearance for Eclipse v16.1 treatment planning software for proton therapy
| |
GROW
emerging geographies, businesses and technologies |
• Received Investigational Device Exemption (IDE) and initiated preparation for the first-ever clinical trial of Flash Therapy
• Established direct presence to support customers in Kenya, Turkey, Romania and Bulgaria
• Launched and shipped new Cryotouch product for Interventional Oncology
| |
IMPROVE
operational, financial,
and capital efficiency
|
• $1.6 billion in accessible liquidity
• $484 million in cash flow from operations, up 30% year-over-year, including a record $266 million in cash flow from operations in the fourth quarter of FY20, up 126% year-over-year
• 58% of FY20 revenues from software and services, up from 53% in FY19
|
• |
For awards granted during or prior to fiscal year 2020, all stock option and other stock-based awards granted under the plan (including those held by our executive officers) that are outstanding immediately prior to the effective time of the Merger will become fully vested and be converted into the right to receive a cash payment equal to the product of (i) the Merger Consideration (less the applicable exercise price for stock options or stock appreciation rights) and (ii) the number of shares subject to the award. For outstanding stock options and stock-based awards that vest in whole or in part based on the achievement of performance goals, the number of options and units that vest will be determined based upon target performance.
|
• |
For awards granted during fiscal year 2021, grants will be made in the form of RSUs (including to our executive officers) and outstanding RSUs will convert at the effective time of the Merger to the right to a cash award payable based on the original vesting schedule and terms. The cash amount will be equal to the product of the Merger Consideration and the number of shares subject to the award.
|
• |
90% of our CEO's total target compensation opportunity was performance-based, with 100% of his long-term incentive (equity) awards subject to performance-based vesting.
|
• |
79% of our other Named Executive Officers' total target compensation opportunity was performance-based for our NEOs who served as executive officers for the entire year, with 60% of their regular long-term incentive (equity) awards subject to performance-based vesting. (Excludes a
one-time
retention award granted to Mr. Toth in August 2020.)
|
What We Do:
|
What We DON'T Do:
| |
✓ Independent Compensation Committee
✓ Independent compensation advisor
✓ NEOs employed 'at will'
✓ Robust CEO & NEO stock ownership guidelines
✓ Clawback policy that applies to our annual cash incentive plan and equity incentive plan
✓ Annual compensation review and risk assessment
✓ Annual stockholder 'say on pay' vote
✓ Award 100% of CEO and 60% of other NEO long-term incentive value in performance-vested equity awards
✓ Place caps on maximum payouts from our annual cash incentive plan and our PSU/PSO plans
✓ Require revenue growth to earn a payout for PSU and PSO awards
✓ Solicit detailed feedback regarding our compensation practices from stockholders throughout the year
✓ Annual review of succession plan
|
✗ Target pay to any specified percentile of market
✗ NEO employment contracts
✗ Permit directors and executive officers to engage in common stock margining, pledging or hedging
✗ Permit executive officers to sell Company stock without a
10b5-1
trading plan
✗ Excessive NEO perquisites
✗ Reprice and repurchase options without stockholder approval
✗ Excessive pension/supplemental NEO retirement plan payouts
✗ Single trigger acceleration of equity vesting or change in control payments
✗ Change in control severance payments without involuntary job loss or substantial diminution of duties
|
• |
Attraction and Retention of Key Talent.
The pay program should enable the company to attract and retain individuals with the background, experience, and talent required to lead the development and successful implementation of the Company's business strategy.
|
• |
Performance-Driven Compensation.
A high proportion of total compensation should be at risk and subject to achievement of annual and long-term operating and strategic goals that deliver long-term value creation for both customers and stockholders.
|
• |
Stockholder Alignment
. Long-term incentives should be awarded in Company stock to increase the alignment of executive interests with those of stockholders.
|
• |
Appropriately Balance Short- and Long-term Performance Orientation.
The mix of incentives should place emphasis on achievement of long-term sustainable growth and profitability.
|
• |
Total Compensation Context.
Pay decisions should be made in the context of total compensation relative to pay practices of competitors for key talent and in consideration of individual performance, experience, knowledge, and internal parity among peers.
|
Name
|
Title
| |
Dow R. Wilson
|
Chief Executive Officer
| |
Kolleen T. Kennedy
|
President, Proton Solutions and Chief Growth Officer
| |
J. Michael Bruff.
|
Chief Financial Officer
| |
Christopher A. Toth
(1)
|
President and Chief Operating Officer
| |
Michael Hutchinson
|
Senior Vice President, Chief Legal Officer
| |
Gary E. Bischoping, Jr.
(2)
|
Former President, Interventional Oncology Solutions and Former Chief
Financial Officer
|
(1) |
Mr. Toth was promoted from President, Varian Oncology Systems to President and Chief Operating Officer, effective October 5, 2020 with the start of our fiscal year 2021.
|
(2) |
Mr. Bischoping resigned in March 2020.
|
Component
|
Purpose and Role
| |
Base salary |
• Provide a market competitive, fixed level of cash compensation to attract and retain talented and skilled executives
• Recognize sustained performance, capabilities, job scope, experience, and internal pay equity
| |
Annual cash incentives (Management Incentive Plan, 'MIP') |
• Motivate and reward achievement of annual financial results that drive stockholder value
• Reward achievement of strategic goals that provide the foundation for future growth and profitability
| |
Performance Share Units ('PSU
s
')
|
• Reward achievement of
3-year
financial goals and TSR relative to peers
• Encourage long-term stock price growth and executive retention through
3-year
cliff vesting and TSR metric
• Align executives' interests with stockholders' interests through use of performance-based equity awards
| |
Performance Stock Options ('PSOs') |
• Reward achievement of
3-year
financial goals and TSR relative to peers
• Encourage long-term stock price growth and executive retention through
3-year
cliff vesting, a TSR metric and a seven-year term to exercise the options
• Provide leveraged gains aligned with stockholders through use of performance-based awards and a vehicle that ties gains to increases in stock price
| |
Restricted Stock Units ('RSU
s
')
|
• Encourage stock price growth and executive retention through time-based vesting over three years
• Align executives' interests with stockholders' interests through use of equity awards
|
Time-Based Stock Options ('Options') |
• Encourage stock price growth and executive retention through time-based vesting over three years and a seven-year period to exercise the options
• Provide leveraged gains aligned with stockholders' interests through use of an award that bases gains on increases in the stock price
| |
Executive benefits and perquisites |
• Provide the same health, welfare and 401(k) benefits as other employees
• Provide a competitive benefit by allowing executives to defer compensation through a
non-qualified
deferred compensation plan
• Facilitate executive health and focus on our business by providing reimbursement for annual physical exams and financial counseling
• Encourage support of the communities in which we operate by matching charitable donations (available to all employees)
| |
Executive
change-in-control
agreements
|
• Provide reasonable compensation to executive officers who leave our company under certain circumstances to facilitate their transition to new employment
• 'Double-trigger' provisions encourage executive retention in the event of a change of control
• Require a departing executive officer to sign a separation and release agreement as a condition to receiving post-employment compensation payments or benefits, to mitigate any potential employer liability and avoid future disputes or litigation
|
• |
Risk.
Annually review the risks and rewards associated with the Company's compensation programs. Ensure that the program includes plan design features that mitigate risk without diminishing the incentive nature of the compensation, and encourages and rewards prudent business judgment and appropriate risk-taking over the short term and the long term.
|
• |
Annual Program Assessment
. Assess the program to ensure that it is well aligned with the Company's evolving business strategy and is effective in supporting its talent needs. Solicit recommendations for changes from management and our compensation consultant as appropriate. Determine the specific plan designs to be used for the year.
|
• |
CEO Compensation and Performance Goals
. Annually review and approve corporate goals and objectives relevant to the CEO's compensation; develop the process for evaluating the CEO's performance; and establish a proposal for CEO compensation based on an evaluation of the CEO's performance in light of the foregoing corporate goals and objectives and after discussions with the independent directors of the Board and the Committee's independent advisors.
|
• |
Compensation of Other Executives
. Review, discuss, modify and approve, as appropriate, compensation recommendations made by the CEO for other NEOs.
|
• |
Considerations in Making Compensation Decisions
. Consider, among other factors: the Company's overall performance, stockholder return, the performance of the Company's business segments, the achievement of specific corporate goals and objectives that the Committee established, the achievement of any specific individual goals that have been assigned, individual performance on job duties, executive
|
succession plans, compensation previously provided, compensation of other executives of the Company, and competitive compensation levels. Confer with the independent directors of the Board and consider, as appropriate, views expressed by stockholders on executive compensation matters, including results of stockholder advisory votes on executive compensation.
|
• |
Peer Groups.
Review and establish annually the Company's comparator/peer group for use in assessing the competitive range of compensation provided to individuals in similar positions at comparable companies. Review and establish annually the Company's comparator/peer group for use in assessing total stockholder return relative to business model peers. See additional information on the fiscal year 2020 compensation peer group in 'Peer Group and Market Analysis' below and on the 2020 business model peer group in 'Relative TSR Modifier' below.
|
• |
General Advice to the Board
. Review management and compensation matters having major implications to the long-range development of the Company including plans for succession of the CEO and other executive officers and corporate officers.
|
• |
Compensation Consultant
. Engage an independent advisor and meet with its advisor, as needed, in the Committee's sole discretion.
|
• |
role including the scope and complexity of responsibilities;
|
• |
experience and capabilities;
|
• |
contributions or responsibilities beyond the typical scope of the role;
|
• |
individual performance;
|
• |
internal comparisons; and
|
• |
competitive compensation opportunities as reflected in compensation provided by our peers and other competitors for similar executive talent.
|
• |
U.S. publicly traded companies from the Healthcare Equipment, Healthcare Supplies, Healthcare Technology, Life Sciences Tools & Services, and Biotechnology industries
|
• |
Companies in a relevant range around Varian's revenues and market-capitalization
|
• |
Companies with similar business characteristics and comparable talent requirements, such as complex medical or related electronic devices, alternative healthcare therapies or healthcare-related software, significant
non-U.S.
revenues, and employee headcount generally in a reasonable range around Varian's headcount
|
Varian Medical Systems FY 2020 Compensation Peer Group
| ||||
Healthcare Equipment
|
Life Sciences Tools & Services
|
Healthcare Supplies
| ||
Boston Scientific | Agilent Technologies | Cooper Companies | ||
Edwards Lifesciences |
Bio-Rad
Labs
| Dentsply Sirona | ||
Hill-Rom
Holdings
| Bruker Corporation | West Pharmaceutical Services | ||
Hologic | Mettler-Toledo | |||
IDEXX Labs | PerkinElmer |
Biotechnology
| ||
Intuitive Surgical | Waters Corporation | Alexion Pharmaceuticals | ||
ResMed | ||||
Teleflex |
Healthcare Technology
| |||
Zimmer Biomet Holdings | Cerner Corporation |
Peer Group
| ||||||||||||||||
Company Scope
|
Varian
|
Low
|
Median
|
High
| ||||||||||||
Revenue ($M)
| $ | 3,031 | $ | 1,745 | $ | 2,910 | $ | 9,937 | ||||||||
Market Capitalization ($M)
| $ | 11,903 | $ | 6,972 | $ | 16,461 | $ | 57,325 |
Name
|
FY2019 Annual Salary (effective December 15, 2018) |
FY2020 Annual Salary (effective December 14, 2019)
1
|
% Increase
| |||
Dow R. Wilson
| $1,000,000 | $1,000,000 | 0.0% | |||
Kolleen T. Kennedy
| $722,140 | $722,140 | 0.0% | |||
J. Michael Bruff
| $341,120 | $550,000 | 61.2% | |||
Christopher A. Toth
| $525,000 | $575,000 | 9.5% | |||
Michael D. Hutchinson
| - | $535,000 | - | |||
Gary E. Bischoping
| $566,500 | $566,500 | 0.0% |
(1) |
Salary increase for Mr. Bruff was effective with his promotion on December 1, 2019, and annual salary for Mr. Hutchinson was effective upon his hire date in June 2020. Annual salary for Mr. Wilson reflects his regular annual rate, prior to the temporary 20% reduction for the second half of calendar year 2020.
|
• |
Payment of any cash annual incentives to our NEOs and other eligible executives is conditioned upon achievement of at least $250 million in annual net income, on a
non-GAAP
basis, calculated using the Company's currency rates as of September 2019 and subject to applicable adjustments adopted by the Compensation Committee at the time the MIP goals were set.
|
• |
Total awards paid under the MIP for fiscal year 2020 cannot exceed 8% of fiscal year 2020 EBIT (as defined in the MIP) before incentive compensation. In addition, individual awards payable to each of our NEOs and other eligible executives are capped at the lesser of 200% of target payout or $3,000,000 per individual.
|
• |
The Compensation Committee retained the discretion to reduce each NEO's maximum dollar award amount set forth above based on the formula below and such other factors determined by the Committee in its sole discretion. Specifically for the fiscal year 2020 Financial Results component, in addition to considering economic profit results (both
pre-pandemic
and post-pandemic), the Committee also considered the approved funding for
non-MIP
annual incentive plan participants below the executive level, which was based on second half operating earnings results and other resiliency goals related to navigating the pandemic impact, and capped payouts for the Financial Results component at 100% of target.
|
• |
Target Awards
|
Name
|
Annual
Salary
|
MIP Target
1
|
MIP Maximum
1
| |||||||
% of Salary
|
Amount
|
% of Salary
|
Amount
| |||||||
Dow R. Wilson
|
$1,000,000
|
125%
|
$1,250,000
|
250%
|
$2,500,000
| |||||
Kolleen T. Kennedy
|
$722,140
|
90%
|
$649,926
|
180%
|
$1,299,852
| |||||
J. Michael Bruff
|
$550,000
|
75%
|
$412,500
|
150%
|
$825,000
| |||||
Christopher A. Toth
|
$575,000
|
75%
|
$431,250
|
150%
|
$862,500
| |||||
Michael D. Hutchinson
|
$535,000
|
75%
|
$401,250
|
150%
|
$802,500
| |||||
Gary E. Bischoping
2
|
$566,500
|
75%
|
$424,875
|
150%
|
$849,750
|
(1) |
Amounts reflect annualized targets. Actual MIP payouts are prorated based on new hire, promotion and termination dates during the fiscal year.
|
(2) |
Mr. Bischoping was not eligible for a fiscal year 2020 bonus payment as his employment terminated prior to fiscal year end.
|
•
|
Financial Performance
|
• |
Economic profit results, both
pre-pandemic
and post-pandemic, relative to goals set by the Committee at the beginning of fiscal year 2020
|
• |
Broad-based bonus plan results for participants below the executive level including:
|
• |
Second half Operating Earnings results relative to the second half forecast
|
• |
Resilience results relative to existing goals and additional Company goals approved by the Committee after the onset of the
COVID-19
pandemic
|
Adjusted Gross Cash Earnings
|
- - -Minus- - -
|
Capital Charge on Gross Operating Assets
| ||||||
+ | Operating Earnings | + | Long-term Assets (2) | |||||
+ | Research & Development Expense | + | Other Assets & Liabilities | |||||
+ | Depreciation & Amortization Expense | + | Capitalized R&D | |||||
+ |
Impairments Expense & Other
Adjustments
(1)
| + |
Unusual &
One-Time
(3)
| |||||
=
-
|
Pre-tax Gross Cash Earnings
Taxes (14%)
|
=
x
|
Gross Operating Assets (GOA)
8% Required Rate of Return
| |||||
= |
Gross Cash Earnings (GCE)
| = | Capital Charge |
(1) |
Impairments, restructuring, reserves and currency adjustments
|
(2) |
Net working capital, gross PP&E, goodwill and intangibles
|
(3) |
Unusual and
one-time
items such as accounting and tax rule changes, legal restructuring and impairments
|
FY 2020 MIP Economic Profit Measure
|
FY 2020
|
FY 2020
|
FY 2020
|
FY 2020
|
FY 2020
| |||||
Minimum
|
Target
|
Maximum
|
Actual
|
Pre-Pandemic
| ||||||
Economic Profit ($M)
| $346 | $419 | $506 | $383 | $503 | |||||
Increase in Economic Profit Over FY 2019 Adjusted
|
($73)
| $0 | $87 |
($36)
| $84 | |||||
Percentage of Target Payout
| 0% | 100% | 200% | 49% | 197% |
$Millions
|
Fiscal Year 2020
| |||||||||||
Actual
|
Pre-Pandemic
Estimate
|
Difference
| ||||||||||
Gross Cash Earnings
| 708 | 827 | (119) | |||||||||
Gross Operating Assets (4 quarter average)
| 4,058* | 4,054 | 4 | |||||||||
Required Return
| 8% | 8% | ||||||||||
Capital Charge
| (325) | (324) | (1) | |||||||||
Economic Profit (VVA)
| 383 | 503 | (120) | |||||||||
FY 2020 Target
| 419 | 419 | ||||||||||
Change in Economic Profit (VVA)
| (36) | 84 | ||||||||||
MIP Financial Payout
| 49% | 197% | -148% |
Category
|
Criteria
|
Measures
|
Key Results
|
Points
|
Score
(0x to 2x)
| |||||
Company
performance
during pandemic
| FY20 company goals | Scorecard results covering 7 categories | Met or exceeded goals | 10 | 12 | |||||
Customers
| Customer Satisfaction | Net Promoter Score | NPS improved during pandemic |
5
|
10
| |||||
Innovation to deliver services/
products during pandemic
|
Innovations in online training, remote
support in face of COVID
| No missed customer shipment, installation or service event in 2H; vast majority of service and training delivered virtually | ||||||||
Employees
|
Responsiveness to impact of
pandemic on workforce
| Employee safety, support, resources, and wellness tracking | Employee engagment increased to world class level; including safety, support & wellbeing | 5 | 10 | |||||
Stockholders
| Ensure access to liquidity | Cost savings, net income, working capital | Fiscal year 2020 ending leverage ratio less than 0x with accessible liquidity at >$1.3B | 5 | 10 | |||||
Effectiveness in striking Siemens Healthineers' deal & progressing towards closing | Deal price, multiple & stockholder approval | One of largest all cash multiple in medtech industry with >98% stockholder approval + ability to accelerate strategy | ||||||||
Total
|
25
|
42
|
•
|
Individual Strategic Goals
|
• |
Grow our core radiation therapy business
|
• |
Build software capacity and data capability
|
• |
Expand to new markets
|
• |
Delight customers & patients
|
• |
Inspire people
|
• |
Manage the
COVID-19
pandemic impact, balancing needs of our customers, employees and stockholders
|
• |
Execute on the Merger with Siemens Healthineers
|
Name
|
Grow Core RT
Business
|
Build Software
Capacity &
Data Capability
|
Expand to New
Markets
|
Delight
Customers &
Patients
|
Inspire
People
|
Manage
COVID-19
Impact
|
Execute
Merger w/
Siemens
Heatlhineers
|
Total
| ||||||||||
Dow R. Wilson
| Weight | 20% | 15% | 25% |
40%
| 100% | ||||||||||||
Score | 25% | 15% | 25% |
50%
| 115% | |||||||||||||
Kolleen T. Kennedy
| Weight | 30% | 50% | 10% | 10% | 100% | ||||||||||||
Score | 35% | 60% | 10% | 5% | 110% | |||||||||||||
J. Michael Bruff
| Weight | 60% | 40% | 100% | ||||||||||||||
Score | 65% | 45% | 110% | |||||||||||||||
Christopher A. Toth
| Weight | 25% | 10% | 35% | 10% | 20% | 100% | |||||||||||
Score | 30% | 10% | 40% | 10% | 25% | 115% | ||||||||||||
Miachael D. Hutchinson
| Weight | 10% | 15% | 40% | 15% | 20% | 100% | |||||||||||
Score | 10% | 15% | 40% | 15% | 30% | 110% |
Strategic Goal Category
|
Key Result
| |
Grow Core RT Business | On track for goal of 4.5M patient touches despite pandemic with successful Ethos launch exceeding planned orders/installations and strategic initiatives delivering at or above internal goals. | |
Expand to New Markets | Integration milestones for CTSI and Interventional Oncology Solutions on track or ahead of schedule with strong retention/attraction of critical talent. | |
Inspire People | Fostered increase in employee engagement and diversity, inclusion and belonging, achieving engagement scores in line with top tier companies. Built leadership bench strength and executed internal succession plans for several key senior leadership roles in support of our long-term strategy of transforming into a multi-disciplinary integrated cancer care company. | |
Manage
COVID-19
Impact
| Successfully balanced interests of customers, employees and stockholders, sustaining high employee engagement and safety, and increasing customer net promoter score in the midst of the pandemic. | |
Execute on Merger with
Siemens Healthineers
|
Signed
all-cash
deal valued at $16.4 billion and on track for anticipated close and integration planning.
|
Strategic Goal Category
|
Key Result
| |
Grow Core RT Business | Enabled first human treatment on ProBeam with Flash. | |
Expand to New Markets | Prepared Cardiac RadioAblation multi-institutional clinical trial plan, and achieved acquisition integration milestones for CTSI, Humediq, Interventional Solutions and Noona. | |
Delight Customers & Patients | Ensured successful launch of installed base and service management tools to better support our customers. | |
Inspire People | Expanded relationships and fostered high performing, collaborative executive leadership team. |
Strategic Goal Category
|
Key Result
| |
Inspire People | Built capability and scalability within Finance and IT functions through shared service migrations, functional reorganizations, launch of new financial planning and treasury management tools, stabilization of human capital management and payroll systems, and enhanced process and internal controls. Improved engagement and barriers to execution scores. | |
Manage
COVID-19
Impact
| Exceeded cash flow and liquidity targets, enhanced forecasting accuracy and executed on cost savings measures to ensure continued financial health of the business while navigating the pandemic impact. |
Strategic Goal Category
|
Key Result
| |
Grow Core RT Business | Exceeded revised profitability and inventory goals with sales and operations and cash flow from operations above forecast. | |
Build Software & Data Capability | Leveraged cross organization collaboration to expand global reach and accelerate tech enabled services strategies, including key product launch and expansion of CTSI services business. | |
Expand to New Markets | Achieved acquisition integration milestones for CTSI, with business continuing to outperform. AOI site |
expansion on target providing additional locations of care in India. Established Oncology as a Service (OaaS) program framework. | ||
Delight Customers & Patients | Increased net promoter scores. Launched Unity 2.0 for field service representatives with user adoption increased from 47% in 2018 to 86% in 2020. B2E score greatly exceeded target. | |
Inspire People | Built leadership bench strength and enhanced leadership development to prepare leaders to scale with our continued business growth. Increased engagement survey scores related to leadership and diversity, inclusion and belonging. Continued to build external leadership network focused on driving transformational change. |
Strategic Goal Category
|
Key Result
| |
Grow Core RT Business |
Established protocols for handling customer inquiries and requests relating to potential solvency impacts from
COVID-19.
| |
Expand to New Markets |
Filed new patent applications of strategic importance. Developed and enhanced intellectual property strategies for Noona, cryo and
migrate-to-cloud
initiatives. Assist business with enablement and commercialization of new features for customers in support of new market expansion and also in response to
COVID-19-related
needs.
| |
Inspire People | Updated Company sustainability targets related to energy, greenhouse gases and water. In partnership with human resources, enhanced processes and education related to performance improvement and employee relations. | |
Manage
COVID-19
Impact
|
Helped establish
COVID-19
response initiatives to ensure the health and safety of our employees and the customers they support while ensuring appropriate data privacy.
| |
Execute on Merger with
Siemens Healthineers
|
Helped lead process and negotiations of the Merger with Siemens Healthineers, an
all-cash
deal valued at $16.4 billion and ensure transaction is on track for anticipated close and integration planning.
|
•
|
Calculation of Fiscal Year 2020 MIP Payouts
|
Name
|
MIP
Target
(1)
|
Financial
|
Individual Strategic
|
Total %
Payout
|
MIP
Award
| |||||||||||||
Weight
|
% Payout
|
Weight
|
% Payout
| |||||||||||||||
Dow R. Wilson
| $ | 1,250,000 | 80% | 100% | 20% | 115.0% | 103.0% | $ | 1,287,500 | |||||||||
Kolleen T. Kennedy
| $ | 649,926 | 80% | 100% | 20% | 110.0% | 102.0% | $ | 662,925 | |||||||||
J. Michael Bruff
| $ | 388,780 | 80% | 100% | 20% | 110.0% | 102.0% | $ | 396,556 | |||||||||
Christopher A. Toth
| $ | 431,250 | 80% | 100% | 20% | 115.0% | 103.0% | $ | 444,188 | |||||||||
Michael D. Hutchinson
| $ | 134,111 | 80% | 100% | 20% | 110.0% | 102.0% | $ | 136,793 |
(1)
|
MIP targets are prorated for fiscal year 2020 to reflect December 2019 promotion for Mr. Bruff and June 2020 hire date for Mr. Hutchinson. In addition, Mr. Bischoping was not eligible for a fiscal year 2020 bonus payment as his employment terminated prior to fiscal year end.
|
• |
Grant Types and Mix.
For fiscal year 2020, the Compensation Committee continued to grant equity value in the following mix of long-term equity incentives for ongoing awards:
|
Executive
|
Performance Stock Options
(PSOs)
|
Performance Share Units
(PSUs)
|
Stock Options
(SO)
|
Restricted Stock Units
(RSUs)
| ||||
CEO
| 60% | 40% | ||||||
Other NEOs
| 60% | 20% | 20% |
• |
The number of Mr. Wilson's target PSOs was determined by dividing the intended target PSO grant value by the fair value of a PSO on the grant date, which was equal to (i) the Black-Scholes value per share on the date of grant adjusted by (ii) the grant date fair value of the contingent market condition as determined using Monte Carlo simulation.
|
• |
The number of target PSUs for each NEO was determined by dividing the intended target PSU grant value by the fair value of a PSU on the grant date, which was equal to (i) the closing stock price on the date of grant adjusted by (ii) the grant date fair value of the contingent market condition as determined using Monte Carlo simulation.
|
• |
The number of stock options for each NEO (other than Mr. Wilson who was not granted any time-based stock options) was determined by dividing the intended target grant value of the NEO's stock options by the Black-Scholes value per share on the date of grant.
|
• |
The number of RSUs for each NEO (other than Mr. Wilson who was not granted any RSUs) was determined by dividing the intended target grant value of the NEO's RSUs by the closing stock price on the date of grant.
|
Name
|
Performance Options
(1)
|
Performance Share Units
|
Stock Options
|
Restricted
Stock Units
|
Target
Value of
FY 2020
Awards
| |||||||||||||||||||||||||||||||||||||||
Target
Value
|
Target
PSOs
|
Maximum
PSOs
|
Target
Value
|
Target
PSUs
|
Maximum
PSUs
|
Grant
Value
|
Stock
Options
|
Grant
Value
|
RSUs
| |||||||||||||||||||||||||||||||||||
Dow R. Wilson
| $ | 4,500,000 | 130,095 | 260,190 | $ | 3,000,000 | 20,763 | 41,526 | $ | 7,500,000 | ||||||||||||||||||||||||||||||||||
Kolleen T. Kennedy
| $ | 1,260,000 | 8,859 | 17,718 | $ | 420,000 | 14,122 | $ | 420,000 | 2,859 | $ | 2,100,000 | ||||||||||||||||||||||||||||||||
J. Michael Bruff
| $ | 900,000 | 6,328 | 12,656 | $ | 300,000 | 10,087 | $ | 300,000 | 2,042 | $ | 1,500,000 | ||||||||||||||||||||||||||||||||
Christopher A. Toth
(2)
| $ | 1,200,000 | 8,437 | 16,874 | $ | 400,000 | 13,450 | $ | 2,400,000 | 14,317 | $ | 4,000,000 | ||||||||||||||||||||||||||||||||
Michael D. Hutchinson
| $ | - | - | - | $ | - | - | $ | 1,900,000 | 11,014 | $ | 1,900,000 | ||||||||||||||||||||||||||||||||
Gary E. Bischoping
(3)
| $ | 930,000 | 6,539 | 13,078 | $ | 310,000 | 10,424 | $ | 310,000 | 2,110 | $ | 1,550,000 |
(1) |
The PSOs granted to Mr. Wilson have a seven-year term and an exercise price equal to the Company's closing stock price on the date of grant.
|
(2) |
The RSUs granted to Mr. Toth are comprised of (i) an ongoing grant of 2,723 RSUs with a target value of $400,000 and (ii) a retention grant of 11,594 RSUs with a target value of $2,000,000.
|
(3) |
Mr. Bischoping resigned in March 2020, and as a result, he forfeited all his unvested PSUs, RSUs and options.
|
•
|
Fiscal Year 2020 Performance Share Units (PSUs) and Performance Stock Options (PSOs)
|
3-Year Revenue Compound Annual Growth Rate
| ||||||||||||
>0.0%
|
3.5%
|
7.0%
|
10.5%
|
14.0%
| ||||||||
4.0%
| 100% | 133% | 167% | 200% | 200% | |||||||
2.0%
| 67% | 100% | 133% | 167% | 200% | |||||||
0.0%
| 33% | 67% | 100% | 133% | 167% | |||||||
-2.0%
| 0% | 33% | 67% | 100% | 133% | |||||||
-4.0%
| 0% | 0% | 33% | 67% | 100% |
• |
Reduced by 25 percent if
3-year
TSR ranks below the 25
th
percentile of Business Model peers.
|
• |
Increased by 25 percent if
3-year
TSR ranks above the 75
th
percentile of Business Model peers.
|
• |
Unchanged if
3-year
TSR ranks between 25
th
and 75
th
percentiles of Business Model peers.
|
Varian's Business Model Peers
| ||
Abbott Laboratories | Hologic, Inc. | |
AbbVie Inc. | IDEXX Laboratories, Inc. | |
Agilent Technologies, Inc. | Intuitive Surgical, Inc. | |
Alexion Pharmaceuticals, Inc. | Ion Beam Applications SA | |
Allscripts Healthcare Solutions, Inc. | IQVIA Holdings Inc. | |
Amgen Inc. | Johnson & Johnson | |
athenahealth, Inc.* | Laboratory Corporation of America Holdings | |
C.R. Bard * | LifePoint Health, Inc.* | |
Baxter International Inc. | Medtronic plc | |
Becton, Dickinson and Company | Merck & Co., Inc. | |
Biogen Inc. | Mettler-Toledo International Inc. | |
Bio-Rad
Laboratories, Inc.
| Mylan N.V. | |
Boston Scientific Corporation | Patterson Companies, Inc. | |
Bristol-Myers Squibb Company | PerkinElmer, Inc. | |
Bruker Corporation | Pfizer Inc. | |
Cerner Corporation | QIAGEN N.V. | |
Danaher Corporation | Quest Diagnostics Incorporated | |
DaVita Inc. | ResMed Inc. | |
DENTSPLY SIRONA Inc. | Stryker Corporation | |
Edwards Lifesciences Corporation | Teleflex Incorporated | |
Elekta AB (publ) | Tenet Healthcare Corp. | |
Endo International plc | The Cooper Companies, Inc. | |
Envision Healthcare Corporation * | Universal Health Services, Inc. | |
HCA Holdings, Inc. | Waters Corporation | |
Henry Schein, Inc. | West Pharmaceutical Services, Inc. | |
Hill-Rom
Holdings, Inc.
| Zoetis Inc. |
* |
Approved by the Committee but removed after being acquired or taken private during fiscal year 2018 to 2020.
|
•
|
Settlement of PSUs and PSOs Awarded in Fiscal Year 2018
|
3-Year Revenue Compound Annual Growth Rate
| ||||||||||||
0.0%
|
3.5%
|
7.0%
|
10.5%
|
14.0%
| ||||||||
4.0%
|
100%
|
133%
|
167%
|
200%
|
200%
| |||||||
2.0%
| 67% | 100% | 133% | 167% | 200% | |||||||
0.0%
| 33% | 67% | 100% | 133% | 167% | |||||||
-2.0%
| 0% | 33% | 67% | 100% | 133% | |||||||
-4.0%
| 0% | 0% | 33% | 67% | 100% |
• |
A 100% payout maximum when Varian's
3-year
TSR ranks below 25
th
percentile
|
• |
A 100% payout minimum when Varian's
3-year
TSR ranks above 75
th
percentile
|
• |
The Relative TSR Modifier did not apply if Varian's
3-year
TSR ranked between 25
th
and 75
th
percentiles
|
Name
|
Award
Type
|
Matrix
Payout %
|
TSR
Modifier
|
Total
Payout %
|
2018
Target Shares
|
2018
Shares Earned
| ||||||
Dow R. Wilson
| PSO | 73.8% | - | 73.8% | 215,716 | 159,198 | ||||||
Dow R. Wilson
| PSU | 73.8% | - | 73.8% | 25,681 | 18,952 | ||||||
Kolleen T. Kennedy
| PSU | 73.8% | - | 73.8% | 11,536 | 8,513 | ||||||
J. Michael Bruff
| PSU | - | - | - | - | - | ||||||
Christopher A. Toth
| PSU | 73.8% | - | 73.8% | 2,594 | 1,914 | ||||||
Michael D. Hutchinson
| PSU | - | - | - | - | - | ||||||
Gary E. Bischoping
| PSU | - | - | - | - | - |
•
|
Stock Options (SOs)
|
•
|
Restricted Stock Units (RSUs)
|
Position
|
Stock Ownership Multiple of Salary
| |
CEO
| 6x | |
Next four most highly compensated executive officers
| 3x | |
Other corporate officers
| 2x |
• |
Stock ownership requirements
|
• |
Recoupment policy
|
• |
Prohibitions on executive officers and other employees subject to the quarterly blackout period engaging in any speculative transactions in Company securities, such as hedging
|
• |
Prohibitions on executive officers from pledging Company securities in margin accounts or as collateral for a loan
|
• |
Executive cash incentive payouts and PSU/PSO awards are based on financial performance metrics that drive stockholder value and are capped
|
• |
PSU/PSO awards are also based on multi-year relative TSR goals
|
• |
All equity awards have vesting requirements that align employees' interests with stockholders
|
Name and Principal Position
|
Fiscal Year
(1)
|
Salary ($) |
Bonus ($)
(2)
|
Stock Awards ($)
(3)(4)
|
Option Awards ($)
(4)(5)
|
Non-Equity
Incentive Plan Compensation ($)
(6)
|
Change in Pensions Value and Nonqualified Deferred Compensation Earnings ($) |
All Other Compensation ($)
(7)
|
Total ($) | |||||||||||
Dow R. Wilson
Chief Executive
Officer
(8)
|
2020 2019 2018 |
$965,385 $1,000,000 $1,000,000 |
-
-
-
|
$3,000,046
$2,800,005
$2,800,000
|
$4,499,986 $4,200,011 $4,200,000 |
$1,287,500
$1,403,500
$2,237,500
|
- - - |
$50,056 $42,780 $38,939 |
$9,802,972 $9,446,296 $10,276,439 | |||||||||||
Kolleen T. Kennedy
President, Proton
Solution and Chief
Growth Officer
|
2020 2019 2018 |
$736,027 $721,871 $684,899 |
-
-
-
|
$1,680,032 $1,679,998 $1,680,000 |
$419,847
$419,991
$420,000
|
$662,925
$703,740
$1,126,538
|
- - - |
$23,204
$20,679 $22,530 |
$3,522,035 $3,546,279 $3,933,967 | |||||||||||
J. Michael Bruff
Senior Vice President,
Finance and Chief
Financial Officer
(9)
| 2020 | $524,425 | - | $1,200,021 | $299,887 | $396,556 | - | $18,996 | $2,439,885 | |||||||||||
Christopher A. Toth
President and Chief
Operating Officer
(10)
|
2020 2019 |
$575,481 $524,269 |
-
-
|
$3,599,996
$1,000,009
|
$399,869
$249,989
|
$444,188 $430,290 |
- - |
$22,240
$18,420
|
$5,041,773 $2,222,977 | |||||||||||
Michael D. Hutchinson
Senior Vice President,
Chief Legal Officer
(11)
| 2020 | $185,192 | $75,000 | $1,899,915 | - | $136,793 | - | $280 | $2,297,180 | |||||||||||
Gary E. Bischoping
Former Senior Vice President,
Finance and Chief Financial
Officer
(12)
|
2020 2019 2018 |
$250,567 $563,009 $550,000 |
-
-
-
|
$1,240,022 $1,240,036 $1,240,000 |
$309,906
$310,000 $310,000 |
-
$451,557 $734,250 |
- - - |
$420
$11,992
$39,626
|
$1,800,915 $2,576,594 $2,873,876 |
(1) |
Fiscal year 2020 spanned from September 28, 2019 through October 2, 2020, which resulted in 371 days in the fiscal year, instead of the typical 364 days; as such, salaries reported in the table above reflect one additional week of pay compared to a typical year.
|
(2) |
Mr. Hutchinson received a signing bonus of $75,000 in connection with joining the Company on June 1, 2020.
|
(3) |
This column represents the aggregate grant date fair value of RSU and PSU awards computed in accordance with Accounting Standards Codification 718,
'Compensation-Stock Compensation'
('
ASC 718
'). The fair value for RSU awards was determined using the closing price of our common stock on the grant date multiplied by the number of shares subject to the award. The fair value for PSU awards granted in fiscal years 2018, 2019, and 2020 was determined using the closing price of our common stock on the grant date adjusted according to the contingent market condition specified in the terms of those awards and multiplied by the number of shares subject to the award. For more information on how the grant date fair value of RSU and PSU awards was determined, please see 'Critical Accounting Estimates' in Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form
10-K
for the fiscal years ended October 2, 2020, September 27, 2019, and September 28, 2018.
|
Name
|
Value of PSOs at Target
($)*
|
Value of PSUs at Target
($)*
|
Value of Stock Options
($)
|
Value of RSUs
($)**
|
Total Combined Value of Equity Awards
($)
| |||||||||||||||
(Granted
11/22/19)
|
(Granted
11/21/19)
|
(Granted
2/13/20)
|
(Granted
2/13/20)
| |||||||||||||||||
Dow R. Wilson
| $ | 4,499,986 | $3,000,046 | - | - | $7,500,032 | ||||||||||||||
Kolleen T. Kennedy
| - | $1,260,016 | $419,847 | $420,016 | $2,099,879 | |||||||||||||||
J. Michael Bruff
| - | $900,031 | $299,887 | $299,990 | $1,499,908 | |||||||||||||||
Christopher A. Toth
| - | $1,199,995 | $399,869 | $2,400,001 | $3,999,864 | |||||||||||||||
Michael D. Hutchinson
| - | - | - | $1,899,915 | $1,899,915 | |||||||||||||||
Gary E. Bischoping
| - | $930,042 | $309,906 | $309,980 | $1,549,928 |
* |
Assuming the highest level of performance is achieved under the applicable performance conditions, the maximum possible value of the PSOs and/or PSUs granted to Mr. Wilson, Ms. Kennedy, Mr. Bruff, Mr. Toth and Mr. Bischoping on the grant date is $15,000,064, $2,520,032, $1,800,062, $2,399,990 and $1,860,084, respectively. Mr. Wilson was granted his PSUs on November 22, 2019.
|
** |
Mr. Toth was granted a second RSU award and Mr. Hutchinson was granted a new hire RSU award on August 21, 2020.
|
(5) |
This column represents the aggregate grant date fair value of stock option and PSO awards granted to the NEOs computed in accordance with ASC 718. The fair value for stock option awards was determined using the Black-Scholes option-pricing model. The fair value for PSO awards granted in fiscal years 2019 and 2020 was determined using the Black-Scholes option-pricing model and adjusted according to the contingent market condition specified in the terms of those awards. For more information on how the grant date fair value of stock option and PSO awards was determined, please see 'Critical Accounting Estimates' in Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations and the note on Employee Stock Plans in the Notes to Consolidated Financial Statements in our Annual Report on Form
10-K
for the fiscal years ended October 2, 2020, September 27, 2019 and September 28, 2018.
|
(6) |
This column represents annual cash incentives earned under the MIP for the applicable fiscal year. Awards for Mr. Bruff and Mr. Hutchinson were
pro-rated
to reflect time in role in fiscal year 2020. Mr. Bischoping was ineligible for an award payout as his departure date from Varian did not meet the payout requirements. Amounts include the incentive payments deferred under the DCP. Please refer to the Grant of Plan-Based Awards Table below for more information.
|
(7) |
Set forth in the table below are the material components of the 'All Other Compensation' column for fiscal year 2020.
|
Name
|
Company Contributions to 401(k)
(A)
|
Company Match of Charitable Contributions |
Other (B) | |||||||||
Dow R. Wilson
| $21,415 | $10,000 | $18,640 | |||||||||
Kolleen T. Kennedy
| $19,469 | $2,895 | $840 | |||||||||
J. Michael Bruff
| $18,156 | - | $840 | |||||||||
Christopher A. Toth
| $17,100 | $4,300 | $840 | |||||||||
Michael D. Hutchinson
| - | - | $280 | |||||||||
Gary E. Bischoping
| - | - | $420 |
(A) |
Amount represents Company matching contributions to the NEO's contributions to the Company's 401(k) plan, matched at a level of $1.00 for each dollar contributed, up to 6% of eligible earnings through July 16, 2020 when the match was temporarily suspended for all employees.
|
(B) |
For Mr. Wilson, the amount represents reimbursement of financial counseling. For all employees, this also includes company paid Life Insurance for the time they were each actively employed by the Company in fiscal year 2020.
|
(8) |
Mr. Wilson requested a temporary 20% salary reduction, from $1,000,000 to $800,000 effective for the second half of calendar year 2020, as part of company cost saving measures in response to the adverse financial impact from the
COVID-19
pandemic.
|
(9) |
Mr. Bruff was promoted from serving as the Company's Senior Vice President, Finance and Investor Relations to serve as Senior Vice President, Finance and Chief Financial Officer on December 1, 2019, having thereby succeeded Mr. Bischoping.
|
(10) |
Mr. Toth served as the Company's President, Varian Oncology Systems throughout the entirety of fiscal year 2020 and was promoted to a newly created role as President and Chief Operating Officer on October 5, 2020.
|
(11) |
Mr. Hutchinson was hired to serve as the Company's Senior Vice President, Chief Legal Officer on June 1, 2020.
|
(12) |
Mr. Bischoping served as the Company's Senior Vice President, Finance and Chief Financial Officer through December 1, 2019 when he transitioned roles to serve as the Company's President, Interventional Oncology Solutions; Mr. Bischoping served in the latter role until his departure from the Company on March 6, 2020.
|
Name
|
Award Type
|
Grant
Date
|
Estimated Possible Payouts
Under
Non-Equity
Incentive
Plan Awards (1)
|
Estimated Future Payouts
Under Equity Incentive
Plan Awards (2)
|
All Other
Stock
Awards:
Number
of
Shares of
Restricted
Stock
Units (#)
(3)
|
All Other
Option
Awards:
Number of
Securities
Underlying
Options (#)
(4)
|
Exercise
or Base
Price of
Option
Awards
($/Sh)
|
Grant
Date Fair
Value of
Stock
and
Option
Awards
(5)
| ||||||||||||||||||||||||||||||||||||||||
Threshold
($)
|
Target
($)
|
Maximum
($)
|
Threshold (#) |
Target (#) |
Maximum (#) | |||||||||||||||||||||||||||||||||||||||||||
Dow R. Wilson
| MIP Award | N/A | $0 | $1,250,000 | $2,500,000 | - | - | - | - |
-
| - | - | ||||||||||||||||||||||||||||||||||||
PSOs | 11/22/2019 | - | - | - | 0 | 130,095 | 260,190 | - | - | $131.58 | $4,499,986 | |||||||||||||||||||||||||||||||||||||
PSUs | 11/22/2019 | - | - | - | 0 | 20,763 | 41,526 | - | - | - | $3,000,046 | |||||||||||||||||||||||||||||||||||||
Kolleen T. Kennedy
| MIP Award | N/A | $0 | $649,926 | $1,299,852 | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||
PSUs | 11/21/2019 | - | - | - | 0 | 8,859 | 17,718 | - | - | - | $1,260,016 | |||||||||||||||||||||||||||||||||||||
RSUs | 2/13/2020 | - | - | - | - | - | - | 2,859 | - | - | $420,016 | |||||||||||||||||||||||||||||||||||||
Stock Options | 2/13/2020 | - | - | - | - | - | - | - | 14,122 | $146.91 | $419,847 | |||||||||||||||||||||||||||||||||||||
J. Michael Bruff
| MIP Award | N/A | $0 | $388,780 | $777,561 | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||
PSUs | 11/21/2019 | - | - | - | 0 | 6,328 | 12,656 | - | - | - | $900,031 | |||||||||||||||||||||||||||||||||||||
RSUs | 2/13/2020 | - | - | - | - | - | - | 2,042 | - | - | $299,990 | |||||||||||||||||||||||||||||||||||||
Stock Options | 2/13/2020 | - | - | - | - | - | - | - | 10,087 | $146.91 | $299,887 | |||||||||||||||||||||||||||||||||||||
Christopher A. Toth
| MIP Award | N/A | $0 | $431,250 | $862,500 | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||
PSUs | 11/21/2019 | - | - | - | 0 | 8,437 | 16,874 | - | - | - | $1,199,995 | |||||||||||||||||||||||||||||||||||||
RSUs | 2/13/2020 | - | - | - | - | - | - | 2,723 | - | - | $400,036 | |||||||||||||||||||||||||||||||||||||
RSUs | 8/21/2020 | - | - | - | - | - | - | 11,594 | - | - | $1,999,965 | |||||||||||||||||||||||||||||||||||||
Stock Options | 2/13/2020 | - | - | - | - | - | - | - | 13,450 | $146.91 | $399,869 | |||||||||||||||||||||||||||||||||||||
Michael D. Hutchinson
| MIP Award | N/A | $0 | $134,111 | $268,221 | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||
RSUs | 8/21/2020 | - | - | - | - | - | - | 11,014 | - | - | $1,899,915 | |||||||||||||||||||||||||||||||||||||
Gary E. Bischoping (6)
| MIP Award | N/A | $0 | $0 | $0 | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||
PSUs | 11/21/2019 | - | - | - | 0 | 6,539 | 13,078 | - | - | - | $930,042 | |||||||||||||||||||||||||||||||||||||
RSUs | 2/13/2020 | - | - | - | - | - | - | 2,110 | - | - | $309,980 | |||||||||||||||||||||||||||||||||||||
Stock Options | 2/13/2020 | - | - | - | - | - | - | - | 10,424 | $146.91 | $309,906 |
(1) |
These columns represent the potential awards under our MIP as further discussed in 'Compensation Discussion and Analysis-Fiscal Year 2020 Compensation Program and Pay Decisions-Annual Cash Incentives.' For each NEO, the target amount is calculated by multiplying the NEO's target award percentage by the NEO's annual base salary, and prorated for eligible service over the fiscal year. The maximum award is 200% of each NEO's target award. The MIP provided for a threshold amount in fiscal year 2020. The dollar value of the actual cash incentive award earned for fiscal year 2020 for each NEO is set forth in the Summary Compensation Table above. As such, the amounts set forth in these columns do not represent the actual cash incentive earned by any of the NEOs for fiscal year 2020. Mr. Bischoping resigned in March 2020, and as a result, he was not eligible to receive an annual cash incentive under the MIP for fiscal 2020.
|
(2) |
Consists of PSO grants to Mr. Wilson and PSU grants to each NEO under the 2005 Stock Plan. The maximum number of PSOs or PSUs that can be earned is 200% of the target PSOs or PSUs based on achievement of
3-year
revenue growth and change in EBIT as a percent of revenue goals subject to a relative TSR modifier based on a set of Business Model Peers. The determination of the number of PSUs earned is made at the end of the three-year performance period at which time the earned PSUs vest and are settled. The determination of the number of PSOs earned is made at the end of the three-year performance period at which time the earned PSOs vest and become exercisable. Each NEO must be employed by us throughout the performance period for his or her PSOs or PSUs to vest, except in cases involving retirement, death, disability, a qualified termination that occurs in connection with a change in control, or if the award is not assumed in connection with certain corporate transactions, which include the Merger. See the 'Compensation Discussion and Analysis' and 'Potential Payments Upon Termination or Change in Control' for more information regarding these awards.
|
(3) |
Consists of a single RSU grant to each NEO other than Mr. Wilson and Mr. Toth under the 2005 Stock Plan. Each RSU represents a right to one share of our common stock. For Ms. Kennedy, Mr. Bruff, Mr. Toth, and Mr. Bischoping, the RSUs granted on February 13, 2020 vest and are settled in three equal annual increments on February 15th beginning one year after grant. For Mr. Toth and Mr. Hutchinson, the RSUs granted on August 21, 2020 vest and are settled in three equal annual increments on August 10th beginning one year after grant. For each applicable NEO, the vesting of his or her RSUs is subject to the NEO being employed by us through each vesting date, except in cases involving retirement, death, disability, a qualified termination that occurs in connection with a change in control, or if the award is not assumed in connection with certain corporate transactions, which include the Merger. See the 'Compensation Discussion and Analysis' and 'Potential Payments Upon Termination or Change in Control' for more information regarding these awards.
|
(4) |
Consists of a single stock option grant to each NEO other than Mr. Wilson and Mr. Hutchinson under the 2005 Stock Plan at an exercise price equal to the closing price (fair market value) of the underlying shares on the grant date and expiring seven years from the grant date.
One-third
of the award vests one year after the grant date and the remainder vests in equal monthly installments
|
(5) |
Grant date fair value is computed in accordance with ASC 718. Please see footnotes (3), (4) and (5) to the Summary Compensation Table for more information regarding how the grant date fair value was determined for these awards.
|
(6) |
Mr. Bischoping resigned in March 2020, and as a result, he forfeited all his unvested PSUs, RSUs and options.
|
Option Awards (1) (2)
|
Stock Award (2)
| ||||||||||||||||||||||||||||||
Name
|
Option
Grant
Date
|
Number of
Securities
Underlying
Unexercised
Options
Exercisable
(#)
|
Number of Securities Underlying Unexercised Options Unexercisable (#) |
Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) |
Option Exercise Price ($) |
Option Expiration Date |
Number of Shares or Units of Stock That Have Not Vested (#) |
Market Value of Shares or Units of Stock That Have Not Vested ($) (12) |
Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) |
Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) (12) | |||||||||||||||||||||
Dow R. Wilson
| 02/13/2015 | 111,830 | - | $ | 81.97 | 02/13/2022 | |||||||||||||||||||||||||
02/10/2017 | 75,015 | - | $ | 80.40 | 02/10/2024 | ||||||||||||||||||||||||||
11/17/2017 | 159,198 | - | $ | 109.03 | 11/17/2024 | ||||||||||||||||||||||||||
11/16/2018 | - | - | 163,361 | $ | 118.76 | 11/16/2025 | |||||||||||||||||||||||||
11/22/2019 | - | - | 130,095 | $ | 131.58 | 11/22/2026 | |||||||||||||||||||||||||
23,577 |
(9)
| $ | 4,053,594 | ||||||||||||||||||||||||||||
20,763 |
(11)
| $ | 3,569,783 | ||||||||||||||||||||||||||||
Total
|
346,043
|
-
|
293,456
|
-
|
-
|
44,340
|
$
|
7,623,376
| |||||||||||||||||||||||
Kolleen T. Kennedy
| 02/08/2018 | - | 2,716 | $ | 112.82 | 02/08/2025 | |||||||||||||||||||||||||
02/14/2019 | - | 6,802 | $ | 131.77 | 02/14/2026 | ||||||||||||||||||||||||||
02/13/2020 | - | 14,122 | $ | 146.91 | 02/13/2027 | ||||||||||||||||||||||||||
1,241 |
(3)
| $ | 213,365 | ||||||||||||||||||||||||||||
2,125 |
(4)
| $ | 365,351 | ||||||||||||||||||||||||||||
2,859 |
(6)
| $ | 491,548 | ||||||||||||||||||||||||||||
10,777 |
(8)
| $ | 1,852,890 | ||||||||||||||||||||||||||||
8,859 |
(10)
| $ | 1,523,128 | ||||||||||||||||||||||||||||
Total
| - |
23,640
|
6,225
|
$
|
1,070,264
|
19,636
|
$
|
3,376,017
| |||||||||||||||||||||||
J. Michael Bruff
| 08/17/2017 | 3,750 | - | $ | 99.26 | 08/17/2024 | |||||||||||||||||||||||||
02/08/2018 | 819 | 216 | $ | 112.82 | 02/08/2025 | ||||||||||||||||||||||||||
02/14/2019 | 3,016 | 2,700 | $ | 131.77 | 02/14/2026 | ||||||||||||||||||||||||||
08/15/2019 | 3,779 | 6,686 | $ | 107.32 | 08/15/2026 | ||||||||||||||||||||||||||
02/13/2020 | - | 10,087 | $ | 146.91 | 02/13/2027 | ||||||||||||||||||||||||||
197 |
(3)
| $ | 33,870 | ||||||||||||||||||||||||||||
844 |
(4)
| $ | 145,109 | ||||||||||||||||||||||||||||
1,553 |
(5)
| $ | 267,007 | ||||||||||||||||||||||||||||
2,042 |
(6)
| $ | 351,081 | ||||||||||||||||||||||||||||
1,425 |
(8)
| $ | 245,000 | ||||||||||||||||||||||||||||
6,328 |
(10)
| $ | 1,087,973 | ||||||||||||||||||||||||||||
Total
|
11,364
|
19,689
|
4,636
|
$
|
797,067
|
7,753
|
$
|
1,332,973
| |||||||||||||||||||||||
Christopher A. Toth
| 02/10/2017 | 4,823 | - | $ | 80.40 | 02/10/2024 | |||||||||||||||||||||||||
02/08/2018 | 6,961 | 1,833 | $ | 112.82 | 02/08/2025 | ||||||||||||||||||||||||||
02/14/2019 | 4,524 | 4,049 | $ | 131.77 | 02/14/2026 | ||||||||||||||||||||||||||
02/13/2020 | - | 13,450 | $ | 146.91 | 02/13/2027 | ||||||||||||||||||||||||||
837 |
(3)
| $ | 143,905 | ||||||||||||||||||||||||||||
1,265 |
(4)
| $ | 217,491 | ||||||||||||||||||||||||||||
2,723 |
(6)
| $ | 468,165 | ||||||||||||||||||||||||||||
11,594 |
(7)
| $ | 1,993,356 | ||||||||||||||||||||||||||||
6,415 |
(8)
| $ | 1,102,931 | ||||||||||||||||||||||||||||
8,437 |
(10)
| $ | 1,450,573 | ||||||||||||||||||||||||||||
Total
|
16,308
|
19,332
|
16,419
|
$
|
2,822,919
|
14,852
|
$
|
2,553,504
| |||||||||||||||||||||||
Michael D. Hutchinson
| - | - | 11,014 |
(7)
| $ | 1,893,637 | - | - | |||||||||||||||||||||||
Total
|
-
|
-
|
11,014
|
$
|
1,893,637
|
-
|
-
| ||||||||||||||||||||||||
Gary E. Bischoping
| - | - | - | - | - | - | |||||||||||||||||||||||||
Total
| - | - | - | - | - | - | |||||||||||||||||||||||||
(1) | All options are granted at an exercise price equal to the fair market value (i.e., the closing price) of the underlying shares of our common stock on the date of grant. The following table sets forth the vesting dates for the outstanding unvested option awards: | |||
Grant Date
|
Vesting Schedule (based on original option grant)
| |||
2/13/2015 |
33-1/3%
vested on 2/13/2016;
pro-rata
monthly thereafter until fully vested on 2/13/2018.
| |||
2/10/2017 |
33-1/3%
vested on 2/10/2018;
pro-rata
monthly thereafter until fully vested on 2/10/2020.
| |||
8/17/2017 |
33-1/3%
vested on 8/17/2018;
pro-rata
monthly thereafter until fully vested on 8/17/2020.
| |||
11/17/2017 |
The number of shares and the aggregate market value in the table reflect the number of shares earned on 10/2/2020 based on actual performance through the end of a
3-year
performance period.
| |||
2/8/2018 |
33-1/3%
vested on 2/8/2019;
pro-rata
monthly thereafter until fully vested on 2/8/2021.
| |||
11/16/2018 |
100% vest on 10/1/2021, subject to actual performance. The number of shares and the aggregate market value in the table are based on target performance. The actual number of shares that vest may range from 0% to 200% of target shares based on actual performance at the end of the
3-year
performance period.
| |||
2/14/2019 |
33-1/3%
vest on 2/14/2020;
pro-rata
monthly thereafter until fully vested on 2/14/2022.
| |||
8/15/2019 |
33-1/3%
vest on 8/15/2020;
pro-rata
monthly thereafter until fully vested on 8/15/2022.
| |||
2/13/2020 |
33-1/3%
vested on 2/13/2021;
pro-rata
monthly thereafter until fully vested on 2/13/2023.
| |||
11/22/2019 |
100% vest on 9/30/22, subject to actual performance. The number of shares and the aggregate market value in the table are based on target performance. The actual number of shares that vest may range from 0% to 200% of target shares based on actual performance at the end of the
3-year
performance period.
| |||
(2) | Vesting will occur only if the NEO is employed by us throughout each vesting date or in the case of performance awards, the last day of the performance period, except in cases involving retirement, death, disability, a qualified termination that occurs in connection with a change in control, or if the award is not assumed in connection with certain corporate transactions, which include the Merger. In particular, because Mr. Wilson and Ms. Kennedy are eligible for retirement, certain unvested options and unvested stock awards would continue to vest according to the original vesting schedule even if the services of either were terminated for any reason. See 'Potential Payments Upon Termination or Change in Control' for more information regarding these awards. | |||
(3) |
Grant Date
|
Vesting Schedule (based on total number of RSUs originally granted)
| ||
2/8/2018 | 33 1/3% on 2/15/2019; 33 1/3% on 2/15/2020 and 33 1/3% on 2/15/2021. | |||
(4) |
Grant Date
|
Vesting Schedule (based on total number of RSUs originally granted)
| ||
2/14/2019 | 33 1/3% on 2/15/2020; 33 1/3% on 2/15/2021 and 33 1/3% on 2/15/2022. | |||
(5) |
Grant Date
|
Vesting Schedule (based on total number of RSUs originally granted)
| ||
8/15/2019 | 33 1/3% on 8/10/2020; 33 1/3% on 8/10/2021 and 33 1/3% on 8/10/2022. | |||
(6) |
Grant Date
|
Vesting Schedule (based on total number of RSUs originally granted)
| ||
2/13/2020 | 33 1/3% on 2/15/2021; 33 1/3% on 2/15/2022 and 33 1/3% on 2/15/2023. | |||
(7) |
Grant Date
|
Vesting Schedule (based on total number of RSUs originally granted)
| ||
8/21/2020 | 33 1/3% on 8/10/2021; 33 1/3% on 8/10/2022 and 33 1/3% on 8/10/2023. | |||
(8) |
Grant Date
|
Vesting Schedule (based on total number of PSUs originally granted)
| ||
11/15/2018 |
100% on the last day of fiscal year 2021, subject to actual performance through the end of fiscal year 2021. The number of shares and aggregate market value in the table are based on target performance. The actual number of shares that vest may range from 0% to 200% of target shares based on actual performance at the end of the
3-year
performance period.
|
(9) |
Grant Date
|
Vesting Schedule (based on total number of PSUs originally granted)
| ||
11/16/2018 |
100% on the last day of fiscal year 2021, subject to actual performance through the end of fiscal year 2021. The number of shares and aggregate market value in the table are based on target performance. The actual number of shares that vest may range from 0% to 200% of target shares based on actual performance at the end of the
3-year
performance period.
| |||
(10) |
Grant Date
|
Vesting Schedule (based on total number of PSUs originally granted)
| ||
11/21/2019 |
100% on the last day of fiscal year 2022, subject to actual performance through the end of fiscal year 2022. The number of shares and aggregate market value in the table are based on target performance. The actual number of shares that vest may range from 0% to 200% of target shares based on actual performance at the end of the
3-year
performance period.
| |||
(11) |
Grant Date
|
Vesting Schedule (based on total number of PSUs originally granted)
| ||
11/22/2019 |
100% on the last day of fiscal year 2022, subject to actual performance through the end of fiscal year 2022. The number of shares and aggregate market value in the table are based on target performance. The actual number of shares that vest may range from 0% to 200% of target shares based on actual performance at the end of the
3-year
performance period.
| |||
(12) | Based on the closing price of our common stock as of October 2, 2020 ($171.93). |
Option Awards
|
Stock Awards (1)
| |||||||||||||||
Name
|
Number of Shares Acquired on Exercise (#) |
Value Realized Upon Exercise ($) |
Number of Shares Acquired on Vesting (#) |
Value Realized on Vesting ($) | ||||||||||||
Dow R. Wilson
| 116,723 | $9,870,605 | 41,681 | $5,629,052 | ||||||||||||
Kolleen T. Kennedy
| 20,100 | $791,801 | 13,631 | $2,167,052 | ||||||||||||
J. Michael Bruff
| - | - | 2,234 | $370,267 | ||||||||||||
Christopher A. Toth
| 1,597 | $51,391 | 4,284 | $595,613 | ||||||||||||
Michael D. Hutchinson
| - | - | - | - | ||||||||||||
Gary E. Bischoping
| 22,441 | $438,413 | 1,700 | $248,030 |
(1) |
These amounts include fiscal year 2018 PSUs, which were earned at the end of fiscal year 2020 at 73.8% of target shares, and RSUs that vested during fiscal year 2020.
|
Name
|
Executive Contributions in Last Fiscal Year (1) |
Registrant Contributions in Last Fiscal Year |
Aggregate Earnings in Last Fiscal Year (2) |
Aggregate Withdrawals/ Distributions |
Aggregate Balance at Last Fiscal Year End (3) | |||||||||||||||
Dow R. Wilson
| - | - | $23,173 | - | $885,572 | |||||||||||||||
Kolleen T. Kennedy
| - | - | $1,042,667 | - | $10,031,416 | |||||||||||||||
J. Michael Bruff
| - | - | - | - | - | |||||||||||||||
Christopher A. Toth
| - | - | $17,395 | - | $167,991 | |||||||||||||||
Michael D. Hutchinson
| - | - | - | - | - | |||||||||||||||
Gary E. Bischoping
| - | - | - | - | - |
(1) |
There were no executive contributions attributable to fiscal year 2020.
|
(2) |
None of the earnings in this column are included in the Summary Compensation Table for fiscal year 2020 because they were not preferential or above market.
|
(3) |
Balance at last fiscal year end includes the following amounts reported as compensation to the NEOs in the Summary Compensation Table for fiscal years prior to fiscal year 2020: Mr. Wilson, $705,835 and Ms. Kennedy, $3,241,957
|
Intrinsic Value of Accelerated Equity
Awards (3)
| ||||||||||||||||||||||||||||
Name
|
Cash Severance (1) |
Benefits Continuation (2) |
Options
|
Restricted Stock |
PSUs &
PSOs (4)
|
Tax Reimbursement (5) |
Total
| |||||||||||||||||||||
Dow R. Wilson
| $ | 7,853,500 | $ | 56,574 | - | - | $ | 26,270,388 | $ | - | $ | 34,180,462 | ||||||||||||||||
Kolleen T. Kennedy
| $ | 3,826,168 | $ | 20,454 | $ | 787,002 | $ | 1,070,207 | $ | 3,893,664 | - | $ | 9,597,495 | |||||||||||||||
J. Michael Bruff
| $ | 1,925,000 | $ | 56,582 | $ | 805,500 | $ | 796,896 | $ | 1,332,973 | $ | 2,370,664 | $ | 7,287,615 | ||||||||||||||
Christopher A. Toth
| $ | 2,081,542 | $ | 56,574 | $ | 607,396 | $ | 2,822,861 | $ | 2,670,352 | $ | 4,382,087 | $ | 12,620,812 | ||||||||||||||
Michael D. Hutchinson
| $ | 1,872,500 | $ | 56,574 | - | $ | 1,893,637 | - | $ | 1,922,795 | $ | 5,745,506 |
(1) |
Cash Severance
: Cash severance equal to a multiplier times the sum of (i) annual base salary rate, excluding any temporary compensation reductions related to
COVID-19
pandemic, plus (ii) the greater of (a) the most recently established target bonus, (b) the employee's target bonus as of immediately prior to the change in control or (c) the average annual bonus paid over the prior three fiscal years. The multiplier is 3.0 times for Mr. Wilson, 2.5 times for Ms. Kennedy, and 2.0 times for remaining NEOs. Does not include actual bonus for year of termination, which would be payable in the ordinary course under the MIP as the NEO would have been employed through the end of the performance period, and which bonus amounts are reflected in the Summary Compensation Table above in the
'Non-Equity
Incentive Plan Compensation' column.' Does not reflect any reduction due to payments exceeding the maximum amount that could be paid without implicating the excise tax under Section 4999 of the Internal Revenue Code by less than 10%, although some such reduction would have applied in Mr. Wilson's case upon a hypothetical post-change in control severance event on October 2, 2020.
|
(2) |
Benefits Continuation
: Reflects costs for COBRA benefits continuation premiums for 18 months including medical, dental, and vision insurance.
|
(3) |
Based on the closing stock price as of October 2, 2020 ($171.93). Each outstanding equity award that is subject to vesting provisions will vest in full, with PSUs and PSOs vesting at target levels.
|
(4) |
All PSUs and PSOs are included at target number of shares, except that with respect to PSUs and PSOs earned in October 2020 for fiscal year 2018-2020 performance, 26.2% of target value is included, representing the excess of the 100% of target shares that would have been due upon a hypothetical post-change in control severance event over the 73.8% of target shares that was actually earned based on performance results.
|
(5) |
Tax Reimbursement
. Make-whole payments to indemnify the NEOs for any negative economic impact resulting from the application of the excise tax under Section 4999 of the Internal Revenue Code in connection with the Merger. Consistent with SEC guidance, amounts are based on a hypothetical October 2, 2020 Merger consummation date. As discussed more fully in the 'Compensation Discussion and Analysis,' the Company has, in cooperation with the affected executives, engaged in mitigation planning that is expected to result in no such make-whole payments being made to any NEO other than Mr. Bruff, assuming the anticipated 2021 Merger consummation. The projected make-whole payment for Mr. Bruff upon a 2021 Merger consummation is expected to be less than $3,000,000.
|
Other Termination of Employment (Not in Connection with a Change in Control)
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement
|
Death
|
Disability
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Intrinsic Value of
Equity Awards
(1)
|
Intrinsic Value of
Equity Awards
(1)
|
Intrinsic Value of
Equity Awards
(1)
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Name
|
Options
(2a)
|
Restricted Stock/RSUs
(2b)
|
PSUs
(2c)(5)
|
PSOs
(2d)(5)
|
Total
|
Options
(3a)
|
Restricted Stock/RSUs
(3b)
|
PSUs
(3c)(5)
|
PSOs
(3d)(5)
|
Total
|
Options
(4a)
|
Restricted Stock/RSUs
(4b)
|
PSUs
(4c)(5)
|
PSOs
(4d)(5)
|
Total
| |||||||||||||||||||||||||||||||||||||||||||||
Dow R. Wilson
| $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||||||||||||||||||||
Kolleen T. Kennedy
| $ | 658,295 | $ | 578,716 | $ | 0 | $ | 0 | $ | 1,237,011 | $ | 787,044 | $ | 1,070,264 | $ | 0 | $ | 0 | $ | 1,857,308 | $ | 787,044 | $ | 1,070,264 | $ | 0 | $ | 0 | $ | 1,857,308 | ||||||||||||||||||||||||||||||
J. Michael Bruff
| $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 805,519 | $ | 797,067 | $ | 0 | $ | 0 | $ | 1,602,586 | $ | 805,519 | $ | 797,067 | $ | 0 | $ | 0 | $ | 1,602,586 | ||||||||||||||||||||||||||||||
Christopher A. Toth
| $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 607,475 | $ | 2,822,919 | $ | 0 | $ | 0 | $ | 3,430,394 | $ | 607,475 | $ | 2,822,919 | $ | 0 | $ | 0 | $ | 3,430,394 | ||||||||||||||||||||||||||||||
Michael D. Hutchinson
| $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 1,893,637 | $ | 0 | $ | 0 | $ | 1,893,637 | $ | 0 | $ | 1,893,637 | $ | 0 | $ | 0 | $ | 1,893,637 |
(1) |
Based on the closing stock price as of October 2, 2020 ($171.93).
|
(2a) |
For retirement-eligible NEOs, represents continued vesting of outstanding options granted more than a year prior to October 2, 2020 and prorated acceleration of outstanding options granted less than a year prior to October 2, 2020.
|
(2b) |
For retirement-eligible NEOs, represents continued vesting of outstanding RSUs/RSAs granted more than a year prior to October 2, 2020 and after January 1 of the year following the grant year ('Qualifying Retirement'). Excludes value of RSUs granted on February 13, 2020, as the assumed retirement/termination date of October 2, 2020 does not constitute a Qualifying Retirement for that award.
|
(2c) |
For NEOs who shall be retirement-eligible on or prior to the last day of the performance period of each outstanding PSU award, the number of shares subject to such PSU award would be adjusted on a prorated basis (based on the actual amount of time employed within each performance period). However, payouts remain subject to actual performance through the end of each award's applicable performance period, thus awards continue to be subject to risk of forfeiture. $0's are shown as payouts remain subject to performance post-termination. Assuming target performance is met for all outstanding awards, the intrinsic value of each NEO's PSU awards would be as follows:
|
(2d) |
As of October 2, 2020, Mr. Wilson is the only NEO with outstanding PSO awards (granted November 16, 2018 and November 22, 2019).
|
• |
2018 PSO Award: payout remains subject to actual performance through the end of the award's applicable performance period, thus award continues to be subject to risk of forfeiture. $0 is shown as payout remains subject to performance post-termination. Assuming target performance is met for this outstanding award, the intrinsic value of Mr. Wilson's PSO award would be $8,685,904.
|
• |
2019 PSO Award: because Mr. Wilson is retirement-eligible and his outstanding PSO award was granted less than a year prior to October 2, 2020, service obligations would lapse on a prorated basis (based on actual amount of time employed between the grant date and the assumed retirement/termination date of October 2, 2020). However, payout remains subject to actual performance through the end of the award's applicable performance period, thus award continues to be subject to risk of forfeiture. $0 is shown as payout remains subject to performance post-termination. Assuming target performance is met for this outstanding award, the intrinsic value of Mr. Wilson's accelerated PSO award would be $4,530,247.
|
(3a) |
Represents full acceleration of all outstanding options.
|
(3b) |
Represents full acceleration of all outstanding RSUs.
|
(3c) |
Service obligations would lapse fully for all outstanding PSUs, but payouts remain subject to actual performance through the end of each award's applicable performance period, thus awards continue to be subject to risk of forfeiture.
|
(3d) |
As of October 2, 2020, Mr. Wilson is the only NEO with outstanding PSO awards (granted November 16, 2018 and November 22, 2019).
|
(4a) |
Represents full acceleration of all outstanding options.
|
(4b) |
For awards granted prior to August 2020, represents continued vesting of all outstanding RSUs assuming the fiscal year end closing price on each vesting date. For awards granted in August 2020, represents full acceleration of all outstanding RSUs.
|
(4c) |
Service obligations would lapse fully for all outstanding PSUs, but payouts remain subject to actual performance through the end of each award's applicable performance period, thus awards continue to be subject to risk of forfeiture.
|
(4d) |
As of October 2, 2020, Mr. Wilson is the only NEO with outstanding PSO awards (granted November 16, 2018 and November 22, 2019).
|
(5) |
Excludes value of PSUs and PSOs earned in October 2020 for fiscal year 2018-2020 performance (earned at 73.8% of target shares).
|
Corporate Transaction in which Equity Awards
Are Not Assumed, Continued or Substituted
(No Termination of Employment) Intrinsic Value of
Accelerated Equity Awards(1)
| ||||||||||||||||||||
Name
|
Options
|
Restricted Stock |
PSUs(2)
|
PSOs
|
Total(3)
| |||||||||||||||
Dow R. Wilson
| $ | 0 | $ | 0 | $ | 7,623,376 | $ | 13,935,238 | $ | 21,558,614 | ||||||||||
Kolleen T. Kennedy
| $ | 787,044 | $ | 1,070,264 | $ | 3,376,017 | $ | 0 | $ | 5,233,325 | ||||||||||
J. Michael Bruff
| $ | 805,519 | $ | 797,067 | $ | 1,332,973 | $ | 0 | $ | 2,935,560 | ||||||||||
Christopher A. Toth
| $ | 607,475 | $ | 2,822,919 | $ | 2,553,504 | $ | 0 | $ | 5,983,899 | ||||||||||
Michael D. Hutchinson
| $ | 0 | $ | 1,893,637 | $ | 0 | $ | 0 | $ | 1,893,637 |
(1) |
Based on the closing stock price as of October 2, 2020 ($171.93).
|
(2) |
Excludes value of PSUs and PSOs earned in October 2020 for fiscal year 2018-2020 performance (earned at 73.8% of target shares).
|
(3) |
Represents full acceleration of all outstanding equity awards (with payout for PSUs and PSOs at target performance level) per the Fifth Amended & Restated 2005 Omnibus Stock Plan.
|
• |
An annual cash retainer to all
non-employee
directors.
|
• |
An additional annual cash retainer to the Board Chair, committee chairs and committee members, including an increase to the cash retainers for committee chairs beginning with payments made following the annual meeting in February 2020.
|
• |
Company matching of director contributions to charities and educational institutions.
|
• |
An annual restricted stock unit award to all
non-employee
directors, including an increase to the award amount beginning with grants in February 2020.
|
• |
No performance-based equity awards, pension plans or excessive retirement benefits.
|
• |
Meaningful stock ownership requirements and limit on total director compensation.
|
• |
The increases to committee chair retainers and annual RSU awards were approved in November 2019 prior to the onset of the
COVID-19
pandemic. Subsequently, as part of the Company's cost savings measures in response to the pandemic impact, the Board approved a 20 percent reduction in all cash fees paid to members of Varian's Board of Directors for the second half of calendar year 2020.
|
Compensation Element
|
Compensation Amount (prior to reduction in response to pandemic impact)
| |
Annual Cash Board Retainer |
• $100,000
| |
Additional Annual Cash Retainers for Independent Board Chair and Committee Chairs
(1)
|
• $150,000 for Independent Board Chair
• $24,000 for Audit Committee Chair
• $21,000 for Compensation & Leadership Development Committee Chair
• $12,500 for Nominating & Corporate Governance Committee Chair
• $12,500 for Ethics & Compliance Committee Chair
| |
Additional Annual Cash Retainer for
Non-Chair
Committee Members
|
• $14,000 for Audit Committee Member
• $7,500 for Compensation & Leadership Development Committee Member
• $5,000 for Nominating & Corporate Governance Committee Member
• $5,000 for Ethics & Compliance Committee Member
| |
Annual Equity Award
(2)
|
• $180,000 in RSUs
• Grants cliff-vest (100% vest) upon the earlier of one year from the grant date or the next Annual Meeting of Shareholders
• Vesting accelerates in the event of termination due to death, disability, retirement, or upon a change in control, such as the Merger
| |
Charitable Giving |
• Company matching of director contributions to charities and educational institutions up to a maximum of $10,000 per director per calendar year
• Director contributions to Varian's Political Action Committee were matched by a Company contribution to a charity or educational institution, up to a maximum of $5,000 per director per calendar year
|
(1) |
Prior to February 2020, these amounts were $150,000 (unchanged), $20,000, $19,000, $12,000 and $12,000 respectively.
|
(2) |
Prior to February 2020, the annual grant date fair value was $165,000.
|
Name
|
Fees
Earned or
Paid in
Cash (1)
|
Stock Awards
(2)(6)
|
Option Awards |
Non-Equity
Incentive Plan Compensation |
Change in Pension Value and Nonqualified Deferred Compensation Earnings |
All Other Compensation (3) |
Total ($)
| |||||||||||||||||||||
Anat Ashkenazi
| $ | 115,425 | $ | 179,977 | - | - | - | - | $ | 295,402 | ||||||||||||||||||
Jeffrey Balser
| $ | 106,875 | $ | 179,977 | - | - | - | - | $ | 286,852 | ||||||||||||||||||
Judy Bruner
| $ | 121,550 | $ | 179,977 | - | - | - | $ | 10,000 | $ | 311,527 | |||||||||||||||||
Jean-Luc Butel
| $ | 127,750 | $ | 179,977 | - | - | - | - | $ | 307,727 | ||||||||||||||||||
Regina Dugan
| $ | 120,050 | $ | 179,977 | - | - | - | - | $ | 300,027 | ||||||||||||||||||
R. Andrew Eckert
| $ | 249,375 | $ | 179,977 | - | - | - | - | $ | 429,352 | ||||||||||||||||||
Phillip Febbo
(6)
| $ | 113,050 | $ | 249,617 | - | - | - | - | $ | 362,667 | ||||||||||||||||||
Timothy E. Guertin
(4)
| $ | 27,500 | - | - | - | - | - | $ | 27,500 | |||||||||||||||||||
David J. Illingworth
| $ | 111,500 | $ | 179,977 | - | - | - | - | $ | 291,477 | ||||||||||||||||||
Michelle Le Beau
(5)(6)
| $ | 102,000 | $ | 195,844 | - | - | - | $ | 5,000 | $ | 302,844 |
(1) |
This column includes cash compensation paid during fiscal year 2020 (i) under the terms of the director compensation program that was in effect prior to February 2020, (ii) under the terms of the director compensation program that was in effective beginning in February 2020, and (iii) following the temporary 20 percent reduction in cash compensation for payments made during the second half of calendar year 2020 as a result of cost savings measures in response to the
COVID-19
pandemic impact.
|
(2) |
This column represents the aggregate grant date fair value of RSUs granted in fiscal year 2020, computed in accordance with ASC 718. The fair value is determined using the closing price on the grant date multiplied by the number of shares subject to the award. These amounts reflect our calculation of the value of these awards, and do not necessarily correspond to the actual value that may ultimately be realized by the directors.
|
(3) |
Amounts represent charitable contributions made by the Company during the fiscal year on behalf of Ms. Bruner and Ms. Le Beau under our matching gifts program. Contributions span multiple calendar years and therefore may be higher than the applicable calendar year limits outlined above.
|
(4) |
Timothy E. Guertin retired from the Board effective February 13, 2020.
|
(5) |
Michelle Le Beau was appointed to the Board effective November 27, 2019.
|
(6) |
Mr. Febbo and Ms. Le Beau were each granted additional RSUs for their partial year of service prior to the 2020 Annual Meeting.
|
Name
|
RSUs
Outstanding
|
Options Outstanding | ||||||
Anat Ashkenazi
| 1,225 | - | ||||||
Jeffrey Balser
| 1,225 | - | ||||||
Judy Bruner
| 1,225 | - | ||||||
Jean-Luc Butel
| 1,225 | - | ||||||
Regina Dugan
| 1,225 | - | ||||||
R. Andrew Eckert
| 1,225 | - | ||||||
Phillip Febbo
| 1,225 | - | ||||||
David J. Illingworth
| 1,225 | - | ||||||
Michelle Le Beau
| 1,333 | - |
Item 12.
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
|
A
|
B
|
C
| |||||||||
(In millions, except price per share)
|
Number of securities to be issued upon exercise of outstanding options, warrants and rights |
Weighted average
exercise price of
outstanding options,
warrants and
rights
(1)
|
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column A) | ||||||||
Equity compensation plans approved by security holders
| 2.5 |
(2)
| $ | 110.79 | 11.2 |
(3)
| |||||
Total
| 2.5 | $ | 110.79 | 11.2 | |||||||
(1)
|
The weighted average exercise price does not take into account the shares issuable upon vesting of outstanding restricted stock units, deferred stock units and performance units, which have no exercise price.
|
(2)
|
Consists of stock options (including performance-based options), restricted stock units, deferred stock units and performance units granted under the Fifth Amended and Restated 2005 Omnibus Stock Plan (the 'Fifth Amended 2005 Plan'). The number of shares subject to outstanding performance awards assumes the maximum payout with respect to such awards.
|
(3)
|
Includes 5.7 million shares available for future issuance under the Fifth Amended 2005 Plan. Also includes [4.8] million shares available for future issuance under the 2010 Employee Stock Purchase Plan, including shares subject to purchase during the current purchase period, which commenced on November 2, 2020 (the exact number of which will not be known until the purchase date on April 30, 2021, or earlier, depending on the expected closing date of the Merger). Subject to the number of shares remaining in the share reserve, the maximum number of shares purchasable by any participant under the 2010 Employee Stock Purchase Plan on any one purchase date for any purchase period, including the current purchase period may not exceed 1,000 shares.
|
Amount and Nature of Common Stock Beneficially Owned | ||||||||
Number of Shares Beneficially Owned |
Percent of Class | |||||||
Stockholders
| ||||||||
The Vanguard Group, Inc. (1)
| 10,021,104 | 10.91 | % | |||||
100 Vanguard Blvd.
| ||||||||
Malvern, PA 19355
| ||||||||
BlackRock, Inc. (2)
| 9,929,752 | 10.81 | % | |||||
55 East 52nd Street
| ||||||||
New York, NY 10055
| ||||||||
Directors and Named Executive Officers
| ||||||||
Anat Ashkenazi (3)
| 2,574 | * | ||||||
Jeffrey R. Balser (4)
| 2,824 | * | ||||||
Judy Bruner (5)
| 6,779 | * | ||||||
Jean-Luc
Butel (6)
| 4,415 | * | ||||||
Regina E. Dugan (7)
| 12,396 | * | ||||||
R. Andrew Eckert (8)
| 14,273 | * | ||||||
Phillip G. Febbo (9)
| 1,708 | * | ||||||
David J. Illingworth (10)
| 15,369 | * | ||||||
Michelle M. Le Beau (11)
| 1,333 | * | ||||||
Dow R. Wilson
| 104,645 | * | ||||||
J. Michael Bruff (12)
| 7,798 | * | ||||||
Kolleen T. Kennedy (13)
| 38,704 | * | ||||||
Christopher A. Toth (14)
| 16,078 | * | ||||||
Michael Hutchinson
| 5,589 | * | ||||||
Gary Bischoping, Jr. (15)
| 22,230 | * | ||||||
All directors and executive officers as a group (15 persons) (16) | 246,998 | * |
* |
The percentage of shares of common stock beneficially owned does not exceed one percent of the shares of common stock outstanding at January 20, 2021.
|
(1) |
Based on a Schedule 13G/A filed February 12, 2020, The Vanguard Group, Inc. has sole power to vote 141,096 of these shares, shared power to vote 29,809 of these shares, sole power to dispose of 9,858,132 of these shares and shared power to dispose of 162,972 of these shares.
|
(2) |
Based on a Schedule 13G/A filed February 10, 2020, BlackRock, Inc. has sole power to vote 8,803,867 of these shares and sole power to dispose of 9,929,752 of these shares.
|
(3) |
Amount shown includes 1,225 restricted stock units that will vest on February 11, 2021.
|
(4) |
Amount shown includes 1,225 restricted stock units that will vest on February 11, 2021.
|
(5) |
Amount shown includes 1,225 restricted stock units that will vest on February 11, 2021.
|
(6) |
Amount shown includes 1,225 restricted stock units that will vest on February 11, 2021.
|
(7) |
Amount shown includes 1,225 restricted stock units that will vest on February 11, 2021.
|
(8) |
Amount shown includes 1,225 restricted stock units that will vest on February 11, 2021.
|
(9) |
Amount shown includes 1,225 restricted stock units that will vest on February 11, 2021.
|
(10) |
Amount shown includes 1,225 restricted stock units that will vest on February 11, 2021.
|
(11) |
Amount shown includes 1,333 restricted stock units that will vest on February 11, 2021.
|
(12) |
Amount shown includes 1,299 restricted stock units that will vest on February 15, 2021.
|
(13) |
Amount shown includes 3,256 restricted stock units that will vest on February 15, 2021, and includes 8,330 shares that may be acquired under exercisable stock options.
|
(14) |
Amount shown includes 2,376 restricted stock units that will vest on February 15, 2021.
|
(15) |
Amount shown is based on the Company's available records as of March 6, 2020.
|
(16) |
Amount shown includes 18,513 shares that may be acquired under exercisable stock options, 11,133 shares restricted stock units that will vest on February 11, 2021 and 8,459 restricted stock units that will vest on February 15, 2021, held by all persons who are directors and/or executive officers of the Company as of January 20, 2021. The amount shown (i) excludes the holdings of Mr. Bischoping, who is a former executive officer of the Company, and (ii) includes the holdings of Mr. Kevin O'Reilly, who is a current executive officer of the Company as of October 5, 2020.
|
• |
any transaction with another company for which a related person's only relationship is as an employee (other than an executive officer), director, or beneficial owner of less than 10% of that company's shares, if the amount involved does not exceed the greater of $1 million, or 2% of that company's total annual revenue, and the related person is not involved in the decision-making process for such transaction;
|
• |
any charitable contribution, grant or endowment by the Company to a charitable organization, foundation or university for which a related person's only relationship is as an employee (other than an executive officer) or a director, if the amount involved does not exceed the lesser of $1 million, or 2% of the charitable organization's total annual receipts, and the related person is not involved in the decision-making process for such transaction;
|
• |
compensation to executive officers determined by the Compensation Committee;
|
• |
compensation to directors determined by the Board; and
|
• |
transactions in which all security holders receive proportional benefits.
|
• |
Dr. Balser is the Chief Executive Officer of Vanderbilt University Medical Center, which is a customer of ours.
|
• |
Mr. Eckert serves as an outside director of a company from whom we are licensing and with whom we are developing certain technology.
|
Fee Category
|
Fiscal Year 2020
|
Fiscal Year 2019
| ||||||
Audit Fees
| $ | 6,843,334 | $ | 5,793,031 | ||||
Audit-Related Fees
| $ | 389,500 | $ | 160,460 | ||||
Tax Fees
| $ | 711,732 | $ | 1,050,397 | ||||
All Other Fees
| $ | 2,700 | $ | 16,880 | ||||
Total Fees
| $ | 7,947,266 | $ | 7,020,768 |
(a) |
The following documents are filed as part of this report:
|
(1) |
Consolidated Financial Statements:
|
• |
Consolidated Statements of Earnings
|
• |
Consolidated Statements of Comprehensive Earnings
|
• |
Consolidated Balance Sheets
|
• |
Consolidated Statements of Cash Flows
|
• |
Consolidated Statements of Equity
|
• |
Notes to the Consolidated Financial Statements
|
• |
Report of Independent Registered Public Accounting Firm
|
(2) |
Consolidated Financial Statement Schedule:
|
Page
| ||||
Schedule
| ||||
II
| Valuation and Qualifying Accounts |
See page 144of the
Original Form 10-K
|
(3) |
Exhibits:
|
Exhibit
Number
|
Description
| |
2.1
| Amended and Restated Distribution Agreement, dated as of January 14, 1999, by and among Varian Associates, Inc. (which has been renamed Varian Medical Systems, Inc.), Varian, Inc. and Varian Semiconductor Equipment Associates, Inc. (incorporated by reference to Exhibit No. 2 to the Registrant's Form8-K Current Report filed as of April 19, 1999, FileNo. 1-7598). | |
2.2
| Separation and Distribution Agreement, dated as of January 27, 2017, by and between Registrant and Varex Imaging Corporation (incorporated by reference to Exhibit No. 2.1 to the Registrant's Form8-K Current Report filed as of January 30, 2017, FileNo. 1-7598). | |
2.3
| Agreement and Plan of Merger by and among Siemens Healthineers Holding I GmbH, Falcon Sub Inc., Varian Medical Systems, Inc. and, with respect to certain provisions, Siemens Medical Solutions USA, Inc., dated as of August 2, 2020 (incorporated by reference to Exhibit No. 2.1 to the Registrant's Form8-K Current Report filed as of August 3, 2020, FileNo. 1-7598). | |
2.4
| Letter of Support between Siemens Healthineers AG and Varian Medical Systems, Inc., dated August 2, 2020 (incorporated by reference to Exhibit No. 2.2 to the Registrant's Form8-K Current Report filed as of August 3, 2020, FileNo. 1-7598). | |
3.1
| Registrant's Amended and Restated Certificate of Incorporation, as amended (incorporated by reference to Exhibit No. 3.1 to the Registrant's Form8-K Current Report filed as of August 18, 2014, FileNo. 1-7598). | |
3.2
| Registrant'sBy-Laws, as amended, effective September 1, 2018 (incorporated by reference to Exhibit No. 3.1 to the Registrant's Form8-K Current Report filed as of August 21, 2018, FileNo. 1-7598). | |
3.3
| Registrant's Amended and Restated Bylaws, as amended (incorporated by reference to Exhibit No. 3.1 to the Registrant's Form8-K Current Report filed as of March 3, 2020, FileNo. 1-7598) | |
4.1
| Specimen Common Stock Certificate (incorporated by reference to Exhibit No. 4.1 to the Registrant's Form10-Q Quarterly Report for the quarter ended April 2, 1999, FileNo. 1-7598). | |
4.2
| Form of Senior Indenture, between Registrant and one or more trustees to be named (incorporated by reference to Exhibit No. 4.2 to the Registrant's FormS-3, FileNo. 333-221763). | |
4.3
| Form of Subordinated Indenture, between Registrant and one or more trustees to be named (incorporated by reference to Exhibit No. 4.3 to the Registrant'sForm-3, FileNo. 333-221763). | |
4.4
| Description of Securities Registered Under Section 12 of the Exchange Act (incorporated by reference to Exhibit 4.4 to the Registrant's Form10-K Annual Report for the year ended September 27, 2019, FileNo. 1-7598). | |
10.1†
| Form of Registrant's Indemnity Agreement with the directors and executive officers (incorporated by reference to Exhibit No. 10.3 to the Registrant's Form10-Q Quarterly Report for the quarter ended April 2, 1999, FileNo. 1-7598). | |
10.2†
| Form of Registrant's Change in Control Agreement for Chief Executive Officer (incorporated by reference to Exhibit 10.2 to the Registrant's Form10-K Annual Report for the year ended October 2, 2015, FileNo. 1-7598). | |
10.3†
| Form of Registrant's Change in Control Agreement for Senior Executives (Chief Financial Officer and General Counsel) (incorporated by reference to Exhibit 10.3 to the Registrant's Form10-K Annual Report for the year ended October 2, 2015, FileNo. 1-7598). | |
10.4†
| Form of Registrant's Change in Control Agreement for Senior Executives (other than the Chief Executive Officer, the Chief Financial Officer, and the General Counsel) (incorporated by reference to Exhibit 10.4 to the Registrant's Form10-K Annual Report for the year ended October 2, 2015, FileNo. 1-7598). | |
10.5†
| Form of Registrant's Change in Control Agreement for Key Employees (incorporated by reference to Exhibit 10.5 to the Registrant's Form10-K Annual Report for the year ended October 2, 2015, FileNo. 1-7598). |
Exhibit
Number
|
Description
| |
10.6
| Employee Benefits Allocation Agreement, dated April 2, 1999, by and among Varian Associates, Inc. (which has been renamed Varian Medical Systems, Inc.), Varian, Inc. and Varian Semiconductor Equipment Associates, Inc. (incorporated by reference to Exhibit No. 99.1 to the Registrant's Form8-K Current Report filed as of April 19, 1999, FileNo. 1-7598). | |
10.7
| Intellectual Property Agreement, dated April 2, 1999, by and among Varian Associates, Inc. (which has been renamed Varian Medical Systems, Inc.), Varian, Inc. and Varian Semiconductor Equipment Associates, Inc. (incorporated by reference to Exhibit No. 99.2 to the Registrant's Form8-K Current Report filed as of April 19, 1999, FileNo. 1-7598). | |
10.8
| Tax Sharing Agreement, dated April 2, 1999, by and among Varian Associates, Inc. (which has been renamed Varian Medical Systems, Inc.), Varian, Inc. and Varian Semiconductor Equipment Associates, Inc. (incorporated by reference to Exhibit No. 99.3 to the Registrant's Form8-K Current Report filed as of April 19, 1999, FileNo. 1-7598). | |
10.9†
| Registrant's Frozen Deferred Compensation Plan (incorporated by reference to Exhibit No. 10.17 to the Registrant's Form10-K Annual Report for the fiscal year ended September 29, 2000, FileNo. 1-7598). | |
10.10†
| Registrant's Amended and Restated 2005 Deferred Compensation Plan (incorporated by reference to Exhibit No. 10.2 of the Registrant's Form10-Q Quarterly Report for the quarter ended January 2, 2009, FileNo. 1-7598). | |
10.11†
| Registrant's Management Incentive Plan (incorporated by reference to Exhibit 10.12 to the Registrant's Form10-K Annual Report for the year ended October 2, 2015, FileNo. 1-7598). | |
10.12†
| Registrant's 2010 Employee Stock Purchase Plan (incorporated by reference to Exhibit No. 10.1 to the Registrant's Form10-Q Quarterly Report for the quarter ended April 2, 2010, FileNo. 1-7598). | |
10.13†
| Registrant's Third Amended and Restated 2005 Omnibus Stock Plan (incorporated by reference to Exhibit No. 10.1 to the Registrant's Form10-Q Quarterly Report for the quarter ended March 30, 2012, FileNo. 1-7598). | |
10.14†
| Form of Registrant's Nonqualified Stock Option Agreement under the Registrant's Third Amended and Restated 2005 Omnibus Stock Plan (incorporated by reference to Exhibit No. 10.2 to the Registrant's Form10-Q Quarterly Report for the quarter ended March 30, 2012, FileNo. 1-7598). | |
10.15†
| Form of Registrant's Nonqualified Stock Option Agreement under the Registrant's Third Amended and Restated 2005 Omnibus Stock Plan (effective for nonqualified stock option awards granted to executive officers after November 8, 2015) (incorporated by reference to Exhibit No. 10.1 to the Registrant's Form8-K Current Report filed as of November 12, 2015, FileNo. 1-7598). | |
10.16†
| Form of Registrant'sNon-Employee Director Nonqualified Stock Option Agreement under the Registrant's Third Amended and Restated 2005 Omnibus Stock Option Plan (incorporated by reference to Exhibit No. 10.3 to the Registrant's Form10-Q Quarterly Report for the quarter ended March 30, 2012, FileNo. 1-7598). | |
10.17†
| Form of Registrant's Restricted Stock Unit Agreement under the Registrant's Third Amended and Restated 2005 Omnibus Stock Plan (effective for restricted stock unit awards granted to executive officers after November 8, 2015) (incorporated by reference to Exhibit No. 10.2 to the Registrant's Form8-K Current Report filed as of November 12, 2015, FileNo. 1-7598). | |
10.18†
| Form of Registrant's Performance Unit Agreement under the Registrant's Third Amended and Restated 2005 Omnibus Stock Plan (effective for performance unit awards granted to executive officers after November 8, 2015) (incorporated by reference to Exhibit No. 10.3 to the Registrant's Form8-K Current Report filed as of November 12, 2015, FileNo. 1-7598). | |
10.19†
| Form of Registrant's Grant Agreement for Deferred Stock Units under the Registrant's Third Amended and Restated 2005 Omnibus Stock Plan (incorporated by reference to Exhibit No. 10.7 to the Registrant's Form10-Q Quarterly Report for the quarter ended March 30, 2012, FileNo. 1-7598). | |
10.20†
| Form of Registrant'sNon-Employee Grant Agreement for Deferred Stock Units (for use in Singapore) under the Registrant's Third Amended and Restated 2005 Omnibus Stock Plan (incorporated by reference to Exhibit 10.8 of the Registrant's Form10-Q Quarterly Report for the quarter ended March 30, 2012, FileNo. 1-7598). |
Exhibit
Number
|
Description
| |
10.21++
| Loan and Security Agreement (Building Loan) dated as of July 15, 2015 by and among MM PROTON I, LLC, as Borrower; JPMORGAN CHASE BANK, N.A., as Administrative Agent and Collateral Agent; and the Lenders referenced therein. 'Lenders' includes the Registrant (incorporated by reference to Exhibit 10.43 to the Registrant's Form10-K/A filed as of August 18, 2016, FileNo. 1-7598). | |
10.22++
| First Amendment to Loan and Security Agreement (Building Loan) dated as of August 5, 2015 by and among MM PROTON I, LLC, as Borrower; JPMORGAN CHASE BANK, N.A., as Administrative Agent and Collateral Agent; and the Lenders referenced therein. 'Lenders' includes the Registrant (incorporated by reference to Exhibit 10.44 to the Registrant's Form10-K/A filed as of August 18, 2016, FileNo. 1-7598). | |
10.23++
| Loan and Security Agreement (Project Loan) dated as of July 15, 2015 by and among MM PROTON I, LLC, a Borrower; JPMORGAN CHASE BANK, N.A., as Administrative Agent and Collateral Agent, and the Lenders referenced therein (incorporated by reference to Exhibit 10.45 to the Registrant's Form10-K/A filed as of August 18, 2016, FileNo. 1-7598). 'Lenders' includes the Registrant. | |
10.24++
| Amendment No. One to Loan and Security Agreement (Project Loan) dated as of July 31, 2015 by and among MM PROTON I, LLC, as Borrower; JPMORGAN CHASE BANK, N.A., as Administrative Agent and Collateral Agent, and the Lenders referenced therein. (incorporated by reference to Exhibit 10.46 to the Registrant's Form10-K/A filed as of August 18, 2016, FileNo. 1-7598). 'Lenders' includes the Registrant. | |
10.25
| Transition Services Agreement, dated as of January 27, 2017, by and between Registrant and Varex Imaging Corporation (incorporated by reference to Exhibit No. 10.1 to the Registrants Form8-K Current Report filed as of January 30, 2017, FileNo. 1-7598). | |
10.26
| Tax Matters Agreement, dated as of January 27, 2017, by and between Registrant and Varex Imaging Corporation (incorporated by reference to Exhibit No. 10.2 to the Registrants Form8-K Current Report filed as of January 30, 2017, FileNo. 1-7598). | |
10.27
| Employee Matters Agreement, dated as of January 27, 2017, by and between Registrant and Varex Imaging Corporation (incorporated by reference to Exhibit No. 10.3 to the Registrant's Form8-K Current Report filed as of January 30, 2017, FileNo. 1-7598). | |
10.28
| Intellectual Property Matters Agreement, dated as of January 27, 2017, by and between Registrant and Varex Imaging Corporation (incorporated by reference to Exhibit No. 10.4 to the Registrant's Form8-K Current Report filed as of January 30, 2017, FileNo. 1-7598). | |
10.29
| Trademark License Agreement, dated as of January 27, 2017, by and between Registrant and Varex Imaging Corporation (incorporated by reference to Exhibit No. 10.5 to the Registrant's Form8-K Current Report filed as of January 30, 2017, FileNo. 1-7598). | |
10.30†
| Registrant's Fourth Amended and Restated 2005 Omnibus Stock Plan (incorporated by reference to Appendix A of the Registrant's Proxy Statement for its 2017 Annual Meeting of Stockholders filed as of December 30, 2016, FileNo. 1-7598). | |
10.31†
| Offer Letter between Registrant and Gary Bischoping, dated March 20, 2017 (incorporated by reference to Exhibit 10.1 to the Registrant's From8-K Current Report filed as of April 5, 2017, FileNo. 1-07598). | |
10.32†
| Form of Registrant's Performance-based Nonqualified Stock Option Agreement under the Registrant's Fourth Amended and Restated 2005 Omnibus Stock Plan for Section 16 officers (incorporated by reference to Exhibit No. 10.1 to the Registrant's Form8-K Current Report filed as of November 15, 2017, FileNo. 1-7598). | |
10.33†
| Form of Registrant's Time-based Nonqualified Stock Option Agreement under the Registrant's Fourth Amended and Restated 2005 Omnibus Stock Plan for Section 16 officers (incorporated by reference to Exhibit No. 10.2 to the Registrant's Form8-K Current Report filed as of November 15, 2017, FileNo. 1-7598). | |
10.34†
| Form of Registrant's Restricted Stock Unit Agreement under the Registrant's Fourth Amended and Restated 2005 Omnibus Stock Plan for Section 16 officers (incorporated by reference to Exhibit No. 10.3 to the Registrant's Form8-K Current Report filed as of November 15, 2017, FileNo. 1-7598). |
Exhibit
Number
|
Description
| |
10.35†
| Form of Registrant's Performance Unit Agreement under the Registrant's Fourth Amended and Restated 2005 Omnibus Stock Plan for Section 16 officers (incorporated by reference to Exhibit No. 10.4 to the Registrant'sForm 8-K Current Report filed as of November 15, 2017, FileNo. 1-7598). | |
10.36†
| Credit Agreement, dated as of April 3, 2018, among Registrant, Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer and each lender from time to time party thereto (incorporated by reference to Exhibit No. 10.1 to the Registrant's Form8-K Current Report filed as of April 4, 2018, FileNo. 1-7598). | |
10.37†
| Registrant's Fifth Amended and Restated 2005 Omnibus Stock Plan (incorporated by reference to Appendix A of the Registrant's Proxy Statement for its 2018 Annual Meeting of Stockholders filed as of December 29, 2017, FileNo. 1-7598). | |
10.38†
| Form of Registrant's Time-based Nonqualified Stock Option Agreement under the Registrant's Fifth Amended and Restated 2005 Omnibus Stock Plan (incorporated by reference to Exhibit 10.52 to the Registrant's Form 10-K Annual Report for the year ended September 28, 2018, File No. 1-7598). | |
10.39†
| Form of Registrant's Time Based Restricted Stock Unit Agreement under the Registrant's Fifth Amended and Restated 2005 Omnibus Stock Plan (effective for grants made prior to August 21, 2020) (incorporated by reference to Exhibit 10.53 to the Registrant's Form 10-K Annual Report for the year ended September 28, 2018, File No. 1-7598). | |
10.40†
| Form of Registrant Performance Units Agreement under the Registrant's Fifth Amended and Restated 2005 Omnibus Stock Plan (incorporated by reference to Exhibit 10.54 to the Registrant's Form 10-K Annual Report for the year ended September 28, 2018, File No. 1-7598). | |
10.41
| Amendment No.2 to Credit Agreement, dated November 1, 2019, by and among Registrant, Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer and each lender from time to time party thereto (incorporated by reference to Exhibit 10.41 to the Registrant's Form10-K filed as of November 25, 2019, FileNo. 1-7598). | |
10.42†
| Form of Registrant'sNon-Employee Director Restricted Stock Unit Agreement under the Registrant's Fifth Amended and Restated 2005 Omnibus Stock Plan (incorporated by reference to Exhibit No. 10.1 to the Registrant's Form10-Q Quarterly Report filed as of February 11, 2020, FileNo. 1-7598). | |
10.43†
| Executive Separation Agreement by and between Registrant and John Kuo dated April 22, 2020 (incorporated by reference to Exhibit No. 10.1 to the Registrant's Form10-Q Quarterly Report filed as of August 11, 2020, FileNo. 1-7598). | |
10.44†
| Change in Control Agreement between Varian Medical Systems, Inc. and Dow R. Wilson, effective as of August 1, 2020 (incorporated by reference to Exhibit No. 10.1 to the Registrant's Form8-K Current Report filed as of August 3, 2020, FileNo. 1-7598). | |
10.45†
| Change in Control Agreement between Varian Medical Systems, Inc. and J. Michael Bruff, effective as of August 1, 2020 (incorporated by reference to Exhibit No. 10.2 to the Registrant's Form8-K Current Report filed as of August 3, 2020, FileNo. 1-7598). | |
10.46†
| Change in Control Agreement between Varian Medical Systems, Inc. and Kolleen T. Kennedy, effective as of August 1, 2020 (incorporated by reference to Exhibit 10.3 to the Registrant's Form8-K Current Report filed as of August 3, 2020, FileNo. 1-7598). | |
10.47†
| Change in Control Agreement between Varian Medical Systems, Inc. and Christopher A. Toth, effective as of August 1, 2020 (incorporated by reference to Exhibit No. 10.4 to the Registrant's Form8-K Current Report filed as of August 3, 2020, FileNo. 1-7598). | |
10.48†
| Form of Registrant's Time Based Restricted Stock Unit Agreement under the Registrant's Fifth Amended and Restated 2005 Omnibus Stock Plan (effective for grants made on and after August 21, 2020) (incorporated by reference to Exhibit 10.48 to the Registrant's Annual Report on Form10-K for the period ended October 2, 2020, filed on November 25, 2020). | |
21
| List of Subsidiaries as of November 5, 2020 (incorporated by reference to Exhibit 21 to the Registrant's Annual Report on Form10-K for the period ended October 2, 2020, filed on November 25, 2020). |
Exhibit
Number
|
Description
| |
23
| Consent of Independent Registered Public Accounting Firm (incorporated by reference to Exhibit 23 to the Registrant's Annual Report on Form10-K for the period ended October 2, 2020, filed on November 25, 2020). | |
31.1*
| Chief Executive Officer Certification Pursuant to Rule13a-14(a) of the Securities Exchange Act. | |
31.2*
| Chief Financial Officer Certification Pursuant to Rule13a-14(a) of the Securities Exchange Act. | |
32.1
| Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (incorporated by reference to Exhibit 32.1 to the Registrant's Annual Report on Form10-K for the period ended October 2, 2020, filed on November 25, 2020). | |
32.2
| Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (incorporated by reference to Exhibit 32.2 to the Registrant's Annual Report on Form10-K for the period ended October 2, 2020, filed on November 25, 2020). | |
101
|
The following financial statements from the Company's Annual Report on Form
10-K
for the year ended October 2, 2020: (i) Consolidated Statements of Earnings, (ii) Consolidated Statements of Comprehensive Earnings, (iii) Consolidated Balance Sheets, (iv) Consolidated Statements of Cash Flows, (v) Consolidated Statements of Equity, and (vi) Notes to the Consolidated Financial Statements, tagged as blocks of text and including detailed tags (incorporated by reference to Exhibit 101 to the Registrant's Annual Report on Form
10-K
for the period ended October 2, 2020, filed on November 25, 2020).
| |
104
|
The cover page from the Company's Annual Report on Form
10-K
for the year ended October 2, 2020, formatted in Inline XBRL and contained in Exhibit 101.
|
† |
Management contract or compensatory arrangement.
|
* |
Filed herewith.
|
++ |
Confidential treatment has been granted as to certain portions of this exhibit pursuant to Rule
24b-2
of the Securities Exchange Act of 1934, as amended.
|
VARIAN MEDICAL SYSTEMS, INC.
| ||
By: |
/s/
J. MICHAEL BRUFF
| |
J. Michael Bruff
Senior Vice President, Finance and
Chief Financial Officer
|
Attachments
- Original document
- Permalink
Disclaimer
Varian Medical Systems Inc. published this content on 01 February 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 01 February 2021 21:19:04 UTC.