Exhibit 10.3


 


Exhibit C


 


VARIAN MEDICAL SYSTEMS, INC.


2005 OMNIBUS STOCK PLAN


NON-EMPLOYEE DIRECTOR


NONQUALIFIED STOCK OPTION AGREEMENT


 


Varian
Medical Systems, Inc. (the “Company”) hereby grants you, «FNAME» «LNAME»
(the “Director”), a nonqualified stock option under the Company’s 2005 Omnibus
Stock Plan (the ”Plan”), to purchase shares of common stock of the Company
(“Shares”).  The date of this Agreement
is «GrantDate» (the “Grant Date”).  In
general, the latest date this option will expire is «ExpirationDate»  (the “Expiration Date”).  However, as provided in the attached
Non-Employee Director, Terms and Conditions of Nonqualified Stock Option (“Appendix
A”), this option may expire earlier than the Expiration Date.  Subject to the provisions of Appendix A
and of the Plan, the principal features of this option are as follows:


 


	
  Maximum Number of Shares

  Purchasable with this Option: 

  	
   

  	
  Purchase
  Price per share:

  	
   

  
	
  «Shares»

  	
   

  	
  $

  	
  «GrantPrice»

  	
   

  
					



 


	
  Scheduled Vesting Date:

  	
   

  	
  Number of
  Shares*:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  «GrantDate»

  	
   

  	
  «Shares»

  	
   

  



 










*Shares vest in whole share increments;
fractions of shares vest only when they equal whole share increments.


 


	
  Event Triggering

  Termination of Option:

  	
   

  	
  Maximum Time to Exercise

  After Triggering Event**:

  
	
  Termination
  of Service due to Disability

  	
   

  	
  3 years

  
	
  Termination
  of Service due to Retirement

  	
   

  	
  3 years

  
	
  Termination
  of Service due to death

  	
   

  	
  3 years

  
	
  Termination
  of Service due to completion of term as Director

  	
   

  	
  3 years

  
	
  All
  other Terminations of Service

  	
   

  	
  3 months

  



 










**However, in no event may
this option be exercised after the Expiration Date (except in certain cases of
the death of the Director).


 


Your
signature below indicates your agreement and understanding that this option is
subject to all of the terms and conditions contained in Appendix A and the
Plan.  For example, important additional
information on vesting and termination of this option is contained in
Paragraphs 4 through 6 of Appendix A.  ACCORDINGLY, PLEASE BE SURE TO READ ALL OF
APPENDIX A AND THE PLAN, WHICH CONTAIN THE SPECIFIC TERMS AND CONDITIONS
OF THIS OPTION. YOU CAN REQUEST A COPY OF THE PLAN BY CONTACTING THE CORPORATE
HUMAN RESOURCES OFFICE IN PALO ALTO, CALIFORNIA.


 


	
  VARIAN
  MEDICAL SYSTEMS, INC.

  	
   

  	
  DIRECTOR

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Vice President, Human Resources

  	
   

  	
  «FNAME» «LNAME»

  



 





















 


APPENDIX A


Non-Employee Director


TERMS AND CONDITIONS OF NONQUALIFIED STOCK OPTION


 


1.   Grant of Option.  The Company hereby grants to the Director
under the Plan, as a separate incentive in connection with his or her service
and not in lieu of any other compensation for his or her services, a
nonqualified stock option to purchase, on the terms and conditions set forth in
this Agreement and the Plan, all or any part of an aggregate of «Shares»
Shares.  This option is not intended to
qualify as an “incentive stock option” under Section 422 of the Internal
Revenue Code of 1986, as amended.


 


2.   Exercise Price.  The purchase price per Share for this option
(the “Exercise Price”) shall be $«GrantPrice».


 


3.   Number of Shares.  The number and class of Shares specified in
Paragraph 1 above, and/or the Exercise Price, are subject to adjustment by
the Board of Directors of the Company (the “Board”) in the event of any merger,
reorganization, consolidation, recapitalization, separation, liquidation, stock
dividend, split-up, Share combination or other change in the corporate
structure of the Company affecting the Shares.


 


4.   Vesting Schedule.  The right to exercise this option is
scheduled to vest fully as of the Grant Date.


 


5.   Expiration of Option.  In the event of the Director’s Termination of
Service for any reason other than Disability, Retirement, completion of term as
a Director or death, the Director may, within three (3) months after the
date of such Termination, or prior to the Expiration Date, whichever shall
first occur, exercise this option.  In
the event of the Director’s Termination of Service due to Disability, or
completion of term as a Director, Retirement, the Director may, within three (3) years
after the date of such Termination, or prior to the Expiration Date, whichever
shall first occur, exercise this option.


 


6.   Death of Director.  In the event that the Director dies while in
the employ of the Company or during the three (3) month or three (3) year
periods referred to in Paragraph 5 above, the Director’s designated
beneficiary, or if either no beneficiary survives the Director or the Board
does not permit beneficiary designations, the administrator or executor of the
Director’s estate, may, within three (3) years after the date of death,
exercise this option.  Any such
transferee must furnish the Company (a) written notice of his or her
status as a transferee, (b) evidence satisfactory to the Company to
establish the validity of the transfer of this option and compliance with any
laws or regulations pertaining to such transfer, and (c) written
acceptance of the terms and conditions of this option as set forth in this
Agreement.


 


7.   Persons Eligible to Exercise Option.  This option shall be exercisable during the
Director’s lifetime only by the Director. 
The option shall not be transferable by the Director, except by (a) a
valid beneficiary designation made in a form and manner acceptable to the
Board, or (b) will or the applicable laws of descent and distribution.


 


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8.   Exercise of Option.  This option may be exercised by the person
then entitled to do so as to any Shares which may then be purchased (a) by
giving written notice of exercise to the Secretary of the Company (or his or
her designee), specifying the number of full Shares to be purchased and
accompanied by full payment of the Exercise Price (and the amount of any income
or other taxes the Company determines is required to be withheld by reason of
such exercise), and (b) by giving satisfactory assurances in writing if
requested by the Company, signed by the person exercising the option, that the
Shares to be purchased upon such exercise are being purchased for investment
and not with a view to the distribution thereof.  In the absolute discretion of the Board, the
person entitled to exercise the option may elect to satisfy the tax withholding
requirement described in subparagraph (a) above by having the Company
withhold Shares or delivering to the Company already-owned Shares.  No partial exercise of this option may be for
less than ten (10) Share lots or multiples thereof.


 


9.   Suspension of Exercisability.  If at any time the Company shall determine,
in its discretion, that the listing, registration or qualification of the
Shares upon any securities exchange or under any state or federal law, or the
consent or approval of any governmental regulatory authority, is necessary or
desirable as a condition of the purchase of Shares hereunder, this option may
not be exercised, in whole or in part, unless and until such listing,
registration, qualification, consent or approval shall have been effected or
obtained free of any conditions not acceptable to the Company.  The Company shall make reasonable efforts to
meet the requirements of any such state or federal law or securities exchange
and to obtain any such consent or approval of any such governmental authority.


 


10. No Rights of Stockholder.  Neither the Director (nor any beneficiary)
shall be or have any of the rights or privileges of a stockholder of the Company
in respect of any of the Shares issuable pursuant to the exercise of this
option, unless and until certificates representing such Shares shall have been
issued, recorded on the records of the Company or its transfer agents or
registrars, and delivered to the Director (or beneficiary).


 


11. No Effect on Service.  Nothing in this Agreement or the Plan shall
confer upon the Director any right to continue service on the Board of the
Company or its Subsidiaries (as the case may be).


 


12. Address for Notices.  Any notice to be given to the Company under
the terms of this Agreement shall be addressed to the Company, in care of its
Secretary at 3100 Hansen Way, Palo Alto, California 94304, or at such other
address as the Company may hereafter designate in writing.


 


13. Option is Not Transferable.  Except as otherwise expressly provided
herein, this option and the rights and privileges conferred hereby may not be
transferred, pledged, assigned or otherwise hypothecated in any way (whether by
operation of law or otherwise) and shall not be subject to sale under
execution, attachment or similar process. 
Upon any attempt to transfer, pledge, assign, hypothecate or otherwise
dispose of this option, or of any right or privilege conferred hereby, or upon
any attempted sale under any execution, attachment or similar process, this
option and the rights and privileges conferred hereby immediately shall become
null and void.


 


14. Maximum Term of Option.  Notwithstanding any other provision of this
Agreement except paragraph 6 above relating to the death of the Director (in
which case this option is exercisable to the extent set forth therein), this
option is not exercisable after the Expiration Date.


 


15. Binding Agreement.  Subject to the limitation on the
transferability of this option contained herein, this Agreement shall be
binding upon and inure to the benefit of the heirs, legatees, legal
representatives, successors and assigns of the parties hereto.


 


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16. Conditions to Exercise.  The Exercise Price for this option must be
paid in the legal tender of the United States (including, in the Board’s sole
discretion, by means of a broker-assisted cashless exercise) or, in the Board’s
sole discretion, in Shares of equivalent value that (a) were previously
issued to the Director and (b) have been held by the Director for at least
six (6) months prior thereto. 
Exercise of this option will not be permitted until satisfactory
arrangements have been made for the payment of the appropriate amount of
withholding taxes (as determined by the Company).  If the Director fails to remit to the Company
such withholding amount within the time period specified by the Board (in its
discretion), the award may be forfeited and in such case the Director shall not
receive any of the Shares subject to this Agreement.


 


17. Plan Governs.  This Agreement is subject to all of the terms
and provisions of the Plan.  In the event
of a conflict between one or more provisions of this Agreement and one or more
provisions of the Plan, the provisions of the Plan shall govern.  Capitalized terms and phrases used and not
defined in this Agreement shall have the meaning set forth in the Plan.


 


18. Governing Law.  This Agreement shall be governed by and
construed in accordance with the laws of the State of California, without
reference to its principles of conflicts of law.


 


19. Board Authority.  The Board shall have all discretion, power,
and authority to interpret the Plan and this Agreement and to adopt such rules for
the administration, interpretation and application of the Plan as are
consistent therewith.  All actions taken
and all interpretations and determinations made by the Board in good faith
shall be final and binding upon the Director, the Company and all other
interested persons, and shall be given the maximum deference permitted by
law.  No member of the Board shall be
personally liable for any action, determination or interpretation made in good
faith with respect to the Plan or this Agreement.


 


20. Captions.  The captions provided herein are for
convenience only and are not to serve as a basis for the interpretation or
construction of this Agreement.


 


21. Agreement Severable.  In the event that any provision in this
Agreement shall be held invalid or unenforceable, such provision shall be
severable from, and such invalidity or unenforceability shall not be construed
to have any effect on, the remaining provisions of this Agreement.


 


22. Modifications to the Agreement.  This
Agreement constitutes the entire understanding of the parties on the subjects
covered.  The Director expressly warrants
that he or she is not executing this Agreement in reliance on any promises,
representations, or inducements other than those contained herein.  Modifications to this Agreement or the Plan
can be made only in an express written contract executed by a duly authorized
officer of the Company.


 


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