YEAR 2000 NON-QUALIFIEDSTOCK OPTION PLANOFSUNRISE MEDICAL INC.

 

     SUNRISE MEDICAL INC., a corporation organized underthe laws of the State of Delaware, hereby adopts this Year 2000 Non-QualifiedStock Option Plan of Sunrise Medical Inc. by the action of its Board ofDirectors as of February 28, 2000, without stockholder approval.

The purposes of this Plan are as follows:

     (1)  To further the growth, developmentand financial success of the Company by providing additional incentives to itsAssociates, Consultants and Non-Associate Directors by assisting them to becomeowners of the Company's Common Stock and thus to benefit directly from itsgrowth, development and financial success.

     (2)  To enable the Company to obtain andretain the services of the type of professional, technical and managerialAssociates and Consultants considered essential to the long-range success of theCompany by providing and offering them an opportunity to become owners of theCompany's Common Stock under non-qualified stock options.

ARTICLE IDEFINITIONS

     Whenever the following terms are used in this Plan,they shall have the meaning specified below unless the context clearly indicatesto the contrary. The masculine pronoun shall include the feminine and neuter andthe singular shall include the plural, where the context so indicates.

Section 1.1 - Administrator

     "*Administrator*" shall mean the entity that conductsthe administration of the Plan (including the grant of Options) as providedherein. With reference to the administration of the Plan with respect to anOption granted or to be granted to Non-Associate Directors, the term"Administrator" shall refer to the Board. With reference to theadministration of the Plan with respect to an Option granted or to be granted toAssociates or Consultants, the term "Administrator" shall refer to theCommittee, unless and to the extent (a) the Board has assumed the authority foradministration of all or any part of the Plan as permitted in Section 6.2 or (b)the Committee has delegated the authority for administration of all or part ofthe Plan as permitted by Section 6.5.

Section 1.2 - Associate

     "*Associate*" shall mean any Employee (as defined inaccordance with the regulations and revenue rulings then applicable underSection 3401(c) of the Code) of the Company, or of any corporation which is thena Parent Corporation or a Subsidiary, whether such Employee is so employed atthe time this Plan is adopted or becomes so employed subsequent to the adoptionof this Plan.

Section 1.3 - Board

     "*Board*" shall mean the Board of Directors of the Company, asconstituted from time to time.

Section 1.4 - Committee

     "*Committee*" shall mean the Compensation Committee of theBoard, or another committee or subcommittee of the Board, appointed as providedin Section 6.1.

Section 1.5 - Company

     "*Company*" shall mean Sunrise Medical Inc. In addition,"*Company*" shall mean any corporation assuming, or issuing newstock options in substitution for, Options outstanding under the Plan.

Section 1.6 - Consultant

     *"Consultant"* shall mean any consultant or adviser if:

     (a)  the consultant or adviser renders bona fide services to theCompany;

     (b)  the services rendered by the consultant or adviser are not inconnection with the offer or sale of securities in a capital-raising transactionand do not directly or indirectly promote or maintain a market for the Company'ssecurities; and

     (c)  the consultant or adviser is a natural person who hascontracted directly with the Company to render such services.

Section 1.7 - Director

     "*Director*" shall mean a member of the Board.

Section 1.8 - Exchange Act

     "*Exchange Act*" shall mean the Securities Exchange Act of1934, as amended from time to time.

Section 1.9 - Non-Associate Director

     "*Non-Associate Director*" shall mean a Director who is not anAssociate.

Section 1.10 - Officer

     "*Officer*" shall mean an officer of the Company, as definedin Rule 16a-1(f) under the Exchange Act, as such Rule may be amended in thefuture.

Section 1.11 - Option

     "*Option*" shall mean a non-qualified option to purchaseCommon Stock of the Company, granted under the Plan. Options granted under thePlan are not intended to qualify under Section 422 of the Internal Revenue Codeof 1986, as amended.

Section 1.12 - Optionee

     "*Optionee*" shall mean an Associate, Consultant or aNon-Associate Director to whom an Option is granted under the Plan.

Section 1.13 - Parent Corporation

     "*Parent Corporation*" shall mean any corporation in anunbroken chain of corporations ending with the Company if each of thecorporations other than the Company then owns stock possessing 50% or more ofthe total combined voting power of all classes of stock in one of the othercorporations in such chain.

Section 1.14 - Plan

     "*Plan*" shall mean this Year 2000 Non-Qualified Stock OptionPlan of Sunrise Medical Inc., as amended and/or restated from time to time.

Section 1.15 - Rule 16b-3

     "*Rule 16b-3*" shall mean that certain Rule 16b-3 under theExchange Act, as such Rule may be amended from time to time.

Section 1.16 - Secretary

     "*Secretary*" shall mean the Secretary of the Company.

Section 1.17 - Subsidiary

     "*Subsidiary*" shall mean any corporation in an unbroken chainof corporations beginning with the Company if each of the corporations otherthan the last corporation in the unbroken chain then owns stock possessing 50%or more of the total combined voting power of all classes of stock in one of theother corporations in such chain.

**Section 1.18 - Termination of Consultancy**
     *"Termination of Consultancy"* shall mean the time when theengagement of Optionee as a consultant to the Company or a Subsidiary isterminated for any reason, with or without cause, including without limitation,by resignation, discharge, death or retirement; but excluding terminations wherethere is a simultaneous commencement of employment with the Company or anySubsidiary. The Administrator, in its absolute discretion, shall determine theeffect of all matters and questions relating to Termination of Consultancy,including, but not by way of limitation, the question of whether a Terminationof Consultancy resulted from a discharge for good cause, and all questions ofwhether particular leaves of absence constitute Terminations of Consultancy.Notwithstanding any other provision of this Plan, the Company or any Subsidiaryhas an absolute and unrestricted right to terminate a Consultant's service atany time for any reason whatsoever, with or without cause, except to the extentexpressly provided otherwise in writing.
**Section 1.19 - Termination of Directorship**
     "*Termination of Directorship*" shall mean the time when aDirector ceases to be a member of the Board for any reason, including, but notby way of limitation, a termination by resignation, expiration of term, removal(with or without cause), retirement or death. The Board, in its sole andabsolute discretion, shall determine the effect of all matters and questionsrelating to Termination of Directorship.
**Section 1.20 - Termination of Employment**
     "*Termination of Employment*" shall mean the time when theemployee-employer relationship between the Associate and the Company, a ParentCorporation or a Subsidiary is terminated for any reason, with or without cause,including, but not by way of limitation, a termination by resignation,discharge, death, disability, or retirement, but excluding (i) terminationswhere there is a simultaneous reemployment by the Company, a Parent Corporationor a Subsidiary, (ii) at the discretion of the Administrator, terminations whichresult in a temporary severance of the employee-employer relationship, and (iii)at the discretion of the Administrator, terminations which are followed by thesimultaneous establishment of a consulting relationship by the Company or aSubsidiary with the former Associate. The Administrator, in its absolutediscretion, shall determine the effect of all other matters and questionsrelating to Termination of Employment, including, but not by way of limitation,the question of whether a Termination of Employment resulted from a dischargefor good cause, and all questions of whether particular leaves of absenceconstitute Terminations of Employment. Notwithstanding any other provision ofthis Plan, the Company or any Subsidiary has an absolute and unrestricted rightto terminate an Associate's employment at any time for any reason whatsoever,with or without cause, except to the extent expressly provided otherwise inwriting.
**ARTICLE IISHARES SUBJECT TO PLAN

Section 2.1 - Shares Subject to Plan**
     The shares of stock subject to Options shall be shares of the Company's $1.00par value Common Stock. The aggregate number of such shares which may be issuedupon exercise of Options shall initially be Three Million (3,000,000) shares,and, upon termination of the Company's Second Amended and Restated 1993 StockOption Plan, as amended and/or restated from time to time (the "Restated1993 Plan") the aggregate number of shares that may be issued upon exerciseof Options under this Plan shall be increased, on a share per share basis, bythe number of shares remaining available for option grant under the Restated1993 Plan. The foregoing increase shall be implemented without consideration ofthe 1.5% of outstanding shares annual increase under the Restated 1993 Plan,thus only giving consideration of the 4,000,000 aggregate share limitation underthe Restated 1993 Plan.
**Section 2.2 - Unexercised Options; Retained or Surrendered Shares**
     If any Option expires or is canceled without having been fully exercised, thenumber of shares subject to such Option but as to which such Option was notexercised prior to its expiration or cancellation may again be optionedhereunder, subject to the overall limitation of Section 2.1. Shares of stockwhich are received or retained by the Company upon the exercise of optionspursuant to Section 5.3(b) or Sections 5.3(c) and 5.4(d) may also again beoptioned hereunder, subject to the overall limitation of Section 2.1.
**Section 2.3 - Changes in Company's Shares**
     In the event that the outstanding shares of Common Stock of the Company arehereafter changed into or exchanged for a different number or kind of shares orother securities of the Company, or of another corporation, by reason ofreorganization, merger, consolidation, recapitalization, reclassification, stocksplit-up, stock dividend or combination of shares, appropriate adjustments shallbe made by the Administrator in the number and kind of shares for the purchaseof which Options may be granted, including adjustments of the limitations inSection 2.1 on the maximum number and kind of shares which may be issued onexercise of Options.
**ARTICLE IIIGRANTING OF OPTIONS

Section 3.1 - Eligibility**
     Each Associate of the Company, any Parent or any Subsidiary, including,without limitation, each Associate who is employed on a full-time basis in theUnited States by the Company, any Parent or any Subsidiary and who is an"exempt employee" as defined under the Fair Labor Standards Act of1938, as amended, shall be eligible to be granted Options under the Plan. Inaddition, each Consultant and Non-Associate Director of the Company or of anycorporation which is then a Parent Corporation or a Subsidiary shall also beeligible to be granted Options under the Plan.
**Section 3.2 - Limitations on Grants to Officers and Directors**
     Notwithstanding anything herein to the contrary, not more than 49% of allOptions actually granted during the earlier of (i) the first three yearsfollowing the adoption of this Plan or (ii) the term of this Plan, may begranted to Officers and Directors. All Options granted in excess of thislimitation shall be null and void and of no force or effect.
**Section 3.3 - No Qualification as Incentive Stock Options**
     No Option shall qualify as an "*incentive stock option*" underSection 422 of the Internal Revenue Code of 1986, as amended.
**Section 3.4 - Granting of Options

(a)  The Administrator shall from time to time, in its absolutediscretion:

(1)  Select from among the Associates, Consultants and  Non-associate Directors (including those individuals to whom Options have been  previously granted under the Plan) such of them as in its opinion should be  granted Options; and

(2)  Determine the number of shares to be subject to such  Options; and

(3)  Determine the terms and conditions of such Options, consistentwith the Plan; and

(4)  Instruct the Secretary to issue such Options and may impose  such conditions on the grant of such Options as it deems appropriate.
**ARTICLE IVTERMS OF OPTIONS

Section 4.1 - Option Agreement**
     Each Option shall be evidenced by a written Stock Option Agreement, whichshall be executed by the Optionee and an authorized Officer of the Company andwhich shall contain such terms and conditions as the Administrator shalldetermine, consistent with the Plan.
**Section 4.2 - Option Price**
     (a)  The price of the shares subject to an Option shall be the fairmarket value of such shares on the date that such Option is granted; provided,however, that the Administrator, in its sole discretion, has the authority toset the price of the shares subject to an Option at a price per share that isless than or greater than the fair market value of such shares on the date theOption is granted.

     (b)  For purposes of the Plan, the fair market value of a share ofthe Company's Common Stock as of a given date shall be: (i) the closing price ofa share of the Company's Common Stock on the principal exchange on which sharesof the Company's Common Stock are then trading, if any, on the trading dayprevious to such date, or, if shares were not traded on the trading day previousto such date, then on the next preceding trading day during which a saleoccurred; or (ii) if such Common Stock is not traded on an exchange but isquoted on NASDAQ or a successor quotation system, (1) the last sales price (ifthe Company's Common Stock is then listed as a National Market Issue under theNASD National Market System) or (2) the mean between the closing representativebid and asked prices (in all other cases) for the Company's Common Stock on thetrading day previous to such date as reported by NASDAQ or such successorquotation system; or (iii) if such Common Stock is not publicly traded on anexchange and not quoted on NASDAQ or a successor quotation system, the meanbetween the closing bid and asked prices for the Company's Common Stock, on thetrading day previous to such date, as determined in good faith by theAdministrator; or (iv) if the Company's Common Stock is not publicly traded, thefair market value established by the Administrator acting in good faith. Forpurposes of the intial grant of options under the Plan on March 1, 2000, thefair market value of a share of the Company's Common Stock on March 1, 2000,shall be the last sales price as reported by NASDAQ on March 1, 2000.
**Section 4.3 - Commencement of Exercisability**
     (a)  Options shall become exercisable at such times and in suchinstallments (which may be cumulative) as the Administrator shall provide in theterms of each individual Option; *provided*, *however*, that by aresolution adopted after an Option is granted the Administrator may, on suchterms and conditions as it may determine to be appropriate, accelerate the timeat which such Option or any portion thereof may be exercised.

     (b)  Except as provided in the applicable Stock Option Agreementexecuted hereunder, no portion of an Option which is unexercisable atTermination of Employment, Termination of Consultancy or Termination ofDirectorship, as applicable, shall thereafter become exercisable.
**Section 4.4 - Expiration of Options**
     (a)  No Option may be exercised to any extent by anyone after theexpiration of ten years from the date the Option was granted.

     (b)  Subject to the provisions of Section 4.4(a), the Administratorshall provide, in the terms of each individual Option, when such Option expiresand becomes unexercisable.

     (c)  The Administrator may extend the term of any outstandingOption in connection with any Termination of Employment, Termination ofConsultancy or Termination of Directorship of the Optionee, or amend any otherterm or condition of such Option relating to such a termination.
**Section 4.5 - Consideration**
     In consideration of the granting of an Option, the Optionee shall agree, inthe written Stock Option Agreement, to remain in the employ (or, in the case ofa Non-Associate Director, as a Director) of the Company, a Parent Corporation ora Subsidiary for a period of at least one year after the Option is granted.Nothing in this Plan or in any Stock Option Agreement hereunder shall conferupon any Optionee any right to continue in the employ or as a Director of theCompany, any Parent Corporation or any Subsidiary or shall interfere with orrestrict in any way the rights of the Company and its Parent Corporation andSubsidiaries, which are hereby expressly reserved, to discharge (or, in the caseof a Non-Associate Director, to remove) any Optionee at any time for any reasonwhatsoever, with or without cause.
**Section 4.6 - Adjustments in Outstanding Options**
     In the event that the outstanding shares of the stock subject to Options arechanged into or exchanged for a different number or kind of shares of theCompany or other securities of the Company or of any other corporation by reasonof merger, consolidation, recapitalization, reclassification, stock split-up,stock dividend or combination of shares, the Administrator shall make anappropriate and equitable adjustment in the number and kind of shares as towhich all outstanding Options, or portions thereof then unexercised, shall beexercisable, to the end that after such event the Optionee's proportionateinterest shall be maintained as before the occurrence of such event. Suchadjustment in an outstanding Option shall be made without change in the totalprice applicable to the Option or the unexercised portion of the Option (exceptfor any change in the aggregate price resulting from rounding-off of sharequantities or prices) and with any necessary corresponding adjustment in Optionprice per share. Any such adjustment made by the Administrator shall be finaland binding upon all Optionees, the Company and all other interested persons.
**Section 4.7 - Merger, Consolidation, Acquisition, Liquidation or Dissolution**
     Notwithstanding the provisions of Section 4.6, in its absolute discretion,and on such terms and conditions as it deems appropriate, in the event of themerger or consolidation of the Company with or into another corporation, theacquisition by another corporation, person or group of persons of all orsubstantially all of the Company's assets or 40% or more of the Company's thenoutstanding voting stock, or the liquidation or dissolution of the Company orany other transaction deemed by the Board to involve a change in control of theCompany (a "Corporate Transaction"), the Administrator may, but is notobligated to, provide by the terms of any Option or by that a resolution adoptedprior to the occurrence of such Corporate Transaction that (i) upon suchCorporate Transaction, such Option shall be exercisable as to all shares coveredthereby, notwithstanding anything to the contrary in Section 4.3 and/or anyinstallment provisions of such Option, (ii) or such Option cannot be exercisedand is terminated after the Corporate Transaction, and if the Administrator soprovides, it must on such terms and conditions as it deems appropriate, alsoprovide that for some period of time prior to such Corporate Transaction thatsuch Option shall be exercisable as to all shares covered thereby,notwithstanding anything to the contrary in Section 4.3 and/or any installmentprovisions of such Option.
**ARTICLE VEXERCISE OF OPTIONS

Section 5.1 - Person Eligible to Exercise**
     During the lifetime of the Optionee, only the Optionee, or any permittedtransferee pursuant to Section 7.1 hereof, may exercise an Option (or anyportion thereof) granted to the Optionee. After the death of the Optionee, anyexercisable portion of an Option may, prior to the time when such portionbecomes unexercisable under the Plan or the applicable Stock Option Agreement,be exercised by his personal representative or by any person empowered to do sounder the deceased Optionee's will or under the then applicable laws of descentand distribution.

**Section 5.2 - Partial Exercise**
     At any time and from time to time prior to the time when any exercisableOption or exercisable portion thereof becomes unexercisable under the Plan orthe applicable Stock Option Agreement, such Option or portion thereof may beexercised in whole or in part; *provided*, *however*, that the Companyshall not be required to issue fractional shares and the Administrator may, bythe terms of the Option, require any partial exercise to be with respect to aspecified minimum number of shares.
**Section 5.3 - Manner of Exercise**
     An exercisable Option, or any exercisable portion thereof, may be exercisedsolely by delivery to the Secretary or his office of all of the following priorto the time when such Option or such portion becomes unexercisable under thePlan or the applicable Stock Option Agreement:

(a)  Notice in writing signed by the Optionee or other person  then entitled to exercise such Option or portion, stating that such Option or  portion is exercised, such notice complying with all applicable rules  established by the Administrator; and

(b)  (1) Full payment (in cash or by check) for the shares with  respect to which such Option or portion is thereby exercised; or

(2)  With the consent of the Administrator, (A) shares of the    Company's Common Stock owned for at least six months by the Optionee, duly    endorsed for transfer to the Company or (B) shares of the Company's Common    Stock issuable to the Optionee upon exercise of the Option, in either case,    with a fair market value (as determined under Section 4.2(b)), on the date    of option exercise equal to the aggregate Option price of the shares with    respect to which such Option or portion is thereby exercised; or

(3)  With the consent of the Administrator, allow payment, in    whole or in part, through the delivery of a notice that the Optionee has    placed a market sell order with a broker with respect to the shares of    Common Stock then issuable upon exercise of the Option, and that the broker    has been directed to pay a sufficient portion of the net proceeds of the    sale to the Company in satisfaction of the Option exercise price, provided    that payment of such proceeds is then made to the Company upon settlement of    such sale;

(4)  With the consent of the Administrator, any combination of    the consideration provided in the foregoing subsections (1), (2) and (3);    and

(c)  The payment to the Company (or other employer corporation)  of all amounts which it is required to withhold under federal, state or local  law in connection with the exercise of the Option, which in the discretion of  the Administrator, may be in the form of consideration used by the Optionee to  pay for such shares pursuant to Section 5.3(b); and

(d)  Such representations and documents as the Administrator, in  its absolute discretion, deems necessary or advisable to effect compliance  with all applicable provisions of the Securities Act and any other federal or  state securities laws or regulations. The Administrator may, in its absolute  discretion, also take whatever additional actions it deems appropriate to  effect such compliance including, without limitation, placing legends on share  certificates and issuing stop-transfer orders to transfer agents and  registrars; and

(e)  In the event that the Option or portion thereof shall be  exercised pursuant to Section 5.1 by any person or persons other than the  Optionee, appropriate proof of the right of such person or persons to exercise  the Option or portion thereof.
**Section 5.4 - Conditions to Issuance of Stock Certificates**
     The shares of the Company's Common Stock issuable and deliverable upon theexercise of an Option, or any portion thereof, may be either previouslyauthorized but unissued shares or issued shares which have then been reacquiredby the Company. The Company shall not be required to issue or deliver anycertificate or certificates for shares of stock purchased upon the exercise ofany Option or portion thereof prior to fulfillment of all of the followingconditions:

(a)  The admission of such shares to listing on all stock  exchanges on which such series or class of stock is then listed; and

(b)  The completion of any registration or other qualification of  such shares under any state or federal law or under the rulings or regulations  of the Securities and Exchange Commission or any other governmental regulatory  body, which the Administrator shall, in its absolute discretion, deem  necessary or advisable; and

(c)  The obtaining of any approval or other clearance from any  state or federal governmental agency which the Administrator shall, in its  absolute discretion, determine to be necessary or advisable; and

(d)  The payment to the Company (or other employer corporation)  of all amounts which it is required to withhold under federal, state or local  law in connection with the exercise of the Option, which in the discretion of  the Administrator, may be in the form of consideration used by the Optionee to  pay for such shares pursuant to Section 5.3(b); and

(e)  The lapse of such reasonable period of time following the  exercise of the Option as the Administrator may establish from time to time  for reasons of administrative convenience.
**Section 5.5 - Rights as Stockholders**
     The holders of Options shall not be, nor have any of the rights or privilegesof, stockholders of the Company in respect of any shares purchasable upon theexercise of any part of an Option unless and until certificates representingsuch shares have been issued by the Company to such holders.
**Section 5.6 - Transfer Restrictions**
     The Administrator, in its absolute discretion, may impose such otherrestrictions on the transferability of the shares purchasable upon the exerciseof an Option as it deems appropriate. Any such other restriction shall be setforth in the respective Stock Option Agreement and may be referred to on thecertificates evidencing such shares.
**ARTICLE VIADMINISTRATION

Section 6.1 - Committee**
     The Compensation Committee of the Board (or another committee or asubcommittee of the Board assuming the functions of the Administrator under thisPlan) shall serve as the Committee and shall consist of two or more Directorsappointed by and holding office at the pleasure of the Board, provided, however,that grants to Associates who are considered reporting persons under Section 16of the Exchange Act are to be administered by a committee or subcommitteeconsisting of two or more Directors each of whom satisfies the applicablerequirements of Rule 16b-3. Appointment of Committee members shall be effectiveupon acceptance of appointment. Committee members may resign at any time bydelivering written notice to the Board. Vacancies in the Committee may be filledby the Board.
**Section 6.2 - Duties and Powers of Administrator**
     It shall be the duty of the Administrator to conduct the generaladministration of the Plan in accordance with its provisions. The Administratorshall have the power to interpret the Plan and the Options and to adopt suchrules for the administration, interpretation and application of the Plan as areconsistent therewith and to interpret, amend or revoke any such rules. In itsabsolute discretion, the Board may at any time and from time to time exerciseany and all rights and duties of the Committee under this Plan, except withrespect to matters which under Rule 16b-3 are required to be determined in thesole discretion of the Committee.
**Section 6.3 - Majority Rule**
     The Administrator shall act by a majority of its members in office. TheAdministrator may act either by vote at a meeting or by a memorandum or otherwritten instrument signed by a majority of the Administrator.
**Section 6.4 - Compensation; Professional Assistance; Good Faith Actions**
     Members of the Administrator shall receive such compensation for theirservices as members as may be determined by the Board. All expenses andliabilities incurred by members of the Administrator in connection with theadministration of the Plan shall be borne by the Company. The Administrator mayemploy attorneys, Consultants, accountants, appraisers, brokers or otherpersons. The Administrator, the Company and its Officers and Directors shall beentitled to rely upon the advice, opinions or valuations of any such persons.All actions taken and all interpretations and determinations made by theAdministrator in good faith shall be final and binding upon all Optionees, theCompany and all other interested persons. No member of the Administrator shallbe personally liable for any action, determination or interpretation made ingood faith with respect to the Plan or the Options, and all members of theAdministrator shall be fully protected by the Company in respect to any suchaction, determination or interpretation.
**Section 6.5 - Delegation of Authority to Grant Awards**
     The Committee may, but need not, delegate from time to time some or all ofits authority to grant (and administer the terms of) Options under the Plan to acommittee consisting solely of one or more members of the Committee orconsisting solely of one or more Officers of the Company; provided, however,that the Committee may not so delegate its authority to grant Options (oradminister the Plan with respect to Options granted) to any individual (i) whois subject on the date of the grant to the reporting rules under Section 16(a)of the Exchange Act, (ii) who is an Executive Officer or (iii) who is anOfficer. Any delegation hereunder shall be subject to the restrictions andlimits that the Committee specifies at the time of such delegation of authorityand may be rescinded at any time by the Committee. At all times, any committeeappointed under this Section 6.5 shall serve in such capacity at the pleasure ofthe Committee.
**ARTICLE VIIOTHER PROVISIONS

Section 7.1 - Transferability of Options**
     (a)  No Option or interest or right therein or part thereof shallbe liable for the debts, contracts or engagements of the Optionee or hissuccessors in interest or shall be subject to disposition by transfer,alienation, anticipation, pledge, encumbrance, assignment or any other meanswhether such disposition be voluntary or involuntary or by operation of law, byjudgment, levy, attachment, garnishment or any other legal or equitableproceedings (including bankruptcy), and any attempted disposition thereof shallbe null and void and of no effect; *provided*, *however*, that nothingin this Section 7.1 shall prevent transfers by will or by the applicable laws ofdescent and distribution, or permitted transfers pursuant to the Section 7.1(b)hereof.

     (b)  Notwithstanding the foregoing provisions of thisSection 7.1, the Administrator, in its sole discretion, may determine to grantan Option, which, by its terms or by resolution of the Administrator after itsgrant, may be transferred by the Optionee, in writing and with prior writtennotice to the Administrator, by (i) gift or contribution, to a "familymember" of the Optionee (as defined under the instructions to use of FormS-8), or (ii) pursuant to a domestic relations order, provided, that an Optionthat has been so transferred shall continue to be subject to all of the termsand conditions as applicable to the original Optionee, and the transferee shallexecute any and all such documents requested by the Administrator in connectionwith the transfer, including without limitation to evidence the transfer and tosatisfy any requirements for an exemption for the transfer under applicablefederal and state securities laws.
**Section 7.2 - Amendment, Suspension or Termination of the Plan**
     The Plan may be wholly or partially amended or otherwise modified, suspendedor terminated at any time or from time to time by the Board. Neither theamendment, suspension nor termination of the Plan shall, without the consent ofthe holder of the Option, impair any rights or obligations under any Optiontheretofore granted. No Option may be granted during any period of suspensionnor after termination of the Plan,
**Section 7.4 - Effect of Plan Upon Other Option and Compensation Plans**
     The adoption of this Plan shall not affect any other compensation orincentive plans in effect for the Company, any Parent Corporation or anySubsidiary. Nothing in this Plan shall be construed to limit the right of theCompany, any Parent Corporation or any Subsidiary (a) to establish any otherforms of incentives or compensation for Associates of the Company, any ParentCorporation or any Subsidiary or (b) to grant or assume options otherwise thanunder this Plan in connection with any proper corporate purpose, including, butnot by way of limitation, the grant or assumption of options in connection withthe acquisition by purchase, lease, merger, consolidation or otherwise, of thebusiness, stock or assets of any corporation, firm or association.
**Section 7.5 - Titles**
     Titles are provided herein for convenience only and are not to serve as abasis for interpretation or construction of the Plan.
**Section 7.6 - Conformity to NYSE Requirements**
     The Plan is intended to conform to the extent necessary with allrequirements of the New York Stock Exchange permitting an employee benefit planto be adopted without stockholder approval, under the "broad-based"plan exemption as in effect on the date this Plan was adopted. Notwithstandinganything herein to the contrary, the Plan shall be administered, and Optionsshall be granted and may be exercised, only in such a manner as to conform tosuch laws, rules and regulations. To the extent permitted by applicable law, thePlan and Options granted hereunder shall be deemed amended to the extentnecessary to conform to such exception._______________

     I hereby certify that the Plan was originally adopted by the Board ofDirectors of Sunrise Medical Inc. on February 28, 2000, without obtainingstockholder approval.

Executed as of _______________, 2000.

 

__________________________________________

Steven A. Jaye, Secretary

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