VITAL SIGNS, INC.
                         1991 DIRECTOR STOCK OPTION PLAN


     1. Purpose of the Plan. The purpose of this Stock Option Plan ("Plan"),  to
be known as the "Vital  Signs,  Inc. 1991  Director  Stock Option  Plan",  is to
attract  qualified  personnel to accept positions of responsibility as directors
with  Vital  Signs,  Inc.,  a New  Jersey  corporation  ("Company"),  to provide
incentives  for  persons  to remain on the  Board of the  Company  and to induce
personnel  to  maximize  the  Company's  performance  during  the terms of their
options.

     2. Definitions. As used in the Plan, unless the context requires otherwise,
the following terms shall have the following meanings:

          (a)  "Anniversary  Date" shall mean, for each member of the Board, the
     first date  after  March 1, 1991 on which he or she is elected to the Board
     and each annual  anniversary of such date on which such person continues to
     serve on the Board.

          (b) "Board" shall mean the Board of Directors of the company.

          (c) "Change in Control Event" means any of the following events:

               (i) the  acquisition  by any one person,  or more than one person
          acting as a group,  of ownership  of stock of the Company,  other than
          any person or group of persons who held such total voting power on the
          date that this Plan was first adopted by the Board, possessing 33-1/3%
          or more of the total voting power of the capital stock of the Company;

               (ii) the approval by the  stockholders  of the Company of (i) any
          consolidation or merger of the Company, in which the holders of voting
          stock of the Company  immediately  before the  consolidation or merger
          will not own 50% or more of the  voting  shares of the  continuing  or
          surviving corporation  immediately after such consolidation or merger,
          or  (ii)  any  sale,  lease,   exchange  or  other  transfer  (in  one
          transaction or series of related transactions) of all or substantially
          all of the assets of the Company; or

               (iii) a change of 50% (rounded to the next whole  percent) in the
          membership of the Board of Directors within a 12-month period,  unless
          the election or nomination  for election by  stockholders  of each new
          director  within such period was approved by the vote of 80;  (rounded
          to the next whole  person) of the  directors  then still in office who
          were in office at the beginning of the 12-month period.



<PAGE>

          (d) "Committee"  shall mean a committee of the Board designated by the
     Board  and  consisting  solely  of  members  of the  Board (at least two in
     number) who have not, during the twelve months  preceding their election to
     such  committee,  been  granted  any  stock  option  under  the Plan or the
     Company's  1990 Employee Stock Option Plan or granted or awarded any equity
     securities pursuant to any other plan of the Company or its affiliates.

          (e) "Common Stock" shall mean the Company's common stock,  without par
     value, or if,  pursuant to the adjustment  provisions of Section 11 hereof,
     another security is substituted for the Common Stock, such other security.

          (f) "Effective Date" shall mean the date on which the Plan is approved
     by the shareholders of the Company.

          (g) "Fair Market Value" shall mean the fair market value of the Common
     Stock on the Grant Date or other  relevant date. If on such date the Common
     Stock is listed on a stock exchange or is quoted on the automated quotation
     system of NASDAQ, the Fair Market Value shall be the closing sale price (or
     if such price is unavailable, the average of the high bid price and the low
     asked  price) on such date.  If no such closing sale price or bid and asked
     prices are  available,  the Fair Market Value shall be  determined  in good
     faith by the  Committee in accordance  with  generally  accepted  valuation
     principles  and  such  other  factors  as the  Committee  reasonably  deems
     relevant.

          (h) "Grant Date" shall mean the date on which an option is granted.

          (i) "Mandatory Options" shall mean options granted pursuant to Section
     7(a) hereof.

          (j)  "Non-mandatory  Options" shall mean options  granted  pursuant to
     Section 7(b) hereof.

          (k) "Option"  shall mean the right,  granted  pursuant to the Plan, to
     purchase one or more shares of Common Stock.

          (l) "Optionee"  shall mean a person to whom an Option has been granted
     under the Plan.

          (m) "Outside  Director" shall mean any member of the Board who, on any
     of such  person's  Anniversary  Dates,  shall  not  have  been  compensated
     (directly  or   indirectly)   by  the  Company  or  any  of  the  Company's
     subsidiaries as an employee, consultant or advisor during the twelve months
     preceding such-Anniversary Date (other than reimbursement for out-of-pocket
     expenses or compensation pursuant to the Plan).

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          (n) "Selected Outside Director" shall mean any member of the Board who
     (i) on his or her last  Anniversary  Date was an Outside  Director and (ii)
     since his or her last Anniversary Date, has not been compensated  (directly
     or  indirectly) by the Company or any of the Company's  subsidiaries  as an
     employee, consultant or advisor (other than reimbursement for out-of-pocket
     expenses or compensation pursuant to the Plan).

     3. Stock  Subject  to the Plan.  There  will be  reserved  for use upon the
exercise of Options  granted  from time to time under the Plan an  aggregate  of
100,000 shares of Common Stock,  subject to adjustment as provided in Section 11
hereof.  The Board shall determine from time to time whether all or part of such
100,000 shares shall be authorized but unissued shares of Common Stock or issued
shares of Common Stock which shall have been reacquired by the Company and which
are held in its treasury.  If any option granted under the Plan should expire or
terminate for any reason without having been exercised in full, the  unpurchased
shares shall become available for the grant of options under the Plan.

     4.  Administration  of the  Plan.  The Plan  shall be  administered  by the
Committee.  Subject to the provisions of the Plan, the Committee shall have full
discretion:

          (a)  To   designate   those   Selected   Outside   Directors  to  whom
     Non-mandatory  Options shall be granted,  to designate the number of shares
     to be covered by each  Non-mandatory  Option and to  determine  the time or
     times at which Non-mandatory Options shall be granted;

          (b) To determine  the  exercise  price of options  granted  hereunder,
     subject to Section 7(b) hereof;

          (c) To interpret the Plan;

          (d) To promulgate, amend and rescind rules and regulations relating to
     the Plan,  provided,  however,  that no such rules or regulations  shall be
     inconsistent with any of the terms of the Plan;

          (e)  To  subject  any  option  to  such  additional  restrictions  and
     conditions  (not  inconsistent  with  the  Plan) as may be  specified  when
     granting the Option; and

          (f)  To  make  all  other   determinations   in  connection  with  the
     administration of the Plan.

     5. Eligibility. The only persons who shall be eligible to receive Mandatory
options  under the Plan shall be persons  who, on their  applicable  Anniversary
Date,  constitute Outside  Directors,  The only persons who shall be eligible to
receive  Non-mandatory options under the Plan shall be persons who, on the Grant
Date  for the  applicable  Non-Mandatory  option,  constitute  Selected  Outside
Directors. Notwithstanding the foregoing, no member of the


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<PAGE>

Committee  shall be eligible to receive Options under the Plan while such person
is serving on the Committee.

     6.  Term.  No Option  shall be  granted  under the Plan more than ten years
after the date that the Plan is first adopted by the Hoard.

     7.  Grant of Stock  Options.  The  following  provisions  shall  apply with
respect to Options granted hereunder:

          (a) Mandatory  Options.  At the close of business on each  Anniversary
     Date of each  Outside  Director  during the term of the Plan,  the  Company
     shall grant to such Outside  Director an Option to purchase  four  thousand
     (4.000) shares of Common Stock  (subject to adjustment  pursuant to section
     11 hereof).

          (b) Non-Mandatory Options. The Committee shall have the right to grant
     Non-Mandatory options to Special Outside Directors from time to time during
     the term of the Plan,

          (c) Option  Price.  The price at which shares of Common Stock shall be
     purchased  upon  exercise  of an Option  shall be equal to the Fair  Market
     Value of such shares on the Grant Date.

          (d)  Expiration.  Except as  otherwise  provided in Section 10 hereof,
     each Option shall cease to be exercisable ten years after the date on which
     it is granted.

     8.  Exercise  of  Options.  Unless  the  exercise  date  of  an  option  is
accelerated  pursuant  to Section 12 hereof or unless  the  Committee  otherwise
provides at the time that an Option is granted,  the following  provisions shall
apply with respect to the exercise of Options:

          (a) During  the first  year  after the Grant  Date of an Option,  such
     Option may only be  exercised as to up to 50% of the shares of Common Stock
     covered thereby.

          (b) During the first two years after the Grant Date of an option, such
     Option may only be  exercised as to up to 758 of the shares of Common Stock
     initially  covered  thereby,  and the  limitation set forth in Section 8(a)
     hereof may not be contravened.

          (c) An Option may be  exercised  in its  entirety or as to any portion
     thereof  at any time  more than two  years  after  the  Grant  Date of such
     Option, until the term of such option expires or otherwise ends.

     9.  Method  of  Exercise.  To the  extent  permitted  by  Section 8 hereof,
Optionees may exercise  their Options from time to time by giving written notice
to the Company.


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The  date of  exercise  shall be the date on which  the  Company  receives  such
notice.  Such notice shall be on a form furnished by the Company and shall state
the number of shares to be purchased and the desired  closing  date,  which date
shall be at least  fifteen  days  after  the  giving of such  notice,  unless an
earlier date shall have been mutually  agreed upon. At the closing,  the Company
shall deliver to the Optionee (or other person  entitled to exercise the Option)
at the principal office of the Company, or such other place as shall be mutually
acceptable,  a certificate or  certificates  for such shares against  payment in
full of the option price for the number of shares to be delivered,  such payment
to be by a  certified  or bank  cashier's  check  and/or,  if  permitted  by the
Committee in its discretion,  by transfer to the Company of capital stock of the
Company having a Fair Market value (as  determined  pursuant to Section 2(f)) on
the date of exercise  equal to the excess of the  purchase  price for the shares
purchased over the amount (if any) of the certified or bank cashier's  check. If
the  Optionee (or other  person  entitled to exercise the Option)  shall fail to
accept  delivery of and pay for all or any part of the shares  specified  in his
notice when the Company  shall  tender such shares to him, his right to exercise
the option with respect to such unpurchased shares may be terminated.

     10.  Termination of Board Status.  In the event that an Optionee  ceases to
serve on the Board for any reason other than cause,  death or  disability,  such
Optionees options shall  automatically  terminate three months after the date on
which such service terminates, but in any event not later than the date on which
such options would terminate  pursuant to Section 7(d) hereof. In the event that
an Optionee is removed  from the Board by means of a  resolution  which  recites
that the Optionee is being  removed  solely for cause,  such  Optionees  options
shall  automatically  terminate  on the date such removal is  effective.  In the
event  that an  Optionee  ceases  to serve on the  Board by  reason  of death or
disability, an Option exercisable by him shall terminate one year after the date
of death or disability of the Optionee, but in any event not later than the date
on which such options would  terminate  pursuant to Section 7(d) hereof.  During
such time after death, an Option may only be exercised by the Optionees personal
representative,  executor  or  administrator,  as the case may be.  No  exercise
permitted  by  this  Section  10  shall  entitle  an  Optionee  or his  personal
representative,  executor or administrator to exercise any portion of any option
beyond the  extent to which such  option is  exercisable  pursuant  to Section 8
hereof on the date such Optionee ceases to serve on the Board.

     11. Changes in Capital  Structure.  In the event that, by reason of a stock
dividend,    recapitalization,     reorganization,     merger,    consolidation,
reclassification,  stock split-up, combination of shares, exchange of shares, or
comparable  transaction  occurring on a date  subsequent to the date the Plan is
first  approved  by the Board,  the  outstanding  shares of Common  Stock of the
Company are hereafter increased or decreased, or changed into or exchanged for a
different  number or kind of shares or other securities of the Company or of any
other  corporation,  then appropriate  adjustments shall be made by the Board to
the  number and kind of shares  reserved  for  issuance  under the Plan upon the
grant and  exercise of options and the number and kind of shares  subject to the
automatic grant provisions of Section 7(a) hereof. In addition,  the Board shall
make  appropriate  adjustments  to the  number  and kind of  shares  subject  to
outstanding  options, and the purchase price per share under outstanding options
shall be appropriately  adjusted  consistent with such change. In no event shall
fractional shares be


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<PAGE>

issued or issuable  pursuant to any  adjustment  made under this Section 11. The
determination of the Board as to any adjustment shall be final and conclusive.

     12.  Mandatory  Exercise:  Acceleration.  Notwithstanding  anything  to the
contrary  set forth in the Plan,  in the event that the Company  should  adopt a
plan of complete  liquidation,  the Company may give an Optionee  written notice
thereof  requiring  such  Optionee  either (a) to exercise hiss or her Mandatory
options  and/or  Non-Mandatory  Options within thirty days after receipt of such
notice,  including  all  installments  whether  or not they would  otherwise  be
exercisable  at that date, or (b) to surrender  such options or any  unexercised
portion  thereof.  The Company  shall take such action with respect to Mandatory
options if it takes similar  action under its 1990 Employee Stock Option Plan or
any successor plan thereto (collectively, the "Employee Plan") and shall refrain
from taking such action with  respect to mandatory  options if it refrains  from
taking similar  action under the Employee Plan.  Those options which the Company
requests to be exercised  and which shall not have been  exercised in accordance
with  the  provisions  of the  Plan  by the  end of  such  30-day  period  shall
automatically  lapse  irrevocably  and the  applicable  Optionee  shall  have no
further  rights with  respect to such  Options.  Notwithstanding  any  provision
herein to the contrary,  all Mandatory Options and Non-Mandatory Options granted
hereunder  shall be fully  exercisable at such time as a Change in Control Event
occurs.

     13. Option Grant.  Each grant of an Option under the Plan will be evidenced
by a document in such form as the Committee may from time to time approve.  Such
document will contain such  provisions  as the  Committee may in its  discretion
deem  advisable,   including  without  limitation  additional   restrictions  or
conditions  upon the  exercise  of an  Option.  The  Committee  may  require  an
Optionee,  as a condition  to the grant or exercise of an option or the issuance
or delivery of shares upon the exercise of an option or the payment therefor, to
make such representations and warranties and to execute and deliver such notices
of exercise and other  documents as the Committee may doom  consistent  with the
Plan or the terms and conditions of the option  agreement.  Not in limitation of
any of the foregoing, in any such case referred to in the preceding sentence the
Committee  may also  require  the  Optionee  to execute  and  deliver  documents
(including  the  investment  letter  described in Section 19),  containing  such
representations,  warranties  and  agreements as the Committee or counsel to the
Company  shall deem  necessary or advisable  to comply with any  exemption  from
registration under the Securities Act of 1933, as amended,  any applicable State
securities laws, and any other applicable law, regulation or rule.

     14.  Investment-Letter.  If required by the Committee,  each Optionee shall
agree to  execute  a  statement  directed  to the  Company,  upon each and every
exercise by such Optionee of any Options,  that shares issued  thereby are being
acquired for investment  purposes only and not with a view to the redistribution
thereof,  and  containing  an  agreement  that such  shares  will not be sold or
transferred  unless either (1)  registered  under the Securities Act of 1933, as
amended, or (2) exempt from such registration in the opinion of Company counsel.
If required by the Committee,  certificates  representing shares of Common Stock
issued upon exercise of options shall bear a restrictive  legend summarizing the
restrictions on transferability applicable thereto.



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<PAGE>

     15.  Requirements  of Law. The granting of Options,  the issuance of shares
upon the  exercise  of an option,  and the  delivery  of shares upon the payment
therefor shall be subject to compliance  with all applicable  laws,  rules,  and
regulations. Without limiting the generality of the foregoing, the Company shall
not be  obligated  to sell,  issue or  deliver  any shares  unless all  required
approvals from  governmental  authorities  and stock  exchanges  shall have been
obtained and all applicable  requirements of governmental  authorities and stock
exchanges shall have been complied with.

     16. Tax Withholding.  The Company, as and when appropriate,  shall have the
right to require each Optionee  purchasing  or receiving  shares of Common Stock
under the Plan to pay any federal,  state,  or local taxes required by law to be
withheld.

     17.  Nonassignabilitv.  No Option shall be assignable or transferable by an
Optionee except by will or the laws of descent and distribution or pursuant to a
qualified  domestic  relations order as defined by the Internal  Revenue Code of
1986,  as amended (the  "Code"),  or Title I of the Employee  Retirement  Income
Security Act ("ERISA") or the rules thereunder, in which event the terms of this
Plan,  including  all  restrictions  and  limitations  set forth  herein,  shall
continue  to  apply to the  transferee.  Except  as  otherwise  provided  in the
immediately  preceding sentence,  during an optionee's lifetime, no person other
than the Optionee may exercise his or her options.

     18.  Optionee  Rights as  Shareholder  and Board An Optionee  shall have no
rights as a shareholder  of the Company with respect to any shares subject to an
option until the option has been exercised and the  certificate  with respect to
the shares  purchased  upon  exercise  of the  option  has been duly  issued and
registered in the name of the  Optionee.  Nothing in the Plan shall be deemed to
give an Optionee any right to a continued  position on the Board nor shall it be
deemed  to give any  person  any  other  right not  specifically  and  expressly
provided in the Plan.

     19. Termination and Amendment. The Board may at any time terminate or amend
the Plan as it may  deem  advisable,  except  that  (i) no such  termination  or
amendment  shall  adversely  affect any Optionee with respect to any right which
has  accrued  under  the Plan in  regard  to any  option  granted  prior to such
termination  or amendment,  (ii) Sections 7(a) and 7(c) of the Plan shall not be
amended  more than once every six months,  other than to comport with changes in
the Code,  ERISA or the rules  thereunder,  and (iii) no such amendment shall be
effective  without  approval of the stockholders of the Company if the effect of
such  amendment  is to (a)  materially  increase  the number of shares of Common
Stock  authorized for issuance  pursuant to the Plan (otherwise than pursuant to
Section  11),  (b)  increase  the  number of shares of Common  Stock  subject to
Mandatory  Options,  (c) reduce the exercise  price of Options,  (d)  materially
modify the  requirements as to eligibility for  participation in the Plan or (e)
materially  increase the benefits  accruing to  participants  under the Plan. By
accepting any Option under the Plan, each Outside Director acknowledges that any
such  termination  or amendment  effected in  accordance  with the Plan shall be
applicable  to  such  outside  Director  with  respect  to any of  such  Outside
Director's Anniversary Dates occurring after such termination or amendment.



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<PAGE>

     20. Effective Date.  Notwithstanding  Board approval of the Plan, this Plan
shall not be effective  until the Effective  Date. All options  granted prior to
the Effective  Date shall be subject to the condition that the  stockholders  of
the Company approve the Plan within one year after the Board initially  approves
the plan.

     21. Sunday or Holiday.  In the event that the time for the  performance  of
any action or the  giving of any  notice is called  for under the Plan  within a
period of time which  ends or falls an a Sunday or legal  holiday,  such  period
shall be deemed to end or fall on the next date  following  such Sunday or legal
holiday which is not a Sunday or legal holiday.