S-8

As filed with the Securities and Exchange Commission on October 27, 2004.

Registration No. 333-

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM S-8
REGISTRATION STATEMENT
Under
The Securities Act of 1933

CARDINAL HEALTH, INC.

(Exact name of registrant as specified in its charter)

Ohio
(State or other jurisdiction of incorporation or organization) 31-0958666
(I.R.S. Employer Identification No.)

7000 Cardinal Place, Dublin, Ohio
(Address of Principal Executive Offices) 43017
(Zip Code)

ALARIS MEDICAL SYSTEMS, INC. NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
ALARIS MEDICAL SYSTEMS, INC. 2004 STOCK INCENTIVE PLAN
ALARIS MEDICAL SYSTEMS, INC. 1996 STOCK OPTION PLAN
THIRD AMENDED AND RESTATED 1988 STOCK OPTION PLAN
(Full title of the plans)

Paul S. Williams
Executive Vice President, Chief Legal Officer and Secretary
Cardinal Health, Inc.
7000 Cardinal Place
Dublin, Ohio 43017
(Name and address of agent for service)

(614) 757-5000
(Telephone number, including area code, of agent for service)

CALCULATION OF REGISTRATION FEE

			Proposed maximum		Proposed maximum
Title of securities	Amount to be		offering price		aggregate offering		Amount of
to be registered	registered(1)		per share(2)		price(2)		registration fee(2)
Common Shares, without par value		569,000		$37.97		$21,604,930		$2,737.34

(1)	Also includes an indeterminable number of additional shares that may become issuable pursuant to the anti-dilution provisions of the Plans.
(2)	The registration fee has been calculated pursuant to Rule 457(c) and (h) based on the average of the high and low sale prices on October 20, 2004, of the Company’s Common Shares as reported on the New York Stock Exchange.

PART II

INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

Item 3. Incorporation of Documents by Reference.

     The information in the documents listed in (a) through (c) below to the extent filed and not furnished are incorporated by reference in this registration statement. All information filed (but not furnished) in documents filed by Cardinal Health, Inc. (the “Company”) pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), subsequent to the date of the filing of this registration statement and prior to the filing of a post-effective amendment that indicates that all securities registered hereunder have been sold, or that de-registers all securities then remaining unsold, shall be deemed to be incorporated by reference in this registration statement and to be a part hereof from the date of the filing of such documents.

(a)	The Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2004 filed with the Securities and Exchange Commission (the “Commission”) on October 26, 2004 (the “Form 10-K”);
(b)	All other information filed (but not furnished) in reports filed by the Company pursuant to Section 13(a) or 15(d) of the Exchange Act since June 30, 2004; and
(c)	The description of the Company’s Common Shares contained in the Company’s Registration Statement on Form 8-A dated August 19, 1994, pursuant to Section 12 of the Exchange Act.

Item 5. Interest of Named Experts and Counsel.

     The legality of the Common Shares offered hereby has been passed upon for the Company by Stephen T. Falk, Vice President and Associate General Counsel of the Company. Mr. Falk is paid a salary by the Company and he participates in various employee benefit plans offered to its employees generally. Mr. Falk holds Common Shares of the Company, as well as vested and unvested equity incentive awards with respect to Common Shares of the Company, valued at greater than $50,000.

Item 6. Indemnification of Directors and Officers.

     Section 1701.13(E) of the Ohio Revised Code sets forth conditions and limitations governing the indemnification of officers, directors and other persons.

     Article 6 of the Company’s Restated Code of Regulations, as amended (“Code of Regulations”), contains certain indemnification provisions adopted pursuant to authority contained in Section 1701.13(E) of the Ohio Revised Code. The Company’s Code of Regulations provides for the indemnification of its officers, directors, employees, and agents against all expenses with respect to any judgments, fines, and amounts paid in settlement, or with respect to any threatened, pending, or completed action, suit, or proceeding to which they were or are parties or are threatened to be made parties by reason of acting in such capacities, provided that it is determined, either by a majority vote of a quorum of disinterested directors of the Company or the shareholders of the Company or otherwise as provided in Section 1701.13(E) of the Ohio Revised Code, that (a) they acted in good faith and in a manner they reasonably believed to be in or not opposed to the best interests of the Company; (b) in any action, suit, or proceeding by or in the right of the Company, they were not, and have not been adjudicated to have been, negligent or guilty of misconduct in the performance of their duties to the Company; and (c) with respect to any criminal action or proceeding, that they had no reasonable cause to believe that their conduct was unlawful. Section 1701.13(E) provides that to the extent a director, officer, employee, or agent has been successful on the merits or otherwise in defense of any such action, suit, or proceeding, such individual shall be indemnified against expenses reasonably incurred in connection therewith.

     The Company has entered into indemnification contracts with each of its directors and executive officers. These contracts generally: (i) confirm the existing indemnity provided to them under the Company’s Code of Regulations and assure that this indemnity will continue to be provided; (ii) provide that if the Company does not maintain directors’ and officers’ liability insurance, the Company will, in effect, become a self-insurer of the coverage; (iii) provide that, in addition, the directors and officers shall be indemnified to the fullest extent permitted by law against all expenses (including legal fees), judgments, fines, and settlement amounts incurred by them in any action or proceeding on account of their service as a director, officer, employee, or agent of the Company, or at the request of the Company as a director, officer, employee, trustee, fiduciary, manager, member or agent of another corporation, partnership, trust, limited liability company, employee benefit plan or other enterprise; and (iv) provide for the mandatory advancement of expenses to the executive officer or director in connection with the defense of any proceedings, provided that the executive officer or director agrees to reimburse the Company for that advancement if it is ultimately determined that the executive officer or director is not entitled to indemnification for that proceeding under the agreement. Coverage under the contracts is excluded: (A) on account of conduct which is finally adjudged to be knowingly fraudulent, deliberately dishonest, or willful misconduct; or (B) if a final court of adjudication shall determine that such indemnification is not lawful; or (C) in respect of any suit in which judgment is rendered for violations of Section 16(b) of the Exchange Act or provisions of any federal, state, or local statutory law; or (D) on account of any remuneration paid which is finally adjudged to have been in violation of law; or (E) on account of conduct occurring prior to the time the executive officer or director became an officer, director, employee or agent of the Company or its subsidiaries (but in no event earlier than the time such entity became a subsidiary of the Company); or (F) with respect to proceedings initiated or brought voluntarily by the executive officer or director and not by way of defense, except for proceedings brought to enforce rights under the indemnification contract.

     The Company maintains a directors’ and officers’ insurance policy which insures the officers and directors of the Company from claims arising out of an alleged wrongful act by such persons in their respective capacities as officers and directors of the Company.

Item 8. Exhibits.

Exhibit Number	Description of Exhibit
4(a)	Specimen Certificate for the Company’s Common Shares (1)
4(b)	Amended and Restated Articles of Incorporation of the Company, as amended (2)
4(c)	Restated Code of Regulations of the Company, as amended (3)
4(d)	ALARIS Medical Systems, Inc. Non-Employee Director Stock Option Plan
4(e)	ALARIS Medical Systems, Inc. 2004 Stock Incentive Plan
4(f)	ALARIS Medical Systems, Inc. 1996 Stock Option Plan
4(g)	Third Amended and Restated 1988 Stock Option Plan
5	Opinion of Stephen T. Falk as to legality of the Common Shares being registered
23(a)	Consent of Ernst & Young LLP
23(b)	Consent of Stephen T. Falk (included in opinion filed as Exhibit 5 hereto)
24	Power of Attorney (included in the signature page to this registration statement)

(1)	Included as an exhibit to the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2001 (File No. 1-11373) and incorporated herein by reference.
(2)	Included as an exhibit to the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2004 (File No. 1-11373) and incorporated herein by reference.
(3)	Included as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2001 (File No. 1-11373) and incorporated herein by reference.

Item 9. Undertakings.

A. The undersigned Company hereby undertakes:

     (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: (i) to include any prospectus required by Section 10(a)(3) of the Securities Act; (ii) to reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement; and (iii) to include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; provided, however, that clauses (i) and (ii) do not apply if the information required to be included in a post-effective amendment by those clauses is contained in periodic reports filed with or furnished to the

Commission by the Company pursuant to Section 13 or Section 15(d) of the Exchange Act that are incorporated by reference in the registration statement;

     (2) That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof; and

     (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

B. The undersigned Company hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the Company’s annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

C. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Company pursuant to the provisions described under Item 6 above or otherwise, the Company has been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Company of expenses incurred or paid by a director, officer or controlling person of the Company in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Company will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

SIGNATURES

     The Registrant. Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Dublin, state of Ohio, on this 27th day of October, 2004.

CARDINAL HEALTH, INC.
By:	/s/ Robert D. Walter
	Robert D. Walter, Chairman and
	Chief Executive Officer

     KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Paul S. Williams as his/her attorney-in-fact and agent, with full power of substitution and re-substitution, for him/her and in his/her name, place and stead, in any and all capacities, to sign any and all amendments, including post-effective amendments, to this registration statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite or necessary to be done in and about the premises, as fully to all intents and purposes as he/she might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his substitute, may lawfully do or cause to be done by virtue hereof.

     Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated on October 27th, 2004.

Signature	Title
/s/ Robert D. Walter Robert D. Walter	Chairman, Chief Executive Officer (principal executive officer) and Director
/s/ J. Michael Losh J. Michael Losh	Chief Financial Officer (principal financial officer and principal accounting officer) and Director

Signature	Title
/s/ Dave Bing Dave Bing	Director
/s/ George H. Conrades George H. Conrades	Director
/s/ John F. Finn John F. Finn	Director
/s/ Robert L. Gerbig Robert L. Gerbig	Director
/s/ John F. Havens John F. Havens	Director
/s/ John B. McCoy John B. McCoy	Director
/s/ Richard C. Notebaert Richard C. Notebaert	Director
/s/ Michael D. O’Halleran Michael D. O’Halleran	Director
/s/ David W. Raisbeck David W. Raisbeck	Director
/s/ Jean G. Spaulding Jean G. Spaulding	Director
/s/ Matthew D. Walter Matthew D. Walter	Director

EXHIBIT INDEX

Exhibit Number	Description of Exhibit
4(a)	Specimen Certificate for the Company’s Common Shares (1)
4(b)	Amended and Restated Articles of Incorporation of the Company, as amended (2)
4(c)	Restated Code of Regulations of the Company, as amended (3)
4(d)	ALARIS Medical Systems, Inc. Non-Employee Director Stock Option Plan
4(e)	ALARIS Medical Systems, Inc. 2004 Stock Incentive Plan
4(f)	ALARIS Medical Systems, Inc. 1996 Stock Option Plan
4(g)	Third Amended and Restated 1988 Stock Option Plan
5	Opinion of Stephen T. Falk as to legality of the Common Shares being registered
23(a)	Consent of Ernst & Young LLP
23(b)	Consent of Stephen T. Falk (included in opinion filed as Exhibit 5 hereto)
24	Power of Attorney (included in the signature page to this Registration Statement)

(1)	Included as an exhibit to the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2001 (File No. 1-11373) and incorporated herein by reference.
(2)	Included as an exhibit to the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2004 (File No. 1-11373) and incorporated herein by reference.
(3)	Included as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2001 (File No. 1-11373) and incorporated herein by reference.

EX-4.D

                                                                    EXHIBIT 4(d)

                          ALARIS MEDICAL SYSTEMS, INC.

                     NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN

SECTION 1.  NAME

The name of this Plan, effective as of May 22, 2002, is the Non-Employee
Director Stock Option Plan. This Plan is a continuation, and amendment and
restatement, of the Third Amended and Restated 1990 Non-Qualified Stock Option
Plan for Non-Employee Directors, as amended effective April 17, 2000.

SECTION 2.  DEFINITIONS

For the purposes of the Plan, the following terms shall be defined as set forth
below:

         (a) "Board" means the board of directors of the Company.

         (b) "Code" means the Internal Revenue Code of 1986, as amended from
time to time, and the Treasury regulations promulgated thereunder.

         (c) "Committee" means the committee appointed by the Board to
administer the Plan as provided in Section 4(a).

         (d) "Common Stock" means the $.01 par value common stock of the Company
or any security of the Company identified by the Committee as having been issued
in substitution or exchange therefor or in lieu thereof.

         (e) "Company" means ALARIS Medical Systems, Inc., a Delaware
corporation.

         (f) "Effective Date" means September 7, 1990.

         (g) "Employee" means an individual whose wages are subject to the
withholding of federal income tax under Section 3401 of the Code.

         (h) "Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, or any successor statute.

         (i) "Fair Market Value" of a Share as of a specified date means, except
as otherwise reasonably determined by the Committee based on reported prices of
a Share, (i) the average of the highest and lowest market prices of a Share on
such date as reported in the American Stock Exchange (or the principal exchange
on which the Shares are then traded) composite transactions published in the
Eastern Edition of The Wall Street Journal or, if no trading of Common Stock is
reported for that day, the next preceding day on which trading was reported, or
(ii) if the Shares are traded in the over-the-counter market, the average of the
highest bid and lowest asked prices per Share on the specified date (or the next
preceding date on which trading was reported) as reported through the NASDAQ
system or any successor thereto. "Non-Employee Director" means an individual
who: (i) is now, or hereafter becomes, a member of the Board; (ii) is neither an
Employee nor an Officer (other than an officer who does not receive a salary as
an officer) of the Company or of any Subsidiary on the date of the grant of the
NQSO; and (iii) has not elected to decline to participate in the Plan pursuant
to the next succeeding sentence. A director otherwise eligible to participate in
the Plan may make an irrevocable, one-time election, by written notice to the
Corporate Secretary of the Company and the Chairman of the Committee within
thirty days after his initial election or appointment to the Board to decline to
participate in the Plan.

         (k) "NQSO" means an option granted under this Plan, which option is not
qualified under Section 422 of the Code.



         (l) "Officer" means an individual elected or appointed by the Board or
by the board of directors of a Subsidiary, or chosen in such other manner as may
be prescribed by the by-laws of the Company or a Subsidiary, as the case may be,
to serve as such.

         (m) "Participant" means a Non-Employee Director who is granted a NQSO
under the Plan.

         (n) "Plan" means this Non-Employee Director Stock Option Plan, as
amended from time to time.

         (o) "Retainer" means the fixed fee payable to a Non-Employee Director
in effect on the first day of each calendar quarter for which such fee is
payable for services to be rendered as a Non-Employee Director during such
calendar quarter, excluding meeting fees.

         (p) "Rule 16b-3" means Rule 16b-3 promulgated by the Securities and
Exchange Commission under the Exchange Act, or any successor or replacement rule
adopted by the Securities and Exchange Commission.

         (q) "Share" means one share of Common Stock, adjusted in accordance
with Section 9(b), if applicable.

         (r) "Stock Option Agreement" means the written agreement between the
Company and the Participant that contains the terms and conditions pertaining to
the NQSO.

         (s) "Subsidiary" means any corporation or entity of which the Company,
directly or indirectly, is the beneficial owner of fifty percent (50%) or more
of the total combined voting power of all classes of its stock having voting
power, unless the Committee shall determine that any such corporation or entity
shall be excluded hereunder from the definition of the term Subsidiary.

SECTION 3.  PURPOSE

The purpose of the Plan is to enable the Company to provide incentives, which
are linked directly to increases in stockholder value, to Non-Employee Directors
in order that they will be encouraged to serve on the Board and exert their best
efforts on behalf of the Company.

SECTION 4.  ADMINISTRATION

         (a) Composition of the Committee

The Plan shall be administered by a Committee appointed by the Board consisting
of no less than two individuals. Members of the Committee need not be members of
the Board, Officers or Employees of the Company. Members of the Committee shall
not be entitled to participate in the Plan. The Board may from time to time
remove members from, or add members to, the Committee. Vacancies on the
Committee, however caused, shall be filled by the Board.

         (b) Actions by the Committee

The Committee shall hold meetings at such times and places as it may determine.
Acts approved by a majority of the members of the Committee present at a meeting
at which a quorum is present, or acts reduced to or approved in writing by a
majority of the members of the Committee, shall be the valid acts of the
Committee.

         (c) Powers of the Committee

The Committee shall have the authority to administer the Plan in its sole and
absolute discretion; PROVIDED, HOWEVER, that the Committee shall have no
authority to grant NQSOs, to determine the number of Shares subject to NQSOs or
the price at which each Share covered by a NQSO may be purchased pursuant to the
Plan, all of which shall be automatic as described in Section 8. To this end,


                                       2


the Committee is authorized to construe and interpret the Plan and to make all
other determinations necessary or advisable for the administration of the Plan.
Subject to the foregoing, any determination, decision or action of the Committee
in connection with the construction, interpretation, administration or
application of the Plan shall be final, conclusive and binding upon all
Participants and any person validly claiming under or through a Participant.

         (d) Liability of Committee Members

No member of the Board or the Committee will be liable for any action or
determination made in good faith by the Board or the Committee with respect to
the Plan or any grant or exercise of a NQSO thereunder.

         (e) NQSO Accounts

The Company will maintain a separate account record for each Participant.
Whenever NQSOs are granted to or exercised by a Participant, the Participant's
account shall be appropriately credited or debited. Appropriate adjustment shall
also be made with respect to each account in the event of an adjustment pursuant
to Section 9(b).

SECTION 5.  EFFECTIVE DATE AND TERM OF THE PLAN

         (a) Effective Date of the Plan

The Plan in its original form was adopted by the Board on July 12, 1990, and
became effective on September 7, 1990. The Plan was subsequently amended several
times, with each such amendment approved by the stockholders of the Company, and
the last such amendment becoming effective April 17, 2000. The Plan, as set
forth in this amendment and restatement, was adopted by the Board on February
26, 2002, to become effective as of May 22, 2002, subject to approval by the
stockholders of the Company at a meeting duly called and held within twelve
months following the date of Board approval.

         (b) Term of the Plan

No NQSO shall be granted pursuant to the Plan on or after May 22, 2007, but
NQSOs granted before then may extend beyond that date.

SECTION 6.  SHARES SUBJECT TO THE PLAN

The maximum aggregate number of Shares which may be subject to NQSOs granted to
Non-Employee Directors under the Plan during its term shall be 1,000,000. The
limitation on the number of Shares which may be subject to NQSOs under the Plan
shall be subject to adjustment as provided in Section 9(b). If any NQSO granted
under the Plan expires or is terminated for any reason without having been
exercised in full, the Shares allocable to the unexercised portion of such NQSO
shall again become available for grant pursuant to the Plan. At all times during
the term of the Plan, the Company shall reserve and keep available for issuance
such number of Shares as the Company is obligated to issue upon the exercise of
all then outstanding NQSOs.

SECTION 7.  SOURCE OF SHARES ISSUED UNDER THE PLAN

Common Stock issued under the Plan may consist, in whole or in part, of
authorized and unissued Shares or treasury Shares, as determined in the sole and
absolute discretion of the Committee. No fractional Shares shall be issued under
the Plan.


                                       3


SECTION 8.  NON-QUALIFIED STOCK OPTION

         (a) Grant of NQSOs

An individual who first becomes a Non-Employee Director on or after May 22,
2002, shall be granted automatically NQSOs to purchase 20,000 Shares on the next
succeeding business day after becoming a Non-Employee Director. In addition, (i)
NQSOs to purchase 20,000 Shares shall be granted automatically to each
Non-Employee Director on each anniversary date of his preceding automatic NQSO
grant (the "Anniversary Date") under the Plan and every year thereafter during
the term of the Plan, provided that said Non-Employee Director continues to be a
member of the Board on the date of each such additional grant; and (ii) any
Non-Employee Director who had an Anniversary Date that occurred on or after
January 1, 2002 and before May 22, 2002, with respect to which the Non-Employee
Director received an automatic grant of NQSOs to purchase 10,000 Shares, shall
be granted automatically NQSOs to purchase 10,000 Shares on the next succeeding
business day after May 22, 2002. NQSOs shall be granted in the aforesaid manner
until the date on which the Shares available for grant shall no longer be
sufficient to permit grants of NQSOs covering 20,000 Shares to be made to each
Non-Employee Director entitled to a grant as of such date, in which event the
Shares then available for grant shall be allocated on a PRO RATA basis among the
Non-Employee Directors entitled to a grant of NQSOs as of such date.

         (b) Exercise Price

The price at which each Share covered by a NQSO may be purchased pursuant to
this Plan shall be equal to the Fair Market Value of a Share on the date of the
NQSO grant.

         (c) Terms and Conditions

All NQSOs granted pursuant to the Plan shall be evidenced by a Stock Option
Agreement (which need not be the same for each Participant or NQSO), approved by
the Committee which shall be subject to the following express terms and
conditions and to the other terms and conditions specified in this Section 8,
and to such other terms and conditions as shall be determined by the Committee
in its sole and absolute discretion which are not inconsistent with the terms of
the Plan:

                  (i) except as set forth in Sections 8(a) and 10, all NQSOs
granted to a Participant shall vest and become first exercisable at the rate of
one-third of the Shares subject to the NQSOs for each twelve month period of
continuous service on the Board (from the date of grant of the NQSO) by such
Participant, rounded down to the nearest whole number for each of the first two
twelve month periods and rounded up to the nearest whole number for the third
twelve month period of service;

                  (ii) the failure of a NQSO to vest for any reason whatsoever
shall cause the NQSO to expire and be of no further force or effect;

                  (iii) unless terminated earlier pursuant to Sections 8(f) or
10, the term of each NQSO granted on or after May 22, 2002 shall be ten years
from the date of grant;

                  (iv) no NQSO or interest therein may be pledged, hypothecated,
encumbered or otherwise made subject to execution, attachment or similar
process, and no NQSO or interest therein shall be assignable or transferable by
the holder otherwise than by will or by the laws of descent and distribution or
to a beneficiary upon the death of a Participant, and an NQSO shall be
exercisable during the lifetime of the holder only by him or by his guardian or
legal representative, except that a NQSO may be transferred to one or more
transferees during the lifetime of the Participant, and may be exercised by such
transferee in accordance with the terms of such NQSO, subject to any terms and
conditions which the Committee may impose thereon. A transferee or other person
claiming any rights under the Plan from or through any Participant shall be
subject to all terms and conditions of the Plan and any Stock Option Agreement
applicable to such Participant, except as otherwise determined by the Committee,
and to any additional terms and conditions deemed necessary or appropriate by
the Committee; and


                                       4


         (v) payment for the Shares to be received upon exercise of a NQSO may
be made in cash or in Shares (determined with reference to their Fair Market
Value on the date of exercise), or any combination thereof.

         (d) Additional Means of Payment

Any Stock Option Agreement may, in the sole and absolute discretion of the
Committee, permit payment by any other form of legal consideration consistent
with applicable law and any rules and regulations relating thereto, including,
but not limited to, the execution and delivery of a full recourse promissory
note by the Participant to the Company.

         (e) Exercise

The holder of a NQSO may exercise the same by filing with the Corporate
Secretary of the Company a written election, in such form as the Committee may
determine, specifying the number of Shares with respect to which such NQSO is
being exercised. Such notice shall be accompanied by payment in full of the
exercise price for such Shares. Notwithstanding the foregoing, the Committee may
specify a reasonable minimum number of Shares that may be purchased on any
exercise of an Option, provided that such minimum number will not prevent the
Participant from exercising the Option with respect to the full number of Shares
as to which the Option is then exercisable.

         (f) Termination of NQSOs.

NQSOs granted under the Plan shall be subject to the following events of
termination:

                  (i) in the event a Participant is removed from the Board for
cause, all unexercised NQSOs held by such Participant on the date of such
removal (whether or not vested) will expire immediately;

                  (ii) in the event a Participant is no longer a member of the
Board, other than by reason of removal for cause, all NQSOs which remain
unvested at the time the Participant is no longer a member of the Board shall
expire immediately, and all NQSOs which have vested prior to such time shall
expire twelve months thereafter unless by their terms they expire sooner; and

                  (iii) in the event a Participant becomes an Officer or
Employee of the Company or a Subsidiary (whether or not such Participant remains
a member of the Board) all NQSOs which remain unvested on the date such
Participant becomes an Officer or Employee of the Company shall expire
immediately, and all NQSOs which have vested prior to such date shall expire
twelve months thereafter unless by their terms they expire sooner.

SECTION 9.  RECAPITALIZATION

         (a) Corporate Flexibility

The existence of the Plan and the NQSOs granted hereunder shall not affect or
restrict in any way the right or power of the Board or the stockholders of the
Company, in their sole and absolute discretion, to make, authorize or consummate
any adjustment, recapitalization, reorganization or other change in the
Company's capital structure or its business, any merger or consolidation of the
Company, any issue of bonds, debentures, common stock, preferred or prior
preference stocks ahead of or affecting the Company's capital stock or the
rights thereof, the dissolution or liquidation of the Company or any sale or
transfer of all or any part of its assets or business, or any other grant of
rights, issuance of securities, transaction, corporate act or proceeding and
notwithstanding the fact that any such activity, proceeding, action, transaction
or other event may have, or be expected to have, an impact (whether positive or
negative) on the value of any NQSO or underlying Shares.


                                       5


         (b) Adjustments Upon Changes in Capitalization

Except as otherwise provided in Section 10 below, in the event of any change in
capitalization affecting the Common Stock of the Company, such as a stock
dividend, stock split or recapitalization, the Committee shall make
proportionate adjustments with respect to: (i) the aggregate number of Shares
available for issuance under the Plan; (ii) the number of shares subject to each
grant under the Plan; (iii) the number and exercise price of Shares subject to
outstanding NQSOs; and (iv) such other matters as shall be appropriate in light
of the circumstances; PROVIDED, HOWEVER, that the number of Shares subject to
any NQSO shall always be a whole number.

SECTION 10.  CHANGES OF CONTROL

In the event of a Change of Control (as defined below), all NQSOs not vested on
or prior to the effective time of any such Change of Control shall vest
immediately prior to such effective time. Unless otherwise determined by the
Committee at the time of a Change of Control, in the event of a Change of
Control all outstanding NQSOs shall terminate and cease to be outstanding
immediately following the Change of Control; PROVIDED, HOWEVER, that no such
NQSO termination shall occur unless a Participant shall have been given five
business days, following prior written notice, to exercise such Participant's
outstanding vested NQSOs at the effective time of the Change of Control, or to
receive cash in an amount per Share subject to such NQSOs equal to the amount by
which the price paid for a Share (determined on a fully diluted basis and taking
into account the exercise price, as determined by the Committee) in the Change
of Control exceeds the per share exercise price of such NQSOs. The Committee in
its discretion may make provisions for the assumption of outstanding NQSOs, or
the substitution for outstanding NQSOs of new incentive awards covering the
stock of a successor corporation or a parent or subsidiary thereof, with
appropriate adjustments as to the number and kind of shares and prices so as to
prevent dilution or enlargement of rights.

A "Change of Control" will be deemed to occur on the date any of the following
events occur:

         (a) any person or persons acting together which would constitute a
"group" for purposes of Section 13(d) of the Exchange Act (other than the
Company, any Subsidiary and Jeffry M. Picower (including, any of his Affiliates
and any lineal descendant of Mr. Picower, any widow or then current spouse of
Mr. Picower or of any such lineal descendant, a trust established principally
for the benefit of any of the foregoing, any entity which is at least 90%
beneficially owned by any of the foregoing, and the executor, administrator or
personal representative of the estate of any of the foregoing (the "Picower
Group"))) beneficially own (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, securities of the Company or any Significant Subsidiary
(as defined below) representing greater than 10% of the total combined voting
power of the Company or the Significant Subsidiary entitled to vote in the
election of the board of directors of the Company or the Significant Subsidiary;
PROVIDED, HOWEVER, that such event shall not constitute a Change of Control
unless and until the combined voting power of such securities owned
beneficially, directly or indirectly, by such person or persons is greater than
the combined voting power of all such securities owned beneficially, directly or
indirectly, by Mr. Picower and the Picower Group;

         (b) persons other than the Current Directors (as herein defined)
constitute a majority of the members of the Board (for these purposes, a
"Current Director" means any member of the Board as of May 1, 1997, and any
successor of any such member whose election, or nomination for election by the
Company's stockholders, was approved by at least a majority of the Current
Directors then on the Board or by Mr. Picower or the Picower Group);

         (c) the consummation of (i) a plan of liquidation of all or
substantially all of the assets of the Company or any Subsidiary owning directly
or indirectly all or substantially all of the consolidated assets of the Company
(a "Significant Subsidiary"), or (ii) an agreement providing for the merger or
consolidation of the Company or a Significant Subsidiary (A) in which the
Company or a Significant Subsidiary is not the continuing or surviving
corporation (other than a consolidation or merger with a wholly-owned subsidiary
of the Company in which all Shares of the Company or common stock in the
Significant


                                       6



Subsidiary outstanding immediately prior to the effectiveness thereof are
changed into or exchanged for all or substantially all of the common stock of
the surviving corporation and (if the Company ceases to exist) the surviving
corporation assumes all the NQSO, or (B) pursuant to which, even though the
Company is the continuing or surviving corporation, the Shares of the Company or
common stock in the Significant Subsidiary are converted into cash, securities
or other property; PROVIDED, HOWEVER, that no "Change of Control" shall be
deemed to occur as the result of a consolidation or merger of the Company or a
Significant Subsidiary in which the holders of the Shares of the Company
immediately prior to the consolidation or merger have, as a result thereof,
directly or indirectly, at least a majority of the combined voting power of all
classes of voting stock of the continuing or surviving corporation or its parent
immediately after such consolidation or merger or in which the Board immediately
prior to the merger or consolidation would, immediately after the merger or
consolidation, constitute a majority of the board of directors of the continuing
or surviving corporation or its parent; or

         (d) the consummation of an agreement (or agreements) providing for the
sale or other disposition (in one transaction or a series of transactions) of
all or substantially all of the assets of the Company or a Significant
Subsidiary other than such a sale or disposition immediately after which such
assets will be owned directly or indirectly by the stockholders of the Company
in substantially the same proportions as their ownership of the Shares
immediately prior to such sale or disposition.

SECTION 11.  SECURITIES LAW REQUIREMENTS

No Shares shall be issued under the Plan unless and until: (i) the Company and
the Participant have taken all actions required to register the Shares under the
Securities Act of 1933, as amended, or perfect an exemption from the
registration requirements thereof; (ii) any applicable listing requirement of
any stock exchange or national market system on which the Common Stock is listed
has been satisfied; and (iii) any other applicable provision of state or federal
law has been satisfied. The Company shall be under no obligation to register the
Shares with the Securities and Exchange Commission or to effect compliance with
the registration or qualification requirements of any state securities laws or
stock exchange.

SECTION 12.  AMENDMENT AND TERMINATION

         (a) Modifications to the Plan

The Board may, insofar as permitted by law, from time to time, with respect to
any Shares at the time not subject to NQSOs, suspend or terminate the Plan or,
subject to Sections 8(a) and 8(b), revise or amend the Plan in any respect
whatsoever. However, any revision or amendment that would cause the Plan to fail
to comply with any requirement of applicable law or regulation if such amendment
were not approved by the stockholders of the Company shall not be effective
unless and until such approval is obtained.

         (b) Rights of Participant

No amendment, suspension or termination of the Plan or of any NQSO that would
adversely affect the right of any Participant with respect to a NQSO previously
granted under the Plan will be effective without the written consent of the
affected Participant.

SECTION 13.  MISCELLANEOUS

         (a) Stockholders' Rights

No Participant and no beneficiary or other person claiming under or through such
Participant shall acquire any rights as a stockholder of the Company by virtue
of such Participant having been granted a NQSO under the Plan. No Participant
and no beneficiary or other person claiming under or through such Participant
will have any right, title or interest in or to any Shares allocated or reserved
under the Plan or subject to any NQSO, except as to Shares, if any, that have
been issued or transferred to such Participant. No adjustment shall be made for
dividends or distributions or other rights for which the record date is prior to
the date of exercise.


                                       7


         (b) Other Compensation Arrangements

Nothing contained in the Plan shall prevent the Board from adopting other
compensation arrangements, subject to stockholder approval if such approval is
required. Such other arrangements may be either generally applicable or
applicable only in specific cases.

         (c) Treatment of Proceeds

Proceeds realized from the exercise of NQSOs under the Plan shall constitute
general funds of the Company.

         (d) Costs of the Plan

The costs and expenses of administering the Plan shall be borne by the Company.

         (e) No Right to Continue as Director

Nothing contained in the Plan or in any instrument executed pursuant to the Plan
will confer upon any Participant any right to continue as a member of the Board
or affect the right of the Company, the Board or the stockholders of the Company
to terminate the directorship of any Participant at any time with or without
cause.

         (f) Severability

The provisions of the Plan shall be deemed severable and the validity or
unenforceability of any provision shall not affect the validity or
enforceability of the other provisions hereof.

         (g) Governing Law

The Plan and all actions taken thereunder shall be enforced, governed and
construed by and interpreted under the laws of the State of Delaware applicable
to contracts made and to be performed wholly within such State without giving
effect to the principles of conflict of laws thereof.

         (h) Headings

The headings contained in this Plan are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Plan.





                                       8

EX-4.E

                                                                    EXHIBIT 4(e)

                          ALARIS MEDICAL SYSTEMS, INC.
                            2004 STOCK INCENTIVE PLAN

1.    ESTABLISHMENT, PURPOSE AND TYPES OF AWARDS.

ALARIS Medical Systems, Inc., a Delaware corporation (the "COMPANY"), hereby
establishes the ALARIS Medical Systems, Inc. 2004 Stock Incentive Plan (the
"2004 PLAN").

The purpose of the 2004 Plan is to promote the long-term growth and
profitability of the Company by (i) providing key people with incentives to
improve stockholder value and to contribute to the growth and financial success
of the Company through their future services and (ii) enabling the Company to
attract, retain and reward the best-available persons.

The 2004 Plan permits the granting of stock options (including incentive stock
options qualifying under Code section 422 ("ISOs") and nonstatutory stock
options ("NQSOs"), stock appreciation rights, restricted or unrestricted stock
awards, phantom stock, performance awards, other stock-based awards or any
combination of the foregoing.

2.    DEFINITIONS.

Under the 2004 Plan, the following definitions apply:

      (a) "ADMINISTRATOR" means the Board or the committee(s) of the Board or
officer(s) appointed by the Board that have authority to administer the 2004
Plan as provided in Section 3 hereof.

      (b) "AFFILIATE" means any entity, whether now or hereafter existing, which
controls, is controlled by, or is under common control with, the Company
(including, without limitation, joint ventures, limited liability companies, and
partnerships). For this purpose, "control" shall mean ownership of 50% or more
of the total combined voting power or value of all classes of stock or interests
of the entity.

      (c) "AWARD" means any stock option, stock appreciation right, stock award,
phantom stock award, performance award, or other stock-based award.

      (d) "AWARD AGREEMENT" means a written document memorializing the terms and
conditions of an Award granted pursuant to the 2004 Plan and which shall
incorporate the terms of the 2004 Plan.

      (e) "BOARD" means the board of directors of the Company.

      (f) "CAUSE" as applied to any Grantee means, unless otherwise defined in
the Grantee's employment or service agreement: (i) the conviction of such
Grantee for the commission of any felony; (ii) the commission by such Grantee of
any crime involving moral turpitude (e.g., larceny, embezzlement) which results
in harm to the business, reputation, prospects or financial condition of the
Company or any Affiliate; or (iii) the willful neglect, failure or refusal of
such individual to carry out his duties, which results in harm to the business,
reputation, prospects or financial condition of the Company, or any Affiliate,
which neglect, failure or refusal continues for a period of ten (10) consecutive
business days following notice thereof, or ten (10) cumulative business days
following successive notices thereof, to such individual from the Company;
provided, however, that such willful neglect, failure or refusal is not due to
the death or disability (i.e., as a result of an injury or sickness such
individual is rendered unable to perform his duties as an officer, employee,
consultant or independent contractor, as the case may be, on a full-time basis
for an extended period) of such individual or illness leading to the death or
disability of such individual.

                                       1



      (g) "CHANGE OF CONTROL" means the occurrence of any of the following:

            (i) the direct or indirect sale, transfer, conveyance or other
disposition (other than by way of merger or consolidation or by way of the
granting of liens or security interests), in one or a series of related
transactions, of all or substantially all of the properties or assets of the
Company taken as a whole to any "person" (as that term is used in Section 13(d)
of the Exchange Act) other than the Principal Stockholder and his Related
Parties;

            (ii) the adoption of a plan relating to the liquidation or
dissolution of the Company;

            (iii) the consummation of any transaction (including, without
limitation, any merger or consolidation) the result of which is that any
"person" (as defined above), other than the Principal Stockholder and his
Related Parties, becomes the Beneficial Owner, directly or indirectly, of more
than 50% of the Common Stock, measured by voting power rather than number of
shares;

            (iv) the Company consolidates with, or merges with or into, any
Person, or any Person consolidates with, or merges with or into, the Company, in
any such event pursuant to a transaction in which the outstanding Common Stock
or the common stock of such other Person is converted into or exchanged for
cash, securities or other property, other than any such transaction where the
Common Stock outstanding immediately prior to such transaction is converted into
or exchanged for common stock of the surviving or transferee Person constituting
a majority of the outstanding shares of such common stock of such surviving or
transferee Person (immediately after giving effect to such issuance); or

            (v) on the first day a majority of the members of the Board are not
Continuing Directors.

For purposes of this Section 2(g): (A) "BENEFICIAL OWNER" has the meaning in
Rule 13d-3 under the Exchange Act; (B) "CONTINUING DIRECTOR" means any member of
the Board who: (i) was a member of the Board as of the effective date of the
2004 Plan; (ii) was nominated for election or elected to the Board with the
approval of a majority of the Continuing Directors who were members of the Board
at the time of such nomination or election; or (iii) became a member of the
Board as a result of the actions of the Principal Stockholder or a Related
Party; provided that at the time the Principal Stockholder or a Related Party
took any such action, the Principal Stockholder or a Related Party was the
Beneficial Owner of more than 50% of the Common Stock; (C) "PERSON" means any
individual, corporation, partnership, joint venture, association, joint-stock
company, trust, unincorporated organization, limited liability company or
government or other entity; (D) "PRINCIPAL STOCKHOLDER" means Jeffry M. Picower;
and (E) "RELATED PARTY" means: (i) any spouse or immediate family member of the
Principal Stockholder; or (ii) any trust, corporation, partnership or other
entity, the beneficiaries, stockholders, partners, owners or Persons
beneficially holding an 80% or more controlling interest of which consist of the
Principal Stockholder and/or such other Persons referred to in the immediately
preceding clause (i).

      (h) "CODE" means the Internal Revenue Code of 1986, as amended, and any
regulations promulgated thereunder.

      (i) "COMMON STOCK" means shares of common stock of the Company, $.01 par
value per share.

      (j) "EXCHANGE ACT" means the Securities Act of 1934, as amended.

      (k) "FAIR MARKET VALUE" means, with respect to a share of Common Stock for
any purpose on a particular date, the value determined by the Administrator in
good faith. If the Common Stock is registered under Section 12(b) or 12(g) of
the Exchange Act, and listed for trading on a national exchange or market, "Fair
Market Value" means, as applicable, either: (i) the closing price or the average
of the high and low sale price on the relevant date, as determined in the
Administrator's discretion, quoted on the New York Stock Exchange or such other
national exchange or market on which the Common Stock is then listed; or (ii) in
the absence of such listing on a national exchange or market, as determined in
good faith by the Administrator. If no public trading of the Common Stock occurs
on the relevant date but the Common Stock is still so listed, then Fair Market
Value shall be determined as of the next preceding date on which trading of the
Common Stock does occur. For all purposes under the 2004 Plan, the term
"RELEVANT DATE" as used in this Section 2(i) means either the date as of which
Fair Market Value is to be determined or the

                                       2




next preceding date on which public trading of the Common Stock occurred, as
determined in the Administrator's discretion.

      (l) "GRANTEE" means an individual who is granted an Award under the 2004
Plan.

      (m) "PERFORMANCE MEASURES" means one or more of the following business
criteria, as determined by the Administrator: (i) earnings before interest,
taxes, depreciation and amortization; (ii) revenues; (iii) net income; (iv)
sales; (v) operating earnings or income; (vi) earnings per share; (vii) cash
flow; (viii) cash usage; (ix) absolute and/or relative return on equity or
assets; (x) pre-tax profits; (xi) earnings growth; (xii) sales growth; (xiii)
comparison to peer companies; (xiv) market share benchmarks or growth; (xv)
share price benchmarks or growth; (xvi) organizational development activities;
(xvii) product quality and reliability measures; (xviii) strategic initiatives;
(xix) risk control; (xx) any combination of the foregoing; or (xxi) such other
appropriate stockholder-approved measures of performance, including individual
measures of performance.

3.    ADMINISTRATION.

      (a) ADMINISTRATION OF THE 2004 PLAN. The 2004 Plan shall be administered
by the Board or by such committee(s) of the Board as may be appointed by the
Board from time to time. To the extent allowed by applicable law, the Board by
resolution may authorize an officer or officers to grant Awards (other than
stock Awards) to other officers and employees of the Company and its Affiliates,
and, to the extent of such authorization, such officer or officers shall be the
Administrator. To the extent allowed by applicable law, the Administrator may
delegate administrative functions to certain committees and individuals as
appropriate for the effective administration of the 2004 Plan.

      (b) POWERS OF THE ADMINISTRATOR. The Administrator shall have all the
powers vested in it by the terms of the 2004 Plan, such powers to include
authority, in its sole and absolute discretion, to grant Awards under the 2004
Plan, prescribe Award Agreements evidencing and establishing the terms of such
Awards and establish programs for granting Awards. The Administrator shall have
full power and authority to take all other actions necessary to carry out the
purpose and intent of the 2004 Plan, including, without limitation, the
authority to:

            (i) determine the eligible persons to whom, and the time or times at
which, Awards may be granted;

            (ii) determine the types of Awards to be granted;

            (iii) determine the number of shares to be covered by or used for
reference purposes for each Award;

            (iv) impose such terms, limitations, restrictions and conditions
upon any such Award as the Administrator shall deem appropriate;

            (v) modify, amend, extend or renew outstanding Awards, or accept the
surrender of outstanding Awards and substitute new Awards (provided, however,
that except as provided in Sections 6 or 7(c) of the 2004 Plan, any modification
that would materially adversely affect any outstanding Award shall not be made
without the consent of the holder);

            (vi) accelerate or otherwise change the time in which an Award may
be exercised or becomes payable and to waive or accelerate the lapse, in whole
or in part, of any restriction or condition with respect to such Award,
including, without limitation, any restriction or condition with respect to the
vesting or exercisability of an Award following termination of any Grantee's
employment or other relationship with the Company; provided, however, that no
such waiver or acceleration of lapse restrictions shall be made with respect to
a performance-based stock Award granted to an executive officer of the Company
if such waiver or acceleration is inconsistent with Code section 162(m);

            (vii) establish objectives and conditions, if any, for earning
Awards and determining whether Awards will be paid after the end of a
performance period; and

                                       3




            (viii) for any purpose, including, without limitation, qualifying
for preferred tax treatment under foreign tax laws or otherwise complying with
the regulatory requirements of local or foreign jurisdictions, to establish
sub-plans as the Administrator may determine to be necessary in order to
implement and administer the 2004 Plan or a sub-plan in foreign countries, and
to take any and all other actions it deems necessary or advisable for the proper
administration of the 2004 Plan or a sub-plan, including, without limitation,
amending, modifying, administering or terminating such sub-plans as the
Administrator may determine to be necessary and prescribing, amending and
rescinding rules and regulations relating to such sub-plans.

The Administrator shall have full power and authority, in its sole and absolute
discretion, to administer, construe and interpret the 2004 Plan and Award
agreements and to make all other determinations necessary or advisable for the
administration of the 2004 Plan, Award Agreements and all other documents
relevant to the 2004 Plan and Awards issued thereunder, and to adopt and
interpret such rules, regulations, agreements, guidelines and instruments for
the administration of the 2004 Plan.

      (c) NON-UNIFORM DETERMINATIONS. The Administrator's determinations under
the 2004 Plan (including, without limitation, determinations of the persons to
receive Awards, the form, amount and timing of such Awards, the terms and
provisions of such Awards and the Award Agreements evidencing such Awards) need
not be uniform and may be made by the Administrator selectively among persons
who receive, or are eligible to receive, Awards, whether or not such persons are
similarly situated.

      (d) LIMITED LIABILITY. To the maximum extent permitted by law, no member
of the Administrator shall be liable for any action taken or decision made in
good faith relating to all their activities under the 2004 Plan.

      (e) INDEMNIFICATION. To the maximum extent permitted by law and by the
Company's charter and bylaws, the members of the Administrator shall be
indemnified by the Company for all their activities under the 2004 Plan.

      (f) EFFECT OF ADMINISTRATOR'S DECISION. All actions taken, and decisions
and determinations made, by the Administrator on all matters relating to the
2004 Plan pursuant to the powers vested in it hereunder shall be in the
Administrator's sole and absolute discretion and shall be final, conclusive and
binding on all parties concerned, including the Company, its stockholders, any
Grantee and any other employee (including any employee-director) or consultant
of the Company, and their respective successors in interest.

4.    SHARES AVAILABLE; MAXIMUM AWARDS.

The shares of Common Stock subject to the 2004 Plan shall be unissued shares or
reacquired shares, bought on the open market or otherwise. Subject to adjustment
as provided in Section 7(c), the number of shares of Common Stock that may be
issued pursuant to Awards shall not exceed the sum of: (i) 1,500,000 shares of
Common Stock; and (ii) the number of shares of Common Stock, if any: (a)
available for future grant under the 1996 Stock Option Plan (the "1996 Plan") as
of the date of the Company's 2004 annual meeting of stockholders; (b) underlying
grants under the 1996 Plan that are forfeited, canceled, expire, become
unexercisable or settled in cash without delivery of shares of Common Stock; (c)
withheld to pay the exercise price or to satisfy withholding taxes in connection
with any grant under the 1996 Plan; or (d) tendered, either actually or through
attestation, to pay the exercise price of any Award under the 2004 Plan or any
grant under the 1996 Plan or to satisfy withholding taxes in connection with any
such Award or grant. The Company shall reserve such number of shares of Common
Stock for Awards.

Subject to adjustment as provided in Section 7(c): (i) the maximum number of
shares of Common Stock that may be issued pursuant to Awards intended to be
"incentive stock options" within the meaning of Code section 422 shall not
exceed 9,600,000; and (ii) the maximum number of shares of Common Stock that may
be issued pursuant to any combination of Awards that may be granted during any
one calendar year to any one individual is 1,000,000. Such per-individual limit
shall not be adjusted to effect a

                                       4




restoration of shares of Common Stock with respect to which the related Award is
terminated, surrendered or canceled.

Any shares of Common Stock covered by an Award (or portion of an Award) that are
forfeited or canceled, become unexercisable, expire or are settled in cash,
including the settlement of withholding taxes or payment of the exercise price
by withholding shares of Common Stock, and any shares of Common Stock that are
forfeited back to the Company after delivery because of the failure to meet an
Award contingency or condition in connection with any Award, shall be deemed to
have not been delivered for purposes of determining the number of shares
available for issuance under the 2004 Plan and shall be available for further
Awards.

5.    PARTICIPATION.

Participation in the 2004 Plan: (i) shall be open to all employees (including
employee-directors), officers and other individuals rendering substantial
services as a consultant or independent contractor to the Company or any
Affiliate, as may be selected by the Administrator from time to time; and (ii)
shall not be open to non-employee directors. The Administrator may also grant
Awards to individuals in connection with hiring, retention or otherwise, prior
to the date the individual first performs services for the Company or an
Affiliate, provided that such Awards shall not become vested or exercisable
prior to the date the individual first commences performance of such services.

6.    AWARDS.

The Administrator, in its sole discretion, establishes the terms of all Awards
granted under the 2004 Plan. Awards may be granted individually or in tandem
with other types of Awards, concurrently with or without respect to outstanding
Awards. All Awards are subject to the terms and conditions provided in the Award
Agreement. The Administrator may permit or require a Grantee to defer receipt of
the payment of cash or the delivery of Common Stock that would otherwise be due
to such Grantee by virtue of the exercise of, payment of, or lapse or waiver of
restrictions respecting, any Award. If any such payment deferral is required or
permitted, the Administrator shall, in its sole discretion, establish rules and
procedures for such payment deferrals.

      (a) STOCK OPTIONS. The Administrator may from time to time grant to
eligible participants Awards of ISOs or NQSOs; provided, however, that Awards of
ISOs shall be limited to employees of the Company or of any current or hereafter
existing "parent corporation" or "subsidiary corporation" of the Company as
defined in Code sections 424(e) and (f), respectively, and any other individuals
who are eligible to receive ISOs under Code section 422. Stock options intended
to qualify as ISOs under Code section 422 must have an exercise price at least
equal to Fair Market Value as of the date of grant, but NQSOs may be granted
with an exercise price less than Fair Market Value. No stock option shall be an
ISO unless so designated by the Administrator at the time of grant or in the
Award Agreement evidencing such stock option. To the extent the aggregate Fair
Market Value (determined at the time of grant) of Common Stock with respect to
which ISOs are exercisable for the first time by a Grantee during any calendar
year exceeds the statutory limit, the ISOs or portions thereof which exceed such
limit (according to the order in which they were granted) shall be treated as
NQSOs.

      (b) STOCK APPRECIATION RIGHTS. The Administrator may from time to time
grant to eligible participants Awards of Stock Appreciation Rights ("SAR"). A
SAR entitles the Grantee to receive, subject to the provisions of the 2004 Plan
and the Award Agreement, a payment having an aggregate value equal to the
product of (i) the excess of (A) the Fair Market Value on the exercise date of
one share of Common Stock over (B) the base price per share specified in the
Award Agreement, times (ii) the number of shares specified by the SAR, or
portion thereof, which is exercised. If upon settlement of the exercise of a SAR
a Grantee is to receive a portion of such payment in shares of Common Stock, the
number of shares shall be determined by dividing such portion by the Fair Market
Value of a share of Common Stock on the exercise date. No fractional shares
shall be used for such payment and the Administrator shall determine whether
cash shall be given in lieu of such fractional shares or whether such fractional
shares shall be eliminated.

                                       5




      (c) STOCK AWARDS.

            (i) The Administrator may from time to time grant unrestricted or
restricted stock Awards to eligible participants in such amounts, on such terms
and conditions, and for such consideration, including no consideration or such
minimum consideration as may be required by law, as it shall determine. A stock
Award may be denominated in Common Stock or other securities, stock-equivalent
units (commonly referred to as phantom stock), securities or debentures
convertible into Common Stock, or any combination of the foregoing, and may be
paid in Common Stock or other securities, in cash, or in a combination of Common
Stock or other securities and cash, all as determined in the sole discretion of
the Administrator.

            (ii) The Administrator may grant stock Awards in a manner
constituting "qualified performance-based compensation" within the meaning of
Code section 162(m). The grant of, or lapse of restrictions with respect to,
such performance-based stock awards shall be based upon one or more Performance
Measures and objective performance targets to be attained relative to those
Performance Measures, all as determined by the Administrator. The Administrator,
in its sole discretion, may make adjustments in the method of calculating
attainment of Performance Measures and/or performance targets and/or modify the
performance results upon which Awards are based (in each such case, due to:
changes in tax laws, generally accepted accounting principles and/or accounting
policies; restatement of prior period financial results; or any other matter
which is unusual, non-recurring or creates unintended results that obtain or
arise from events not anticipated when the Performance Measures and performance
targets were established; so long as, in each case, all compensation awarded
hereunder remains "qualified performance-based compensation" under Code section
162(m).

7.    OTHER GOVERNING PROVISIONS.

      (a) AWARD TERMS. All Awards granted shall be evidenced by an Award
Agreement (which need not be the same for each Grantee), approved by the
Administrator which shall incorporate the following express terms and conditions
and such other terms and conditions as are set forth in the 2004 Plan, and such
other terms and conditions as shall be determined by the Administrator in its
sole and absolute discretion which are not inconsistent with the terms of the
2004 Plan:

            (i) Unless terminated earlier, the term of any Award shall be
specified in the Award Agreement but shall be no greater than ten (10) years
from the date of grant;

            (ii) The Administrator shall have the discretion to accelerate
vesting upon termination of employment of a Grantee or upon such other event as
it deems appropriate;

            (iii) No Award or interest therein may be pledged, hypothecated,
encumbered or otherwise made subject to execution, attachment or similar
process, and no Award or interest therein shall be assignable or transferable by
the holder otherwise than by will or by the laws of descent and distribution or
to a beneficiary upon the death of a Grantee, and an Award shall be exercisable
during the lifetime of the holder only by the Grantee or by his or her guardian
or legal representative, except that an Award (other than an ISO) may be
transferred to one or more transferees during the lifetime of the Grantee, and
may be exercised by such transferee in accordance with the terms of such Award,
but only if and to the extent such transfers are permitted by the Administrator
pursuant to the express terms of the Award Agreement. A transferee or other
person claiming any rights under the 2004 Plan from or through any Grantee shall
be subject to all terms and conditions of the 2004 Plan and any Award Agreement
applicable, except as otherwise determined by the Administrator; and

            (iv) Awards may be granted to eligible participants for no
consideration or such minimum consideration as may be required by law, as the
Administrator shall determine in its sole discretion. As determined in the sole
discretion of the Administrator, Award Agreements may permit payment by cash,
Common Stock, any combination of cash and Common Stock or any other form of
legal consideration consistent with applicable law, including the execution and
delivery of a full recourse promissory note to the Company by Grantees who are
neither executive officers nor directors of the Company.

                                       6




      (b) TAX LIABILITY AND WITHHOLDING. Grantees and holders of Awards shall
pay to the Company, in a manner satisfactory to the Administrator, any taxes
(including any foreign and social taxes) required to be withheld in respect of
Awards no later than the date of the event creating the tax liability. The
Company may, to the extent permitted by law, deduct any such tax obligations
from any payment of any kind otherwise due to the Grantee or holder of an Award.
In the event that payment to the Company of such tax obligations is made in
shares of Common Stock, such shares shall be valued at Fair Market Value on the
applicable date for such purposes and shall not exceed in amount the minimum
statutory tax withholding obligation.

      (c) ADJUSTMENTS FOR CORPORATE TRANSACTIONS AND OTHER EVENTS.

            (i) STOCK DIVIDEND, STOCK SPLIT AND REVERSE STOCK SPLIT. In the
event of a stock dividend of, or stock split or reverse stock split affecting,
the Common Stock, then (A) the maximum number of shares of Common Stock subject
to the 2004 Plan pursuant to Section 4, the maximum number of shares of Common
Stock available for issuance as ISOs pursuant to Section 4 and the maximum
number of shares of Common Stock that may be granted during any one calendar
year to any Grantee pursuant to Section 4 and (B) the number of shares covered
by and the exercise price and other terms of outstanding Awards, shall, without
further action of the Board, be adjusted to reflect such event. The
Administrator may make adjustments, in its discretion, to address the treatment
of fractional shares and fractional cents that arise with respect to outstanding
Awards as a result of the stock dividend, stock split or reverse stock split.

            (ii) NON-CHANGE OF CONTROL TRANSACTIONS. Except with respect to the
transactions set forth in Section 7(c)(i), in the event of any change affecting
the Common Stock, the Company or its capitalization, by reason of a spin-off,
split-up, dividend, recapitalization, merger, consolidation or share exchange,
other than any such change that is part of a transaction resulting in a Change
of Control of the Company, the Administrator, in its discretion and without the
consent of the holders of Awards, may make: (A) appropriate adjustments to the
maximum number and kind of shares reserved for issuance or with respect to which
Awards may be granted under the 2004 Plan, in the aggregate and with respect to
any individual during any one calendar year of the Company, as provided in
Section 4 of the 2004 Plan; and (B) any adjustments in outstanding Awards,
including, without limitation, modifying the number, kind and price of
securities subject to Awards.

            (iii) CHANGE OF CONTROL TRANSACTIONS. In the event of any
transaction resulting in a Change of Control of the Company:

                  (A) Unless otherwise determined by the Administrator at the
time of award or by amendment with the Grantee's consent, all Awards not vested
on or prior to the effective time of any such Change of Control shall vest
immediately prior to such effective time.

                  (B) Unless otherwise determined by the Administrator in the
Award Agreement or at the time of the Change of Control, outstanding stock
options and other Awards that are payable in or convertible into Common Stock
under the 2004 Plan will terminate upon the effective time of such Change of
Control unless provision is made in connection with the transaction for the
continuation or assumption of such Awards by, or for the substitution of the
equivalent awards of, the surviving or successor entity or a parent thereof. The
outstanding stock options and other Awards that will terminate upon the
effective time of the Change of Control shall become fully vested immediately
before the effective time of the Change of Control, and, the holders of stock
options and other Awards under the 2004 Plan will be permitted, immediately
before the Change of Control, to exercise or convert all portions of such stock
options or other Awards under the 2004 Plan that are then exercisable or
convertible, or which become exercisable or convertible, upon or prior to the
effective time of the Change of Control; provided, however, that no such Award
termination shall occur unless a Grantee shall have been given five (5) business
days, following prior written notice, to exercise such Grantee's outstanding
vested Awards at the effective time of the Change of Control, or at the
discretion of the Administrator to receive cash in an amount per share of Common
Stock subject to such Award equal to the amount by which the Award (determined
on a fully

                                       7




diluted basis and taking into account the exercise price, as determined by the
Administrator) in the Change of Control exceeds the per share exercise price of
such Award.

                  (C) The Administrator, in its sole and absolute discretion,
may make such additional provisions for the assumption of outstanding Awards, or
the substitution for outstanding Awards of new incentive Awards covering the
stock of a successor corporation or a parent or subsidiary thereof, with
appropriate adjustments as to the number and kind of shares and prices so as to
prevent dilution or enlargement of rights.

            (iv) UNUSUAL OR NONRECURRING EVENTS. The Administrator is authorized
to make, in its discretion and without the consent of holders of Awards,
adjustments in the terms and conditions of, and the criteria included in, Awards
in recognition of unusual or nonrecurring events affecting the Company, or the
financial statements of the Company or any Affiliate, or of changes in
applicable laws, regulations or accounting principles, whenever the
Administrator determines that such adjustments are appropriate in order to
prevent dilution or enlargement of the benefits or potential benefits intended
to be made available under the 2004 Plan.

      (d) SUBSTITUTION OF AWARDS IN MERGERS AND ACQUISITIONS. Awards may be
granted under the 2004 Plan from time to time in substitution for awards held by
employees, officers, consultants or directors of entities who become or are
about to become employees (including employee-directors), officers or
consultants of the Company or an Affiliate as the result of a merger or
consolidation of the employing entity with the Company or an Affiliate, or the
acquisition by the Company or an Affiliate of the assets or stock of the
employing entity. The terms and conditions of any substitute Awards so granted
may vary from the terms and conditions set forth herein to the extent that the
Administrator deems appropriate at the time of grant to conform the substitute
Awards to the provisions of the awards for which they are substituted.

      (e) TERMINATION, AMENDMENT AND MODIFICATION. The Board may terminate,
amend or modify the 2004 Plan or any portion thereof at any time. Except as
otherwise determined by the Board, termination of the 2004 Plan shall not affect
the Administrator's ability to exercise the powers granted to it hereunder with
respect to Awards granted under the 2004 Plan prior to the date of such
termination.

      (f) NON-GUARANTEE OF EMPLOYMENT OR SERVICE. Nothing in the 2004 Plan or in
any Award Agreement shall confer any right on an individual to continue in the
service of the Company or shall interfere in any way with the right of the
Company to terminate such service at any time, with or without cause or notice,
and whether or not such termination results in: (i) the failure of any Award to
vest; (ii) the forfeiture of any unvested or vested portion of any Award; and/or
(iii) any other adverse effect on the Grantee's interests under the 2004 Plan.

      (g) COMPLIANCE WITH SECURITIES LAWS; LISTING AND REGISTRATION. If at any
time the Administrator determines that the delivery of Common Stock under the
2004 Plan is or may be unlawful under the laws of any applicable jurisdiction,
or Federal, state or foreign securities laws, the right to exercise an Award or
receive shares of Common Stock pursuant to an Award shall be suspended until the
Administrator determines that such delivery is lawful. The Company shall have no
obligation to effect any registration or qualification of the Common Stock under
Federal, state or foreign laws.

      (h) NO TRUST OR FUND CREATED. Neither the 2004 Plan nor any Award shall
create or be construed to create a trust or separate fund of any kind or a
fiduciary relationship between the Company and a Grantee or any other person. To
the extent that any Grantee or other person acquires a right to receive payments
from the Company pursuant to an Award, such right shall be no greater than the
right of any unsecured general creditor of the Company.

      (i) GOVERNING LAW. The validity, construction and effect of the 2004 Plan,
Award Agreements, any rules, regulations, determinations or decisions made by
the Administrator relating to the 2004 Plan or Award Agreements and the rights
of any and all persons having or claiming to have any interest therein or
thereunder, shall be determined exclusively in accordance with applicable
federal laws and the laws of the State of Delaware, without regard to its
conflict of laws principles.

                                       8




8.    EFFECTIVE DATE; TERMINATION DATE. The 2004 Plan is effective on the date
it is approved by the stockholders. No Award shall be granted under the 2004
Plan after the close of business on February 23, 2014. Subject to other
applicable provisions of the 2004 Plan, all Awards made under the 2004 Plan
prior to such termination of the 2004 Plan shall remain in effect until such
Awards have been satisfied or terminated in accordance with the 2004 Plan and
the terms of such Awards.

                                       9

EX-4.F

                                                                    EXHIBIT 4(f)

                          ALARIS MEDICAL SYSTEMS, INC.
                             1996 STOCK OPTION PLAN

                      (as last amended on October 29, 2002)
          (as further modified to reflect name change on June 30, 2003)

1.    NAME. The name of this plan is the ALARIS Medical Systems, Inc. (formerly
ALARIS Medical, Inc.) 1996 Stock Option Plan.

2.    DEFINITIONS. For the purposes of the Plan, the following terms shall be
defined as set forth below:

      (a) "Affiliate" means any partnership, corporation, firm, joint venture,
association, trust, unincorporated organization or other entity (other than a
Subsidiary) that, directly or indirectly through one or more intermediaries, is
controlled by the Company, where the term "controlled by" means the possession,
direct or indirect, of the power to cause the direction of the management and
policies of such entity, whether through the ownership of voting interests or
voting securities, as the case may be, by contract or otherwise. For purposes of
Section 11 below, "Affiliate" means any partnership, corporation, firm, joint
venture, association, trust, unincorporated organization or other entity that,
directly or indirectly through one or more intermediaries, is "controlled by"
(as defined above) Jeffry M. Picower or the Picower Group (as defined in Section
11(b)(i) below).

      (a) "Board" means the board of directors of the Company.

      (c) "Cause" as applied to any Participant means: (i) the conviction of
such individual for the commission of any felony; (ii) the commission by such
individual of any crime involving moral turpitude (e.g., larceny, embezzlement)
which results in harm to the business, reputation, prospects or financial
condition of the Company, any Subsidiary or Affiliate; or (iii) the willful
neglect, failure or refusal of such individual to carry out his duties, which
results in harm to the business, reputation, prospects or financial condition of
the Company, any Subsidiary or Affiliate, which neglect, failure or refusal
continues for a period of ten consecutive business days following notice
thereof, or ten cumulative business days following successive notices thereof,
to such individual from the Company; provided, however, that such willful
neglect, failure or refusal is not due to the death or disability (i.e., as a
result of an injury or sickness such individual is rendered unable to perform
his duties as an Officer, Employee, consultant or independent contractor, as the
case may be, on a full-time basis for an extended period) of such individual or
illness leading to the death or disability of such individual.

      (d) "Closing Price" means, except as otherwise reasonably determined by
the Committee based on reported prices of a Share, (i) the daily closing price
of a Share as reported in the American Stock Exchange (or the principal exchange
on which the Shares are then traded) composite transactions published in the
Eastern Edition of THE WALL STREET JOURNAL or (ii) if the Shares are traded in
the over-the-counter market, the daily average of the highest bid and lowest
asked prices per Share as reported through the Nasdaq system or any successor
thereto.

      (e) "Code" means the Internal Revenue Code of 1986, as amended from time
to time and the Treasury regulations promulgated thereunder.

      (f) "Committee" means the Board or a committee appointed by the Board to
administer the Plan as provided in Section 4(a).

                                       1




      (g) "Common Stock" means the $.01 par value common stock of the Company or
any security of the Company identified by the Committee as having been issued in
substitution or exchange therefor or in lieu thereof.

      (h) "Company" means ALARIS Medical Systems, Inc. (formerly ALARIS Medical,
Inc.), a Delaware corporation.

      (i) "Director" means an individual who: (i) is now, or hereafter becomes,
a member of the Board or of the board of directors of any Subsidiary or
Affiliate; and (ii) is not eligible to participate in the Non-Employee Director
NQSO Plan.

      (j) "Employee" means an individual employed by the Company, a Subsidiary,
or an Affiliate whose wages, if an employee in the United States, are subject to
the withholding of federal income tax under Section 3401 of the Code.

      (k) "Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, or any successor statute.

      (l) "Fair Market Value" of a Share as of a specified date means, except as
otherwise reasonably determined by the Committee based on reported prices of a
Share, (i) the average of the highest and lowest market prices of a Share on
such date as reported in the American Stock Exchange (or the principal exchange
on which the Shares are then traded) composite transactions published in the
Eastern Edition of THE WALL STREET JOURNAL or, if no trading of Common Stock is
reported for that day, the next preceding day on which trading was reported, or
(ii) if the Shares are traded in the over-the-counter market, the average of the
highest bid and lowest asked prices per Share on the specified date (or the next
preceding date on which trading was reported) as reported through the Nasdaq
system or any successor thereto.

      (m) "ISO" means any stock option granted pursuant to the Plan that is
intended to be and is specifically designated as an "incentive stock option"
within the meaning of Section 422 of the Code.

      (n) "Non-Employee Director NQSO Plan" means the Company's Non-Employee
Director Stock Option Plan, as may be amended from time to time.

      (o) "NQSO" means any stock option granted pursuant to the provisions of
the Plan that is not an ISO.

      (p) "Officer" means an individual elected or appointed by the Board or by
the board of directors of a Subsidiary or Affiliate or chosen in such other
manner as may be prescribed by the by-laws of the Company, a Subsidiary or
Affiliate, as the case may be, to serve as such, or, in the case of an Affiliate
which is not a corporation, any individual elected or appointed to fulfill a
similar function by a body or individual exercising similar authority.

      (q) "Option" means an ISO or a NQSO (including a NQSO which is designated
as a Performance Option) granted under the Plan.

      (r) "Participant" means an individual who is granted an Option under the
Plan.

      (s) "Performance Option" means any NQSO which is designated as a
Performance Option and is subject to the performance vesting provisions set
forth in Section 9(d) and the Stock Option Agreement.

                                       2




      (t) "Plan" means this ALARIS Medical Systems, Inc. (formerly ALARIS
Medical, Inc.) 1996 Stock Option Plan, as it may be amended from time to time.

      (u) "Rule 16b-3" means Rule 16b-3 promulgated by the Securities and
Exchange Commission under the Exchange Act, or any successor or replacement rule
adopted by the Securities and Exchange Commission.

      (v) "Share" means one share of Common Stock, adjusted in accordance with
Section 10(b), if applicable.

      (w) "Stock Option Agreement" means the written agreement between the
Company and the Participant that contains the terms and conditions pertaining to
an Option.

      (x) "Subsidiary" means any corporation of which the Company, directly or
indirectly, is the beneficial owner of fifty percent (50%) or more of the total
combined voting power of all classes of its stock having voting power and which
qualifies as a subsidiary corporation pursuant to Section 424(f) of the Code.

      (y) "Target Date" means the date, as described in Section 9(d), on which a
Target Price is achieved with respect to a Performance Option.

      (z) "Target Price" means a target price of a Share, as determined by the
Committee in its sole and absolute discretion and so designated in the Stock
Option Agreement, upon the attainment of which the applicable Vesting Percentage
portion of a Performance Option shall become vested, as described in Section
9(d).

      (aa) "Ten Percent Stockholder" means a Participant who prior to the grant
of an ISO owned, directly or indirectly within the meaning of Section 424(d) of
the Code, ten percent (10%) or more of the total combined voting power of all
classes of stock of the Company, any Subsidiary or any parent of the Company (as
defined in Section 424(e) of the Code).

      (bb) "Vesting Percentage" means a specified percentage of a Performance
Option, as determined by the Committee in its sole and absolute discretion and
set forth in the Stock Option Agreement, which shall become vested upon the
attainment of a Target Price in accordance with Section 9(d).

3.    PURPOSE. The purpose of the Plan is to enable the Company to provide
incentives, which are linked directly to increases in stockholder value, to
certain key personnel in order that they will be encouraged to promote the
financial success and progress of the Company.

4.    ADMINISTRATION.

      (a) COMPOSITION OF THE COMMITTEE. The Plan shall be administered by the
Board or a committee appointed by the Board. Members of that committee shall not
be entitled to participate in the Plan. Subject to the provisions of the first
sentence of this Section 4(a), the Board may from time to time remove members
from, or add members to, that committee. Vacancies on that committee, however
caused, shall be filled by the Board.

      (b) ACTIONS BY THE COMMITTEE. The Committee shall hold meetings (in person
or telephonically) at such times and places as it may determine. Acts approved
by a majority of the members

                                       3




of the Committee present at a meeting at which a quorum is present, or acts
reduced to or approved in writing by a majority of the members of the Committee,
shall be the valid acts of the Committee.

      (c) POWERS OF THE COMMITTEE. Subject to the express terms and conditions
hereof, the Committee shall have the authority to administer the Plan in its
sole and absolute discretion. To this end, the Committee is authorized to
construe and interpret the Plan and to make all other determinations necessary
or advisable for the administration of the Plan, including, but not limited to,
the authority to determine the eligible individuals who shall be granted
Options, the number of Options to be granted, the vesting period, if any, for
all Options granted hereunder, the date on which any Option becomes first
exercisable, the number of Shares subject to each Option, the exercise price for
the Shares subject to each Option, and, whether the Option to be granted is an
ISO or a NQSO. The Committee may delegate to an Officer its authority to grant
Options to eligible individuals under the Plan who are not Officers; provided,
however, that Options to purchase no more than 50,000 Shares may be granted to
any individual in any calendar year pursuant to such delegation of authority.
Any determination, decision or action of the Committee in connection with the
construction, interpretation, administration or application of the Plan shall be
final, conclusive and binding upon all Participants and any person validly
claiming under or through a Participant.

      (d) LIABILITY OF COMMITTEE MEMBERS. No member of the Board or the
Committee will be liable for any action or determination made in good faith by
the Board or the Committee with respect to the Plan or any grant or exercise of
an Option thereunder.

      (e) OPTION ACCOUNTS. The Committee shall maintain or cause to be
maintained a journal in which a separate account for each Participant shall be
established. Whenever an Option is granted to or exercised by a Participant, the
Participant's account shall be appropriately credited or debited. Appropriate
adjustment shall also be made in the journal with respect to each account in the
event of an adjustment pursuant to Section 10(b).

5.    EFFECTIVE DATE AND TERM OF THE PLAN.

      (a) EFFECTIVE DATE OF THE PLAN. The Plan was adopted by the Board on
November 26, 1996, and became effective on such date, subject to approval by the
stockholders of the Company, which was obtained at a meeting held on June 11,
1997. An amendment of the Plan was approved by the Board and became effective on
May 28, 1998, subject to approval by the stockholders of the Company, which was
obtained at a meeting held on June 24, 1998. A further amendment of the Plan was
approved by the Board and became effective on December 23, 1999, subject to
approval by the stockholders of the Company, which was obtained at a meeting
held on May 31, 2000. A further amendment of the Plan was approved by the Board
and became effective on January 1, 2002. The Plan was last amended by the Board
on October 29, 2002, as set forth herein, and became effective on such date,
subject to approval by the stockholders of the Company at a meeting duly called
and held within twelve months following such date.

      (b) TERM OF PLAN. No Option shall be granted pursuant to the Plan on or
after November 26, 2006, but Options theretofore granted may extend beyond that
date.

6.    TYPE OF OPTIONS AND SHARES SUBJECT TO THE PLAN. Options granted under the
Plan may be either ISOs or NQSOs. Each Option that is a Performance Option must
be a NQSO. Each Stock Option Agreement shall specify whether the Option covered
thereby is an ISO or a NQSO and, in the case of a NQSO, whether the Option is a
Performance Option. No Performance Options shall be granted under the Plan on or
after October 29, 2002.

                                       4




The maximum aggregate number of Shares that may be issued with respect to
Options under the Plan is 11,000,000 Shares. However, no more than 1,000,000
Shares (subject to adjustment as described below) shall be awarded with respect
to any one or more Options granted to any Participant in any calendar year. The
limitation on the number of Shares which may be granted under the Plan shall be
subject to adjustment as provided in Section 10(b).

If any Option granted under the Plan expires or is terminated for any reason,
any Shares as to which the Option has not been exercised shall again be
available for purchase under Options subsequently granted. At all times during
the term of the Plan, the Company shall reserve and keep available for issuance
such number of Shares as the Company is obligated to issue upon the exercise of
all then outstanding Options.

7.    SOURCE OF SHARES ISSUED UNDER THE PLAN. Common Stock issued under the Plan
may consist, in whole or in part, of authorized or unissued Shares or treasury
Shares, as determined in the sole and absolute discretion of the Committee. No
fractional Shares shall be issued under the Plan.

8.    ELIGIBILITY. The individuals eligible for the grant of Options under the
Plan shall be: (i) all Directors, Officers and Employees; and (ii) such
individuals determined by the Committee to be rendering substantial services as
a consultant or independent contractor to the Company or any Subsidiary or
Affiliate of the Company, as the Committee shall determine from time to time in
its sole and absolute discretion; provided, however, that (i) only Employees of
the Company or any Subsidiary shall be eligible to receive ISOs, and (ii) only
Officers and Employees who are appointed or designated as corporate or
divisional vice presidents or directors of the Company (and such other
categories of Employees and consultants and independent contractors as shall be
specifically approved by the Committee) shall be eligible to receive Performance
Options. Any Participant shall be eligible to be granted more than one Option
hereunder.

9.    OPTIONS.

      (a) GRANT OF OPTIONS. Subject to any applicable requirements of the Code
and any regulations issued thereunder, the date of the grant of an Option shall
be the date on which the Committee determines to grant the Option.

      (b) EXERCISE PRICE OF ISOS AND PERFORMANCE OPTIONS. The exercise price of
each Share subject to an ISO or a Performance Option shall be determined by the
Committee but shall not be less than the Fair Market Value of a Share on the
date of grant of the ISO or Performance Option, as the case may be; provided,
however, except that in the case of a grant of an ISO to a Participant who at
the time such ISO was granted was a Ten Percent Stockholder, the exercise price
shall not be less than 110% of the Fair Market Value of a Share on the date of
grant of the ISO.

      (c) EXERCISE PRICE OF NQSOS (OTHER THAN PERFORMANCE OPTIONS). The exercise
price of each Share subject to a NQSO (other than a Performance Option) shall be
determined by the Committee at the time of grant but shall not be less than the
par value of a Share.

      (d) EXERCISE PERIOD. Each Option granted hereunder shall vest and become
first exercisable as determined by the Committee in its sole and absolute
discretion and set forth in the Stock Option Agreement. Notwithstanding the
foregoing, the vesting schedule applicable to each Performance Option shall be
subject to the following requirements; provided, however, that notwithstanding
the failure to achieve any applicable Target Price(s), an outstanding
Performance Option shall vest on the date that is seven (7) years after the date
of grant of the Performance Option.

                                       5




            (i) The Committee shall designate one or more Vesting Percentage(s)
and a Target Price applicable to each such Vesting Percentage(s) with respect to
each Performance Option granted pursuant to this Plan. The total sum of such
designated Vesting Percentage(s), (or, in the case of only one Vesting
Percentage, such Vesting Percentage) shall equal 100% of such Performance
Option.

            (ii) That portion of each Performance Option equal to a designated
Vesting Percentage shall vest and become first exercisable on the date ("Target
Date") on which the Closing Price has equaled or exceeded the Target Price
applicable to such Vesting Percentage with respect to the Shares on each day
(with exception permitted for up to six days) during the ninety calendar day
period preceding such Target Date.

      (e) TERMS AND CONDITIONS. All Options granted pursuant to the Plan shall
be evidenced by a Stock Option Agreement (which need not be the same for each
Participant or Option), approved by the Committee which shall be subject to the
following express terms and conditions and the other terms and conditions as are
set forth in this Section 9, and to such other terms and conditions as shall be
determined by the Committee in its sole and absolute discretion which are not
inconsistent with the terms of the Plan:

            (i) the failure of an Option to vest when due to vest pursuant to
its terms for any reason whatsoever shall cause the unvested Option to expire
and be of no further force or effect;

            (ii) unless terminated earlier pursuant to Sections 9(i) or 11, the
term of any Option granted under the Plan shall be specified in the Stock Option
Agreement but shall be no greater than ten years from the date of grant;
provided, however, that no ISO granted to a Ten Percent Stockholder shall have a
term of more than five years from the date of grant;

            (iii) the Committee shall have the discretion to accelerate vesting
upon termination of employment of a Participant.

            (iv) in the case of an ISO, the aggregate Fair Market Value
(determined as of the time the ISO is granted) of Shares exercisable for the
first time by a Participant during any calendar year (under the Plan and any
other incentive stock option plans of the Company, any Subsidiary or any parent
of the Company (as defined in Section 424(e) of the Code) shall not exceed
$100,000;

            (v) no Option or interest therein may be pledged, hypothecated,
encumbered or otherwise made subject to execution, attachment or similar
process, and no Option or interest therein shall be assignable or transferable
by the holder otherwise than by will or by the laws of descent and distribution
or to a beneficiary upon the death of a Participant, and an Option shall be
exercisable during the lifetime of the holder only by him or by his guardian or
legal representative, except that an Option (other than an ISO) may be
transferred to one or more transferees during the lifetime of the Participant,
and may be exercised by such transferee in accordance with the terms of such
Option, but only if and to the extent such transfers are permitted by the
Committee pursuant to the express terms of the Stock Option Agreement (subject
to any terms and conditions which the Committee may impose thereon). A
transferee or other person claiming any rights under the Plan from or through
any Participant shall be subject to all terms and conditions of the Plan and any
Stock Option Agreement applicable to such Participant, except as otherwise
determined by the Committee, and to any additional terms and conditions deemed
necessary or appropriate by the Committee; and

            (vi) payment for the Shares to be received upon exercise of an
Option may be made in cash or, if so provided by the Committee in the Stock
Option Agreement, in Shares (determined with

                                       6




reference to their Fair Market Value on the date of exercise), or any
combination thereof acceptable to the Company.

      (f) ADDITIONAL MEANS OF PAYMENT. Any Stock Option Agreement may, in the
sole and absolute discretion of the Committee, permit payment by any other form
of legal consideration consistent with applicable law and any rules and
regulations relating thereto, including, but not limited to, the execution and
delivery of a full recourse promissory note by the Participant to the Company.

      (g) EXERCISE. The holder of an Option may exercise the same by filing with
the Corporate Secretary of the Company a written election, in such form as the
Committee may determine, specifying the number of Shares with respect to which
such Option is being exercised, and accompanied by payment in full of the
exercise price for such Shares. Notwithstanding the foregoing, the Committee may
specify a reasonable minimum number of Shares that may be purchased on any
exercise of an Option, provided that such minimum number will not prevent the
Participant from exercising the Option with respect to the full number of Shares
as to which the Option is then exercisable.

      (h) WITHHOLDING TAXES. Prior to issuance of the Shares upon exercise of an
Option, the Participant shall pay or make adequate provision for the payment of
any federal, state, local or foreign withholding obligations of the Company or
any Subsidiary or Affiliate of the Company, if applicable. In the event a
Participant shall fail to make adequate provision for the payment of such
obligations, the Company shall have the right to withhold an amount of Shares
otherwise deliverable to the Participant sufficient to pay such withholding
obligations or, in the discretion of the Committee, to refuse to honor the
exercise.

      (i) TERMINATION OF OPTIONS. Options granted under the Plan shall be
subject to the following events of termination, unless otherwise provided in the
Stock Option Agreement:

            (i) in the event a Participant who is a Director (but not an Officer
or Employee) is removed from the Board or the board of directors of a Subsidiary
or an Affiliate, as the case may be, for cause (as contemplated by the charter,
by-laws or other organizational or governing documents), all unexercised Options
held by such Participant on the date of such removal (whether or not vested)
shall expire immediately;

            (ii) in the event the employment of a Participant who is an Officer
or Employee is terminated for Cause, or in the event the services of a
Participant who is a consultant or independent contractor are terminated for
Cause, all unexercised Options held by such Participant on the date of such
termination (whether or not vested) shall expire immediately;

            (iii) in the event a Participant ceases to be a Director, Officer or
Employee as a result of death or disability (within the meaning of the Company's
long-term disability plan as then in effect), the Option shall expire one year
thereafter;

            (iv) in the event the Participant ceases to be a Director, Officer
or Employee after attainment of age 55 and after completing five years of
employment with the Company (measured from the Optionee's most recent date of
hire), the Option shall expire three (3) years thereafter; and

            (v) in the event a Participant is no longer a Director, Officer,
Employee, consultant or independent contractor, other than for the reasons set
forth in Sections 9(i)(i), 9(i)(ii), 9(i)(iii) and 9(i)(iv), all Options which
remain unvested on the date the Participant ceases to be a Director, Officer or
Employee, as the case may be, shall expire immediately, and all Options which
have vested prior to such date shall expire three (3) months thereafter unless
by their terms they expire sooner.

                                       7




10.   RECAPITALIZATION.

      (a) CORPORATE FLEXIBILITY. The existence of the Plan and the Options
granted hereunder shall not affect or restrict in any way the right or power of
the Board or the stockholders of the Company, in their sole and absolute
discretion, to make, authorize or consummate any adjustment, recapitalization,
reorganization or other change in the Company's capital structure or its
business, any merger or consolidation of the Company, any issue of bonds,
debentures, common stock, preferred or prior preference stock ahead of or
affecting the Company's capital stock or the rights thereof, the dissolution or
liquidation of the Company or any sale or transfer of all or any part of its
assets or business, or any other grant of rights, issuance of securities,
transaction, corporate act or proceeding and notwithstanding the fact that any
such activity, proceeding, action, transaction or other event may have, or be
expected to have, an impact (whether positive or negative) on the value of any
Option or underlying Shares.

      (b) ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. Except as otherwise
provided in Section 11, in the event of any change in capitalization affecting
the Common Stock of the Company, such as a stock dividend, stock split or
recapitalization, the Committee shall make proportionate adjustments with
respect to: (i) the aggregate number of Shares available for issuance under the
Plan; (ii) the number of Shares available for any individual award; (iii) the
number and exercise price of Shares subject to outstanding Options; provided,
however, that the number of Shares subject to any Option shall always be a whole
number; (iv) the Target Price with respect to any Performance Options; and (v)
such other matters as shall be appropriate in light of the circumstances.

11.   CHANGE OF CONTROL.

      (a) In the event of a Change of Control (as defined below), unless
otherwise determined by the Committee at the time of grant or by amendment (with
the holder's consent) of such grant, all Options (other than Performance
Options) not vested on or prior to the effective time of any such Change of
Control shall vest immediately prior to such effective time. Unless otherwise
determined by the Committee in the Stock Option Agreement or at the time of a
Change of Control, in the event of a Change of Control, all outstanding Options
(including Performance Options) shall terminate and cease to be outstanding
immediately following the Change of Control; provided, however, that no such
Option termination shall occur unless a Participant shall have been given five
business days, following prior written notice, to exercise such Participant's
outstanding vested Options at the effective time of the Change of Control, or at
the discretion of the Committee to receive cash in an amount per Share subject
to such Options equal to the amount by which the price paid for a Share
(determined on a fully diluted basis and taking into account the exercise price,
as determined by the Committee) in the Change of Control exceeds the per share
exercise price of such Options. The Committee in its sole and absolute
discretion may make provisions for the assumption of outstanding Options, or the
substitution for outstanding Options of new incentive awards covering the stock
of a successor corporation or a parent or subsidiary thereof, with appropriate
adjustments as to the number and kind of shares and prices so as to prevent
dilution or enlargement of rights.

      (b) A "Change of Control" will be deemed to occur on the date any of the
following events occur:

            (i) any person or persons acting together which would constitute a
"group" for purposes of Section 13(d) of the Exchange Act (other than the
Company, any Subsidiary and Jeffry M. Picower (including, any of his Affiliates
and any lineal descendant of Mr. Picower, any widow or then current spouse of
Mr. Picower or of any such lineal descendant, a trust established principally
for the benefit of any of the foregoing, any entity which is at least 90%
beneficially owned by any of the

                                       8




foregoing, and the executor, administrator or personal representative of the
estate of any of the foregoing (any one or more of the foregoing being sometimes
referred to herein as the "Picower Group")) beneficially own (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, securities of the Company
or any Significant Subsidiary (as defined below) representing greater than 10%
of the total combined voting power of the Company or the Significant Subsidiary
entitled to vote in the election of the board of directors of the Company or the
Significant Subsidiary; provided, however, that such event shall not constitute
a Change of Control unless and until the combined voting power of such
securities owned beneficially, directly or indirectly, by such person or persons
is greater than the combined voting power of all such securities owned
beneficially, directly or indirectly, by Mr. Picower and the Picower Group;

            (ii) persons other than the Current Directors (as herein defined)
constitute a majority of the members of the Board (for these purposes, a
"Current Director" means any member of the Board as of November 27, 1996, and
any successor of any such member whose election, or nomination for election by
the Company's stockholders, was approved by at least a majority of the Current
Directors then on the Board or by Mr. Picower or the Picower Group);

            (iii) the consummation of (A) a plan of liquidation of all or
substantially all of the assets of the Company or any Subsidiary owning directly
or indirectly all or substantially all of the consolidated assets of the Company
(a "Significant Subsidiary"), or (B) an agreement providing for the merger or
consolidation of the Company or a Significant Subsidiary (1) in which the
Company or the Significant Subsidiary is not the continuing or surviving
corporation (other than a consolidation or merger with a wholly-owned subsidiary
of the Company in which all shares of Common Stock of the Company or common
stock in the Significant Subsidiary outstanding immediately prior to the
effectiveness thereof are changed into or exchanged for all or substantially all
of the common stock of the surviving corporation and (if the Company ceases to
exist) the surviving corporation assumes all outstanding Options) or (2)
pursuant to which, even though the Company is the continuing or surviving
corporation, the shares of Common Stock of the Company or common stock in the
Significant Subsidiary are converted into cash, securities or other property;
provided, however, that no "Change of Control" shall be deemed to occur as the
result of a consolidation or merger of the Company or a Significant Subsidiary
in which the holders of the shares of Common Stock of the Company immediately
prior to the consolidation or merger have, as a result thereof, directly or
indirectly, at least a majority of the combined voting power of all classes of
voting stock of the continuing or surviving corporation or its parent
immediately after such consolidation or merger or in which the Board immediately
prior to the merger or consolidation would, immediately after the merger or
consolidation, constitute a majority of the board of directors of the continuing
or surviving corporation or its parent; or

            (iv) the consummation of an agreement (or agreements) providing for
the sale or other disposition (in one transaction or a series of transactions)
of all or substantially all of the assets of the Company or a Significant
Subsidiary other than such a sale or disposition immediately after which such
assets will be owned directly or indirectly by the stockholders of the Company
in substantially the same proportions as their ownership of the shares of Common
Stock immediately prior to such sale or disposition.

      (c) Notwithstanding the foregoing provisions of this Section 11, unless
otherwise determined by the Committee at the time of grant or by amendment (with
the holder's consent) of such grant, in the event of a Sale Transaction (as
defined below), all Performance Options not fully vested on or prior to the
effective time of any such Sale Transaction shall vest immediately prior to such
effective time, in whole or in part, if and only to the extent the price to be
paid per Share (determined on a fully diluted basis and taking into account the
exercise price, as determined by the Committee) in the Sale Transaction equals
or exceeds the Target Price with respect to the applicable vesting percentage of
such Performance Option.

                                       9




For purposes of this Section 11, a "Sale Transaction" will be deemed to have
occurred on the date any of the following events shall have occurred:

            (i) any person or persons acting together which would constitute a
"group" for purposes of Section 13(d) of the Exchange Act (other than the
Company, any Subsidiary, Jeffry M. Picower and the Picower Group) acquire all or
substantially all of the Common Stock of the Company;

            (ii) the consummation of (A) a plan of liquidation of all or
substantially all of the assets of the Company, or (B) an agreement providing
for the merger or consolidation of the Company (1) in which the Company is not
the continuing or surviving corporation (other than a consolidation or merger
with a wholly-owned subsidiary of the Company in which all shares of Common
Stock outstanding immediately prior to the effectiveness thereof are changed
into or exchanged for all or substantially all of the common stock of the
surviving corporation and (if the Company ceases to exist) the surviving
corporation assumes all outstanding Options) or (2) pursuant to which, even
though the Company is the continuing or surviving corporation, the shares of
Common Stock are converted into cash, securities or other property; provided,
however, that no "Sale Transaction" shall be deemed to occur as the result of a
consolidation or merger of the Company in which the holders of the shares of
Common Stock immediately prior to the consolidation or merger have, as a result
thereof, directly or indirectly, at least a majority of the combined voting
power of all classes of voting stock of the continuing or surviving corporation
or its parent immediately after such consolidation or merger or in which the
Board immediately prior to the merger or consolidation would, immediately after
the merger or consolidation, constitute a majority of the board of directors of
the continuing or surviving corporation or its parent; or

            (iii) the consummation of an agreement (or agreements) providing for
the sale or other disposition (in one transaction or a series of transactions)
of all or substantially all of the assets of the Company other than such a sale
or disposition immediately after which such assets will be owned directly or
indirectly by the stockholders of the Company in substantially the same
proportions as their ownership of the shares of common stock of the Company
immediately prior to such sale or disposition.

12.   SECURITIES LAW REQUIREMENTS. No Shares shall be issued under the Plan
unless and until: (i) the Company and the Participant have taken all actions
required to register the Shares under the Securities Act of 1933, as amended, or
perfect an exemption from the registration requirements thereof; (ii) any
applicable listing requirement of any stock exchange or national market system
on which the Common Stock is listed has been satisfied; and (iii) any other
applicable provision of state or federal law has been satisfied. The Company
shall be under no obligation to register the Shares with the Securities and
Exchange Commission or to effect compliance with the registration or
qualification requirements of any state securities laws or stock exchange.

13.   AMENDMENT AND TERMINATION.

      (a) MODIFICATIONS TO THE PLAN. The Board may, insofar as permitted by law,
from time to time, with respect to any Shares at the time not subject to
Options, suspend or terminate the Plan or revise or amend the Plan in any
respect whatsoever. However, unless the Board specifically otherwise provides,
any revision or amendment that would cause the Plan to fail to comply with
Section 422 or 162(m) of the Code or any other requirement of applicable law or
regulation if such amendment were not approved by the stockholders of the
Company, shall not be effective unless and until such approval is obtained.

                                       10




      (b) RIGHTS OF PARTICIPANT. No amendment, suspension or termination of the
Plan or of any Option that would adversely affect the right of any Participant
with respect to an Option previously granted under the Plan will be effective
without the written consent of the affected Participant.

14.   MISCELLANEOUS.

      (a) STOCKHOLDERS' RIGHTS. No Participant and no beneficiary or other
person claiming under or through such Participant shall acquire any rights as a
stockholder of the Company by virtue of such Participant having been granted an
Option under the Plan. No Participant and no beneficiary or other person
claiming under or through such Participant will have any right, title or
interest in or to any Shares allocated or reserved under the Plan or subject to
any Option, except as to Shares, if any, that have been issued or transferred to
such Participant. No adjustment shall be made for dividends or distributions or
other rights for which the record date is prior to the date of exercise of an
Option, except as may be provided in the Stock Option Agreement.

      (b) OTHER COMPENSATION ARRANGEMENTS. Nothing contained in the Plan shall
prevent the Board from adopting other compensation arrangements, subject to
stockholder approval if such approval is required. Such other arrangements may
be either generally applicable or applicable only in specific cases.

      (c) TREATMENT OF PROCEEDS. Proceeds realized from the exercise of Options
under the Plan shall constitute general funds of the Company.

      (d) COSTS OF THE PLAN. The costs and expenses of administering the Plan
shall be borne by the Company.

      (e) NO RIGHT TO CONTINUE EMPLOYMENT OR SERVICES. Nothing contained in the
Plan or in any instrument executed pursuant to the Plan will confer upon any
Participant any right to continue to render services to the Company, a
Subsidiary or Affiliate; to continue as a Director, Officer, Employee,
consultant or independent contractor; or affect the right of the Company, a
Subsidiary, an Affiliate, the Board, the board of directors of a Subsidiary or
an Affiliate, the stockholders of the Company or a Subsidiary, or the holders of
interests of an Affiliate, as applicable, to terminate the directorship, office,
employment or consultant or independent contractor relationship, as the case may
be, of any Participant at any time with or without Cause. The term "Cause" as
defined herein is included solely for the purposes of the Plan and is not, and
shall not be deemed to be: (i) a restriction on the right of the Company, a
Subsidiary or Affiliate, as the case may be, to terminate any Officer or
Employee for any reason whatsoever; or (ii) a part of the employment
relationship (whether oral or written, express or implied) of any such
individual.

      (f) SEVERABILITY. The provisions of the Plan shall be deemed severable and
the validity or unenforceability of any provision shall not affect the validity
or enforceability of the other provisions hereof.

      (g) GOVERNING LAW. The Plan and all actions taken thereunder shall be
enforced, governed and construed by and interpreted under the laws of the State
of Delaware applicable to contracts made and to be performed wholly within such
State without giving effect to the principles of conflict of laws thereof.

      (h) HEADINGS. The headings contained in this Plan are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Plan.

                                       11

EX-4.G

                                                                    EXHIBIT 4(g)

                           THIRD AMENDED AND RESTATED
                             1988 STOCK OPTION PLAN

      1.    NAME.

      The name of this plan is the Third Amended and Restated 1988 Stock Option
Plan.

      2.    DEFINITIONS.

      For the purposes of the Plan, the following terms shall be defined as set
forth below:

      (a)   "Affiliate" means any partnership, corporation, firm, joint venture,
            association, trust, unincorporated organization or other entity
            (other than a Subsidiary) that, directly or indirectly through one
            or more intermediaries, is controlled by the Company, where the term
            "controlled by" means the possession, direct or indirect, of the
            power to cause the direction of the management and policies of such
            entity, whether through the ownership of voting interests or voting
            securities, as the case may be, by contract or otherwise.

      (b)   "Board" means the board of directors of the Company.

      (c)   "Cause" as applied to any Officer or Employee means: (i) the
            conviction of such individual for the commission of any felony; (ii)
            the commission by such individual of any crime involving moral
            turpitude (e.g., larceny, embezzlement) which results in harm to the
            business, reputation, prospects or financial condition of the
            Company, any Subsidiary or Affiliate; or (iii) the willful neglect,
            failure or refusal of such individual to carry out his duties, which
            results in harm to the business, reputation, prospects or financial
            condition of the Company, any Subsidiary or Affiliate, which
            neglect, failure or refusal continues for a period of ten
            consecutive business days following notice thereof, or ten
            cumulative business days following successive notices thereof, to
            such individual from the Company; provided, however, that such
            willful neglect, failure or refusal is not due to the death or
            disability (i.e., as a result of an injury or sickness such
            individual is rendered permanently unable to perform his duties as
            an Officer or an Employee, as the case may be, on a full-time basis)
            of such individual or illness leading to the death or disability of
            such individual.

      (d)   "Chairman" means the individual appointed by the Board to serve as
            the chairman of the Committee.

      (e)   "Code" means the Internal Revenue Code of 1986, as amended from time
            to time and the Treasury regulations promulgated thereunder.



      (f)   "Committee" means the committee appointed by the Board to administer
            the Plan as provided in Section 4(a).

      (g)   "Common Stock" means the $.01 par value common stock of the Company
            or any security of the Company identified by the Committee as having
            been issued in substitution or exchange therefor or in lieu thereof.

      (h)   "Company" means Advanced Medical, Inc., a Delaware corporation.

      (i)   "Director" means an individual who: (i) is now, or hereafter
            becomes, a member of the Board or of the board of directors of any
            Subsidiary or Affiliate; and (ii) is not eligible to participate in
            the Non-Employee Director NQSO Plan.

      (j)   "Employee" means an individual employed by the Company, a
            subsidiary, or an Affiliate whose wages are subject to the
            withholding of federal income tax under Section 3401 of the Code.

      (k)   "Exchange Act" means the Securities Exchange Act of 1934, as amended
            from time to time, or any successor statute.

      (l)   "Fair Market Value" of a Share as of a specified date means the
            average of the highest and lowest market prices of a Share on such
            date as reported in the American Stock Exchange composite
            transactions published in the Eastern Edition of The Wall Street
            Journal or, if no trading of Common Stock is reported for that day,
            the next preceding day on which trading was reported. In the event
            the Shares are not then traded on the American Stock Exchange, the
            Fair Market Value of a Share shall be determined by reference to the
            principal market or exchange on which the Shares are then traded.

      (m)   "ISO" means any stock option granted pursuant to the Plan that is
            intended to be and is specifically designated as an "incentive stock
            option" within the meaning of Section 422 of the Code.

      (n)   "Non-Employee Director NQSO Plan" means the Company's Second Amended
            and Restated 1990 Non-Qualified Stock Option Plan for Non-Employee
            Directors.

      (o)   "NQSO" means any stock option granted pursuant to the provisions of
            the Plan that is not an ISO.

      (p)   "Officer" means an individual elected or appointed by the Board or
            by the board of directors of a Subsidiary or Affiliate or chosen in
            such other manner as may be prescribed by the by-laws of the
            Company, a Subsidiary or Affiliate, as the case may be, to serve as
            such, or, in the case of an Affiliate which is not a corporation,
            any individual elected or appointed to

                                      -2-


            fulfill a similar function by a body or individual exercising
            similar authority.

      (q)   "Option" means an ISO or a NQSO granted under the Plan.

      (r)   "Participant" means an individual who is granted an Option under the
            Plan.

      (s)   "Plan" means this Third Amended and Restated 1988 Stock Option Plan.

      (t)   "Rule 16b-3" means Rule 16b-3 promulgated by the Securities and
            Exchange Commission under the Exchange Act, or any successor or
            replacement rule adopted by the Securities and Exchange Commission.

      (u)   "Share" means one share of Common Stock, adjusted in accordance with
            Section 10(b), if applicable.

      (v)   "Stock Option Agreement" means the written agreement between the
            Company and the Participant that contains the terms and conditions
            pertaining to an option.

      (w)   "Subsidiary" means any corporation of which the Company, directly or
            indirectly, is the beneficial owner of fifty percent (50%) or more
            of the total voting power of all classes of its stock' having voting
            power and which qualifies as a subsidiary corporation pursuant to
            Section 424(f) of the Code.

      (x)   "Ten Percent Shareholder" means a Participant who prior to the grant
            of an ISO owned, directly or indirectly within the meaning of
            Section 424(d) of the Code, ten percent (10%) or more of the total
            combined voting power of all classes of stock of the Company, any
            Subsidiary or any parent of the Company (as defined in Section
            425(e) of the Code).

      3.    PURPOSE.

      The purpose of the Plan is to enable the Company to provide incentives,
which are linked directly to increases in shareholder value, to certain key
personnel in order that they will be encouraged to promote the financial success
and progress of the Company.

      4.    ADMINISTRATION.

      (a)   Composition of the Committee.

      The Plan shall be administered by a Committee appointed by the Board,
consisting of not less than a sufficient number of "disinterested persons" (as
such term is defined in Rule 16b-3), who are also "outside directors" (within
the meaning of Section 162(m) of the Code) so as to qualify the Committee to
administer the Plan as contemplated by Rule 16b-3 and Section 162(m),
respectively. Members of the Committee shall not be entitled to participate in

                                      -3-


the Plan. Subject to the provisions of the first sentence of this Section 4(a),
the Board may from time to time remove members from, or add members to, the
Committee. Vacancies on the Committee, however caused, shall be filled by the
Board. The Board shall appoint one of the members of the Committee as Chairman.

      (b)   Actions by the Committee.

      The Committee shall hold meetings at such times and places as it may
determine. Acts approved by a majority of the members of the Committee present
at a meeting at which a quorum is present, or acts reduced to or approved in
writing by a majority of the members of the Committee, shall be the valid acts
of the Committee.

      (c)   Powers of the Committee.

      Subject to the express terms and conditions hereof, the Committee shall
have the authority to administer the Plan in its sole and absolute discretion.
To this end, the Committee is authorized to construe and interpret the Plan and
to make all other determinations necessary or advisable for the administration
of the Plan, including, but not limited to, the authority to determine the
eligible individuals who shall be granted Options, the number of Options to be
granted, the vesting period, if any, for all Options granted hereunder, the date
on which any option becomes first exercisable, the number of Shares subject to
each Option, the exercise price for the Shares subject to each option, and,
whether the Option to be granted is an ISO or a NQSO. Any determination,
decision or action of the Committee in connection with the construction,
interpretation, administration or application of the Plan shall be final,
conclusive and binding upon all Participants and any person validly claiming
under or through a Participant.

      (d)   Liability of Committee Members.

      No member of the Board or the Committee will be liable for any action or
determination made in good faith by the Board or the Committee with respect to
the Plan or any grant or exercise of an option thereunder.

      (e)   Option Accounts.

      The Committee shall maintain a journal in which a separate account for
each Participant shall be established. Whenever an Option is granted to or
exercised by a Participant, the Participant's account shall be appropriately
credited or debited. Appropriate adjustment shall also be made in the journal
with respect to each account in the event of an adjustment pursuant to Section
10(b).

      5.    EFFECTIVE DATE AND TERM OF THE PLAN.

      (a)   Effective Date of the Plan.

      The Plan in its original form was adopted by the Board on December 27,
1988. The Plan in its first amended and restated form was adopted by the Board
on July 12, 1990 and became effective on September 7, 1990. The Plan in its
second amended and restated form was adopted by the Compensation Committee of
the Board and approved by the Board and became

                                      -4-


effective on June 30, 1992. The Plan in its third amended and restated form was
adopted by the Board and became effective on June 28, 1994, subject to approval
by the shareholders of the Company at a meeting duly called and held within
twelve months following such date.

      (b)   Term of Plan.

      No Option shall be granted pursuant to the Plan on or after December 27,
1998, but Options theretofore granted may extend beyond that date.

      6.    TYPE OF OPTIONS AND SHARES SUBJECT TO THE PLAN.

      Options granted under the Plan may be either ISOs or NQSOs. Each Stock
Option Agreement shall specify whether the Option covered thereby is an ISO or a
NQSO.

      The maximum aggregate number of Shares that may be issued under the Plan
is 1,700,200 Shares; provided, however, that no more than 250,000 Shares
(subject to adjustment as described below) shall be awarded to any Participant
in any calendar year. The aggregate number of Shares available for issuance
under the Plan shall be reduced by the number of Shares issued outside of the
Plan pursuant to stock options or otherwise to persons eligible to participate
in the Plan. The limitation on the number of Shares which may be granted under
the Plan shall be subject to adjustment as provided in Section 10(b).

      If any Option granted under the Plan expires or is terminated for any
reason, any Shares as to which the option has not been exercised shall again be
available for purchase under options subsequently granted. At all times during
the term of the Plan, the Company shall reserve and keep available for issuance
such number of Shares as the Company is obligated to issue upon the exercise of
all then outstanding options.

      7.    SOURCE OF SHARES ISSUED UNDER THE PLAN.

      Common Stock issued under the Plan may consist, in whole or in part, of
authorized or unissued Shares or treasury Shares, as determined in the sole and
absolute discretion of the Committee. No fractional Shares shall be issued under
the Plan.

      8.    ELIGIBILITY.

      The individuals eligible for the grant of Options under the Plan shall be:
(i) all Directors, Officers and Employees; and (ii) such individuals determined
by the Committee to be rendering substantial services as a consultant or
independent contractor to the Company or any Subsidiary or Affiliate of the
Company, as the Committee shall determine from time to time in its sole and
absolute discretion; provided, however, that only Employees of the Company or
any Subsidiary shall be eligible to receive ISOs. Any Participant shall be
eligible to be granted more than one Option hereunder.

                                      -5-


      9.    OPTIONS.

      (a)   Grant of Options.

      Subject to any applicable requirements of the Code and any regulations
issued thereunder, the date of the grant of an Option shall be the date on which
the Committee determines to grant the Option.

      (b)   Exercise Price of ISOs.

      The exercise price of each Share subject to an ISO shall not be less than
the Fair Market Value of a Share on the date of grant of the ISO, except that in
the case of a grant of an ISO to a Participant who at the time such ISO was
granted was a Ten Percent Shareholder, the exercise price shall not be less than
110% of the Fair Market Value of a Share on the date of the grant of the ISO.

      (c)   Exercise Price of NOSQs.

      The exercise price of each Share subject to a NQSO shall be determined by
the Committee at the time of grant but will not be less than the par value of a
Share.

      (d)   Exercise Period.

      Each option granted hereunder shall vest and become first exercisable as
determined by the Committee.

      (e)   Terms and Conditions.

      All Options granted pursuant to the Plan shall be evidenced by a Stock
Option Agreement (which need not be the same for each Participant or Option),
approved by the Committee which shall be subject to the following express terms
and conditions and the other terms and conditions as are set forth' in this
Section 9, and to such other terms and conditions as shall be determined by the
Committee in its sole and absolute discretion which are not inconsistent with
the terms of the Plan:

            (i)   the failure of an Option to vest for any reason whatsoever
                  shall cause the Option to expire and be of no further force or
                  effect;

            (ii)  unless terminated earlier pursuant to Sections 9(i) or 11,
                  the term of any Option granted under the Plan shall be ten
                  years from the date of grant; provided, however, that no ISO
                  granted to a Ten Percent Shareholder shall have a term of more
                  than five years from the date of grant;

            (iii) in the case of an ISO, the aggregate Fair Market Value
                  (determined as of the time the ISO is granted) of Shares
                  exercisable for the first time by a Participant during any
                  calendar year (under the Plan and any other incentive stock
                  option plans of the Company, any

                                      -6-


                  Subsidiary or any parent of the Company (as defined in Section
                  424(e) of the Code) shall not exceed $100,000;

            (iv)  Options shall not be transferable by the holder otherwise than
                  by will or by the laws of descent and distribution, and shall
                  be exercisable during the lifetime of the holder only by him
                  or by his guardian or legal representative;

            (v)   no Option or interest therein may be transferred, assigned,
                  pledged or hypothecated by the holder during his lifetime
                  whether by operation of law or otherwise, or be made subject
                  to execution, attachment or similar process; and

            (vi)  payment for the Shares to be received upon exercise of an
                  Option may be made in cash, in Shares (determined with
                  reference to their Fair Market Value on the date of exercise)
                  or any combination thereof.

      (f)   Additional Means of Payment.

      Any Stock Option Agreement may, in the sole and absolute discretion of the
Committee, permit payment by any other form of legal consideration consistent
with applicable law and any rules and regulations relating thereto, including,
but not limited to, the execution and delivery of a full recourse promissory
note by the Participant to the Company.

      (g)   Exercise.

      The holder of an option may exercise the same by filing with the Corporate
Secretary of the Company and the Chairman a written election, in such form as
the Committee may determine, specifying the number of Shares with respect to
which such Option is being exercised, and accompanied by payment in full of the
exercise price for such Shares. Notwithstanding the foregoing, the Committee may
specify a reasonable minimum number of Shares that may be purchased on any
exercise of an Option, provided that such minimum number will not prevent the
Participant from exercising the Option with respect to the full number of Shares
as to which the Option is then exercisable.

      (h)   Withholding Taxes.

      Prior to issuance of the Shares upon exercise of an Option, the
Participant shall pay or make adequate provision for the payment of any Federal,
state, local or foreign withholding obligations of the Company or any Subsidiary
or Affiliate of the Company, if applicable. In the event a Participant shall
fail to make adequate provision for the payment of such obligations, the Company
shall have the right to issue a stock certificate for an amount of Shares equal
to the difference obtained by subtracting: (i) the number of Shares, rounded up
for any fraction to the next whole number, that have a Fair Market Value (as of
the date of exercise) equal to such amount as is sufficient to satisfy
applicable federal, state or local withholding obligations; from (ii) the number
of Shares attributable to that portion of the option so exercised. The Company
shall promptly remit, or cause to be remitted, to the appropriate taxing
authorities

                                      -7-


the amount so withheld. In such cases, although the stock certificate delivered
to the Participant will be for a net number of Shares, such Participant shall be
considered, for tax purposes, to have received the number of Shares equal to the
full number of Shares to which the Option had been exercised.

      (i)   Termination of Options.

      Options granted under the Plan shall be subject to the following events of
termination:

            (i)   in the event a Participant who is a Director is removed from
                  the Board or the board of directors of a Subsidiary or an
                  Affiliate, as the case may be, for cause (as contemplated by
                  the charter, by-laws or other organizational or governing
                  documents), all unexercised Options held by such Participant
                  on the date of such removal (whether or not vested) will
                  expire immediately;

            (ii)  in the event the employment of a Participant who is an Officer
                  or Employee is terminated for Cause, all unexercised Options
                  held by such Participant on the date of such termination of
                  employment (whether or not vested) will expire immediately;
                  and

            (iii) in the event a Participant is no longer a Director,
                  Officer or Employee other than for the reasons set forth in
                  Sections 9(i)(i) or 9(i)(ii), all Options which remain
                  unvested at the time the Participant is no longer a Director,
                  Officer or Employee, as the case may be, shall expire
                  immediately, and all Options which have vested prior to such
                  time shall expire twelve months thereafter unless by their
                  terms they expire sooner.

      10.   RECAPITALIZATION.

      (a)   Corporate Flexibility.

      The existence of the Plan and the Options granted hereunder shall not
affect or restrict in any way the right or power of the Board or the
shareholders of the Company, in their sole and absolute discretion, to make,
authorize or consummate any adjustment, recapitalization, reorganization or
other change in the Company's capital structure or its business, any merger or
consolidation of the Company, any issue of bonds, debentures, common stock,
preferred or prior preference stock ahead of or affecting the Company's capital
stock or the rights thereof, the dissolution or liquidation of the Company or
any sale or transfer of all or any part of its assets or business, or any other
grant of rights, issuance of securities, transaction, corporate act or
proceeding and notwithstanding the fact that any such activity, proceeding,
action, transaction or other event may have, or be expected to have, an impact
(whether positive or negative) on the value of any Option.

                                      -8-


      (b)   Adjustments Upon Chances in Capitalization.

      Except as otherwise provided in Section 11 and subject to any required
action by the shareholders of the Company, in the event of any change in
capitalization affecting the Common Stock of the Company, such as a stock
dividend, stock split or recapitalization, the Committee, in its sole and
absolute discretion, may make proportionate adjustments with respect to: (i) the
aggregate number of Shares available for issuance under the Plan; (ii) the
number of Shares available for any individual award; (iii) the number and
exercise price of Shares subject to outstanding Options; provided, however, that
the number of Shares subject to any Option shall always be a whole number; and
(iv) such other matters as shall be appropriate in light of the circumstances.

      11.   CHANGE OF CONTROL

      In the event of a Change of Control (as defined below), unless otherwise
determined by the Committee at the time of grant or by amendment (with the
holder's consent) of such grant, all Options not vested on or prior to the
effective time of any such Change of Control shall immediately vest as of such
effective time. The Committee in its discretion may make provisions for the
assumption of outstanding Options, or the substitution for outstanding Options
of new incentive awards covering the stock of a successor corporation or a
parent or subsidiary thereof, with appropriate adjustments as to the number and
kind of shares and prices so as to prevent dilution or enlargement of rights.

      A "Change of Control" will be deemed to occur on the date any of the
following events occur:

      (a)   any person or persons acting together which would constitute a
"group" for purpose of Section 13(d) of the Exchange Act (other than the
Company, any Subsidiary and Jeffrey M. Picower (including, any of his affiliates
and any lineal descendant of Mr. Picower, any spouse of Mr. Picower or of any
such lineal descendant, a trust established principally for the benefit of any
of the foregoing, any entity beneficially owned by the foregoing, and the
executor, administrator or personal representative of the estate of any of the
foregoing)) beneficially own (as defined in Rule 13-3 under the Exchange Act),
directly or indirectly, at least 30% of the total voting power of the Company
entitled to vote generally in the election of the Board of Directors of the
Company;

      (b)   either (i) the Current Directors (as herein defined) cease for any
reason to constitute at least a majority of the members of the Board (for these
purposes, a "Current Director" means any member of the Board as of June 28,
1994, and any successor of a Current Director whose election, or nomination for
election by the Company's shareholders, was approved by at least a majority of
the Current Directors then on the Board) or (ii) at any meeting of the
shareholders of the Company called for the purpose of electing directors, a
majority of the persons nominated by the Board for election as directors fail to
be elected;

      (c)   the shareholders of the Company approve (i) a plan of complete
liquidation of the Company, or (ii) an agreement providing for the merger or
consolidation of the Company (A) in which the Company is not the continuing or
surviving corporation (other than

                                      -9-


consolidation or merger with IMED Corporation or a wholly-owned subsidiary of
the Company in which all Shares outstanding immediately prior to the
effectiveness thereof are changed into or exchanged for the same consideration)
or (B) pursuant to which the Shares are converted into cash, securities or other
property, except a consolidation or merger of the Company in which the holders
of the Shares immediately prior to the consolidation or merger have, directly or
indirectly, at least a majority of the common stock of the continuing or
surviving corporation immediately after such consolidation or merger or in which
the Board immediately prior to the merger or consolidation would, immediately
after the merger or consolidation, constitute a majority of the board of
directors of the continuing or surviving corporation; or

      (d)   the shareholders of the Company approve an agreement (or agreements)
providing for the sale or other disposition (in one transaction or a series of
transactions) of all or substantially all of the assets of the Company.

      12.   SECURITIES LAW REQUIREMENTS.

      No Shares shall be issued under the Plan unless and until: (i) the Company
and the Participant have taken all actions required to register the Shares under
the Securities Act of 1933, as amended, or perfect an exemption from the
registration requirements thereof; (ii) any applicable listing requirement of
any stock exchange on which the Common Stock is listed has been satisfied; and
(iii) any other applicable provision of state or Federal law has been satisfied.
The Company shall be under no obligation to register the Shares with the
Securities and Exchange Commission or to effect compliance with the registration
or qualification requirements of any state securities laws or stock exchange.

      13.   AMENDMENT AND TERMINATION.

      (a)   Modifications to the Plan.

      The Board may, insofar as permitted by law, from time to time, with
respect to any Shares at the time not subject to Options, suspend or terminate
the Plan or revise or amend the Plan in any respect whatsoever. However, unless
the Board specifically otherwise provides, any revision or amendment that would
cause the Plan to fail to comply with Rule 16b-3, Section 422 or 162(m) of the
Code or any other requirement of applicable law or regulation if such amendment
were not approved by the shareholders of the Company shall not be effective
unless and until such approval is obtained.

      (b)   Rights of Participant.

      No amendment, suspension or termination of the Plan that would adversely
affect the right of any Participant with respect to an Option previously granted
under the Plan will be effective without the written consent of the affected
Participant.

                                      -10-


      14.   MISCELLANEOUS.

      (a)   Shareholders' Rights

      No Participant and no beneficiary or other person claiming under or
through such Participant shall acquire any rights as a shareholder of the
Company by virtue of such Participant having been granted an Option under the
Plan. No Participant and no beneficiary or other person claiming under or
through such Participant will have any right, title or interest in or to any
Shares, allocated or reserved under the Plan or subject to any Option except as
to Shares, if any, that have been issued or transferred to such Participant. No
adjustment shall be made for dividends or distributions or other rights for
which the record date is prior to the date of exercise of an Option, except as
may be provided in the Stock Option Agreement.

      (b)   Other Compensation Arrangements.

      Nothing contained in the Plan shall prevent the Board from adopting other
compensation arrangements, subject to shareholder approval if such approval is
required. Such other arrangements may be either generally applicable or
applicable only in specific cases.

      (c)   Treatment of Proceeds.

      Proceeds realized from the exercise of Options under the Plan shall
constitute general funds of the Company.

      (d)   Costs of the Plan.

      The costs and expenses of administering the Plan shall be borne by the
Company.

      (e)   No Right to Continue Employment or Services.

      Nothing contained in the Plan or in any instrument executed pursuant to
the Plan will confer upon any Participant any right to continue to render
services to the Company, a Subsidiary or Affiliate; to continue as a Director,
Officer or Employee; or affect the right of the Company, a Subsidiary, an
Affiliate, the Board, the board of directors of a Subsidiary or an Affiliate,
the shareholders of the Company or a Subsidiary, or the holders of interests of
an Affiliate, as applicable, to terminate the directorship, office or
employment, as the case may be, of any Participant at any time with or without
Cause or with or without any other cause, reason or justification. The term
"Cause" as defined herein is included solely for the purposes of the Plan and is
not, and shall not be deemed to be: (i) a restriction on the right of the
Company, a Subsidiary or Affiliate, as the case may be, to terminate any Officer
or Employee for any reason whatsoever; or (ii) a part of the employment
relationship (whether oral or written, express or implied) of any such
individual.

      (f)   Severability.

      The provisions of the Plan shall be deemed severable and the validity or
unenforceability of any provision shall not affect the validity or
enforceability of the other provisions hereof.

                                      -11-


      (g)   Binding Effect of Plan.

      The Plan amends and restates in its entirety the Company's Second Amended
and Restated 1988 Stock Option Plan which was adopted by the Board on June 30,
1992. The Plan shall inure to the benefit of the Company, its successors and
assigns.

      (h)   No Waiver of Breach.

      No waiver by any party hereto at any time of any breach by another party
hereto of, or compliance with, any condition or provision of the Plan to be
performed by such other party shall be deemed a waiver of the same, any similar
or any dissimilar provisions of conditions at the same or at any prior or
subsequent time.

      (i)   Governing Law.

      The Plan and all actions taken thereunder shall be enforced, governed and
construed by and interpreted under the laws of the State of Delaware applicable
to contracts made and to be performed wholly within such State without giving
effect to the principles of conflict of laws thereof.

      (j)   Headings.

      The headings contained in this agreement are reference purposes only and
shall not affect in any way the meaning or interpretation of this agreement.

      15.   EXECUTION

      To record the adoption of the Plan to read as set forth herein, the
Company has caused its authorized officer to execute the same as of this _____
day of June, 1994.

                                             ADVANCED MEDICAL, INC.

                                             By: /s/ Jeffry M. Picower
                                                 ------------------------------
                                                   Jeffry M. Picower
                                                   Chief Executive Officer

ATTEST:

By: /s/ Joseph W. Kuhn
    ------------------------------
      Joseph W. Kuhn
      Secretary



                                      -12-

EX-5

                                                                       EXHIBIT 5


                                October 27, 2004


Cardinal Health, Inc.
7000 Cardinal Place
Dublin, OH  43017

Ladies and Gentlemen:

                  I have acted as counsel to Cardinal Health, Inc., an Ohio
corporation (the "Company"), in connection with the Company's Registration
Statement on Form S-8 (the "Registration Statement") filed under the Securities
Act of 1933, as amended (the "Act"), relating to the issuance of up to 569,000
common shares, without par value (the "Common Shares"), of the Company pursuant
to the following plans (collectively, the "Plans"): (a) ALARIS Medical Systems,
Inc. Non-Employee Director Stock Option Plan; (b) ALARIS Medical Systems, Inc.
2004 Stock Incentive Plan; (c) ALARIS Medical Systems, Inc. 1996 Stock Option
Plan; and (d) Third Amended and Restated 1988 Stock Option Plan.

                  In connection with the foregoing, I have examined: (a) the
Amended and Restated Articles of Incorporation, as amended, and Restated Code of
Regulations, as amended, of the Company, (b) copies of the Plans, and (c) such
records of the corporate proceedings of the Company and such other documents as
I deemed necessary to render this opinion. I have assumed that the copies of the
Plans I reviewed are the form approved by the Board of Directors of ALARIS
Medical Systems, Inc. (or a committee of such Board).

                  Based on such examination, I am of the opinion that the Common
Shares available for issuance under the Plans, when issued, delivered and paid
for in accordance with the terms and conditions of the Plans, will be legally
issued, fully paid and nonassessable.

                  For purposes of the opinions given herein, I do not purport to
be a member of the Bar of, or an expert on the laws of, any jurisdiction other
than the State of Ohio, and I express no opinion herein as to the laws of any
jurisdiction other than the laws of the State of Ohio.

                  I hereby consent to the filing of this Opinion as Exhibit 5 to
the Registration Statement and the reference to me in Item 5 of Part II of the
Registration Statement. In giving such consent, I do not thereby admit that I am
in the category of person whose consent is required under Section 7 of the Act
or the rules and regulations of the Securities and Exchange Commission.


                                                     Very truly yours,


                                                     /s/ Stephen T. Falk
                                                     -------------------------
                                                     Stephen T. Falk
                                                     Vice President and
                                                     Associate General Counsel

EX-23.A

                                                                 EXHIBIT 23(A)



            CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


We consent to the incorporation by reference in this Registration Statement on
Form S-8 pertaining to the ALARIS Medical Systems, Inc. Non-Employee Director
Stock Option Plan, 2004 Stock Incentive Plan, 1996 Stock Option Plan and Third
Amended and Restated 1988 Stock Option Plan of our report dated October 25,
2004, with respect to the consolidated financial statements and financial
statement schedule of Cardinal Health, Inc. and subsidiaries included in its
Annual Report (Form 10-K) for the year ended June 30, 2004 filed with the
Securities and Exchange Commission.


/s/ Ernst & Young LLP

Ernst & Young LLP
Columbus, Ohio
October 26, 2004