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                                                                   EXHIBIT 10.1

                                  VARIAN, INC.

                          EMPLOYEE STOCK PURCHASE PLAN

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                                TABLE OF CONTENTS

                                                                           PAGE

Section  1            PURPOSE.................................................1

Section  2            DEFINITIONS.............................................1

         2.1      "1934 Act"..................................................1

         2.2      "Board".....................................................1

         2.3      "Code"......................................................1

         2.4      "Committee".................................................1

         2.5      "Common Stock"..............................................1

         2.6      "Company"...................................................1

         2.7      "Compensation"..............................................1

         2.8      "Eligible Employee".........................................1

         2.9      "Employee"..................................................2

         2.10     "Employer" or "Employers"...................................2

         2.11     "Enrollment Date"...........................................2

         2.12     "Grant Date"................................................2

         2.13     "Participant"...............................................2

         2.14     "Plan"......................................................2

         2.15     "Purchase Date".............................................2

         2.16     "Shares"....................................................2

         2.17     "Subsidiary"................................................2

Section 3             ADMINISTRATION..........................................2

         3.1      Committee...................................................2

         3.2      Authority of the Committee..................................3

         3.3      Delegation by the Comittee..................................3

         3.4      Decisions Binding...........................................3

         3.5      Administrative Expenses.....................................3

Section 4             SHARES SUBJECT TO THE PLAN..............................3

         4.1      Number Available............................................3

         4.2      Adjustments.................................................4

Section 5             ENROLLMENT..............................................4

         5.1      Participation...............................................4

         5.2      Payroll Withholding.........................................4

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                               TABLE OF CONTENTS
                                   (CONTINUED)

                                                                            PAGE

Section 6             OPTIONS TO PURCHASE COMMON STOCK........................4

         6.1      Grant of Option.............................................4

         6.2      Duration of Option..........................................4

         6.3      Number of Shares Subject to Option..........................5

         6.4      Other Terms and Conditions..................................5

Section 7             PURCHASE OF SHARES......................................5

         7.1      Exercise of Option..........................................5

         7.2      Delivery of Shares..........................................5

         7.3      Exhaustion of Shares........................................6

Section 8             WITHDRAWAL AND CESSATION OF PARTICIPATION...............6

         8.1      Withdrawal..................................................6

         8.2      Termination of Status as Eligible Employee..................6

Section 9             MISCELLANEOUS...........................................6

         9.1      No Effect on Employment.....................................6

         9.2      Participation by Subsidiaries...............................6

         9.3      Indemnification.............................................7

         9.4      Beneficiary Designations....................................7

         9.5      Inalienability..............................................7

         9.6      Compliance with Rule 16b-3..................................7

         9.7      Apportionment of Costs and Duties...........................7

         9.8      No Rights as Stockholder....................................7

         9.9      Withholding Requirements....................................8

         9.10     Withholding Arrangements....................................8

Section 10            AMENDMENT, TERMINATION AND DURATION.....................8

         10.1     Amendment, Suspension or Termination........................8

         10.2     Duration of the Plan........................................8

Section 11            LEGAL CONSTRUCTION......................................8

         11.1     Gender and Number...........................................8

         11.2     Severability................................................9

         11.3     Requirements of Law.........................................9

         11.4     Governing Law...............................................9

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                              TABLE OF CONTENTS
                                   (CONTINUED)

                                                                           PAGE

         11.5     Captions....................................................9

EXECUTION             ........................................................9


                                      iii
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                                  VARIAN, INC.
                          EMPLOYEE STOCK PURCHASE PLAN

                                    SECTION 1
                                     PURPOSE

     Varian,  Inc. hereby  establishes the Varian,  Inc. Employee Stock Purchase
Plan,  effective as of the first  Enrollment  Date, in order to provide eligible
employees of the Company and its participating Subsidiaries with the opportunity
to purchase Common Stock through payroll deductions.

                                   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 "BOARD" means the Board of Directors of the Company.

     2.3 "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,  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.

     2.4  "COMMITTEE"  means the committee  appointed by the Board to administer
the Plan. As of the effective date of the Plan,  the Plan shall be  administered
by the Stock Committee of the Board.

     2.5 "COMMON STOCK" means the common stock of the Company.

     2.6 "COMPANY" means Varian, Inc., a Delaware corporation,  or any successor
thereto.

     2.7 "COMPENSATION"  means a Participant's  regular wages. The Board, in its
discretion, may (on a uniform and nondiscriminatory basis) establish a different
definition of  Compensation  prior to an  Enrollment  Date for all options to be
granted on such Enrollment Date.

     2.8 "ELIGIBLE EMPLOYEE" means every Employee of an Employer, except (a) any
Employee who immediately  after the grant of an option under the Plan, would own
stock and/or hold outstanding  options to purchase stock possessing five percent
(5%) or more of the total combined voting power or value of all classes of stock
of the Company or of any Subsidiary

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of the Company  (including stock attributed to such Employee pursuant to Section
424(d) of the Code), or (b) as provided in the following sentence. The Board, in
its  discretion,  from time to time  may,  prior to an  Enrollment  Date for all
options to be granted  on such  Enrollment  Date,  determine  (on a uniform  and
nondiscriminatory  basis) that an Employee shall not be an Eligible  Employee if
he or she: (1) has not  completed a minimum  period of service  since his or her
last hire date,  (2)  customarily  works less than a minimum number of hours per
week,  (3)  customarily  works less than a minimum number of months per calendar
year, or (4) is an officer or other manager of the Company.

     2.9  "EMPLOYEE"  means an active  employee  of an  Employer,  whether  such
employee  is so  employed at the time the Plan is adopted or becomes so employed
subsequent to the adoption of the Plan.

     2.10  "EMPLOYER" or  "EMPLOYERS"  means any one or all of the Company,  and
those  Subsidiaries  whose  employees  the Board has  designated  as eligible to
participate in the Plan.

     2.11  "ENROLLMENT  DATE"  means  such  dates  as may be  determined  by the
Committee (in its discretion and on a uniform and nondiscriminatory  basis) from
time to time.

     2.12  "GRANT  DATE"  means any date on which a  Participant  is  granted an
option under the Plan.

     2.13  "PARTICIPANT"  means  an  Eligible  Employee  who  (a) has  become  a
Participant  in the Plan  pursuant to Section 4.1 and (b) has not ceased to be a
Participant pursuant to Section 8 or Section 9.

     2.14 "PLAN" means the Varian,  Inc.  Employee  Stock  Purchase Plan, as set
forth in this instrument and as hereafter amended from time to time.

     2.15 "PURCHASE DATE" means such dates as may be determined by the Committee
(in its  discretion and on a uniform and  nondiscriminatory  basis) from time to
time  prior  to an  Enrollment  Date  for  all  options  to be  granted  on such
Enrollment Date.

     2.16 "SHARES" means shares of Common Stock.

     2.17   "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.

                                   SECTION 3.
                                 ADMINISTRATION

     3.1 THE COMMITTEE.  The Plan shall be  administered  by the Committee.  The
Committee  shall have the  authority  to control  and manage the  operation  and
administration  of the Plan.  The member(s) of the Committee  shall be appointed
from time to time by, and serve at the pleasure of, the Board.

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     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 supervise the
administration  of the Plan and to control  its  operation,  including,  but not
limited to, the power to (a) interpret and determine the meaning and validity of
the provisions of the Plan and the options and to determine any question arising
under, or in connection with, the  administration,  operation or validity of the
Plan or the options,  (b)  determine  any and all  considerations  affecting the
eligibility  of any employee to become a Participant  or to remain a Participant
in the  Plan,  (c)  cause an  account  or  accounts  to be  maintained  for each
Participant,  (d) determine the time or times when, and the number of Shares for
which,  options shall be granted,  (e) establish and revise an accounting method
or formula for the Plan,  (f) designate a custodian or broker to receive  Shares
purchased  under the Plan and to  determine  the manner and form in which Shares
are to be delivered to the  designated  custodian or broker,  (g)  determine the
status and rights of Participants and their Beneficiaries or estates, (h) employ
such brokers,  counsel,  agents and advisers,  and to obtain such broker, legal,
clerical and other services, as it may deem necessary or appropriate in carrying
out the provisions of the Plan, (i) establish,  from time to time, rules for the
performance of its powers and duties and for the administration of the Plan, and
(j) adopt such procedures and subplans as are necessary or appropriate to permit
participation  in the Plan by  Employees  who are foreign  nationals or employed
outside of the United States.

     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 in any way which would jeopardize the Plan's  qualification
under Rule 16b-3.

     3.4  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 possible deference permitted by law.

     3.5 ADMINISTRATIVE EXPENSES. All expenses incurred in the administration of
the Plan by the  Committee,  or  otherwise,  including  legal fees and expenses,
shall be paid and borne by the  Employers,  except any stamp  duties or transfer
taxes applicable to the purchase of Shares may be charged to the account of each
Participant.  Any  brokerage  fees for the  purchase of Shares by a  Participant
shall be paid by the Company,  but fees and taxes (including brokerage fees) for
the transfer, sale or resale of Shares by a Participant shall be borne solely by
the Participant.

                                   SECTION 4
                           SHARES SUBJECT TO THE PLAN

     4.1 NUMBER AVAILABLE. Subject to adjustment as provided in Section 4.2, the
total number of Shares  available  for issuance  under the Plan shall not exceed
1,200,000.  Shares  sold  under the Plan may be either  newly  issued  Shares or
treasury Shares.

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     4.2 ADJUSTMENTS. 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 Board shall adjust the number,  class and purchase price of the
Shares available for purchase under the Plan and in the maximum number of Shares
subject  to any option  under the Plan in such  manner as the Board (in its sole
discretion)  shall  determine  to be  appropriate  to prevent  the  dilution  or
diminution of such options.

                                   SECTION 5
                                   ENROLLMENT

     5.1 PARTICIPATION. Each Eligible Employee may elect to become a Participant
by enrolling or re-enrolling in the Plan effective as of any Enrollment Date. In
order to enroll,  an Eligible  Employee  must  complete,  sign and submit to the
Company an enrollment  form in such form,  manner and by such deadline as may be
specified  by the  Committee  from  time to time  (in  its  discretion  and on a
nondiscriminatory  basis).  Any Participant whose option expires and who has not
withdrawn  from the Plan  automatically  will be  re-enrolled in the Plan on the
Enrollment  Date  immediately  following  the Purchase  Date on which his or her
option  expires.  Any  Participant  whose option has not expired and who has not
withdrawn from the Plan  automatically will be deemed to be un-enrolled from the
Participant's  current option and be enrolled as of a subsequent Enrollment Date
if the price  per Share on such  subsequent  Enrollment  Date is lower  than the
price per Share on the  Enrollment  Date relating to the  Participant's  current
option.

     5.2 PAYROLL  WITHHOLDING.  On his or her enrollment  form, each Participant
must elect to make Plan  contributions  via payroll  withholding from his or her
Compensation. Pursuant to such procedures as the Committee may specify from time
to time, a Participant may elect to have withholding equal to a whole percentage
from 1% to 10% (or such lesser percentage that the Board may establish from time
to time for all options to be granted on any Enrollment Date). A Participant may
elect  to  increase  or  decrease  his or her  rate of  payroll  withholding  by
submitting a new enrollment  form in accordance  with such  procedures as may be
established  by the Committee  from time to time. A Participant  may stop his or
her payroll  withholding by submitting a new enrollment  form in accordance with
such  procedures as may be  established  by the Committee  from time to time. In
order to be effective as of a specific date, an enrollment form must be received
by the Company no later than the  deadline  specified by the  Committee,  in its
discretion and on a nondiscriminatory  basis, from time to time. Any Participant
who is  automatically  re-enrolled in the Plan will be deemed to have elected to
continue  his or  her  contributions  at  the  percentage  last  elected  by the
Participant.

                                   SECTION 6
                        OPTIONS TO PURCHASE COMMON STOCK

     6.1 GRANT OF  OPTION.  On each  Enrollment  Date on which  the  Participant
enrolls  or  re-enrolls  in the Plan,  he or she shall be  granted  an option to
purchase Shares.

     6.2 DURATION OF OPTION.  Each option granted under the Plan shall expire on
the  earliest to occur of (a) the  completion  of the  purchase of Shares on the
last Purchase Date occurring  within 27 months of the Grant Date of such option,
(b) such shorter option period as

                                       4
<PAGE>

     may be  established  by the Board from time to time prior to an  Enrollment
Date for all options to be granted on such  Enrollment  Date, or (c) the date on
which  the  Participant  ceases  to be such  for  any  reason.  Until  otherwise
determined by the Committee for all options to be granted on an Enrollment Date,
the period  referred to in clause (b) in the preceding  sentence  shall mean the
period from the applicable  Enrollment  Date through the last business day prior
to the immediately following Enrollment Date.

     6.3 NUMBER OF SHARES SUBJECT TO OPTION.  The number of Shares available for
purchase by each  Participant  under the option may be limited by the Board from
time to time prior to an  Enrollment  Date for all options to be granted on such
Enrollment Date.

     6.4  OTHER  TERMS AND  CONDITIONS.  Each  option  shall be  subject  to the
following additional terms and conditions:

          (a) payment for Shares  purchased  under the option shall be made only
     through payroll withholding under Section 5.2;

          (b)   purchase  of  Shares  upon   exercise  of  the  option  will  be
     accomplished only in accordance with Section 7.1;

          (c) the  price  per  Share  under the  option  will be  determined  as
     provided in Section 7.1; and

          (d) the option in all  respects  shall be subject to such other  terms
     and conditions (applied on a uniform and  nondiscriminatory  basis), as the
     Committee shall determine from time to time in its discretion.

                                   SECTION 7
                               PURCHASE OF SHARES

     7.1 EXERCISE OF OPTION.  Subject to Section 7.2, on each Purchase Date, the
funds then  credited  to each  Participant's  account  shall be used to purchase
whole Shares. Any cash remaining after whole Shares have been purchased shall be
carried forward in the  Participant's  account for the purchase of Shares on the
next Purchase Date. The price per Share of the Shares purchased under any option
granted under the Plan shall be eighty-five percent (85%) of the lower of:

          (a) the  closing  price per Share on the Grant Date for such option on
     the NASDAQ National Market System; or

          (b) the  closing  price per Share on the  Purchase  Date on the NASDAQ
     National Market System.

     7.2  DELIVERY  OF  SHARES.  As  directed  by  the  Committee  in  its  sole
discretion, Shares purchased on any Purchase Date shall be delivered directly to
the Participant or to a custodian or broker (if any) designated by the Committee
to hold  Shares  for the  benefit  of the  Participants.  As  determined  by the
Committee  from  time to time,  such  Shares  shall  be  delivered  as  physical
certificates or by means of a book entry system.

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<PAGE>

     7.3  EXHAUSTION OF SHARES.  If at any time the Shares  available  under the
Plan  are  over-enrolled,   enrollments  shall  be  reduced  proportionately  to
eliminate the over-enrollment.  Such reduction method shall be "bottom up", with
the result that all option  exercises  for one Share shall be  satisfied  first,
followed by all exercises for two Shares,  and so on, until all available Shares
have been exhausted.  Any funds that, due to over-enrollment,  cannot be applied
to the purchase of whole Shares shall be refunded to the  Participants  (without
interest thereon). SECTION 8 WITHDRAWAL AND CESSATION OF PARTICIPATION

     8.1  WITHDRAWAL.  A Participant  may withdraw from the Plan by submitting a
completed enrollment form to the Company. A withdrawal will be effective only if
it is received by the Company by the deadline specified by the Committee (in its
discretion and on a uniform and nondiscriminatory basis) from time to time. When
a withdrawal becomes effective,  the Participant's  payroll  contributions shall
cease and all  amounts  then  credited  to the  Participant's  account  shall be
distributed to him or her (without interest thereon).

     8.2 TERMINATION OF STATUS AS ELIGIBLE  EMPLOYEE.  A Participant shall cease
to be a  Participant  immediately  upon the cessation of his or her status as an
Eligible Employee (for example,  because of his or her termination of employment
from an Employer for any reason).  As soon as practicable  after such cessation,
the  Participant's  payroll  contributions  shall  cease  and all  amounts  then
credited  to  the  Participant's  account  shall  be  distributed  to him or her
(without interest thereon).  If a Participant is on a Company-approved  leave of
absence,  in the  Committee's  discretion his or her  participation  in the Plan
shall continue for so long as he or she remains an Eligible Employee and has not
withdrawn from the Plan pursuant to Section 8.1.

                                   SECTION 9
                                  MISCELLANEOUS

     9.1 NO EFFECT ON EMPLOYMENT.  Neither the  establishment  or maintenance of
the Plan, the granting of options, the purchase of Shares, nor any action of any
Employer  or the  Committee,  shall  be held or  construed  to  confer  upon any
individual  any right to be continued as an employee of the Employer  nor,  upon
dismissal,  any right or interest in any specific  assets of the Employers other
than as provided in the Plan.  Each  Employer  expressly  reserves  the right to
discharge any employee at any time, with or without cause.

     9.2 PARTICIPATION BY SUBSIDIARIES.  One or more Subsidiaries of the Company
may become participating Employers with approval for such participation from the
Board.  A Subsidiary  that becomes a  participating  employer shall be deemed to
agree to all of the Plan's terms,  including (but not limited to) the provisions
granting exclusive  authority (a) to the Board to amend the Plan, and (b) to the
Committee to  administer  and  interpret the Plan. An Employer may terminate its
participation  in the Plan at any time. The liabilities  incurred under the Plan
to the Participants employed by each Employer shall be solely the liabilities of
that Employer,  and no other Employer shall be liable for benefits  accrued by a
Participant during any period when he or she was not employed by such Employer.

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<PAGE>

     9.3 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,  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.

     9.4 BENEFICIARY  DESIGNATIONS.  If permitted by the Committee (or a uniform
and  nondiscriminatory   basis),  a  Participant  under  the  Plan  may  name  a
beneficiary or beneficiaries  to whom any amounts credited to the  Participant's
account  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  amounts  remaining  unpaid  at  the
Participant's death shall be paid to the Participant's estate.

     9.5  INALIENABILITY.  In no  event  may  either  a  Participant,  a  former
Participant  or  his  or her  beneficiary,  spouse  or  estate  sell,  transfer,
anticipate,  assign,  hypothecate, or otherwise dispose of any right or interest
under the Plan;  and such rights and interests  shall not at any time be subject
to the claims of creditors nor be liable to attachment, execution or other legal
process.  Accordingly,  for example, a Participant's interest in the Plan is not
transferable pursuant to a domestic relations order.

     9.6  COMPLIANCE  WITH RULE  16B-3.  Any  transactions  under this Plan with
respect to officers  (as defined in Rule 16a-1  promulgated  under the 1934 Act)
are  intended to comply with all  applicable  conditions  of Rule 16b-3.  To the
extent any provision of the Plan or action by the Committee  fails to so comply,
it shall be deemed  null and void,  to the  extent  permitted  by law and deemed
advisable by the Committee.  Notwithstanding any contrary provision of the Plan,
if the Board  specifically  determines that compliance with Rule 16b-3 no longer
is required, all references in the Plan to Rule 16b-3 shall be null and void.

     9.7  APPORTIONMENT OF COSTS AND DUTIES.  All acts required of the Employers
under the Plan may be performed by the Company for itself and its  Subsidiaries,
and the costs of the Plan may be equitably  apportioned  by the Committee  among
the Company and the other  Employers.  Whenever  an  Employer  is  permitted  or
required under the terms of the Plan to do or perform any act,  matter or thing,
it shall be done and  performed by any officer or employee of the  Employers who
is thereunto duly authorized by the Employers.

     9.8 NO RIGHTS AS STOCKHOLDER.  No Participant (nor any  beneficiary)  shall
have any of the  rights or  privileges  of a  stockholder  of the  Company  with
respect to any Shares

                                       7
<PAGE>

issuable upon exercise of an option, 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).

     9.9 WITHHOLDING REQUIREMENTS.  Prior to the delivery of any Shares pursuant
to exercise of an option,  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 the
exercise of such option.

     9.10 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 option 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 option 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.

                                   SECTION 10
                       AMENDMENT, TERMINATION AND DURATION

     10.1  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. If the Plan is terminated, the Board, in its discretion, may
elect to terminate all outstanding options either immediately or upon completion
of the  purchase  of Shares on the next  Purchase  Date,  or may elect to permit
options to expire in accordance with their terms (and  participation to continue
through  such  expiration  dates).  If  the  options  are  terminated  prior  to
expiration,  all amounts then credited to Participants'  accounts which have not
been used to purchase  Shares  shall be returned  to the  Participants  (without
interest thereon) as soon as administratively practicable.

     10.2 DURATION OF THE PLAN.  The Plan shall  commence on the date  specified
herein,  and subject to Section 10.1  (regarding  the Board's  right to amend or
terminate the Plan), shall remain in effect thereafter.

                                   SECTION 11
                               LEGAL CONSTRUCTION

     11.1 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.

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<PAGE>

     11.2  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.

     11.3  REQUIREMENTS  OF LAW.  The  granting of options  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.

     11.4  GOVERNING  LAW. The Plan 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.

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

                                    EXECUTION

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

                                  VARIAN, INC.

Dated: February 11, 2000          By:  /S/ A. W. HOMAN
                                       --------------------
                                  Name: A. W. Homan
                                  Title:  Vice President, General Counsel
                                             and Secretary

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