Exhibit 10.21

Description of Certain Compensatory Arrangements

Executive Compensation

Varian Medical Systems, Inc. (the “Company”) does not have a written employment
agreement with any of its executive officers. The annual base salary for
calendar year 2013 for each of the Company’s Principal Executive Officer,
Principal Financial Officer, and certain executive officers (the “executive
officers”) is as follows:

 

Name

   Base Salary  

Dow R. Wilson,

        President and Chief Executive Officer

   $ 900,000   

Elisha W. Finney,

        Executive Vice President, Finance and Chief Financial Officer

   $ 573,735   

Kolleen T. Kennedy,

        Senior Vice President and President, Oncology Systems

   $ 550,066   

Robert H. Kluge,

        Senior Vice President and President, X-ray Products

   $ 463,316   

John W. Kuo,

        Senior Vice President, General Counsel and Corporate Secretary

   $ 417,027   

On November 9, 2012, the Compensation and Management Development Committee (the
“Compensation Committee”) set the performance goals for fiscal year 2013 under
the Company’s Management Incentive Plan (“MIP”) for the executive officers. The
annual cash incentives under the MIP for the Company’s Section 16 executives,
including the executive officers, are intended to comply with the exception for
performance-based compensation under Section 162(m) of the Internal Revenue
Code. For fiscal year 2013, the Compensation Committee established a pool of
funds equal to one and one-quarter percent (1.25%) of the Company’s fiscal year
2013 earnings before interest and taxes (“EBIT”) results (the “MIP Bonus Pool”)
to be available for annual cash incentives under the MIP to this group. The
Compensation Committee has discretion to pay each of these executive officers
less than their corresponding share of the MIP Bonus Pool. Such discretion shall
be exercised by the Compensation Committee based on the achievement of the
following performance goals in fiscal year 2013 over fiscal year 2013 and any
other factors determined by the Compensation Committee in its sole
discretion. In the case of Mr. Wilson, Ms. Finney and Mr. Kuo, payments under
the MIP will be based 40% on EBIT growth for the Company as a whole, 20% on
revenue growth for the Company as a whole, 20% on net orders growth for the
Company as a whole, and 20% on the executive officer’s individual performance
and such other factors determined by the Compensation Committee in its sole
discretion. In the case of Ms. Kennedy, payment under the MIP will be based 20%
on EBIT growth for the Company as a whole, 10% on revenue growth for the Company
as a whole, 10% on net orders growth for the Company as a whole, 20% on EBIT
growth for the Oncology Systems business segment, 10% on revenue growth for the
Oncology Systems business segment, 10% on net orders growth for the Oncology
Systems business segment, and 20% on her individual performance and such other
factors determined by the Compensation Committee in its sole discretion. In the
case of Mr. Kluge, payment under the MIP will be based 20% on EBIT growth for
the Company as a whole, 10% on revenue growth for the Company as a whole, 10% on
net orders growth for the Company as a whole, 20% on EBIT growth for the X-ray
Products business segment, 10% on revenue growth for the X-ray Products business
segment, 10% on net orders growth for the X-ray Products business segment, and
20% on his individual performance and such other factors determined by the
Compensation Committee in its sole discretion. Payment under the MIP to the
executive officers may vary from $0 to the maximum of the lesser of two times
the target participation level or a specified percentage of the MIP Bonus Pool
based upon achievement under the performance goals described above.

--------------------------------------------------------------------------------

Set forth below are payout levels for each executive officer if the target and
maximum levels under the MIP are achieved:

 

Name

   Target     Maximum (the lesser of
the following)        As a %of
base salary     As a % of
base  salary     As a % of MIP
Bonus Pool  

Dow R. Wilson

     113 %      226 %      37 % 

Elisha W. Finney

     83 %      166 %      17 % 

Kolleen T. Kennedy

     83 %      166 %      17 % 

Robert H. Kluge

     78 %      156 %      13 % 

John W. Kuo

     68 %      136 %      10 % 

These executive officers have also been extended certain perquisites, such as
use of a leased automobile under the Company’s Executive Car Program. Under the
Executive Car Program, the Company provides a leased vehicle costing up to
$82,000 for the Chief Executive Officer and leased vehicles costing up to
$68,000 for the other executive officers. Insurance, maintenance expenses and
fuel costs are also included in the Executive Car Program. Participants have an
option to purchase the car at the end of its three-year lease period or upon
retirement at the lower of its depreciated book value or its fair market value
(based on the Kelley Blue Book Auto Market Report wholesale value).

The Company does not permit its executive officers to use the Company’s
fractionally owned aircraft for purely personal trips. However, the Company
allows and includes in an executive officer’s compensation, as applicable,
aircraft use attributable to permitted spousal use of the fractionally owned
aircraft for business purposes and spousal travel on commercial airplanes deemed
valuable and appropriate for business purposes.

The Company reimburses executive officers and non-executive officers for
financial planning, estate planning, tax planning, tax return preparation and
financial counseling services (to a maximum of $6,500 per year and unlimited for
the Chief Executive Officer). The Company also reimburses certain individuals,
including all executive officers and non-executive officers, for annual medical
examinations (up to a maximum of $4,000 per year).

Additionally, for the benefit of the executive officers, the Company also
provides a Company supplemental contribution match representing retirement
contributions which could not be contributed to the executive officers’
qualified retirement accounts due to Internal Revenue Code limitations. The
Company also permits executive officers to participate in the Company’s Deferred
Compensation Plan, under which they may defer up to 50% of their base salaries
and up to 100% of their cash incentives, and in compensation and benefit
programs generally available to all other U.S. employees, such as the Company’s
Employee Stock Purchase Plan, 401(k) Retirement Program and supplemental life
and disability insurance programs. Commencing in fiscal year 2013, the executive
officers will not be eligible to participate in the Company’s Employee Incentive
Plan.

Compensation of Directors

Annual Cash Compensation.    Each non-employee director receives an annual
retainer of $45,000, except that the lead director receives an annual retainer
of $60,000, or in the case of a new director or lead director a pro-rata portion
thereof. The chairs of the Compensation and Management Development

--------------------------------------------------------------------------------

Committee and the Nominating and Corporate Governance Committee also receive an
additional $10,000 annual retainer for serving in these positions, and the chair
of the Audit Committee receives an additional $15,000. Each non-employee
director also receives $2,000 for each Board meeting attended ($1,000 if the
Board meeting was an in-person meeting and the director attended by telephone or
video conference), and $1,500 for each committee meeting attended ($750 if the
committee meeting was an in-person meeting and the director attended by
telephone or video conference). Directors who are employees receive no
compensation for their services as directors. All directors, however, receive
reimbursement for out-of-pocket expenses of the directors’ associated with
attending Board and committee meetings and for expenses related to directors’
continuing education programs. Non-employee directors may elect to receive cash
compensation as full-value shares of the Company’s common stock, at a value
equal to the fair market value of the Company’s common stock on the date that
the foregone cash compensation otherwise would have been paid. Directors may
alternatively elect to defer their retainer and/or meeting fees under the
Company’s Deferred Compensation Plan, subject to the restrictions of applicable
tax laws.

Equity Compensation. New non-employee directors do not receive initial equity
awards, but each continuing non-employee director receives an annual grant of
non-qualified stock options to purchase 5,000 shares of common stock at an
exercise price equal to the fair market value (i.e., the closing price) of the
underlying shares of the Company’s common stock on the date of grant and an
annual grant of Deferred Stock Units having a fair market value on the date of
grant of $100,000, based on the fair market value of the Company’s common stock
on the date of grant (typically the date after the Company’s annual meeting of
stockholders).

Compensation for Levy as a Non-Executive Employee

In his role as a non-executive employee of the Company (and in addition to his
responsibilities as Chairman of the Board), Dr. Levy provides on-going advice
and counsel to the management of the Company on strategic business and
technological matters, and is involved with investor groups and key customers.
In connection with this non-executive employee role, Dr. Levy receives the
following compensation:

 

  •  

base salary at a rate of $160,000 per annum;

 

  •  

provision of a leased office space;

 

  •  

provision of an administrator; and

 

  •  

eligibility for the Corporation’s non-executive employee health and welfare
benefit plans, subject to his election and contributions towards those benefit
plans, as well as the Employee Incentive Plan.

Dr. Levy is not eligible to participate in the Company’s Management Incentive
Plan and in any executive perquisite programs, including the Executive Car
Program and reimbursement for executive physicals. He is also not eligible for
equity awards, paid personal leave accrual or for any supplemental retirement
contributions in excess of the Company’s matching contributions under the Varian
Medical Systems, Inc. Retirement Plan (the Company’s 401(k) Plan). He does not
receive any separate compensation for his duties serving on the Board. He
receives the same reimbursement of expenses as do all other employees.

Compensation for Guertin as a Non-Executive Employee

Effective at the end of fiscal year 2012, Mr. Guertin stepped down as the
Company’s President and CEO. He became our Vice Chairman, effective as of
September 29, 2012. Mr. Guertin will continue as a non-executive employee of the
Company until his retirement in February 2013. In his new role as a

--------------------------------------------------------------------------------

non-executive employee of the Company (and in addition to his responsibilities
as Vice Chairman of the Board), Mr. Guertin will provide on-going advice and
counsel to our management on strategic business and technological matters, will
continue to be involved with industry and investor groups and key customers, and
will provide transitional support. As a non-executive employee, Mr. Guertin will
receive a base salary of $952,711 per year. He will also participate in the MIP
at a “target” participation level of 115% of annual salary in fiscal year 2013
and in the EIP, with any payouts based on fiscal year 2013 results and to be
prorated up to Mr. Guertin’s retirement date. He will further be entitled to
participate in the DCP, including being eligible to receive Company Supplemental
Contributions. In addition he will receive the following perquisites:
(a) reimbursement for up to $4,000 for annual medical examinations in January
and February 2013 (plus up to $4,000 not to date reimbursed in calendar year
2012); (b) reimbursement for financial planning advice, estate planning advice,
tax planning advice and/or tax return preparation (no dollar limit); and
(c) benefits equivalent to those offered under our Executive Car Program
(subject to a vehicle purchase price limit of $82,000 and including the option
to purchase the vehicle following his retirement). We will also provide him with
leased offsite office space at a fair market value not to exceed $7,000 per
month and a part-time administrator. Mr. Guertin will also be eligible to
participate in compensation and benefit programs generally available to all
other U.S. employees, 401(k) retirement plan and medical, dental, supplemental
life and disability insurance programs, subject to his election and
contributions towards those benefit programs, and receives the same
reimbursement of expenses as do all other employees. Mr. Guertin will not be
eligible for the grant of equity awards in his capacity as an employee in fiscal
year 2013. Mr. Guertin does not receive any separate compensation for his duties
serving on the Board. After Mr. Guertin retires, he will receive the same
compensation as our other non-employee directors.