VARI-L COMPANY, INC. EMPLOYEE STOCK PURCHASE PLAN

                          AS OF DECEMBER 31, 1998

                           ARTICLE I. - PURPOSE

1.01. PURPOSE.

     The Vari-L Company, Inc. Employee Stock Purchase Plan is intended to
provide a method whereby employees of Vari-L Company, Inc. (hereinafter
referred to, unless the context otherwise requires, as the "Company") will
have an opportunity to acquire a proprietary interest in the Company
through the purchase of shares of the Common Stock of the Company.  It is
the intention of the Company to have the Plan qualify as an "Employee
Stock Purchase Plan" under Section 423 of the Internal Revenue Code of
1986, as amended (the "Code").  The provisions of the Plan shall be
construed so as to extend and limit participation in a manner consistent
with the requirements of that section of the Code.

                         ARTICLE II. - DEFINITIONS

2.01. BASE PAY.

     "Base Pay" shall mean regular straight-time earnings including
payments for overtime, shift premium, bonuses and other special payments,
commissions and other marketing incentive payments.

2.02. COMMITTEE.

     "Committee" shall mean the individuals described in Article XI.

2.03. EMPLOYEE.

     "Employee" means any person who is customarily employed on a full-
time or part-time basis by the Company and is regularly scheduled to work
more than 20 hours per week.

               ARTICLE III. -  ELIGIBILITY AND PARTICIPATION

3.01. INITIAL ELIGIBILITY.

     Any employee who shall have completed one hundred eighty (180) days'
employment and shall be employed by the Company on the date his
participation in the Plan is to become effective shall be eligible to
participate in offerings under the Plan which commence on or after such
180-day period has concluded.

3.02. LEAVE OF ABSENCE.

     For purposes of participation in the Plan, a person on leave of
absence shall be deemed to be an employee for the first 180 days of such
leave of absence and such employee's employment shall be deemed to have
terminated at the close of business on the 180th day of such leave of
absence unless such employee shall have returned to regular full-time or
part-time employment (as the case may be) prior to the close of business
on such 180th day. Termination by the Company of any employee's leave of
absence, other than termination of such leave of absence on return to full-
time or part-time employment, shall terminate an employee's employment for
all purposes of the Plan and shall terminate such employee's participation
in the Plan and right to exercise any option.

3.03. RESTRICTIONS ON PARTICIPATION.

     Notwithstanding any provisions of the Plan to the contrary, no
employee shall be granted an option to participate in the Plan:

     (a)  if, immediately after the grant, such employee would own stock,
and/or hold outstanding options to purchase stock, possessing 5% or more
of the total combined voting power or value of all classes of stock of the
Company (for purposes of this paragraph, the rules of Section 424(d) of
the Code shall apply in determining stock ownership of any employee); or

     (b)  which permits his rights to purchase stock under all employee
stock purchase plans of the Company to accrue at a rate which exceeds
$25,000 in fair market value of the stock (determined at the time such
option is granted) for each calendar year in which such option is
outstanding.

3.04. COMMENCEMENT OF PARTICIPATION.

     An eligible employee may become a participant by completing an
authorization for a payroll deduction on the form provided by the Company
and filing it with the President of the Company on or before the date set
therefor by the Committee, which date shall be prior to the end of the
third pay period after the Offering Commencement Date for the Offering (as
such terms are defined below).  Payroll deductions for a participant shall
commence on the applicable Offering Commencement Date when his
authorization for a payroll deduction becomes effective and shall end on
the Offering Termination Date of the Offering to which such authorization
is applicable unless sooner terminated by the participant as provided in
Article VIII.

                          ARTICLE IV. - OFFERINGS

4.01. ANNUAL OFFERINGS.

     The Plan was originally implemented by four annual offerings of the
Company's Common Stock beginning on the 10th day of March, 1995 and the
1st day of January in each of the years 1996, 1997, and 1998, each
offering terminating on December 31 of the same year (the "Pre-1999
Offerings").  The Company will make four additional annual offerings of
the Company's Common Stock (the "Offerings") beginning on January 1, 1999
and on the first day of January in each of the years 2000, 2001 and 2002;
provided, however, that each annual Offering may, in the discretion of the
Committee exercised prior to the commencement thereof, be divided into two
six-month Offerings commencing, respectively, on January 1 and July 1 of
such year and terminating on June 30 of such year and December 31 of such
year, respectively. The maximum number of shares issued in the respective
years shall be:

     -    From January 1, 1999 to December 31, 1999:  189,216 shares.

     -    From January 1, 2000 to December 31, 2000:  189,216 shares plus
unissued shares from the prior Offerings, whether offered or not.

     -    From January 1, 2001 to December 31, 2001:  189,216 shares plus
unissued shares from the prior Offerings, whether offered or not.

     -    From January 1, 2002 to December 31, 2002:  189,216 shares plus
unissued shares from the prior Offerings, whether offered or not.

If a six-month Offering is made, the maximum number of shares to be issued
shall be one-half (1/2) of the number of shares set forth for the annual
period in which the six-month Offering falls, plus, if the Offering is a
July 1 to December 31 Offering, unissued shares, whether offered or not,
from the immediately preceding six-month Offering.  As used in the Plan,
"Offering Commencement Date" means the January 1 or July 1, as the case
may be, on which the particular Offering begins and "Offering Termination
Date" means the June 30 or December 31, as the case may be, on which the
particular Offering terminates.

                      ARTICLE V. - PAYROLL DEDUCTIONS

5.01. AMOUNT OF DEDUCTION.

     At the time a participant files his authorization for payroll
deduction, he shall elect to have deductions made from his pay on each
payday during the time he is a participant in an Offering at the rate of
1, 2, 3, 4, 5, 6, 7, 8, 9 or 10% of his base pay in effect at the Offering
Commencement Date of such Offering.  In the case of a part-time, hourly
employee, such employee's base pay during an Offering shall be determined
by multiplying such employee's hourly rate of pay in effect on the
Offering Commencement Date by the number of regularly scheduled hours of
work for such employee during such Offering.

5.02. PARTICIPANT'S ACCOUNT.

     All payroll deductions made for a participant shall be credited to
his account under the Plan.  A participant may not make any separate cash
payment into such account except when on leave of absence and then only as
provided in Section 5.04.

5.03. CHANGES IN PAYROLL DEDUCTIONS.

     A participant may discontinue his participation in the Plan as
provided in Article VIII, but no other change can be made during an
Offering and, specifically, a participant may not alter the amount of his
payroll deductions for that Offering.

5.04. LEAVE OF ABSENCE.

     If a participant goes on a leave of absence, such participant shall
have the right to elect:   to withdraw the balance in his or her account
pursuant to Section 7.02,  to discontinue contributions to the Plan but
remain a participant in the Plan, or remain a participant in the Plan
during such leave of absence, authorizing deductions to be made from
payments by the Company to the participant during such leave of absence
and undertaking to make cash payments to the Plan at the end of each
payroll period to the extent that amounts payable by the Company to such
participant are insufficient to meet such participant's authorized Plan
deductions.

                     ARTICLE VI. - GRANTING OF OPTION

6.01. NUMBER OF OPTION SHARES.

     On the Commencement Date of each Offering, a participating employee
shall be deemed to have been granted an option to purchase a maximum
number of shares of the stock of the Company equal to an amount determined
as follows:  an amount equal to (i) that percentage of the employee's base
pay which he has elected to have withheld (but not in any case in excess
of 10%) multiplied by (ii) the employee's base pay during the period of
the offering (iii) divided by 85% of the market value of the stock of the
Company on the applicable Offering Commencement Date.  The market value of
the Company's stock shall be determined as provided in paragraphs (a) and
(b) of Section 6.02 below.  An employee's base pay during the period of an
offering shall be determined by multiplying, in the case of a one-year
offering, his normal weekly rate of pay (as in effect on the last day
prior to the Commencement Date of the particular offering) by 52 or the
hourly rate by 2,080 or, in the case of a six-month offering, by 26 or
1,040, as the case may be, provided that, in the case of a part-time,
hourly employee, the employee's base pay during the period of an offering
shall be determined by multiplying such employee's hourly rate by the
number of regularly scheduled hours of work for such employee during such
Offering.

6.02. OPTION PRICE.

     The option price of stock purchased with payroll deductions made
during such annual offering for a participant therein shall be the lower
of:

     (a)  85% of the closing price of the stock on the nearest business
day prior to the Offering Commencement Date on which trading occurred on
the NASDAQ Small Cap Market (based on the average of the closing bid and
closing ask prices) or the NASDAQ National Market System; or

     (b)  85% of the closing price of the stock on the Offering
Termination Date or the nearest prior business day on which trading
occurred on the NASDAQ Small Cap Market (based on the average of the
closing bid and closing ask prices) or the NASDAQ National Market System.
If the Common Stock of the Company is not admitted to trading on any of
the aforesaid dates for which closing prices of the stock are to be
determined, then reference shall be made to the fair market value of the
stock on that date, as determined on such basis as shall be established or
specified for the purpose by the Committee.

                     ARTICLE VII. - EXERCISE OF OPTION

7.01. AUTOMATIC EXERCISE.

     Unless a participant gives written notice to the Company as
hereinafter provided, his option for the purchase of stock with payroll
deductions made during any offering will be deemed to have been exercised
automatically on the Offering Termination Date applicable to such
offering, for the purchase of the number of full shares of stock which the
accumulated payroll deductions in his account at that time will purchase
at the applicable option price (but not in excess of the number of shares
for which options have been granted to the employee pursuant to Section
6.01), and any excess in his account at that time will be returned to him.

7.02. WITHDRAWAL OF ACCOUNT.

     By written notice to the Treasurer of the Company, at any time prior
to the Offering Termination Date applicable to any Offering, a participant
may elect to withdraw all the accumulated payroll deductions in his
account at such time.

7.03. FRACTIONAL SHARES.

     Fractional shares will not be issued under the Plan and any
accumulated payroll deductions which would have been used to purchase
fractional shares will be returned to any employee promptly following the
termination of an Offering, without interest.

7.04. TRANSFERABILITY OF OPTION.

     During a participant's lifetime, options held by such participant
shall be exercisable only by that participant.

7.05. DELIVERY OF STOCK.

     As promptly as practicable after the Offering Termination Date of
each Offering, the Company will deliver to each participant, as
appropriate, the stock purchased upon exercise of his option.

                        ARTICLE VIII. - WITHDRAWAL

8.01. IN GENERAL.

     As indicated in Section 7.02, a participant may withdraw payroll
deductions credited to his account under the Plan at any time by giving
written notice to the Treasurer of the Company.  All of the participant's
payroll deductions credited to his account will be paid to him promptly
after receipt of his notice of withdrawal, and no further payroll
deductions will be made from his pay during such Offering.  The Company
may, at its option, treat any attempt to borrow by an employee on the
security of his accumulated payroll deductions as an election, under
Section 7.02, to withdraw such deductions.

8.02. EFFECT ON SUBSEQUENT PARTICIPATION.

     A participant's withdrawal from any Offering will not have any effect
upon his eligibility to participate in any succeeding Offering or in any
similar plan which may hereafter be adopted by the Company; except that
persons subject to the reporting requirements of Section 16 of the
Securities Exchange Act of 1934, as amended, may not elect to participate
in a succeeding Offering commencing within six months of a withdrawal by
such individual.

8.03. TERMINATION OF EMPLOYMENT.

     Upon termination of the participant's employment for any reason,
including retirement (but excluding death while in the employ of the
Company or continuation of a leave of absence for a period beyond 180
days), the payroll deductions credited to his account will be returned to
him, or, in the case of his death subsequent to the termination of his
employment, to the person or persons entitled thereto under Section 12.01.

8.04. TERMINATION OF EMPLOYMENT DUE TO DEATH.

     Upon termination of the participant's employment because of his
death, his beneficiary (as defined in Section 12.01) shall have the right
to elect, by written notice given to the Treasurer of the Company prior to
the earlier of the Offering Termination Date or the expiration of a period
of sixty (60) days commencing with the date of the death of the
participant, either:

     (a)  to withdraw all of the payroll deductions credited to the
participant's account under the Plan, or

     (b)  to exercise the participant's option for the purchase of stock
on the Offering Termination Date next following the date of the
participant's death for the purchase of the number of full shares of stock
which the accumulated payroll deductions in the participant's account at
the date of the participant's death will purchase at the applicable option
price, and any excess in such account will be returned to said
beneficiary, without interest.

     In the event that no such written notice of election shall be duly
received by the President of the Company, the beneficiary shall
automatically be deemed to have elected, pursuant to paragraph (b), to
exercise the participant's option.

8.05. LEAVE OF ABSENCE.

     A participant on leave of absence shall, subject to the election made
by such participant pursuant to Section 5.04, continue to be a participant
in the Plan so long as such participant is on continuous leave of absence.
A participant who has been on leave of absence for more than 180 days and
who therefore is not an employee for the purpose of the Plan shall not be
entitled to participate in any offering commencing after the 180th day of
such leave of absence.  Notwithstanding any other provisions of the Plan,
unless a participant on leave of absence returns to regular full-time or
part-time employment with the Company at the earlier of:   the termination
of such leave of absence or  three months from the 180th day of such leave
of absence, such participant's participation in the Plan shall terminate
on whichever of such dates first occurs.

                          ARTICLE IX. - INTEREST

9.01. PAYMENT OF INTEREST.

     No interest will be paid or allowed on any money paid into the Plan
or credited to the account of any participant employee.

                            ARTICLE X. - STOCK

10.01. MAXIMUM SHARES.

     The maximum number of shares which shall be issued under the Plan,
subject to adjustment upon changes in capitalization of the Company as
provided in Section 12.04 shall not exceed 800,000 shares for all
Offerings, including the shares issued in the Pre-1999 Offerings,
consisting of 43,136 shares issued in Pre-1999 Offerings, 189,216 shares
in each annual Offering (94,608 shares in each six-month Offering) plus in
each Offering all unissued shares from prior Offerings, whether offered or
not.  If the total number of shares for which options are exercised on any
Offering Termination Date in accordance with Article VI exceeds the
maximum number of shares for the applicable Offering, the Company shall
make a pro rata allocation of the shares available for delivery and
distribution in a nearly uniform manner as it shall be practicable and as
it shall determine to be equitable, and the balance of payroll deductions
credited to the account of each participant under the Plan shall be
returned to him as promptly as possible.

10.02. PARTICIPANT'S INTEREST IN OPTION STOCK.

     The participant will have no interest in stock covered by his option
until such option has been exercised.

10.03. REGISTRATION OF STOCK.

     Stock to be delivered to a participant under the Plan will be
registered in the name of the participant, or, if the participant so
directs by written notice to the Treasurer of the Company prior to the
Offering Termination Date applicable thereto, in the names of the
participant and one such other person as may be designated by the
participant, as joint tenants with rights of survivorship or as tenants by
the entireties, to the extent permitted by applicable law.

10.04. RESTRICTIONS ON EXERCISE.

     The Board of Directors may, in its discretion, require as conditions
to the exercise of any option that the shares of Common Stock reserved for
issuance upon the exercise of the option shall have been duly qualified,
upon official notice of issuance, upon NASDAQ, and that either:

     (a)  a Registration Statement under the Securities Act of 1933, as
amended, with respect to said shares shall be effective, or

     (b)  the participant shall have represented at the time of purchase,
in form and substance satisfactory to the Company, that it is his
intention to purchase the shares for investment and not for resale or
distribution.

                       ARTICLE XI. - ADMINISTRATION

11.01. APPOINTMENT OF COMMITTEE.

     The Executive Committee of the Board of Directors (the "Committee")
shall administer the Plan.

11.02. AUTHORITY OF COMMITTEE.

     Subject to the express provisions of the Plan, the Committee shall
have plenary authority in its discretion to interpret and construe any and
all provisions of the Plan, to adopt rules and regulations for
administering the Plan, and to make all other determinations deemed
necessary or advisable for administering the Plan.  The Committee's
determination on the foregoing matters shall be conclusive.

11.03. RULES GOVERNING THE ADMINISTRATION OF THE COMMITTEE.

     The Board of Directors may from time to time appoint members of the
Committee in substitution for or in addition to members previously
appointed and may fill vacancies, however caused, in the Committee.  The
Committee may select one of its members as its Chairman and shall hold its
meetings at such times and places as it shall deem advisable and may hold
telephonic meetings.  A majority of its members shall constitute a quorum.
All determinations of the Committee shall be made by a majority of its
members.  The Committee may correct any defect or omission or reconcile
any inconsistency in the Plan, in the manner and to the extent it shall
deem desirable.  Any decision or determination reduced to writing and
signed by a majority of the members of the Committee shall be as fully
effective as if it had been made by a majority vote at a meeting duly
called and held.  The Committee may appoint a secretary and shall make
such rules and regulations for the conduct of its business as it shall
deem advisable.

                       ARTICLE XII. - MISCELLANEOUS

12.01. DESIGNATION OF BENEFICIARY.

     A participant may file a written designation of a beneficiary who is
to receive any stock and/or cash.  Such designation of beneficiary may be
changed by the participant at any time by written notice to the Treasurer
of the Company.  Upon the death of a participant and upon receipt by the
Company of proof of identity and existence at the participant's death of a
beneficiary validly designated by him under the Plan, the Company shall
deliver such stock and/or cash to such beneficiary.  In the event of the
death of a participant and in the absence of a beneficiary validly
designated under the Plan who is living at the time of such participant's
death, the Company shall deliver such stock and/or cash to the executor or
administrator of the estate of the participant, or if no such executor or
administrator has been appointed (to the knowledge of the Company), the
Company, in its discretion, may deliver such stock and/or cash to the
spouse or to any one or more dependents of the participant as the Company
may designate.  No beneficiary shall, prior to the death of the
participant by whom he has been designated, acquire any interest in the
stock or cash credited to the participant under the Plan.

12.02. TRANSFERABILITY.

     Neither payroll deductions credited to a participant's account nor
any rights with regard to the exercise of an option or to receive stock
under the Plan may be assigned, transferred, pledged, or otherwise
disposed of in any way by the participant other than by will or the laws
of descent and distribution.  Any such attempted assignment, transfer,
pledge or other disposition shall be without effect, except that the
Company may treat such act as an election to withdraw funds in accordance
with Section 7.02.

12.03. USE OF FUNDS.

     All payroll deductions received or held by the Company under this
Plan may be used by the Company for any corporate purpose and the Company
shall not be obligated to segregate such payroll deductions.

12.04. ADJUSTMENT UPON CHANGES IN CAPITALIZATION.

     (a)  If, while any options are outstanding, the outstanding shares of
Common Stock of the Company have increased, decreased, changed into, or
been exchanged for a different number or kind of shares or securities of
the Company through reorganization, merger, recapitalization,
reclassification, stock split, reverse stock split or similar transaction,
appropriate and proportionate adjustments may be made by the Committee in
the number and/or kind of shares which are subject to purchase under
outstanding options and on the option exercise price or prices applicable
to such outstanding options.  In addition, in any such event, the number
and/or kind of shares which may be offered in the Offerings described in
Article IV hereof shall also be proportionately adjusted.  No adjustments
shall be made for stock dividends.  For the purposes of this paragraph,
any distribution of shares to shareholders in an amount aggregating 20% or
more of the outstanding shares shall be deemed a stock split and any
distributions of shares aggregating less than 20% of the outstanding
shares shall be deemed a stock dividend.

     (b)  Upon the dissolution or liquidation of the Company, or upon a
reorganization, merger or consolidation of the Company with one or more
corporations as a result of which the Company is not the surviving
corporation, or upon a sale of substantially all of the property or stock
of the Company to another corporation, the holder of each option then
outstanding under the Plan will thereafter be entitled to receive at the
next Offering Termination Date upon the exercise of such option for each
share as to which such option shall be exercised, as nearly as reasonably
may be determined, the cash, securities and/or property which a holder of
one share of the Common stock was entitled to receive upon and at the time
of such transaction.  The Board of Directors shall take such steps in
connection with such transactions as the Board shall deem necessary to
assure that the provisions of this Section 12.04 shall thereafter be
applicable, as nearly as reasonably may be determined, in relation to the
said cash, securities and/or property as to which such holder of such
option might thereafter be entitled to receive.

12.05. AMENDMENT AND TERMINATION.

     The Board of Directors shall have complete power and authority to
terminate or amend the Plan; provided, however, that the Board of
Directors shall not, without the approval of the stockholders of the
Corporation (i) increase the maximum number of shares which may be issued
under any Offering (except pursuant to Section 12.04); or (ii) amend the
requirements as to the class of employees eligible to purchase stock under
the Plan.  No termination, modification, or amendment of the Plan may,
without the consent of an employee then having an option under the Plan to
purchase stock, adversely affect the rights of such employee under such
option.

12.06. EFFECTIVE DATE.

     The Plan shall become effective as of March 10, 1995.

12.07. NO EMPLOYMENT RIGHTS.

     The Plan does not, directly or indirectly, create any right for the
benefit of any employee or class of employees to purchase any shares under
the Plan, or create in any employee or class of employees any right with
respect to continuation of employment by the Company, and it shall not be
deemed to interfere in any way with the Company's right to terminate, or
otherwise modify, an employee's employment at any time.

12.08. EFFECT OF PLAN.

     The provisions of the Plan shall, in accordance with its terms, be
binding upon, and inure to the benefit of, all successors of each employee
participating in the Plan, including, without limitation, such employee's
estate and the executors, administrators or trustees thereof, heirs and
legatees, and any receiver, trustee in bankruptcy or representative of
creditors of such employee.

12.09. GOVERNING LAW.

     The laws of the State of Colorado will govern all matters relating to
this Plan except to the extent it is superseded by the laws of the United
States.