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                                                                    Exhibit 10.3
                           DIAMETRICS MEDICAL, INC.
                       1995 EMPLOYEE STOCK PURCHASE PLAN
                           (as amended May 23, 2001)


                            ARTICLE I. INTRODUCTION

     Section 1.01. Purpose. The purpose of the Diametrics Medical, Inc. 1995
Employee Stock Purchase Plan (the "Plan") is to provide employees of Diametrics
Medical, Inc., a Minnesota corporation (the "Company"), and certain related
corporations with an opportunity to share in the ownership of the Company by
providing them with a convenient means for regular and systematic purchases of
the Company's Common Stock, par value $.01 per share, and, thus, to develop a
stronger incentive to work for the continued success of the Company.

     Section 1.02. Rules of Interpretation. It is intended that the Plan be an
"employee stock purchase plan" as defined in Section 423(b) of the Internal
Revenue Code of 1986, as amended (the "Code"), and Treasury Regulations
promulgated thereunder. Accordingly, the Plan shall be interpreted and
administered in a manner consistent therewith if so approved. All Participants
in the Plan will have the same rights and privileges consistent with the
provisions of the Plan.

     Section 1.03. Definitions. For purposes of the Plan, the following terms
will have the meanings set forth below:

          (a)  "Acceleration Date" means the earlier of the date of shareholder
     approval or approval by the Company's Board of Directors of (i) any
     consolidation or merger of the Company in which the Company is not the
     continuing or surviving corporation or pursuant to which shares of Company
     Common Stock would be converted into cash, securities or other property,
     other than a merger of the Company in which shareholders of the Company
     immediately prior to the merger have the same proportionate ownership of
     stock in the surviving corporation immediately after the merger; (ii) any
     sale, exchange or other transfer (in one transaction or a series of related
     transactions) of all or substantially all of the assets of the Company; or
     (iii) any plan of liquidation or dissolution of the Company.

          (b)  "Affiliate" means any subsidiary corporation of the Company, as
     defined in Section 424(f) of the Code, whether now or hereafter acquired or
     established.

          (c)  "Committee" means the committee described in Section 10.01.

          (d)  "Company" means Diametrics Medical, Inc., a Minnesota
     corporation, and its successors by merger or consolidation as contemplated
     by Article XI herein.

          (e)  "Current Compensation" means all regular base wage or salary
     payments paid by the Company to a Participant in accordance with the terms
     of his or her employment, but excluding annual bonus payments and all other
     forms of special compensation.

          (f)  "Fair Market Value" as of a given date means such value of the
     Common Stock as reasonably determined by the Committee, but shall not be
     less than (i) the closing price of the Common Stock as reported for
     composite transactions if the Common Stock is then traded on a national
     securities exchange, (ii) the last sale price if the Common Stock is then
     quoted on the NASDAQ National Market System, or (iii) the average of the
     closing representative bid and asked prices of the Common Stock as reported
     on NASDAQ on the date as of which the fair market value is being
     determined. If on a given date the Common Stock are not traded on an
     established securities market, the Committee shall make a good faith
     attempt to satisfy the requirements of this Section 1.03 and in connection
     therewith shall take such action as it deems necessary or advisable.
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          (g)  "Full-Time Employee" means an employee of the Company or a
     Participating Affiliate as of the first day of a Purchase Period who has
     worked for the company for at least 90 days, including an officer or
     director who is also an employee, but excluding an employee whose customary
     employment is less than 20 hours per week, provided, however, that for the
     initial Purchase Period, all employees whose customary employment exceeds
     20 hours per week shall be eligible to participate regardless of the number
     of days they have been employed by the Company.

          (h)  "Participant" means a Full-Time Employee who is eligible to
     participate in the Plan under Section 2.01 and who has elected to
     participate in the Plan.

          (i)  "Participating Affiliate" means an Affiliate which has been
     designated by the Committee in advance of the Purchase Period in question
     as a corporation whose eligible Full-Time Employees may participate in the
     Plan.

          (j)  "Plan" means the Diametrics Medical, Inc. 1995 Employee Stock
     Purchase Plan, as amended, the provisions of which are set forth herein.

          (k)  "Purchase Period" means the approximate 3-month periods beginning
     on the first business day in January, April, July and October of each year
     and ending on the last business day in the following March, June, September
     and December, respectively; provided that the initial Purchase Period will
     commence on July 3, 1995 and will terminate on September 29, 1995.

          (l)  "Common Stock" means the Company's Common Stock, $.01 par value,
     as such stock may be adjusted for changes in the Company as contemplated by
     Article XI herein.

          (m)  "Stock Purchase Account" means the account maintained on the
     books and records of the Company recording the amount received from each
     Participant through payroll deductions made under the Plan.

                   ARTICLE II. ELIGIBILITY AND PARTICIPATION

     Section 2.01. Eligible Employees. All Full-Time Employees shall be eligible
to participate in the plan beginning on the first day of the first Purchase
Period to commence after such person becomes a Full-Time Employee. Subject to
the provisions of Article VI, each such employee will continue to be eligible to
participate in the Plan so long as he or she remains a Full-Time Employee.

     Section 2.02. Election to Participate. An eligible Full-Time Employee may
elect to participate in the Plan for a given Purchase Period by filing with the
Company, in advance of that Purchase Period and in accordance with such terms
and conditions as the Committee in its sole discretion may impose, a form
provided by the Company for such purpose which authorizes regular payroll
deductions from Current Compensation beginning with the first payday in that
Purchase Period and continuing until the employee withdraws from the Plan or
ceases to be eligible to participate in the Plan.

     Section 2.03. Limits on Stock Purchase. No employee shall be granted any
right to purchase Common Stock hereunder if such employee, immediately after
such right to purchase is granted, would own, directly or indirectly, within the
meaning of Section 423(b)(3) and Section 424(d) of the Code, Common Stock
possessing 5% or more of the total combined voting power or value of all the
classes of the capital stock of the Company or all Affiliates.

     Section 2.04. Voluntary Participation. Participation in the Plan on the
part of a Participant is voluntary and such participation is not a condition of
employment nor does participation in the Plan entitle a Participant to be
retained as an employee.

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                   ARTICLE III. PAYROLL DEDUCTIONS, COMPANY
                   CONTRIBUTIONS AND STOCK PURCHASE ACCOUNT

     Section 3.01. Deduction from Pay. The form described in Section 2.02 will
permit a Participant to elect payroll deductions of any multiple of 1% but not
less than 1% or more than 10% of such Participant's Current Compensation for
each pay period, subject to such other limitations as the Committee in its sole
discretion may impose. A Participant may cease making payroll deductions at any
time, subject to such limitations as the Committee in its sole discretion may
impose.

     Section 3.02. Credit to Account. Payroll deductions will be credited to
the Participant's Stock Purchase Account on each payday, and Company
contributions will be credited to the Participant's Stock Purchase Account on
the last business day of the Purchase Period at the time of and in connection
with the purchase of shares of Common Stock in accordance with Article IV and V
hereof.

     Section 3.03. Interest. No interest will be paid upon payroll deductions,
Company contributions or on any amount credited to, or on deposit in, a
Participant's Stock Purchase Account.

     Section 3.04. Nature of Account. The Stock Purchase Account is established
solely for accounting purposes, and all amounts credited to the Stock Purchase
Account will remain part of the general assets of the Company or the
Participating Affiliate (as the case may be).

     Section 3.05. No Additional Contributions. A Participant may not make any
payment into the Stock Purchase Account other than the payroll deductions made
pursuant to the Plan.

                     ARTICLE IV. RIGHT TO PURCHASE SHARES

     Section 4.01. Number of Shares. Each Participant will have the right to
purchase on the last business day of the Purchase Period all, but not less than
all, of the largest number of whole shares of Common Stock that can be purchased
at the price specified in Section 4.02 with the entire credit balance in the
Participant's Stock Purchase Account, subject to the limitations that (a) no
more than 2,000 shares of Common Stock may be purchased under the Plan by any
one Participant for a given Purchase Period and (b) in accordance with Section
423 (b)(8) of the Code, no more than $25,000 in Fair Market Value (determined at
the beginning of each Purchase Period) of Common Stock and other stock may be
purchased under the Plan and all other employee stock purchase plans (if any) of
the Company and the Affiliates by any one Participant for any calendar year. If
the purchases for all Participants would otherwise cause the aggregate number of
shares of Common Stock to be sold under the Plan to exceed the number specified
in Section 10.03, each Participant shall be allocated a pro rata portion of the
Common Stock to be sold.

     Section 4.02. Purchase Price. The purchase price for any Purchase Period
shall be the lesser of (a) 85% of the Fair Market Value of the Common Stock on
the first business day of that Purchase Period or (b) 85% of the Fair Market
Value of the Common Stock on the last business day of that Purchase Period, in
each case rounded up to the next higher full cent.

                         ARTICLE V. EXERCISE OF RIGHT

     Section 5.01. Purchase of Stock. On the last business day of a Purchase
Period, the entire credit balance in each Participant's Stock Purchase Account
will be used to purchase the largest number of whole shares of Common Stock
purchasable with such amount (subject to the limitations of Section 4.01),
unless the Participant has filed with the Company, in advance of that date and
subject to such terms and conditions as the Committee in its sole discretion may
impose, a form provided by the Company which requests the distribution of the
entire credit balance in cash.

     Section 5.02. Cash Contributions. Any amount remaining in a Participant's
Stock Purchase Account after the last business day of a Purchase Period will be
paid to the Participant in cash within 30 days after the end of that Purchase
Period.

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     Section 5.03. Notice of Acceleration Date. The Company shall use its best
efforts to notify each Participant in writing at least ten days prior to any
Acceleration Date that the then current Purchase Period will end on such
Acceleration Date.

                ARTICLE VI. WITHDRAWAL FROM PLAN: SALE OF STOCK

     Section 6.01. Voluntary Withdrawal. A Participant may, in accordance with
such terms and conditions as the Committee in its sole discretion may impose,
withdraw from the Plan and cease making a payroll deductions by filing with the
Company a form provided for this purpose. In such event, the entire credit
balance in the Participant's Stock Purchase Account will be paid to the
Participant in cash within 30 days. A Participant who withdraws from the Plan
will not be eligible to reenter the Plan until the beginning of the next
Purchase Period following the date of such withdrawal.

     Section 6.02. Death. Subject to such terms and conditions as the Committee
in its sole discretion may impose, upon the death of a Participant, no further
amounts shall be credited to the Participant's Stock Purchase Account.
Thereafter, on the last business day of the Purchase Period during which such
Participant's death occurred and in accordance with Section 5.01, the entire
credit balance in such Participant's Stock Purchase Account will be used to
purchase Common Stock, unless such Participant's estate has filed with the
Company, in advance of that day and subject to such terms and conditions as the
Committee in its sole discretion may impose, a form provided by the Company
which elects to have the entire credit balance in such Participant's Stock
Account distributed in cash within 30 days after the end of that Purchase Period
or at such earlier time as the Committee in its sole discretion may decide. Each
Participant, however, may designate one or more beneficiaries who, upon death,
are to receive the Common Stock or the amount that otherwise would have been
distributed or paid to the Participant's estate and may change or revoke any
such designation form time to time. No such designation, change or revocation
will be effective unless made by the Participant in writing and filed with the
Company during the Participant's lifetime. Unless the Participant has otherwise
specified the beneficiary designation, the beneficiary or beneficiaries so
designated will become fixed as of the date of the death of the Participant so
that, if a beneficiary survives the Participant but dies before the receipt of
the payment due such beneficiary, the payment will be made to such beneficiary's
estate.

     Section 6.03. Termination of Employment. Subject such terms and conditions
as the Committee in its sole discretion may impose, upon a Participant's normal
or early retirement with the consent of the Company under any pension or
retirement plan of the Company or Participating Affiliate, no further amounts
shall be credited to the Participant's Stock Purchase Account. Thereafter, on
the last business day of the Purchase Period during which such Participant's
approved retirement occurred and in accordance with Section 5.01, the entire
credit balance in such Participant's Stock Purchase Account will be used to
purchase Common Stock, unless such Participant has filed with Company, in
advance of that day and subject to such terms and conditions as the committee in
its sole discretion may impose, a form provided by the Company which elects to
receive the entire credit balance in such Participant's Stock Purchase Account
in cash within 30 days after the end of that Purchase Period, provided that such
Participant shall have no right to purchase Common Stock in the event that the
last day of such a Purchase Period occurs more than three months following the
termination of such Participates employment with Company by reason of such an
approved retirement. In the event of any other termination of employment (other
than death) with the Company or a participating Affiliate, participation the
Plan will cease on the date the Participant ceases to be a Full-Time Employee
for any reason. In such event, the entire credit balance in such Participant's
Stock Purchase Account will be paid to the Participant in cash within 30 days.
For purposes of this Section 6.03, a transfer of employment to any Affiliate, or
a leave of absence which has been approved by the Committee, will not be deemed
a termination of employment as a Full-Time Employee.

                       ARTICLE VII. NON-TRANSFERABILITY

     Section 7.01. Nontransferable Right to Purchase. The right to purchase
Common Stock hereunder may not be assigned, transferred, pledged or hypothecated
(whether by operation of law or otherwise), except as provided in Section 6.02,
and will not be subject to execution, attachment or similar process. Any
attempted assignment, transfer, pledge, hypothecation or other disposition or
levy of attachment or similar process upon the right to purchase will be null
and void and without effect.

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     Section 7.02. Nontransferable Account. as provided in Section 6.02, the
amounts credited to a Stock Purchase Account may not be assigned, transferred,
pledged or hypothecated in any way, and any attempted assignment, transfer,
pledge, hypothecation or other disposition of such amounts will be null and void
and without effect.

                       ARTICLE VIII. STOCK CERTIFICATES

     Section 8.01. Delivery. Promptly after the last day of each Purchase
Period and subject to such terms and conditions as the Committee in its sole
discretion may impose, the Company will cause to be delivered to or for the
benefit of the Participant a certificate representing the Common Stock purchased
on the last business day of such Purchase Period.

     Section 8.02. Securities Laws. The Company shall not be required to issue
or deliver any certificate representing Common Stock prior to registration under
the Securities Act of 1933, as amended, or registration or qualification under
any state law if such registrations required. The Company shall use its best
efforts to accomplish such registration (if and to the extent required) not
later than a reasonable time following the Purchase Period, and delivery of
certificates may be deferred until such registration is accomplished.

     Section 8.03. Completion of Purchase. A Participant shall have no interest
in the Common Stock purchased until a certificate representing the same is
issued to or for the benefit of the Participant.

     Section 8.04. Form of Ownership. The certificates representing Common
Stock issued under the Plan will be registered in the name of the Participant or
jointly in the name of the Participant and another person, as the Participant
may direct on a form provided by the Company.

         ARTICLE IX. EFFECTIVE DATE AMENDMENT AND TERMINATION OF PLAN

     Section 9.01. Effective Date. The Plan was approved by the Board of
Directors of the Company on April 19, 1995, and will be approved by the
shareholders within 12 months of such date.

     Section 9.02. Plan Commencement. The initial Purchase Period under the Plan
will commence on July 3,1995. Thereafter each succeeding Purchase Period will
commence and terminate in accordance with Section 1.03(k).

     Section 9.03. Powers of Board. The Board of Directors may amend or
discontinue the Plan at any time. No amendment or discontinuation of the Plan,
however, shall without shareholder approval be made that (i) absent such
shareholder approval, would cause Rule 16b-3 under the Securities Exchange Act
of 1934, as amended (the "Act") to become unavailable with respect to the Plan,
(ii) requires shareholder approval under any rules or regulations of the
National Association of Securities Dealers, Inc. or any securities exchange that
are applicable to the Company, or (iii) permit the issuance of Common Stock
before payment therefor in full.

     Section 9.04. Automatic Termination. The Plan shall automatically terminate
when all of the shares of Common Stock provided for in Section 10.03 have been
sold.

                           ARTICLE X. ADMINISTRATION

     Section 10.01. The Committee. The Plan shall be administered by a committee
(the "Committee") of two or more directors of the none of whom shall be officers
or employees of the Company and all of whom shall be "disinterested persons"
with respect to the Plan within the meaning of Rule 16b-3 under the Act. The
members of the committee shall be appointed by and serve at the pleasure of the
Board of Directors.

     Section 10.02. Powers of Committee. Subject to the provisions of the Plan,
the Committee shall have full authority to administer the plan, including
authority to interpret and construe any provision of the Plan, to establish
deadlines by which the various administrative forms must be received in order to
be effective, and to adopt such other rules and regulations for administrating
the Plan as it may deem appropriate. The Committee shall have full

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and complete authority to determine whether all or any part of the Common Stock
acquired pursuant to the Plan shall be subject to restriction on the
transferability thereof or any other restrictions affecting in any manner a
Participant's rights with respect thereto but any such restrictions shall be
contained in the form by which a Participant elects to participate in the Plan
pursuant to Section 2.02. Decisions of the Committee will be final and binding
on all parties who have an interest in the Plan.

     Section 10.03. Stock to be Sold. The Common Stock to be issued and sold
under the Plan may be treasury shares or authorized but unissued shares, or the
Company may purchase Common Stock in the market for sale under the Plan. Except
as provided in Section 11.01, the aggregate number of shares of Common Stock to
be sold under the Plan will not exceed 400,000 shares.

     Section 10.04. Notices. Notices to the Committee should be addressed as
follows:

     Compensation Committee

     Diametrics Medical, Inc.

     2658 Patton Road

     Roseville, Minnesota 55113



            ARTICLE XI. ADJUSTMENT FOR CHANGES IN STOCK OR COMPANY

     Section 11.01. Stock dividend or Reclassification. If the outstanding
shares of Common Stock are increased, decreased, changed into or exchanged for a
different number or kind of securities of the Company, or shares of a different
par value or without par value, through reorganization, recapitalization,
reclassification, stock dividend, stock split, amendment to the Company's
certificate of Incorporation, reverse stock split or otherwise, and appropriate
adjustment shall be made in the maximum numbers and kind of securities to be
purchased under the Plan with a corresponding adjustment in the purchase price
to be paid therefor.

     Section 11.02. Merger or Consolidation. If the Company is merged into or
consolidated with one or more corporations during the term of the Plan,
appropriate adjustments will be made to give effect thereto on an equitable
basis in terms of issuance of shares of the corporation surviving the merger or
of the consolidated corporation, as the case may be.

                          ARTICLE XII. APPLICABLE LAW

Rights to purchase Common Stock granted under the Plan shall be construed and
shall take effect in accordance with the laws of the State of Minnesota.

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