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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.          )

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December 30, 2020

Dear Stockholder:

        You are cordially invited to attend Varex Imaging Corporation's 2021 Annual Meeting of Stockholders on Thursday, February 11, 2021 at 2:00 p.m. Mountain Time. The meeting will be a virtual meeting of stockholders, which will be conducted via a live audio webcast. You will be able to attend the meeting, submit your questions and vote online during the meeting by visiting www.virtualshareholdermeeting.com/VREX21. The Secretary's formal notice of the meeting and the Proxy Statement appear on the following pages and describe the matters to be acted upon at the annual meeting.

        We hope that you can join us. However, whether or not you plan to attend, please vote your shares as soon as possible so that your vote will be counted.

		Sincerely,
		Ruediger Naumann-Etienne, PhD Chairman of the Board

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Varex Imaging Corporation
1678 S. Pioneer Road
Salt Lake City, Utah 84104

December 30, 2020

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
AND PROXY STATEMENT

        Varex Imaging Corporation will hold its annual meeting of stockholders on Thursday, February 11, 2021 at 2:00 p.m. Mountain Time. The meeting will be a virtual meeting of stockholders, which will be conducted via a live audio webcast. You will be able to attend the meeting, submit your questions and vote online during the meeting by visiting www.virtualshareholdermeeting.com/VREX21.

        This annual meeting is being held for the following purposes:

1.

to elect two directors to serve until the 2022 Annual Meeting of Stockholders;



2.

to approve, on an advisory basis, our executive compensation as described in the accompanying Proxy Statement;



3.

to ratify the appointment of PricewaterhouseCoopers LLP ("PwC") as our independent registered public accounting firm for fiscal year 2021; and



4.

to transact any other business that properly comes before the annual meeting.

        The Board of Directors has selected December 18, 2020 as the record date for determining stockholders entitled to vote at the annual meeting. A list of stockholders as of that date will be available for inspection during ordinary business hours at our principal executive offices at 1678 S. Pioneer Road, Salt Lake City, Utah 84104 for 10 days before the annual meeting. If you would like to view the list, please contact us to schedule an appointment by calling (801) 978-5447 and leave a message. In addition, the list will be available for inspection by stockholders on the virtual meeting website during the meeting.

        Except for those stockholders that have already requested printed copies of our proxy materials, we are furnishing our proxy materials for this annual meeting to you through the Internet. On or about December 30, 2020, we mailed or emailed to stockholders as of the record date a Notice of Internet Availability of Proxy Materials (the "Notice"). If you received a Notice by mail or email, you will not receive a printed copy of the proxy materials unless you specifically request one. Instead, the Notice explains how to access and review on the Internet all of the important information contained in our Proxy Statement and in our Annual Report on Form 10-K for the fiscal year ended October 2, 2020, as well as how to submit your proxy over the Internet. We believe that mailing or emailing the Notice and posting other materials on the Internet allows us to provide you with the information you need more quickly while lowering the costs of delivery and reducing the environmental impact of the annual meeting. If you received the Notice and would still like to receive a printed copy of our proxy materials, you may request a printed copy of the proxy materials through the Internet at www.proxyvote.com; by telephone at 1-800-579-1639; or by sending an email to sendmaterial@proxyvote.com.

        Whether or not you plan to attend the annual meeting, please vote your shares as soon as possible in accordance with the instructions provided to you to ensure that your vote is counted at the annual meeting.

		By Order of the Board of Directors,
		Kimberley E. Honeysett Corporate Secretary

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GENERAL INFORMATION

Q:

Who is soliciting my proxy?

A:

The Company's Board is sending you this Proxy Statement in connection with the Board's solicitation of proxies for use at the 2021 Annual Meeting of Stockholders or any adjournment or postponement thereof (the "Annual Meeting"). Certain of our directors, officers and employees also may solicit proxies on the Board's behalf by mail, telephone, email, or fax, or in person. We have hired Georgeson Inc., to assist in soliciting proxies from brokers, bank nominees and other stockholders.

Q:

Who is paying for this solicitation?

A:

We will pay for the solicitation of proxies. Our directors, officers and employees will not receive additional remuneration. We expect that we will pay Georgeson Inc. not more than $10,000, plus reasonable out-of-pocket expenses, and also will reimburse banks, brokers, custodians, nominees and fiduciaries for their reasonable charges and expenses to forward our proxy materials to the beneficial owners of our common stock.

Q:

What am I voting on?

A:

You will be voting on three proposals. Proposal One is for the election of Timothy E. Guertin and Walter M Rosebrough, Jr. to the Board for a one-year term ending at the 2022 Annual Meeting of Stockholders.

Proposal Two is an advisory vote on the compensation of the executive officers listed in the Summary Compensation Table (the "Named Executive Officers" or "NEOs") as described in this Proxy Statement.

Proposal Three is the ratification of the appointment of PwC as our independent registered public accounting firm for fiscal year 2021.

Q:

Who can vote?

A:

Only our stockholders of record at the close of business on December 18, 2020 may vote. Each share of common stock outstanding on that date is entitled to one vote on all matters to come before the meeting.

Q:

Why did I receive a one-page notice in the mail regarding the Internet availability of proxy materials this year instead of a full set of proxy materials?

A:

Pursuant to rules adopted by the U.S. Securities and Exchange Commission (the "SEC"), we have elected to provide access to our proxy materials (consisting of the Notice of Annual Meeting, this Proxy Statement, the corresponding proxy form, and our Annual Report on Form 10-K for the fiscal year ended October 2, 2020) over the Internet. Therefore, we are sending a Notice of Internet Availability of Proxy Materials (the "Notice") to our stockholders. Starting on the date of distribution of the Notice, all stockholders will have the ability to access the proxy materials on the website referred to in the Notice or request a printed set of the proxy materials. Instructions on how to access the proxy materials over the Internet or to request printed copies may be found in the Notice. If you request printed versions of the proxy materials by mail, the materials will also include a proxy card or other voting instruction form.

As permitted by SEC rules, we will deliver one Annual Report or Proxy Statement to multiple stockholders sharing the same address unless we have received contrary instructions. We will, upon written or oral request, deliver a separate copy of our Annual Report or Proxy Statement to a

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stockholder at a shared address to which a single copy of our Annual Report or Proxy Statement was delivered and will include instructions as to how the stockholder can notify the Company that the stockholder wishes to receive a separate copy of our Annual Report or Proxy Statement in the future. Stockholders wishing to receive a separate Annual Report or Proxy Statement in the future or stockholders sharing an address wishing to receive a single copy of our Annual Report or Proxy Statement in the future may contact us at investors@vareximaging.com or at:

Varex Imaging Corporation
Attention: Investor Relations
1678 South Pioneer Road
Salt Lake City, Utah 84104
(801) 972-5000

Q:

Can I receive proxy materials for future annual meetings by email rather than receiving a paper copy of the Notice?

A:

Yes, and doing so will help us further reduce the cost and environmental impact of our stockholder meetings. If you are a holder of record, you may elect to receive the Notice or other future proxy materials by email by logging into www.proxyvote.com and entering your email address before you vote if you are voting by Internet or any other time at www.computershare.com/investor. If your shares are registered in street name, please check with your broker, bank, or other nominee about how to receive future proxy materials by email. If you choose to receive proxy materials by email, next year you will receive an email with instructions on how to view those materials and vote before the next annual meeting. Your choice to obtain documents by email will remain in effect until you notify us otherwise.

Q:

What is the difference between a stockholder of record and a "street name" holder?

A:

If your shares are registered directly in your name with Computershare Trust Company, N.A., our stock transfer agent, you are considered the stockholder of record for those shares.

If your shares are held in a stock brokerage account or by a bank or other nominee, you are considered the beneficial owner of the shares and your shares are said to be held in "street name." Street name holders generally cannot vote their shares directly and must instead instruct the broker, bank or other nominee how to vote their shares using the method described under "How do I vote and how do I revoke my proxy?" below.

Q:

How do I vote and how do I revoke my proxy?

A:

If you hold your shares in your own name as a stockholder of record, you may vote your shares either in person at the meeting or by proxy. To vote at the meeting, please visit www.virtualshareholdermeeting.com/VREX21/ and vote when indicated. To vote by proxy, please vote in one of the following ways:

1.

Via the Internet. You may vote through the Internet at www.proxyvote.com by following the instructions provided in the Notice.

2.

Via Telephone. If you received your proxy materials or request printed copies by mail, stockholders located in the United States may vote by calling the toll-free number found on the proxy card.

3.

Via Mail. If you received your proxy materials or request printed copies by mail, you may vote by mail by marking, dating, signing, and mailing the proxy card in the envelope provided.

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Voting by proxy will not affect your right to vote your shares if you attend the Annual Meeting and want to vote in person—by voting in person you automatically revoke your proxy. You also may revoke your proxy at any time before the applicable voting deadline (11:59 p.m. Eastern Time on February 10, 2021) by giving our Secretary written notice of your revocation, by submitting a later-dated proxy card or by voting again using the telephone or Internet (your latest telephone or Internet proxy is the one that will be counted).

If you vote by proxy, the individuals named as proxyholders will vote your shares as you instruct. If you vote your shares over the telephone, you must select a voting option—"For," "Withhold Authority," or "Abstain" (for Proposal One) and "For," "Against," or "Abstain" (for Proposals Two and Three)—for your proxy to be counted on that matter. If you validly vote your shares over the Internet or by mail but do not provide voting instructions on all or any voting proposal, the individuals named as proxyholders will vote your shares FOR the director nominees, FOR Proposal Two, and FOR Proposal Three. In that case, the proxyholders will have full discretion and authority to vote in the election of directors.

If your shares are registered in street name, you must vote your shares in the manner prescribed by your broker, bank, or other nominee. In most instances, you can do this over the telephone or Internet, or if you have received or request a hard copy of the Proxy Statement and accompanying voting instruction form, you may mark, sign, date and mail your voting instruction form in the envelope your broker, bank, or other nominee provides. The materials that were sent to you have specific instructions for how to submit your vote and the deadline for doing so. If you hold shares in street name and would like to revoke your proxy, you must follow the broker, bank, or other nominee's instructions on how to do so. If you wish to vote in person at the Annual Meeting, you must obtain a legal proxy from the broker, bank, or other nominee holding your shares.

Q:

What is the deadline for submitting a proxy?

A:

Telephone and Internet voting facilities for stockholders of record will be available 24 hours a day. To be counted, proxies submitted by telephone or the Internet must be received by 11:59 p.m. Eastern Time on February 10, 2021. Proxies submitted by mail must be received prior to the start of the Annual Meeting.

Q:

What constitutes a quorum?

A:

On the record date, we had 39,171,602 shares of common stock, $0.01 par value, outstanding. Voting can take place at the Annual Meeting only if stockholders owning a majority of the issued and outstanding stock entitled to vote at the Annual Meeting are present in person or represented by proxy.

Q:

What are abstentions and broker non-votes and how do they affect voting?

A:

Abstentions—If you specify that you wish to "abstain" from voting on an item, your shares will not be voted on that item. Abstentions are counted toward establishing a quorum. Abstentions have no effect on the election of directors, but are included in the shares entitled to vote on Proposals Two and Three. On Proposals Two and Three, abstentions have the effect of a vote against the proposal.

Broker Non-Votes—If your broker holds your shares in its name and does not receive voting instructions from you, your broker has discretion to vote these shares on certain "routine" matters, such as the ratification of the appointment of the independent registered public accounting firm. However, on non-routine matters such as the election of directors and the advisory vote to approve executive compensation, your broker must receive voting instructions from you, as your broker does not have discretionary voting power for those particular items. So long as the broker has

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discretion to vote on at least one proposal, these "broker non-votes" are counted toward establishing a quorum. When voted on "routine" matters, broker non-votes are counted toward determining the outcome of that "routine" matter.

Q:

What vote is needed?

A:

For Proposal One, the election of directors, a majority of the votes cast at the Annual Meeting at which a quorum is present shall elect the nominees for director. For purposes of the election of directors, a "majority of votes cast" means that the number of shares voted "for" a director's election exceeds 50% of the number of votes cast with respect to that director's election. Votes cast shall include direction to withhold authority in each case and exclude abstentions with respect to that director's election.

For Proposals Two and Three, an affirmative vote of the majority of shares present in person or represented by proxy at the Annual Meeting and entitled to vote is required.

Q:

Is cumulative voting permitted for the election of directors?

A:

No, in accordance with our certificate of incorporation, you may not cumulate your votes for the election of directors.

Q:

What happens if the director nominees do not receive a majority of votes cast at the Annual Meeting?

A:

In an uncontested election, if a nominee for director who is an incumbent director is not elected and no successor has been elected at the Annual Meeting, our Bylaws indicate that the director is to promptly tender his or her resignation to the Board. The Nominating Committee is then to make a recommendation to the Board as to whether to accept or reject the tendered resignation, or whether other action should be taken. The Board is then to act on the tendered resignation, taking into account the Nominating Committee's recommendation, and publicly disclose its decision. Any director who tenders his or her resignation is not to participate in the recommendation of the Nominating Committee or the decision of the Board with respect to his or her resignation. If the director's resignation is not accepted by the Board, the director will continue to serve until the next annual meeting and until his or her successor is duly elected, or his or her earlier resignation or removal. If the director's resignation is accepted by the Board, or if a nominee for director is not elected and the nominee is not an incumbent director, then the Board, in its sole discretion, may fill any resulting vacancy or decrease the size of the Board pursuant to the provisions of our Bylaws.

Q:

Can I vote on other matters?

A:

You are entitled to vote on any other matters that are properly brought before the Annual Meeting. Our Bylaws limit the business conducted at any annual meeting to (1) business in the notice of the Annual Meeting, (2) business directed by the Board and (3) business brought by a stockholder of record entitled to vote at the meeting so long as the stockholder has met the requirements for submitting stockholder proposals provided in our Bylaws. Under our Bylaws, a stockholder must notify our Secretary in writing (at our Salt Lake City, Utah headquarters) of the proposal not less than 90 days nor more than 120 days before the anniversary of the prior year's annual meeting, which for the 2022 Annual Meeting of Stockholders will be no earlier than October 14, 2021 and no later than November 13, 2021. The notice must give a brief description of the business to be brought before the Annual Meeting, the reasons for conducting the business and the text of the proposal, as well as the name and address of the stockholder giving the notice and the beneficial owner on whose behalf the proposal is made, the number of shares owned and

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information about that beneficial ownership, all as detailed in our Bylaws. The notice must also describe any material interest the stockholder or beneficial owner has in the business and arrangements between such stockholder or beneficial owner and any other person in connection with the proposal and must include certain representations, all as detailed in our Bylaws.

We do not currently expect any matters other than those listed in this Proxy Statement to come before the Annual Meeting. If any other matter is presented, your proxy gives the individuals named as proxyholders the authority to vote your shares to the extent authorized by Rule 14a-4(c) under the Securities Exchange Act of 1934 (the "Exchange Act").

Q:

When must I submit a proposal to have it considered for presentation in next year's proxy materials?

A:

To have your stockholder proposal be considered for presentation in the proxy statement and proxy card for our 2022 Annual Meeting of Stockholders, rather than just voted upon at the meeting without inclusion in the proxy statement and proxy card, a stockholder must submit to our Secretary (at our Salt Lake City, Utah headquarters) a written proposal no later than September 3, 2021. The submission must contain the information required under Rule 14a-8 under the Exchange Act.

Q:

How do I suggest potential candidates for director positions?

A:

A stockholder may suggest one or more potential candidates for consideration by the Board as nominees for election as one of our directors at an annual meeting of stockholders. This can be done by notifying our Corporate Secretary in writing (at our Salt Lake City, Utah headquarters) not less than 90 days nor more than 120 days before the anniversary of the prior year's annual meeting, which for the 2022 Annual Meeting of Stockholders will be no earlier than October 14, 2021 and no later than November 13, 2021. The notice must include all information about the potential candidate that must be disclosed in proxy solicitations pursuant to Regulation 14A under the Exchange Act (including the potential candidate's written consent to being named as a nominee and serving as a director) and a description of all material monetary agreements during the past three years and any other material relationships, between such stockholder and a beneficial owner on whose behalf the potential candidacy is made and their affiliates and associates, or others acting in concert, on the one hand, and each potential candidate, and his/her affiliates and associates, or others acting in concert, on the other hand, including all information that would be required to be disclosed pursuant to Item 404 under Regulation S-K if the stockholder were a "registrant," all as described in our Bylaws. The notice must also include certain additional information about and representations by, the stockholder and/or the beneficial owner, all as detailed in our Bylaws.

Q:

How does the Board select nominees for election to the Board?

A:

The Nominating Committee will consider potential candidates for directors submitted by stockholders, in addition to those suggested by other Board members and members of our management, and does not evaluate potential candidates differently based upon the source of the potential candidate. The Nominating Committee considers and evaluates each properly submitted potential candidate for director in an effort to achieve a balance of skills and characteristics on the Board, as well as to ensure that the composition of the Board at all times adheres to the independence requirements applicable to companies listed on the Nasdaq Global Select Stock Market ("Nasdaq") and other regulatory requirements applicable to us. Please refer to "Proposal One—Election of Directors" and our Corporate Governance Guidelines for additional details on our policy, process, and membership criteria. A stockholder may recommend potential candidates

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for director by notifying our Corporate Secretary in writing (at our Salt Lake City, Utah headquarters) as detailed in the question and answer above.

Q:

How may I communicate with the Board?

A:

Stockholders and other interested parties may communicate directly with the Board, the Board's Chairman or any other director or with the independent directors as a group or any other group of directors through the Board's Chairman by sending an email to boardofdirectors@vareximaging.com. Messages received will be forwarded to the appropriate director or directors.

Q:

When and where is the Annual Meeting being held?

A:

The Annual Meeting will be held on Thursday, February 11, 2021 at 2:00 p.m. Mountain Time. The meeting will be a virtual meeting of stockholders, which will be conducted via a live audio webcast available at www.virtualshareholdermeeting.com/VREX21. If you have any questions about attending the Annual Meeting, please contact our Investor Relations department at investors@vareximaging.com.

Q:

How can I find the results of the Annual Meeting?

A:

Preliminary results will be announced at the Annual Meeting. Final results will also be published in a Current Report on Form 8-K to be filed with the SEC within four business days after the Annual Meeting. If the official results are not available at that time, we will provide preliminary voting results in the Form 8-K and will provide the final results in an amendment to the Form 8-K as soon as they become available.

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PROPOSAL ONE
ELECTION OF DIRECTORS

Our Board; Selection of Nominees

        In accordance with our certificate of incorporation, commencing with our 2020 annual meeting of stockholders, we began to declassify our board as follows: (i) the class of directors elected at our 2020 annual meeting of stockholders was elected for a two-year term; (ii) the class of directors standing for election at the Annual Meeting will stand for election for a one-year term; and (iii) commencing with our 2022 annual meeting of stockholders, and at each annual meeting thereafter, all directors will stand for election for a one-year term.

        Timothy E. Guertin and Walter M Rosebrough, Jr. have terms expiring at the Annual Meeting and are standing for election for a one-year term. Jocelyn D. Chertoff, M.D., Jay K. Kunkel, Ruediger Naumann-Etienne, PhD, Sunny S. Sanyal, and Christine A. Tsingos have terms expiring at the 2022 annual meeting of stockholders.

        As discussed above, the current terms of Messrs. Guertin and Rosebrough will expire at the Annual Meeting. Messrs. Guertin and Rosebrough have each been recommended by the Nominating Committee and nominated by the Board for election by the stockholders to a one-year term ending at the 2022 Annual Meeting.

        Our Nominating Committee is charged with identifying, evaluating, and recommending director nominees to the full Board. There are no minimum qualifications for directors. The Nominating Committee generally seeks individuals who have or provide:

•

Knowledge about our industries and technologies;



•

International business experience;



•

Cultural, gender, ethnic or age diversity;



•

Experience in financial oversight, and a strong reputation with the financial community;



•

Experience in business management and the potential to succeed top management in the event of unexpected necessary Board intervention;



•

Broad experience at the policy making level in business, government, education, technology, or public interest; or



•

Business contacts, knowledge or influence useful to our business and product lines.

        We believe that all of our directors should be committed to enhancing stockholder value, represent the interests of all stockholders, and have sufficient time to carry out their duties and to provide insight and practical wisdom based on experience. Their service on other boards of public companies should be limited to a number that permits them, given their individual circumstances, to perform and carry out all director duties in a responsible manner. The Board believes that directors who are full-time employees of other companies should not serve on more than three public company boards at one time, and that directors who are retired from full-time employment should not serve on more than four public company boards. Further, while we do not have a formal diversity policy, our Board and Nominating Committee are committed to actively seeking highly qualified women and individuals from minority groups to include in the pool from which new candidates are selected.

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        When seeking new director candidates, the Nominating Committee will consider potential candidates for directors submitted by Board members, members of our management and our stockholders. The Nominating Committee does not evaluate candidates differently based upon the source of the nominee.

        The individuals named as proxyholders will vote your proxy for the election of the nominee directors unless you direct them to withhold your vote. If one or both nominees become unable to serve as a director before the Annual Meeting (or decides not to serve), the individuals named as proxyholders may vote for a substitute.

        Set forth below are the names and ages of the nominees and the other continuing directors, the years they became directors, their principal occupations or employment for at least the past five years, and the names of other public companies for which they serve as a director or have served as a director during the past five years. Also set forth are the specific experience, qualifications, attributes, or skills that led our Nominating Committee to conclude that each person should serve as a director. All our directors have held high-level positions in their fields and have experience in dealing with complex issues. We believe that each is an individual of high character and integrity and exercises sound judgment.

Nominees for Election for a One-Year Term Ending with the 2022 Annual Meeting:

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Director Qualifications Matrix

        The following matrix is provided to illustrate the skills and qualifications of the nominated and continuing members of our Board and demonstrate our commitment to inclusiveness and diversity.

Governance of the Company

Overview

        We are committed to strong corporate governance. Our governance policies and practices include:

Ethical Conduct and Strong Governance

•

The Board's Corporate Governance Guidelines articulate clear corporate governance policies, which include basic director duties and responsibilities.



•

The fundamental responsibility of the Board is to represent the interests of the stockholders of the Company. In fulfilling its responsibilities, the Board performs the following principal functions: (i) reviewing corporate strategy, annual operating budgets, mergers and acquisitions over a certain threshold and significant financings; (ii) providing general oversight of the Company's business; (iii) selecting, evaluating, and compensating the Company's Chief Executive Officer and other executive officers; (iv) evaluating and establishing Board processes, performance and compensation; (v) selecting directors; and (vi) monitoring legal and ethical conduct.



•

The Board has adopted a Code of Conduct applicable to all our employees, including the executive officers, and to our directors.

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•

We have a hotline for employees to report concerns regarding ethics and financial matters, including accounting, internal controls, and audit concerns, and have established procedures for anonymous submission of these matters.



•

Each director is responsible for disclosing to the Nominating Committee and General Counsel situations that he or she reasonably believes give rise to a potential conflict of interest or related person transaction. The Board, upon recommendation of the Nominating Committee and after consultation with the Company's legal counsel, determines on a case-by-case basis or where it deems appropriate by specific category whether such a conflict of interest or related person transaction exists. Please refer to the discussion under "Certain Relationships and Related Transactions" for more information.



•

The Board conducts an annual assessment on its effectiveness and the effectiveness of each of its committees.



•

Directors are expected to attend all stockholder meetings.



•

The Board encourages directors to participate in developmental continuing education programs applicable to their position as a director of the Company, including, but not limited to, those recommended by the Nominating Committee.

Director Independence

•

The Company has an independent non-employee director as Chairman, and our Bylaws mandate that the roles of Chairman and Chief Executive Officer must be separated.



•

A majority of the Board members are independent of the Company and our management. The definition of "independent" is included in our Corporate Governance Guidelines, which can be found through the "Corporate Governance" link on the Investors page on our website at www.vareximaging.com.



•

All members of our Board committees—the Audit Committee, the Compensation Committee, and the Nominating Committee—are independent.

Majority Voting

•

The Company's Bylaws and Corporate Governance Guidelines include a majority voting standard for uncontested director elections. Under this standard, if the number of nominees timely nominated for an annual meeting does not exceed the number of directors to be elected, each director shall be elected if the number of shares voted "for" a director's election exceeds 50% of the number of votes cast with respect to that director's election. Votes cast shall include direction to withhold authority in each case and exclude abstentions with respect to that director's election. Any incumbent director who is not re-elected by the majority voting standard will be required to tender his or her resignation promptly following the certification of the stockholders' vote. The Nominating Committee will consider such resignation and recommend to the Board whether to accept or reject the resignation, or whether other action should be taken. The Board will act on the Nominating Committee's recommendation within 90 days following the certification of the stockholders' vote and will promptly disclose publicly its decision regarding whether to accept the director's resignation.

Board Structure

•

In accordance with our certificate of incorporation, commencing with the 2020 annual meeting, we began to declassify our board as follows: (i) the class of directors elected at our 2020 annual meeting were elected for a two-year term; (ii) the class of directors standing for election at the

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Annual Meeting will stand for election for a one-year term; and (iii) commencing with our 2022 annual meeting, and at each annual meeting thereafter, all directors will stand for election for a one-year term.

•

The Board is committed to inclusiveness and diversity.



•

The Board does not believe that rotating committee members at set intervals should be mandated as a policy since there may be reasons at a given point in time to maintain an individual Board member's committee membership for a longer period. However, for the Board's standing committees, our guidelines state that the Nominating Committee should consider recommending a new member to each committee every three years, and rotating the Chairman of a committee as appropriate.



•

The annual cycle of agenda items for Board and committee meetings reflects Board and committee requests and changing business and legal issues. The Board receives regularly scheduled presentations from our finance, legal and compliance departments and major business units and operations, and reviews enterprise risk at least annually. The Board's and committees' annual agenda includes review of, among other items, our long-term strategic plans and periodic reports on progress against these plans, emerging and disruptive technologies, potential acquisition or investment targets, capital projects, the evaluation of the Chief Executive Officer and management, and Board succession.

Director and Executive Compensation

•

The Board has adopted stock ownership guidelines for our directors and executive officers. Each non-employee director is expected to own shares valued at five times the directors' annual retainer fee, with shares subject to deferred stock units counting for this purpose. Our Chief Executive Officer is expected to own shares valued at six times base salary, our Chief Financial Officer at three times base salary, and each of our other executive officers at one times base salary. Individuals who become subject to these stock ownership guidelines are generally required to achieve the applicable ownership level within five years of first becoming subject to the guidelines.



•

The Board has adopted a recoupment policy to recover certain incentive payments made to executives in the event of a restatement of our financial statements.

Director Independence

        The Board has determined that Dr. Chertoff, Mr. Guertin, Mr. Kunkel, Dr. Naumann-Etienne, Mr. Rosebrough, and Ms. Tsingos are "independent" for purposes of the Nasdaq listing requirements and under our Corporate Governance Guidelines. Mr. Sanyal, our President and Chief Executive Officer, is an employee and therefore not "independent." The Board considered transactions and relationships (such as Ms. Tsingos' service on the board of Envista Holdings Corporation, a customer of the Company), both direct and indirect, between each director (and his or her immediate family) and the Company and its subsidiaries and affirmatively determined that none of Dr. Chertoff, Mr. Kunkel, Dr. Naumann-Etienne, Dr. Reinhardt, Mr. Rosebrough, and Ms. Tsingos has any material relationship, either direct or indirect, with us other than as a director and stockholder.

Board Meetings

        The Board met eight times in fiscal year 2020. Each of the Board meetings included executive sessions of either the independent directors or the non-management directors, or both, with Dr. Naumann-Etienne presiding at such meetings. We have three standing committees of the Board: the Audit Committee, the Compensation Committee, and the Nominating Committee. Each current

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director attended at least 75% of the total Board meetings and meetings of the committees on which they served that were held in fiscal year 2020. Directors are encouraged to attend meetings of committees on which they do not serve as members. All directors of the Company are strongly encouraged to attend our annual meeting of stockholders. All the directors then serving on the Board were present at our 2020 Annual Meeting, except for Mr. Kunkel who was unable to attend due to COVID-19 related travel restrictions.

Board Leadership Structure

        The Board has adopted Corporate Governance Guidelines designed to promote the functioning of the Board and its committees. These Guidelines and our Bylaws address Board composition, Board functions and responsibilities, qualifications, leadership structure, committees, and meetings.

        Our Bylaws require that the Chairman of the Board be chosen from among the directors and may not be the Chief Executive Officer. The Board has determined that having Dr. Naumann-Etienne, who is "independent" within the meaning of the Nasdaq listing standards, serve as Chairman and Mr. Sanyal serve as Chief Executive Officer is in the best interests of the stockholders. We have separated the roles of Chief Executive Officer and Chairman in recognition of the differences between the two roles. The Chief Executive Officer is responsible for setting our strategic direction and for our day-to-day leadership and performance, while the Chairman provides guidance to the Chief Executive Officer and leads the Board. The Board believes its administration of its risk oversight function has not affected the Board's leadership structure.

The Board's Role in Risk Oversight

        Our Company faces a number of risks, including operational, economic, financial, legal, regulatory, and competitive risks. Our management is responsible for the day-to-day management of the risks we face. While our Board, as a whole, has ultimate responsibility for the oversight of risk management, it administers its risk oversight role in part through the Board committee structure, with the Audit Committee, the Compensation Committee, and the Nominating Committee responsible for monitoring and reporting on the material risks associated with their respective subject matter areas. In fiscal year 2019, we updated the charter of the Audit Committee to reference its oversight responsibility with respect to cybersecurity.

        The Board's role in our risk oversight process includes receiving regular reports from members of senior management, as well as external advisors such as PwC, on areas of material risk to us, including operational, economic, financial, legal, regulatory and competitive risks. The full Board (or the appropriate committee in the case of risks that are reviewed by a particular committee) receives these reports from those responsible for the relevant risk in order to enable it to understand our risk exposures and the steps that management has taken to monitor and control these exposures. When a committee receives the report, the Chairman of the relevant committee generally provides a summary to the full Board at the next Board meeting. This enables the Board and its committees to coordinate the risk oversight role. The Audit Committee assists the Board in oversight and monitoring of principal risk exposures related to financial statements, legal, ethical compliance, regulatory, and other matters, as well as related mitigation efforts. The Compensation Committee assesses, at least annually, the risks associated with our compensation policies. The Nominating Committee assists the Board in oversight of risks that we have relative to compliance with corporate governance standards.

Board Committees and Committee Meetings

        Each of our standing committees has a written charter approved by the Board that clearly establishes the committee's roles and responsibilities. Copies of the charters for the Audit Committee, the Compensation Committee, and the Nominating Committee, as well as our Corporate Governance

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Guidelines and Code of Conduct, can be found through the "Corporate Governance" link on the Investors page on our website at www.vareximaging.com. Please note that information on, or that can be accessed through, our website is not part of these proxy soliciting materials, is not deemed "filed" with the SEC and is not to be incorporated by reference into any of our filings under the Securities Act of 1933, as amended, or the Exchange Act, and, except for information filed by the Company under the cover of Schedule 14A, is not deemed to be proxy soliciting materials.

Audit Committee
Chair: Ms. Tsingos
Additional Members: Dr. Chertoff, Mr. Kunkel, and Dr. Naumann-Etienne
Meetings in Fiscal Year 2020: 9

Committee Functions:

•

Oversees our accounting and financial reporting process and audits of financial statements.



•

Assists the Board in oversight and monitoring of (i) the integrity of our financial statements, (ii) our compliance with legal and regulatory requirements, (iii) the independent registered public accounting firm's qualifications and independence, (iv) the performance of our internal audit function and of the independent registered public accounting firm and (v) the principal risk exposures facing the Company that are related to financial statements, legal, regulatory and other similar matters, such as risks related to cybersecurity, as well as the Company's related mitigation efforts.



•

Prepares the Audit Committee Report included in our proxy statement.



•

Reports to the Board the results of its monitoring and recommendations.



•

Provides to the Board any additional information and materials as the committee may determine is necessary to make the Board aware of significant financial matters requiring the Board's attention.

Member Qualifications

        Each member of the Audit Committee meets the additional requirements regarding independence for Audit Committee members under Nasdaq listing requirements. The Board has determined that Ms. Tsingos is an "audit committee financial expert" as defined in Item 407(d)(5) of Regulation S-K under the Exchange Act based upon her experience as the chief financial officer of Bio-Rad Laboratories between 2002 and 2019 and as the chief financial officer of Attest Systems, Inc. between 2000 and 2002.

Compensation and Management Development Committee
Chair: Mr. Rosebrough
Additional Members: Mr. Guertin, Mr. Kunkel, and Dr. Naumann-Etienne
Meetings in Fiscal Year 2020: 5

Committee Functions:

•

Discharges the Board's responsibilities relating to compensation of our executive officers.



•

Evaluates our compensation plans, policies and programs for executive officers and recommends the establishment of policies dealing with various compensation and employee benefit plans.



•

Oversees our stock and cash incentive plans.



•

Reviews and discusses with management and recommends to the Board whether the disclosures under "Compensation Discussion and Analysis" should be included in our proxy statement.

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•

Reviews the compensation paid to directors for service on the Board and its committees.



•

Provides advice on management development matters that have major implications for the growth, development, and depth of our management team, including reviewing succession plans.



•

Assesses, at least annually, the risks associated with our compensation policies, and reports to the Board and the Audit Committee whether our compensation policies and practices create risks that are reasonably likely to have a material adverse effect on us.

        The Compensation Committee determines all compensation for our NEOs and certain other of the Company's officers. Before making decisions on compensation for individuals other than our Chief Executive Officer, the Compensation Committee reviews with our Chief Executive Officer each individual's performance and accomplishments over the prior year. Except for his own position, our Chief Executive Officer makes recommendations to the Compensation Committee about base salary increases, any changes to the incentive plan target awards and the amount of equity awards for each executive. However, the Compensation Committee retains and does not delegate any of its exclusive power to determine all matters of executive compensation and benefits for the designated officers. The Compensation Committee meets with its independent advisors and other independent members of the Board to determine the Chief Executive Officer's compensation.

Compensation Committee Advisors

        To independently assist and advise the Compensation Committee, the Compensation Committee has retained Frederic W. Cook & Co., Inc. ("FW Cook") as its compensation consultant since May 2018. The engagement with FW Cook is exclusively with the Compensation Committee, which has sole authority to retain and terminate any compensation consultant or other advisor that it uses. FW Cook does not have any relationship with the Company or management except as it may relate to performing services on behalf of the Compensation Committee. The Compensation Committee has assessed the independence of FW Cook pursuant to SEC rules and concluded that no conflict of interest exists that would prevent the company from independently representing the Compensation Committee.

        The compensation consultant reviews and analyzes our executive compensation programs, compensation strategy and effectiveness of pay delivery. The compensation consultant provides market information on compensation trends and practices and makes recommendations to the Compensation Committee based on competitive data. The compensation consultant advises the Compensation Committee chair on agenda items for Compensation Committee meetings, reviews management proposals and is available to perform special projects at the Compensation Committee chair's request. The compensation consultant also periodically provides the Compensation Committee with updates on regulatory and legislative developments pertaining to executive compensation and compensation committee governance. The compensation consultant provides analyses and recommendations that inform the Compensation Committee's decisions, but does not decide or approve any compensation actions. As needed, the Compensation Committee also consults with the compensation consultant on program design changes.

Member Qualifications

        In addition to being independent, each member of the Compensation Committee is a "non-employee director" for purposes of the Exchange Act.

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Nominating and Corporate Governance Committee
Chair: Dr. Chertoff
Additional Members: Mr. Guertin, Mr. Rosebrough, and Ms. Tsingos
Meetings in Fiscal Year 2020: 4

Committee Functions:

•

Develops and recommends to the Board corporate governance principles, including our Corporate Governance Guidelines, Code of Conduct, and protocol regarding conflicts of interest and related person transactions.



•

Identifies, evaluates, and recommends to the Board potential nominees to the Board, including those received from stockholders.



•

Reviews with the Board annually the independence, skills and characteristics of all individual members and the skills and characteristics of the Board as a whole in determining whether to recommend incumbent directors for re-election.



•

Evaluates and makes recommendations to the Board concerning the size of the Board, the appointment of directors to Board committees, the qualifications of committee members and the selection of Board committee chairs.



•

Oversees the annual review of director independence and evaluation of the Board's performance.



•

Assists the Board in oversight and monitoring the Company's Environmental, Social, and Governance (ESG) programs.

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PROPOSAL TWO
ADVISORY VOTE TO APPROVE OUR EXECUTIVE COMPENSATION

Background to the Advisory Vote

        Under Section 14A of the Exchange Act, stockholders are able to vote to approve, on an advisory (non-binding) basis (an "Advisory Vote on Compensation"), the compensation of the NEOs as disclosed in this Proxy Statement in the Compensation Discussion and Analysis section and the related executive compensation tables. Accordingly, we are asking stockholders to approve, on an advisory (non-binding) basis, the following advisory resolution at our Annual Meeting:

"RESOLVED, that the compensation of the Company's named executive officers, as disclosed in the Annual Proxy Statement for the 2021 Annual Meeting of Stockholders pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, the Compensation Tables, and the other related tables and disclosure, is hereby APPROVED."

        The Board recommends a vote FOR this resolution because it believes that the policies and practices described in the Compensation Discussion and Analysis section of this Proxy Statement are effective in achieving the Company's goals of attracting, retaining and motivating our executives, rewarding individual and Company performance and aligning the executives' long-term interests with those of the Company's stockholders.

        We encourage stockholders to read the Compensation Discussion and Analysis beginning on page 29 of this Proxy Statement, as well as the related compensation tables and narrative, which provide detailed information on the Company's compensation policies and practices and the compensation of our NEOs.

        This "say-on-pay" vote is a non-binding advisory vote. The approval or disapproval of this proposal by stockholders will not require the Board or the Compensation Committee to take any action regarding our executive compensation practices. Nonetheless, the Board and the Compensation Committee will consider the outcome of the vote when making future compensation decisions for our NEOs.

Required Vote

        Approval of the resolution above (on a non-binding, advisory basis) requires that the number of votes cast at the Annual Meeting, in person or by proxy, in favor of the resolution exceeds the number of votes cast in opposition to the resolution.

Next "Say-On-Pay" Advisory Vote

        We currently conduct an annual Advisory Vote on Compensation and the Board expects to hold the next Advisory Vote on Compensation at the 2022 Annual Meeting.

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PROPOSAL THREE
RATIFICATION OF THE APPOINTMENT OF OUR INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM

Selection of the Accounting Firm

        The Audit Committee has appointed PwC as our independent registered public accounting firm to perform the audit of our financial statements for fiscal year 2021, and we are asking you and other stockholders to ratify this appointment.

        The Audit Committee, which is directly responsible for the appointment, compensation, retention and oversight of our independent registered public accounting firm, annually reviews the independent registered public accounting firm's independence, including reviewing all relationships between the independent registered public accounting firm and us and any disclosed relationships or services that may impact the objectivity and independence of the independent registered public accounting firm, and the independent registered public accounting firm's performance. Additionally, the Audit Committee also noted that our PwC engagement audit partner is subject to regular rotation and the most recent rotation occurred in fiscal year 2018. As a matter of good corporate governance, the Board, upon recommendation of the Audit Committee, has determined to submit to stockholders for ratification, the appointment of PwC. In the event that a majority of the shares of common stock present in person or represented by proxy at the Annual Meeting and entitled to vote on Proposal Three does not ratify this appointment of PwC, the Audit Committee will review its future appointment of PwC.

        We expect that a representative of PwC will be present at the Annual Meeting and that such representative will have an opportunity to make a statement if he or she desires and will be available to respond to appropriate questions.

Policy on Audit Committee Pre-Approval of Services of Independent Registered Public Accounting Firm

        The Audit Committee must pre-approve all audit and permissible non-audit services to be provided by the independent registered public accounting firm. These services may include audit services, audit-related services, tax services and other services. Pre-approval is generally requested annually and any pre-approval is detailed as to the particular service, which must be classified in one of the four categories of services. The Audit Committee may also, on a case-by-case basis, pre-approve services that are not contained in the annual pre-approval request. In connection with this pre-approval policy, the Audit Committee also considers whether the categories of pre-approved services are consistent with the rules on accountant independence promulgated by the SEC.

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Principal Accountant Fees and Services

        The following is a summary of the fees billed or to be billed to us by PwC for professional services rendered for the fiscal years ended October 2, 2020 and September 27, 2019.

        The Audit Committee determined that PwC's provision of these services, and the fees that we paid for these services, are compatible with maintaining the independence of the independent registered public accounting firm. The Audit Committee pre-approved all services that PwC provided in fiscal year 2020 and 2019 in accordance with the pre-approval policy discussed above.

Required Vote

        Ratification of the appointment of PwC as our independent registered public accounting firm for the fiscal year ending October 1, 2021 requires an affirmative vote of the majority of shares present in person or represented by proxy at the Annual Meeting and entitled to vote. Unless marked to the contrary, proxies received will be voted "FOR" ratification of the appointment of PwC.

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AUDIT COMMITTEE REPORT

        The Audit Committee of the Board (the "Audit Committee") consists of the four directors whose names appear below. Each member of the Audit Committee meets the definition of "independent director" and otherwise qualifies to be a member of the Audit Committee under Nasdaq listing requirements.

        The Audit Committee's general role is to assist the Board in monitoring the Company's financial reporting process and related matters. Its specific responsibilities are set forth in its charter. The Audit Committee reviews its charter at least annually, and did so in the August 2020 Audit Committee meeting.

        As required by the charter, the Audit Committee reviewed the Company's financial statements for fiscal year 2020 and met with management, as well as with representatives of PricewaterhouseCoopers LLP, the Company's independent registered public accounting firm, to discuss the financial statements. The Audit Committee also discussed with members of PricewaterhouseCoopers LLP the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board.

        In addition, the Audit Committee received the written disclosures and letters required by the applicable requirements of the Public Company Accounting Oversight Board regarding PricewaterhouseCoopers LLP's communications with the Audit Committee concerning independence and discussed with members of PricewaterhouseCoopers LLP its independence from management and the Company.

        Based on these discussions, the financial statement review and other matters it deemed relevant, the Audit Committee recommended to the Board that the Company's audited financial statements for fiscal year 2020 be included in the Company's Annual Report on Form 10-K for the fiscal year ended October 2, 2020.

        Furthermore, in connection with the standards for independence promulgated by the Securities and Exchange Commission, the Audit Committee reviewed the services provided by PricewaterhouseCoopers LLP, the fees the Company paid for these services, and whether the provision of the services is compatible with maintaining the independence of the independent registered public accounting firm. The Audit Committee deemed that the provision of the services is compatible with maintaining that independence.

        The Audit Committee has selected PricewaterhouseCoopers LLP to be the Company's independent registered public accounting firm for fiscal year 2021. In doing so, the Audit Committee considered the results from its review of PricewaterhouseCoopers LLP's independence, including (a) all relationships between PricewaterhouseCoopers LLP and the Company and any disclosed relationships or services that may impact their objectivity and independence, (b) PricewaterhouseCoopers LLP's performance and qualification as an independent registered public accounting firm and (c) the fact that the PricewaterhouseCoopers LLP engagement audit partner is rotated on a regular basis as required by applicable laws and regulations. As a matter of good corporate governance, the Audit Committee has determined to submit its appointment of PricewaterhouseCoopers LLP to the stockholders for ratification. In the event that a majority of the shares of common stock present or represented at the Annual Meeting and entitled to vote on the matter does not ratify this appointment, the Audit Committee will review its future appointment of PricewaterhouseCoopers LLP.

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STOCK OWNERSHIP

Beneficial Ownership of Certain Stockholders, Directors and Executive Officers

        This table shows as of December 4, 2020: (1) the beneficial owners of more than five percent of our common stock and the number of shares they beneficially owned based on information provided in their most recent filings with the SEC; and (2) the number of shares each director, each nominee for director and each NEO and all directors, nominees for director and executive officers as a group beneficially owned, as reported by each person. Except as otherwise indicated, the address of each is 1678 S. Pioneer Road, Salt Lake City, Utah 84104. Beneficial ownership is determined under the rules of the SEC and generally includes voting or investment power with respect to securities. Except as noted, each person has sole voting and investment power over the shares shown in this table. For each individual and group included in the table below, the percentage ownership is calculated by dividing the number of shares beneficially owned by the person or group, which includes the number of shares of common stock that the person or group had the right to acquire on or within 60 days after December 4, 2020 by the sum of the 39,171,602 shares of common stock outstanding on December 4, 2020, plus the number of shares of common stock that the person or group had the right to acquire on or within 60 days after December 4, 2020.

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Delinquent Section 16(a) Reports

        Under U.S. securities laws, directors, certain officers, and persons holding more than 10% of our common stock must report their initial ownership of our common stock and any changes in their ownership to the SEC. The SEC has designated specific due dates for these reports and we must identify in this Proxy Statement those persons who did not file these reports when due. Based solely on our review of copies of the reports filed with the SEC and the written representations of our directors and executive officers, except as set forth in the following sentence, we believe that each person who at any time during the 2020 fiscal year was a director or an executive officer or held more than 10% of our common stock filed the required reports on time in fiscal year 2020. The Form 4s covering two transactions for each of Sunny Sanyal, Kimberley Honeysett, Mark Jonaitis, Brian Giambattista, and one transaction for Kevin Yankton that were due on February 18, 2020, were not filed until February 28, 2020.

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EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

Background

        Prior to January 28, 2017, we were a wholly-owned subsidiary of Varian Medical Systems, Inc. ("Varian"). On January 28, 2017, Varian completed its spin-off of the Company (the "Spin-off") and we became an independent publicly traded company. Our executives have been compensated under the Varex executive compensation program since fiscal year 2018. The discussion in this section provides an overview of, and describes details regarding, the compensation programs for our NEOs and Board in fiscal year 2020. It includes a discussion of our business highlights, our philosophy, programs, governance, along with actual and target compensation received.

        In establishing the executive compensation program for fiscal year 2020, the Compensation Committee continued to review and revise our executive compensation program to better align its targeted results with the Company's business strategy and objectives as a stand-alone, publicly-traded company. For 2020, the Compensation Committee approved:

•

a long-term incentive (LTI) program comprised of time-based RSUs (50%) and, new for fiscal year 2020, performance-based stock options (50%); and, consistent with 2019,



•

an annual cash incentive plan that incorporated financial measures of (1) revenue, (2) free cash flow, and (3) EBITDA of the Company as well an assessment of pre-determined individual strategic goals. For solution line executives, the annual cash incentive plan also incorporates revenue and contribution margin of each executive's solution or business line.

        The Compensation Committee believes this program incentivizes the NEOs to manage the business and take actions that will increase the market valuation of the Company over the long term.

Business Highlights

        In fiscal year 2020, the ongoing impact of COVID-19 created significant challenges for our business and operations. During this extraordinary year, we focused on improving items in our control to better position Varex for growth once the economy recovers from the COVID-19 pandemic.

Cost Reduction Actions

        We targeted $28 million of annualized cost reductions which are expected to be fully realized starting in the second quarter of fiscal year 2021. Approximately 75% of the cost reductions are expected to benefit gross margin and about 25% to benefit operating expenses.

•

We completed the closure of our Santa Clara facility ahead of schedule, which we expect to provide annualized savings of about $14 million, or $3.5 million per quarter.



•

Additionally, we reduced 94 positions in the U.S. in the fourth quarter of the fiscal year which we expect to provided annualized savings of $14 million beginning in the first quarter of fiscal year 2021.

New Capital Structure

        During the second half of fiscal 2020, we put in place a more flexible debt structure that also helped increase our liquidity.

•

In the fourth quarter of fiscal year 2020, we completed a private offering of $300 million of 7.875% senior secured notes due in 2027, and also entered into an asset-based revolving credit facility of up to $100 million, which currently remains undrawn. We used the proceeds from the

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offering primarily to pay off our prior credit facility. The remaining net proceeds from the notes offering were added to our cash balance and are expected to be used for general corporate purposes.

•

In the third quarter of fiscal year 2020, we completed a private offering of $200 million of 4.00% convertible senior notes due in 2025. In connection with that transaction, we entered into bond hedge and warrant transactions designed to offset the effect of potential dilution up to a 50% premium above the closing stock price prior to the pricing of the convertible notes.

China

        China appears to have recovered from the initial shutdown due to COVID-19. In fiscal year 2020, the China market represented 11% of our total company revenues. Our local Chinese OEM customers have continued to successfully bring new CT systems to market. Strong sales of CT systems by local Chinese manufacturers led to a significant increase in the number of CT tubes that we shipped to China in fiscal year 2020 over the prior fiscal year.

New Products

        Our R&D teams have been actively engaged with our customers during fiscal year 2020 with new product development efforts.

•

We are in the final stages of commercializing our new Z Platform digital detectors. This new technology is initially targeted at cardiac, surgery, dental and other fluoroscopy imaging systems that need high performance dynamic detectors that can reduce X-ray dose used during imaging. Since introducing this platform at RSNA last year, we have three new Z Platform models that are now available to our customers for evaluation and integration. Additional models are in development and we expect to release them to customers during fiscal year 2021.



•

We began to make engineering prototypes of a new family of liquid metal bearing X-ray tubes available to our customers recently for evaluation. The initial models are designed for CT and Cardiac applications, and we have a growing pipeline of customers interested in incorporating these technologies into their future products.



•

We also continued to make progress with our nanotube technology development with our joint-venture partner, VEC Imaging. A year ago, at the annual meeting of Radiological Society of North America (RSNA), we exhibited a prototype of our nanotube technology in a multi-emitter mammography system configuration. Since then, we have received significant interest in this technology. We are engaged in early stage product development activity with several OEMs to explore the use of our technology in their future imaging systems. We continue to be very happy with the performance of the emitters and the tubes.

Financial Results

        Our financial results for fiscal year 2020 included:

•

Revenues decreased to $738 million from $781 million in the prior year. Medical revenues declined by 2% and Industrial revenues declined by 16% from the prior year. The Medical segment represented 79% of total company revenues and the Industrial segment represented 21%.



•

Year over year, we experienced strong sales from CT products while products for other medical modalities decreased due to the unfavorable impact of COVID-19 on elective procedures such as mammography, oncology, surgery and dental. Industrial product sales were negatively

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impacted across all the vertical markets we serve, including applications for cargo screening at ports and borders, baggage screening at airports, and non-destructive testing and inspection.

•

For fiscal year 2020, we had a GAAP net loss of $57 million, or $1.47 per diluted share. On a non-GAAP basis, we had net earnings of $3 million, or $0.08 per diluted share.



•

We ended fiscal year 2020 with cash and cash equivalents of $101 million. For the fiscal year, we had cash flow from operations of $13 million. Our total debt outstanding was $455 million compared to $395 million at the end of the prior fiscal year.

2020 Say-on-Pay Advisory Vote on Executive Compensation

        At our 2020 Annual Meeting of Stockholders, approximately 92.3% of the votes cast in the "say-on-pay" advisory vote were "FOR" approval of our proposal. We value this positive endorsement by our stockholders of our 2019 executive compensation policies and believe that the outcome signals our stockholders' support of our compensation program. Consequently, based on these say-on-pay results, we continued our general approach to compensation for fiscal year 2020, including our pay for performance philosophy and our efforts to attract, retain, and motivate our named executive officers.

Philosophy of Our Executive Compensation Programs

        The Compensation Committee believes that attracting, motivating, and retaining a team of high-performing executives with strong industry expertise is critical to advancing the interests of stockholders. To promote these objectives, the Compensation Committee is guided by the following principles in developing our executive compensation program and in making pay decisions:

•

Key Talent.  The pay program should enable the Company to attract and retain individuals with the background, experience, and talent required to lead the development and successful implementation of the Company's business strategy.



•

Pay for Performance.  A high proportion of total compensation should be at risk for achievement of annual operating and strategic goals and for long-term value creation for stockholders.



•

Stockholder Alignment.  Long-term incentives should be awarded in the form of Company equity to directly align executive interests with those of stockholders.



•

Long-term Performance Orientation.  The mix of incentives should place emphasis on long-term sustainable growth and profitability.



•

Total Compensation Context.  Pay decisions should be made in the context of total compensation relative to pay practices of competitors for key talent and in consideration of individual performance, experience, knowledge, and internal parity among peers.

        The Compensation Committee believes that our compensation programs should include short-term and long-term components, including cash and equity-based compensation, and should reward performance as measured against established goals and in terms of share price appreciation. The Compensation Committee evaluates both performance and compensation to make sure that the compensation provided to executives remains competitive relative to compensation paid by companies of similar size operating in our industry, taking into account our relative performance and our own strategic goals. Our Compensation Committee considers the total current and potential long-term compensation of each of our executive officers in establishing each element of compensation, but views each element as related but distinct.

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Program Overview

        This Compensation Discussion and Analysis section focuses on the following executives who were our NEOs for fiscal year 2020:

        Each program component and the rationale for it are highlighted below:

Pay for Performance

        Our executive compensation programs are heavily weighted towards variable compensation that provides a direct link between corporate performance, stock price and pay outcomes for our executives. Our programs also tie pay outcomes to the achievement of key strategic objectives that we believe will drive longer-term value to stockholders. The Compensation Committee regularly assesses our programs to ensure they are aligned with the Company's evolving business strategy and are effective in supporting the Company's talent needs.

•

Compensation Mix.  The total direct compensation ("TDC") of our NEOs is comprised of three elements: base salary, annual cash incentives, and LTIs. As illustrated by the segments in the following graphs*, 86% of the target TDC of our Chief Executive Officer was at-risk and aligned

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with our stockholders in the form of annual cash incentives and LTIs. For our other NEOs as a group, 68% of their target TDC was at-risk.



•

Use of rigorous performance goals in our annual incentive plan.  Target objectives are set at the beginning of the fiscal year to be challenging, but attainable with solid performance in more typical economic times. Fiscal year 2020 was a difficult environment as the COVID-19 global pandemic resulted in closures and generally less commercial activity in certain industries. As a result of our financial performance in fiscal year 2020, and consistent with our pay for performance philosophy, executives earned between 32% and 60% of their target annual cash incentive awards (36% for the Chief Executive Officer and 43% on average for all other NEOs). MIP payouts were not adjusted to account for the significant difficulties that COVID-19 presented for the business.



•

50% of LTI value granted in the form of performance-based stock options.  For 2020, the LTI program was comprised of time-based RSUs (50%) and, new for 2020, performance-based stock options (50%). The performance-based stock options have an exercise price that is 10% higher than our closing stock price on the date of grant, thus requiring achievement of a 10% stock price increase before the stock options begin to have realizable value to the executives, subject to the service-based vesting conditions.



•

Impact of COVID-19 on business and executive compensation.  Our business was impacted by the COVID-19 global pandemic and the associated economic downturn, as described above in the Business Highlights section. To help mitigate this impact and to better conserve the Company's cash reserves, commencing in May 2020 and ending in September 2020, the CEO's base salary was temporarily reduced by 30% and the other NEO's salaries were temporarily reduced by 20% (other than Mr. Verhoef, who was paid in accordance with the terms of his transition agreement). The NEO salary amounts paid in 2020 were also impacted by the unpaid furlough put in place in the summer of 2020 applicable to all "non-essential" Varex employees.



•

Use of Strategic Goals.  Achievement of individual strategic goals represents 25% of the annual cash incentive opportunity for our executive officers. We believe this is a useful method for rewarding achievement of key milestones in the implementation of our strategies. The Compensation Committee carefully evaluates management's accomplishments relative to our key strategic goals.



•

Alignment of pay and stockholders' returns.  The Compensation Committee carefully structures the compensation program to achieve alignment with stockholder interests, while providing target pay opportunities that are competitive with the market and appropriate to the specific

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contributions of each executive. Because 85% of our Chief Executive Officer's target TDC is tied to the achievement of operating results and share price performance, it is valuable to assess the pay that is realized compared to the pay opportunity. Our NEOs' TDC for fiscal year 2020, which includes short-term incentives and the intrinsic value of LTIs granted in fiscal year 2020 as of the end of fiscal year 2020, was significantly lower than their fiscal year 2020 target TDC, which demonstrates alignment with stockholders as illustrated below:

Key Changes for Fiscal Year 2021 Compensation and Governance Programs

        For fiscal year 2021, our short-term incentive plan will only utilize one corporate financial measure: Earnings before Interest and Taxes ("EBIT"). The plan will also incorporate two distinct six-month measurement periods for the financial metric as opposed to a full year measure. This allows the setting of appropriate thresholds at the beginning of fiscal year 2021 and then to establish new thresholds in May 2021 that will apply for the second six-month period of the fiscal year. The change is being done in recognition of the enhanced economic uncertainties as of November 2020 when the Plan was approved, related to the global COVD-19 global pandemic. Our LTI program for fiscal year 2021 will remain substantially the same as the program for fiscal year 2020.

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Executive Compensation Practices Highlights

        A number of practices strengthen the alignment of our executive compensation program with the interests of our stockholders:

How We Make Compensation Decisions

Role of the Compensation and Management Development Committee.

        The Compensation Committee oversees the development and administration of our executive compensation programs, including the underlying philosophy and related policies. The Compensation Committee's responsibilities include:

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determining the compensation and performance goals for our Chief Executive Officer after meeting with its independent advisors and discussing with the other independent members of the Board,



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determining the compensation and performance goals for our other Section 16 Officers (as so designated by the Company under Rule 16a-1(f) of the Exchange Act) and vice presidents reporting to the Chief Executive Officer,



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determining a market peer group to ensure our executive compensation programs are competitive,



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performing an annual risk assessment of our executive compensation programs, and



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assessing our executive compensation programs annually to ensure that they are well aligned with the Company's evolving business strategy and are effective in supporting its talent needs.

        Role of the Chief Executive Officer.    The Chief Executive Officer makes recommendations to the Compensation Committee as requested on incentive plan design, financial and strategic performance goals, performance and compensation for other executives, and management transitions and succession.

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The Chief Executive Officer does not make recommendations regarding his own compensation or Board compensation.

        Role of the Independent Compensation Consultant.    The Compensation Committee retained FW Cook, a nationally-recognized independent compensation consulting firm, to advise on certain compensation matters. FW Cook does not provide other services to the Company or the Company's management.

        FW Cook advised the Compensation Committee with respect to fiscal year 2020 compensation trends and best practices, competitive pay levels, equity grant practices and competitive levels, peer group data, incentive plan design, and relevant Proxy Statement disclosure.

        The Compensation Committee has determined that FW Cook is independent, and the services provided by FW Cook during fiscal year 2020 did not raise any conflict of interests. In reaching these conclusions, the Compensation Committee considered the factors set forth in Rule 10C-1 of the Exchange Act and applicable listing standards.

        Setting Executive Compensation.    Generally, in determining base salary, target annual incentives and guidelines for long-term equity awards, the Compensation Committee considers several factors including, but not limited to the executive's:

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role, including the scope and complexity of responsibilities;



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experience and capabilities;



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contributions or responsibilities beyond the typical scope of the role;



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individual performance and internal equity; and



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competitive compensation opportunities as reflected in compensation provided by our peers and other competitors for similar executive talent.

        Peer Group and Market Analysis.    The Compensation Committee uses a compensation peer group to monitor the compensation practices of our primary competitors for executive talent. The Compensation Committee reviews executive pay relative to the median pay of comparable positions in peer group companies and, as appropriate, compensation survey data. The Compensation Committee's independent compensation consultant reviews the companies in the peer group annually and proposes changes in response to mergers and acquisitions, significant movements in revenues or market capitalization, and revised business strategies. For the peer group developed during fiscal year 2019 and used for fiscal year 2020 pay decisions, the Compensation Committee approved the removal of one peer from the prior year peer group (Integra) and the addition of one peer (marked with an asterisk in the table below). The peer group companies compete in the healthcare equipment and supplies, life sciences tools and services, and electronic equipment instruments and components industries that the Compensation Committee believes reflect the competitive market for executive talent similar to that required by the Company.

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        At the time the peer group was selected, Varex had annual revenue (based on the most recent four quarters) and market capitalization (as of April 22, 2019) near the median of the peer group. Further detail on the peer group is as follows:

Fiscal Year 2020 Compensation Program and Pay Decisions

        Base Salaries.    The Compensation Committee reviews base salaries of our NEOs annually but primarily adjusts salaries in recognition of significant increases in position responsibilities, demonstrated capabilities, and sustained individual performance. Gaps in internal pay equity or external pay competitiveness are also considered. For fiscal year 2020, the NEOs received base salary increases ranging from 2.0% to 4.0% from their fiscal year 2019 base salaries, which salaries were effective as of December 14, 2019. Fiscal year 2020 base salaries were as follows:

        Annual Cash Incentives.    Our NEOs receive annual incentives through our Management Incentive Plan ("MIP"), which rewards our executive officers for the achievement of predetermined annual financial and strategic goals. On November 21, 2019, the Compensation Committee set the fiscal year 2020 performance goals under the MIP for the NEOs and certain other executive officers. For fiscal year 2020, the Compensation Committee established a pool of funds equal to 4.0% of our fiscal year 2020 EBIT results (the "MIP Bonus Pool") to be available for annual cash incentives under the MIP to the executive officers. The Compensation Committee retained negative discretion to pay each of these executive officers less than their corresponding maximum share of the MIP Bonus Pool based on the financial performance measures, team and individual strategic goals summarized below. The corresponding maximum share of the MIP Bonus Pool was the lesser of two times the target participation level of each executive officer under the MIP or a specified percentage of the MIP Bonus Pool, which is defined in the table below for each NEO.

        The Compensation Committee sets individual incentive opportunities, expressed as a percentage of each individual's salary, prior to the commencement of the fiscal year corresponding with each individual's position and responsibilities with the Company and competitive pay practices. The target incentive opportunities are reviewed by the Compensation Committee, in consultation with its

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independent compensation consultant. There were no changes to the target incentive opportunity percentages for fiscal year 2020.

        75% of the MIP opportunity is based on financial measures and 25% is based on individual strategic goal. Both portions have potential funding of between 0% and 200% of target. For fiscal year 2020, for corporate executives (Messrs. Sanyal, Maheshwari, Verhoef and Ms. Honeysett), the 75% financial portion is determined by metrics based on overall company performance (revenue, EBITDA, and free cash flow), and for solution and business line executives (Messrs. Giambattista and Jonaitis), the 75% financial portion is determined 50% by metrics based on overall company performance and 50% by metrics related to each executive's solution or business line. The individual strategic portion is determined based on achievement of pre-established individual goals. The mechanics for calculating the fiscal year 2020 MIP awards was as follows:

Fiscal Year 2020 MIP Framework

        Financial Portion—On November 21, 2019, the Compensation Committee set the fiscal year 2020 financial performance goals under the MIP for the NEOs and other officers reporting directly to our CEO, as well as for our Chief Accounting Officer. For fiscal year 2020, the Compensation Committee selected revenue, EBITDA, and free cash flow as the equally-weighted financial performance measures applicable to overall Company performance because it believes that these measures drive our stock market value. As noted above, Messrs. Giambattista and Jonaitis also had metrics related to their solution or business line. For these metrics, the Compensation Committee selected solution or business line revenue and contribution margin (gross margin less research and development costs) because it believes these are the best measures of financial success at the solution or business line level. Each of

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these metrics is subject to adjustment provisions adopted by the Compensation Committee at the time the MIP goals were set.

        The payout percentages for the financial metrics were determined in accordance with the tables below. Results between indicated levels in the table are interpolated on a straight-line basis.

Fiscal Year 2020 Financial Goals Attainment

Fiscal Year 2020 Solution Line Financial Goals Attainment

Segment / Solution Line Financial Objectives

Fiscal Year 2020 Payouts—

        The Compensation Committee evaluated the performance of Mr. Sanyal, considering the applicable financial and individual achievements, and determined his award in its sole discretion. Mr. Sanyal's individual goals related to the successful consolidation of the Company's Santa Clara facility, product development, and the completion of important customer contract renewals. The Committee met in executive session for this evaluation and then reviewed their recommendation for Mr. Sanyal with the full Board.

        Mr. Sanyal submitted recommendations for each of the other NEOs based on the achievement of the respective corporate and solution line financial goals for fiscal year 2020, in relation to the thresholds set by the Compensation Committee, in addition to the scoring of the individual portions of the MIP. MIP payouts were not adjusted to account for the significant difficulties that COVID-19 presented for the business.

        Mr. Maheshwari received a prorated award in accordance with the terms of his offer letter. Mr. Giambattista's individual goals related to developing production capabilities and prototype

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development. Ms. Honeysett's individual goals related to improving operational efficiency by developing a crisis communications strategy and streamlining the contract approval process. Mr. Jonaitis' individual goals related to reducing the overall bill of material (BOM) cost for certain groups of products, while also improving international operations. Mr. Verhoef's individual goals related to supply chain cost improvements and reducing the run rate of general and administrative costs and manufacturing overhead. In addition to the original assessment of individual goal attainment, Mr. Sanyal recommended an additional discretionary adjustment to 125% of the individual target for Mr. Giambattista. This adjustment was recommended due to the successful completion and accelerated closing of the Santa Clara facility, in addition to other achievements, not fully reflected in the original assessment.

        Final determination of awards was made by the Compensation Committee, with payouts as calculated in the following table: