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                                                                   Exhibit 10.46



                             ****CONFIDENTIAL****
              R. Crouch Separation Agreement and Complete Release



                       CONFIDENTIAL SEPARATION AGREEMENT
                             AND COMPLETE RELEASE

WHEREAS, RESPIRONICS, INC. (hereinafter referred to as "RI") employed Robert D.
               Crouch (hereinafter referred to as "Separating Employee")
               pursuant to an employment agreement dated December 1, 1994 (the
               "Employment Agreement");

AND WHEREAS, RI and Separating Employee wish to resolve any and
               all matters between them relating to Separating Employee's
               employment with RI, or with any affiliates of RI, and the
               termination thereof.

NOW THEREFORE, Separating Employee and RI, each intending to be legally
          bound by, and in consideration of, the following mutual promises and
          covenants, do agree as follows:

I.        Separating Employee's last day of work with RI will be on October 13,
          2000. Thereafter, Separating Employee will cease accruing time or
          credit (vesting or otherwise) with respect to any type of RI-related
          benefit including, but not limited to, vacation, 401(k) plan, stock
          options, etc., and Separating Employee hereby waives any claim to the
          contrary.

II.       Future Payments and Benefits:

          A.   RI will pay Separating Employee (or his estate in the event
               Separating Employee passes away) an amount equal to $514,388.99.
               This amount will be paid out over a one-hundred and eleven (111)
               week period in fifty-five (55) payments of $9,268.27, paid bi-
               weekly, and one payment of $4,634.14. These payments represent
               separation pay, and RI will withhold appropriate federal, state,
               and local income taxes from these payments. RI will not withhold
               any amounts for any other benefit or program, except as expressly
               provided herein.

          B.   Separating Employee's company medical and dental insurance
               coverage ceases no later than the last day of November, 2002.
               Between October 31, 2000 and November 30, 2002, he may continue
               coverage for medical and dental, if he elects to do so. RI will
               participate in the payment of Separating Employee's medical and
               dental insurance premiums for coverage for a maximum period
               ending in November, 2002. The percentage RI contributes to such
               insurance premiums will be the same percentage it contributed in
               January, 2000. Separating Employee will be responsible for the
               same percentage of the premiums that he paid in January, 2000. By
               executing this Separation Agreement and Complete Release,
               Separating Employee authorizes RI to deduct from his separation
               payments sufficient funds to cover his portion of the monthly
               premium for these insurances. After November 30, 2002, Separating
               Employee will be offered COBRA.

               Separating Employee's Basic Life, Optional Life, and Dependent
               Life insurance will cease on October 13, 2000. Separating
               Employee will receive a MetLife Conversion Form to convert his
               group life benefits to a personal policy with MetLife Insurance
               Company. Conversion must be requested within 31 days from October
               13, 2000.

               If Separating Employee participated in the Flexible Spending
               Accounts, he should be aware of these important facts: his bi-
               weekly contributions stop effective October 13, 2000, and in
               order to request reimbursement from his Health Care Spending
               Account or Dependent Day Care Spending Account for 2000, he must
               have incurred the expenses

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                             ****CONFIDENTIAL****
              R. Crouch Separation Agreement and Complete Release


               prior to that date. Separating Employee will have until March 31,
               2001 to submit a claim requesting reimbursement on his flexible
               spending accounts for 2000, but his expenses must have been
               incurred no later than his last day worked. If Separating
               Employee has any questions about his benefits, he may contact
               Rosalie Carter in Human Resources.

          C.   Notwithstanding section II.B., if Separating Employee obtains
               employment which provides for company-sponsored medical or dental
               insurance benefits before November 30, 2002, Separating Employee
               has a choice to either (i) remain on the RI insurance benefit
               plans as described above or (ii) join the new company-sponsored
               insurance benefit plans. If Separating Employee elects to join
               the new company-sponsored insurance benefit plans, the medical
               and dental benefits described in section II.B shall immediately
               cease on the earlier of the date on which the new benefits become
               effective and November 30, 2002, provided that RI will pay to
               Separating Employee the difference, if any, between the premium
               Separating Employee paid under the RI plans and the portion of
               the premium due from Separating Employee under the new company-
               sponsored plan (up to a maximum of the monthly amount RI
               contributes on behalf of Separating Employee under the RI plans).
               These payments would cease as of November 30, 2002. If Separating
               Employee's new company-sponsored medical and dental insurances'
               benefits cease before November 30, 2002, RI will pay for
               Separating Employee's COBRA coverage under the new company-
               sponsored plan (up to a maximum of the monthly amount RI
               contributes on behalf of Separating Employee under the RI plans)
               until the earlier of 18 months after such COBRA coverage begins
               or November 30, 2002. Separating Employee understands and
               acknowledges that if he accepts employment which provides for
               company-sponsored medical or dental benefits, he will no longer
               be eligible for COBRA under RI's medical and dental insurance
               policies.

          D.   Separating Employee understands and acknowledges that any stock
               options granted to him under the Respironics, Inc. 1992 Stock
               Incentive Plan are exercisable only for the periods following the
               termination of employment specified in such plan and any related
               stock option agreements with the Separating Employee. Separating
               Employee's termination is considered to be a voluntary
               termination with the consent of RI for purposes of the applicable
               stock option plans.

          E.   RI will permit Separating Employee to retain the following items:
               (i) the mobile telephone system that is currently installed in
               his van; (ii) the facsimile equipment and Compaq personal
               computer that currently are installed in his home; (iii) The Palm
               Pilot and Wizard 8520 that he currently uses; and (iv) the
               Toshiba computer with docking station, keyboard and monitor that
               he currently uses in the office. All RI information must be
               removed from each of the above items, to the satisfaction of RI,
               before the items are given to Separating Employee. All costs
               associated with operating such items after Separating Employee's
               termination, including, but not limited to, software licenses,
               repairs, use time, hook ups, etc., shall be paid by Separating
               Employee.

III.      Separating Employee understands and agrees that neither RI nor any
          successor or affiliate of RI will be obligated in any way to provide
          him with future employment, compensation, and/or benefits, other than
          those provided herein, in any amount or for any reason. The above
          payments include an agreed-upon resolution of any and all payments due
          Separating Employee pursuant to all employment- or separation-related
          agreements and/or programs, which amounts were in dispute. This
          provision does not take away the rights of Separating Employee, as a
          former employee, under the provisions of RI's 401(k) Plan or Incentive
          Stock Option Plan as they relate to terminated employees. Moreover,
          nothing in this provision is intended to affect Separating

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                             ****CONFIDENTIAL****
              R. Crouch Separation Agreement and Complete Release


          Employee's rights as a shareholder, including his right to be elected
          as a director of RI and compensated therefor.

IV.       It is expressly understood and agreed that by entering into this
          Separation Agreement and Complete Release RI in no way admits that it
          has treated Separating Employee unlawfully or wrongfully in any way.
          Neither this Separation Agreement and Complete Release, nor the
          implementation thereof, shall be construed to be, or shall be
          admissible in any proceedings as, evidence of an admission by RI of
          any violation of, or failure to comply with, any federal, state or
          local law, ordinance, agreement, rule, regulation, or order. However,
          Separating Employee agrees that this section does not preclude
          introduction of this Separation Agreement and Complete Release by RI
          to establish that all of Separating Employee's claims were settled,
          compromised, and released according to the terms of this Agreement.

V.        In consideration for the items described in sections I through II,
          above, Separating Employee, on behalf of himself, his heirs,
          representatives, estates, successors and assigns, does hereby
          irrevocably and unconditionally remise, release and forever discharge
          RI, RI's parents, subsidiaries, affiliates, benefit plans, and their
          past, present and future officers, directors, trustees,
          administrators, agents and employees, as well as the heirs, successors
          and assigns of any of such persons or such entities, hereinafter
          separately and collectively called "Releasees", from all manner of
          suits, actions, causes of action, damages and claims (including, but
          not limited to, claims for attorneys fees and expenses), known and
          unknown, that he has, or may have, on behalf of himself or any entity,
          against any of the Releasees for any actions up to and including the
          date hereof and the continuing effects thereof. Except for the
          performance of the provisions of this Separation Agreement and
          Complete Release, it is the intention of Separating Employee to effect
          a general release of all such claims.

          This release includes, but is not limited to, claims which were
          asserted, could have been asserted, or could be asserted by Separating
          Employee, or on his behalf, arising out of his employment with RI or
          the termination thereof, including but not limited to, claims under
          the federal Age Discrimination In Employment Act of 1967, as amended,
          Title VII of the federal Civil Rights Act of 1964, as amended, the
          Pennsylvania Human Relations Act, and other federal, state, and local
          statutes, ordinances, executive orders and regulations prohibiting
          age, race, sex, non-job-related disability and other types of
          discrimination, the Employee Retirement Income Security Act of 1974,
          as amended, and federal, state or local law claims of any kind.

VI.       Separating Employee acknowledges that as part of his duties, he had
          access to confidential and proprietary information and trade secrets,
          such as sources of supply, designs, data, processes, business plans
          and strategies, and know-how of RI. All knowledge and information he
          gained from these sources as well as the business, markets and trade
          secrets themselves, including all unpatented inventions, designs,
          know-how, trade secrets, technical information and data,
          specifications, blueprints, transparencies, test data and additions,
          modifications and improvements thereon which have been revealed to him
          shall for all time and for all purposes be regarded by him as strictly
          confidential and held in trust. Separating Employee will not reveal or
          disclose the confidential information, proprietary information or
          trade secrets to any other person, firm, corporation, company or
          entity. The parties acknowledge that, if a then-current director of RI
          requests Separating Employee to do work concerning RI, Separating
          Employee can assist the director by performing such work.

VII.      Separating Employee agrees that he has continuing obligations pursuant
          to the terms of the Employment Agreement and other confidentiality and
          similar agreements between RI and him. Separating Employee agrees to
          honor all obligations under these agreements.

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                             ****CONFIDENTIAL****
              R. Crouch Separation Agreement and Complete Release


VIII.     Separating Employee and RI agree that, except as required by law, the
          terms and conditions of this Separation and Complete Release Agreement
          will be kept completely confidential and will not be discussed,
          disclosed, or revealed, directly or indirectly, to any person,
          corporation, or other entity other than to Separating Employee's
          family and professional advisors consulted by Separating Employee to
          understand the interpretation, application, and legal effect of this
          Separation Agreement and Complete Release.

IX.       Separating Employee agrees to refrain from making any statements,
          claims, allegations or assertions against RI or its employees
          regarding the matters covered by this Separation Agreement and
          Complete Release.

X.        Separating Employee acknowledges that he has been given the
          opportunity to consider this Separation Agreement and Complete Release
          for at least twenty-one (21) days, which is a reasonable period of
          time, and that he has been advised to consult with an attorney in
          relation thereto, prior to executing this Separation Agreement and
          Complete Release. Separating Employee further acknowledges that he has
          had a full and fair opportunity to consult with an attorney and that
          he has carefully read and fully understands all of the provisions of
          this Separation Agreement and Complete Release and is voluntarily
          executing and entering into this Separation Agreement and Complete
          Release, intending to be legally bound thereby.

XI.       For a period of seven (7) days following the execution of this
          Separation Agreement and Complete Release, Separating Employee may
          revoke this Separation Agreement and Complete Release by delivery of a
          written notice revoking the same, within that seven-day period, to the
          attention of William R. Decker at RI. This Separation Agreement and
          Complete Release shall not become effective or enforceable until that
          seven-day revocation period has expired. Once that (7) day period has
          expired, this Separation Agreement and Complete Release will be
          forever enforceable.

XII.      The parties hereto further understand, covenant, and agree that the
          terms and conditions of this Separation Agreement and Complete Release
          constitute the full and complete understandings, agreements, and
          arrangements of the parties and that there are no agreements,
          covenants, promises or arrangements other than those set forth or
          expressly referenced herein. Any subsequent alteration in, or variance
          from, any term or condition of this Separation Agreement and Complete
          Release shall be effective only if executed in writing and signed by
          Separating Employee and an authorized representative of RI.

XIII.     This Separation Agreement and Complete Release shall be governed by
          Pennsylvania law, without regard to choice of law principles.

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                             ****CONFIDENTIAL****
              R. Crouch Separation Agreement and Complete Release


IN WITNESS WHEREOF, the aforesaid parties, having read this Separation Agreement
and Complete Release and intending to be legally bound hereby, have caused this
Separation Agreement and Complete Release to be executed as of this 12 day of
October, 2000.

FOR RESPIRONICS, INC.

By: William R. Decker                        Robert D. Crouch

/s/ William R. Decker                    /s/ Robert D. Crouch
--------------------------------         -----------------------------------
         (signature)                               (signature)




                                         Sworn to and subscribed before me this

                                         12/th/ day of October, 2000.
                                         ------        --------

                                         /s/ Linda L. Farren
                                         ----------------------------
                                                Notary Public

                                         My Commission Expires: June 25, 2001
                                                               ----------------


                ----------------------------------------------
                                 Notarial Seal
                        Linda L. Farren, Notary Public
                      Forest Hills Boro, Allegheny County
                      My Commission Expires June 25, 2001
                ----------------------------------------------
                 Member, Pennsylvania Association of Notaries

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