Exhibit 10.21


Description of
Management Incentive Plan as Administered by the Compensation and

Management Development Committee of the Board of Directors of

Varian Medical Systems, Inc. for Fiscal Year 2005


Description of the
Management Incentive Plan


The following paragraphs
provide a summary of the principal features of the Management Incentive Plan
and its operation. The Management Incentive Plan in its entirety has been set
forth and previously filed as Exhibit 10.2 to the Company’s Form 10-Q
Quarterly Report for the quarter ended April 2, 1999. The following
summary is qualified in its entirety by reference to the Management Incentive
Plan.


Purpose of the
Management Incentive Plan


The Management Incentive
Plan is intended to motivate our key employees to increase stockholder value by
(1) linking a portion of their cash compensation to our financial
performance, (2) providing rewards for improving financial performance and
(3) helping to attract and retain key employees.


Administration of
the Management Incentive Plan


The Management Incentive
Plan is administered by the Compensation and Management Development Committee
of the Board of Directors. The members of the Compensation and Management
Development Committee must qualify as “outside directors” under Section 162(m)
for purposes of qualifying the Management Incentive Plan as performance-based
compensation under that section. Subject to the terms of the Management
Incentive Plan, the Compensation and Management Development Committee has the
sole discretion to determine the key employees who shall be granted awards, and
the amounts, terms and conditions of each award. The Compensation and
Management Development Committee may delegate its authority to grant and
administer awards to one or more officers or directors appointed by the
Compensation and Management Development Committee, but only with respect to
awards that are not intended to qualify as performance-based compensation
under Section 162(m).


Eligibility to
Receive Awards


Eligibility for the
Management Incentive Plan is determined in the discretion of the Compensation
and Management Development Committee. In selecting participants for the
Management Incentive Plan, the Compensation and Management Development
Committee chooses key employees of the Company and its affiliates who are
likely to have a significant impact on our performance.


Awards and
Performance Goals


Under the Management Incentive Plan, the Compensation
and Management Development Committee establishes (1) the performance goals
that must be achieved in order for the participant to actually be paid an award
and (2) a formula or table for calculating a participant’s award,
depending upon how actual performance compares to the pre-established
performance goals. A participant’s award will increase or decrease as actual
performance increases or decreases.


The Compensation and Management Development Committee
also determines the periods for measuring actual performance (the “performance
period”). Performance periods may last as long as three fiscal years.


The Compensation
and Management Development Committee may set performance periods and
performance goals that differ from participant to participant. For example, the
Compensation and Management Development Committee may choose performance goals
based on either company-wide or business unit results, as deemed appropriate in
light of the participant’s specific responsibilities. For purposes of
qualifying awards as performance-based compensation under Section 162(m),
the Compensation and Management Development Committee will specify performance
goals from the 









  



following list: EBIT, EBITDA, earnings per share, net
income, operating cash flow, return on assets, return on equity, return on
sales, revenue and stockholder return.


EBIT means the Company’s or a business unit’s income
before reductions for interest and taxes. EBITDA means the Company’s or a
business unit’s income before reductions for interest, taxes, depreciation and
amortization. Earnings per share means the Company’s or a business unit’s net income,
divided by a weighted average number of common shares outstanding and dilutive
common equivalent shares deemed outstanding. Net income means the Company’s or
a business unit’s income after taxes. Operating cash flow means the Company’s
or a business unit’s sum of net income plus depreciation and amortization less
capital expenditures plus certain specified changes in working capital. Return
on assets means the percentage equal to the Company’s or a business unit’s EBIT
(before incentive compensation), divided by the Company’s or such business unit’s,
as applicable, average net assets. Return on equity means the percentage equal
to the Company’s net income, divided by average stockholders’ equity. Return on
sales means the percentage equal to the Company’s or a business unit’s EBIT
(before incentive compensation), divided by the Company’s or such business unit’s,
as applicable, revenue. Revenue means the Company’s or a business unit’s sales.
Stockholder return means the total return (change in share price plus
reinvestment of any dividends) of a share of the Company’s common stock.


For any performance
period, no participant may receive an award of more than the lesser of (1) 200%
of the participant’s annualized salary rate on the last day of the performance
period or (2) $2 million. Also, the total of all awards for any
performance period cannot exceed 8% of the Company’s EBIT before incentive
compensation for the most recent completed fiscal year of the Company. Awards
that exceed this overall limit will be pro-rated so that the total does not
exceed such limit.


Determination and
Payment of Actual Awards


After the end of each
performance period, a determination is made as to the extent to which the
performance goals applicable to each participant were achieved or exceeded. The
actual award (if any) for each participant is determined by applying the
formula to the level of actual performance that was achieved. However, the
Compensation and Management Development Committee retains discretion to
eliminate or reduce the actual award payable to any participant below that
which otherwise would be payable under the applicable formula. Awards under the
Management Incentive Plan generally are payable in cash or common stock of the
Company within 120 days after the performance period during which the
award was earned.


Fiscal Year 2005
Performance Goals


On November 18, 2004,
the Compensation and Management Development Committee set the performance goals
for fiscal year 2005 to be based upon a percentage EBIT growth formula. For
each of Richard M. Levy, Chairman of the Board, President and Chief Executive
Officer; Elisha W. Finney, Corporate Vice President and Chief Financial
Officer; Tim E. Guertin, Corporate Executive Vice President; Joseph B. Phair,
Corporate Vice President Administration, Secretary and General Counsel; and one
other executive officer of the Company, his or her performance goal is based
100% on company-wide performance. For Robert Kluge, Corporate Vice President,
his performance goal is based 40% on company-wide EBIT growth performance and
60% on the EBIT growth performance of the X-Ray Products business segment.