<PAGE>


                                                                    EXHIBIT 10.1


                          VARIAN MEDICAL SYSTEMS, INC.

                               OMNIBUS STOCK PLAN


<PAGE>


                                TABLE OF CONTENTS
                                                                   Page

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 "Director".................................................2
     2.11 "Disability"...............................................2
     2.12 "EBIT".....................................................2
     2.13 "EBITDA"...................................................2
     2.14 "Earnings Per Share".......................................2
     2.15 "Employee".................................................2
     2.16 "Exercise Price"...........................................2
     2.17 "Fair Market Value"........................................2
     2.18 "Fiscal Year"..............................................2
     2.19 "Grant Date"...............................................2
     2.20 "Incentive Stock Option"...................................2
     2.21 "Net Income"...............................................2
     2.22 "Non-employee Director"....................................2
     2.23 "Non-qualified Stock Option"...............................2
     2.24 "Operating Cash Flow"......................................2
     2.25 "Option"...................................................2
     2.26 "Participant"..............................................3
     2.27 "Performance Goals"........................................3
     2.28 "Performance Period".......................................3
     2.29 "Performance Share"........................................3
     2.30 "Performance Unit".........................................3
     2.31 "Period of Restriction"....................................3
     2.32 "Plan".....................................................3
     2.33 "Restricted Stock".........................................3
     2.34 "Retirement"...............................................3
     2.35 "Return on Assets".........................................3
     2.36 "Return on Equity..........................................3
     2.37 "Return on Sales"..........................................3
     2.38 "Revenue"..................................................3
     2.39 "Rule 16b-3"...............................................3
     2.40 "Section 16 Person"........................................4
     2.41 "Shareholder Return".......................................4
     2.42 "Shares"...................................................4
     2.43 "Stock Appreciation Right".................................4
     2.44 "Subsidiary"...............................................4
     2.45 "Termination of Service"...................................4
     2.46 "VAI"......................................................4


                                      -i-
<PAGE>


                                TABLE OF CONTENTS
                                   (continued)
                                                                   Page

SECTION 3 ADMINISTRATION.............................................4

     3.1  The Committee..............................................4
     3.2  Authority of the Committee.................................4
     3.3  Delegation by the Committee................................4
     3.4  Non-employee Directors.....................................5
     3.5  Decisions Binding..........................................5

SECTION 4 SHARES SUBJECT TO THE PLAN.................................5

     4.1  Number of Shares...........................................5
     4.2  Lapsed Awards..............................................5
     4.3  Adjustments in Awards and Authorized Shares................5

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

     5.1  Grant of Options...........................................5
     5.2  Award Agreement............................................5
     5.3  Exercise Price.............................................5
          5.3.1 Non-qualified Stock Options..........................6
          5.3.2 Incentive Stock Options..............................6
          5.3.3 Substitute Options...................................6
     5.4  Expiration of Options......................................6
          5.4.1 Expiration Dates.....................................6
          5.4.2 Death of Participant.................................6
          5.4.3 Committee Discretion.................................6
     5.5  Exercisability of Options..................................6
     5.6  Payment....................................................7
     5.7  Restrictions on Share Transferability......................7
     5.8  Certain Additional Provisions for Incentive Stock Options..7
          5.8.1 Exercisability.......................................7
          5.8.2 Termination of Service...............................7
          5.8.3 Company and Subsidiaries Only........................7
          5.8.4 Expiration...........................................7
     5.9  Grant of Reload Options....................................7

SECTION 6 STOCK APPRECIATION RIGHTS..................................8

     6.1  Grant of SARs..............................................8
     6.2  Exercise Price and Other Terms.............................8
     6.3  SAR Agreement..............................................8
     6.4  Expiration of SARs.........................................8
     6.5  Payment of SAR Amount......................................8
     6.6  Payment Upon Exercise of SAR...............................8

SECTION 7 RESTRICTED STOCK...........................................8

     7.1  Grant of Restricted Stock..................................8
     7.2  Restricted Stock Agreement.................................8
     7.3  Transferability............................................8
     7.4  Other Restrictions.........................................8
          7.4.1 General Restrictions.................................9
          7.4.2 Section 162(m) Performance Restrictions..............9
          7.4.3 Legend on Certificates...............................9


                                      -ii-
<PAGE>


                                TABLE OF CONTENTS
                                   (continued)

                                                                   Page

     7.5  Removal of Restrictions....................................9
     7.6  Voting Rights..............................................9
     7.7  Dividends and Other Distributions..........................9
     7.8  Return of Restricted Stock to Company......................9

SECTION 8 PERFORMANCE UNITS AND PERFORMANCE SHARES...................9

     8.1  Grant of Performance Units and Shares......................9
     8.2  Initial Value..............................................9
     8.3  Performance Objectives and Other Terms....................10
          8.3.1 General Performance Objectives......................10
          8.3.2 Section 162(m) Performance Objectives...............10
     8.4  Earning of Performance Units and Performance Shares.......10
     8.5  Form and Timing of Payment................................10
     8.6  Cancellation..............................................10

SECTION 9 NON-EMPLOYEE DIRECTORS....................................10

     9.1  Granting of Options.......................................10
          9.1.1 Non-employee Directors..............................10
          9.1.2 Chairman............................................10
     9.2  Terms of Options..........................................11
          9.2.1 Option Agreement....................................11
          9.2.2 Exercise Price......................................11
          9.2.3 Exercisability......................................11
          9.2.4 Expiration of Options...............................11
          9.2.5 Death of Director...................................11
          9.2.6 Not Incentive Stock Options.........................11
          9.2.7 Other Terms.........................................11
     9.3  Substitute Options........................................11
     9.4  Elections by Non-employee Directors.......................12

SECTION 10 MISCELLANEOUS............................................12

     10.1 No Effect on Employment or Service........................12
     10.2 Participation.............................................12
     10.3 Indemnification...........................................12
     10.4 Successors................................................12
     10.5 Beneficiary Designations..................................12
     10.6 Nontransferability of Awards..............................12
     10.7 No Rights as Stockholder..................................13
     10.8 Withholding Requirements..................................13
     10.9 Withholding Arrangements..................................13
     10.10 Deferrals................................................13

SECTION 11 AMENDMENT, TERMINATION AND DURATION......................13

     11.1 Amendment, Suspension or Termination......................13
     11.2 Duration of the Plan......................................13

SECTION 12 LEGAL CONSTRUCTION.......................................13

     12.1 Gender and Number.........................................13
     12.2 Severability..............................................14
     12.3 Requirements of Law.......................................14
     12.4 Governing Law.............................................14
     12.5 Captions..................................................14

                                     -iii-

<PAGE>


                          VARIAN MEDICAL SYSTEMS, INC.
                               OMNIBUS STOCK PLAN


                                   SECTION 1
                        BACKGROUND, PURPOSE AND DURATION

     1.1 EFFECTIVE DATE. This amended and restated Plan is effective as of the
date on which VAI distributes the shares of the common stock of Varian, Inc. and
Varian Semiconductor Equipment Associates, Inc. to the stockholders of VAI,
subject to the approval of the Plan by a majority of the shares of the common
stock of VAI which are present in person or by proxy and entitled to vote at the
1999 Annual and Special Meeting of the Stockholders of VAI.

     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, and (3) directors of the Company who are employees of
neither the Company nor any Affiliate. The Plan also is intended to further the
growth and profitability of the Company. The Plan is intended to permit the
grant of Awards that qualify as performance-based compensation under section
162(m) of the Code.

                                    SECTION 2
                                   DEFINITIONS

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

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

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

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

     2.4 "AWARD AGREEMENT" means the written agreement setting forth the terms
and provisions applicable to each Award granted under the Plan.

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

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

                                       1

<PAGE>


     2.10 "DIRECTOR" means any individual who is a member of the Board

     2.11 "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.

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

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

     2.14 "EARNINGS PER SHARE" means as to any Performance Period, the Company's
or a business unit's Net Income, divided by a weighted average number of common
shares outstanding and dilutive common equivalent shares deemed outstanding,
determined in accordance with generally accepted accounting principles.

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

     2.16 "EXERCISE PRICE" means the price at which a Share may be purchased by
a Participant pursuant to the exercise of an Option.

     2.17 "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.

     2.18 "FISCAL YEAR" means the fiscal year of the Company.

     2.19 "GRANT DATE" means, with respect to an Award, the date that the Award
was granted.

     2.20 "INCENTIVE STOCK OPTION" means an Option to purchase Shares which is
designated as an Incentive Stock Option and is intended to meet the requirements
of section 422 of the Code.

     2.21 "NET INCOME" means as to any Performance Period, the Company's or a
business unit's income after taxes, determined in accordance with generally
accepted accounting principles.

     2.22 "NON-EMPLOYEE DIRECTOR" means a Director who is an employee of neither
the Company nor of any Affiliate.

     2.23 "NON-QUALIFIED STOCK OPTION" means an option to purchase Shares which
is not intended to be an Incentive Stock Option.

     2.24 "OPERATING CASH FLOW" means as to any Performance Period, the
Company's or a business unit's sum of Net Income plus depreciation and
amortization less capital expenditures plus changes in working capital comprised
of accounts receivable, inventories, other current assets, trade accounts
payable, accrued expenses, product warranty, advance payments from customers and
long-term accrued expenses, determined in accordance with generally acceptable
accounting principles.

     2.25 "OPTION" means an Incentive Stock Option or a Non-qualified Stock
Option.

                                       2

<PAGE>


     2.26 "PARTICIPANT" means an Employee, Consultant, or Non-employee Director
who has an outstanding Award.

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

     2.28 "PERFORMANCE PERIOD" means any fiscal period not to exceed three
consecutive Fiscal Years, as determined by the Committee in its sole discretion.

     2.29 "PERFORMANCE SHARE" means a Performance Share granted to a Participant
pursuant to Section 8.

     2.30 "PERFORMANCE UNIT" means a Performance Unit granted to a Participant
pursuant to Section 8.

     2.31 "PERIOD OF RESTRICTION" means the period during which shares of
Restricted Stock are subject to forfeiture and/or restrictions on
transferability.

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

     2.33 "RESTRICTED STOCK" means an Award granted to a Participant pursuant to
Section 7.

     2.34 "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."

     2.35 "RETURN ON ASSETS" means as to any Performance Period, the percentage
equal to the Company's or a business unit's EBIT before incentive compensation,
divided by average net Company or business unit, as applicable, assets,
determined in accordance with generally accepted accounting principles.

     2.36 "RETURN ON EQUITY" means as to any Performance Period, the percentage
equal to the Company's Net Income divided by average stockholder's equity,
determined in accordance with generally accepted accounting principles.

     2.37 "RETURN ON SALES" means as to any Performance Period, the percentage
equal to the Company's or a business unit's EBIT before incentive compensation,
divided by the Company's or the business unit's, as applicable, Revenue,
determined in accordance with generally accepted accounting principles.

     2.38 "REVENUE" means as to any Performance Period, the Company's or a
business unit's net sales, determined in accordance with generally accepted
accounting principles.

     2.39 "RULE 16B-3" means Rule 16b-3 promulgated under the 1934 Act, as
amended, and any future regulation amending, supplementing or superseding such
regulation.

                                       3

<PAGE>


     2.40 "SECTION 16 PERSON" means a person who, with respect to the Shares, is
subject to section 16 of the 1934 Act.

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

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

     2.43 "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.

     2.44 "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.

     2.45 "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; and (c) in the case of a Non-employee Director, a cessation of the
Non-employee Director's service on the Board for any reason.

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

                                   SECTION 3
                                 ADMINISTRATION

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

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

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

                                        4

<PAGE>


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

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

                                   SECTION 4
                           SHARES SUBJECT TO THE PLAN

     4.1 NUMBER OF SHARES. Subject to adjustment as provided in Section 4.3, the
total number of Shares available for grant under the Plan shall not exceed
5,000,000, plus such number of Shares as are granted pursuant to substitute
Options under Sections 5.3.3 and 9.3 in connection with the distribution of
Shares to the stockholders of VAI. 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, 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, and the
numerical limit of Section 5.1 in such manner as the Committee (in its sole
discretion) shall determine to be appropriate to prevent the dilution or
diminution of such Awards. In the case of Options granted to Non-employee
Directors pursuant to Section 9, the foregoing adjustments shall be made by the
Board, and any such adjustments also shall apply to the future grants provided
by Section 9. Notwithstanding the preceding, the number of Shares subject to any
Award always shall be a whole number.

                                    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, provided that during any Fiscal Year, no Participant shall be granted
Options covering more than 1,000,000 Shares. The Committee may grant Incentive
Stock Options, Non-qualified Stock Options, or a combination thereof.

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

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

                                        5

<PAGE>

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

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

          5.3.3 SUBSTITUTE OPTIONS. Notwithstanding the provisions of Sections
     5.3.1 and 5.3.2, in the event that the Company or an Affiliate consummates
     a transaction described in section 424(a) of the Code (e.g., the
     acquisition of property or stock from an unrelated corporation), persons
     who become Employees 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.

          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 (subject to Section 5.8.2 regarding Incentive
          Stock Options); or

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

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

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

          5.4.3 COMMITTEE DISCRETION. Subject to the limits of Sections 5.4.1
     and 5.4.2, the Committee, in its sole discretion, (a) shall provide in each
     Award Agreement when each Option expires and becomes unexercisable, and (b)
     may, after an Option is granted and before such Option expires, extend the
     maximum term of the Option (subject to Section 5.8.4 regarding Incentive
     Stock Options).

     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

                                        6

<PAGE>


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 CERTAIN ADDITIONAL PROVISIONS FOR INCENTIVE STOCK OPTIONS.

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

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

          5.8.3 COMPANY AND SUBSIDIARIES ONLY. Incentive Stock Options may be
     granted only to persons who are employees of the Company or a Subsidiary on
     the Grant Date.

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

     5.9 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.

                                        7

<PAGE>

                                    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 1,000,000 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 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 100,000
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.

                                        8

<PAGE>


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

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

         "The sale or other transfer of the shares of stock represented by this
         certificate, whether voluntary, involuntary, or by operation of law, is
         subject to certain restrictions on transfer as set forth in the Varian
         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 100,000 Performance Shares or
Performance Units may be granted to any Participant.

                                        9

<PAGE>


     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.

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

     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
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
                             NON-EMPLOYEE DIRECTORS

     9.1 GRANTING OF OPTIONS.

          9.1.1 NON-EMPLOYEE DIRECTORS. Each Non-employee Director shall be
     granted an Option to purchase 10,000 Shares (an "Initial Grant") on the
     later of the Effective Date of the Plan or the date of the Non-employee
     Director's appointment or election as a Non-employee Director. Thereafter,
     for so long as the Non-employee Director serves as such, he or she annually
     shall be granted an Option for an additional 5,000 Shares (each a
     "Subsequent Grant"). Each such Subsequent Grant shall be made on the first
     business day after each Annual Meeting of Stockholders occurring after the
     date of the Initial Grant or previous Subsequent Grant, but only if the
     Non-employee Director has continuously served as such through the Grant
     Date.

                                       10

<PAGE>


          9.1.2 CHAIRMAN. Each Chairman of the Company who is a Non-employee
     Director shall be granted an Option to purchase 100,000 Shares (an "Initial
     Chairman's Grant") on the later of the Effective Date of the Plan or the
     date such individual becomes Chairman. Thereafter, for so long as such
     individual serves as Chairman, he or she annually will be granted an Option
     for an additional 5,000 Shares (each a "Subsequent Chairman's Grant"). Each
     such Subsequent Chairman's Grant shall be made on the first business day
     after each Annual Meeting of Stockholders occurring after the date of the
     Initial Chairman's Grant or previous Subsequent Chairman's Grant, but only
     if the individual has continuously served as Chairman through the Grant
     Date. Any Initial Chairman's Grant or Subsequent Chairman's Grant shall be
     in lieu of any Initial Grant or Subsequent Grant the Chairman otherwise
     would be entitled to under Section 9.1.1.

     9.2 TERMS OF OPTIONS.

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

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

          9.2.3 EXERCISABILITY. Each Option granted pursuant to this Section 9
     shall be fully exercisable on the Grant Date.

          9.2.4 EXPIRATION OF OPTIONS. Each Option shall terminate upon the
     first to occur of the following events:

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

               (b) The expiration of three (3) months from the date of the
          Non-employee Director's Termination of Service for a reason other than
          death, Disability, resignation or Retirement; or

               (c) The expiration of three (3) years from the date of the
          Non-employee Director's Termination of Service by reason of completion
          of the Participant's term as a Director, Disability or Retirement; or

               (d) The expiration of one (1) month from the date of the
          Non-employee Director's Termination of Service by reason of
          resignation.

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

          9.2.6 NOT INCENTIVE STOCK OPTIONS. Options granted pursuant to this
     Section 9 shall not be designated as Incentive Stock Options.

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

     9.3 SUBSTITUTE OPTIONS. Notwithstanding the provisions of Section 9.2.2, in
the event that the Company or an Affiliate consummates a transaction described
in section 424(a) of the Code (e.g., the acquisition of property or stock from
an unrelated corporation), persons who become Non-employee Directors on account
of such transaction may be granted Options in substitution for options granted
by their former employer. If such substitute

                                       11

<PAGE>


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.

     9.4 ELECTIONS BY NON-EMPLOYEE DIRECTORS. Pursuant to such procedures as the
Board (in its discretion) may adopt from time to time, each Non-employee
Director may elect to forego receipt of all or a portion of the annual retainer,
committee chair fees, meeting attendance fees and other cash compensation
otherwise due to the Non-employee Director in exchange for Shares. The number of
Shares received by any Non-employee Director shall equal the amount of foregone
compensation divided by the Fair Market Value of a Share on the date that the
compensation otherwise would have been paid to the Non-employee Director,
rounded up to the nearest whole number of Shares. In addition, pursuant to such
procedures as the Board (in its discretion) may adopt from time to time, each
Non-employee Director may elect to forego receipt of all or a portion of the
annual retainer, committee chair and meeting attendance fees and other cash
compensation otherwise due to the Non-employee Director in exchange for an
Option to purchase Shares. The number of Shares subject to such an Option
received by any Non-employee Director shall equal the amount of foregone
compensation multiplied by four (4) and divided by the Fair Market Value of a
Share on the date that the compensation otherwise would have been paid to the
Non-employee Director, rounded up to the nearest whole number of Shares. All
Options granted pursuant to this Section 9.4 shall be subject to the
restrictions of Section 9.2.

                                   SECTION 10
                                  MISCELLANEOUS

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

     10.2 PARTICIPATION. No Employee 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.

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

     10.4 SUCCESSORS. All obligations of the Company under the Plan, with
respect to Awards granted hereunder, shall be binding on any successor to the
Company, whether the existence of such successor is the result of a direct or
indirect purchase, merger, consolidation or otherwise, of all or substantially
all of the business or assets of the Company.

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

                                       12

<PAGE>


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

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

     10.8 WITHHOLDING REQUIREMENTS. Prior to the delivery of any Shares or cash
pursuant to an Award (or exercise thereof), the Company shall have the power and
the right to deduct or withhold, or require a Participant to remit to the
Company, an amount sufficient to satisfy federal, state, local and foreign taxes
(including the Participant's FICA obligation) required to be withheld with
respect to such Award (or exercise thereof). Notwithstanding any contrary
provision of the Plan, if a Participant fails to remit to the Company such
withholding amount within the time period specified by the Committee (in its
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.

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

     10.10 DEFERRALS. The Committee, in its sole discretion, may permit a
Participant to defer receipt of the payment of cash or the delivery of Shares
that would otherwise be delivered to a Participant under the Plan. Any such
deferral elections shall be subject to such rules and procedures as shall be
determined by the Committee in its sole discretion.

                                   SECTION 11
                       AMENDMENT, TERMINATION AND DURATION

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

     11.2 DURATION OF THE PLAN. The Plan shall commence on the date specified
herein, and subject to Section 11.1 (regarding the Board's right to amend or
terminate the Plan), shall remain in effect thereafter. However, without further
stockholder approval, no Incentive Stock Option may be granted under the Plan
after ten (10) years from the Effective Date.

                                   SECTION 12
                               LEGAL CONSTRUCTION

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

                                       13

<PAGE>


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

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

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

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

                                    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:  April 2, 1999                            By
                                                   -----------------------------
                                                   Name:  Joseph B. Phair
                                                   Title:


                                       14