MEDIQ INCORPORATED

                             1997 STOCK OPTION PLAN







                                   DRAFTED BY
                           DRINKER BIDDLE & REATH LLP
                       PHILADELPHIA NATIONAL BANK BUILDING
                              1345 CHESTNUT STREET
                           PHILADELPHIA, PA 19107-3496










                                    JUNE 1997


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                                TABLE OF CONTENTS

                                                                      Page
                                                                      ----

         SECTION 1 - Purpose and Definitions...........................  1

         SECTION 2 - Administration....................................  3

         SECTION 3 - Eligibility.......................................  4

         SECTION 4 - Stock.............................................  4

         SECTION 5 - Granting of Options...............................  5

         SECTION 6 - Annual Limit......................................  5

         SECTION 7 - Terms and Conditions of Options...................  5

         SECTION 8 - Option Agreements - Other Provisions.............. 12

         SECTION 9 - Capital Adjustments............................... 12

         SECTION 10 - Change in Control................................ 13

         SECTION 11 - Amendment or Discontinuance of the Plan.......... 14

         SECTION 12 - Termination of Plan.............................. 15

         SECTION 13 - Shareholder Approval............................. 15

         SECTION 14 - Miscellaneous.................................... 16


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                               MEDIQ INCORPORATED

                             1997 STOCK OPTION PLAN


                       SECTION 1 - Purpose and Definitions

                  (a) Purpose. This MEDIQ INCORPORATED 1997 STOCK OPTION PLAN is
         intended to provide a means whereby MEDIQ Incorporated may, through the
         grant of Options to Key Employees and Non-Employee Directors, attract
         and retain such Key Employees and Non-Employee Directors and motivate
         such Key Employees and Non-Employee Directors to exercise their best
         efforts on behalf of the Company and of any Related Corporation.

                  (b) Definitions.

                      (1) Board. The term "Board" shall mean the Board of
                      Directors of the Company.

                      (2) Common Stock. The term "Common Stock" shall mean the
                      common stock of the Company, par value $1.00 per share.

                      (3) Code. The term "Code" shall mean the Internal Revenue
                      Code of 1986, as amended.

                      (4) Committee. The term "Committee" shall mean:

                                 (A) A committee which consists of not fewer
                      than two (2) directors of the Company who shall be
                      appointed by, and serve at the pleasure of, the Board
                      (taking into consideration the rules under Section 16(b)
                      of the Securities Exchange Act of 1934 and the
                      requirements of section 162(m) of the Code); or

                                 (B) In the event a committee has not been
                      established in accordance with (A) above, the entire
                      Board; provided, however, that a member of the Board shall
                      not participate in a vote approving the grant of an Option
                      to himself or herself to the extent provided under the
                      laws of the State of Delaware governing corporate
                      self-dealing.

                      (5) Company. The term "Company" shall mean MEDIQ
           Incorporated.


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                      (6) Fair Market Value. The term "Fair Market Value" shall
           mean the fair market value of the optioned shares of Common Stock,
           which shall be arrived at by a good faith determination of the
           Committee and shall be:

                                 (A) The mean between the highest and lowest
                      quoted selling price, if there is a market for the Common
                      Stock on a registered securities exchange or in an over
                      the counter market, on the date of grant;

                                 (B) The weighted average of the means between
                      the highest and lowest sales on the nearest date before
                      and the nearest date after the date of grant, if there are
                      no sales on the date of grant but there are sales on dates
                      within a reasonable period both before and after the date
                      of grant;

                                 (C) The mean between the bid and asked prices,
                      as reported by the National Quotation Bureau on the date
                      of grant, if actual sales are not available during a
                      reasonable period beginning before and ending after the
                      date of grant; or

                                 (D) Such other method of determining fair
                      market value as shall be authorized by the Code, or the
                      rules or regulations thereunder, and adopted by the
                      Committee. Where the fair market value of the optioned
                      shares of Common Stock is determined under (B) above, the
                      average of the means between the highest and lowest sales
                      on the nearest date before and the nearest date after the
                      date of grant is to be weighted inversely by the
                      respective numbers of trading days between the selling
                      dates and the date of grant (i.e., the valuation date), in
                      accordance with Treas. Reg. ss. 20.2031-2(b)(1).

                      (7) Incentive Stock Option. The term "Incentive Stock
           Option" ("ISO") shall mean an option which, at the time such option
           is granted under the Plan, qualifies as an ISO within the meaning of
           section 422 of the Code and is designated as an ISO in the Option
           Agreement.

                      (8) Key Employees. The term "Key Employees" shall mean
           officers and other key employees of the Company or a Related
           Corporation.

                      (9) Non-Employee Directors. The term "Non-Employee
           Directors" shall mean directors of the Company who:


                                 (A) Are not employees of the Company or any
                      Related Corporation; and

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                                 (B) Have not been employees of the Company or
                      any Related Corporation during the immediately preceding
                      12-month period.

                      (10) Non-Qualified Stock Option. The term "Non-Qualified
           Stock Option" ("NQSO") shall mean an option which, at the time such
           option is granted, does not qualify as an ISO, and/or is designated
           as an NQSO in the Option Agreement.

                      (11) Option Agreement. The term "Option Agreement" shall
           mean a written document evidencing the grant of an Option, as
           described in Section 8.

                      (12) Optionee. The term "Optionee" shall mean a Key
           Employee or Non-Employee Director to whom an Option has been granted.

                      (13) Options. The term "Options" shall mean Incentive
           Stock Options and Non-Qualified Stock Options.

                      (14) Plan. The term "Plan" shall mean the MEDIQ
           Incorporated 1997 Stock Option Plan, as set forth herein and as
           amended from time to time.

                      (15) Related Corporation. The term "Related Corporation"
           shall mean either a corporate subsidiary of the Company, as defined
           in section 424(f) of the Code or the corporate parent of the Company,
           as defined in section 424(e) of the Code.

           Notwithstanding Sections 1(b)(7) and (10), if an Option granted to a
     Key Employee is not designated in the Option Agreement as an ISO or NQSO,
     the option shall constitute an ISO if it complies with the terms of section
     422 of the Code, and otherwise, it shall constitute an NQSO.

                           SECTION 2 - Administration

           The Plan shall be administered by the Committee. Each member of such
Committee, while serving as such, shall be deemed to be acting in his or her
capacity as a director of the Company.

           The Committee shall have full authority, subject to the terms of the
Plan, to select the Key Employees to be granted ISOs and/or NQSOs under the
Plan, to select the Non-Employee Directors to be granted NQSOs under the Plan,
to grant Options on behalf of the Company and to set the date of grant and the
other terms of such Options. The Committee may correct any defect, supply any
omission and reconcile any inconsistency in this Plan and in any Option granted

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hereunder in the manner and to the extent it shall deem desirable. The Committee
also shall have the authority to establish such rules and regulations, not
inconsistent with the provisions of the Plan, for the proper administration of
the Plan, and to amend, modify or rescind any such rules and regulations, and to
make such determinations and interpretations under, or in connection with, the
Plan, as it deems necessary or advisable. All such rules, regulations,
determinations and interpretations shall be binding and conclusive upon the
Company, its shareholders and all employees, and upon their respective legal
representatives, beneficiaries, successors and assigns and upon all other
persons claiming under or through any of them.

           No member of the Board or the Committee shall be liable for any
action or determination made in good faith with respect to the Plan or any
Option granted under it.

                             SECTION 3 - Eligibility

           The class of employees who shall be eligible to receive Options under
the Plan shall be the Key Employees (including any directors who also are
officers or are other key employees of the Company and/or of a Related
Corporation). More than one Option may be granted to a Key Employee under the
Plan. Non-Employee Directors shall be eligible to receive NQSOs, and not ISOs,
under the Plan. More than one NQSO may be granted to a Non-Employee Director
under the Plan.

                                SECTION 4 - Stock

           Options may be granted under the Plan to purchase up to a maximum of
nine hundred thousand (900,000) shares of the Company's Common Stock, subject to
adjustment as hereinafter provided; provided, however, that no Key Employee
shall receive Options for more than one hundred thousand (100,000) shares of
Common Stock over any one (1) year period; and further provided that no shares
shall be issuable pursuant to Options for which shareholder approval is not
obtained if shareholder approval is required by applicable securities laws or by
any exchange on which Common Stock is then listed. Shares issuable under the
Plan may be authorized but unissued shares or reacquired shares, and the Company
may purchase shares required for this purpose, from time to time, if it deems
such purchase to be advisable.

           If any Option granted under the Plan expires or otherwise terminates
for any reason whatever (including, without limitation, the Optionee's surrender
thereof) without having been exercised, the shares subject to the unexercised
portion of such Option shall continue to be available for the granting of
Options under the Plan as fully as if such shares had never been subject to an
Option; provided, however, that (a) if an Option is cancelled, the cancelled
Option is counted against the maximum number of shares for which Options may be
granted to an employee, and (b) if the Option price is reduced after the date of


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grant, the transaction is treated as a cancellation of an Option and the grant
of a new Option for purposes of counting the maximum number of shares for which
Options may be granted to a Key Employee.

                         SECTION 5 - Granting of Options

           From time to time until the expiration or earlier suspension or
discontinuance of the Plan, the Committee may, on behalf of the Company, grant
to Key Employees and Non-Employee Directors under the Plan such Options as it
determines are warranted; provided, however, that grants of ISOs and NQSOs shall
be separate and not in tandem; and further provided that Non-Employee Directors
shall not be eligible to receive ISOs under the Plan. The granting of an Option
under the Plan shall not be deemed either to entitle the Optionee to, or to
disqualify the Optionee from, any participation in any other grant of Options
under the Plan. In making any determination as to whether a Key Employee or
Non-Employee Director shall be granted an Option and as to the number of shares
to be covered by such Option, the Committee shall take into account the duties
of the Key Employee or Non-Employee Director, his or her present and potential
contributions to the success of the Company or a Related Corporation, and such
other factors as the Committee shall deem relevant in accomplishing the purposes
of the Plan. Moreover, the Committee may provide in the Option that said Option
may be exercised only if certain conditions, as determined by the Committee, are
fulfilled.

                            SECTION 6 - Annual Limit

                  (a) ISOs. The aggregate Fair Market Value of the Common Stock
         with respect to which ISOs are exercisable for the first time by a Key
         Employee during any calendar year (under this Plan and any other ISO
         plan of the Company or a Related Corporation) shall not exceed one
         hundred thousand dollars ($100,000).

                  (b) NQSOs. The annual limit set forth above for ISOs shall not
         apply to NQSOs.

                   SECTION 7 - Terms and Conditions of Options

         The Options granted pursuant to the Plan shall expressly specify
whether they are ISOs or NQSOs; however, if the Option is not designated in the
Key Employee's Option Agreement as an ISO or NQSO, the Option shall constitute
an ISO if it complies with the terms of section 422 of the Code, and otherwise,
it shall constitute an NQSO. In addition, the Options granted pursuant to the
Plan shall include expressly or by reference the following terms and conditions,
as well as such other provisions not inconsistent with the provisions of this
Plan and, for ISOs granted under this Plan, the provisions of section 422(b) of
the Code, as the Committee shall deem desirable:

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                  (a) Number of Shares. A statement of the number of shares to
         which the Option pertains.

                  (b) Price. A statement of the Option price which shall be
         determined and fixed by the Committee in its discretion but, in the
         case of an ISO, shall not be less than the higher of one hundred
         percent (100%) (one hundred ten percent (110%) in the case of more than
         ten percent (10%) shareholders as discussed in (k) below) of the Fair
         Market Value of the optioned shares of Common Stock, or the par value
         thereof, on the date the ISO is granted and, in the case of an NQSO,
         shall not be less than the higher of one hundred percent (100%) of the
         Fair Market Value of the optioned shares of Common Stock, or the par
         value thereof, on the date the NQSO is granted.

                  (c) Term.

                           (1) ISOs. Subject to earlier termination as provided
                  in Subsections (e), (f), (g) and (h) below and in Section 9
                  hereof, the term of each ISO shall be not more than ten (10)
                  years (five (5) years in the case of more than ten percent
                  (10%) shareholders as discussed in (k) below) from the date of
                  grant.

                           (2) NQSOs. Subject to earlier termination as provided
                  in Subsections (e), (f), (g) and (h) below and in Section 9
                  hereof, the term of each NQSO shall be not more than ten (10)
                  years and one (1) day from the date of grant.

                  (d) Exercise.

                           (1) General. Options shall be exercisable in such
                  installments and on such dates as the Committee may specify.
                  The Committee may accelerate the exercise date of any
                  outstanding Options, in its discretion, if it deems such
                  acceleration to be desirable.

                           Any Option shares, the right to the purchase of which
                  has accrued, may be purchased at any time up to the expiration
                  or termination of the Option. Exercisable Options may be
                  exercised, in whole or in part, from time to time by giving
                  written notice of exercise to the Company at its principal
                  office, to the attention of its Secretary, specifying the
                  number of shares to be purchased and accompanied by payment in
                  full of the aggregate Option price for such shares; provided
                  that no partial exercise of an Option shall be for a number of
                  shares of Common Stock having an aggregate Option price of
                  less than $1,000, unless such partial exercise applies to the
                  remaining shares available under the Option. Only full shares
                  shall be issued under the Plan, and any fractional share

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                  which might otherwise be issuable upon exercise of an Option
                  granted hereunder shall be forfeited.

                           (2) Manner of Payment. The Option price shall be
                  payable:

                                    (A) In cash or its equivalent;

                                    (B) If the Committee, in its discretion, so
                           provides in the Option Agreement or, in the case of
                           Options which are not ISOs, if the Committee, in its
                           discretion, so determines at or prior to the time of
                           exercise, in whole or in part, in Company Common
                           Stock previously acquired by the Optionee, provided
                           that if such shares of Common Stock were acquired
                           through the exercise of an ISO and are used to pay
                           the Option price of an ISO, such shares have been
                           held by the Key Employee for a period of not less
                           than the holding period described in section
                           422(a)(1) of the Code on the date of exercise, or if
                           such shares of Common Stock were acquired through
                           exercise of an NQSO or of an option under a similar
                           plan or through exercise of an ISO and are used to
                           pay the Option price of an NQSO, such option was
                           granted more than six (6) months prior to the date of
                           exercise of the Option;

                                    (C) If the Committee, in its discretion, so
                           provides in the Option Agreement or, in the case of
                           Options which are not ISOs, if the Committee, in its
                           discretion, so determines at or prior to the time of
                           exercise, in whole or in part, in Company Common
                           Stock newly acquired by the Optionee upon exercise of
                           such Option (which shall constitute a disqualifying
                           disposition in the case of an Option which is an
                           ISO);

                                    (D) If the Committee, in its discretion, so
                           provides in the Option Agreement or, in the case of
                           Options which are not ISOs, if the Committee, in its
                           discretion, so determines at or prior to the time of
                           exercise, in any combination of (A), (B) and (C)
                           above; or

                                    (E) If the Committee, in its discretion, so
                           provides in the Option Agreement or, in the case of
                           Options which are not ISOs, if the Committee, in its
                           discretion, so determines at or prior to the time of
                           exercise, by permitting the Optionee to deliver a
                           properly executed notice of exercise of the Option to
                           the Company and a broker, with irrevocable
                           instructions to the broker promptly to deliver to the
                           Company the amount of sale or loan proceeds necessary
                           to pay the exercise price of the Option.

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                           In the event such Option price is paid, in whole or
                  in part, with shares of Common Stock, the portion of the
                  Option price so paid shall be equal to the Fair Market Value
                  on the date of exercise of the Option of the Common Stock
                  surrendered in payment of such Option price.

                  (e) Termination of Employment or Board Membership for Cause.
         If a Key Employee's employment by the Company (and Related
         Corporations) or a Non-Employee Director's service as a director is
         terminated for Cause, all rights of any kind under any Option then held
         by such Optionee shall immediately lapse and terminate. For purposes of
         this Subsection (e), "Cause" shall include, without limitation, the
         following, not corrected after notice and a reasonable opportunity to
         cure:

                           (1) Dishonesty;

                           (2) Fraud, theft or misappropriation or embezzlement
                  of Company funds;

                           (3) Conviction of any felony, crime involving fraud
                  or misrepresentation, or of any other crime (whether or not
                  connected with the Optionee's employment) the effect of which
                  is likely to adversely affect the Company or its affiliates;

                           (4) Material breach of the Optionee's obligations
                  under the Optionee's employment agreement with the Company (if
                  any);

                           (5) Repeated and consistent failure of Optionee to be
                  present at work during normal business hours unless the
                  absence is because of a disability;

                           (6) Willful violation of any express direction or any
                  rule or regulation established by the Company or its Chief
                  Executive Officer;

                           (7) Gross incompetence in the performance of, or
                  gross neglect of, Optionee's duties under Optionee's
                  employment agreement with the Company (if any);

                           (8) Illegal possession or use of any controlled
                  substance; or

                           (9) Use of alcohol or other drugs which interferes
                  with the performance by Optionee of his or her duties.

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                  (f) Termination of Employment or Board Membership for A Reason
         Other Than Cause, Death or Disability. If a Key Employee's employment
         by the Company (and Related Corporations) or a Non-Employee Director's
         service as a director is terminated by either party prior to the
         expiration date fixed for his or her Option for any reason other than
         Cause (as defined in Subsection (e)), death or disability, such Option
         may be exercised, to the extent of the number of shares with respect to
         which the Optionee could have exercised it on the date of such
         termination, or to any greater extent permitted by the Committee, by
         the Optionee at any time prior to the earlier of:

                           (1) The expiration date specified in such Option; or

                           (2) An accelerated termination date determined by the
                  Committee, in its discretion, except that, subject to Section
                  9 hereof, such accelerated termination date shall not be
                  earlier than the date of the Key Employee's termination of
                  employment or the date the Non-Employee Director ceases to
                  serve as a director, and in the case of ISOs, such termination
                  date shall not be later than three (3) months after the date
                  of such termination of employment.

                  (g) Exercise upon Disability of Optionee. If an Optionee shall
         become disabled (within the meaning of section 22(e)(3) of the Code)
         during his or her employment or Board membership and, prior to the
         expiration date fixed for his or her Option, his or her employment or
         service as a director is terminated as a consequence of such
         disability, such Option may be exercised, to the extent of the number
         of shares with respect to which the Optionee could have exercised it on
         the date of such termination, or to any greater extent permitted by the
         Committee, by the Optionee at any time prior to the earlier of:

                           (1) The expiration date specified in such Option; or

                           (2) An accelerated termination date determined by the
                  Committee, in its discretion, except that, subject to Section
                  9 hereof, such accelerated termination date shall not be
                  earlier than the date of the Optionee's termination of
                  employment or service as a director by reason of disability,
                  and in the case of ISOs, such date shall not be later than one
                  (1) year after the date of such termination of employment. In
                  the event of the Optionee's legal disability, such Option may
                  be so exercised by the Optionee's legal representative.

                  (h) Exercise upon Death of Optionee. If an Optionee shall die
         during his or her employment or service as a director, and prior to the
         expiration date fixed for his or her Option, or if an Optionee whose
         employment or service as a director is terminated for any reason other
         than Cause (as defined in Subsection (e)), shall die following his or
         
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         her termination of employment or service as a director but prior to the
         earliest of:

                           (1) The expiration date fixed for his or her Option;

                           (2) The expiration of the period determined under
                  Subsections (f) and (g) above; or

                           (3) In the case of an ISO, three (3) months following
                  termination of employment, such Option may be exercised, to
                  the extent of the number of shares with respect to which the
                  Optionee could have exercised it on the date of his or her
                  death, or to any greater extent permitted by the Committee, by
                  the Optionee's estate, personal representative or beneficiary
                  who acquired the right to exercise such Option by bequest or
                  inheritance or by reason of the death of the Optionee, at any
                  time prior to the earlier of:

                                    (A) The expiration date specified in such
                           Option; or

                                    (B) An accelerated termination date
                           determined by the Committee, in its discretion except
                           that, subject to Section 9 hereof, such accelerated
                           termination date shall not be earlier than six (6)
                           months, nor later than one (1) year after the date of
                           death.

                  (i) Non-Transferability.

                           (1) ISOs. No ISO shall be assignable or transferable
                  by the Key Employee otherwise than by will or by the laws of
                  descent and distribution, and during the lifetime of the Key
                  Employee, the ISO shall be exercisable only by him or her or
                  by his or her guardian or legal representative. If the Key
                  Employee is married at the time of exercise and if the Key
                  Employee so requests at the time of exercise, the certificate
                  or certificates shall be registered in the name of the Key
                  Employee and the Key Employee's spouse, jointly, with right of
                  survivorship.

                           (2) NQSOs. Except as otherwise provided in any Option
                  Agreement, no NQSO shall be assignable or transferable by the
                  Optionee otherwise than by will or by the laws of descent and
                  distribution, and during the lifetime of the Optionee, the
                  NQSO shall be exercisable only by him or her or by his or her
                  guardian or legal representative. If the Optionee is married
                  at the time of exercise and if the Optionee so requests at the
                  time of exercise, the certificate or certificates shall be
                  registered in the name of the Optionee and the Optionee's
                  spouse, jointly, with right of survivorship.

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                  (j) Rights as a Shareholder. An Optionee shall have no rights
         as a shareholder with respect to any shares covered by his or her
         Option until the issuance of a stock certificate to him or her for such
         shares.

                  (k) Ten Percent Shareholder. If the Key Employee owns more
         than ten percent (10%) of the total combined voting power of all shares
         of stock of the Company or of a Related Corporation at the time an ISO
         is granted to such Key Employee, the Option price for the ISO shall be
         not less than one hundred ten percent (110%) of the Fair Market Value
         of the optioned shares of Common Stock on the date the ISO is granted,
         and such ISO, by its terms, shall not be exercisable after the
         expiration of five (5) years from the date the ISO is granted. The
         conditions set forth in this Subsection (k) shall not apply to NQSOs.

                  (l) Listing and Registration of Shares. If at any time the
         Committee shall determine, in its discretion, that the listing,
         registration or qualification of the shares covered by an Option upon
         any securities exchange or under any state or federal law, or the
         consent or approval of any governmental regulatory body, is necessary
         or desirable as a condition of, or in connection with, the granting of
         such Option or the purchase of shares thereunder, the Company shall use
         its best efforts to effect or obtain such listing registration,
         qualification, consent or approval as soon as practicable. If such
         listing registration, qualification, consent or approval is not
         effected or obtained, no Option may be exercised, in whole or in part,
         unless and until action shall have been taken by the Company or by the
         Optionee in order to obtain an exemption from any such requirement,
         under conditions acceptable to the Committee. Without limiting the
         generality of the foregoing, each Optionee or his or her legal
         representative or beneficiary may also be required to give satisfactory
         assurance that shares purchased upon exercise of an Option are being
         purchased for investment and not with a view to distribution, and
         certificates representing such shares may be legended accordingly.

                  (m) Withholding and Use of Shares to Satisfy Tax Obligations.
         The obligation of the Company to deliver shares of Common Stock upon
         the exercise of any Option shall be subject to applicable federal,
         state and local tax withholding requirements.

                  If the exercise of any Option is subject to the withholding
         requirements of applicable federal, state and/or local tax laws, the
         Committee, in its discretion (and subject to such withholding rules
         ("Withholding Rules") as shall be adopted by the Committee), may permit
         the Key Employee to satisfy the minimum required federal, state and/or
         local withholding tax, in whole or in part, by electing to have the
         Company withhold (or by returning to the Company) shares of Common
         Stock, which shares shall be valued, for this purpose, at their Fair
         Market Value on the date of exercise of the Option (or if later, the
         
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         date on which the Optionee recognizes ordinary income with respect to
         such exercise) (the "Determination Date"). An election to use shares of
         Common Stock to satisfy tax withholding requirements must be made in
         compliance with and subject to the Withholding Rules. The Committee may
         not withhold shares in excess of the number necessary to satisfy the
         minimum federal, state and local income tax withholding requirements.
         In the event shares of Common Stock acquired under the exercise of an
         ISO are used to satisfy such withholding requirement, such shares of
         Common Stock must have been held by the Key Employee for a period of
         not less than the holding period described in section 422(a)(1) of the
         Code on the Determination Date.

                SECTION 8 - Option Agreements - Other Provisions

         Options granted under the Plan shall be evidenced by written Option
Agreements in such form as the Committee shall, from time to time, approve,
which Option Agreements shall contain provisions (such as, but not limited to,
non-compete provisions), not inconsistent with the provisions of the Plan (for
Options) and not inconsistent with section 422(b) of the Code (for ISOs), as the
Committee shall deem advisable, and which Option Agreements shall specify
whether the Option is an ISO or NQSO; provided, however, if an Option granted to
a Key Employee is not designated in the Option Agreement as an ISO or NQSO, the
Option shall constitute an ISO if it complies with the terms of section 422 of
the Code, and otherwise, it shall constitute an NQSO. Each Optionee shall enter
into, and be bound by, such Option Agreement.

                         SECTION 9 - Capital Adjustments

         The number of shares which may be issued under the Plan, and the
maximum number of shares with respect to which options may be granted during a
specified period to any Key Employee under the Plan, as stated in Section 4
hereof, and the number of shares issuable upon exercise of outstanding Options
under the Plan (as well as the Option price per share under such outstanding
Options), shall, subject to the provisions of section 424(a) of the Code, be
adjusted, as may be deemed appropriate by the Committee, to reflect any stock
dividend, stock split, share combination, or similar change in the
capitalization of the Company. 

         In the event of a corporate transaction (as that term is described in
section 424(a) of the Code and the Treasury Regulations issued thereunder as,
for example, a merger, consolidation, acquisition of property or stock,
separation, reorganization, or liquidation), each outstanding Option shall be
assumed by the surviving or successor corporation or by a parent or subsidiary
of such corporation if such corporation is the employer corporation (as provided
in section 424(a) of the Code and the regulations thereunder); provided,
however, that, in the event of a proposed corporate transaction, the Committee
may terminate all or a portion of the outstanding Options if it determines that
such termination is in the best interests of the Company. If the Committee

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decides to terminate outstanding Options, the Committee shall give each Optionee
holding an Option to be terminated not less than seven (7) days' notice prior to
any such termination by reason of such a corporate transaction, and any such
Option which is to be so terminated may be exercised (if and only to the extent
that it is then exercisable) up to, and including the date immediately preceding
such termination. Further, as provided in Section 7(d) hereof the Committee, in
its discretion, may accelerate, in whole or in part, the date on which any or
all Options become exercisable.

         The Committee also may, in its discretion, change the terms of any
outstanding Option to reflect any such corporate transaction, provided that, in
the case of ISOs, such change is excluded from the definition of a
"modification" under section 424(h) of the Code.

                         SECTION 10 - Change in Control

         Notwithstanding any other provision of this Plan, all outstanding
Options shall become fully vested and exercisable upon a Change in Control. For
purposes of this Section 10, a "Change in Control" of the Company shall be
deemed to have occurred if:

         (a) any person (a "Person"), as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")
(other than (i) the Company and/or its wholly-owned subsidiaries, (ii) members
of the Rotko Family, as defined below, (iii) any ESOP or other employee benefit
plan of the Company, and any trustee or other fiduciary in such capacity holding
securities under such employee plan, (iv) any corporation owned, directly or
indirectly, by the shareholders of the Company in substantially the same
proportions as their ownership of stock of the Company), is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of the Company representing 30% or more of the
combined voting power of the Company's then outstanding securities; or

         (b) the Company's shareholders or the Company's directors shall approve
(i) any consolidation or merger of the Company in which the Company is not the
continuing or surviving corporation or pursuant to which the Company's voting
common shares (the "Common Shares") would be converted into cash, securities or
other property, other than a merger of the Company in which holders of Common
Shares immediately prior to the merger have the same proportionate ownership of
common shares of the surviving corporation immediately after the merger as
immediately before, (ii) any sale, lease, exchange or other transfer (in one
transaction or series of related transactions) of all or substantially all the
assets or earning power of the Company, or (iii) the liquidation or dissolution
of the Company.

                                      -13-


<PAGE>


         As used in this Section 10, "members of the Rotko Family" shall mean
the wife, children and grandchildren of the late Bernard Rotko, their respective
spouses and estates and any trusts primarily for the benefit of any of the
foregoing.

              SECTION 11 - Amendment or Discontinuance of the Plan

                  (a) General. The Board from time to time may suspend or
         discontinue the Plan or any outstanding Option, or amend the Plan or
         any outstanding Option in any respect whatsoever, except that the
         following amendments shall require shareholder approval (given in the
         manner set forth in Section 11(b) below):

                  (1) With respect to ISOs, any amendment which would:

                           (A) Change the class of employees eligible to
                  participate in the Plan;

                           (B) Except as permitted under Section 9 hereof,
                  increase the maximum number of shares of Common Stock with
                  respect to which ISOs may be granted under the Plan; or

                           (C) Extend the duration of the Plan under Section 12
                  hereof with respect to any ISOs granted hereunder;

                  (2) With respect to Options, any amendment which would require
         shareholder approval pursuant to Treas. Reg. ss. 1.162-27(e)(4)(vi) (or
         any successor thereto) (to the extent compliance with section 162(m) of
         the Code is desired); and

                  (3) With respect to Options, any amendment which would require
         shareholder approval under the rules of an exchange or market on which
         Common Stock is traded or listed.

         Notwithstanding the foregoing, no such suspension, discontinuance or 
    amendment shall materially impair the rights of any holder of an outstanding
    Option without the consent of such holder.

         (b) Shareholder Approval Requirements.  Shareholder approval must meet
    the following requirements:

                  (1) The approval of shareholders must be by a majority of the
         outstanding shares of Common Stock present, or represented, and
         entitled to vote at a meeting duly held in accordance with the
         applicable laws of the State of Delaware; and 

                                      -14-


<PAGE>




                  (2) The approval of shareholders must comply with all
         applicable provisions of the corporate charter, bylaws, and applicable
         state law prescribing the method and degree of shareholder approval
         required for the issuance of corporate stock or options. If the
         applicable state law does not prescribe a method and degree of
         shareholder approval in such case, the approval of shareholders must be
         effected:

                           (A) By a method and in a degree that would be treated
                  as adequate under applicable state law in the case of an
                  action requiring shareholder approval (i.e., an action on
                  which shareholders would be entitled to vote if the action
                  were taken at a duly held shareholders' meeting); or

                           (B) By a majority of the votes cast at a duly held
                  shareholders' meeting at which a quorum representing a
                  majority of all outstanding voting stock is, either in person
                  or by proxy, present and voting on the plan.

                        SECTION 12 - Termination of Plan

         Unless earlier terminated as provided in the Plan, the Plan and all
authority granted hereunder shall terminate absolutely at 12:00 midnight on June
22, 2007, which date is within ten (10) years after the date the Plan was
adopted by the Board (or the date the Plan was approved by the shareholders of
the Company, whichever is earlier), and no Options hereunder shall be granted
thereafter. Nothing contained in this Section 12, however, shall terminate or
affect the continued existence of rights created under Options issued hereunder
and outstanding on June 22, 2007, which by their terms extend beyond such date.

                        SECTION 13 - Shareholder Approval

         This Plan shall become effective on June 23, 1997; provided, however,
that if the Plan is not approved by the shareholders in the manner described in
Section 11(b), within twelve (12) months before or after said date, no further
Options shall be granted under the Plan, and any ISOs granted under the Plan
shall be null and void.

                                      -15-


<PAGE>


                           SECTION 14 - Miscellaneous

                  (a) Governing Law. With respect to any ISOs granted pursuant
         to the Plan and the Option Agreements thereunder, the Plan, such Option
         Agreements and any ISOs granted pursuant thereto shall be governed by
         the applicable Code provisions to the maximum extent possible.
         Otherwise, the operation of, and the rights of Optionees under, the
         Plan, the Option Agreements and any Options granted thereunder shall be
         governed by applicable federal law and otherwise by the laws of the
         State of Delaware.

                  (b) Rights. Neither the adoption of the Plan nor any action of
         the Board or the Committee shall be deemed to give any individual any
         right to be granted an Option, or any other right hereunder, unless and
         until the Committee shall have granted such individual an Option, and
         then his or her rights shall be only such as are provided by the Option
         Agreement.

                  Any Option under the Plan shall not entitle the holder thereof
         to any rights as a shareholder of the Company prior to the exercise of
         such Option and the issuance of the shares pursuant thereto. Further,
         notwithstanding any provisions of the Plan or the Option Agreement with
         an Optionee, the Company shall have the right, in its discretion, to
         retire an Optionee at any time pursuant to its retirement rules or
         otherwise to terminate his or her employment at any time for any reason
         whatsoever.

                  (c) Indemnification of Board and Committee. Without limiting
         any other rights of indemnification which they may have from the
         Company and any Related Corporation, the members of the Board and the
         members of the Committee shall be indemnified by the Company against
         all costs and expenses reasonably incurred by them in connection with
         any claim, action, suit, or proceeding to which they or any of them may
         be a party by reason of any action taken or failure to act under, or in
         connection with, the Plan, or any Option granted thereunder, and
         against all amounts paid by them in settlement thereof (provided such
         settlement is approved by legal counsel selected by the Company) or
         paid by them in satisfaction of a judgment in any such action, suit, or
         proceeding, except a judgment based upon a finding of willful
         misconduct or recklessness on their part. Upon the making or
         institution of any such claim, action, suit, or proceeding, the Board
         or Committee member shall notify the Company in writing, giving the
         Company an opportunity, at its own expense, to handle and defend the
         same before such Board or Committee member undertakes to handle it on
         his or her own behalf.

                  (d) Application of Funds. The proceeds received by the Company
         from the sale of Common Stock pursuant to Options granted under the
         Plan shall be used for general corporate purposes. Any cash received in
         payment for shares upon exercise of an Option to purchase Common Stock
         shall be added to the general funds of the Company and shall be used
         for its

                                      -16-


<PAGE>



         corporate purposes. Any Common Stock received in payment for shares
         upon exercise of an Option to purchase Common Stock shall become
         treasury stock.

                  (e) No Obligation to Exercise Option. The granting of an
         Option shall impose no obligation upon an Optionee to exercise such
         Option.

         IN WITNESS WHEREOF, MEDIQ Incorporated has caused these presents to be
duly executed, under seal, this [ ] day of June, 1997.



ATTEST:                                         MEDIQ INCORPORATED
[SEAL]



/s/ Eugene M. Schloss                         By: /s/ Thomas E. Carroll
-------------------------                         ------------------------
        Secretary                                          President



                                      -17-