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                                                                  EXHIBIT 10.19




                            UROHEALTH SYSTEMS, INC.

               1996 DIRECTORS' NON-QUALIFIED STOCK INCENTIVE PLAN



         1.      Establishment and Purpose.

                 (a)      UROHEALTH Systems, Inc., a Delaware corporation (the
"Company"), hereby adopts its 1996 Directors' Stock Incentive Plan.  The Plan
is intended to provide a means whereby eligible members of the Board may be
given an opportunity to purchase shares of Stock pursuant to options which are
not intended to qualify as incentive stock options under Section 422 of the
Code.

                 (b)      The purpose of the Plan is to enable the Company to
attract qualified individuals to serve as members of the Board, to provide
additional performance incentives to such individuals while serving as
directors, and to encourage their continued service on the Board.

         2.      Definitions.

                 As used herein, the following definitions shall apply:

                 (a)      "Affiliate" shall mean any parent or subsidiary
corporations of the Company, as defined in Sections 424(e) and (f) of the Code
(but substituting "the Company" for "employer corporation"), including parents
or subsidiaries of the Company that become such after adoption of the Plan.

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

                 (c)      "Change in Control" shall mean a change in ownership
or control of the Company effected through either of the following
transactions:

                          o       the direct or indirect acquisition by any
         Person or related group of Persons (other than an acquisition from or
         by the Company or by a Company-sponsored employee benefit plan or by a
         Person or related group of Persons that directly or indirectly
         controls, is controlled by, or is under common control with, the
         Company) of beneficial ownership (within the meaning of Rule 13d-3 of
         the Exchange Act) of securities possessing more than fifty percent
         (50%) of the total combined voting power of the Company's outstanding
         securities, or

                          o       a change in the composition of the Board over
         a period of thirty-six (36) months or less such that a majority of the
         Board members (rounded up to the next whole number) ceases, by reason
         of one or more contested elections for Board
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         membership, to be comprised of individuals who either (a) have been 
         Board members continuously since the beginning of such period or 
         (b) have been elected or nominated for election as Board members during
         such period by at least a majority of the Board members described in 
         clause (a) who were still in office at the time such election or 
         nomination was approved by the Board.

                 (d)      "Code" shall mean the Internal Revenue Code of 1986,
as amended.

                 (e)      "Company" shall mean UROHEALTH Systems, Inc., a
Delaware  corporation.

                 (f)      "Continuous Status as a Director" shall mean the
absence of any interruption or termination of service as a Director.

                 (g)      "Corporate Transaction" shall mean any of the
following stockholder-approved transactions to which the Company is a party:

                          o       a merger or consolidation in which the
         Company is not the surviving entity, except for a transaction the
         principal purpose of which is to change the state in which the Company
         is incorporated,

                          o       the sale, transfer or other disposition of
         all or substantially all of the assets of the Company (including the
         capital stock of the Company's subsidiary corporations) in complete
         liquidation or dissolution of the Company, or

                          o       any reverse merger in which the Company is
         the surviving entity but in which securities possessing more than
         fifty percent (50%) of the total combined voting power of the
         Company's outstanding securities are transferred to a Person or
         Persons different from those who held such securities immediately
         prior to such merger.

                 (h)      "Director" shall mean a member of the Board.

                 (i)      "Effective Date" shall mean the date this Plan is
adopted by the Board.

                 (j)      "Employee" shall mean any person who is an employee
of the Company, or any Affiliate of the Company, for purposes of tax
withholding under the Code.  The payment of a director's fee by the Company
shall not be sufficient to render the recipient of such fee an Employee.

                 (k)      "Exchange Act" shall mean the Securities Exchange Act
of 1934, as amended.

                 (l)      "Fair Market Value" shall mean the price which the
Board acting in good faith determines through any reasonable valuation method
that a share of Stock might change



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hands between a willing buyer and a willing seller, neither being under any
compulsion to buy or to sell and both having reasonable knowledge of the
relevant facts; provided, however, that where there exists a public market for
the Stock at the time of such determination, the Fair Market Value shall be the
average of the closing bid and asked prices of a share of Stock quoted in the
Over-The-Counter Market Summary or the last reported sale price of a share of
Stock or the closing price of a share of Stock quoted on The American Stock
Exchange, The Nasdaq National Market or on any exchange on which the Stock is
then listed, whichever is applicable, as published in the Western Edition of
The Wall Street Journal on the trading day prior to the date of determination
of Fair Market Value.

                 (m)      "Option" shall mean an option to purchase shares of
Stock granted pursuant to the Plan.

                 (n)      Option Certificate" shall mean the written
certificate setting forth the terms of an Option in the form attached as
Exhibit A hereto.

                 (o)      "Optionee" shall mean an Outside Director who
receives an Option.

                 (p)      "Outside Director" shall mean a Director who is not
an Employee.

                 (q)      "Person" shall mean a natural person, corporation,
partnership, limited liability company, joint venture, trust, or any other
entity and any government or instrumentality of a government.

                 (r)      "Plan" shall mean this UROHEALTH Systems, Inc. 1996
Directors' Stock Incentive Plan.

                 (s)      "Securities Act" shall mean the Securities Act of
1933, as amended.

                 (t)      "Stock" shall mean the Common Stock, $.001 par value
per share, of the Company.

         3.      Stock Subject to the Plan.

                 Subject to the provisions of Section 12 of the Plan, the
maximum number of shares of Stock which may be made subject to Options and sold
under the Plan is 300,000 shares of Stock.  If an Option expires or becomes
unexercisable for any reason and has not been exercised in full, the Stock
subject to such Option shall be available for future grant under the Plan.  If
Stock which was acquired upon exercise of an Option is subsequently repurchased
by the Company, such Stock shall not be available for future grants under the
Plan.





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         4.      Interpretation and Administration of the Plan.

                 (a)     The Plan shall be administered (the
"Adminstrator") by (i) the Board or (ii) a committee designated by the Board,
which committee shall be constituted in such a manner as to satisfy the
applicable laws and to permit such grants and related transactions under the
Plan to be exempt from Section 16(b) of the Exchange Act in accordance with
Rule 16b-3.  Once appointed, such Committee shall continue to serve in its
designated capacity until otherwise directed by the Board.

                 (b)      Subject to applicable laws, the provisions of the
Plan (including any other powers given to the Administrator hereunder) and
except as otherwise provided by the Board, the Administrator shall have the
authority, in its discretion:

                          to select the directorsd to whom Options may from
time to time be granted hereunder;

                          to determine whether and to what extent Options are
granted hereunder;

                          to determine the number of shares of Common Stock to
be covered by each Option granted hereunder;

                          to approve forms of  Option Agreements for use under
the Plan;

                          to determine the terms and conditions of any Option
granted hereunder;

                          to amend the terms of any outstanding Option granted
under the Plan including a reduction in the exercise price (or base amount on
which appreciation is measured) of any Award to reflect a reduction in the Fair
Market Value of the Common Stock since the grant date of the Award, provided
that any amendment that would adversely affect the Grantee's rights under an
outstanding Award shall not be made without the Grantee's written consent;

                          to construe and interpret the terms of the Plan and
Options granted pursuant to the Plan; and

                          to take such other action, not inconsistent with the
terms of the Plan, as the Administrator deems appropriate.

                 (c)      All decisions, determinations and interpretations of
the Administrator shall be final and binding on the Optionees and any other
holders of Options intended by the Administrator to be affected thereby.

         5.      Option Grants.

                 (a)      All grants of Options hereunder shall be made in
accordance with the provisions of this Section 5.





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                 (b)      An option to purchase 7,500 shares of Stock shall be
granted ("Initial Grant") to each Outside Director, such Initial Grant to be
made (i) to the then existing Outside Directors on August 15, 1996, and (ii) to
other Outside Directors elected or appointed to the Board after the Approval
Date on the date each such Outside Director first becomes an Outside Director
of the Company.  Beginning with the 1997 annual meeting of the Company's
stockholders and thereafter at each subsequent annual meeting of the Company's
stockholders, each Outside Director who continues as an Outside Director
immediately following each such annual meeting shall be granted an option to
purchase 7,500 shares of Stock ("Subsequent Grant"); provided that no
Subsequent Grant shall be made to any Outside Director who has not served as an
Outside Director of the Company, as of the time of such annual meeting, for at
least one year.  Each Subsequent Grant shall be made on the date of the annual
stockholders' meeting in question.  If any Option ceases to be exercisable in
whole or in part, the shares which were subject to such Option, but as to which
the Option had not been exercised, shall continue to be available under the
Plan.

         6.      Terms and Conditions of Options.

                 (a)      Each Option granted pursuant to the Plan shall be
evidenced by an Option Certificate executed by the Company and the Optionee.

                 (b)      The exercise price per share of Options granted under
the Plan shall be 100% of the Fair Market Value per share of Stock on the date
of grant of the Option, subject to adjustment to the extent provided in Section
12 hereof.

                 (c)      Subject to the provisions in the Option Certificate
and Sections 10(e) and 10(f) hereof, each Option shall vest and become
exercisable twelve (12) months after the date of grant.

                 (d)      The term of each Option shall be ten (10) years from
the date of grant, unless a shorter period is required to comply with any
applicable law, in which case such shorter period shall apply.

         7.      Eligibility.

                 Options may be granted only to Outside Directors.  No Optionee
shall have any rights as a stockholder of the Company as a result of the grant
of an Option under the Plan or his or her exercise of such Option pending the
actual issuance by the Company of the Stock subject to such Option.  The Plan
shall not confer upon any Outside Director any right with respect to
continuation of service as a Director or nomination to serve as a Director, nor
shall it interfere in any way with any rights that the Director or the Company
may have to terminate his or her directorship at any time.

         8.      Term of Plan; Effective Date.





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                 The Plan shall become effective on the Effective Date, subject
to approval of the Plan by the stockholders of the Company.  If the Effective
Date precedes such stockholder approval any Option granted under the Plan prior
to such approval shall be conditioned upon approval by stockholders of the
Plan.  Options may be granted under the Plan at any time on or before the tenth
anniversary of the date of adoption of the Plan.

         9.      Payment Upon Exercise.

                 Payment of the exercise price upon exercise of any Option may
be made (i) in cash, (ii) by delivery on a form prescribed by the Board of an
irrevocable direction to a securities broker approved by the Board to sell
shares and deliver all or a portion of the proceeds to the Company in payment
for the Stock; (iii) with shares of Stock owned by the Optionee or withholding
of shares otherwise deliverable to the Optionee upon exercise of the Option; or
(iv) any combination of the foregoing.  Any stock used to exercise an Option
shall be valued at its Fair Market Value on the date of the exercise of the
Option.

         10.     Exercise of Option.

                 (a)      An Option shall be deemed to be exercised when
written notice of such exercise has been given to the Company in accordance
with the terms of the Option Certificate by the person entitled to exercise the
Option and full payment for the Stock has been received by the Company in
accordance with Section 9 hereof.  An Option may not be exercised for a
fraction of a share of Stock.

                 (b)      If an Optionee ceases to serve as a Director (other
than as a result of disability, death or following a Change in Control), he or
she may, but only within three (3) months after the date he or she ceases to be
a Director, exercise his or her then outstanding Options to the extent that he
or she was entitled to exercise them at the date of such termination.
Notwithstanding the foregoing, in no event may any Option be exercised after
the expiration of its term set forth in Section 6.  To the extent that the
Optionee was not entitled to exercise an Option at the date of such
termination, or does not exercise such Option (that he or she was entitled to
exercise) within the time specified herein, the Option shall terminate.

                 (c)      Notwithstanding the provisions of Section 9(b) above,
in the event an Optionee is unable to continue his or her service as a Director
as a result of his or her total and permanent disability (as defined in Section
22(e)(3) of the Code), he or she may, within twelve (12) months from the date
of such termination, exercise his or her then outstanding Options to the extent
he or she was entitled to exercise them at the date of such termination.
Notwithstanding the foregoing, in no event may any Option be exercised after
the expiration of its term set forth in Section 6.  To the extent that the
Optionee was not entitled to exercise the Option at the date of termination, or
if Optionee does not exercise such Option (that he or she was entitled to
exercise) within the time specified herein, the Option shall terminate.

                 (d)      If during the term of his or her Option, an Optionee
(A) dies and had been in Continuous Status as a Director at the time of his or
her death, or (B) dies within three (3)





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months after termination of Continuous Status as a Director, the Option may be
exercised at any time within twelve (12) months following the date of the
Optionee's death by the Optionee's personal representative or by a person who
acquired the right to exercise the Option by bequest or intestate succession,
but only to the extent the Optionee was entitled to exercise the Option at the
time of his or her termination of Continuous Status as a Director.
Notwithstanding the foregoing, in no event may the Option be exercised after
the expiration of the term set forth in Section 6.

                 (e)      Should any Corporate Transaction occur while an
Optionee remains in Continuous Status as a Director, then each outstanding
Option held by such Optionee shall become fully exercisable, immediately prior
to the specified effective date of such Corporate Transaction, for all or any
portion of the shares at the time represented by such Option and may be
exercised with respect to any or all of such shares represented by the Option
prior to the specified effective date of such Corporate Transaction.
Immediately following the consummation of the Corporate Transaction, each such
option shall terminate unless assumed by the successor company or its parent.

                 (f)      Should a Change in Control occur while an Optionee
remains in Continuous Status as a Director, then each outstanding Option held
by such Optionee shall become fully exercisable, immediately prior to the
effective date of such Change in Control, for all of the shares at the time
subject to such Option and may be exercised with respect to any or all of such
shares represented by the Option.  The Option shall remain so exercisable until
the expiration or sooner termination of the Option term.

         11.     Nontransferability of Options.

                 Options hereunder shall be transferable to the extent 
permitted under the Option Agreement.

         12.     Adjustment Upon Changes in Capitalization.

                 In the event that the number of outstanding shares of Stock of
the Company is changed through merger, consolidation, reorganization,
recapitalization, reincorporation, stock split, stock dividend (in excess of
two percent) or other change in the capital structure of the Company without
consideration, the number of shares of Stock available under the Plan, the
number of shares of Stock deliverable in connection with any Option and the
exercise price per share of such Option shall be proportionately adjusted;
provided however, that no certificate or scrip representing fractional shares
shall be issued and any resulting fractions of a share shall be ignored.

         13.     Amendment and Termination of the Plan.

                 (a)      The Board may amend the Plan from time to time in
such respects as the Board may deem advisable; provided, however, that to the
extent necessary to comply with any other applicable law or regulation, the
Company shall obtain approval by the Company's





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stockholders to amend the Plan to the extent and in the manner required by such
law or regulation.  Notwithstanding the foregoing, the provisions set forth in
Sections 5 and 6 of the Plan shall not be amended periodically and in no event
more than once every six (6) months, other than to comport with changes in the
Code, the Employee Retirement Income Security Act of 1974, as amended, or any
applicable rules and regulations thereunder.

                 (b)      The Board, without further approval of the
stockholders, may at any time terminate or suspend the Plan.  Except as
otherwise provided herein, any such termination or suspension of the Plan shall
not affect Options already granted hereunder, and such Options shall remain in
full force and effect as if the Plan had not been terminated or suspended.

                 (c)      Except as otherwise provided herein, rights and
obligations under any outstanding Option shall not be altered or impaired by
amendment, suspension or termination of the Plan, except with the consent of
the person to whom the Option was granted or transferred.

         14.     Conditions Upon Issuance of Stock.

                 (a)      Stock shall not be issued pursuant to the exercise of
an Option unless the exercise of such Option and the issuance and delivery of
such Stock pursuant thereto shall comply with all relevant provisions of law,
including, without limitation, the Securities Act, the Exchange Act, the rules
and regulations promulgated thereunder, state securities laws, and the
requirements of any stock exchange or national market system upon which the
Stock may then be listed, and shall be further subject to the approval of
counsel for the Company with respect to such compliance.

                 (b)      Inability of the Company to obtain authority from any
regulatory body having jurisdictional authority deemed by the Company's counsel
to be necessary for the lawful issuance and sale of any Stock hereunder shall
relieve the Company of any liability for failure to issue or sell such Stock.

         15.     Reservation of Stock.

                 The Company, during the term of the Plan, will at all times
reserve and keep available such number of shares of Stock as shall be
sufficient to satisfy the requirements of the Plan.





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