Key Employee Nonstatutory Stock Option Plan

MEDEX, INC


KEY EMPLOYEE NONSTATUTORY STOCK OPTION PLAN


1. PURPOSE


The Medex, Inc. Key Employee Nonstatutory Stock Option Plan (the "Plan") is intended to strengthen the ability of Medex, Inc. (the "Company"), to attract and retain the services of knowledgeable and experienced persons who, through their efforts and expertise, can make a significant contribution to the success of the Company's business, and to provide additional incentive for such key employees to continue to work for the best interests of the Company and its stockholders through continuing ownership of its common stock, $.01 par value ("Common Stock"). Accordingly, the Company will grant to key employees (the "Optionee") options (the "Option") to purchase shares of Common Stock of the Company on the terms and conditions hereinafter established.


2. ADMINISTRATION OF THE PLAN


The Plan shall be administered by a committee composed of three (3) members of the Board of Directors of the Company who are not employees of the Company (the "Committee"). The interpretation and construction by the Committee of any provisions of the Plan or of any agreement or other matters related to the Plan shall be final. The Committee may from time to time adopt such rules and regulations for carrying out the Plan as it may deem advisable. No member of the Committee shall be liable for any action or determination made in good faith with respect to the Plan. The Company shall grant all Options under the Plan by resolution of the Committee, which Options shall be evidenced by the delivery of certificates in a form approved by the Committee. With respect to persons subject to Section 16 of the Securities Exchange Act of 1934 ("1934 Act"), transactions under this plan are intended to comply with all applicable conditions of Rule 16b-3 or its successors under the 1934 Act. To the extent any provisions of the Plan or actions by the Committee or participants fail to comply, it shall be deemed null and void, to the extent permitted by law and deemed advisable by the Committee.


3. STOCK SUBJECT TO THE PLAN


The shares to be issued under the Plan shall be made available either from authorized but unissued shares of Common Stock of the Company or from shares of Common Stock reacquired by the Company, including shares purchased in the open market.


Shares issued under the Plan shall be subject to the terms, conditions and restrictions specified in the Plan. 2 Subject to the provisions of the succeeding paragraphs of this Section 3 and Section 10, the aggregate number of shares which may be issued under the Plan shall not exceed 1,000,000 shares.


If prior to August 28, 2001, Options issued under the Plan shall be reacquired by the Company pursuant to the provisions hereof; such Options shall again become available for granting under the Plan.


4. ELIGIBILITY AND GRANT OF OPTIONS


Options may be granted only to employees of the Company or its subsidiaries. No employee shall be eligible to receive Options within one (1) year prior to his normal retirement date. The Options issued herewith shall be nontransferrable. No Options shall be sold, assigned, pledged, encumbered or otherwise transferred by the Optionee. Subject to the terms and conditions of the Plan, options may be granted to such key employees in such amounts and at such times as the Committee shall, in its sole discretion, decide.


5. PURCHASE PRICE


The purchase price of the shares under each Option shall be the fair market value of the stock at the time such Option is granted, determined by the "Last Transaction" price at which shares of the Company's stock are listed in the "NASDAQ National Market System" quotation of the over-the-counter market at the close of business on the date of granting the Option, or if the stock was not so traded on such date, then on the next date when the stock is regularly traded and quoted on the "NASDAQ National Market System". The purchase price shall be paid in full prior to the delivery of the stock.


6. LIMITATIONS ON THE RIGHT TO EXERCISE OPTIONS


Subject to the provisions of Section 7 hereof, no Options shall be exercised unless at the time of such exercise the holder of the Options is in the employment of the Company or one of its subsidiaries. In no event shall any Options be exercised after the expiration of ten years from the date of granting such Options. Options will be exercisable during such Option period as follows:


(a) No Options shall be exercised until one year after the date of grant.


(b) At the end of one year from the date of grant, twenty percent (20%) of
the Options granted, and each year


2 3
thereafter an additional twenty percent (20%), if they do not expire
under the terms of Section 7, shall be eligible to be exercised until
all the granted Options are free of this limitation.


(c) No Options shall be exercised which do not survive the expiration
provisions of Section 7 hereof.


Any option granted on or after November 15, 1995 may, by action of the Committee, be granted with any limitation, restriction, and/or condition upon the exercise of such option as the Committee may deem appropriate, including the complete waiver of any limitation, restriction and/or condition on the right to exercise (including those set forth in Sections 6 or 7 herein), provided those limitations, restrictions and/or conditions are not in conflict with any section other than 6 or 7 of this Plan.


7. EXPIRATION OF OPTIONS


Each year all Options granted under this Plan which become exercisable under th ...