Exhibit 10.1

VARIAN, INC.

OMNIBUS STOCK PLAN

(as amended and restated effective November 8, 2007)

SECTION 1

BACKGROUND, PURPOSE AND DURATION

1.1 Effective Date. The Plan, as amended and restated, is effective as of
November 8, 2007, subject to the approval of the amended and restated Plan by a
majority of the shares of the Company’s common stock which are present in person
or by proxy and entitled to vote at the 2008 Annual Meeting of Stockholders of
the Company.

1.2 Purpose of the Plan. The Plan is intended to increase shareholder value and
the success of the Company by motivating employees of the Company and its
Affiliates and directors of the Company who are employees of neither the Company
nor any Affiliate. The Plan is intended to permit the grant of Awards that
qualify as performance-based compensation under section 162(m) of the Code.

SECTION 2

DEFINITIONS

The following words and phrases shall have the following meanings unless a
different meaning is plainly required by the context:

2.1 “1934 Act” means the Securities Exchange Act of 1934, as amended. Reference
to a specific section of the 1934 Act or regulation thereunder shall include
such section or regulation, any valid regulation promulgated under such section,
and any comparable provision of any future legislation or regulation amending,
supplementing or superseding such section or regulation.

2.2 “Affiliate” means any corporation or any other entity (including, but not
limited to, partnerships and joint ventures) controlling, controlled by, or
under common control with the Company.

2.3 “Award” means, individually or collectively, a grant under the Plan of
Non-qualified Stock Options, Incentive Stock Options, SARs, Restricted Stock,
Stock Units, Performance Units or Performance Shares.

2.4 “Award Agreement” means the written agreement setting forth the terms and
provisions applicable to each Award granted under the Plan.

2.5 “Board” means the Board of Directors of the Company.

2.6 “Code” means the Internal Revenue Code of 1986, as amended. Reference to a
specific section of the Code or regulation thereunder shall include such section
or regulation,

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any valid regulation promulgated thereunder, and any comparable provision of any
future legislation or regulation amending, supplementing or superseding such
section or regulation.

2.7 “Committee” means the committee appointed by the Board (pursuant to
Section 3.1) to administer the Plan.

2.8 “Company” means Varian, Inc., a Delaware corporation, or any successor
thereto.

2.9 “Director” means any individual who is a member of the Board.

2.10 “Disability” means a permanent and total disability within the meaning of
section 22(e)(3) of the Code, provided that in the case of Awards other than
Incentive Stock Options, the Committee in its sole discretion may determine
whether a permanent and total disability exists in accordance with uniform and
non-discriminatory standards adopted by the Committee from time to time.

2.11 “EBIT” means as to any Performance Period, the Company’s or a business
unit’s income before reductions for interest and taxes, determined in accordance
with generally accepted accounting principles.

2.12 “EBITA” means as to any Performance Period, the Company’s or a business
unit’s income before reductions for interest, taxes and acquisition-related
intangible amortization, determined in accordance with generally accepted
accounting principles.

2.13 “EBITDA” means as to any Performance Period, the Company’s or a business
unit’s income before reductions for interest, taxes, depreciation and
amortization, determined in accordance with generally accepted accounting
principles.

2.14 “Earnings Per Share” means as to any Performance Period, the Company’s or a
business unit’s diluted earnings per share, determined in accordance with
generally accepted accounting principles.

2.15 “Employee” means any employee of the Company or of an Affiliate, whether
such employee is so employed at the time the Plan is adopted or becomes so
employed subsequent to the adoption of the Plan.

2.16 “Exchange Program” means a program established by the Committee under which
outstanding Awards are amended to provide for a lower Exercise Price or
surrendered or cancelled in exchange for (a) Awards with a lower Exercise Price,
(b) a different type of Award, (c) cash, or (d) a combination of (a), (b) and/or
(c). Notwithstanding the preceding, the term Exchange Program does not include
any (i) program under which an outstanding Award is surrendered or cancelled in
exchange for a different type of Award and/or cash having a total value equal to
or less than the value of the surrendered or cancelled Award, nor (ii) action
described in Section 4.3.

2.17 “Exercise Price” means the price at which a Share may be purchased by a
Participant pursuant to the exercise of an Option.

 

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2.18 “Fair Market Value” means the last quoted per share selling price for
Shares on the relevant date, or if there were no sales on such date, the
arithmetic mean of the highest and lowest quoted selling prices on the nearest
day before and the nearest day after the relevant date, as determined by the
Committee. Notwithstanding the preceding, for federal, state and local income
tax reporting purposes, fair market value shall be determined by the Committee
in accordance with uniform and nondiscriminatory standards adopted by it from
time to time.

2.19 “Fiscal Year” means any fiscal year of the Company.

2.20 “Grant Date” means, with respect to an Award, the date that the Award was
granted.

2.21 “Incentive Stock Option” means an Option to purchase Shares which is
designated as an Incentive Stock Option and is intended to meet the requirements
of section 422 of the Code.

2.22 “Net Income” means as to any Performance Period, the Company’s or a
business unit’s income after taxes, determined in accordance with generally
accepted accounting principles.

2.23 “Non-employee Director” means a Director who is an employee of neither the
Company nor of any Affiliate.

2.24 “Non-qualified Stock Option” means an option to purchase Shares which is
not intended to be an Incentive Stock Option.

2.25 “Operating Cash Flow” means as to any Performance Period, the Company’s or
a business unit’s net cash provided by operating activities, determined in
accordance with generally accepted accounting principles, less net capital
expenditures.

2.26 “Option” means an Incentive Stock Option or a Non-qualified Stock Option.

2.27 “Participant” means an Employee who has been selected by the Committee for
participation in the Plan or a Non-employee Director who has an outstanding
Award.

2.28 “Performance Goals” means the goal(s) (or combined goal(s)) determined by
the Committee (in its sole discretion) to be applicable to a Participant with
respect to an Award. As determined by the Committee, the Performance Goals
applicable to an Award may provide for a targeted level or levels of achievement
using one or more of the following measures: (a) EBIT, (b) EBITA, (c) EBITDA,
(d) Earnings Per Share, (e) Net Income, (f) Operating Cash Flow, (g) Return on
Net Assets, (h) Return on Equity, (i) Return on Sales, (j) Revenue, and
(k) Shareholder Return. The Performance Goals may differ from Participant to
Participant and from Award to Award. Prior to the Determination Date, the
Committee shall determine whether any significant element(s) shall be included
in or excluded from the calculation of any Performance Goal with respect to any
Participant. “Determination Date” means the latest possible date that will not
jeopardize an Award’s qualification as performance-based compensation under
section 162(m) of the Code. Notwithstanding the previous sentence,

 

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for Awards not intended to qualify as performance-based compensation,
“Determination Date” shall mean such date as the Committee may determine in its
sole discretion.

2.29 “Performance Period” means any fiscal period not to exceed three
consecutive Fiscal Years, as determined by the Committee in its sole discretion.

2.30 “Performance Share” means a Performance Share granted to a Participant
pursuant to Section 8.

2.31 “Performance Unit” means a Performance Unit granted to a Participant
pursuant to Section 8.

2.32 “Period of Restriction” means the period during which shares of Restricted
Stock are subject to forfeiture and/or restrictions on transferability.

2.33 “Plan” means the Varian, Inc. Omnibus Stock Plan, as set forth in this
instrument and as hereafter amended from time to time.

2.34 “Restricted Stock” means an Award granted to a Participant pursuant to
Section 7.

2.35 “Retirement” means, with respect to any Participant, “Retirement” as
defined pursuant to the Company’s or the Board’s Retirement Policies, as they
may be established from time to time.

2.36 “Return on Net Assets” means as to any Performance Period, the percentage
equal to the Company’s or a business unit’s EBIT before incentive compensation,
divided by the Company’s or business unit’s average net assets, determined in
accordance with generally accepted accounting principles.

2.37 “Return on Equity” means as to any Performance Period, the percentage equal
to the Company’s Net Income divided by average stockholder’s equity, determined
in accordance with generally accepted accounting principles.

2.38 “Return on Sales” means as to any Performance Period, the percentage equal
to the Company’s or a business unit’s EBIT (after incentive compensation),
divided by the Company’s or the business unit’s, as applicable, Revenue,
determined in accordance with generally accepted accounting principles.

2.39 “Revenue” means as to any Performance Period, the Company’s or a business
unit’s net sales, determined in accordance with generally accepted accounting
principles.

2.40 “Rule 16b-3” means Rule 16b-3 promulgated under the 1934 Act, as amended,
and any future regulation amending, supplementing or superseding such
regulation.

2.41 “Section 16 Person” means a person who, with respect to the Shares, is
subject to section 16 of the 1934 Act.

 

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2.42 “Shareholder Return” means as to any Performance Period, the total return
(change in share price plus reinvestment of any dividends) of a Share.

2.43 “Shares” means shares of the Company’s common stock, $.01 par value.

2.44 “Stock Appreciation Right” or “SAR” means an Award, granted alone, in
connection or in tandem with a related Option, that pursuant to Section 6 is
designated as a SAR.

2.45 “Stock Unit” means a bookkeeping entry initially representing an amount
equal to the Fair Market Value of one Share. Stock Units represent an unfunded
and unsecured obligation of the Company.

2.46 “Subsidiary” means any corporation in an unbroken chain of corporations
beginning with the Company if each of the corporations other than the last
corporation in the unbroken chain then owns stock possessing fifty percent
(50%) or more of the total combined voting power of all classes of stock in one
of the other corporations in such chain.

2.47 “Termination of Service” means (a) in the case of an Employee, a cessation
of the employee-employer relationship between an Employee and the Company or an
Affiliate for any reason, including, but not by way of limitation, a termination
by resignation, discharge, death, Disability, Retirement, or the disaffiliation
of an Affiliate, but excluding any such termination where there is a
simultaneous reemployment by the Company or an Affiliate; and (b) in the case of
a Non-employee Director, a cessation of the Non-employee Director’s service on
the Board for any reason.

SECTION 3

ADMINISTRATION

3.1 The Committee. The Plan shall be administered by the Committee. The
Committee shall consist of not less than two (2) Directors. The members of the
Committee shall be appointed from time to time by, and serve at the pleasure of,
the Board. Each member of the Committee shall qualify as (a) a “non-employee
director” under Rule 16b-3, and (b) an “outside director” under section 162(m)
of the Code. If it is later determined that one or more members of the Committee
do not so qualify, actions taken by the Committee prior to such determination
shall be valid despite such failure to qualify.

3.2 Authority of the Committee. It shall be the duty of the Committee to
administer the Plan in accordance with the Plan’s provisions. The Committee
shall have all powers and discretion necessary or appropriate to administer the
Plan and to control its operation, including, but not limited to, the power to
(a) determine which Employees and shall be granted Awards, (b) prescribe the
terms and conditions of the Awards (other than the Options granted to
Non-employee Directors pursuant to Section 9), (c) interpret the Plan and the
Awards, (d) adopt such procedures and subplans as are necessary or appropriate
to permit participation in the Plan by Employees and Directors who are foreign
nationals or employed outside of the United States, (e) adopt rules for the
administration, interpretation and application of the Plan as are consistent
therewith, and (f) interpret, amend or revoke any such rules. Notwithstanding
any contrary provision of the Plan, the Committee may reduce the amount payable
under any Award (other than an Option) after the grant of such Award.
Notwithstanding the preceding, the

 

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Committee shall not implement an Exchange Program without the approval of the
holders of a majority of the Shares that are present in person or by proxy and
entitled to vote at any annual or special meeting of the stockholders of the
Company.

3.3 Delegation by the Committee. The Committee, in its sole discretion and on
such terms and conditions as it may provide, may delegate all or any part of its
authority and powers under the Plan to one or more directors and/or officers of
the Company; provided, however, that the Committee may not delegate its
authority and powers (a) with respect to Section 16 Persons, (b) in any way
which would jeopardize the Plan’s qualification under Rule 16b-3, or (c) with
respect to awards which are intended to qualify as performance-based
compensation under section 162(m) of the Code.

3.4 Non-employee Directors. Notwithstanding any contrary provision of this
Section 3, the Board shall administer Section 9 of the Plan, and the Committee
shall exercise no discretion with respect to Section 9. In the Board’s
administration of Section 9 and the Options and any Shares granted to
Non-employee Directors, the Board shall have all of the authority and discretion
otherwise granted to the Committee with respect to the administration of the
Plan.

3.5 Decisions Binding. All determinations and decisions made by the Committee,
the Board, and any delegate of the Committee pursuant to the provisions of the
Plan shall be final, conclusive, and binding on all persons, and shall be given
the maximum deference permitted by law.

SECTION 4

SHARES SUBJECT TO THE PLAN

4.1 Number of Shares. Subject to adjustment as provided in Section 4.3, the
total number of Shares available for issuance under the Plan shall not exceed
10,200,000, plus such number of Shares as were issued pursuant to substitute
Options under Sections 5.3.3 and 9.3 in connection with the distribution of
Shares to the stockholders of Varian Associates, Inc. Shares issued under the
Plan may be either authorized but unissued Shares or treasury Shares.

4.2 Lapsed Awards. If an Award terminates, expires, or lapses for any reason,
any Shares subject to such Award again shall be available to be the subject of
an Award, unless otherwise determined by the Committee.

4.3 Adjustments in Awards and Authorized Shares. In the event of any merger,
reorganization, consolidation, recapitalization, separation, liquidation, stock
dividend, split-up, Share combination, or other change in the corporate
structure of the Company affecting the Shares, the Committee shall adjust the
number and class of Shares (or cash or other property) that may be delivered
under the Plan, the number, class, and price of Shares subject to outstanding
Awards, and the numerical limit of Sections 5.1, 6.1, 7.1 and 8.1 in such manner
as the Committee (in its sole discretion) shall determine to be appropriate to
prevent the dilution or diminution of such Awards. In the case of Options
granted to Non-employee Directors pursuant to Section 9, the foregoing
adjustments shall be made by the Board, and any such adjustments also shall
apply to the future grants provided by Section 9. Notwithstanding the preceding,
the number of Shares subject to any Award always shall be a whole number.

 

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SECTION 5

STOCK OPTIONS

5.1 Grant of Options. Subject to the terms and provisions of the Plan, Options
may be granted to Employees at any time and from time to time as determined by
the Committee in its sole discretion. The Committee, in its sole discretion,
shall determine the number of Shares subject to each Option, provided that
during any Fiscal Year, no Participant shall be granted Options covering more
than 500,000 Shares. The Committee may grant Incentive Stock Options,
Non-qualified Stock Options, or a combination thereof.

5.2 Award Agreement. Each Option shall be evidenced by an Award Agreement that
shall specify the Exercise Price, the expiration date of the Option, the number
of Shares to which the Option pertains, any conditions to exercise of the
Option, and such other terms and conditions as the Committee, in its sole
discretion, shall determine. The Award Agreement shall specify whether the
Option is intended to be an Incentive Stock Option or a Non-qualified Stock
Option.

5.3 Exercise Price. Subject to the provisions of this Section 5.3, the Exercise
Price for each Option shall be determined by the Committee in its sole
discretion.

5.3.1 Non-qualified Stock Options. In the case of a Non-qualified Stock Option,
the Exercise Price shall be not less than one hundred percent (100%) of the Fair
Market Value of a Share on the Grant Date.

5.3.2 Incentive Stock Options. In the case of an Incentive Stock Option, the
Exercise Price shall be not less than one hundred percent (100%) of the Fair
Market Value of a Share on the Grant Date; provided, however, that if on the
Grant Date, the Employee (together with persons whose stock ownership is
attributed to the Employee pursuant to section 424(d) of the Code) owns stock
possessing more than ten percent (10%) of the total combined voting power of all
classes of stock of the Company or any of its Subsidiaries, the Exercise Price
shall be not less than one hundred and ten percent (110%) of the Fair Market
Value of a Share on the Grant Date.

5.3.3 Substitute Options. Notwithstanding the provisions of Sections 5.3.1 and
5.3.2, in the event that the Company or an Affiliate consummates a transaction
described in section 424(a) of the Code (e.g., the acquisition of property or
stock from an unrelated corporation), persons who become Employees on account of
such transaction may be granted Options in substitution for options granted by
their former employer. If such substitute Options are granted, the Committee, in
its sole discretion and consistent with section 424(a) of the Code, shall
determine the exercise price of such substitute Options.

5.4 Expiration of Options.

5.4.1 Expiration Dates. Each Option shall terminate no later than the first to
occur of the following events:

(a) The expiration of ten (10) years from the Grant Date; or

 

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(b) The expiration of three (3) months from the date of the Participant’s
Termination of Service for a reason other than the Participant’s death,
Disability or Retirement; or

(c) The expiration of one (1) year from the date of the Participant’s
Termination of Service by reason of Disability; or

(d) The expiration of three (3) years from the date of the Participant’s
Retirement (subject to Section 5.8.2 regarding Incentive Stock Options); or

(e) The date of the Participant’s Termination of Service by the Company for
cause (as determined by the Company); or

(f) The date for termination of the Option determined by the Committee in its
sole discretion and set forth in the written Award Agreement.

5.4.2 Death of Participant. Notwithstanding Section 5.4.1, if a Participant who
is an Employee dies prior to the expiration of his or her Options, his or her
Options shall be exercisable until the expiration of three (3) years after the
date of death.

5.4.3 Committee Discretion. Subject to the limits of Sections 5.4.1 and 5.4.2,
the Committee, in its sole discretion, (a) shall provide in each Award Agreement
when each Option expires and becomes unexercisable, and (b) may, after an Option
is granted and before such Option expires, extend the maximum term of the Option
(subject to Section 5.8.4 regarding Incentive Stock Options). Unless otherwise
expressly determined by the Committee, any extension of the term of any Option
shall comply with Section 409A of the Code.

5.5 Exercisability of Options. Options granted under the Plan shall be
exercisable at such times and be subject to such restrictions and conditions as
the Committee shall determine in its sole discretion. After an Option is
granted, the Committee, in its sole discretion, may accelerate the
exercisability of the Option. If a Participant dies while an Employee, the
exercisability of his or her Options shall be fully accelerated to the date of
Termination of Service.

5.6 Payment. Options shall be exercised by the Participant’s delivery of a
written notice of exercise to the Secretary of the Company (or its designee),
setting forth the number of Shares with respect to which the Option is to be
exercised, accompanied by full payment for the Shares.

Upon the exercise of any Option, the Exercise Price shall be payable to the
Company in full in cash or its equivalent. The Committee, in its sole
discretion, also may permit exercise (a) by tendering previously acquired Shares
having an aggregate Fair Market Value at the time of exercise equal to the total
Exercise Price, or (b) by any other means which the Committee, in its sole
discretion, determines to both provide legal consideration for the Shares, and
to be consistent with the purposes of the Plan.

As soon as practicable after receipt of a written notification of exercise and
full payment for the Shares purchased, the Company shall deliver to the
Participant (or the Participant’s

 

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designated broker), Share certificates (which may be in book entry form)
representing such Shares.

5.7 Restrictions on Share Transferability. The Committee may impose such
restrictions on any Shares acquired pursuant to the exercise of an Option as it
may deem advisable, including, but not limited to, restrictions related to
applicable Federal securities laws, the requirements of any national securities
exchange or system upon which Shares are then listed or traded, or any blue sky
or state securities laws.

5.8 Certain Additional Provisions for Incentive Stock Options.

5.8.1 Exercisability. The aggregate Fair Market Value (determined on the Grant
Date(s)) of the Shares with respect to which Incentive Stock Options are
exercisable for the first time by any Employee during any calendar year (under
all plans of the Company and its Subsidiaries) shall not exceed $100,000.

5.8.2 Termination of Service. If any portion of an Incentive Stock Option is
exercised more than three (3) months after the Participant’s Termination of
Service for any reason other than Disability or death (unless (a) the
Participant dies during such three-month period, and (b) the Award Agreement or
the Committee permits later exercise), the portion so exercised shall be deemed
a Non-qualified Stock Option.

5.8.3 Company and Subsidiaries Only. Incentive Stock Options may be granted only
to persons who are employees of the Company or a Subsidiary on the Grant Date.

5.8.4 Expiration. No Incentive Stock Option may be exercised after the
expiration of ten (10) years from the Grant Date; provided, however, that if the
Option is granted to an Employee who, together with persons whose stock
ownership is attributed to the Employee pursuant to section 424(d) of the Code,
owns stock possessing more than ten percent (10%) of the total combined voting
power of all classes of the stock of the Company or any of its Subsidiaries, the
Option may not be exercised after the expiration of five (5) years from the
Grant Date.

SECTION 6

STOCK APPRECIATION RIGHTS

6.1 Grant of SARs. Subject to the terms and conditions of the Plan, SARs may be
granted to Employees at any time and from time to time as shall be determined by
the Committee, in its sole discretion. The Committee shall have complete
discretion to determine the number of SARs granted to any Participant, provided
that during any Fiscal Year, no Participant shall be granted SARs covering more
than 500,000 Shares.

6.2 Exercise Price and Other Terms. The Committee, subject to the provisions of
the Plan, shall have complete discretion to determine the terms and conditions
of SARs granted under the Plan. However, the exercise price of an SAR shall be
not less than one hundred percent (100%) of the Fair Market Value of a Share on
the Grant Date.

 

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6.3 SAR Agreement. Each SAR grant shall be evidenced by an Award Agreement that
shall specify the exercise price, the term of the SAR, the conditions of
exercise, and such other terms and conditions as the Committee, in its sole
discretion, shall determine.

6.4 Expiration of SARs. A SAR granted under the Plan shall expire upon the date
determined by the Committee, in its sole discretion, and set forth in the Award
Agreement. Notwithstanding the foregoing, the rules of Section 5.4 also shall
apply to SARs.

6.5 Payment of SAR Amount. Upon exercise of a SAR, a Participant shall be
entitled to receive payment from the Company in an amount determined by
multiplying:

(a) The difference between the Fair Market Value of a Share on the date of
exercise (or as specified in the Award Agreement) over the exercise price; times

(b) The number of Shares with respect to which the SAR is exercised.

6.6 Payment Upon Exercise of SAR. At the sole discretion of the Committee,
payment for a SAR may be in cash, Shares or a combination thereof.

SECTION 7

RESTRICTED STOCK

7.1 Grant of Restricted Stock. Subject to the terms and provisions of the Plan,
the Committee, at any time and from time to time, may grant Shares of Restricted
Stock to Employees in such amounts as the Committee, in its sole discretion,
shall determine. The Committee, in its sole discretion, shall determine the
number of Shares to be granted to each Participant, provided that pursuant to
the Plan no more than 850,000 Shares in the aggregate may be (a) granted as
Restricted Stock, and (b) issued pursuant to Performance Units, Performance
Shares and Stock Units.

7.2 Restricted Stock Agreement. Each Award of Restricted Stock shall be
evidenced by an Award Agreement that shall specify the Period of Restriction,
the number of Shares granted, any price to be paid for the Shares, and such
other terms and conditions as the Committee, in its sole discretion, shall
determine. Unless the Committee determines otherwise, Shares of Restricted Stock
shall be held by the Company as escrow agent until the restrictions on such
Shares have lapsed.

7.3 Transferability. Shares of Restricted Stock may not be sold, transferred,
pledged, assigned, or otherwise alienated or hypothecated until the end of the
applicable Period of Restriction.

7.4 Other Restrictions. The Committee, in its sole discretion, may impose such
other restrictions on Shares of Restricted Stock as it may deem advisable or
appropriate, in accordance with this Section 7.4.

7.4.1 General Restrictions. The Committee may set restrictions based upon the
achievement of specific performance objectives (Company-wide, business unit or

 

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individual), applicable federal or state securities laws, or any other basis
determined by the Committee in its sole discretion.

7.4.2 Section 162(m) Performance Restrictions. For purposes of qualifying grants
of Restricted Stock as “performance-based compensation” under section 162(m) of
the Code, the Committee, in its sole discretion, may set restrictions based upon
the achievement of Performance Goals. The Performance Goals shall be set by the
Committee on or before the latest date permissible to enable the Restricted
Stock to qualify as “performance-based compensation” under section 162(m) of the
Code. In granting Restricted Stock which is intended to qualify under section
162(m) of the Code, the Committee shall follow any procedures determined by it
from time to time to be necessary or appropriate to ensure qualification of the
Restricted Stock under section 162(m) of the Code (e.g., in determining the
Performance Goals).

7.4.3 Legend on Certificates. The Committee, in its sole discretion, may legend
the certificates representing Restricted Stock to give appropriate notice of
such restrictions. For example, the Committee may determine that some or all
certificates representing Shares of Restricted Stock shall bear the following
legend:

“The sale or other transfer of the shares of stock represented by this
certificate, whether voluntary, involuntary, or by operation of law, is subject
to certain restrictions on transfer as set forth in the Varian, Inc. Omnibus
Stock Plan, and in a Restricted Stock Agreement. A copy of the Plan and such
Restricted Stock Agreement may be obtained from the Secretary of Varian, Inc.”

7.5 Removal of Restrictions. Shares of Restricted Stock covered by each
Restricted Stock grant made under the Plan shall be released from escrow as soon
as practicable after the last day of the Period of Restriction. The Committee,
in its sole discretion, may accelerate the time at which any restrictions shall
lapse, and remove any restrictions. After the restrictions have lapsed, the
Participant shall be entitled to have any legend or legends under Section 7.4
removed from his or her Share certificate, and the Shares shall be freely
transferable by the Participant.

7.6 Voting Rights. During the Period of Restriction, Participants holding Shares
of Restricted Stock granted hereunder may exercise full voting rights with
respect to those Shares, unless otherwise provided in the Award Agreement.

7.7 Dividends and Other Distributions. During the Period of Restriction,
Participants holding Shares of Restricted Stock shall be entitled to receive all
dividends and other distributions paid with respect to such Shares unless
otherwise provided in the Award Agreement. If any such dividends or
distributions are paid in Shares, the Shares shall be subject to the same
restrictions on transferability and forfeitability as the Shares of Restricted
Stock with respect to which they were paid.

7.8 Return of Restricted Stock to Company. On the date set forth in the Award
Agreement, the Restricted Stock for which restrictions have not lapsed shall
revert to the Company and again shall become available for grant under the Plan.

 

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SECTION 8

PERFORMANCE UNITS, PERFORMANCE SHARES AND STOCK UNITS

8.1 Grant of Performance Units, Performance Shares and Stock Units. Performance
Units, Performance Shares and Stock Units may be granted to Employees at any
time and from time to time, as shall be determined by the Committee, in its sole
discretion. The Committee shall have complete discretion in determining the
number of Performance Units, Performance Shares and Stock Units granted to any
Participant, provided that pursuant to the Plan no more than 850,000 Shares in
the aggregate may be (a) issued pursuant to Performance Units, Performance
Shares and Stock Units, and (b) granted as Restricted Stock.

8.2 Initial Value. Each Performance Unit shall have an initial value that is
established by the Committee on or before the Grant Date, provided that such
value shall not exceed the Fair Market Value of a Share on the Grant Date. Each
Performance Share shall have an initial value equal to the Fair Market Value of
a Share on the Grant Date.

8.3 Performance Objectives and Other Terms. The Committee, in its sole
discretion, shall set performance objectives and/or other vesting criteria
which, depending on the extent to which they are met or satisfied, will
determine the number or value of Performance Units, Performance Shares or Stock
Units that will be paid out to the Participants. The Committee may set
performance objectives or other vesting criteria based upon the achievement of
Company-wide, business unit, or individual goals, or any other basis (including
continued employment) determined by the Committee in its sole discretion. The
time period during which performance objectives must be met shall be called the
“Performance Period.” Each Award of Performance Units, Performance Shares or
Stock Units shall be evidenced by an Award Agreement that shall specify the
Performance Period, and such other terms and conditions as the Committee, in its
sole discretion, shall determine.

8.3.1 General Performance Objectives. The Committee may set performance
objectives based upon the achievement of Company-wide, business unit or
individual goals, or any other basis determined by the Committee in its sole
discretion.

8.3.2 Section 162(m) Performance Objectives. For purposes of qualifying grants
of Performance Units, Performance Shares or Stock Units as “performance-based
compensation” under section 162(m) of the Code, the Committee, in its sole
discretion, may determine that the performance objectives applicable to
Performance Units, Performance Shares or Stock Units shall be based on the
achievement of Performance Goals. The Performance Goals shall be set by the
Committee on or before the latest date permissible to enable the Performance
Units, Performance Shares or Stock Units to qualify as “performance-based
compensation” under section 162(m) of the Code. In granting Performance Units,
Performance Shares or Stock Units which are intended to qualify under section
162(m) of the Code, the Committee shall follow any procedures determined by it
from time to time to be necessary or appropriate to ensure qualification of the
Performance Units, Performance Shares or Stock Units under section 162(m) of the
Code (e.g., in determining the Performance Goals).

8.4 Earning of Performance Units, Performance Shares and Stock Units. After the
applicable Performance Period has ended, the Participant shall be entitled to
receive a payout

 

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of the number of Performance Units, Performance Shares or Stock Units earned
during the Performance Period, depending upon the extent to which the applicable
performance objectives have been achieved. After the grant of a Performance
Unit, Performance Share or Stock Unit, the Committee, in its sole discretion,
may reduce or waive any performance objectives for the Award.

8.5 Terms of Stock Units.

8.5.1 Award Agreement. Each Award of a Stock Unit shall be evidenced by an Award
Agreement (satisfactory to the Committee), which shall be executed by the
Participant and the Company.

8.5.2 Vesting. Each Award of a Stock Unit shall vest upon the Participant’s
Termination of Service.

8.5.3 Dividends and Other Distributions. Any dividends or other distributions
paid on the Shares underlying an Award of Stock Units shall be deemed reinvested
in Stock Units (the “Dividend Stock Units”). Dividend Stock Units shall be
subject to the same terms and conditions as the underlying Award, including any
deferral election made pursuant to Section 8.7.

8.6 Form and Timing of Payment.

8.6.1 Performance Shares and Units. Payment of earned Performance Units or
Performance Shares shall be made as soon as practicable after the expiration of
the applicable Performance Period or satisfaction of any other vesting criteria.
The Committee, in its sole discretion, may pay such earned Awards in cash,
Shares or a combination thereof.

8.6.2 Stock Units. Payment of Stock Units shall be made by issuance of Shares as
soon as administratively practicable following an individual’s Termination of
Service. Notwithstanding the preceding, a Participant may, at the sole
discretion of, and in accordance with rules established by the Committee, elect
to defer delivery of the proceeds of an Award of Stock Units. A Participant’s
election as provided in the preceding sentence shall be irrevocable and shall
comply will all applicable provisions of the Code (including, but not by way of
limitation, Section 409A).

8.7 Cancellation. On the date set forth in the Award Agreement, all unearned or
unvested Performance Units, Performance Shares or Stock Unit shall be forfeited
to the Company, and again shall be available for grant under the Plan.

8.8 Elections by Participants. At the sole discretion of the Committee, and
pursuant to such procedures as the Committee (in its sole discretion) may adopt
from time to time, each Participant may elect to forego receipt of all or a
portion of cash compensation otherwise due to the Participant in exchange for
Shares and/or Stock Units. The number of Shares and/or Stock Units received by a
Participant shall equal the amount of foregone compensation divided by the Fair
Market Value of a Share on the date that the compensation otherwise would have
been paid to the Participant, rounded up to the nearest whole number of Shares.

 

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SECTION 9

NON-EMPLOYEE DIRECTORS

9.1 Granting of Options.

9.1.1 Non-employee Directors. Each Non-employee Director (including a
Non-Employee Chairman of the Board) shall be granted an Option to purchase
10,000 Shares (an “Initial Grant”) on the date of the Non-employee Director’s
appointment or election as a Non-employee Director. Thereafter, for so long as
the Non-employee Director serves as such, he or she annually shall be granted an
Option for an additional 4,000 Shares (each a “Subsequent Grant”). Each such
Subsequent Grant shall be made on the first business day after each Annual
Meeting of Stockholders occurring after the date of the Initial Grant or
previous Subsequent Grant, but only if the Non-employee Director has
continuously served as such through the Grant Date.

9.1.2 Chairman. Each Chairman of the Company who is a Non-employee Director
shall be granted an Option to purchase 20,000 Shares (an “Initial Chairman’s
Grant”) on the date such individual becomes Chairman.

9.2 Terms of Options.

9.2.1 Option Agreement. Each Option granted pursuant to this Section 9 shall be
evidenced by a written stock option agreement which shall be executed by the
Non-employee Director and the Company.

9.2.2 Exercise Price. The Exercise Price for the Shares subject to each Option
granted pursuant to this Section 9 shall be one hundred percent (100%) of the
Fair Market Value of such Shares on the Grant Date.

9.2.3 Exercisability. Each Initial Grant and Initial Chairman’s Grant shall vest
and become exercisable in three equal installments over three years from the
Grant Date, assuming continued service as a Director. Each Subsequent Grant
shall be fully exercisable on the Grant Date.

9.2.4 Expiration of Options. Each Option shall terminate upon the first to occur
of the following events:

(a) The expiration of ten (10) years from the Grant Date; or

(b) The expiration of three (3) years from the date of the Non-employee
Director’s Termination of Service as a result of death, Disability, resignation
prior to completion of the Director’s term as a Director, or completion of the
Director’s term.

(c) The expiration of one (1) month from the date of the Non-employee Director’s
Termination of Service for a reason other than death, Disability, resignation
prior to completion of the Director’s term as a Director, or completion of the
Director’s term.

 

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9.2.5 Death of Director. Notwithstanding Section 9.2.4, if a Non-employee
Director dies prior to the expiration of his or her options in accordance with
Section 9.2.4, his or her options shall terminate three (3) years after the date
of his or her death.

9.2.6 Not Incentive Stock Options. Options granted pursuant to this Section 9
shall not be designated as Incentive Stock Options.

9.2.7 Other Terms. All provisions of the Plan not inconsistent with this
Section 9 shall apply to Options granted to Non-employee Directors; provided,
however, that Section 5.2 (relating to the Committee’s discretion to set the
terms and conditions of Options) shall be inapplicable with respect to
Non-employee Directors.

9.3 Grant of Stock Units. On the first business day after each Annual Meeting of
Stockholders, each individual then serving as a Non-employee Director shall be
granted Stock Units with an initial value of $45,000, rounded up to the nearest
whole number of Shares.

9.4 Terms of Stock Units.

9.4.1 Award Agreement. Each Award granted pursuant to Section 9.3 shall be
evidenced by an Award Agreement (satisfactory to the Board), which shall be
executed by the Non-Employee Director and the Company.

9.4.2 Vesting. Each Award granted pursuant to Section 9.3 shall vest upon the
Non-Employee Director’s Termination of Service.

9.4.3 Dividends and Other Distributions. Any dividends or other distributions
paid on the Shares underlying an Award granted under Section 9.3 shall be deemed
reinvested in Stock Units (the “Dividend Stock Units”). Dividend Stock Units
shall be subject to the same terms and conditions as the underlying Award,
including any deferral election made pursuant to Section 9.4.4.

9.4.4 Form and Timing of Payment. Payment of Stock Units shall be made by
issuance of Shares as soon as administratively practicable following an
individual’s Termination of Service. Notwithstanding the preceding, a
Non-employee Director may, at the sole discretion of, and in accordance with
rules established by the Board, elect to defer delivery of the proceeds of an
Award of Stock Units granted pursuant to Section 9.3. A Non-employee Director’s
election as provided in the preceding sentence shall be irrevocable and shall
comply with all applicable provisions of the Code (including, but not by way of
limitation, Section 409A).

9.5 Substitute Options. Notwithstanding the provisions of Section 9.2.2, in the
event that the Company or an Affiliate consummates a transaction described in
section 424(a) of the Code (e.g., the acquisition of property or stock from an
unrelated corporation), persons who become Non-employee Directors on account of
such transaction may be granted Options in substitution for options granted by
their former employer. If such substitute Options are granted, the Committee, in
its sole discretion and consistent with section 424(a) of the Code, shall
determine the exercise price of such substitute Options.

 

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9.6 Discretion to Adjust Awards. The Board (in its sole discretion) may reduce
the size of any Award that would otherwise be made under Sections 9.1 or 9.3, at
any time before such Award is made.

9.7 Elections by Non-employee Directors. Pursuant to such procedures as the
Board (in its sole discretion) may adopt from time to time, each Non-employee
Director may elect to forego receipt of all or a portion of the annual retainer,
committee chair fees, meeting attendance fees and other cash compensation
otherwise due to the Non-employee Director in exchange for Shares and/or Stock
Units. The number of Shares and/or Stock Units received by any Non-employee
Director shall equal the amount of foregone compensation divided by the Fair
Market Value of a Share on the date that the compensation otherwise would have
been paid to the Non-employee Director, rounded up to the nearest whole number
of Shares. Unless otherwise expressly determined by the Committee, the rules and
procedures for any deferral elections and deferrals under this Section 9.6 shall
be designed to comply with Section 409A of the Code.

SECTION 10

MISCELLANEOUS

10.1 No Effect on Employment or Service. Nothing in the Plan shall interfere
with or limit in any way the right of the Company to terminate any Participant’s
employment or service at any time, with or without cause. For purposes of the
Plan, transfer of employment of a Participant between the Company and any one of
its Affiliates (or between Affiliates) shall not be deemed a Termination of
Service. Employment with the Company and its Affiliates is on an at-will basis
only.

10.2 Participation. No Employee shall have the right to be selected to receive
an Award under this Plan, or, having been so selected, to be selected to receive
a future Award.

10.3 Indemnification. Each person who is or shall have been a member of the
Committee, or of the Board, shall be indemnified and held harmless by the
Company against and from (a) any loss, cost, liability, or expense that may be
imposed upon or reasonably incurred by him or her in connection with or
resulting from any claim, action, suit, or proceeding to which he or she may be
a party or in which he or she may be involved by reason of any action taken or
failure to act under the Plan or any Award Agreement, and (b) from any and all
amounts paid by him or her in settlement thereof, with the Company’s approval,
or paid by him or her in satisfaction of any judgment in any such claim, action,
suit, or proceeding against him or her, provided he or she shall give the
Company an opportunity, at its own expense, to handle and defend the same before
he or she undertakes to handle and defend it on his or her own behalf. The
foregoing right of indemnification shall not be exclusive of any other rights of
indemnification to which such persons may be entitled under the Company’s
Certificate of Incorporation or Bylaws, by contract, as a matter of law, or
otherwise, or under any power that the Company may have to indemnify them or
hold them harmless.

10.4 Successors. All obligations of the Company under the Plan, with respect to
Awards granted hereunder, shall be binding on any successor to the Company,
whether the

 

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existence of such successor is the result of a direct or indirect purchase,
merger, consolidation or otherwise, of all or substantially all of the business
or assets of the Company.

10.5 Beneficiary Designations. If permitted by the Committee, a Participant
under the Plan may name a beneficiary or beneficiaries to whom any vested but
unpaid Award shall be paid in the event of the Participant’s death. Each such
designation shall revoke all prior designations by the Participant and shall be
effective only if given in a form and manner acceptable to the Committee. In the
absence of any such designation, any vested benefits remaining unpaid at the
Participant’s death shall be paid to the Participant’s estate and, subject to
the terms of the Plan and of the applicable Award Agreement, any unexercised
vested Award may be exercised by the administrator or executor of the
Participant’s estate.

10.6 Nontransferability of Awards. No Award granted under the Plan may be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated, other
than by will, by the laws of descent and distribution, or to the limited extent
provided in Section 10.5. All rights with respect to an Award granted to a
Participant shall be available during his or her lifetime only to the
Participant.

10.7 No Rights as Stockholder. Except to the limited extent provided in Sections
7.6 and 7.7, no Participant (nor any beneficiary) shall have any of the rights
or privileges of a stockholder of the Company with respect to any Shares
issuable pursuant to an Award (or exercise thereof), unless and until
certificates representing such Shares shall have been issued, recorded on the
records of the Company or its transfer agents or registrars, and delivered to
the Participant (or beneficiary).

10.8 Withholding Requirements. Prior to the delivery of any Shares or cash
pursuant to an Award (or exercise thereof), the Company shall have the power and
the right to deduct or withhold, or require a Participant to remit to the
Company, an amount sufficient to satisfy federal, state, local and foreign taxes
(including the Participant’s FICA obligation) required to be withheld with
respect to such Award (or exercise thereof). Notwithstanding any contrary
provision of the Plan, if a Participant fails to remit to the Company such
withholding amount within the time period specified by the Committee (in its
sole discretion), the Participant’s Award may, in the Committee’s sole
discretion, be forfeited and in such case the Participant shall not receive any
of the Shares subject to such Award.

10.9 Withholding Arrangements. The Committee, in its sole discretion and
pursuant to such procedures as it may specify from time to time, may permit or
require a Participant to satisfy all or part of the tax withholding obligations
in connection with an Award by (a) having the Company withhold otherwise
deliverable Shares, or (b) delivering to the Company already-owned Shares having
a Fair Market Value equal to the amount required to be withheld. The amount of
the withholding requirement shall be deemed to include any amount which the
Committee determines, not to exceed the amount determined by using the maximum
federal, state, local and foreign jurisdiction marginal income tax rates
applicable to the Participant with respect to the Award on the date that the
amount of tax to be withheld is to be determined. The Fair Market Value of the
Shares to be withheld or delivered shall be determined as of the date that the
taxes are required to be withheld.

 

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10.10 Deferrals. The Committee, in its sole discretion, may permit a Participant
to defer receipt of the payment of cash or the delivery of Shares that would
otherwise be delivered to a Participant under the Plan. Any such deferral
elections shall be subject to such rules and procedures as shall be determined
by the Committee in its sole discretion. Unless otherwise expressly determined
by the Committee, the rules and procedures for any deferral elections and
deferrals under this Section 10.10 shall be designed to comply with Section 409A
of the Code.

SECTION 11

AMENDMENT, TERMINATION AND DURATION

11.1 Amendment, Suspension or Termination. The Board, in its sole discretion,
may amend or terminate the Plan, or any part thereof, at any time and for any
reason. The amendment, suspension or termination of the Plan shall not, without
the consent of the Participant, alter or impair any rights or obligations under
any Award theretofore granted to such Participant. No Award may be granted
during any period of suspension or after termination of the Plan.

11.2 Duration of the Plan. The Plan shall commence on the date specified herein,
and subject to Section 11.1 (regarding the Board’s right to amend or terminate
the Plan), shall remain in effect thereafter. However, without further
stockholder approval, no Incentive Stock Option may be granted under the Plan
after November 7, 2017.

SECTION 12

LEGAL CONSTRUCTION

12.1 Gender and Number. Except where otherwise indicated by the context, any
masculine term used herein also shall include the feminine; the plural shall
include the singular and the singular shall include the plural.

12.2 Severability. In the event any provision of the Plan shall be held illegal
or invalid for any reason, the illegality or invalidity shall not affect the
remaining parts of the Plan, and the Plan shall be construed and enforced as if
the illegal or invalid provision had not been included.

12.3 Requirements of Law. The granting of Awards and the issuance of Shares
under the Plan shall be subject to all applicable laws, rules and regulations,
and to such approvals by any governmental agencies or national securities
exchanges as may be required.

12.4 Governing Law. The Plan and all Award Agreements shall be construed in
accordance with and governed by the laws of the State of California, but without
regard to its conflict of law provisions.

12.5 Captions. Captions are provided herein for convenience only, and shall not
serve as a basis for interpretation or construction of the Plan.

 

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EXECUTION

IN WITNESS WHEREOF, Varian, Inc., by its duly authorized officer, has executed
the Plan on the date indicated below.

 

    VARIAN, INC. Dated:   November 8, 2007     By:   /s/ A. W. Homan       Name:
  A. W. Homan       Title:   Senior Vice President, General Counsel         and
Secretary

 

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