<PAGE>
                                                                   EXHIBIT 10.18

                          VARIAN MEDICAL SYSTEMS, INC.


                                 2000 STOCK PLAN


 (AMENDED AND RESTATED TO REFLECT THE JANUARY 15, 2002 TWO-FOR-ONE STOCK SPLIT)



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                               TABLE OF CONTENTS

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<S>     <C>                                                                                <C>
SECTION 1      BACKGROUND, PURPOSE AND DURATION ............................................1

        1.1    Effective Date...............................................................1
        1.2    Purpose of the Plan..........................................................1

SECTION 2      DEFINITIONS .................................................................1

        2.1    "1934 Act"...................................................................1
        2.2    "Affiliate"..................................................................1
        2.3    "Award"......................................................................1
        2.4    "Award Agreement"............................................................1
        2.5    "Board"......................................................................1
        2.6    "Code".......................................................................1
        2.7    "Committee"..................................................................1
        2.8    "Company"....................................................................1
        2.9    "Consultant".................................................................1
        2.10   "Disability".................................................................1
        2.11   "Employee"...................................................................2
        2.12   "Exercise Price".............................................................2
        2.13   "Fair Market Value"..........................................................2
        2.14   "Fiscal Year"................................................................2
        2.15   "Grant Date".................................................................2
        2.16   "Non-qualified Stock Option".................................................2
        2.17   "Option".....................................................................2
        2.18   "Participant"................................................................2
        2.19   "Performance Period".........................................................2
        2.20   "Performance Share"..........................................................2
        2.21   "Performance Unit"...........................................................2
        2.22   "Period of Restriction"......................................................2
        2.23   "Plan".......................................................................2
        2.24   "Restricted Stock"...........................................................2
        2.25   "Retirement".................................................................2
        2.26   "Shareholder Return".........................................................2
        2.27   "Shares".....................................................................2
        2.28   "Stock Appreciation Right"...................................................2
        2.29   "Subsidiary".................................................................3
        2.30   "Termination of Service".....................................................3
        2.31   "VAI"........................................................................3
</TABLE>

                                       i

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                               TABLE OF CONTENTS
                                  (continued)
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SECTION 3      ADMINISTRATION ..............................................................3

        3.1    The Committee................................................................3
        3.2    Authority of the Committee...................................................3
        3.3    Delegation by the Committee..................................................3
        3.4    Decisions Binding............................................................3

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

        4.1    Number of Shares.............................................................3
        4.2    Lapsed Awards................................................................3
        4.3    Adjustments in Awards and Authorized Shares..................................4

SECTION 5      STOCK OPTIONS ...............................................................4

        5.1    Grant of Options.............................................................4
        5.2    Award Agreement..............................................................4
        5.3    Exercise Price...............................................................4

               5.3.1  Substitute Options....................................................4

        5.4    Expiration of Options........................................................4

               5.4.1  Expiration Dates......................................................4
               5.4.2  Death of Participant..................................................5
        5.5    Exercisability of Options....................................................5
        5.6    Payment......................................................................5
        5.7    Restrictions on Share Transferability........................................5
        5.8    Grant of Reload Options......................................................5

SECTION 6      STOCK APPRECIATION RIGHTS ...................................................5

        6.1    Grant of SARs................................................................5
        6.2    Exercise Price and Other Terms...............................................5
        6.3    SAR Agreement................................................................6
        6.4    Expiration of SARs...........................................................6
        6.5    Payment of SAR Amount........................................................6
        6.6    Payment Upon Exercise of SAR.................................................6

SECTION 7      RESTRICTED STOCK ............................................................6

        7.1    Grant of Restricted Stock....................................................6
        7.2    Restricted Stock Agreement...................................................6
        7.3    Transferability..............................................................6
        7.4    Other Restrictions...........................................................6

               7.4.1  General Restrictions..................................................6
               7.4.2  Legend on Certificates................................................6
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                                       ii

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                               TABLE OF CONTENTS
                                  (continued)
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        7.5    Removal of Restrictions......................................................7
        7.6    Voting Rights................................................................7
        7.7    Dividends and Other Distributions............................................7
        7.8    Return of Restricted Stock to Company........................................7

SECTION 8      PERFORMANCE UNITS AND PERFORMANCE SHARES ....................................7

        8.1    Grant of Performance Units and Shares........................................7

        8.2    Initial Value................................................................7
        8.3    Performance Objectives and Other Terms.......................................7

               8.3.1  General Performance Objectives........................................7
        8.4    Earning of Performance Units and Performance Shares..........................7
        8.5    Form and Timing of Payment...................................................8
        8.6    Cancellation.................................................................8

SECTION 9      MISCELLANEOUS ...............................................................8

        9.1    No Effect on Employment or Service...........................................8
        9.2    Participation................................................................8
        9.3    Indemnification..............................................................8
        9.4    Successors...................................................................8
        9.5    Beneficiary Designations.....................................................8
        9.6    Nontransferability of Awards.................................................8
        9.7    No Rights as Stockholder.....................................................9
        9.8    Withholding Requirements.....................................................9
        9.9    Withholding Arrangements.....................................................9
        9.10   Deferrals....................................................................9

SECTION 10     AMENDMENT, TERMINATION AND DURATION..........................................9

        10.1   Amendment, Suspension or Termination.........................................9
        10.2   Duration of the Plan.........................................................9

SECTION 11     LEGAL CONSTRUCTION...........................................................9

        11.1   Gender and Number............................................................9
        11.2   Severability.................................................................9
        11.3   Requirements of Law.........................................................10
        11.4   Governing Law...............................................................10
        11.5   Captions....................................................................10
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                                      iii

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                          VARIAN MEDICAL SYSTEMS, INC.
                             2000 STOCK OPTION PLAN
            (AS AMENDED AND RESTATED TO REFLECT THE JANUARY 15, 2002
                            TWO-FOR-ONE STOCK SPLIT)

                                    SECTION 1
                        BACKGROUND, PURPOSE AND DURATION

            1.1 Effective Date. This Plan is effective as of November 17, 2000.

            1.2 Purpose of the Plan. The Plan is intended to increase incentives
and to encourage Share ownership on the part of (1) employees of the Company and
its Affiliates, (2) consultants who provide significant services to the Company
and its Affiliates. The Plan also is intended to further the growth and
profitability of the Company.

                                    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.

            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, 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 Medical Systems, Inc., a Delaware
corporation, or any successor thereto.

            2.9 "Consultant" means any consultant, independent contractor, or
other person who provides significant services to the Company or its Affiliates,
but who is neither an Employee nor a member of the Company's Board of Directors.

            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 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.

                                       1
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            2.11 "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 who is neither an
officer (as designated by the Company's Board of Directors) nor a director of
the Company.

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

            2.13 "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.

            2.14 "Fiscal Year" means the fiscal year of the Company.

            2.15 "Grant Date" means, with respect to an Award, the date that the
Award was granted.

            2.16 "Non-qualified Stock Option" means an option to purchase Shares
which is intended to meet the requirements of section 422 of the Code .

            2.17 "Option" means a Non-qualified Stock Option.

            2.18 "Participant" means an Employee or Consultant who has an
outstanding Award.

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

            2.20 "Performance Share" means a Performance Share granted to a
Participant pursuant to Section 8.

            2.21 "Performance Unit" means a Performance Unit granted to a
Participant pursuant to Section 8.

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

            2.23 "Plan" means the Varian Medical Systems, Inc. 2000 Stock Plan,
as set forth in this instrument and as hereafter amended from time to time.

            2.24 "Restricted Stock" means an Award granted to a Participant
pursuant to Section 7.

            2.25 "Retirement" means, in the case of an Employee or a
Non-employee Director, "Retirement" as defined pursuant to the Company's or the
Board's Retirement Policies, as they may be established from time to time. With
respect to a Consultant, no Termination of Service shall be deemed to be on
account of "Retirement."

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

            2.27 "Shares" means shares of the Company's common stock, $1.00 par
value.

            2.28 "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
<PAGE>

            2.29 "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.

            2.30 "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; (b) in the case
of a Consultant, a cessation of the service relationship between a Consultant
and the Company or an Affiliate for any reason, including, but not by way of
limitation, a termination by resignation, discharge, death, Disability, or the
disaffiliation of an Affiliate, but excluding any such termination where there
is a simultaneous re-engagement of the consultant by the Company or an
Affiliate.

            2.31 "VAI" means Varian Associates, Inc., a Delaware corporation.

                                    SECTION 3
                                 ADMINISTRATION

            3.1 The Committee. The Plan shall be administered by the Committee
which shall consist of not less than two (2) Directors. As of the effective date
of the Plan the Plan shall be administered by the Stock Grant Committee of the
Board.

            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 Consultants shall be granted
Awards, (b) prescribe the terms and conditions of the, (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 Consultants 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.

            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.

            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 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 grant under the Plan shall not
exceed 3,770,728, plus such number of Shares as are granted pursuant to
substitute Options under Sections 5.3.1. Shares granted 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. In addition, if any Shares are tendered to the Company
(whether by physical delivery or attestation) as full or partial payment for the
exercise of an Option or in satisfaction of a tax withholding obligation
pursuant to an Award, only the net Shares issued shall be deemed granted for
purposes of determining the maximum number of Shares that may be granted under
Section 4.1. Also,

                                       3
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Shares granted pursuant to Awards assumed or granted in substitution of other
awards in connection with the acquisition by the Company of an unrelated entity
shall not reduce the maximum number of Shares issuable under Section 4.1.

            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 which may be delivered under the Plan, the
number, class, and price of Shares subject to outstanding Awards, in such manner
as the Committee (in its sole discretion) shall determine to be appropriate to
prevent the dilution or diminution of such Awards. Notwithstanding the
preceding, the number of Shares subject to any Award always shall be a whole
number.

                                    SECTION 5
                                  STOCK OPTIONS

            5.1 Grant of Options. Subject to the terms and provisions of the
Plan, Options may be granted to Employees and Consultants 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.

            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 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. The Exercise Price for each Option shall be
determined by the Committee in its sole discretion.

                5.3.1 Substitute Options. Notwithstanding the provisions of this
Section 5.3.1 , 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
or Consultants 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. 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.

                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

                    (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; or

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

                                       4
<PAGE>

                    (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. If a Participant who is a Consultant dies
prior to the expiration of his or her Options, the Committee, in its discretion,
may provide that his or her Options shall be exercisable for up to three (3)
years after the date of death.

            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 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 Grant of Reload Options. The Committee may provide in an Award
Agreement that a Participant who exercises all or part of an Option by payment
of the Exercise Price with already-owned Shares, shall be granted an additional
option (a "Reload Option") for a number of shares of stock equal to the number
of Shares tendered to exercise the previously granted Option plus, if the
Committee so determines, any Shares withheld or delivered in satisfaction of any
tax withholding requirements. As determined by the Committee, each Reload Option
shall (a) have a Grant Date which is the date as of which the previously granted
Option is exercised, and (b) be exercisable on the same terms and conditions as
the previously granted Option, except that the Exercise Price shall be
determined as of 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 and Consultants 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 2,000,000 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

                                       5
<PAGE>

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.

            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 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 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 and Consultants 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 during any Fiscal Year, no Participant shall be
granted more than 200,000 Shares of Restricted Stock.

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

                7.4.2 Legend on Certificates. The Committee, in its 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

                                       6
<PAGE>

        Varian Medical Systems, 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 Medical Systems, 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 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.

                                    SECTION 8
                    PERFORMANCE UNITS AND PERFORMANCE SHARES

            8.1 Grant of Performance Units and Shares. Performance Units and
Performance Shares may be granted to Employees and Consultants 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 and Performance Shares granted to any Participant,
provided that during any Fiscal Year, no more than 200,000 Performance Shares or
Performance Units may be granted to any Participant.

            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 shall set
performance objectives in its discretion which, depending on the extent to which
they are met, will determine the number or value of Performance Units or Shares
that will be paid out to the Participants. 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
discretion. The time period during which the performance objectives must be met
shall be called the "Performance Period." Each Award of Performance Units or
Shares 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
discretion.

            8.4 Earning of Performance Units and Performance Shares. After the
applicable Performance Period has ended, the Participant shall be entitled to
receive a payout of the number of Performance Units or Shares earned during the
Performance Period, depending upon the extent to which the applicable

                                       7
<PAGE>

performance objectives have been achieved. After the grant of a Performance Unit
or Share, the Committee, in its sole discretion, may reduce or waive any
performance objectives for Award.

            8.5 Form and Timing of Payment. Payment of earned Performance Units
or Performance Shares shall be made as soon as practicable after the expiration
of the applicable Performance Period. The Committee, in its sole discretion, may
pay such earned Awards in cash, Shares or a combination thereof.

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

                                    SECTION 9
                                  MISCELLANEOUS

            9.1 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.

            9.2 Participation. No Employee or Consultant 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.

            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 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.

            9.4 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 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.

            9.5 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.

            9.6 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 9.5. All rights with respect to an Award
granted to a Participant shall be available during his or her lifetime only to
the Participant.

                                       8
<PAGE>

            9.7 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).

            9.8 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
discretion), the Participant's Award may, in the Committee's discretion, be
forfeited and in such case the Participant shall not receive any of the Shares
subject to such Award.

            9.9 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.

            9.10 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.

                                   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. 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.

            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.

            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.

                                       9
<PAGE>

            11.3 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.

            11.4 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.

            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 Medical Systems, Inc., by its duly
authorized officer, has executed the Plan on the date indicated below.

                                      VARIAN MEDICAL SYSTEMS, INC.


Dated:  January 15, 2002              By /s/ JOSEPH B. PHAIR
                                         --------------------------------------
                                         Name:   Joseph B. Phair
                                         Title:  Vice President, Administration,
                                                 General Counsel & Secretary


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