<PAGE>   1
                                                                   EXHIBIT 10.28

                              EMPLOYMENT AGREEMENT


      This Employment Agreement ("Agreement") is entered into this 11th day of
May, 1999, by and between Sean Seerey (the "Executive") and APACHE MEDICAL
SYSTEMS, INC., a Delaware corporation (the "Company").

      WHEREAS, the Company considers Executive to be a valued employee with
significant expertise; and

      WHEREAS, the Company desires to extend certain stock options and establish
severance pay provisions applicable to Executive in consideration for
Executive's promotion and agreement to the terms and conditions set forth
herein; and

      WHEREAS, Executive desires to continue to be an employee of the Company on
the terms and conditions set forth herein;

      NOW, THEREFORE, in consideration of the promises and mutual agreements
made herein, and intending to be legally bound hereby, the Company and Executive
agree as follows:

      1. Employment Term. The Company will employ Executive for a term
commencing on May 16, 1999 and ending on May 15, 2000 ("Employment Term"). The
Employment Term shall be automatically extended for additional one-year terms,
unless Executive or the Company provides ninety (90) days' advance notice to the
other of its intention not to renew.

      2. Employment Duties. Executive will serve as Vice President, Sales of the
Company and shall perform such duties as may be assigned from time to time by
the Company. Executive shall, on a full-time basis, serve the Company
faithfully, diligently and competently and to the best of his ability and in
accordance with this Agreement and applicable law.

      3. Compensation. In exchange for Executive's services under this
Agreement, the Company shall pay Executive as salary $125,000 per annum. Salary
shall be payable in twenty-four (24) equal bi-monthly installments and otherwise
in accordance with the Company's ordinary pay practices. Executive shall also be
eligible for a Performance Bonus, the terms of which are described on the
"Performance Plan" attached to this Agreement as Exhibit 3. Any payments made to
Executive pursuant to this Section 3 shall be treated as wages for withholding
and employment tax purposes.

      4.    Benefits.

            (a) Executive shall be entitled during the Employment Term to
participate in such employee benefit plans and programs as are offered from time
to time to employees of the Company to the extent that his position, tenure,
compensation, age,


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<PAGE>   2

health and other qualifications make him eligible to participate. The Company
does not promise the adoption or continuance of any particular plan or program
during the Employment Term, and Executive's (and his dependents') participation
in any such plan or program shall be subject to the provisions, rules,
regulations and laws applicable thereto.

            (b) Executive shall be entitled to paid vacation in accordance with
the Company's vacation policy applicable to Executive Staff.

      5. Stock Options. Executive is eligible for a new stock option grant in
the amount of 20,000 shares pursuant to the Incentive Stock Option Agreement,
attached as Exhibit 1 to this Agreement, and the Nonstatutory Stock Option
Agreement, attached as Exhibit 2 to this Agreement.

      6. Reimbursement of Expenses. Executive shall be entitled to reimbursement
for ordinary, necessary and reasonable out-of-pocket business expenses which he
incurs in connection with performing his duties hereunder. The reimbursement of
all such expenses shall be made upon presentation of satisfactory evidence of
the amounts and nature of such expenses and shall be subject to the Company's
policies regarding business expenses and to the reasonable approval of the
Company's Chief Executive Officer.

      7. Non-Competition, Non-Solicitation. Executive agrees that throughout the
duration of his employment with the Company and for the duration of 12 months
thereafter, regardless of the reason for his termination, he shall not, either
directly or indirectly: (a) solicit or attempt to secure the Company's existing
clients or customers at the time of Executive's termination; and (b) the
Executive shall not hire, contract with or solicit for employment any employee
of the Company. For general purposes of this Agreement, "Severance Period" shall
be defined as the period of time for which Executive receives a continuation of
his salary and Company-provided health insurance benefits or, in the case of
Executive's resignation that is not occasioned by a Material Change in
Responsibility or by a Change in Control as Defined by Sections 8(c) and 9, six
months.

      8. Termination.

            (a) For Cause. Notwithstanding any other provision of this
Agreement, Executive's employment with the Company and this Agreement may be
terminated by the Company at any time and without notice for cause. For purposes
of this Agreement, "cause" shall mean the Executive's (i) commission of an
action against or in derogation of the interests of the Corporation which
constitutes an act of fraud, dishonesty or moral turpitude or which, if proven
in a court of law, would constitute a violation of a criminal code or similar
law; (ii) material breach of any material duty or obligation imposed upon the
Executive by the Corporation; (iii) divulging the Corporation's confidential
information; or (iv) performance of any similar action that the Compensation
Committee of the Board of Directors, in its sole discretion, may deem to


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be sufficiently injurious to the interests of the Corporation so as to
constitute substantial cause for termination. In the event of termination under
this Section 8(a), the Company's obligations under this Agreement shall cease
and, except as required by applicable law, Executive shall forfeit all rights to
receive any other compensation or benefits under this Agreement, except that he
shall be entitled to his Salary for services performed through the date of such
termination and any vested stock options. Termination of Executive pursuant to
this Section 8(a) shall not relieve him of his obligations under Section 7.

            (b) Without Cause. Notwithstanding any other provision of this
Agreement, Executive's employment with the Company and this Agreement may be
terminated by the Company for any reason or for no reason, provided that
Executive shall be entitled to all vested stock options, which may be exercised
during the Severance Period as defined by this Agreement, and continuation of
his salary and Company-provided health insurance benefits for six (6) months. If
the Company notifies Executive of its intention not to renew this Agreement as
provided in Section 1, Executive shall be deemed to be terminated by the Company
as of the last day of the Employment Term and Executive shall be entitled to
salary and benefits as provided in this Section 8(b). Termination of Executive
pursuant to this Section 8(b) shall not relieve him of his obligations under
Section 7.

            (c) Material Change in Responsibility. During the term of this
Agreement, Executive may terminate his employment with the Company and this
Agreement upon ninety (90) days' advance written notice in the event of any
"material change in responsibility." For purposes of this Agreement, a "material
change in responsibility" shall mean a material change in his duties or
authority. Should Executive provide written notice to the Company pursuant to
this Section, the Company may cure the "material change in responsibility"
during the 90-day notice period which cure may not be unreasonably rejected by
Executive. Notice of termination under this Section 8(c) shall be valid only if
received by the Company within 120 days after the "material change in
responsibility" occurred. In the event of termination under this Section 8(c),
Executive shall be entitled to all previously vested stock options, which may be
exercised within 60 days of termination, and continuation of his salary and
Company-provided health insurance benefits for six (6) months. Termination of
Executive pursuant to this Section 8(c) shall not relieve Executive of his
obligations under Section 7.

      9. Termination Due to Change in Control.

            (a) Defined. For purposes of this Agreement, a "change in control"
is: (1) the purchase or other acquisition by any person, entity or group of
persons, within the meaning of Section 13(d) or 14(d) of the Securities Exchange
Act of 1934 or any comparable successor provisions, of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under such Act) of thirty percent
(30%) or more of either the outstanding shares of common stock or the combined
voting power of the Company's then outstanding voting securities entitled to
vote generally; (2) the approval by the stockholders of the Company of a
reorganization, merger or consolidation, in each case, with respect to which
persons who were stockholders of the Company immediately prior


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<PAGE>   4

to such reorganization, merger or consolidation do not, immediately thereafter,
own more than thirty percent (30%) of the combined voting power entitled to vote
generally in the election of directors of the reorganized, merged or
consolidated Company's then outstanding securities; (3) a liquidation or
dissolution of the company; or (4) the sale of all or substantially all of the
Company's assets.

            (b) In the event that a change in control results in either an
involuntary termination of Executive through elimination of his position or a
voluntary termination as a result of a material change in responsibility
pursuant to Section 8(c) or transfer of Executive to a location outside of a
50-mile radius of his permanent residence, Executive shall be entitled to all
vested stock options, which may be exercised within sixty (60) days of
termination, continuation of his salary, and Company-provided health insurance
benefits for six (6) months.

            (c) A "change in control" will not effect or diminish Executive's
rights and obligations under any provision of this Agreement, including, without
limitation, Sections 8, 9, 10, 11, and 12. Termination pursuant to this Section
9 shall not relieve Executive of his obligations under Section 7.

      10. Disability. If, prior to expiration or termination of the Employment
Term, Executive becomes unable to perform his duties by reason of disability,
the Company shall have the right to terminate this Agreement by giving written
notice to Executive to that effect. After giving such notice, the Employment
Term shall terminate with the payment of three months salary to Executive. As
used in this Section, "disability" means the inability of the Executive to
engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in
death or has lasted or can be expected to last for a continuous period of not
less than six (6) months.

      11. Notices.

            (a) All notices hereunder shall be in writing and shall be deemed
given when delivered in person or when telecopied with hard copy to follow, or
three business days after being deposited in the United States mail, postage
prepaid, registered or certified mail, or two business days after delivery to a
nationally recognized express courier, expenses prepaid, addressed as follows:

            If to Executive:

            ----------------
            ----------------
            ----------------



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            If to Company:

            Peter Gladkin
            President & Chief Executive Officer
            APACHE Medical Systems, Inc.
            1650 Tysons Blvd.  #300
            McLean, VA 22102-3915
            Telecopy: (703) 749-7963

and/or at such other addresses as may be designated by notice given in
accordance with the provisions hereof.

      12. Confidentiality. In the course of performing duties under this
Agreement, Executive may have access to "Confidential Information," including
but not limited to contracts, contract proposals, proprietary information, trade
secrets, inventions, procedures, processes, financial information, business
records, business plans, and other information of a confidential and proprietary
nature owned by the Company. Executive acknowledges that protection of this
Confidential Information is of critical importance to the Company. To ensure
that such Confidential Information is not disclosed or divulged to other
persons, Executive agrees as follows:

            (a) that said Confidential Information is the property of the
Company and is to be held by Executive in trust and solely for the benefit of
the Company;

            (b) that Executive shall not disclose or otherwise make available
such confidential Information to any person or entity without the prior written
consent of the Company, except as necessary for the performance of Executive's
services under this Agreement;

            (c) that Executive shall not in any way utilize such Confidential
Information for the gain or advantage of Executive or others or to the detriment
of the Company; and

            (d) that upon termination of this Agreement, Executive shall
promptly return any and all such Confidential Information to the Company and
shall continue to abide by the confidentiality provisions of this Section Twelve
(12).

      13. Assignment of Agreement. This Agreement shall be binding upon and
inure to the benefit of both parties and their respective heirs, successors and
permitted assigns. No party shall assign this Agreement or its rights hereunder
without the prior written consent of the other party; provided, however, that
the Company shall assign this Agreement to any person or entity acquiring all or
substantially all of the business of the Company (whether by sale of stock, sale
of assets, merger, consolidation or otherwise).



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<PAGE>   6

      14. Entire Agreement/Modification of Agreement. This Agreement contains
all of the agreements between the parties with respect to the subject matter
hereof, and this Agreement supersedes all other agreements, oral or written,
between the parties with respect to the subject matter hereof. No change or
modification of this Agreement shall be valid unless the same shall be in
writing and signed by both parties. No waiver of any provisions of this
Agreement shall be valid unless in writing and signed by the waiving party. No
waiver of any of the provisions of this Agreement shall be deemed, or shall
constitute, a waiver of any other provision, whether or not similar, nor shall
any waiver constitute a continuing waiver, unless so provided in the waiver.

      15. Severability. If any provisions of this Agreement or portions thereof
shall, for any reason, be considered invalid or unenforceable by any court of
competent jurisdiction, such provisions or portions thereof shall be ineffective
only to the extent of such invalidity or unenforceability, and the remaining
provisions of this Agreement or portions thereof shall nevertheless be valid,
enforceable and of full force and effect. The Company's rights under this
Agreement shall not be exclusive and shall be in addition to all other rights
and remedies available at law or in equity.

      16. Headings. The section headings or titles herein are for convenience of
reference only, shall not be deemed a part of this Agreement, and shall not in
any way affect the meaning or interpretation of this Agreement.

      17. Resolution of Disputes. In the event of a dispute between Executive
and the Company that is not resolved after a good faith effort by the parties,
such dispute will be submitted to arbitration. The arbitration will be conducted
in accordance with the rules of the American Arbitration Association in effect
at the time of the demand for arbitration and will be held in Washington, D.C.
The arbitrator will be selected from an appropriate list of qualified
arbitrators, permit reasonable discovery, and make written findings of fact and
conclusions of law reflecting the appropriate substantive law. Either party must
deliver a request for arbitration writing to the other party within sixty (60)
days of the date the aggrieved party first has knowledge of the event giving
rise to the claim or sixty (60) days following the 120-day period in the case of
a "Material Change in Responsibility" as defined in Section 7, otherwise the
claim will be considered void and waived. The decision of the arbitrator will be
exclusive, final and binding on Executive and the Company, and Executive is
hereby waiving any right he may have to have any dispute decided in court and by
a jury. The losing party will bear the cost of the arbitrator.

      18. Applicable Law. This Agreement shall be governed and construed
according to the laws of the Commonwealth of Virginia. Executive expressly
submits and consents in advance to the jurisdiction of the federal and state
courts of the Commonwealth of Virginia for all purposes in connection with any
action or proceeding arising out of or relating to this Agreement for all
disputes not resolved pursuant to Section 17.


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<PAGE>   7



      IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective as of the day and year first above written.

                                 /s/ Sean Seerey
                              ------------------------------
                              Sean Seerey



                              APACHE MEDICAL SYSTEMS, INC.

                              By:     /s/ Peter Gladkin
                                    ---------------------------
                                    Name: Peter Gladkin
                                    Title: President & Chief Executive Officer



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<PAGE>   8
                          APACHE MEDICAL SYSTEMS, INC.
                        INCENTIVE STOCK OPTION AGREEMENT

          This Incentive Stock Option Agreement (this "Agreement"), dated as of
May 11, 1999 (the "Grant Date"), is by and between APACHE Medical Systems, Inc.,
a Delaware corporation (the "Corporation"), and Sean Seerey (the "Optionee"), a
key employee of the Corporation.

          1. Grant of Option. Subject to the provisions of the APACHE Medical
Systems, Inc. Employee Stock Option Plan (the "Plan") and this Agreement, the
Corporation hereby grants to the Optionee the right and option (the "Option") to
purchase from the Corporation an aggregate of 20,000 shares of the Corporation's
common stock, par value $0.01 per share (the "Shares"), at an exercise price of
$1.2300 per Share.

          2. Vesting and Expiration. The option rights of the Optionee will be
exercisable until May 13, 2009, provided that they have vested and, except as
otherwise expressly provided in this Agreement, the Optionee is employed by the
Corporation. The Option shall vest as provided on Exhibit A hereto.

          3. Exercise Following Termination of Employment. If the Optionee
ceases to be an employee of the Corporation, the outstanding portion of the
Option shall be exercisable only in accordance with the following provisions:

             (a) If the Optionee's employment with the Corporation is terminated
for "cause" (as defined below), the outstanding portion of the Option, whether
or not vested, shall terminate at the time notice of termination is effective.
As used herein, "cause" means the Optionee's (i) commission of an action against
or in derogation of the interests of the Corporation which constitutes an act of
fraud, dishonesty or moral turpitude or which, if proven in a court of law,
would constitute a violation of a criminal code or similar law; (ii) material
breach of any lawful material duty or obligation imposed upon the Optionee by
the Corporation; or (iii) divulging the Corporation's confidential information.

             (b) If the Optionee's employment with the Corporation is terminated
for any reason other than for cause (as defined above), death or disability (as
defined below), the outstanding portion of the Option (to the extent vested
prior to such termination) shall remain exercisable until the first to occur of
(i) the expiration date referred to in Section 2, and (ii) the expiration of
three months from the effective date of termination, provided that if the
Optionee ceases to be employed by the Corporation by reason of death or
disability, the period referred to in this clause (ii) shall be one year
following the date the Optionee ceases to be an employee of the Corporation. If
the Optionee dies during such three-month period referred to in clause (ii), his
or her estate may exercise the Option (to the extent such Option was vested and
exercisable prior to death), but not later than the earlier of one year after
the date of death or the expiration of the term of the Option. As used herein,
"disability" means the inability of the Optionee to engage in any substantial
gainful activity by reason of any medically determinable physical or mental
impairment which can be expected to result in death or has lasted or can be
expected to last for a continuous period of not less than 12 months.




<PAGE>   9

          4. Acceleration Following Termination Other Than for Cause. In the
event Optionee's employment is terminated other than for cause, any Shares as to
which the Option has not vested on the effective date of termination that would
have vested during the three (3) months after the effective date of Optionee's
termination will be accelerated to, and vest on, the effective date of
Optionee's termination. Any Shares as to which the Option has not vested on the
effective date of termination will be cancelled.

          5. Limitation on Exercisability. Notwithstanding any other provision
hereof, including, without limitation, Sections 4, 9 and 10, the Shares that may
be purchased for the first time during any calendar year pursuant to the Option,
together with any other options issued to the Optionee by the Corporation
intended to be incentive stock options (as defined in Section 422 of the
Internal Revenue Code of 1986, as amended from time to time, or subsequent
comparable statute (the "Code")), shall not have a Fair Market Value (as defined
in Section 9 hereof and determined as of the respective Grant Dates of such
options) in excess of $100,000.

          6. Exercise. The Option may be exercised by delivering to the
Corporation at its principal offices a written notice, signed by a person
entitled to exercise the Option, of the election to exercise the Option and
stating the number of Shares to be purchased. Such notice shall be accompanied
by the payment of the full exercise price of the Shares to be purchased. Upon
payment in accordance with the Plan and within the time period specified by the
Corporation of the amount, if any, required to be withheld for Federal, state
and local tax purposes on account of the exercise of the Option, the Option
shall be deemed exercised as of the date the Corporation received such notice.
The Corporation may withhold, or allow the Optionee to remit to the Corporation,
any Federal, state or local taxes required by law to be withheld with respect to
any event giving rise to income tax liability with respect to the Option. In
order to satisfy all or any portion of such income tax liability, the Optionee
may elect to surrender Shares previously acquired by the Optionee or to have the
Corporation withhold Shares that would otherwise have been issued to the
Optionee pursuant to the exercise of the Option, the number of such withheld or
surrendered Shares to be sufficient to satisfy all or a portion of the income
tax liability that arises upon the event giving rise to income tax liability
with respect to the Option. Payment of the full exercise price shall be in the
form of cash, shares of capital stock of the Corporation having a Fair Market
Value (as defined in Section 9 hereof) on the date of exercise equal to the full
exercise price, or by any combination of cash and shares of such capital stock.
Upon the proper exercise of the Option, subject to the other provisions of this
Agreement, the Corporation shall issue in the name of the person exercising the
Option, and deliver to such person, a certificate or certificates for the Shares
purchased.

          7. Nontransferability of Option. The Option shall not be transferable
by the Optionee except by will or the laws of descent and distribution. Without
limiting the generality of the foregoing, the Option shall not be sold,
transferred except as aforesaid, assigned, pledged or otherwise encumbered or
disposed of, shall not be assignable by operation of law, and shall not be
subject to execution, attachment or similar process. Any attempted sale,
transfer, pledge, assignment or other encumbrance or disposition of the Option
contrary to the provisions hereof, or the levy of any execution, attachment or
similar process upon the Option, shall be null and void and without effect.
During the lifetime of the Optionee, the Option may be exercised only




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<PAGE>   10

by the Optionee or the Optionee's agent, attorney-in-fact or guardian. Following
the death of the Optionee, the Option may be exercised by the Optionee's
beneficiary or estate to the extent permitted by Section 3.

          8. Notice of Transfer of Shares. The Optionee may not transfer or
otherwise dispose of any Shares purchased upon the exercise of the Option before
the expiration of (a) two years from the Grant Date or (b) one year after the
exercise of the Option with respect to such Shares, whichever occurs later,
without first giving written notice to the Secretary of the Corporation.

          9. Adjustments Upon Reorganization or Changes in Capitalization. In
the event of a stock split, stock dividend, recapitalization, reclassification
or combination of shares, merger, sale of assets or similar event, the
Compensation Committee of the Board of Directors shall adjust equitably (a) the
number and class of Shares or other securities that are reserved for issuance
under the Option, (b) the number and class of Shares or other securities that
are subject to the Option, and (c) the appropriate Fair Market Value and other
price determinations applicable to the Option. The Compensation Committee of the
Board of Directors shall make all determinations under this Section 9, and all
such determinations shall be conclusive and binding. As used herein, "Fair
Market Value" means the amount determined by the Compensation Committee of the
Board of Directors from time to time, using such good faith valuation methods as
it deems appropriate, except that as long as the Shares are traded on NASDAQ or
a recognized stock exchange, it shall mean the average of the highest and lowest
quoted selling prices for the Shares on the relevant date, or, if there were no
sales on such date, the weighted average of the means between the highest and
the lowest quoted selling prices on the nearest day before and the nearest day
after the relevant date, as prescribed by Treasury Regulation Section
20.2031-2(b)(2), as reported in The Wall Street Journal or a similar publication
selected by the Compensation Committee of the Board of Directors.

          10. Acceleration of Exercisability. Notwithstanding the provisions of
Section 2, the Option shall immediately vest, and until the expiration date
specified in Section 2 shall remain, exercisable as to all of the Shares
forthwith upon the occurrence of any Change in Control of the Corporation. As
used herein, "Change in Control" means the purchase or other acquisition by any
person, entity or group of persons, within the meaning of Sections 13(d) and
14(d) of the Securities Exchange Act of 1934 (the "Exchange Act") or any
comparable successor provisions, of beneficial ownership (within the meaning of
Rule 13d-3 promulgated under the Exchange Act) of 30% or more of either the
outstanding Shares or the combined voting power of the Corporation's then
outstanding voting securities entitled to vote generally; the approval by the
stockholders of the Corporation of a reorganization, merger, or consolidation,
in each case, with respect to which persons who were stockholders of the
Corporation immediately prior to such reorganization, merger or consolidation do
not, immediately thereafter, own more than 30% of the combined voting power
entitled to vote generally in the election of directors of the reorganized,
merged or consolidated Corporation's then outstanding securities; a liquidation
or dissolution of the Corporation; or of the sale of all or substantially all of
the Corporation's assets.



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<PAGE>   11

          11.     Miscellaneous.

                  (a)      Notices. Any notice hereunder shall be in writing,
and delivered or sent by first-class U.S. mail, postage prepaid, addressed to:

                           (i)      if to the Corporation, at:

                                    1650 Tysons Boulevard, Suite 300
                                    McLean, Virginia  22102, and

                           (ii)     if to Optionee, at:

                                     ---------------------
                                     ---------------------

subject to the right of either party, by written notice hereunder, to designate
at any time hereafter some other address.

                  (b) Compliance with Law and Regulations. The Option and the
obligation of the Corporation to sell and deliver Shares hereunder shall be
subject to all applicable Federal and state laws, rules and regulations and to
such approvals by any government or regulatory agency as may be required.
Notwithstanding any other provision of this Agreement, the Option may not be
exercised if its exercise, or the receipt of Shares pursuant thereto, would be
contrary to applicable law.

                  (c) No Rights as Stockholder. The Optionee shall have no
rights as a stockholder with respect to any Shares subject to the Option prior
to the date of issuance to the Optionee of a certificate or certificates for
such Shares.

                  (d) No Employment Rights. Nothing in the Plan, this Agreement
or the grant of an Option shall confer upon the Optionee any rights to continued
employment with the Corporation or shall interfere with the right of the
Corporation to terminate the Optionee's employment with the Corporation.

                  (e) Section 83(b) Election. If the Optionee elects, in
accordance with Section 83(b) of the Code, to recognize ordinary income in the
year in which the Option is granted, the Optionee shall furnish to the
Corporation a copy of a completed and signed election form and shall pay (or
make arrangements satisfactory to the Corporation to pay) to the Corporation,
within sixty (60) days after the Grant Date, any Federal, state and local taxes
required to be withheld with respect to the Option.

                  (f) Withholding. The Corporation shall, to the extent
permitted by law, have the right to deduct from any payment of any kind
otherwise due to the Optionee any Federal, state and local taxes required by law
to be withheld or collected with respect to the Option.



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<PAGE>   12

                  (g) Reservation of Shares; Certain Costs. The Corporation
shall keep available sufficient authorized but unissued Shares needed to satisfy
the requirements of this Agreement. The Corporation shall pay any original issue
tax that may be due upon the issuance of Shares pursuant to the Option and all
other costs incurred by the Corporation in issuing such Shares.

                  (h) Employment by Affiliates. For the purpose of this
Agreement, employment by a parent or subsidiary of, or a successor to, the
Corporation shall be considered employment by the Corporation. "Parent" and
"subsidiary" as used herein shall have the meaning of "parent" and "subsidiary
corporation," respectively, as defined in Section 424 of the Code.

                  (i) Plan Governs. The Optionee hereby acknowledges receipt of
a copy of the Plan and agrees to be bound by its terms, all of which are
incorporated herein by reference. The Plan shall govern in the event of any
conflict between this Agreement and the Plan.

                  (j) Choice of Law. This Agreement shall be construed in
accordance with and be governed by the laws of the State of Delaware.

                  (k) Counterparts. This Agreement may be executed in two
counterparts each of which shall constitute one and the same instrument.



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<PAGE>   13

         IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the day and year first above written.

                            APACHE MEDICAL SYSTEMS, INC.

                                /s/Peter Gladkin

                            ------------------------
                            By:     Peter Gladkin
                            Title:  President and Chief Executive Officer

                                /s/ Sean Seerey

                            -------------------------
                            Sean Seerey, Optionee



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<PAGE>   14


                                    EXHIBIT A

May 11, 1999

Sean P. Seerey

Dear Sean:

Pursuant to the terms and conditions of the company's Employee Stock Option Plan
(the "Plan"), you have been granted an Incentive Stock Option to Purchase 20,000
shares (the "Option") of stock as outlined below.

<TABLE>
<S>                            <C>                       <C>
    Granted To:                Sean P. Seerey

    Grant Date:                May 13, 1999

    Options Granted:           20,000

    Option Price per Share:    $ 1.2300                  Total Cost to Exercise:   $ 24,688.0000

    Expiration Date:           May 13, 2009

    Vesting Schedule:          20% per year for 5 years
                               4,000 on 5/13/2000
                               4,000 on 5/13/2001
                               4,000 on 5/13/2002
                               4,000 on 5/13/2003
                               4,000 on 5/13/2004
</TABLE>

By my signature below, I hereby acknowledge receipt of this Option granted on
the date shown above, which has been issued to me under the terms and conditions
of the Plan. I further acknowledge receipt of the copy of the Plan and agree to
conform to all of the terms and conditions of the Option and the Plan.

Signature:  /s/ Sean P. Seerey                               Date:  May 11, 1999
          ------------------------------------------
           Sean P. Seerey

         Note:  If there are any discrepancies in the name or address shown
         above, please make the appropriate corrections on this form.



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