-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, bIE2A67NURUwKLvEPaDTkTwhtNPcR4cAKhVRRERXYN2CdAeI+KGrzySuPYI4n6tj evWLsZMZEStX6niiC0UoRA== 0000891618-95-000282.txt : 19950516 0000891618-95-000282.hdr.sgml : 19950516 ACCESSION NUMBER: 0000891618-95-000282 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 19950331 FILED AS OF DATE: 19950515 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: VARIAN ASSOCIATES INC /DE/ CENTRAL INDEX KEY: 0000203527 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRONIC COMPONENTS & ACCESSORIES [3670] IRS NUMBER: 942359345 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-07598 FILM NUMBER: 95538871 BUSINESS ADDRESS: STREET 1: 3100 HANSEN WAY STREET 2: MAIL STOP E 224 CITY: PALO ALTO STATE: CA ZIP: 94304-1030 BUSINESS PHONE: 4154934000 MAIL ADDRESS: STREET 1: 3100 HANSEN WAY STREET 2: MAIL STOP E 224 CITY: PALO ALTO STATE: CA ZIP: 94304-1030 FORMER COMPANY: FORMER CONFORMED NAME: VARIAN DELAWARE INC DATE OF NAME CHANGE: 19761123 10-Q 1 FORM 10-Q FOR VARIAN ASSOCIATES, INC. 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (MARK ONE) /X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1995 OR / / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSISTION PERIOD FROM _______ TO _______ COMMISSION FILE NUMBER: 1-7598 EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER: VARIAN ASSOCIATES, INC. STATE OR OTHER JURISDICTION OF IRS EMPLOYER INCORPORATION OR ORGANIZATION: IDENTIFICATION NO.: DELAWARE 94-2359345 Address of principal executive offices: 3050 Hansen Way, Palo Alto, California 94304-1000 Telephone No., including area code: (415) 493-4000 SECURITIES REGISTERED PURSUANT TO SECTION 12(B)OF THE ACT: NAME OF EACH EXCHANGE TITLE OF EACH CLASS ON WHICH REGISTERED ------------------- ----------------------- Common Stock, New York Stock Exchange $1 par value Pacific Stock Exchange Preferred Stock New York Stock Exchange Purchase Rights Pacific Stock Exchange SECURITIES REGISTERED PURSUANT TO SECTION 12(G)OF THE ACT: NONE Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES X NO --- --- An index of exhibits filed with this Form 10-Q is located on page 14. Indicate the number of shares outstanding of each of the issuer's classes of common stock as of April 28, 1995: 33,917,000 shares of $1 par value common stock. 2 PART 1. FINANCIAL INFORMATION VARIAN ASSOCIATES, INC. AND SUBSIDIARY COMPANIES CONSOLIDATED STATEMENTS OF EARNINGS UNAUDITED
SECOND QUARTER ENDED SIX MONTHS ENDED - ------------------------------------------------------------------------------------------------------------------------------- (DOLLARS IN THOUSANDS MARCH 31, APRIL 1, MARCH 31, APRIL 1, EXCEPT PER SHARE AMOUNTS) 1995 1994 1995 1994 - ------------------------------------------------------------------------------------------------------------------------------- SALES $ 490,369 $ 394,534 $ 891,496 $ 718,284 ---------- ---------- ---------- ---------- OPERATING COSTS AND EXPENSES Cost of sales 329,640 264,762 600,684 484,407 Research and development 24,469 21,480 46,049 39,905 Marketing 52,336 46,126 99,430 87,833 General and administrative 36,212 31,523 63,751 55,620 ---------- ---------- ---------- ---------- Total operating costs and expenses 442,657 363,891 809,914 667,765 ---------- ---------- ---------- ---------- OPERATING EARNINGS 47,712 30,643 81,582 50,519 Interest expense, net 580 1,065 1,510 2,127 ---------- ---------- ---------- ---------- EARNINGS BEFORE TAXES 47,132 29,578 80,072 48,392 Taxes on Earnings 17,440 11,240 29,630 18,390 ---------- ---------- ---------- ---------- NET EARNINGS $ 29,692 $ 18,338 $ 50,442 $ 30,002 ========== ========== ========== ========== Average Shares Outstanding Including Common Stock Equivalents 35,100 35,697 35,182 35,742 ========== ========== ========== ========== EARNINGS PER SHARE - FULLY DILUTED $ 0.85 $ 0.51 $ 1.43 $ 0.84 ========== ========== ========== ========== - -------------------------------------------------------------------------------------------------------------------------------- Dividends Declared Per Share $ 0.07 $ 0.06 $ 0.13 $ 0.11 Order Backlog $ 810,000 $ 753,500 - --------------------------------------------------------------------------------------------------------------------------------
See accompanying notes to the consolidated financial statements. -2- 3 VARIAN ASSOCIATES, INC. AND SUBSIDIARY COMPANIES CONSOLIDATED BALANCE SHEETS UNAUDITED
- ----------------------------------------------------------------------------------------------------- MARCH 31, SEPTEMBER 30, (DOLLARS IN THOUSANDS EXCEPT PAR VALUES) 1995 1994 - ----------------------------------------------------------------------------------------------------- ASSETS CURRENT ASSETS Cash and cash equivalents $ 77,156 $ 78,872 Accounts receivable 384,368 338,448 Inventories Raw materials and parts 135,822 104,212 Work in process 63,650 60,296 Finished goods 26,722 14,668 ---------- ---------- Total Inventories 226,194 179,176 Other current assets 76,771 72,243 ---------- ---------- TOTAL CURRENT ASSETS 764,489 668,739 Property, Plant, and Equipment 593,849 574,402 Accumulated depreciation and amortization (354,759) (339,082) ---------- ---------- NET PROPERTY, PLANT, AND EQUIPMENT 239,090 235,320 Other Assets 61,418 58,364 ---------- ---------- TOTAL ASSETS $1,064,997 $ 962,423 ========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Notes payable $ 38,491 $ 4,816 Accounts payable - trade 86,361 78,094 Accrued expenses 271,639 248,751 Product warranty 46,100 41,682 Advance payments from customers 61,801 58,440 ---------- ---------- TOTAL CURRENT LIABILITIES 504,392 431,783 Long-Term Debt 60,329 60,399 Deferred taxes 20,759 20,788 ---------- ---------- TOTAL LIABILIITIES 585,480 512,970 ---------- ---------- STOCKHOLDERS' EQUITY Preferred stock Authorized 1,000,000 shares, par value $1, issued none -- -- Common stock Authorized 99,000,000 shares, par value $1, issued and outstanding 33,907,000 shares at March 31, 1995 and 33,979,000 shares at September 30, 1994 33,907 33,979 Retained earnings 445,610 415,474 ---------- ---------- TOTAL STOCKHOLDERS' EQUITY 479,517 449,453 ---------- ---------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $1,064,997 $ 962,423 ========== ==========
See accompanying notes to the consolidated financial statements. -3- 4 VARIAN ASSOCIATES, INC. AND SUBSIDIARY COMPANIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS UNAUDITED
SIX MONTHS ENDED - ---------------------------------------------------------------------------------------------------- MARCH 31, APRIL 1, (DOLLARS IN THOUSANDS) 1995 1994 - ---------------------------------------------------------------------------------------------------- OPERATING ACTIVITIES Net Cash Provided by Operating Activities $ 26,555 $ 14,046 INVESTING ACTIVITIES Purchase of property, plant, and equipment (27,587) (25,563) Purchase of businesses, net of cash acquired (12,754) 250 Other, net 2,593 2,873 ----------- ------------ Net Cash Used by Investing Activities (37,748) (22,440) FINANCING ACTIVITIES Net borrowings on short-term obligations 33,675 26,418 Proceeds from common stock issued to employees 14,471 16,124 Purchase of common stock (30,452) (39,079) Other, net (4,467) (3,843) ----------- ------------ Net Cash Provided / (Used) by Financing Activities 13,227 (380) EFFECTS OF EXCHANGE RATE CHANGES ON CASH (3,750) 503 ----------- ------------ Net Decrease in Cash and Cash Equivalents (1,716) (8,271) Cash and Cash Equivalents at Beginning of Period 78,872 73,307 ----------- ------------ Cash and Cash Equivalents at End of Period $ 77,156 $ 65,036 =========== ============
See accompanying notes to the consolidated financial statements. -4- 5 VARIAN ASSOCIATES, INC. AND SUBSIDIARY COMPANIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Unaudited (Dollars in Millions) NOTE 1: The consolidated financial statements include the accounts of Varian Associates, Inc. and its subsidiaries and have been prepared by the Company, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. It is suggested that these financial statements be read in conjunction with the financial statements and the notes thereto included in the Company's latest Form 10-K annual report. In the opinion of management, the consolidated financial statements include all normal recurring adjustments necessary to present fairly the information required to be set forth therein. The results of operations for the second quarter and semi-annual periods ended March 31, 1995, and April 1, 1994, are not necessarily indicative of the results to be expected for a full year or for any other periods. NOTE 2: Inventories are valued at the lower of cost or market (realizable value) using the last-in, first-out (LIFO) cost for the U.S. inventories of the Health Care Systems (except for X-ray Tube Products), Instruments, and Semiconductor Equipment segments. All other inventories are valued principally at average cost. Approximately half of total gross inventories are valued using the LIFO method. If the first-in, first-out (FIFO) method had been used for those operations valuing inventories on a LIFO basis, inventories would have been higher than reported by $50.2 at March 31, 1995, $49.0 at September 30, 1994, $50.8 at April 1, 1994, and $50.8 at October 1, 1993. NOTE 3: The Company enters into forward exchange contracts to mitigate the effects of operational (sales orders and purchase commitments) and balance sheet exposures to fluctuations in foreign currency exchange rates. When the Company's foreign exchange contracts hedge operational exposure, the effects of movements in currency exchange rates on these instruments are recognized in income when the related revenue and expenses are recognized. When foreign exchange contracts 5 6 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) NOTE 3 (Continued) hedge balance sheet exposure, such effects are recognized in income when the exchange rate changes. Because the impact of movements in currency exchange rates on foreign exchange contracts generally offsets the related impact on the underlying items being hedged, these instruments do not subject the Company to risk that would otherwise result from changes in currency exchange rates. At March 31, 1995, the Company had forward exchange contracts with maturities of twelve months or less to sell foreign currencies totaling $88.2 million ($1.2 million of Belgian francs, $14.9 million of British pounds, $2.6 million of Canadian dollars, $23.2 million of Deutsche marks, $16.4 million of French francs, $1.0 million of Italian lira, $24.3 million of Japanese yen, $1.9 million of Swedish krona and $2.7 million of Swiss francs,) and to buy foreign currencies totaling $28.6 million ($0.9 million of Australian dollars, $7.5 million of British pounds, $2.1 million of Swiss francs and $18.1 million of Japanese yen). NOTE 4: In February 1990, a purported class action was brought by Panache Broadcasting of Pennsylvania, Inc. on behalf of all purchasers of electron tubes in the U.S. against the Company and a joint- venture partner, alleging that the activities of their joint venture in the power-grid tube industry violated antitrust laws. The complaint seeks injunctive relief and unspecified damages which may be trebled under the antitrust laws. In February 1993, the U.S. District Court in Chicago granted the Company's motion to dismiss the complaint with leave to amend. Panache Broadcasting filed an amended complaint in March 1993. A Federal magistrate has recommended that the court grant in part and deny in part the Company's motion to dismiss that complaint. No determination has been made regarding the plaintiff's request to certify the purported class. The Company believes that it has meritorious defenses to the Panache lawsuit. In addition to the above-referenced matter, the Company is currently a defendant in a number of legal actions and could incur an uninsured liability in one or more of them. In the opinion of management, the outcome of the above litigation will not have a material adverse effect on the financial condition of the Company. The Company has also been named by the U.S. Environmental Protection Agency or third parties as a potentially responsible party under the Comprehensive Environmental Response Compensation and Liability Act of 1980, as amended, at six sites to which Varian is alleged to have shipped manufacturing waste for disposal. The Company is also involved in various stages of environmental investigation and/or remediation under the direction of, or in consultation with, local and/or state agencies at certain current or former Company facilities. 6 7 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) NOTE 4 (Continued) Uncertainty as to (a) the extent to which the Company caused, if at all, the conditions being investigated, (b) the extent of environmental contamination and risks, (c) the applicability of changing and complex environmental laws, (d) the number and financial viability of other potentially responsible parties, (e) the stage of the investigation and/or remediation, (f) the unpredictability of investigation and/or remediation costs (including as to when they will be incurred), (g) applicable clean-up standards,(h) the remediation (if any) which will ultimately be required, and (i) available technology make it difficult to assess the likelihood and scope of further investigation or remediation activities or to estimate the future costs of such activities if undertaken. In addition, the Company believes that it has rights to contribution and/or reimbursement from financially viable, potentially responsible parties and/or insurance companies, and has filed a lawsuit against 36 insurance companies with respect to most of the above-referenced sites. The Company has established reserves for these environmental matters, which reserves management believes are adequate. Based on information currently available, management believes that the costs of these matters are otherwise not reasonably likely to have a material adverse effect on the financial condition of the Company. NOTE 5: On October 20, 1994, the Company announced that it will seek a buyer for the Electron Devices operations. The sale will not go forward unless the selling price recognizes the increased profitability and improving value attained in the business in recent years. 7 8 MANAGEMENT'S DISCUSSION AND ANALYSIS On April 20, Varian reported continued strong orders and record sales and profits for the second quarter and first half of fiscal 1995. Earnings per share also rose over last year's comparable periods, reaching $0.85 for the quarter, a 67% increase over the prior year's $0.51 and $1.43 per share for the first half, moving 70% ahead of 1994's $0.84. Net earnings for the second quarter were a record $29.6 million, exceeding the year-ago's $18.3 million by 62%. This was the sixth consecutive quarter in which orders exceeded the $400 million level, climbing to $439 million versus last year's $413 million. Sales of $490 million were up 24% over the $395 million of 1994's second period, establishing a new high for any quarter. Backlog rose to $810 million from $754 million at the close of last year's first half, but was lower than in the prior quarter due largely to termination of an equipment distribution agreement with Tokyo Electron Ltd. For the first six months of 1995, orders were a record $932 million versus the prior year's $853 million. Sales climbed to $891 million over 1994's $718 million. Earnings for the first half also set a record for the period at $50.4 million, up 68% from last year's $30 million. All four of the Company's major businesses contributed to the record revenues, with the greatest momentum coming from Semiconductor Equipment operations. Health Care Systems orders rose 9% from the year-ago's first half, as this business posted its eighth straight quarter of over $100 million in new bookings. First-half sales were up 20%, and operating margins improved. The X-ray Tube Products side of this business enjoyed a particularly strong quarter as it successfully entered new market niches and increased its penetration of the market overall. The Oncology Systems side of the business continued to expand its presence in key international markets offering excellent growth potential. Good acceptance of new products, such as the Varis software management system, which enhances the quality of care for cancer patients while helping to reduce medical facility operating costs, also contributed to the higher results. Orders and sales for Varian's Instruments business were up 3% and 5%, respectively, over last year's first half. Second quarter sales were a record $101 million for the period and included particularly strong shipments in the vacuum products and nuclear magnetic resonance (NMR) instruments sectors. Operating margins declined moderately, due in part to costs incurred for a reorganization of Instruments' marketing activities to take better advantage of increased operating efficiencies. Backlog declined 9% from the previous quarter reflecting a lag in orders for high-end NMR systems which tend to follow a somewhat sporadic pattern. First-half orders for Varian's Semiconductor Equipment business grew 16% over the year-ago period, prior to adjustments for Varian's resale activity for Tokyo Electron Ltd. (TEL) which was phased out at the end of fiscal 1994. Sales grew 52% and backlog rose 38% over 1994 levels. Operating margins for this business continued to show significant improvement over the year-ago periods, and have now reached the double-digit level. The reported orders tend to obscure the current strong demand for Varian-made products because the 1994 total included substantial bookings for TEL products then being distributed by Varian. When adjusted to remove the TEL volume, orders increased by 53% over the year-ago's first half. Worldwide demand for Varian's chip-making systems in the first half included especially strong bookings from the Pacific 8 9 MANAGEMENT'S DISCUSSION AND ANALYSIS (Continued) Rim nations. Order rates were good for both ion implantation and sputtering products, especially some of the company's leading-edge systems for advanced chip processing. Varian's Electron Devices business orders rose slightly to $145 million from $143 million in the prior year's first half, while sales were up 9% reaching $142 million versus $130 million during this same period. Backlog also improved 3% over the year ago period. Operating margins for this business improved in the second quarter, and for the year-to-date as well. FINANCIAL CONDITION The Company's financial condition remained strong during the first six months of fiscal 1995. Operating activities provided cash of $26.6 million in the first-half of fiscal 1995 compared to $14.1 million in the same period last year. Investing activities in the first half of fiscal 1995 used $37.7 million, $12.8 million for the purchase of businesses, and the remainder used mainly for the purchase of property, plant and equipment. Investing activities in the same period last year used $22.4 million, mainly for the purchase of property, plant and equipment. Financing activities provided $13.2 million during the first-half of 1995 and used $0.4 million during the same period last year. Total debt as a percentage of total capital increased to 17.1% at the end of the second quarter of fiscal 1995 as compared with 12.7% at fiscal year end. The ratio of current assets to current liabilities decreased to 1.52 to 1 at March 31, 1995, from 1.55 to 1 at fiscal year end, 1994. The Company has available $50 million in unused committed lines of credit. OUTLOOK Despite the favorable financial results described above, future revenue and profitability remain difficult to predict. The Company continues to face various risks associated with its business operations including uncertain general worldwide economic conditions, lingering worldwide recessionary conditions, new product acceptance, and uncertainty regarding possible legislation and private initiatives in the U.S. to control health care costs. Such conditions could affect the Company's future performance. As discussed in the annual report form 10-K for the fiscal year ended September 30, 1994, the Company is involved in certain environmental matters. The company has established reserves for these environmental matters, which reserves management believes are adequate. Based on information currently available, management continues to believe that the costs of these matters, individually or in the aggregate, are otherwise not reasonably likely to have a material adverse effect on the financial condition or results of operations of the Company. 9 10 REPORT OF INDEPENDENT ACCOUNTANTS To the Board of Directors of Varian Associates, Inc.: We have reviewed the consolidated balance sheet of Varian Associates, Inc. and subsidiary companies as of March 31, 1995, and the related consolidated statements of earnings for the quarters and semi-annual periods ended March 31, 1995 and April 1, 1994, and the condensed consolidated statements of cash flows for the semi-annual periods ended March 31, 1995 and April 1, 1994. These financial statements are the responsibility of the Company's management. We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to the aforementioned financial statements for them to be in conformity with generally accepted accounting principles. /s/ Coopers & Lybrand L.L.P. ------------------------------ COOPERS & LYBRAND L.L.P. San Jose, California April 18, 1995 10 11 PART II. OTHER INFORMATION Item 4 Submission of Matters to a Vote of Security Holders At the Company's Annual Meeting of Stockholders held on February 16, 1995, the stockholders of the Company voted on the election of five directors to the Company's Board of Directors for three-year terms. The voting on each such nominee for director was as follows:
Votes Votes Broker Nominee For Withheld Abstentions Nonvotes (1) ------------------- ---------- -------- ----------- ------------ Samuel Hellman 29,505,948 74,091 0 Terry R. Lautenbach 29,501,893 74,091 0 Gordon E. Moore 29,514,136 74,091 0 David E. Mundell 29,540,055 74,091 0 Philip J. Quigley 29,527,172 74,091 0
(1) Pursuant to the Rules of the New York Stock Exchange, this election of directors constituted a routine matter, and therefore brokers were permitted to vote without receipt of instructions from clients. At the Annual Meeting of Stockholders, the stockholders also voted on a proposal to approve amendments to the Omnibus Stock Plan and on a proposal to approve the Management Incentive Plan. The voting on those proposals were as follows:
Votes Votes Broker Proposal For Against Abstentions Nonvotes ------------------- ---------- --------- ----------- ---------- Proposal to approve 24,923,882 1,008,893 539,747 3,119,410 amendments to the Omnibus Stock Plan. Proposal to approve the 24,393,421 1,543,217 535,883 3,119,410 Management Incentive Plan.
Item 6 Exhibits and Reports on Form 8-K (a) Exhibits: Exhibit 10.1 Registrant's Omnibus Stock Plan, as amended and effective as of October 1, 1994. Exhibit 10.4 Registrant's Management Incentive Plan, as amended and effective as of October 1, 1994. 11 12 PART II ITEM 6 (Continued) Exhibit 11 Computation of Earnings Per Share. Exhibit 15 Letter Regarding Unaudited Interim Financial Information. Exhibit 27 Financial Data Schedule (b) Reports on Form 8-K: A report on Form 8-K was filed on October 20, 1994, regarding the Registrant's announcement that it will seek a buyer for its Electron Devices operations. 12 13 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. VARIAN ASSOCIATES, INC. ---------------------- Registrant May 12, 1995 ---------------------- Date /s/ Allen K. Jones ---------------------- Allen K. Jones Vice President and Controller 13 14 INDEX OF EXHIBITS
Exhibit Number Page ------- ---- 10.1 Registrant's Omnibus Stock Plan 15 10.4 Registrant's Management Incentive Plan 26 11 Computation of Earnings Per Share 30 15 Letter Regarding Unaudited Interim Financial Information 31 27 Financial Data Schedule 32 14
EX-10.1 2 REGISTRANT'S OMNIBUS STOCK PLAN 1 EXHIBIT 10.1 VARIAN ASSOCIATES, INC. OMNIBUS STOCK PLAN (as amended and effective as of October 1, 1994) 1. PURPOSE The purpose of the Plan is to provide a vehicle under which a variety of stock-based incentive and other awards may be granted to employees and directors of the Company and its Subsidiaries to promote the Company's success. 2. DEFINITIONS A. "Award" means any form of stock option, restricted stock, stock appreciation right, long-term incentive award or other incentive award granted under the Plan. B. "Award Notice" means any written notice from the Company to a Participant or agreement between the Company and a Participant that establishes the terms applicable to an Award. C. "Board of Directors" means the Board of Directors of the Company. D. "Code" means the Internal Revenue Code of 1986, as amended. E. "Committee" means the Organization and Compensation Committee of the Board of Directors, or such other committee designated by the Board of Directors, which is authorized to administer the Plan under Section 3 hereof. The Committee shall be comprised solely of Directors who are both (i) disinterested persons under Rule 16b-3, and (ii) outside directors under Section 162(m) of the Code. F. "Common Stock" means common stock of the Company. G. "Company" means Varian Associates, Inc. H. "Director" means a member of the Board of Directors. I. "Exchange Act" means the Securities Exchange Act of 1934, as amended. J. "Fair Market Value" means, as of a specified date, the mean of the high and the low sales price of the Common Stock on the composite tape for the New York Stock Exchange-listed securities, or if not traded on that date, then on the date last traded. If for any reason the Company's stock ceases to be listed on the New York Stock Exchange, the Committee shall establish the method for determining the Fair Market Value of the Common Stock. 15 2 Exhibit 10.1, Omnibus Stock Plan (Continued) K. "Key Employee" means any employee of the Company or a Subsidiary whose performance the Committee determines can have a significant effect on the success of the Company. L. "Participant" means any individual to whom an Award is granted under the Plan. M. "Plan" means this Plan, which shall be known as the Varian Associates, Inc. Omnibus Stock Plan. N. "Return on Equity" means the Company's annual earnings expressed as a percentage of the Company's annual average shareholders equity, as reported in the Company's Annual Report to Stockholders. O. "Return on Net Assets" means annual operating earnings expressed as a percentage of annual average net assets. Return on Net Assets for a multi-year performance period means the average of Return on Net Assets calculated separately for each fiscal year of such multi-year period. P. "Rule 16b-3" means Rule 16b-3 issued under the Exchange Act, or any successor rule. Q. "Subsidiary" means a corporation or other business entity (i) of which the Company directly or indirectly has an ownership interest of 50% or more, or (ii) of which it has a right to elect or appoint 50% or more of the board of directors or other governing body. 3. ADMINISTRATION A. The Plan shall be administered by the Committee. The Committee shall have the authority to: (i) interpret and determine all questions of policy and expediency pertaining to the Plan; (ii) adopt such rules, regulations, agreements and instruments as it deems necessary for its proper administration; (iii) select Key Employees to receive Awards; (iv) determine the form and terms of Awards; (v) determine the number of shares or other consideration subject to Awards (within the limits prescribed in the Plan); 3 Exhibit 10.1, Omnibus Stock Plan (Continued) (vi) determine whether Awards will be granted singly, in combination, in tandem, in replacement of, or as alternatives to, other grants under the Plan or any other incentive or compensation plan of the Company, a Subsidiary or an acquired business unit; (vii) grant waivers of Plan or Award conditions (other than Awards intended to qualify under Section 162(m) of the Code); (viii) accelerate the vesting, exercise or payment of Awards (but with respect to Awards intended to qualify under Section 162(m) of the Code, only as permitted under that Section); (ix) correct any defect, supply any omission, or reconcile any inconsistency in the Plan, any Award or any Award Notice; (x) establish and administer Awards in addition to the types specifically enumerated in Section 2.A. which the Committee determines are consistent with the Plan's purpose; and (xi) take any and all other actions it deems necessary or advisable for the proper administration of the Plan. B. The Committee may adopt such Plan amendments, procedures, regulations, subplans and the like as it deems are necessary to enable Key Employees and Directors who are foreign nationals or employed outside the United States to receive Awards. C. The Committee may delegate its authority to grant and administer Awards to a separate committee; however, only the Committee may grant and administer Awards (i) with respect to persons who are subject to Section 16 of the Exchange Act, and (ii) which are intended to qualify as performance-based compensation under Section 162(m) of the Code. 4. ELIGIBILITY A. Any Key Employee is eligible to become a Participant in the Plan. B. Directors who are not employees of the Company or a Subsidiary shall receive Awards in accordance with Section 7. 5. SHARES AVAILABLE A. Subject to Section 15, the maximum number of shares of Common Stock available for Award grants (including incentive stock options) during each fiscal year shall be 5% of the total outstanding shares of the Company on the last business day of the preceding fiscal year. The maximum number of shares of Common Stock available for incentive stock option grants under the Plan is 6,000,000. 4 Exhibit 10.1, Omnibus Stock Plan (Continued) B. The shares of Common Stock available under the Plan may be authorized and unissued shares or treasury shares. 6. TERM The Plan as amended shall become effective as of October 1, 1994, and shall continue in effect until terminated by the Board of Directors. However, Awards (other than stock options) intended to qualify under Section 162(m) of the Code shall be conditional upon approval of the amended and restated Plan by the Company's stockholders not later than the 1995 annual meeting of stockholders. 7. AWARDS TO NON-EMPLOYEE DIRECTORS Directors who are not employees of the Company or a Subsidiary shall receive Awards in accordance with the following terms: A. On the first business day following adoption of this Plan by the Board of Directors, and thereafter on the first business day of each fiscal year, each such director shall receive (i) a fully vested grant of 200 shares of Common Stock, subject to payment to the Company of the aggregate par value of such shares in cash, and (ii) a non-qualified stock option for 2,000 shares. B. Options to such directors shall be subject to the following terms: (i) the exercise price shall be equal to 100% of the Fair Market Value of the shares on the date of the grant, payable in accordance with all the alternatives stated in Sections 8.B.(ii) and (iii); (ii) the term of the options shall be 10 years; (iii) the options shall be exercisable beginning 12 months after the date of the grant; and (iv) the options shall be subject to Section 13. 8. STOCK OPTIONS A. Awards may be granted in the form of stock options. Stock options may be incentive stock options within the meaning of Section 422 of the Code or non-qualified stock options (i.e., stock options which are not incentive stock options). During any fiscal year of the Company, no Participant shall be granted options for more than 1,000,000 shares. B. Subject to Section 8.C. relating to incentive stock options, options shall be in such form and contain such terms as the Committee deems appropriate. While the terms of options need not be identical, each option shall be subject to the following terms: (i) The exercise price shall be the price set by the Committee but may not be less than 100% of the Fair Market Value of the shares on the date of the grant. (ii) The price shall be paid in cash (including check, bank draft, or money order), or at the discretion of the Committee, all or part of the purchase price may be paid by delivery of the optionee's full recourse 5 Exhibit 10.1, Omnibus Stock Plan (Continued) promissory note, delivery of Common Stock already owned by the Participant for at least 6 months and valued at its Fair Market Value, or any combination of the foregoing methods of payment, provided no less than the par value of the stock is paid in cash. In the case of incentive stock options, the terms of payment shall be determined at the time of grant. (iii) Promissory notes given as payment of the price, if permitted by the Committee, shall contain such terms as set by the Committee which are not inconsistent with the following: the unpaid principal shall bear interest at a rate set from time to time by the Committee; payments of principal and interest shall be made no less frequently than annually; no part of the note shall be payable later than 10 years from the date of purchase of the shares; and the optionee shall give such security as the Committee deems necessary to ensure full payment. (iv) The term of an option may not be greater than 10 years from the date of the grant. (v) Neither a person to whom an option is granted nor his legal representative, heir, legatee or distributee shall be deemed to be the holder of, or to have any of the rights of a holder with respect to, any shares subject to such option unless and until he has exercised his option. C. The following special terms shall apply to grants of incentive stock options: (i) No incentive stock option shall be granted after the 10th anniversary of the date the Plan is adopted by the Board of Directors. (ii) Subject to Section 8.C.(iii), the price under each incentive stock option shall not be less than 100% of the Fair Market Value of the shares on the date of the grant. (iii) No incentive stock option shall be granted to any employee who directly or indirectly owns stock possessing more than 10% of the total combined voting power of all classes of stock of the Company, unless at the time of such grant the option price is at least 110% of the Fair Market Value of the stock subject to the option and such option is not exercisable after the expiration of 5 years from the date of the grant. (iv) No incentive stock option shall be granted to a person in his capacity as a Key Employee of a Subsidiary if the Company has less than a 50% ownership interest in such Subsidiary. (v) The Fair Market Value (determined on the date(s) of grant) of the shares subject to incentive stock options which first become 6 Exhibit 10.1, Omnibus Stock Plan (Continued) exercisable during any calendar year shall not exceed $100,000 for any employee. (vi) Options shall contain such other terms as may be necessary to qualify the options granted therein as incentive stock options pursuant to Section 422 of the Code, or any successor statute. 9. RESTRICTED STOCK A. Awards may be granted in the form of restricted stock. During any fiscal year of the Company, no Participant shall be granted more than 25,000 shares of restricted stock. B. Grants of restricted stock shall be awarded in exchange for consideration equal to an amount from 0 to 50% of the aggregate Fair Market Value of such stock, as determined by the Committee. The price, if any, of such restricted stock shall be paid in cash, or at the discretion of the Committee, all or part of the purchase price may be paid by delivery of the Participant's full recourse promissory note, delivery of Common Stock already owned by the Participant for at least 6 months and valued at its Fair Market Value, or any combination of the foregoing methods of payment, provided no less than the par value of the stock is paid in cash, or the Participant has rendered no less than 3 months' prior service to the Company. C. Restricted stock awards shall be subject to such restrictions as the Committee may impose including, if the Committee shall so determine, restrictions on transferability and restrictions relating to continued employment. For purposes of qualifying restricted stock as performance-based compensation under Section 162(m) of the Code, the Committee may in its discretion determine that grants of restricted stock shall be conditioned on the achievement of pre-established Company goals for Return on Equity. The target goals for Return on Equity and the number of shares which may be awarded upon achievement of such target goals, shall be set by the Committee on or before the latest date permissible so as to qualify under Section 162(m) of the Code. In granting restricted stock which is intended to qualify under Section 162(m) of the Code, the Committee shall follow any procedures determined by it to be necessary or appropriate to ensure such qualification. No restricted stock award intended to qualify under Section 162(m) of the Code shall be paid unless and until the Committee certifies in writing that the pre-established performance goals have been satisfied. D. The Committee, in its discretion, may reduce or eliminate a Participant's restricted stock award at any time before it is granted, whether or not calculated on the basis of pre-established performance goals or formulas. E. The Committee shall have the discretion to grant to a Participant receiving restricted shares all or any of the rights of a stockholder while such shares continue to be subject to restrictions. 7 Exhibit 10.1, Omnibus Stock Plan (Continued) 10. LONG-TERM INCENTIVE AWARDS A. Awards may be granted in the form of long-term incentive awards, which shall be made on the basis of Company and/or business unit performance goals and formulas determined by the Committee in its sole discretion. In the discretion of the Committee, long-term incentive awards may be paid in cash and/or shares of Common Stock having an equivalent value (based on Fair Market Value on the date that a cash payment otherwise would have been made to the Participant). B. During any fiscal year of the Company, no Participant shall receive a long-term incentive award of more than (i) 200% of that Participant's annual base salary at the end of the applicable performance period, or (ii) $5,000,000, whichever of these amounts is lower. In applying this limit, any shares of Common Stock paid in satisfaction of a long-term incentive award shall be valued at Fair Market Value on the date that the cash payment otherwise would have been made to the Participant. Total aggregate long-term incentive awards for any performance period shall not exceed five percent of the Company's pre-tax operating earnings (before incentive compensation) for the last fiscal year of the performance period. If total aggregate long-term incentive awards calculated for a performance period would exceed this aggregate limitation, all long-term incentive awards for that performance period shall be pro-rated on an equal basis among all Participants according to a formula established by the Committee. C. For purposes of qualifying long-term incentive awards as performance-based compensation under Section 162(m) of the Code, the Committee may in its discretion determine that such awards shall be conditioned on the achievement of pre-established Company and/or business unit goals for Return on Net Assets, provided that any such goals for purposes of an Award to the Company's Chief Executive Officer shall be Company goals for Return on Net Assets. The target goals for Return on Net Assets and the amounts which may be awarded upon achievement of such target goals, shall be set by the Committee on or before the latest date permissible so as to qualify under Section 162(m) of the Code. In granting long-term incentive awards which are intended to qualify under Section 162(m) of the Code, the Committee shall follow any procedures determined by it to be necessary or appropriate to ensure such qualification. No long-term incentive award intended to qualify under Section 162(m) of the Code shall be paid unless and until the Committee certifies in writing that the pre-established performance goals have been satisfied. D. The Committee, in its discretion, may reduce or eliminate a Participant's long-term incentive award at any time before it is paid, whether or not calculated on the basis of pre-established performance goals or formulas. 11. STOCK APPRECIATION RIGHTS A. Awards may be granted in the form of stock appreciation rights. Stock appreciation rights may be awarded in tandem with a stock option, in addition to a stock option, or may be 8 Exhibit 10.1, Omnibus Stock Plan (Continued) free-standing and unrelated to a stock option. During any fiscal year of the Company, no Participant shall be granted stock appreciation rights for more than 1,000,000 shares. B. A stock appreciation right entitles the Participant to receive from the Company an amount equal to the positive difference between (i) the Fair Market Value of Common Stock on the date of exercise of the stock appreciation right and (ii) the grant price or some lesser amount as the Committee may determine either at the time of grant or prior to the time of exercise. C. With respect to persons subject to Section 16 of the Exchange Act, a stock appreciation right may only be exercised during a period which (i) begins on the third business day following a date when the Company's quarterly summary statement of sales and earnings is released to the public and (ii) ends on the 12th business day following such date. This Section 11.C. shall not apply if the exercise occurs automatically on the date when a related stock option expires. D. Settlement of stock appreciation rights may be in cash, in shares of Common Stock, or a combination thereof, as determined by the Committee. 12. DEFERRAL OF AWARDS At the discretion of the Committee, payment of an Award, dividend equivalent, or any portion thereof may be deferred until a time established by the Committee. Deferrals shall be made in accordance with guidelines established by the Committee to ensure that such deferrals comply with applicable requirements of the Code and its regulations. Deferrals shall be initiated by the delivery of a written, irrevocable election by the Participant to the Committee or its nominee. Such election shall be made prior to the date specified by the Committee. The Committee may also (A) credit interest on cash payments that are deferred and set the rates of such interest and (B) credit dividends or dividend equivalents on deferred payments denominated in the form of shares. 13. EXERCISE OF STOCK OPTIONS UPON TERMINATION OF EMPLOYMENT OR SERVICES A. Options granted under Section 7 shall be exercisable upon the Participant's termination of service within the following periods only. Subject to Section 21, stock options to other Participants may permit the exercise of options upon the Participant's termination of employment within the following periods, or such shorter periods as determined by the Committee at the time of grant: (i) if on account of death, within 18 months of such event by the person or persons to whom the Participant's rights pass by will or the laws of descent or distribution. (ii) if on account of disability (as defined in Section 22(e)(3) of the Code or any successor statute), non-qualified stock options may be 9 Exhibit 10.1, Omnibus Stock Plan (Continued) exercised within 18 months of such termination and incentive stock options within 12 months. (iii) if on account of retirement (as defined from time to time by Company policy), non-qualified stock options may be exercised within 36 months of such termination and incentive stock options within 3 months. (iv) if on account of resignation, options may be exercised within 1 month of such termination. (v) if for cause (as defined from time to time by Company policy), no unexercised option shall be exercisable to any extent after termination. (vi) if for any reason other than death, disability, retirement, resignation, or cause, options may be exercised within 3 months of such termination. B. An unexercised option shall be exercisable only to the extent that such option was exercisable on the date the Participant's employment or service terminated. However, terms relating to the exercisability of options may be amended by the Committee before or after such termination, except in respect to options granted under Section 7. C. In no case may an unexercised option be exercised to any extent by anyone after expiration of its term. 14. NONASSIGNABILITY The rights of a Participant under the Plan shall not be assignable by such Participant, by operation of law or otherwise, except by will or the laws of descent and distribution. During the lifetime of the person to whom a stock option or similar right (including a stock appreciation right) is granted, he or she alone may exercise it. No Participant may create a lien on any funds, securities, rights or other property to which he or she may have an interest under the Plan, or which is held by the Company for the account of the Participant under the Plan. 15. ADJUSTMENT OF SHARES AVAILABLE The Committee shall make appropriate and equitable adjustments in the shares available for future Awards, the numerical limitations set forth in Sections 8.A., 9.A. and 11.A., future Awards under Section 7.A., and the number of shares covered by unexercised, unvested or unpaid Awards upon the subdivision of the outstanding shares of Common Stock; the declaration of a dividend payable in Common Stock; the declaration of a dividend payable in a form other than Common Stock in an amount that has a material effect on the price of the shares of Common Stock; the combination or consolidation of the outstanding shares of Common Stock 10 Exhibit 10.1, Omnibus Stock Plan (Continued) (by reclassification or otherwise) into a lesser number of shares of Common Stock; a recapitalization; or a similar event. 16. PAYMENT OF WITHHOLDING TAXES As a condition to receiving or exercising an Award, as the case may be, the Participant shall pay to the Company or the employer Subsidiary the amount of all applicable federal, state, local and foreign taxes required by law to be paid or withheld relating to receipt or exercise of the Award. The Company shall deduct such withholding taxes from any Award paid in cash. 17. AMENDMENTS The Board of Directors may amend the Plan at any time and from time to time, provided however that the Board shall not amend the terms of the Plan more frequently than permitted under Rule 16b-3 in regard to provisions that affect persons receiving Awards under Section 7. Rights and obligations under any Award granted before amendment of the Plan shall not be materially altered or impaired adversely by such amendment, except with consent of the person to whom the Award was granted. 18. REGULATORY APPROVALS AND LISTINGS Notwithstanding any other provision in the Plan, the Company shall have no obligation to issue or deliver certificates of Common Stock under the Plan prior to (A) obtaining approval from any governmental agency which the Company determines is necessary or advisable, (B) admission of such shares to listing on the stock exchange on which the Common Stock may be listed and (C) completion of any registration or other qualification of such shares under any state or federal law or ruling of any governmental body which the Company determines to be necessary or advisable. 19. NO RIGHT TO CONTINUED EMPLOYMENT OR GRANTS Participation in the Plan shall not give any Key Employee any right to remain in the employ of the Company or any Subsidiary. Further, the adoption of this Plan shall not be deemed to give any Key Employee or other individual the right to be selected as a Participant or to be granted an Award. 20. NO RIGHT, TITLE, OR INTEREST IN COMPANY ASSETS No Participant shall have any rights as a stockholder of the Company until he acquires an unconditional right under an Award to have shares of Common Stock issued to him. To the extent any person acquires a right to receive payments from the Company under this Plan, such rights shall be no greater than the rights of an unsecured creditor of the Company. 11 Exhibit 10.1, Omnibus Stock Plan (Continued) 21. SPECIAL PROVISION PERTAINING TO PERSONS SUBJECT TO SECTION 16 Notwithstanding any other term of this Plan, the following shall apply to persons subject to Section 16 of the Exchange Act, except in the case of death or disability: A. No restricted stock or other equity security (within the meaning used in Rule 16b-3 of the Exchange Act or any successor rule) offered pursuant to this Plan may be transferred for at least 6 months after acquisition; and B. No stock option, stock appreciation right or other derivative security (within the meaning used in Rule 16b-3 of the Exchange Act or any successor rule) issued pursuant to the Plan may be exercisable for at least 6 months after the date of issue. 22. GOVERNING LAW The Plan shall be governed by and construed in accordance with the laws of the State of Delaware. EX-10.4 3 REGISTRANT'S MANAGEMENT INCENTIVE PLAN 1 EXHIBIT 10.4 VARIAN ASSOCIATES, INC. MANAGEMENT INCENTIVE PLAN (as amended and effective as of October 1, 1994) 1. PURPOSES The purposes of the Varian Associates, Inc. Management Incentive Plan are to motivate the Company's key employees to improve stockholder value by linking a portion of their cash compensation to the Company's financial performance, reward key employees for improving the Company's financial performance, and help attract and retain key employees. 2. DEFINITIONS A. "Award" means any cash incentive payment made under the Plan. B. "Code" means the Internal Revenue Code of 1986, as amended. C. "Committee" means the Organization and Compensation Committee of Varian Associates, Inc.'s Board of Directors, or such other committee designated by that Board of Directors, which is authorized to administer the Plan under Section 3 hereof. The Committee shall be comprised solely of directors who are outside directors under Section 162(m) of the Code. D. "Company" means Varian Associates, Inc. and any corporation or other business entity of which Varian Associates, Inc. (i) directly or indirectly has an ownership interest of 50% or more, or (ii) has a right to elect or appoint 50% or more of the board of directors or other governing body. E. "Key Employee" means any employee of the Company whose performance the Committee determines can have a significant effect on the success of the Company. F. "Participant" means any individual to whom an Award is granted under the Plan. G. "Plan" means this Plan, which shall be known as the Varian Associates, Inc. Management Incentive Plan. H. "Return on Sales" means annual operating earnings expressed as a percentage of annual sales. 26 2 Exhibit 10.4, Management Incentive Plan (Continued) 3. ADMINISTRATION A. The Plan shall be administered by the Committee. The Committee shall have the authority to: (i) interpret and determine all questions of policy and expediency pertaining to the Plan; (ii) adopt such rules, regulations, agreements and instruments as it deems necessary for its proper administration; (iii) select Key Employees to receive Awards; (iv) determine the terms of Awards; (v) determine amounts subject to Awards (within the limits prescribed in the Plan); (vi) determine whether Awards will be granted in replacement of or as alternatives to any other incentive or compensation plan of the Company or an acquired business unit; (vii) grant waivers of Plan or Award conditions (other than Awards intended to qualify under Section 162(m) of the Code); (viii) accelerate the payment of Awards (but with respect to Awards intended to qualify under Section 162(m) of the Code, only as permitted under that Section); (ix) correct any defect, supply any omission, or reconcile any inconsistency in the Plan, any Award or any Award notice; (x) take any and all other actions it deems necessary or advisable for the proper administration of the Plan; (xi) adopt such Plan procedures, regulations, subplans and the like as it deems are necessary to enable Key Employees to receive Awards; and (xii) amend the Plan at any time and from time to time, provided however that no amendment to the Plan shall be effective unless approved by the Company's stockholders, to the extent such stockholder approval is required under Section 162(m) of the Code with respect to Awards which are intended to qualify under that Section. 3 Exhibit 10.4, Management Incentive Plan (Continued) B. The Committee may delegate its authority to grant and administer Awards to a separate committee; however, only the Committee may grant and administer Awards which are intended to qualify as performance-based compensation under Section 162(m) of the Code. 4. ELIGIBILITY Any Key Employee is eligible to become a Participant in the Plan. 5. AWARDS A. Awards may be made on the basis of Company and/or business unit performance goals and formulas determined by the Committee in its sole discretion. During any fiscal year of the Company, no Participant shall receive an Award of more than (i) 200% of that Participant's annual base salary at the end of the applicable performance period, or (ii) $5,000,000, whichever of these amounts is lower. Total aggregate Awards for any fiscal year shall not exceed eight percent of the Company's pre-tax operating earnings (before incentive compensation) for that fiscal year. If total aggregate Awards calculated for a fiscal year would exceed this aggregate limitation, all Awards for that fiscal year shall be pro-rated on an equal basis among all Participants according to a formula established by the Committee. B. For purposes of qualifying Awards as performance-based compensation under Section 162(m) of the Code, the Committee may in its discretion determine that such Awards shall be conditioned on the achievement of pre-established Company and/or business unit goals for Return on Sales, provided that any such goals for purposes of an Award to the Company's Chief Executive Officer shall be Company goals for Return on Sales. The target goals for Return on Sales and the amounts which may be awarded upon achievement of such target goals shall be set by the Committee on or before the latest date permissible so as to qualify under Section 162(m) of the Code. In granting Awards which are intended to qualify under Section 162(m) of the Code, the Committee shall follow any procedures determined by it to be necessary or appropriate to ensure such qualification. No Award intended to qualify under Section 162(m) of the Code shall be paid unless and until the Committee certifies in writing that the pre-established performance goals have been satisfied. C. The Committee, in its discretion, may reduce or eliminate a Participant's Award at any time before it is paid, whether or not calculated on the basis of pre-established performance goals or formulas. D. The Company shall withhold all applicable federal, state, local and foreign taxes required by law to be paid or withheld relating to the receipt or payment of any Award. E. At the discretion of the Committee, payment of an Award or any portion thereof may be deferred until a time established by the Committee. Deferrals shall be made in accordance with guidelines established by the Committee to ensure that such deferrals comply with applicable requirements of the Code and its regulations. Deferrals shall be initiated by the 4 Exhibit 10.4, Management Incentive Plan (Continued) delivery of a written, irrevocable election by the Participant to the Committee or its nominee. Such election shall be made prior to the date specified by the Committee. The Committee may also credit interest on cash payments that are deferred and set the rates of such interest. 6. GENERAL A. The Plan shall become effective as of October 1, 1994, subject to stockholder approval of the Plan at the 1995 annual meeting of the Company's stockholders. B. Any rights of a Participant under the Plan shall not be assignable by such Participant, by operation of law or otherwise, except by will or the laws of descent and distribution. No Participant may create a lien on any funds or rights to which he or she may have an interest under the Plan, or which is held by the Company for the account of the Participant under the Plan. C. Participation in the Plan shall not give any Key Employee any right to remain in the employ of the Company. Further, the adoption of this Plan shall not be deemed to give any Key Employee or other individual the right to be selected as a Participant or to be granted an Award. D. To the extent any person acquires a right to receive payments from the Company under this Plan, such rights shall be no greater than the rights of an unsecured creditor of the Company. E. The Plan shall be governed by and construed in accordance with the laws of the State of California. EX-11 4 COMPUTATION OF EARNINGS PER SHARE 1 EXHIBIT 11 COMPUTATION OF EARNINGS PER SHARE IN ACCORDANCE WITH INTERPRETIVE RELEASE NO. 34-9083 UNAUDITED
SECOND QUARTER ENDED SIX MONTHS ENDED MARCH 31, APRIL 1, MARCH 31, APRIL 1, (SHARES IN THOUSANDS) 1995 1994 1995 1994 - ---------------------------------------------------------------------------------------------------------------------------------- Actual weighted average shares outstanding for the period 33,782 34,486 33,838 34,522 Dilutive employee stock options 1,318 1,211 1,344 1,220 ----------- ----------- ---------- ------------ Weighted average shares outstanding for the period 35,100 35,697 35,182 35,742 =========== =========== ========== ============ (DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) Earnings applicable to fully diluted earnings per share $ 29,692 $ 18,338 $ 50,442 $ 30,002 =========== =========== ========== ============ Earnings per share based on SEC interpretive release No. 34-9083: Earnings per share - Fully Diluted (1) $ 0.85 $ 0.51 $ 1.43 $ 0.84 =========== =========== ========== ============
(1) There is no significant difference between fully diluted earnings per share and primary earnings per share. -30- EX-15 5 LETTER REGARDING UNAUDITED INTERIM FINANCIAL INFO. 1 EXHIBIT 15 Securities and Exchange Commission 450 Fifth Street, N.W. Washington, D.C. 20549 RE: Varian Associates, Inc. Registrations on Forms S-8 and S-3 We are aware that our report dated April 18, 1995 on our review of the interim financial information of Varian Associates, Inc. for the three-month and six-month periods ended March 31, 1995, included in this Form 10-Q is incorporated by reference in the Company's registration statements on Forms S-8, Registration Statement Numbers 33-46000, 33-33661, 33-33660, and 2-95139 and Forms S-8 and S-3, Registration Statement Number 33-40460. Pursuant to Rule 436(c) under the Securities Act of 1933 this report should not be considered a part of the registration statements prepared or certified by us within the meaning of Sections 7 and 11 of that Act. /s/ Coopers & Lybrand L.L.P. ----------------------------- Coopers & Lybrand L.L.P. San Jose, California May 12, 1995 31 EX-27 6 FINANCIAL DATA SCHEDULE
5 1,000 6-MOS SEP-29-1995 OCT-01-1994 MAR-31-1995 77156 0 386819 2451 226194 764489 593849 354759 1064997 504392 0 33907 0 0 445610 1064997 891496 891496 600684 809914 0 0 1510 80072 29630 50442 0 0 0 50442 0 1.43
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