Document:

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.EXHIBIT 10(a)

 

EARL  SCHEIB,
INC.

15206 Ventura Boulevard

Suite 200

Ventura, California 91403

 

December 10, 2004

 

To:                            Christian K. Bement

David I. Sunkin

Charles E. Barrantes

 

From:                  The Board of Directors of Earl Scheib, Inc.

 

Subject:     Amendment to Earl Scheib, Inc. Modified Executive
Retention and Incentive Plan (“Amendment”)

 

Reference is made
to the Earl Scheib, Inc. Modified Executive Retention and Incentive Plan dated
as of April 2, 2003 (the “Original Plan”). 
This Amendment is effective as of October 25, 2004.

 

Section 3.1(a) of
the Original Plan is amended and restated to read in full as follows:

 

“(a)         (i)Your
employment is involuntarily terminated by the Company or any of its
Subsidiaries for any reason other than Just Cause, or (ii) you voluntarily
terminate your employment with the Company and all Subsidiaries for Good Reason
within 60 days after the occurrence of such Good Reason”.

 

Section 3.1(b) of
the Original Plan is amended and restated to read in full as follows:

 

“(b)         Within the period beginning 90 days
before the execution by the Company of a definitive agreement to consummate an
Other Transaction and ending upon the occurrence of the Other Transaction, (i)
your employment is involuntarily terminated by the Company or any of its
Subsidiaries for any reason other than Just Cause, or (ii) you voluntarily
terminate your employment with the Company and all Subsidiaries for Good Reason
within 60 days after the occurrence of such Good Reason.”

 

Section 3.1(c) of
the Original Plan is amended and restated to read in full as follows:

 

“(c)         Within the period beginning 90 days after
the occurrence of the earlier of a Change in Control or an Other Transaction
and ending 150 days after the occurrence of the earlier of a Change in Control
or an Other Transaction, you voluntarily terminate your employment with the
Company and all of its Subsidiaries, with or without Good Reason.”

 

A new Section
3.1(d) is hereby added to the Original Plan to read in full as follows:

 

“(d)         Within 12 months after the occurrence of
an Other Transaction, (i) your employment is involuntarily terminated by the
Company or any of its Subsidiaries for any reason other than Just Cause, or
(ii) you voluntarily terminate your employment with the Company and all
Subsidiaries for Good Reason within 60 days after the occurrence of such Good
Reason”.

 

Section 3.2(a) of
the Original Plan is amended and restated to read in full as follows:

 

“(a)  Six in the case of a termination under
Section 3.1(a)(i) or Section 3.1(c), for each of Christian K. Bement and David
I. Sunkin;”

 

Section 3.2(b) of
the Original Plan is amended and restated to read in full as follows:

 

“(b)  Eighteen in the
case of a termination under Section 3.1(b) or (d) with respect to an Other
Transaction, for each of Christian K. Bement and David I. Sunkin.”

 

Section 3.2(c) of
the Original Plan is amended and restated to read in full as follows:

 

“(c)  Nine in the case of a termination under
Section 3.1(a)(i) or Section 3.1(c), for Charles E. Barrantes;”

 

 

Section 3.2(d) of
the Original Plan is amended and restated to read in full as follows:

 

“(d)  Twenty-one in the
case of a termination under Section 
3.1(b) or (d) with respect to an Other Transaction, for Charles E.
Barrantes.”

 

A new Section
3.2(e) is hereby added to the Original Plan to read in full as follows:

 

“(e)   Twelve in the case of a termination under
Section 3.1(a)(ii) for each of Christian K. Bement, David I. Sunkin and Charles
E. Barrantes.”

 

Section 10.6 of
the Original Plan is amended and restated to read in full as follows:

 

“This Plan shall
continue in full force and effect until its terms and provisions are completely
carried out.”

 

Except as set
forth herein, all provisions of the Original Plan shall remain in full force
and effect.

 

	
   

  	
  Sincerely,

  
	
   

  	
   

  
	
   

  	
  EARL SCHEIB, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By /s/Christian K. Bement

  	
   

  
	
   

  	
  Name Christian K. Bement

  
	
   

  	
  Title President & Chief Executive Officer

  

 

 

EMPLOYEE ACKNOWLEDGES
THAT EMPLOYEE HAS READ THIS AMENDMENT, UNDERSTANDS IT AND IS VOLUNTARILY
ENTERING INTO IT.

 

 

	
   

  	
   

  	
   

  	
   

  
	
  Signature of Employee

  	
   

  	
  Dated

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Printed Name of
  Employee

  	
   

  	
  Address of Employee

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Signature and Title of
  Company

  	
   

  	
  Dated

  	
   

  
	
  Representative

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