Exhibit
10.1


 


September
17, 2004


 


Dow
Wilson


 


Dear
Dow,


 


I
am pleased to confirm our offer of employment to you for the position of
President, Oncology Systems and Corporate Vice-President, Varian Medical
Systems, Inc. (VMS) reporting to Tim Guertin, in his role as Chief Operating
Officer of VMS.  This offer is contingent
on approval by our Board of Directors.  Your
start date has yet to be determined but this offer is contingent on a start
date not later than January 30, 2005.


 


The
specific components making up this offer are as follows:


 


Salary


 


Your starting
weekly base salary will be $8,847.00 ($460,044.00 annualized). VMS is on a
bi-weekly payroll cycle.


 


Management Incentive Plan


 


You will be eligible to participate in the VMS
Management Incentive Plan (MIP) beginning in fiscal year 2006. Your target
award percentage will be 75% of base salary (at 100% achievement of funding
target levels).  Under the terms of the
MIP (please refer to the Plan document for the actual terms governing awards),
awards are based on specific VMS financial achievements. In general, to be
eligible for the award, you must be actively employed and in good standing at
the end of the specified performance period. 
The award is typically payable in December for the prior fiscal year’s
performance.  A separate MIP
participation letter will be issued to you along with the highlights and terms
of the plan.


 


In lieu of MIP
participation in fiscal year 2005, we will grant you a lump sum bonus of
$500,000.00 which will be payable within the first month of your
employment.  In the event that a payout
of more than $500,000 would have been made to you under the MIP had you been a
participant for fiscal year 2005 at your FY2006 participation level, we will
provide you an additional incremental bonus to cover the differential no later
than December of 2005.


 


Executive
Car


 


While
employed by VMS, you will participate in the VMS Executive Car Program. Your
current purchase price limit will be $66,000 per the car plan terms. Vehicles
are leased for 36 months or 60,000 miles whichever occurs first. Insurance,
maintenance expenses and fuel costs are included in the program. A copy of the
Executive Car Plan will be provided to you.


 


Stock
Options, Restricted Stock & Restricted Cash


 


We shall recommend
to the Compensation and Management Development Committee of the Board of
Directors that you be granted a non-qualified stock option for 50,000 shares of
VMS stock and a restricted stock grant equal to $1,8000,000.00 for shares of
the corporation’s Common Stock (calculated on the closing price of our stock on
the first date of your employment) (the “Employment Date”).


 


For the
non-qualified stock options, the exercise price would be the closing price on
the New York Stock Exchange on the effective day of the grant, which will be
your Employment Date.  These
non-qualified options vest over a three-year period and expire after 10 years.
The first one-third of the options vest and are exercisable after the end of
the first year following the option grant and the remainder of the options


 





















 


vest and are
exercisable on a monthly basis thereafter. 
The details of the grant will be set forth in the option agreement.


 


For the restricted
stock, the grant will be effective as of the Employment Date.  The shares will vest over a 15-year period
according to the following vesting schedule: the first one-third after the end
of the fifth year following the restricted stock grant date, the second
one-third after the end of the tenth year following the restricted stock grant date,
and the last one-third after the end of the fifteenth year following the
restricted stock grant date. The details of the grant will be set forth in the
restricted stock agreement.


 


Additionally, also
effective as of the Employment Date, we will grant you $1,600,000.00 cash over
a 5-year period.  The initial payment of
$320,000 will be paid on the first anniversary of the Employment Date, followed
by forty seven (47) monthly payments in the amount of $26,666 beginning on the
first month following the initial payment; and one (1) final payment in the
amount of $26,700.


 


Benefit Programs


 


While employed by VMS,
you will be eligible to participate in health, life, benefit and retirement
plans offered by VMS in accordance with plan enrollment requirements. While
some plans are provided at no costs, others do require an employee
contribution.


 


Additionally, you will be
entitled to the following executive benefits while employed by VMS:


 


•                  Reimbursement
for financial and tax planning up to a maximum of $6,500/year.


•                  Reimbursement
of annual executive physical examination up to a maximum of $1,500/year.


•                  Supplemental
Retirement Plan (SRP) match beginning after one year of employment.  Equal to 6% of the participant’s base salary
and applicable incentive payments earned during the year, reduced by the amount
of any company matching contributions that would be made to the 401(k)
Retirement Plan if the participant had contributed the maximum 401(k) amount
for the plan year.


•                  Participation
in the VMS Deferred Compensation Plan (DCP). 
This non-qualified DCP is designed to allow its participants to defer
current compensation on a pre-tax basis.


 


Relocation
Program


 


As part of a relocation
package, VMS offers the following:


 


•                  Three
house hunting trips for you and your wife, including airfare, lodging, rental
car and a $75 a day per diem.


•                  Reimbursement
of duplicate housing costs for up to six months, if necessary, not to exceed 1⁄2
of the monthly mortgage expense on a home you purchase in California.


•                  Movement
of household items up to a maximum of 30,000 lbs.


•                  Shipment
of up to two automobiles or mileage reimbursement for driving to the SF Bay
Area.


•                  Should
you relocate to the SF Bay Area in advance of your family, Varian will pay for
home visits to Wisconsin every two weeks for up to six months.


•                  30
days of temporary housing for you.


•                  30
days of temporary storage of household goods.


•                  30
days usage of a rental car.


•                  A
one-time relocation allowance of $30,000.00 (net of taxes).


 


Varian will assist you in
the sale of your primary residence in Wisconsin by paying all normal
seller-closing costs (cost of sales), up to 6% of the sale price. This benefit
will be available to you for up to twelve (12) months from the date you move to
the SF Bay Area.


 





















 


With respect to your new
residence in California, VMS’s policy on closing costs on a new home is the
following:  an employee may be reimbursed
for actual normal closing costs for an appraisal, document preparation, home
inspection, credit report, mortgage application and loan origination points,
title search and title insurance, legal fees, recording fees, state transfer
taxes etc. up to a maximum of 4% of the mortgage value assuming 100% equity
reinvestment of the home purchased.  Costs
for such items as home warranties, prorated property taxes, homeowners
insurance, interest rate buy-down points or prorated interest expense are not
reimbursable.  Varian will not pay for
any assumed buyer closing costs.


 


Please be aware that if
you voluntarily terminate your employment with Varian following your relocation
to the SF Bay Area, you will be expected to repay all relocation expenses in
accordance with the following schedule:


 




	
  Resignation Following

  Relocation

  	
   

  	
  Repayment

  Obligation

  	
   

  
	
  0 - 6 Months

  	
   

  	
  100

  	
  %

  
	
  7 - 12 Months

  	
   

  	
  75

  	
  %

  
	
  13 - 18 Months

  	
   

  	
  50

  	
  %

  
	
  19 -24 Months

  	
   

  	
  25

  	
  %

  
	
  25+ Months

  	
   

  	
  0

  	
  %

  






 


Except for amounts grossed up for applicable taxes as
provided in VMS’s policies, any amounts referenced in and paid pursuant to this
letter and referenced policies are subject to all applicable state, local and
federal withholding taxes.


 


Please note that these proposed terms of employment
supersede any prior agreement, representations or promises of any kind, whether
written, verbal, expressed or implied between the parties hereto with respect
to the subject matters herein.


 


This offer is contingent
upon your ability to perform the essential functions of the position with or
without reasonable accommodation, and pass a drug screen.  Until you have been notified that you have
successfully passed the drug screen, do not take any actions in reliance upon
this offer letter, such as resigning from your current employment.


 


This offer is also
contingent upon your ability to provide proof of employment eligibility under
applicable regulations.


 


VMS’s offer of employment
is based on your individual skills and talent. 
Please make sure not to bring with you to VMS any materials that contain
the trade secret or proprietary information of third parties.  VMS respects the trade secret rights of other
companies and expects all employees to do the same.


 


Your employment at VMS is
an at-will employment relationship, meaning that either VMS, or you, has the
right to terminate the employment relationship at any time with or without
cause or notice.  Your signature below acknowledges
your agreement to VMS’s at-will employment relationship and supercedes all
other agreements on this subject. The at-will nature of the employment
relationship can only be modified by a written agreement signed by you and VMS’s
Chief Executive Officer.


 


We are including new hire
materials for you to review and complete and return to MVS as of your
Employment Date.  Should you have any
questions in the meantime, please feel free to contact me at (650) 424-6180.


 





















 


Dow, we are very
enthusiastic about the prospect of your joining Varian Medical Systems, Inc.
and hope you will have a stimulating and satisfying career here.


 


 


Sincerely,


 


	
  /s/ Wendy Reitherman

  	
   

  	
   

  



 


Wendy
Reitherman


Vice President, Human
Resources


 


	
  cc:

  	
   

  	
  H.R. File

  
	
   

  	
   

  	
  Tim Guertin

  
	
   

  	
   

  	
  Dick Levy

  



 


Your signature below will
indicate your understanding and intention to accept the offer of employment set
forth in this letter and enter into an employment arrangement with Varian.  In addition to the contingencies set forth
above and not withstanding your signature below, it is understood and agreed
that the terms of this letter shall become effective only upon your Employment
Date following termination of your current employment. Please sign both copies
and return one copy in the envelope provided.


 


 


	
  /s/ Dow Wilson

  	
   

  	
  20 December 2004

  	
   

  
	
  Dow
  Wilson (signature)

  	
  Date