PROTOCOL SYSTEMS, INC.

          1993 STOCK OPTION PLAN FOR NONEMPLOYEE DIRECTORS


1.     PURPOSE

The purpose of Protocol Systems, Inc. 1993 Stock Option Plan for Nonemployee
Directors (the "Plan") is to promote the interests of Protocol Systems, Inc.
(the "Company") and its stockholders by strengthening the Company's ability to
attract and retain the services of experienced and knowledgeable nonemployee
directors and by encouraging such directors to acquire or increase their
proprietary interest in the Company.

2.     SHARES SUBJECT TO THE PLAN

Subject to adjustment as provided in Article 7, the total number of shares of
common stock (the "Common Stock") of the Company for which options may be
granted under the Plan in fiscal year 1993 shall be 42,000, and the total
number of shares of Common Stock for which options may be granted under the
Plan in each fiscal year thereafter during any part of which the Plan is
effective (the "Shares") shall be 60,000 shares of Common Stock.   The Shares
shall be shares currently authorized but unissued.  If any option granted
under the Plan expires or terminates for any reason without having been
exercised in full, the Shares subject to, but not delivered under, such option
may become available for the grant of other options under the Plan.  No shares
delivered to the Company in full or partial payment of an option price payable
pursuant to Paragraph 6.3 shall become available for the grant of other
options under the Plan.

3.     ADMINISTRATION OF THE PLAN

The Plan shall be administered by the Compensation Committee of the Company's
Board of Directors (the "Committee").  Subject to the terms of the Plan, the
Committee shall have the power to construe the provisions of the Plan, to
determine all questions arising thereunder, and to adopt and amend such rules
and regulations for administering the Plan as the Committee deems desirable.

4.     PARTICIPATION IN THE PLAN

Each member of the Company's Board of Directors (a "Director") who is not
otherwise an employee of the Company or any subsidiary of the Company (an
"Eligible Director") shall be eligible to participate in the Plan.

5.     NONSTATUTORY STOCK OPTIONS

All options granted under the Plan shall be nonstatutory options not intended
to qualify under Section 422 of the Internal Revenue Code of 1986, as amended.

6.     OPTION TERMS

Each option granted to an Eligible Director under the Plan and the issuance of
Shares thereunder shall be subject to the following terms:

6.1    Option Agreements

       Each option granted under the Plan shall be evidenced by an option
agreement (an "Agreement") duly executed on behalf of the Company and by the
Eligible Director to whom such option is granted and dated as of the
applicable date of grant.  Each Agreement shall be signed on behalf of the
Company by an officer or officers delegated such authority by the Committee
using either manual or facsimile signature.  Each Agreement shall comply with
and be subject to the terms and conditions of the Plan.  Any Agreement may
contain such other terms, provisions and conditions not inconsistent with the
Plan as may be determined by the Committee.

6.2    Option Grant Size and Grant Dates

6.2.1  Initial Grants.  An option to purchase 10,000 Shares (as adjusted
pursuant to Article 7) shall be granted to each Eligible Director immediately
following the Annual Meeting at which such Director is first elected or
immediately following the first Annual Meeting after such Eligible Director is
first elected or appointed by the Board of Directors (the "Board") to be a
Director, whichever is applicable (each an "Initial Grant"); provided, that if
an Eligible Director who previously received an Initial Grant terminates
service as a Director and is subsequently elected or appointed to the Board,
such Director shall not be eligible to receive a second Initial Grant, but
shall be eligible to receive only Annual Grants as provided in Section 6.2.2,
beginning with the Annual Meeting held during the fiscal year immediately
following the year in which such Director was re-elected or appointed;
provided, further that any Eligible Director who, as a result of such
Director's election or appointment by the Board, served on the Board before
the Annual Meeting at which such Director is first elected by shareholders
shall receive at the time of such Director's Initial Grant an option to
purchase the number of Shares (as adjusted pursuant to Article 7) equal to the
product of 250 multiplied by the number of months (or portions thereof) that
such Director served on the Board before his election by shareholders (each an
"Additional Grant").

6.2.2  Annual Grants.  An option to purchase 5,000 Shares (as adjusted
pursuant to Article 7) shall be granted automatically each year, immediately
following the Annual Meeting, to each Director who is an Eligible Director at
such time and who has received an Initial Grant, such grants to begin with the
Annual Meeting held during the fiscal year immediately following the year in
which the Eligible Director receives an Initial Grant; provided, that with
respect to each Director who is an Eligible Director immediately following the
Annual Meeting at which the Plan is approved by the stockholders of the
Company, such grants shall begin with the Annual Meeting at which the Plan is
approved by the stockholders of the Company (each, an "Annual Grant").

6.3    Option Exercise Price

       The option exercise price per share for an Initial, Additional or
Annual Grant shall be the Fair Market Value (as hereinafter defined) of the
Common Stock on the date of grant.  For purposes of the Plan, "Fair Market
Value" equals the closing price for the Common Stock as reported in The Wall
Street Journal for NASDAQ Stock Market transactions.

6.4    Vesting; Exercisability

       Subject to Section 6.7, Initial Grants shall vest over a three-year
period.  Annual Grants and Additional Grants shall vest and become
nonforfeitable, and shall become exercisable on the day the option is granted.

6.5    Time and Manner of Option Exercise

       Any option is exercisable in whole or in part at any time or from time
to time during the option period by giving written notice, signed by the
person exercising the option, to the Company stating the number of Shares with
respect to which the option is being exercised, accompanied by payment in full
of the option exercise price for the number of Shares to be purchased.  The
date both such notice and payment are received by the office of the Secretary
of the Company shall be the date of exercise of the stock option as to such
number of Shares, subject to Section 6.10.  No option may at any time be
exercised with respect to a fractional share.

6.6    Payment of Exercise Price

       Payment of the option exercise price may be in cash or by promissory
note or bank-certified, cashier's, or personal check or, to the extent
permitted by the Committee, payment may be in whole or part by:

a.     transfer to the Company of shares of the Common Stock having a Fair
Market Value equal to the option exercise price at the time of such exercise,
or

b.     delivery of instructions to the Company to withhold from the option
shares that would otherwise be issued on the exercise that number of option
shares having a Fair Market Value equal to the option exercise price at the
time of such exercise.

       If the Fair Market Value of the number of whole shares transferred or
the number of whole option shares surrendered is less than the total exercise
price of the option, the shortfall must be made up in cash.

6.7    Term of Options

       Each option shall expire ten years from its date of grant, but shall be
subject to earlier termination as follows:

a.     In the event of the termination of an optionee's service as a Director,
other than by reason of retirement, total and permanent disability, or death,
the then-outstanding options of such optionee shall automatically expire on
the effective date of such termination.  For purposes of the Plan, the term
"by reason of retirement" means:  (i) mandatory retirement pursuant to Board
policy; or (ii) termination of service voluntarily at any time after age 65.

b.     In the event of the termination of an optionee's service as a Director
by reason of retirement or total and permanent disability, the then-
outstanding options of such optionee shall expire one year after the date of
such termination or on the stated grant expiration date, whichever is earlier.

c.     In the event of the death of an optionee while the optionee is a
Director, the then-outstanding options of such optionee shall expire one year
after the date of death of such optionee or on the stated grant expiration
date, whichever is earlier.

Exercise of a deceased optionee's options that are still exercisable shall be
by the estate of such optionee or by a person or persons whom the optionee has
designated in writing filed with the Company, or, if no such designation has
been made, by the person or persons to whom the optionee's rights have passed
by will or the laws of descent and distribution.

6.8    Transferability

       The right of any optionee to exercise an option granted under the Plan
shall, during the lifetime of such optionee, be exercisable only by such
optionee or pursuant to a qualified domestic relations order as defined by the
Internal Revenue Code of 1986, as amended, or Title I of the Employee
Retirement Income Security Act, or the rules thereunder (a "QDRO") and shall
not be assignable or transferable by such optionee other than by will or the
laws of descent and distribution or a QDRO.

6.9    Limitation of Rights

6.9.1  Limitation as to Shares.  Neither the recipient of an option under the
Plan nor an optionee's successor or successors in interest shall have any
rights as a stockholder of the Company with respect to any Shares subject to
an option granted to such person until the date of issuance of a stock
certificate for such Shares.

6.9.2  Limitation as to Directorship.  Neither the Plan, nor the granting of
an option, nor any other action taken pursuant to the Plan shall constitute or
be evidence of any agreement or understanding, express or implied, that an
Eligible Director has a right to continue as a Director for any period of time
or at any particular rate of compensation.

6.10   Regulatory Approval and Compliance

       Shares shall not be issued with respect to an option unless the
exercise of such option and the issuance and delivery of such shares shall
comply with all relevant provision of law, including, without limitation, any
applicable state securities laws, the Securities Act of 1933, as amended, the
Securities Exchange Act of 1934, as amended, the rules and regulations
thereunder and the requirements of any stock exchange upon which such shares
may then be listed, and such issuance shall be further subject to the approval
of counsel for the Company with respect to such compliance, including the
availability of an exemption from registration for the issuance and sale of
such shares.  The inability of the Company to obtain from any regulatory body
the authority deemed by the Company to be necessary for the lawful issuance
and sale of any shares under this Plan, or the unavailability of an exemption
from registration for the issuance and sale of any shares under this Plan,
shall relieve the Company of any liability with respect to the non-issuance or
sale of such shares.

       As a condition to the exercise of an option, the Company may require
the optionee to represent and warrant in writing at the time of such exercise
that the shares are being purchased only for investment and without any then-
present intention to sell or distribute such shares.  At the option of the
Company, a stop-transfer order against such shares may be placed on the stock
books and records of the Company, and a legend indicating that the stock may
not be pledged, sold or otherwise transferred unless an opinion of counsel is
provided stating that such transfer is not in violation of any applicable law
or regulation, may be stamped on the certificates representing such shares in
order to assure an exemption from registration.  The Company also may require
such other documentation as may from time to time be necessary to comply with
federal and state securities laws.  THE COMPANY HAS NO OBLIGATION TO UNDERTAKE
REGISTRATION OF OPTIONS OR THE SHARES OF STOCK ISSUABLE UPON THE EXERCISE OF
OPTIONS.

       As a condition to the exercise of any option granted under this Plan,
the optionee shall make such arrangements as the Company may require for the
satisfaction of any federal, state or local withholding tax obligations that
may arise in connection with such exercise.

       The issuance, transfer or delivery of certificates of Common Stock
pursuant to the exercise of options may be delayed, at the discretion of the
Board, until the Company is satisfied that the applicable requirements of the
federal and state securities laws and the withholding provisions of the Code
have been met.

7.     CAPITAL ADJUSTMENTS

The aggregate number and class of Shares subject to and authorized by the
Plan, the number and class of Shares with respect to which an option may be
granted to an Eligible Director under the Plan as provided in Article 6, the
number and class of Shares subject to each outstanding option, and the
exercise price per share specified in each such option shall be
proportionately adjusted for any increase or decrease in the number of issued
shares of Common Stock resulting from a split-up or consolidation of shares or
any like capital adjustment or the payment of any stock dividend, or other
increase or decrease in the number of such shares effected without receipt of
consideration by the Company.

In the event of the proposed dissolution or liquidation of the Company, each
outstanding option will terminate immediately prior to the consummation of
such proposed action, unless otherwise provided by the Board.  The Board may,
in the exercise of its sole discretion in such instances, declare that
outstanding options shall terminate as of a date fixed by the Board and give
each optionee the right to exercise his option in whole or in part.  In the
event of a proposed sale of all or substantially all of the assets of the
Company, or the merger of the Company with or into another corporation, each
outstanding option shall be assumed or an equivalent option shall be
substituted by such successor corporation or a parent or subsidiary of such
successor corporation, unless the Board determines, in the exercise of its
sole discretion, not to require such assumption or substitution.

8.     EXPENSES OF THE PLAN

All costs and expenses of the adoption and administration of the Plan shall be
borne by the Company, and none of such expenses shall be charged to any
optionee.

9.     EFFECTIVE DATE AND DURATION OF THE PLAN

The Plan shall be effective immediately following approval by the Company's
stockholders.  The Plan shall continue in effect until it is terminated by
action of the Board or the Company's stockholders, but such termination shall
not affect the terms of any then-outstanding options.

10.    TERMINATION AND AMENDMENT OF THE PLAN

The Board may amend, terminate or suspend the Plan at any time, in its sole
and absolute discretion; provided, however, that if required to qualify the
Plan under Rule 16b-3 promulgated under Section 16 of the Securities Exchange
Act of 1934, as amended, no amendment shall be made more than once every six
months that would change the amount, price or timing of the Initial and Annual
Grants, other than to comport with changes in the Internal Revenue Code of
1986, as amended, or the rules and regulations promulgated thereunder; and
provided, further, that if required to qualify the Plan under Rule 16b-3, no
amendment shall be made without the approval of the Company's stockholders
that would:

a.     materially increase the number of Shares that may be issued under the
Plan.

b.     materially modify the requirements as to eligibility for participation
in the Plan, or

c.     otherwise materially increase the benefits accruing to participants
under the Plan.


ADOPTED by the Board of Directors on January 25, 1993.

RATIFIED by the stockholders on May 17, 1993.

AMENDED by the Board of Directors on March 7, 1996.

RATIFIED by the stockholders on July 10, 1996.

AMENDED by the Board of Directors on February 10, 1999

      PROTOCOL SYSTEMS, INC.


      By:  Craig M. Swanson, Secretary