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 2014 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	$	945,000
Elisha W. Finney, Executive Vice President, Finance and Chief Financial Officer	$	590,947
Kolleen T. Kennedy, Senior Vice President and President, Oncology Systems	$	572,069
Robert H. Kluge, Senior Vice President and President, Imaging Components Businesses	$	463,316
John W. Kuo, Senior Vice President, General Counsel and Corporate Secretary	$	433,708

On November 14, 2013, the Compensation and Management Development Committee (the “Compensation Committee”) set the performance goals for fiscal year 2014 under the Company’s Management Incentive Plan (“MIP”) for the executive officers. For fiscal year 2014, the Compensation Committee established a pool of funds equal to one and one-quarter percent (1.25%) of the Company’s fiscal year 2014 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 performance goals in the following categories in fiscal year 2014 over fiscal year 2013 and any other factors determined by the Compensation Committee in its sole discretion: EBIT growth, revenue growth, orders growth, the executive officer’s 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 their target participation level or a specified percentage of the MIP Bonus Pool based upon achievement of such performance goals.

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		120	%			240	%		39	%
Elisha W. Finney		83	%			166	%		17	%
Kolleen T. Kennedy		83	%			166	%		16	%
Robert H. Kluge		78	%			156	%		12	%
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, which 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 and covers insurance, maintenance expenses and fuel costs. Participants have an option to purchase the car at the end of its three-year lease period or upon retirement.

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 uncapped 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.

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).

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:

Dr. Levy does not receive any separate compensation for his duties serving on the Board.