Omnibus Stock Plan by gailfan9112

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									                                         PROSPECTUS
                            VARIAN, INC. OMNIBUS STOCK PLAN
                                       FEBRUARY 3, 2005



This booklet summarizes the main features of the Varian, Inc. Omnibus Stock Plan as of
February 3, 2005. If there are any differences between the Plan as we describe it in this booklet
and the Plan itself, the Plan will govern. You can get a copy of the Plan and additional
information from our Corporate Human Resources Department.

   This booklet is part of a Prospectus covering securities that have been registered under the
                                      Securities Act of 1933.


                                General Information about the Plan

What is the Plan?

The Plan is a way to give you and other eligible employees, directors and consultants various
awards tied to our common stock. These awards include stock options, stock appreciation rights,
restricted stock, stock units, performance units and performance shares.

What is the purpose of the Plan?

The purpose of the Plan is to increase shareholder value and the success of the Company by
motivating employees of the Company and its affiliates and non-employee directors of the
Company.

Who administers the Plan?

Except for the provisions that apply to non-employee directors, the Compensation Committee of
our Board – which is made up of non-employee directors – administers the Plan and controls its
operations. The Committee is responsible for determining the employees and consultants who
will receive awards, the size and type of the awards and the terms and conditions of the awards –
within the limits of the Plan. It also has the authority to interpret the Plan’s provisions and
decide all questions arising under the Plan. Within certain limits, the Committee also may
delegate its powers under the Plan to our officers and directors. Our Board administers the
provisions of the Plan that apply to non-employee directors.

How many of our shares are available under the Plan?

We can make awards covering 10.2 million shares of Varian, Inc. common stock, plus the
additional shares used to cover options issued to replace Varian Associates, Inc. options that
were outstanding at the time of our spin-off. If an award terminates, expires or lapses, we can
generally use the underlying shares for a new award.



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If we pay a stock dividend, split our stock, merge with another company, reorganize, recapitalize
or make other changes in our capital structure affecting our shares, we will adjust the number
and class of shares subject to the Plan and the number, class and price of shares subject to
outstanding awards, and make other similar modifications to the Plan.

Who can participate in the Plan?

We can make awards to our employees and those of our affiliates (companies that we control, are
controlled by or are under common control with). In addition, the Plan provides for automatic
grants of stock options and stock units to non-employee directors.

Can we change or terminate the Plan?

The Plan has no fixed termination date, but our Board generally may amend, suspend or
terminate the Plan, or any part of the Plan, at any time or for any reason.

If I receive an award, does this affect my employment or service with Varian?

Receiving an award does not change the terms and conditions of your employment or service.
We still have the right to terminate your employment or service at any time, with or without
cause, subject to local laws. Receiving an award also does not entitle you to any other award,
compensation or severance.

                                      Employee Stock Options

What is a stock option and how do I benefit from it?

A stock option gives you the right to buy a specified number of our shares for a fixed price – the
exercise price – during a fixed period. If the value of the shares increases over the exercise price
during this period, you can, in effect, buy the shares at a “discount.” If the value does not
increase, you get no benefit from your stock option. Whatever the result, your stock option gives
you an interest in the value of our shares without risking any of your money.

Are there different types of options?

We may grant either incentive stock options (which get favorable federal tax treatment) or
nonqualified stock options (options that are not incentive stock options). We may only grant you
incentive stock options, however, if you are our employee or an employee of a subsidiary on the
grant date.

What are the terms of my option?

The Committee determines the terms of your grant. When we grant you a stock option, we give
you a written option agreement that tells you the number of shares covered by the option, the
exercise price, the expiration date, any conditions to exercise and any other terms or conditions
that apply. The option agreement also shows whether the option is an incentive stock option or a
nonqualified stock option. We cannot grant anyone stock options covering more than 500,000
shares during any fiscal year.


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How does the Committee determine the exercise price of my stock option?

The Plan requires that the exercise price normally be no less that the fair market value of a share
of our common stock on the grant date. If individuals become employees as the result of an
acquisition, however, the Committee will determine the exercise price (which may be less than
fair market value) of any options that we give them in exchange for options of their former
employer. Once we grant an option, we cannot increase the exercise price (except to reflect
reverse stock splits or other changes to our capital structure).

“Fair market value” means the sales price for our shares last quoted on the grant date. If our
shares do not trade that day, the “fair market value” is the average of the highest and lowest sales
prices on the nearest day before and the nearest day after the grant date.

When can I exercise my option?

The Committee decides when you can exercise your option. The Committee also determines any
conditions to your exercise (for example, continued employment). Your option agreement
includes this information.      The Committee has the discretionary authority accelerate your
option’s exercisability after grant.

No more than $100,000 worth of incentive stock options (based on the fair market value at grant
date) may become exercisable in any calendar year.

How do I exercise my option?

You exercise your option by sending a written notice (that includes the number of shares to be
purchased) to our Corporate Human Resources Department or its designee. You also must pay
the exercise price in full, generally in cash. The Committee may permit you to pay the exercise
price with shares you already own or by other means. Our options administrator – E*Trade –
will have procedures for you to follow.

The Plan allows the Committee to grant “reload options” to those who pay their exercise prices
in already-owned shares. A “reload option” is an additional option to purchase the number of
shares equal to the number you used to pay the exercise price, plus any shares withheld or
delivered to satisfy tax withholding requirements. A reload option’s grant date is the date of the
earlier option’s exercise and its exercise price is the fair market value of our shares on the
exercise date. The remaining terms and conditions of the reload option are the same as those of
the earlier option.

When does my option expire?

The Committee decides when your stock option will expire. After the option’s expiration date,
you can no longer exercise your option. In addition, if certain events occur – such as your
retirement, disability or termination of employment – your option may terminate earlier. For
example, termination of your employment for cause will make your option terminate
immediately. Your option agreement includes this information, which may vary among options
and participants. Please read your option agreement carefully so that you understand the effect
of various events.


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After granting an option, the Committee may extend its term within the limits of the Plan.
However, no stock option may have a term of more than 10 years from grant date, except in
certain cases in the event of death.

                     Non-Employee Director Stock Options and Stock Units

What awards do we make to our non-employee directors?

When we grant stock options to employees, the Committee has leeway in shaping the awards
within the limits of the Plan. In contrast, we make grants of stock options and stock units to our
non-employee directors (directors who are not our employees or employees of our affiliates)
automatically under a non-discretionary formula. Stock units are awards that initially represent
an amount equal to the fair market value of the same number of shares on the date of grant, and
that are paid out in shares upon vesting.

We will grant to each non-employee director, other than our Chairman of the Board, a
nonqualified stock option for 10,000 shares, and our Chairman a nonqualified option for 50,000
shares when first elected.

In addition, we will grant to each non-employee director (but not our Chairman) an option to
purchase 5,000 more shares for each year that he or she continuously serves as a non-employee
director. These grants are made the business day after our annual meeting of stockholders. As
with employees, we give each non-employee director a written stock option agreement that
shows the number of shares covered by an option, the exercise price, the expiration date and the
other terms or conditions that apply.

In addition to stock options, on the first business day after each annual meeting of our
stockholders, we will grant to each person then serving as a non-employee director stock units
with an initial value of $25,000 (rounded up to the nearest whole number of shares). These stock
units vest upon the non-employee director’s termination of service as a director and will be
payable in shares.

In addition, if the Board permits, non-employee directors may elect to defer delivery of the
proceeds of an award of stock units, and also may elect to forego all or a portion of his or her
retainers, fees and other cash compensation in exchange for shares and/or stock units. As of the
date of this prospectus, the Board has not yet determined to permit such deferrals.

What is the exercise price of non-employee directors’ options and when can they be exercised?

The exercise price of a non-employee director’s stock option is normally the fair market value of
our shares on the grant date. If someone who is not an employee becomes a member of our
Board as a result of an acquisition, we may grant that director a stock option at an exercise price
determined by the Committee – which may be less than the fair market value on the grant date.

Our non-employee directors also can choose to receive their annual retainers and other fees in
stock. Directors making this election will receive a number of shares equal to the foregone




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compensation divided by the fair market value of our shares on the date we would otherwise
have paid the compensation.

When can non-employee directors exercise stock options?

Non-employee directors can exercise their stock options immediately.

When do non-employee directors’ options expire?

No non-employee director stock option may have a term of more than 10 years from grant date,
except in certain cases in the event of death. If a non-employee director stops serving on the
Board, his or her option may terminate earlier: three months after leaving our Board for reasons
other than death, disability, retirement, resignation or completion of term; three years after
leaving our Board upon retirement, disability or completion of term; and one month after
resigning.

                                      Stock Appreciation Rights

What is a stock appreciation right?

A stock appreciation right is an award that gives you the right to profit from increases in the
value of our shares without buying the shares. We may grant stock appreciation rights with
stock options or independently, but we cannot grant stock appreciation rights with an exercise
price less than fair market value at grant date. We also cannot grant anyone stock appreciation
rights covering more than 500,000 shares during any fiscal year.

If we grant you stock appreciation rights, we give you an agreement that tells you the exercise
price, the expiration date, any conditions to exercise and any other terms and conditions that
apply.

What happens when I exercise stock appreciation rights?

When you exercise stock appreciation rights, we pay you the difference between the fair market
value of our shares on the date you exercise and your exercise price, times the number of shares
covered by your exercise. We may pay you in cash or in shares.

                                          Restricted Stock

What is restricted stock?

We may give you shares that you generally do not pay for, but that you will not be able to
transfer and must give up unless you “vest”– satisfy certain conditions to your full ownership.
This is known as “restricted stock.”

During any fiscal year, we cannot grant anyone more than 250,000 shares of in the aggregate as
restricted stock and pursuant to performance units, performance shares and stock units.




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How does restricted stock work?

We issue the shares of restricted stock in your name when we grant them, but will usually hold
them in escrow until fully vested. The Committee may set whatever conditions it thinks are
appropriate. For example, the Committee may specify that vesting will occur over a fixed period
of continued employment or your achieving specific performance goals (based, for example, on
the performance of the company or a business unit or you individually). If we grant you
restricted stock, we give you a written agreement that tells you the number of shares, any price to
be paid and any other terms or conditions that apply.

We will release your shares to you as soon as practicable after they vest. If you do not satisfy the
conditions, you will lose your shares.

What stockholder rights do I have?

You can vote your restricted stock and will receive any dividends or other distributions we pay
on your shares unless your agreement provides otherwise. If we pay a dividend or distribution in
shares, those shares will have the same conditions as your original shares of restricted stock.

                    Performance Units, Performance Shares and Stock Units

What are performance units, performance shares and stock units?

Performance units and performance shares are awards that are paid out if you meet or satisfy the
performance objectives and/or vesting criteria that the Committee establishes. The performance
objectives may reflect company-wide, business unit or individual objectives, such as company or
business unit income before interest and taxes or before interest, taxes, amortization and/or
depreciation, earnings per share, net income, operating cash flow, return on net assets, return on
equity, return on sales, revenue and stockholder return, or any other basis determined by the
Committee, including continued employment. The value of your payment will depend upon the
degree of achievement of the performance objectives, although the Committee has discretion to
reduce or waive any performance objectives after your grant. Performance units and performance
shares may be paid out in cash or shares, at the discretion of the Committee.

Stock units vest and are payable to you upon your termination of employment with us. In
addition, if the Board permits, employees may elect to defer delivery of the proceeds of an award
of stock units. Stock units are payable to you in shares. As of the date of this prospectus, the
Board has not yet determined to permit such deferrals.

What are the other terms of performance units, performance shares and stock units?

If we grant you performance units, performance shares or stock units we will give you an
agreement that tells you the performance objectives and/or vesting criteria and any other terms
and conditions that apply. All performance shares will have an initial value equal to the fair
market value of our shares on grant date; performance units will have an initial value not more
than the fair market value of our shares on grant date. During any fiscal year, we cannot grant




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anyone more than 250,000 shares in the aggregate pursuant to performance units, performance
shares and stock units and as restricted stock.

In addition, if the Board permits, employees may elect to defer all or a portion of cash
compensation due to him or her in exchange for shares or stock units. As of the date of this
prospectus, the Board has not yet determined to permit such deferrals.

                                      U.S. Income Tax Information

We have summarized below the general U.S. income tax laws that apply to awards made to you
under the Plan and sale of shares that you may obtain through awards. Please remember that
your federal, state and local income tax consequences depend on your individual circumstances.
You should seek the advice of a qualified tax adviser to discuss your awards. Also, if you are
not a U.S. taxpayer, where you live will determine the tax effect of your participation in the Plan.
This summary assumes that the exercise price of an option or stock appreciation right is less than
the fair market value of our shares when you exercise the award.

What are the tax effects of incentive stock options?

Incentive stock options are intended to qualify for the special treatment available under section
422 of the Internal Revenue Code. You generally do not have to include any amount in income
on grant or exercise of incentive stock options.

If you dispose of shares that you obtain by exercising an incentive stock option more than two
years after grant date and more than one year after you buy the shares (together, the “ISO
Holding Periods”), your gain generally will be taxable at long-term capital gain rates (this is
referred to as a “qualifying disposition”). If you sell the shares, however, within either of these
periods, generally up to the difference between the value of the shares when you exercise and the
exercise price will be ordinary income (this is referred to as a “disqualifying disposition”). Your
additional gain generally will be taxable at long-term or short-term capital gain rates (depending
on whether you have held the shares for more than one year). Also, if you dispose of the shares
within either of these periods in a transaction where you would not be able to recognize a loss
(for example a gift or a sale within 30 days before or after acquisition of an option), the
difference between the value of the shares when you exercise and the exercise price will be
ordinary income.

If you recognize a loss when you dispose of the shares that you obtain by exercising an incentive
stock option, your loss will be a capital loss. Whether your loss will be long-term or short-term
will depend on whether you held the shares for more than one year.

If you use shares obtained by exercising an incentive stock option (“Delivered Shares”) to pay
the exercise price of another incentive stock option, your payment will be treated as a
disqualifying disposition of the Delivered Shares if the Delivered Shares were purchased
pursuant to an incentive stock option and did not satisfy the ISO Holding Periods. As This type
of disposition generally will cause you to recognize ordinary income on the Delivered Shares on
the difference between the exercise price of the Delivered Shares and the fair market value of the
Delivered Shares at exercise.


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If you use exercise your incentive stock option using Delivered Shares that (1) were not
purchased pursuant to an incentive stock option or (2) were purchased pursuant to an incentive
stock option, but that satisfied the ISO Holding Periods, you generally will not recognize
income, gain or loss in connection with the exercise.

If you exercise your incentive stock option using only Delivered Shares to pay the exercise price,
your basis in the same number of new shares will be same as your basis in the Delivered Shares
plus the taxable income, if any, that you recognized on the delivery of the Delivered Shares.
Any additional new shares will have a zero basis.

Do the favorable rules for incentive stock options apply to alternative minimum tax?

The rules that generally apply to incentive stock options do not apply for the alternative
minimum tax. Instead, you compute your alternative minimum taxable income under the rules
that apply to nonqualified stock options. If you hold incentive stock options and are subject to
alternative minimum tax, you should consult your tax adviser before you exercise.

What are the tax effects of nonqualified stock options and stock appreciation rights?

You do not recognize income when we grant you nonqualified stock options or stock
appreciation rights. You will have ordinary income, however, equal to the difference between
the value of the shares that you purchase (plus any cash) and the exercise price that you pay
when you exercise. If you use shares to pay the exercise price of a nonqualified option or use a
combination of shares and cash, you will have ordinary income equal to the value of the excess
of the number of shares that you purchase over the number you surrender, less any cash you pay.

If you recognize gain when you sell or exchange shares you obtain by exercising nonqualified
stock options, your gain will be taxable at long-term or short-term capital gain rates. If you
recognize a loss, it will be a capital loss. The amount of your gain or loss will be the difference
between the amount you receive on sale or exchange of the shares and their value when you
exercised. Whether your gain or loss is long-term or short-term will depend on whether you have
held your shares for more than one year. Your holding period begins when you exercise.

What are the tax effects of restricted stock?

Unless you make an election under section 83(b) of the Internal Revenue Code, you will not
recognize taxable income when we grant you restricted stock. Instead, you generally will
recognize ordinary income as the shares vest (when you can no longer lose them). If you make a
section 83(b) election, you will recognize ordinary income when we grant you restricted stock.
If you later lose your shares, however, you cannot take a tax deduction. In either case, your
ordinary income will be equal to the fair market value of the shares when you recognize the
income.

What are the tax effects of performance units, performance shares and stock units?

You will not recognize taxable income when we grant you a performance unit, performance
share or stock unit award. You will, however, recognize ordinary income when we pay you the
cash or deliver you shares when you satisfy the conditions of the award. The amount of ordinary


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income will be equal to the amount of the cash or the fair market value of the shares. Any gain
or loss when you sell the shares will be capital gain or loss and will be long-term or short-term
depending on whether you hold the shares for more than one year.

What are our tax effects in connection with awards?

We generally will receive a federal income tax deduction equal to the amount of your ordinary
income from your award at the time you recognize that income, so long as applicable
withholding requirements are met.

The Internal Revenue Code, however, contains special rules regarding the federal income tax
deductibility of the compensation we pay to our Chief Executive Officer and each of our other
four most highly compensated officers. In general, we may only deduct up to $1 million of their
annual compensation. We can preserve the deductibility of any additional compensation if we
comply with certain conditions. We designed this Plan to permit awards that we may fully
deduct.

Is the Plan subject to ERISA or qualified under Section 401?

No, the Plan is not subject to the Employee Retirement Income Security Act of 1974 and is not
qualified under Section 401 of the Internal Revenue Code.

                                 Restrictions on Transfer and Sale

Are awards transferable?

You cannot sell, transfer, pledge, assign or otherwise alienate or hypothecate your awards, other
than by will or the laws of descent and distribution. You may, however, designate one or more
beneficiaries to receive any vested awards if you die. During your lifetime, only you can
exercise the rights associated with an award.

Does the Plan limit my ability to sell the shares?

The Plan does not restrict your ability to sell the shares that you obtain under the Plan. If you are
our “affiliate” within the meaning of Rule 405 under the Securities Act of 1933, such as a
director or executive officer, you cannot, however, resell your shares under this prospectus. Your
resales must be either described in a separate prospectus (or in certain instances registered in a
separate registration statement) or sold in accordance with Rule 144 or another exemption under
the Securities Act of 1933. You also must adhere to our insider trading policy.

In addition, if you are subject to Section 16 of the Securities Exchange Act of 1934, we may
recover any profits (as defined under Section 16) from your purchases and sales of our stock
within six months of each other. While acquisition of our shares under the Plan will not be
treated as “purchases” for Section 16(b) purposes, sales of shares acquired under the Plan will be
treated as “sales” for Section 16 (b) purposes.




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                                      Additional Information

Stockholder Rights Plan

On February 18, 1999, we adopted a stockholder rights plan and declared a dividend of one right
for each outstanding share of our common stock. The stockholder rights plan provides that we
will issue one right with each share we issue in the future.

Currently, the rights are represented by certificates for the shares of common stock and are only
transferable with the shares. The rights are not exercisable unless they are triggered by a person
or group crossing the 15% ownership threshold without the prior approval of our Board. Once
triggered, each right becomes exercisable and entitles you to acquire for the exercise price
(currently $200) Varian, Inc. common stock then valued at twice that exercise price (currently
$400). The rights held by the person or group crossing the 15% ownership threshold would
become void. The rights expire on April 2, 2009 unless we redeem them earlier at $.001 each.

When you purchase shares under the Plan, you will receive one right with each share purchased.
If the rights become exercisable, you will receive more information.

Additional Information/Incorporation by Reference

The Securities and Exchange Commission – or SEC – allows us to “incorporate by reference”
into this prospectus the information that we file with the SEC. This means that we can disclose
important information to you by referring you to those documents. If we later file updating or
superseding information in a document that is incorporated by reference into this prospectus, the
later information also will become part of this prospectus and will supersede the earlier
information.

We are incorporating the following documents that we have filed with the SEC:

            •   our registration statement on Form 10, as amended (including the description of
                our common stock contained in our Form 10, as amended, and amendments or
                reports filed to update that description);

            •   all other reports and proxy statements filed pursuant to Section 13(a) or 15(d) of
                the 1934 Act since the end of the fiscal year covered by the annual report or
                prospectus referred to above; and

            •   the description of our rights contained in our registration statement on Form 8-A
                filed with the SEC on April 1, 1999 and any amendments or reports filed to
                update that description.

We are also incorporating by reference all of our future filings with the SEC under Section 13(a),
13(c), 14 and 15(d) of the Securities Exchange Act of 1934 until we complete this offering.

You may obtain a copy of any filings that are incorporated by reference in this prospectus or in
our registration statement on Form S-8 relating to the Plan, except for exhibits to these
documents, by writing or calling:


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                                  General Counsel
                                  Varian, Inc.
                                  3120 Hansen Way
                                  Palo Alto, CA 94304-1030
                                  (650) 213-8000

We may update this prospectus in the future by sending you a supplement or other notice
containing updated information. We will not send you a new prospectus unless you request it.
Please keep this prospectus for future reference.

You can get copies of this prospectus, any supplements or other information about the Plan free
of charge by writing or calling our Corporate Human Resources Department.

You should only rely on this prospectus, any prospectus supplement or information incorporated
by reference. We have not authorized anyone to provide you with different or additional
information. You should not assume that the information in this booklet or any prospectus
supplement is accurate as of any date other than the date on its cover. We are not making an offer
of securities in any state or country where the offer is not permitted.




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