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                                                                   EXHIBIT 10.31



                             LINCARE HOLDINGS INC.

                      NON-QUALIFIED STOCK OPTION AGREEMENT



                                                                January 23, 1995


Employee/Optionee:                James T. Kelly

Number of shares of
Common Stock subject
to this Agreement:                100,000

                 Pursuant to the Lincare Holdings Inc. 1994 Stock Option Plan
(the "Plan"), the 1994 Stock Plan Committee (the "Committee") of the Board of
Directors of Lincare Holdings Inc. (the "Company") has granted to you on this
date an option (the "Option") to purchase the number of shares of the Company's
Common Stock, $.01 par value ("Common Stock"), set forth above. Such shares (as
the same may be adjusted as described in Section 11 below) are herein referred
to as the "Option Shares". The Option shall constitute and be treated at all
times by you and the Company as a "non-qualified stock option" for Federal
income tax purposes and shall not constitute and shall not be treated as an
"incentive stock option" as defined under Section 422A(b) of the Internal
Revenue Code of 1986, as amended (the "Code").  The terms and conditions of the
Option are set forth below.

                 1.       Date of Grant. The Option is granted to you on
January 23, 1995.

                 2.       Option Price. The purchase price to be paid upon the
exercise of the Option is $25.00 per share, the price at which the Company's
shares of Common Stock were traded on the NASDAQ National Market System at the
close of business on the date hereof (subject to adjustment as provided in
Section 11 hereof).

                 3.       Vesting Provisions. Except as otherwise provided in
Section 5 below, you will not be entitled to exercise the Option (and purchase
any Option Shares) prior to December 1, 1997. Commencing on December 1, 1997,
you shall become entitled to exercise the Option (rounded to the nearest whole
share) in accordance with the following schedule, until the Option expires and
terminates pursuant to Section 2 hereof:

                 (a)      Commencing on December 1, 1997, you shall be entitled
                          to exercise 50% of the Option Shares; and


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                 (b)      Commencing on December 1, 1998, you shall be entitled
                          to exercise 50% of the Option Shares.

                 4.       Change of Control.

                 (a)      All Options granted hereunder shall vest and shall
become immediately exercisable upon a "Change of Control" of the Company. As
used herein, the term "Change of Control" shall mean any of the following:

                           (i)    a sale or other disposition (or the last such
                                  sale or other disposition) resulting in the
                                  transfer of more than 50% of the Common Stock
                                  of the Company to unrelated and unaffiliated
                                  third parties; or

                          (ii)    the consolidation or merger of the Company
                                  with or into any other entity (other than a
                                  merger in which the Company is the surviving
                                  corporation and which does not result in more
                                  than 50% of the capital stock of the Company
                                  outstanding immediately after the effective
                                  date of such merger being owned of record or
                                  beneficially by persons other than the
                                  holders of its capital stock immediately
                                  prior to such merger); or

                          (iii)   a sale of substantially all of the properties
                                  and assets of the Company as an entirety to
                                  an unrelated and unaffiliated third party
                                  purchaser; or

                          (iv)    the time at which any person (including a
                                  person's affiliates and associates) or group
                                  (as that term is understood under Section
                                  13(d) of the Exchange Act and the rules and
                                  regulations thereunder), files a Schedule
                                  13-D or 14D-1 (or any successor schedule,
                                  form or report under the Exchange Act)
                                  disclosing that such person or group has
                                  become the beneficial owner (as defined under
                                  Rule 13d-3 or any successor rule or
                                  regulation promulgated under the Exchange
                                  Act) of shares of capital stock of the
                                  Company giving such person or group a
                                  majority of the voting power of all
                                  outstanding capital stock of the Company with
                                  the right to vote generally in an election
                                  for directors or other capital stock of the
                                  Company into which the common stock or other
                                  voting stock is reclassified or changed.





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                 (b)      If one of the events specified in Section
5(a)(ii)-(iv) occurs, then on the business day immediately preceding the
occurrence of such event, you shall become entitled to exercise the Option with
respect to all Option Shares that you had theretofore not otherwise become
entitled to purchase hereunder (with the effect that you shall be deemed
eligible to include such Option Shares in any transaction contemplated by
Section 5(a) hereof to the extent that you (i) purchase such Option Shares and
(ii) are otherwise entitled to participate in such transaction.

                 (c)      Notwithstanding anything contained herein to the
contrary, no new rights to exercise the Option with respect to any Option
Shares shall be acquired under this Section 5 after the date on which you cease
to be employed on a full-time basis by the Company or any subsidiary or parent
thereof (unless you have ceased to be employed on a full-time basis by reason
of death or disability, as described in Section 9(c) below, in which case you
shall be deemed for purposes hereof to continue to be employed on a full-time
basis).

                 5.       Additional Provisions Relating to Exercise.

                 (a)      Once you become entitled to exercise the Option (and
purchase Option Shares) as provided in Sections 4 and 5 hereof, such right will
continue until the date on which the Option expires and terminates pursuant to
Section 2 hereof.

                 (b)      The Committee, in its sole discretion, may at any
time accelerate the time set forth in Sections 4 or 5 at which the Option may
be exercised by you with respect to any Option Shares.

                 6.       Exercise of Option. To exercise the Option, you must
deliver a completed copy of the Stock Option Exercise Form attached hereto to
the principal office of the Company, specifying the number of Option Shares
being purchased as a result of such exercise. The purchase price for the Option
Shares for which an Option is exercised shall be paid in full, in cash, on the
date of exercise, or, at the Company's sole discretion, within ten (10)
business days thereafter.

                 7.       Transferability of Option. The Option may not be
transferred by you (other than by will or the laws of descent and distribution)
and may be exercised during your lifetime only by you.

                 8.       Termination of Employment.

                 (a)       In the event that (i) the Company or any subsidiary
or parent thereof terminates your employment by such entity "for cause" or (ii)
you terminate your employment by such entity for any reason whatsoever (other
than as a result of your death or disability as defined in the Contract), then
the Option may only be





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exercised within one month after such termination, and only to the same extent
that you were entitled to exercise the Option on the date your employment was
so terminated and had not previously done so. For the purposes of Sections 9(a)
and 9(b) hereof, the term "for cause" shall have the meaning set forth in that
certain Employment Agreement, dated as of November 1, 1993, (herein referred to
as the "Contract"), between you and Lincare Inc., a wholly-owned subsidiary of
Company.

                 (b)      In the event that you cease to be employed on a
full-time basis by the Company or any subsidiary or parent thereof as a result
of the termination of your employment by the Company or any subsidiary or
parent thereof at any time other than "for cause", the Option may only be
exercised within one year after the date you cease to be so employed, and only
to the same extent that you were entitled to exercise the Option on the date
you ceased to be so employed by reason of such termination and had not
previously done so.

                 (c)      In the event that you (i) die while employed by the
Company or any subsidiary or parent thereof (or within a period of one month
after ceasing to be employed by the Company or any subsidiary or parent thereof
for any reason described in Section 9(b) above) or (ii) cease to be employed on
a full-time basis by the Company or any subsidiary or parent thereof by reason
of a disability as defined in the Contract, the Option may be exercised as if
you continued to be employed on a full-time basis by the Company or any
subsidiary or parent thereof in accordance with the terms of this Agreement
without giving effect to any applicability of Section 9(b) hereof. In the event
of clause (i) of this subsection, the Option may be exercised by the executor
or administrator of your estate or by any person who shall have acquired the
Option through bequest or inheritance.

                 (d)      Notwithstanding any provision contained in this
Section 9 to the contrary, in no event may the Option be exercised to any
extent by anyone after December 31, 2003.

                 9.       Tax Consequences.

                          You represent and warrant that you understand the
Federal, state and local income tax consequences of the granting of the Option
to you, the acquisition of rights to exercise the Option with respect to any
Option Shares, the exercise of the Option and purchase of Option Shares, and
the subsequent sale or other disposition of any Option Shares. In addition, you
understand that the Company will be required to withhold Federal, state or
local taxes in respect of any compensation income realized by you upon exercise
of the Option granted hereunder. To the extent that the Company is required to
withhold any such taxes, you hereby agree that the Company may deduct from any
payments of any kind otherwise due to you an amount equal to the total Federal,
state and local





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taxes required to be so withheld, or if such payments are inadequate to satisfy
such Federal, state and local taxes, or if no such payments are due or to
become due to you, then you agree to provide the Company with cash funds or
make other arrangements satisfactory to the Company regarding such payment. It
is understood that all matters with respect to the total amount of taxes to be
withheld in respect of any such compensation income shall be determined by the
Board of Directors in its sole discretion; provided, however, that the Board of
Directors shall consult with you regarding such determination and shall
promptly advise you of any such determination made by the Board of Directors
hereunder with the intention that such advice shall be given in time to permit
you to express your views regarding such determination.

                 10.      Adjustments; Reorganization, Reclassification,
Consolidation, Merger or Sale.

                 (a)      In the event that, after the date hereof, the
outstanding shares of the Company's Common Stock shall be increased or
decreased or changed into or exchanged for a different number or kind of shares
of stock or other securities of the Company through stock split, split-up,
combination or exchange of shares or declaration of any dividends payable in
Common Stock, the Committee shall appropriately adjust the number of shares of
Common Stock (and the option price per share) subject to the unexercised
portion of the Option (to the nearest possible full share), and such adjustment
shall be effective and binding for all purposes of this Agreement and the Plan.

                 (b)      If any capital reorganization or reclassification of
the capital stock of the Company or any consolidation or merger of the Company
with another corporation, or the sale of all or substantially all its assets to
another corporation, shall be effected in such a way that holders of Common
Stock shall be entitled to receive stock, securities or assets with respect to
or in exchange for Common Stock, then, subject to Section 11(c) below, each
holder of an Option shall thereafter have the right to receive upon the basis
and upon the terms and conditions specified therein and in lieu of the shares
of Common Stock of the Company immediately theretofore receivable upon the
exercise of such Option, such shares of stock, securities or assets (including
cash) as may be issued or payable with respect to or in exchange for a number
of outstanding shares of such Common Stock equal to the number of shares of
such stock immediately theretofore so receivable had such reorganization,
reclassification, consolidation, merger or sale not taken place.

                 (c)      Notwithstanding the foregoing, in the event of any
offer to holders of the Company's Common Stock generally relating to the
acquisition of their shares, including, without limitation, through purchase,
merger or otherwise, or any transaction generally relating to the acquisition
of substantially all of the assets or





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business of the Company (herein sometimes referred to as an "Acquisition"), the
Board of Directors may, in its sole discretion, cancel the Option and pay or
deliver to you, or cause to be paid or delivered to you, an amount in cash or
securities having a value (as determined by the Board of Directors acting in
good faith) equal to the product of (i) the number of Option Shares that, as of
the date of the consummation of such Acquisition, you had become entitled to
purchase (and had not purchased), multiplied by (ii) the amount, if any, by
which (x) the formula or fixed price per share paid to holders of shares of
Common Stock pursuant to such Acquisition exceeds (y) the option price set
forth in Section 3 hereof.

                 11.      Certain Notices. In case at any time there shall be:
(i) a Change of Control as described in Section 5(a)(ii)-(iv) above; or (ii)
any capital reorganization or reclassification or any consolidation or merger
or sale of all or substantially all of the assets of the Company as described
in Sections 11(b) or 11(c) above, then the Company shall give, by first class
mail, postage prepaid, addressed to you at your address as shown on the books
of the Company, at least 20 days' prior written notice of the date when such
transaction or event shall take place, which notice shall contain a reasonably
detailed summary of the terms of such transaction or event. The Company shall
promptly provide upon request (to the extent permitted under any applicable
agreements with third parties) additional relevant information relating to such
transaction or event reasonably requested by you.

                 12.      Continuation of Employment. Neither the Plan nor the
Option shall confer upon you any right to continue in the employ of the Company
or any subsidiary or parent thereof, or limit in any respect the right of the
Company or any subsidiary or parent thereof to terminate your employment or
other relationship with the Company or any subsidiary or parent thereof, as the
case may be, at any time.

                 13.      Plan Documents. This Agreement is qualified in its
entirety by reference to the provisions of the Plan, which are hereby
incorporated herein by reference.

                 14.      Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of Delaware. If any one
or more provisions of this Agreement shall be found to be illegal or
unenforceable in any respect, the validity and enforceability of the remaining
provisions hereof shall not in any way be affected or impaired thereby.





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                 Please acknowledge receipt of this Agreement by signing the
enclosed copy of this Agreement in the space provided below and returning it
promptly to the Secretary of the Company.


                                                       LINCARE HOLDINGS, INC.



                                                   By   /s/ Howard R. Deutsch
                                                      -------------------------
                                                            Howard R. Deutsch





Accepted and Agreed To:



  /s/ James T. Kelly
-----------------------------
      James T. Kelly





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