<PAGE>
 
                                                                   Exhibit 10.40

                              EXECUTIVE AGREEMENT
                              -------------------


     EXECUTIVE AGREEMENT (this "Agreement") effective as of October 1, 1997, by
and between Dade Behring Holdings, Inc., a Delaware corporation (the "Company")
and Steve Barnes ("Executive"). Capitalized terms used in this Agreement without
definition herein shall have the meaning given to such terms in the Plan (as
defined below).

     Pursuant to the Company's 1997 Executive Stock Purchase and Option Plan
(the "Plan"), the Company and Executive desire to enter into an agreement
pursuant to which the Company will grant to Executive options to acquire 180,000
shares of Common, which options will be subject to time vesting (the "Time
Options"). The Time Options are sometimes hereinafter referred to individually
as an "Option" and collectively as the "Options." All shares of Common Stock now
or hereafter acquired by Executive pursuant to the Plan are referred to herein
as the "Executive Stock".

     The parties hereto agree as follows:

     1.   Stock Options.

     (a)  Time Option Grants.  The Company hereby grants to Executive, pursuant
to the Plan, the Time Options to purchase 180,000 shares of Common (the "Time
Options") with an exercise price per share of $16.00 (the "Option Price"). The
shares issued upon exercise of the Time Options are referred to herein as the
"Time Option Shares". The number of Time Option Shares and the Option Price will
be equitably adjusted for any stock split, stock dividend, reclassification or
recapitalization of the Company which occurs subsequent to the date of this
Agreement.

     (b)  Exercisability.  Notwithstanding any provision to the contrary in the
Plan, on each date set forth below, the Time Options will vest, and thus become
exercisable with respect to the cumulative percentage of Time Option Shares set
forth opposite such date if Executive is, and has been, continuously employed by
the Company or any of its Subsidiaries from the date of this Agreement through
such date:

                                   Cumulative Percentage
                     Date          of Time Options Vested
                     ----          ----------------------

               June 30, 1998                 50%

               December 31, 1998             75%

               December 31, 1999            100%

<PAGE>
 
; provided that upon any Change in Control (as defined below) or the
consummation of an Approved Sale of the Company (as defined in paragraph 6
below), so long as Executive was employed by the Company or any of its
Subsidiaries on the day immediately prior to such Change in Control or
consummation of the Approved Sale, as the case may be, 100% of the Time Options
granted to Executive shall become vested and immediately exercisable (including
any Time Options previously vested pursuant to this paragraph 1(b)). For
purposes hereof, a "Change in Control" shall be deemed to occur upon the first
date that the Investors and their affiliates collectively cease to own at least
50% of the aggregate number of shares of common stock of the Company that they
own on the date hereof (as adjusted for stock splits, stock dividends and
recapitalization and for exchanges in connection with a merger, consolidation,
reorganization or sale).

     (c)  Securities Laws Restrictions.  Executive represents that when
Executive exercises the Options he will be purchasing Executive Stock for
Executive's own account and not on behalf of others. Executive understands and
acknowledges that federal and state securities laws govern and restrict
Executive's right to offer, sell or otherwise dispose of any Executive Stock
unless Executive's offer, sale or other disposition thereof is registered under
the Securities Act of 1933, as amended (the "1933 Act") and state securities
laws or, in the opinion of the Company's counsel, such offer, sale or other
disposition is exempt from registration thereunder. Executive agrees that he
will not offer, sell or otherwise dispose of any Executive Stock in any manner
which would: (i) require the Company to file any registration statement (or
similar filing under state law) with the Securities and Exchange Commission or
to amend or supplement any such filing or (ii) violate or cause the Company to
violate the 1933 Act, the rules and regulations promulgated thereunder or any
other state or federal law. Executive further understands that the certificates
for any Executive Stock Executive purchases will bear the legend set forth in
paragraph 4 hereof or such other legends as the Company deems necessary or
desirable in connection with the 1933 Act or other rules, regulations or laws.

     (d)  Expiration.  The Options will expire on the earlier of the tenth
anniversary of the date hereof or the date of termination of Executive's
employment with the Company or any of its Subsidiaries for any reason (the
"Termination Date"); provided that any portion of the Options which has not
vested and become exercisable prior to the Termination Date shall expire on the
Termination Date and may not be exercised under any circumstance; provided
further that any portion of the Options which has vested and become exercisable
prior to the Termination Date pursuant to the terms of the Plan and this
Agreement will expire on the earlier of (i) (A) 30 days after the Termination
Date if Executive's employment with the Company or any of its Subsidiaries is
terminated for Cause or without Good Reason (as each such term is defined in
that certain Employment Agreement dated as of the date hereof between Dade
International Inc. and Executive) and (B) three years after the Termination Date
if Executive's employment with the Company or any of its Subsidiaries is
terminated for any reason other than as specified in clause (A) above and (ii)
the tenth anniversary of the date hereof. In the event of Executive's death or
Disability (as defined in Executive's employment agreement with the Company of
even date herewith) the portion of the unvested Options which would have

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vested pursuant to paragraph 1(b) on the next succeeding vesting date after the
date of such death or Disability had Executive still been employed by the
Company on such date shall be deemed to have vested.

     (e)  Non-Transferability of Option.  The Options are personal to Executive
and are not transferable by Executive. Only Executive or his estate or heirs is
entitled to exercise the Options.

     (f)  Payment of Cash Dividends.  If the Company pays any cash dividends
with respect to the Common prior to the Termination Date, then with respect to
Time Options which have not been exercised and have not expired, the Company
shall provide Executive with a substantially equivalent economic package (which
substantially equivalent economic package shall be determined in the sole
discretion of the Board, and may consist of a reduction in the Option Price, a
payment in cash, the grant of additional employee benefits or otherwise) as if
Executive had been a holder of the Common issuable upon exercise of the Time
Options at the time such cash dividends are paid. Notwithstanding the foregoing,
if any such Time Options have not vested at the time the Company pays any such
cash dividends, the Company's obligation to provide the aforementioned
substantially equivalent economic package shall arise if, and only if, such Time
Options become vested.

     2.   Repurchase Option.

     (a)  In the event that Executive is no longer employed by the Company or
any of its Subsidiaries for any reason, the Executive Stock, whether held by
Executive, or one or more transferees, will be subject to repurchase by the
Company and the Investors (solely at their option) pursuant to the terms and
conditions set forth in the Plan (the "Repurchase Option").

     (b)  Notwithstanding any limitation in the Plan to the contrary, in the
event that the Company and/or the Investors exercise the Repurchase Option, in
addition to those procedures set forth in the Plan, the procedures set forth in
this Section 2(b) shall apply to any repurchase of Executive Stock pursuant to
the Repurchase Option. If, within 15 days after the delivery of a Determination
Notice to the holder(s) of the Executive Stock, Executive delivers to the Board
a written notice stating that he objects to the Fair Market Value stated in the
Determination Notice (an "Objection Notice"), Fair Market Value shall mean a
fair market value selected by either a New York Stock Exchange member firm, the
business valuation group of any "Big 6" accounting firm or either of the
valuation firms of Houlihan Lokey or Murray Devine selected by the Board
(provided that any such firm or business valuation group is an Independent Third
Party) (the "Independent Valuation Expert") which is equal to the midpoint of
the range of fair market values for the Company, divided by the number of shares
of stock of the Company then outstanding on a fully diluted basis, as determined
by the Independent Valuation Expert; provided that Executive will not be
permitted to deliver an Objection Notice in connection with a Determination
Notice which states a fair market value which

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is greater than or equal to any previous fair market value determination by an
Independent Valuation Expert delivered to the Company no more than one (1) year
prior to the delivery of the Repurchase Notice. If Executive delivers an
Objection Notice objecting to the Fair Market Value set forth in a Repurchase
Notice which also constitutes a Determination Notice, the Company may elect to
revoke the Repurchase Notice by delivering written notice thereof (a "Revocation
Notice") to such holder(s) within ten (10) days of receipt of the valuation by
the Independent Valuation Expert. If the Company does not deliver a Revocation
Notice, the repurchase of such Executive Stock shall be effected on the basis of
the Fair Market Value (to the extent applicable) determined pursuant to the Plan
and this Section 2(b).

     3.   Restrictions on Transfer.

     (a)  Transfer of Executive Stock.  Executive will not sell, pledge or
otherwise transfer any interest in any shares of Executive Stock, except
pursuant to (i) the provisions of paragraphs 2, 3(b), 6 or 7 hereof or (ii)
pursuant to the provisions of the Plan.

     (b)  Certain Permitted Transfers.  The restrictions contained in this
paragraph 3 will not apply with respect to transfers of Executive Stock (i)
pursuant to applicable laws of descent and distribution or (ii) among
Executive's Family Group (as defined below), provided that the restrictions
contained in this paragraph 3 will continue to be applicable to the Executive
Stock after any such transfer and the transferees of such Executive Stock shall
agree in writing to be bound by the provisions of this Agreement. "Family Group"
means Executive's spouse and descendants (whether natural or adopted) and any
trust solely for the benefit of Executive and/or Executive's spouse and/or
descendants. Any transferee of Executive Stock pursuant to a transfer in
accordance with the provisions of this subparagraph 3(b) is herein referred to
as a "Permitted Transferee." Upon the transfer of Executive Stock pursuant to
this paragraph 3(b), the Executive will deliver a written notice thereof (the
"Transfer Notice") to the Company. The Transfer Notice will disclose in
reasonable detail the identity of the Permitted Transferee(s).

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     4.   Additional Restrictions on Transfer.

     (a)  The certificates representing the Executive Stock will bear the
following legend:

     "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
     UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND MAY NOT BE
     SOLD OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
     UNDER THE ACT OR AN EXEMPTION FROM REGISTRATION THEREUNDER. THE SECURITIES
     REPRESENTED BY THIS CERTIFICATE ARE ALSO SUBJECT TO ADDITIONAL RESTRICTIONS
     ON TRANSFER, CERTAIN REPURCHASE OPTIONS AND CERTAIN OTHER AGREEMENTS SET
     FORTH IN AN EXECUTIVE AGREEMENT BETWEEN THE ISSUER (THE "COMPANY") AND A
     CERTAIN EMPLOYEE OF THE COMPANY DATED AS OF OCTOBER 1, 1997, A COPY OF
     WHICH MAY BE OBTAINED BY THE HOLDER HEREOF AT THE COMPANY'S PRINCIPAL PLACE
     OF BUSINESS WITHOUT CHARGE."

     (b)  No holder of Executive Stock may sell, transfer or dispose of any
Executive Stock (except pursuant to an effective registration statement under
the 1933 Act) without first delivering to the Company an opinion of counsel
reasonably acceptable in form and substance to the Company (which counsel shall
be reasonably acceptable to the Company) that registration under the 1933 Act is
not required in connection with such transfer.

     5.   Definition of Executive Stock.  For all purposes of this Agreement,
Executive Stock will continue to be Executive Stock in the hands of any holder
other than Executive (except for the Company and purchasers pursuant to an
offering registered under the 1933 Act or purchasers pursuant to a Rule 144
transaction (other than a Rule 144(k) transaction occurring prior to the time of
a closing of an Initial Public Offering (as defined in Section 7 below)), and
each such other holder of Executive Stock will succeed to all rights and
obligations attributable to Executive as a holder of Executive Stock hereunder.
Executive Stock will also include shares of the Company's capital stock issued
with respect to shares of Executive Stock by way of a stock split, stock
dividend or other recapitalization.

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<PAGE>
 
     6.   Sale of the Company.

     (a)  In the event of an Approved Sale (as such term is defined in that
certain Amended and Restated Stockholders Agreement dated as of October 1, 1997,
by and among the Company and its stockholders listed therein, as the same may be
amended or otherwise modified from time to time (the "Stockholders Agreement")),
each holder of Executive Stock will vote for, consent to and raise no objections
against such Approved Sale. If the Approved Sale is structured as (i) a merger
or consolidation, each holder of Executive Stock will waive any dissenters'
rights, appraisal rights or similar rights in connection with such merger or
consolidation or (ii) a sale of stock, each holder of Executive Stock will agree
to sell all of his shares of Executive Stock and rights to acquire shares of
Executive Stock on the terms and conditions approved by the Board and the
holders of a majority of the Common Stock then outstanding. Each holder of
Executive Stock will take all necessary or desirable actions in connection with
the consummation of the Approved Sale as requested by the Company.

     (b)  The obligations of the holders of Common Stock with respect to the
Approved Sale of the Company are subject to the satisfaction of the following
conditions: (i) upon the consummation of the Approved Sale, each holder of
Common Stock will receive the same form of consideration and the same portion of
the aggregate consideration that such holders of Common Stock would have
received if such aggregate consideration had been distributed by the Company in
complete liquidation pursuant to the rights and preferences set forth in the
Company's Certificate of Incorporation as in effect immediately prior to such
Approved Sale; (ii) if any holders of a class of Common Stock are given an
option as to the form and amount of consideration to be received, each holder of
such class of Common Stock will be given the same option; and (iii) each holder
of then currently exercisable rights to acquire shares of a class of Common
Stock will be given a reasonable opportunity upon reasonable prior notice to
exercise such rights prior to the consummation of the Approved Sale and
participate in such sale as holders of such class of Common Stock.

     (c)  If the Company or the holders of the Company's securities enter into
any negotiation or transaction for which Rule 506 (or any similar rule then in
effect) promulgated by the Securities Exchange Commission may be available with
respect to such negotiation or transaction (including a merger, consolidation or
other reorganization), the holders of Executive Stock will, at the request of
the Company, appoint a purchaser representative (as such term is defined in Rule
501) reasonably acceptable to the Company. If any holder of Executive Stock
appoints a purchaser representative designated by the Company, the Company will
pay the fees of such purchaser representative, but if any holder of Executive
Stock declines to appoint the purchaser representative designated by the
Company, such holder will appoint another purchaser representative, and such
holder will be responsible for the fees of the purchaser representative so
appointed.

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     (d)  Executive and the other holders of Executive Stock (if any) will bear
their pro-rata share (based upon the number of shares sold) of the costs of any
sale of Executive Stock pursuant to an Approved Sale to the extent such costs
are incurred for the benefit of all holders of Common Stock and are not
otherwise paid by the Company or the acquiring party. Costs incurred by
Executive and the other holders of Executive Stock on their own behalf will not
be considered costs of the transaction hereunder.

     (e)  The provisions of this paragraph 6 will terminate upon the closing of
an Initial Public Offering (as defined below).

     7.   Public Offering.  In the event that an Initial Public Offering (as
defined in the Stockholders Agreement) is approved pursuant to Section 6 of the
Stockholders Agreement, the holders of Executive Stock will take all necessary
or desirable actions in connection with the consummation of the Initial Public
Offering. In the event that such Initial Public Offering is an underwritten
offering and the managing underwriters advise the Company in writing that in
their opinion the Common Stock structure will adversely affect the marketability
of the offering, each holder of Executive Stock will consent to and vote for a
recapitalization, reorganization and/or exchange of the Common Stock into
securities that the managing underwriters, the Board and holders of a majority
of the shares of Common Stock then outstanding find acceptable and will take all
necessary or desirable actions in connection with the consummation of the
recapitalization, reorganization and/or exchange; provided that the resulting
securities reflect and are consistent with the rights and preferences set forth
in the Company's Certificate of Incorporation as in effect immediately prior to
such Initial Public Offering.

     8.   Termination of Provisions Relating to Executive Stock.  The provisions
of paragraphs 2 and 3, and the rights of Executive under paragraphs 7 and 8 of
the Plan, will terminate upon the first to occur of (i) an Approved Sale and
(ii) (A) an Initial Public Offering and (B) the Investors and their affiliates
collectively ceasing to own at least 50% of the aggregate number of shares of
common stock of the Company that they own on the date hereof (as adjusted for
stock splits, stock dividends and recapitalization and for exchanges in
connection with a merger, consolidation, reorganization or sale).

                           MISCELLANEOUS PROVISIONS
                           ------------------------
                                        
     9.   Notices.  Any notice provided for in this Agreement must be in writing
and must be personally delivered, received by certified mail, return receipt
requested, or sent by guaranteed overnight delivery service, to the Investors at
the addresses indicated in the Company's records and to the other recipients at
the address indicated below:

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     To the Company:

     Dade Behring Holdings, Inc.
     c/o Bain Capital, Inc.
     Two Copley Place
     Boston, Massachusetts 02116
     Attn:  Stephen G. Pagliuca
            John Connaughton

     With a copy to:

     Kirkland & Ellis
     200 East Randolph Drive
     Chicago, Illinois  60601
     Attn:  Jeffrey C. Hammes, P.C.

     To Executive:

     Steve Barnes
     One Jackson Circle
     Franklin, MA  02038

     With a copy to:

     Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
     One Financial Center
     Boston, Massachusetts 02111
     Attn:  Steven P. Rosenthal, Esq.

or such other address or to the attention of such other person as the recipient
party shall have specified by prior written notice to the sending party. Any
notice under this Agreement will be deemed to have been given when so delivered
or mailed.

     10.  Representations and Warranties.  In connection with the grant of the
Options hereunder, Executive represents and warrants to the Company that:

     (a)  This Agreement constitutes the legal, valid and binding obligation of
Executive, enforceable in accordance with its terms, and the execution, delivery
and performance of this Agreement by Executive does not and will not conflict
with, violate or cause a breach of any agreement, contract or instrument to
which Executive is a party or any judgment, order or decree to which Executive
is subject.

     (b)  As an inducement to the Company to grant the Options to Executive, as
a condition thereto, Executive acknowledges and agrees that neither the grant of
the Options to Executive nor any provision contained herein shall entitle
Executive to remain

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<PAGE>
 
in the employment of the Company or its Subsidiaries or affect the right of the
Company or its Subsidiaries to terminate Executive's employment at any time for
any reason.

     (c)  The Company and Executive acknowledge and agree that this Agreement
has been executed and delivered and the Options have been granted hereunder, in
connection with and as part of the compensation and incentive arrangements among
the Company, Dade International Inc. and Executive and, that except as otherwise
expressly provided in this Agreement, the issuance of the Options and the
issuance of any Executive Stock upon the exercise of any of the Options is
subject to all of the terms and conditions contained in the Plan.

     11.  Severability.  Whenever possible, each provision of this Agreement
will be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or the effectiveness or validity of any provision in any
other jurisdiction, and this Agreement will be reformed, construed and enforced
in such jurisdiction as if such invalid, illegal or unenforceable provision had
never been contained herein.

     12.  Complete Agreement.  This Agreement embodies the complete agreement
and understanding among the parties and supersedes and preempts any prior
understandings, agreements or representations by or among the parties, written
or oral, which may have related to the subject matter hereof in any way.

     13.  Counterparts.  This Agreement may be executed in separate counterparts
(any one of which may be by facsimile), each of which will be deemed to be an
original and all of which taken together will constitute one and the same
agreement.

     14.  Successors and Assigns.  This Agreement is intended to bind and inure
to the benefit of and be enforceable by Executive, the Company, the Investors
and their respective successors and assigns, provided that Executive may not
assign any of his rights or obligations, except as expressly provided by the
terms of this Agreement.

     15.  Governing Law.  The corporate law of Delaware will govern all issues
concerning the relative rights of the Company and its stockholders.  All other
issues concerning the enforceability, validity and binding effect of this
Agreement will be governed by and construed in accordance with the laws of the
State of Illinois, without giving effect to any choice of law or conflict of law
provision or rule (whether of the State of Illinois or any other jurisdiction)
that would cause the application of the law of any jurisdiction other than the
State of Illinois.

     16.  Remedies.  The parties hereto agree and acknowledge that money damages
may not be an adequate remedy for any breach of the provisions of this Agreement
and 

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that any party hereto will have the right to injunctive relief, in addition to
all of its other rights and remedies at law or in equity, to enforce the
provisions of this Agreement.

     17.  Effect of Transfers in Violation of Agreement.  The Company will not
be required (a) to transfer on its books any shares of Executive Stock which
have been sold or transferred in violation of any of the provisions set forth in
this Agreement or (b) to treat as owner of such shares, to accord the right to
vote as such owner or to pay dividends to any transferee to whom such shares
have been transferred in violation of this Agreement.

     18.  Amendments and Waivers.  Any provision of this Agreement may be
amended or waived only with the prior written consent of the Company, Executive
and the Investors who hold 70% of the Common Stock held by the Investors.

     19.  Third Party Beneficiaries.  The parties hereto acknowledge and agree
that the Investors are third party beneficiaries of this Agreement. This
Agreement will inure to the benefit of and be enforceable by the Investors and
their respective successors and assigns.

     20.  Dade Behring Holdings, Inc. 1997 Executive Stock Purchase and Option
Plan. Except as otherwise expressly set forth in this Agreement, the grant of
Options and issuance of Executive Stock hereunder is pursuant to, and subject to
all the terms and conditions of, the Plan, attached hereto as Exhibit A.

                *           *          *          *          *

     IN WITNESS WHEREOF, the parties have executed this Agreement on the day and
year first above written.


                                  DADE BEHRING HOLDINGS, INC.

                                  By: /s/
                                     -------------------------------------

                                  Title:
                                        ----------------------------------



                                      /s/
                                  ----------------------------------------
                                  STEVE BARNES


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