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                                                                     EXHIBIT 4.8



                            FRESENIUS MEDICAL CARE AG
                            1998 STOCK INCENTIVE PLAN



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                                             TABLE OF CONTENTS
                                                                            Page
                                                                            ----

1.   PURPOSE AND ADMINISTRATION...............................................1
     1.1  PURPOSE.............................................................1
     1.2  ADMINISTRATION AND AUTHORIZATION....................................1

2.   PARTICIPATION AND AWARDS.................................................2
     2.1  PARTICIPATION.......................................................2
     2.2  AWARDS..............................................................3
     2.3  GRANT OF AWARDS.....................................................3
     2.4  AWARD PERIOD........................................................3
     2.5  ACCEPTANCE OF AWARDS................................................3
     2.6  RESTRICTIONS ON TRANSFERABILITY.....................................3
     2.7  EMPLOYEE LOANS TO PURCHASE CONVERTIBLE BONDS........................3

3.   THE CONVERTIBLE BONDS....................................................4
     3.1  TERMS OF CONVERTIBLE BONDS..........................................4
     3.2  USE OF BANK TO ISSUE CONVERTIBLE BONDS..............................4
     3.3  VESTING.............................................................4
     3.4  CONVERSION..........................................................4
     3.5  EFFECT OF TERMINATION OF EMPLOYMENT.................................5
     3.6  RE-PRICING/CANCELLATION AND RE-GRANT/WAIVER OF RESTRICTIONS.........5
     3.7  TAX WITHHOLDING.....................................................5
     3.8  MANDATORY REDEMPTION................................................6

4.   RIGHTS OF EMPLOYEES AND PARTICIPANTS.....................................6
     4.1  RIGHTS OF ELIGIBLE EMPLOYEES, PARTICIPANTS AND BENEFICIARIES........6

5.   ADJUSTMENTS AND ACCELERATION.............................................6
     5.1  ADJUSTMENTS; ACCELERATION...........................................6
     5.2  GOLDEN PARACHUTE LIMITATIONS........................................7

6.   OTHER PROVISIONS.........................................................7
     6.1  COMPLIANCE WITH LAWS................................................7
     6.2  AWARDS CONDITIONED ON FAVORABLE INTERNAL REVENUE SERVICE RULING.....8
     6.3  AMENDMENTS, TERMINATION, MODIFICATION AND SUSPENSION................8
     6.4  PRIVILEGES OF STOCK OWNERSHIP.......................................8
     6.5  EFFECTIVE DATE OF THE PLAN..........................................8
     6.6  SUPERVISORY BOARD APPROVAL OF THE PLAN..............................8
     6.7  TERM OF THE PLAN....................................................8
     6.8  GOVERNING LAW/CONSTRUCTION/SEVERABILITY.............................9
     6.9  CAPTIONS............................................................9
     6.10 EFFECT OF CHANGE OF SUBSIDIARY STATUS...............................9
     6.11 NON-EXCLUSIVITY OF PLAN.............................................9

7.   DEFINITIONS..............................................................9
     7.1  DEFINITIONS.........................................................9


                                      (i)

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                            FRESENIUS MEDICAL CARE AG
                            1998 STOCK INCENTIVE PLAN


1.   PURPOSE AND ADMINISTRATION

     1.1  PURPOSE

          The purpose of this Plan is to promote the success of the Company by
providing an additional means through the grant of Awards to attract, motivate,
retain and reward key management and executive employees, including officers,
whether or not directors, of the Company and its Subsidiaries with awards and
incentives for high levels of individual performance and improved financial
performance of the Company and its Subsidiaries.

     1.2  ADMINISTRATION AND AUTHORIZATION.

          (a) MANAGEMENT BOARD. Except as otherwise provided herein, this Plan
shall be administered, and all Awards to Eligible Employees shall be authorized,
by the Management Board. Action of the Management Board with respect to the
administration of this Plan shall be taken pursuant to the vote or written
consent of a majority of its members. The Management Board shall be responsible
to the Supervisory Board for the operation of the Plan.

          (b) AUTHORITY OF MANAGEMENT BOARD. Subject to the express provisions
of this Plan, the Management Board shall have the authority to:

               (i) determine the particular employees who are Eligible
          Employees;

               (ii) grant Awards to Eligible Employees, determine the specific
          terms and conditions of such Awards consistent with the express
          provisions of this Plan, establish the installments (if any) in which
          such Awards shall become convertible and/or shall vest, or determine
          that no delayed convertibility and/or vesting is required, and
          establish the events of termination of such Awards;

               (iii) approve the forms of Award Agreements (which need not be
          identical either as to terms of Awards or among Eligible Employees);

               (iv) construe and interpret the provisions of this Plan and any
          agreements defining the rights and obligations of the Company,
          Eligible Employees and Participants under this Plan, and prescribe,
          amend and rescind rules and regulations relating to the administration
          of this Plan;

               (v) cancel, modify, or waive the Company's rights with respect
          to, or modify, discontinue, suspend, or terminate, any or all
          outstanding Awards held by Participants, subject to any required
          consent under Section 6.3;

               (vi) accelerate or extend the convertibility and/or vesting of
          Awards and extend the term of any or all outstanding Awards within the
          maximum ten-year term of Awards under Section 2.4; and

               (vii) make such other determinations and take such other action
          as contemplated by this Plan or as may be deemed necessary or
          advisable for the administration of this Plan and the effectuation of
          its purposes.


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          (c) BINDING DETERMINATIONS. Any action taken by, or inaction of, the
Company, the Management Board, or the Supervisory Board relating or pursuant to
this Plan shall be within the absolute discretion of that entity or body and
shall be conclusive and binding upon all persons. No member of the Management
Board or Supervisory Board, and no director or officer of the Company or any of
its Subsidiaries, shall be liable for any such action or inaction of the entity
or body, of another person or, except in circumstances involving bad faith, of
himself or herself. Subject only to compliance with the express provisions
hereof, the Management Board and Supervisory Board may act in their absolute
discretion in matters within their authority related to this Plan.

          (d) RELIANCE ON EXPERTS. In making any determination or in taking or
not taking any action under this Plan, the Management Board or the Supervisory
Board, as the case may be, may obtain and may rely upon the advice of experts,
including professional advisors to the Company or its Subsidiaries. No director,
officer or agent of the Company or any Subsidiary shall be liable for any such
action or determination taken, made, or omitted in good faith.

          (e) DELEGATION. The Management Board may delegate ministerial,
non-discretionary functions to individuals who are officers or employees of the
Company or its Subsidiaries.

2.   PARTICIPATION AND AWARDS.

     2.1  PARTICIPATION.

          Awards may be granted by the Management Board only to those employees
that the Management Board determines to be Eligible Employees. Notwithstanding
the foregoing, if an otherwise Eligible Employee is a member of the Management
Board, Awards shall be granted to such member by the Supervisory Board. An
Eligible Employee who has been granted an Award may, if otherwise eligible, be
granted additional Awards if the Management Board (and the Supervisory Board, as
the case may be) shall so determine. In addition, if the Management Board, in
its sole discretion, determines that the limitations on deductions of Section
162(m) of the Code may apply to an Award granted to an Eligible Employee, the
Management Board may, but shall not be required to, seek to have the grant made
by the unanimous consent of the Supervisory Board.

     2.2  AWARDS.

          (a) FORM OF AWARDS. Awards under the Plan shall be in the form of one
or more Convertible Bonds and a corresponding Employee Loan. Upon conversion of
a Convertible Bond, a Participant shall be entitled to receive Nonvoting
Preference Shares of the Company.

          (b) NONVOTING PREFERENCE SHARES AVAILABLE. The maximum number of
Nonvoting Preference Shares that may be subject to conversion of Convertible
Bonds under this Plan (either directly or as represented by ADSs) shall not
exceed an amount determined as follows: 1,333,333 less the number of Nonvoting
Preference Shares that may be subject to conversion of convertible bonds under
the 1996 Plan (either directly or as represented by ADSs), (the "Share Limit"),
subject to adjustment as contemplated by this Section 2.2 and Section 5.1. No
Award may be granted under this Plan unless, on the date of grant, the sum of
(i) the maximum number of Nonvoting Preference Shares issuable at any time upon
conversion of the Convertible Bonds granted pursuant to such Award, plus (ii)
the maximum number of Nonvoting Preference Shares issuable at any time pursuant
to the conversion of all other outstanding Convertible Bonds as of the date of
grant, plus (iii) the number of Nonvoting Preference Shares previously issued
(either directly or as represented by ADSs) pursuant to the conversion of
Convertible Bonds awarded under the Plan, does not exceed the Share Limit;
provided, however, if an Award Agreement is redeemed, canceled, forfeited or
otherwise terminated (i.e., no longer subject to conversion into Nonvoting
Preference Shares) the Nonvoting Preference Shares that were the subject of such
Awards shall not be taken into account for purposes of the preceding calculation
but shall be available to be used as the subject of new Awards.


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     2.3  GRANT OF AWARDS.

          Each Award shall be effected by the transfer of one or more
Convertible Bonds to the Participant, and the simultaneous issuance of a
corresponding Employee Loan by the Company to the Participant, all of which
shall be evidenced by an Award Agreement signed by the Company and by the
Eligible Employee, and such other documentation as the Management Board shall
determine. Anything herein to the contrary notwithstanding, the effective date
of grant of the Award shall be the date the Management Board grants the Award to
the Eligible Employee, regardless of when the Award Agreement is executed or
when the actual Convertible Bonds are issued.

     2.4  AWARD PERIOD.

          Each Award and all executory rights or obligations under the related
Award Agreement shall expire on such date as shall be determined by the
Management Board, which shall not be later than ten (10) years from the
Anniversary Date.

     2.5  ACCEPTANCE OF AWARDS.

          An Eligible Employee offered an Award shall have ten (10) days to sign
the Award Agreement respecting that Award and return the Award Agreement to the
Management Board or its designee. Unless waived by the Management Board in its
sole discretion, the failure of an Eligible Employee to return such signed Award
Agreement within such 10-day period shall be treated, for all purposes of this
Plan, as if such offer was never made to such employee. If the last day of the
10-day period falls on a holiday, a Saturday or a Sunday, the next day (other
than another holiday, Saturday or Sunday) will be treated as the last day of the
10-day period during which the Eligible Employee can sign and return the Award
Agreement. Acceptance of an Award shall automatically be an acceptance of the
Employee Loan. To the extent deemed necessary by the Management Board, initial
Awards under the Plan shall be conditioned upon completion of all necessary
documents evidencing the Convertible Bonds and Employee Loan, in which case the
ten-day period for acceptance of such Awards shall not begin until all such
documents are prepared and delivered to the Eligible Employees.

     2.6  RESTRICTIONS ON TRANSFERABILITY.

          (a) RESTRICTIONS ON TRANSFER. Convertible Bonds that are awarded under
this Plan shall not be transferable by the Participant and shall not be subject
in any manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance or charge (other than to the Company), except by will or the laws of
descent and distribution, or pursuant to a QDRO. Any attempted transfer in
violation of these provisions shall be void and the Company shall disregard any
attempt at transfer, assignment or other alienation prohibited hereby.

          (b) DESIGNATION OF BENEFICIARY OR PERSONAL REPRESENTATIVE. The
designation of a Beneficiary or Personal Representative hereunder shall not
constitute a transfer prohibited by the foregoing provisions.

     2.7  EMPLOYEE LOANS TO PURCHASE CONVERTIBLE BONDS.

          As part of every Award, the Company shall make an Employee Loan to
each Eligible Employee for the purchase of the Convertible Bonds that are the
subject of the Award to that Eligible Employee. Each Employee Loan, which shall
be Deutsche Mark denominated, shall be evidenced by a non-recourse note, secured
solely by a pledge of the Convertible Bonds with respect to which it was made
and, unless sooner prepayable, shall be due and payable only at maturity. The
maturity date of such Employee Loan shall be the same as the expiration date of
the Award, and such Employee Loan shall be prepayable upon the earlier of the
conversion of the Convertible Bonds with respect to which it was made or the
redemption of such Convertible Bonds following termination of employment. Each
Employee Loan shall have a principal amount equal to the face amount of the
Convertible Bonds with respect to which it was made. Each Employee Loan shall
bear interest at a rate determined by the Management Board to be commercially
reasonable under the circumstances, which in all cases shall be the same rate as
the interest 



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rate payable on the Convertible Bonds with respect to which the Employee Loan
was made. Interest on the Employee Loan shall be due and payable only at such
times as interest is due and payable on the Convertible Bonds. If required by
the Management Board, the Eligible Employee shall execute such other documents
as will permit the Company to have a valid security interest in the Convertible
Bonds pledged as security for the Employee Loan.

3.   THE CONVERTIBLE BONDS

     3.1  TERMS OF CONVERTIBLE BONDS.

          Convertible Bonds shall have a face amount equal to the nominal (par)
value of a Nonvoting Preference Share (5 DM) multiplied by the number of
Nonvoting Preference Shares into which the Convertible Bonds may be converted.
The Convertible Bonds shall be Deutsche Mark denominated and shall bear interest
at a rate determined by the Management Board to be commercially reasonable under
the circumstances.

     3.2  USE OF BANK TO ISSUE CONVERTIBLE BONDS.

          The Management Board shall arrange to have Dresdner Kleinwort Benson,
or any other bank it may chose it its sole discretion, hold all of the
Convertible Bonds to be issued under the Plan.

     3.3  VESTING.

          Subject to the provisions of Section 5.1(b), a Participant's right to
convert the Convertible Bonds shall vest over such period and at such times as
the Management Board shall determine in the Award Agreement. Upon vesting,
Convertible Bonds may be converted in whole or in part, as the Management Board
may determine in the Award Agreement.

     3.4  CONVERSION.

          (a) CONVERSION PERIOD. Unless the Management Board otherwise expressly
provides, once convertible, a Convertible Bond shall remain convertible until
converted into Nonvoting Preference Shares or the expiration or earlier
termination of the Award. A Participant wishing to convert all or a portion of
his or her Convertible Bonds shall notify the Company or its designee in writing
of such conversion.

          (b) TIME OF CONVERSION. Unless otherwise provided in the Award
Agreement, Convertible Bonds may be converted into Nonvoting Preference Shares
only on the tenth business day following the publication of the Company's
quarterly financial statements. A Participant wishing to convert all or a
portion of a Convertible Bond shall notify the Company in writing during the
nine business day period following publication of the Company's quarterly
financial statements and make the payments required under Section 3.4(d) and
Section 3.7. The conversion of the Convertible Bond shall be effective not later
than the fourth business day following the nine-day period during which such
notice and payment as required under Section 3.4(d) were received.

          (c) CONVERSION PRICE. The Convertible Bonds shall be convertible into
Nonvoting Preference Shares at a price per share equal to the "standard price"
(I.E., the "single figure quotation") of the Nonvoting Preference Shares on the
Frankfurt Stock Exchange on the first business day following the date of grant
of the Award as denominated in German currency (DM) or the official currency in
Germany after the introduction of the European Currency Unit (Euro). The
effective date of grant of the Award is determined as provided in Section 2.3.

          (d) PAYMENT PROVISIONS. At the time the Participant sends written
notice of conversion to the Company, he or she shall pay or cause to be paid to
the Company in full the sum of the following amounts (i) the conversion price
(as determined above) less the face amount of the Convertible Bonds being
converted, and (ii) the amount of the corresponding Employee Loan. Such payment
shall be made in German currency (DM) or the official currency in Germany after
the introduction of the European Currency Unit (Euro).



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          (e) PREPAYMENT OF EMPLOYEE LOAN. Upon receipt of payment by the
Company as provided above, the Company shall issue the Nonvoting Preference
Shares, as the case may be, and shall apply the applicable portion of the
payment received in repayment of the principal amount of the corresponding
Employee Loan. Interest payable on the Convertible Bond shall be applied against
the interest payable on the Employee Loan.

          (f) RESTRICTIONS ON CONVERSION. Unless otherwise expressly permitted
by the Management Board and by applicable law and the express terms of the
Award, Convertible Bonds may be converted only by the Participant or, if the
Participant has died, the Participant's Beneficiary or, if the Participant has
suffered a Disability and cannot act, the Participant's Personal Representative.

          (g) PARTIAL CONVERSIONS. In the event of a partial conversion of a
Convertible Bond, appropriate adjustment shall be made to the terms of the
portion of the Convertible Bond that has not been converted and to the terms of
the corresponding Employee Loan.

     3.5  EFFECT OF TERMINATION OF EMPLOYMENT.

          Upon termination of employment on account of retirement, disability or
death, the Participant (or Beneficiary or Personal Representative) shall have
one year from the date of termination, or such longer period as the Management
Board shall determine, to convert the Convertible Bonds that are convertible as
of the time of termination into Nonvoting Preference Shares. Upon termination of
employment for any other reason, the Participant shall have ninety (90) days
from the date of termination to convert the Convertible Bonds that are
convertible as of the time of termination into Nonvoting Preference Shares,
unless the Management Board specifically authorizes a longer period.
Notwithstanding the foregoing, in the case of termination for cause, the
Convertible Bonds shall cease to be convertible at the time of termination of
employment. Upon termination of employment for any reason, the conversion rights
with respect to Convertible Bonds that are not then convertible shall terminate,
unless the Management Board, in its sole discretion, provides otherwise.

     3.6  RE-PRICING/CANCELLATION AND RE-GRANT/WAIVER OF RESTRICTIONS.

          Subject to Section 2.2(b), Section 2.6(a), and other specific
limitations on Awards contained in this Plan or the Award Agreement, and to the
extent permitted by law, the Management Board from time to time may (but shall
not be required to) authorize, generally or in specific cases only, for the
benefit of any Eligible Employee any adjustment in the conversion price, the
number of Nonvoting Preference Shares subject to conversion, and the
restrictions upon or the term, of an Award granted under this Plan by (i)
cancellation of an outstanding Award and a subsequent re-granting of an Award,
(ii) substitution of a new Award for an outstanding Award, or (iii) any other
legally valid means. Such amendment or other action may result in, among other
things, changes in a conversion price that is higher or lower than the
conversion price of the Convertible Bonds issued in the original or prior Award,
may provide for a greater or lesser amount of Convertible Bonds subject to the
Award, or may provide for a longer or shorter vesting or conversion period. Any
changes to the terms of a Convertible Bond as provided herein shall be
accompanied by appropriate changes in the corresponding Employee Loan.

     3.7  TAX WITHHOLDING.

          (a) GERMAN WITHHOLDING TAXES. Upon the grant of an Award to a
Participant who is a United States citizen or resident, the Management Board, in
its discretion, may require, as a condition to receiving the Award, the Eligible
Employee to file, at that time or at some future time, with the Company or its
designated agent a protective Form 1001 or its equivalent under German law so as
to elect United States - German Tax Treaty benefits in the event German taxing
authorities take the position that interest payable on the Convertible Bonds
would be subject to German withholding taxes.

          (b) UNITED STATES WITHHOLDING TAXES. Upon the conversion of any
Convertible Bond by or on behalf of a Participant who is a United States citizen
or resident, the Management Board, in its discretion, may require, as a
condition to receiving the Nonvoting Preference Shares, the Participant (or
Personal Representative or Beneficiary, as the case may be) to pay or provide
for payment of the amount of 



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any U.S federal, state or local income and payroll taxes that the Company or its
Subsidiaries may be required to withhold with respect to such conversion on
account of the Participant being (or having been) subject to U.S federal, state
or local income or payroll taxes.

     3.8  MANDATORY REDEMPTION.

          Notwithstanding anything in this Agreement to the contrary, if any
Convertible Bond is not converted within the time provided in this Plan or in
the Award Agreement, the conversion period shall expire, the Company shall
mandatorily redeem the Convertible Bond, and the proceeds of such redemption
shall be used to repay the Employee Loan corresponding thereto.

4.   RIGHTS OF EMPLOYEES AND PARTICIPANTS.

     4.1  RIGHTS OF ELIGIBLE EMPLOYEES, PARTICIPANTS AND BENEFICIARIES.

          (a) EMPLOYMENT STATUS. The status or possible status of an employee as
an Eligible Employee shall not be construed as a commitment that an Award will
be made under this Plan to such employee or to any Eligible Employees generally.

          (b) NO EMPLOYMENT CONTRACT. Nothing contained in this Plan (or in any
other documents related to this Plan or to any Award) shall confer upon any
Eligible Employee or Participant any right to continue in the employ or other
service of the Company or its Subsidiaries or constitute any contract or
agreement of employment or other service, nor shall it interfere in any way with
the right of the Company or its Subsidiaries to change such person's
compensation or other benefits or to terminate the employment of such person,
with or without cause; provided, however, that nothing contained in this Plan or
any document related thereto shall adversely affect any independent contractual
right of such person.

          (c) PLAN NOT FUNDED. Awards under this Plan shall be fulfilled with
Nonvoting Preference Shares authorized as conditional capital with respect to
the Convertible Bonds, and no special or separate reserve, fund or deposit shall
be made to assure fulfillment of such Awards. No Participant, Beneficiary,
Personal Representative or other person shall have any right, title or interest
in any fund or in any specific asset of the Company (including Nonvoting
Preference Shares) except as expressly otherwise provided. Neither the
provisions of this Plan (or of any related documents), nor the creation or
adoption of this Plan, nor any action taken pursuant to the provisions of this
Plan shall create, or be construed to create, a trust of any kind or a fiduciary
relationship between the Company (including its Subsidiaries) and any
Participant, Beneficiary, Personal Representative or other person. To the extent
that a Participant, Beneficiary, Personal Representative, or other person
acquires a right to receive payment pursuant to any Award hereunder, such right
shall be no greater than the right of any unsecured general creditor of the
Company.

5.   ADJUSTMENTS AND ACCELERATION.

     5.1  ADJUSTMENTS; ACCELERATION.

          (a) ADJUSTMENTS. If there shall occur any extraordinary dividend or
other extraordinary distribution in respect of the Nonvoting Preference Shares
(whether in the form of cash, Nonvoting Preference Shares, other securities, or
other property), or any recapitalization, stock split (including a stock split
in the form of a stock dividend), reverse stock split, reorganization, merger,
combination, consolidation, split-up, spin-off, combination, repurchase, sale of
substantially all of the Company's assets, or exchange of Nonvoting Preference
Shares for other securities of the Company, or there shall occur any other like
corporate transaction or event in respect of the Nonvoting Preference Shares,
then the Management Board, in such manner and to such extent (if any) as it
deems appropriate and equitable, shall (1) proportionately adjust any or all of
(a) the number of Nonvoting Preference Shares which underlie an Award (including
the specific maximum number of Nonvoting Preference Shares set forth elsewhere
in this Plan), (b) the number of Nonvoting Preference Shares subject to any or
all outstanding Awards, or (c) the conversion price of any or all 



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outstanding Convertible Bonds, or (2) in the case of an extraordinary dividend
or other distribution, merger, reorganization, consolidation, combination, sale
of assets, split up, exchange, or spin off, make provision for a cash payment or
for the substitution or exchange of any or all outstanding Awards or the
Nonvoting Preference Shares deliverable to the Participant based upon the
distribution or consideration payable to holders of the Nonvoting Preference
Shares upon or in respect of such event. In any of such events, the Management
Board may take such action sufficiently prior to such event if necessary to
permit the Participant to realize the benefits intended to be conveyed with
respect to the underlying Nonvoting Preference Shares in the same manner as is
available to shareholders generally.

          (b) ACCELERATION OF AWARDS UPON CHANGE IN CONTROL. As to any
Participant, unless, prior to a Change in Control Event, the Management Board
determines that, upon its occurrence, there shall be no acceleration of benefits
under Awards, or determines that only certain or limited benefits under Awards
shall be accelerated and the extent to which they shall be accelerated, and/or
establishes a different time in respect of such Change in Control Event for such
acceleration, then upon the occurrence of a Change in Control Event each
Convertible Bond shall immediately become fully convertible. The Management
Board may override the limitations on acceleration in this Section 5.1(b) by
express provision in the Award Agreement and may accord any Eligible Employee a
right to refuse any acceleration, whether pursuant to the Award Agreement or
otherwise, in such circumstances as the Management Board may approve. Any
acceleration of Awards shall comply with applicable regulatory requirements.

          (c) POSSIBLE EARLY TERMINATION OF ACCELERATED AWARDS. If any
Convertible Bond under this Plan has been fully accelerated as permitted by
Section 5.1(b) but is not converted prior to (i) a dissolution of the Company,
or (ii) a reorganization event described in Section 5.1(a) that the Company does
not survive, or (iii) the consummation of a reorganization event described in
Section 5.1(a) that results in a Change of Control approved by the Supervisory
Board, and no provision has been made for the survival, substitution, exchange
or other settlement of such Convertible Bond, such Convertible Bond shall
thereupon be deemed to have been redeemed and the corresponding Employee Loan
shall be deemed to have been fully repaid.

     5.2  GOLDEN PARACHUTE LIMITATIONS.

          Unless the Management Board expressly determines otherwise, the
conversion of a Convertible Bond shall not be accelerated under this Plan to an
extent or in a manner that would not be fully deductible by any U.S. Subsidiary
for federal income tax purposes because of the application of Section 280G of
the Code, and no payment hereunder shall be accelerated if any portion of such
accelerated payment would not be deductible by any U.S. Subsidiary because of
the application of Section 280G of the Code. If a Participant would be entitled
to benefits or payments hereunder and under any other plan or program of the
Company or its U.S. Subsidiaries, which payments would constitute "parachute
payments" as defined in Section 280G of the Code, then the Participant may by
written notice to the Company designate the order in which such parachute
payments shall be reduced or modified so that there would be no denial of
federal income tax deductions for any "parachute payments" because of the
application of Section 280G of the Code.

6.   OTHER PROVISIONS.

     6.1  COMPLIANCE WITH LAWS.

          This Plan, the granting and vesting of Awards under this Plan and the
issuance, delivery and conversion of Convertible Bonds and Nonvoting Preference
Shares hereunder are subject to compliance with all applicable foreign and
United States federal and state laws, rules and regulations and to such
approvals by any listing, regulatory or governmental authority as may, in the
opinion of counsel for the Company, be necessary or advisable in connection
therewith. Any securities delivered under this Plan shall be subject to such
restrictions, and the person acquiring such securities shall, if requested by
the Company, provide such assurances and representations as the Company may deem
necessary or desirable to assure compliance with all applicable legal
requirements. The Management Board is hereby authorized to impose such
conditions and limitations regarding Awards or conversions as may be deemed
necessary or appropriate at such time to comply with Section 16 of the Exchange
Act.



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     6.2  AWARDS CONDITIONED ON FAVORABLE INTERNAL REVENUE SERVICE RULING.

          The grant of Awards and the conversion of all Convertible Bonds
granted under this Plan is subject to the receipt of a favorable ruling from the
Internal Revenue Service, satisfactory to the Management Board, that, among
other things, the grant and vesting of Awards and the conversion of the
Convertible Bonds will be treated in all respects the same as the grant, vesting
and exercise of nonqualified employee stock options for all purposes of the
Code. If the Internal Revenue Service does not provide such a favorable ruling,
the Convertible Bonds and the corresponding Employee Loans will be immediately
redeemed and repaid, respectively, and all benefits and obligations of the
Company and the Participants thereunder shall be fully and completely offset,
with no payment or transfer of any funds from one party to the other.

     6.3  AMENDMENTS, TERMINATION, MODIFICATION AND SUSPENSION.

          (a) AMENDMENT AND TERMINATION. The Management Board may, at any time,
terminate or, from time to time, amend, modify or suspend this Plan, in whole or
in part. No Awards may be granted during any suspension of this Plan or after
termination of this Plan, but the Management Board shall retain jurisdiction as
to Awards then outstanding in accordance with the terms of this Plan.

          (b) AMENDMENTS TO AWARDS. Without limiting any other express authority
of the Management Board under, but subject to the express limits of, this Plan,
the Management Board may, without the consent of a Participant, waive conditions
of or limitations on Awards to Participants that the Management Board in the
prior exercise of its discretion has imposed and may make other changes to the
terms and conditions of Awards that do not affect, in any manner materially
adverse to the Participant, rights and benefits under an Award.

          (d) LIMITATIONS ON AMENDMENTS TO PLAN AND AWARDS. No amendment,
suspension or termination of the Plan, or change affecting any outstanding Award
shall, without the written consent of the Participant, affect in any manner
materially adverse to the Participant any rights or benefits of the Participant
or obligations of the Company under any Award granted under this Plan prior to
the effective date of such change. Changes contemplated by Section 5.1 shall not
be deemed to constitute changes or amendments for purposes of this Section
6.3(d).

     6.4  PRIVILEGES OF STOCK OWNERSHIP.

          Except as otherwise expressly authorized by the Management Board or
this Plan, a Participant shall not be entitled to any privilege of ownership as
to any Nonvoting Preference Shares not actually delivered to and held of record
by the Participant. No adjustment will be made for dividends or other rights as
a shareholder for which a record date is prior to such date of delivery.

     6.5  EFFECTIVE DATE OF THE PLAN.

          This Plan shall be effective as of April 6, 1998 the date of
Management Board approval.

     6.6  SUPERVISORY BOARD APPROVAL OF THE PLAN.

          This Plan is subject to Supervisory Board approval.

     6.7  TERM OF THE PLAN.

          No Award shall be granted more than ten (10) years after the earlier
to occur of the effective date of this Plan or shareholder approval of this Plan
(the "termination date"). Unless otherwise expressly provided in this Plan or in
an applicable Award Agreement, any Award theretofore granted may extend beyond
such date, and all authority of the Management Board with respect to Awards
shall continue during any suspension of this Plan and in respect of outstanding
Awards on such termination date.


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<PAGE>   11

     6.8  GOVERNING LAW/CONSTRUCTION/SEVERABILITY.

          (a) CHOICE OF LAW. This Plan, the Awards, all documents evidencing
Awards and all other related documents shall be governed by, and construed in
accordance with, the laws of the Federal Republic of Germany.

          (b) SEVERABILITY. If any provision shall be held by a court of
competent jurisdiction to be invalid and unenforceable, the remaining provisions
of this Plan shall continue in effect.

     6.9  CAPTIONS.

          Captions and headings are given to the sections and subsections of
this Plan solely as a convenience to facilitate reference. Such headings shall
not be deemed in any way material or relevant to the construction or
interpretation of the Plan or any provision thereof.

     6.10 EFFECT OF CHANGE OF SUBSIDIARY STATUS.

          For purposes of this Plan and any Award hereunder, if an entity ceases
to be a Subsidiary, a termination of employment shall be deemed to have occurred
with respect to each employee of such Subsidiary who does not continue as an
employee of another Subsidiary of the Company.

     6.11 NON-EXCLUSIVITY OF PLAN.

          Nothing in this Plan shall limit or be deemed to limit the authority
of the Management Board or the Supervisory Board to grant Awards or authorize
any other compensation, with or without reference to Nonvoting Preference
Shares, under any other plan or authority.

7.   DEFINITIONS.

     7.1  DEFINITIONS.

          (a) "ANNIVERSARY DATE" shall mean the effective date of the grant of
the Award to the Eligible Employee by the Management Board.

          (b) "AWARD" shall mean an award of a Convertible Bond and the making
of the corresponding Employee Loan.

          (c) "AWARD AGREEMENT" shall mean any writing setting forth the terms
of an Award that has been authorized by the Management Board.

          (d) "BENEFICIARY" shall mean the person, persons, trust or trusts
designated by a Participant or, in the absence of a designation, entitled by
will or the laws of descent and distribution, to receive the benefits specified
in the Award Agreement and under this Plan in the event of a Participant's
death, and shall mean the Participant's executor or administrator if no other
Beneficiary is designated and able to act under the circumstances.

          (e) "CHANGE IN CONTROL EVENT" shall mean any of the following:

               (1) approval by the shareholders of the Company of the
          dissolution or liquidation of the Company;

               (2) approval by the shareholders of the Company of an agreement
          to merge or consolidate, or otherwise reorganize, with or into one or
          more entities that are not Subsidiaries, as a result of which less
          than 50% of the outstanding voting securities of the surviving or
          resulting entity immediately after the reorganization are, or will be,
          owned by shareholders of the Company immediately before such
          reorganization (assuming for purposes of such determination that there
          is no change in the record ownership of the Company's securities from
          the record date for such 



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<PAGE>   12

          approval until such reorganization and that such record owners hold no
          securities of the other parties to such reorganization);

               (3) approval by the shareholders of the Company of the sale of
          substantially all of the Company's business and/or assets to a person
          or entity that is not a Subsidiary; or

               (4) any "person" (as such term is used in Sections 13(d) and
          14(d) of the Exchange Act but excluding any person described in and
          satisfying the conditions of Rule 13d-1(b)(1) thereunder), becomes the
          beneficial owner (as defined in Rule 13d-3 under the Exchange Act),
          directly or indirectly, of securities of the Company representing more
          than 50% of the combined voting power of the Company's then
          outstanding securities entitled to then vote generally in the election
          of Members of the Supervisory Board of the Company.

          (f) "CODE" shall mean the United States Internal Revenue Code of 1986,
as amended from time to time.

          (g) "COMPANY" shall mean Fresenius Medical Care AG, a German stock
corporation (Aktiengesellschaft), and its successors.

          (h) "CONVERTIBLE BOND" shall mean a Deutsche Mark denominated bond
issued to Dresdner Kleinwort Benson (or any other bank the Management Board may
choose by the Company pursuant to Section 3.2) under this Plan that, when
interests therein are issued by Dresdner Kleinwort Benson to a Participant, is
convertible by a Participant, upon payment of the applicable conversion price as
required under Section 3.4(d), in whole or in part, into Nonvoting Preference
Shares, the terms of which are described in Article 3 of this Plan.

          (i) "DISABILITY" shall mean a "permanent and total disability" within
the meaning of Section 22(e)(3) of the Code and such other disabilities,
infirmities, afflictions or conditions as the Management Board by rule may
include.

          (j) "ELIGIBLE EMPLOYEE" shall mean any key management or executive
employee of the Company or its Subsidiaries, including officers (whether or not
directors).

          (k) "EMPLOYEE LOAN" shall mean the loan from the Company to the
Eligible Employee that occurs upon the grant and acceptance of an Award, the
terms of which are described in Section 2.7 of this Plan.

          (l) "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time.

          (m) "EXCHANGE ACT" shall mean the United States Securities Exchange
Act of 1934, as amended from time to time.

          (n) "MANAGEMENT BOARD" shall mean the Board of Managers of the
Company, as such may be constituted from time to time.

          (o) "NONVOTING PREFERENCE SHARES" shall mean shares of the Nonvoting
Preference Stock of the Company having a nominal (par) value of DM 5 per share.

          (p) "PARTICIPANT" shall mean an Eligible Employee who has been granted
an Award under this Plan and who has timely returned an executed Award Agreement
with respect to such Award.

          (q) "PERSONAL REPRESENTATIVE" shall mean the person or persons who,
upon the disability or incompetence of a Participant, shall have acquired on
behalf of the Participant, by legal proceeding or otherwise, the power to
exercise the rights or receive benefits under this Plan and who shall have
become the legal representative of the Participant.



                                       10
<PAGE>   13

          (r) "PLAN" shall mean the Fresenius Medical Care AG 1998 Stock
Incentive Plan.

          (s) "QDRO" shall mean a qualified domestic relations order as defined
in Section 414(p) of the Code or Title I, Section 206(d)(3) of ERISA (to the
same extent as if this Plan were subject thereto), or the applicable rules
thereunder.

          (t) "SECURITIES ACT" shall mean the Securities Act of 1933, as amended
from time to time.

          (u) "SUBSIDIARY" shall mean any corporation or other entity a majority
of whose outstanding voting stock or voting power is beneficially owned directly
or indirectly by the Company, including but not limited to any one of Fresenius
USA, Inc., a Massachusetts corporation, or any successor corporation, National
Medical Care, Inc., a Delaware corporation, or any successor corporation, and
Fresenius Medical Care Holdings, Inc. (formerly known as W.R. Grace & Co.), a
New York corporation, or any successor corporation, and their respective direct
and indirect subsidiaries.

          (v) "U.S. SUBSIDIARY" or "U.S. SUBSIDIARIES" shall mean any Subsidiary
or Subsidiaries that files a United States federal income tax return.

          (w) "SUPERVISORY BOARD" shall mean the Supervisory Board of the
Company, as such may be constituted from time to time.

          (x) "1996 PLAN" shall mean the Fresenius Medical Care AG 1996 Stock
Incentive Plan.




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