ARROW INTERNATIONAL, INC.

                         DIRECTORS STOCK INCENTIVE PLAN

                        (As Amended on January 19, 2000)

      Arrow International, Inc. (the "Company") hereby establishes the Arrow
International, Inc. Directors Stock Incentive Plan (the "Plan").

1.    PURPOSE

      The purpose of the Plan is to enable the Company and its subsidiaries to
attract and retain outside directors and provide them with an incentive to
maintain and enhance the Company's long-term performance record. It is intended
that this purpose will best be achieved by granting eligible directors
non-qualified stock options ("options") under this Plan pursuant to the rules
set forth in Section 83 of the Internal Revenue Code, as amended from time to
time.

2.    ADMINISTRATION

      The Plan shall be administered by the Company's Board of Directors (the
"Board"). Subject to the provisions of the Plan, the Board shall possess the
authority, in its discretion, (a) to prescribe the form of the stock option
agreements, including any appropriate terms and conditions applicable to these
options, and to make any amendments to such agreements or options; (b) to
interpret the Plan; (c) to make and amend rules and regulations relating to the
Plan; and (d) to make all other determinations necessary or advisable for the
administration of the Plan. The Board's determinations shall be conclusive and
binding. No member of the Board shall be liable for any action taken or decision
made in good faith relating to the Plan or any option granted hereunder.

3.    ELIGIBLE DIRECTORS

      Members of the Board of Directors of the Company and its subsidiaries are
eligible to participate in this Plan if they are not also employees or
consultants of the Company or its subsidiaries and do not serve on the Board as
representatives of the interests of shareholders who have made an investment in
the Company.

4.    SHARES AVAILABLE

      The total number of shares of the Company's Common Stock, no par value
(the "Common Stock"), available in the aggregate for options under this Plan
shall not exceed 150,000 (subject to substitution or adjustment as provided in
Section 8). Such shares may be authorized and unissued shares. If an option
expires, terminates or is cancelled without being exercised, new options may
thereafter be granted covering such shares. No option may be granted more than
ten years after the effective date of the Plan.

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5.    TERMS AND CONDITIONS OF OPTIONS

      Each option granted under the Plan shall be evidenced by an option
agreement in such form as the Board shall approve from time to time, which
agreement shall conform with this Plan and contain the following terms and
conditions:

            (a) Number of Shares. On the date the Plan is first adopted by the
      Company's shareholders or on the date on which an eligible director is
      first elected to the Board, whichever is later, such eligible director
      shall receive an option to purchase 5,000 shares of the Common Stock (each
      such option grant is hereinafter referred to as an "Initial Option").
      Subsequent to an eligible director's initial election to the Board and
      provided that such eligible director has served on the Board for at least
      twelve months, each year when new members are elected to the Board, each
      eligible director who will be serving on the new Board shall receive an
      option to purchase 1,500 shares of the Common Stock.

            (b) Exercise Price. The exercise price under each option shall equal
      the fair market value of the Common Stock at the time such option is
      granted.

            (c) Duration of Option. Each option by its terms shall not be
      exercisable after the expiration of ten years from the date such option is
      granted.

            (d) Options Nontransferable. Each option by its terms shall not be
      transferable by the participant otherwise than by will or the laws of
      descent and distribution, and shall be exercisable, during the
      participant's lifetime, only by the participant, the participant's
      guardian or the participant's legal representative.

            (e) Exercise Terms. Each option granted under the Plan shall become
      fully exercisable with respect to the shares subject thereto on the first
      anniversary of the date of grant. Options may be partially exercised from
      time to time during the period extending from the time they first become
      exercisable until the tenth anniversary of the date of grant.

            (f) Payment of Exercise Price. An option shall be exercised upon
      written notice to the Company accompanied by payment in full for the
      shares being acquired. The payment shall be made in cash, by check or, if
      the option agreement so permits, by delivery of shares of Common Stock of
      the Company registered in the name of the participant, duly assigned to
      the Company with the assignment guaranteed by a bank, trust company or
      member firm of the New York Stock Exchange, or by a combination of the
      foregoing. Any such shares so delivered shall be deemed to have a value
      per share equal to the fair market value of the shares on such date. For
      this purpose, fair market value shall equal the closing price of the
      Common Stock on the Nasdaq National Market System on the date the option
      is exercised, or, if there was no trading in such stock on the date of
      such exercise, the closing date on the last preceding day on which there
      was such trading.

6.    GENERAL RESTRICTION ON ISSUANCE OF STOCK CERTIFICATES

      The Company shall not be required to deliver any certificate upon the
exercise of an option until it has been furnished with such opinion,
representation or other document as it may

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reasonably deem necessary to insure compliance with any law or regulation of the
Securities and Exchange Commission or any other governmental authority having
jurisdiction under this Plan. Certificates delivered upon such exercise may bear
a legend restricting transfer absent such compliance. Each option shall be
subject to the requirement that, if at any time the Board shall determine, in
its discretion, that the listing, registration or qualification of the shares
subject to such 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 issue or purchase of shares thereunder, such option may not
be exercised in whole or in part unless such listing, registration,
qualification, consent or approval shall have been effected or obtained free of
any conditions not acceptable to the Board in the exercise of its reasonable
judgment.

7.    TERMINATION OF DIRECTORSHIP

      If a director's directorship terminates for any reason (including, without
limitation, resignation or removal), all nonvested options shall be forfeited.
Vested but unexercised options may be exercised by the director or, in the case
of death, by his or her legal representative or beneficiary in accordance with
the terms of the Plan and the option agreement.

8.    ADJUSTMENT OF SHARES

      In the event of any change in the Common Stock by reason of any stock
dividend, stock split, recapitalization, reorganization, merger, consolidation,
split-up, combination, or exchange of shares, or of any similar change affecting
the Common Stock, the number and kind of shares authorized under Section 4, the
number and kind of shares which thereafter are subject to an option under the
Plan and the number and kind of shares set forth in options under outstanding
agreements and the price per share shall be adjusted automatically consistent
with such change to prevent substantial dilution or enlargement of the rights
granted to, or available for, participants in the Plan.

9.    NO EMPLOYMENT RIGHTS

      The Plan and any awards granted under the Plan shall not confer upon any
director any right with respect to continuance as a director of the Company or
any subsidiary, nor shall they interfere in any way with any right the Company
or its subsidiaries may have to terminate the director's position as a director
at any time.

10.   RIGHTS AS A SHAREHOLDER

      The recipient of any option under the Plan shall have no rights as a
shareholder with respect thereto unless and until certificates for the
underlying shares of Common Stock are issued to the recipient.

11.   AMENDMENT AND DISCONTINUANCE

      This Plan may be amended, modified or terminated by the shareholders of
the Company or by the Board, provided that Plan provisions relating to the
amount, price and timing of options may not be amended more than once every six
months other than to comport with changes in the Internal Revenue Code or the
regulations thereunder and provided further that the Board may not,

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without approval of the shareholders, materially increase the benefits accruing
to participants under the Plan, increase the maximum number of shares as to
which options may be granted under the Plan, change the minimum exercise price,
change the class of eligible persons, extend the period for which options may be
granted or exercised, or withdraw the authority to administer the Plan from the
Board. Notwithstanding the foregoing, to the extent permitted by law, the Board
may amend the Plan without the approval of shareholders, to the extent it deems
necessary to cause the Plan to comply with Securities and Exchange Commission
Rule 16b-3 or any successor rule, as it may be amended from time to time. Except
as required by law, no amendment, modification or termination of the Plan may,
without the written consent of a director to whom any option shall theretofore
have been granted, adversely affect the rights of such director under such
option.

12.   CHANGE IN CONTROL

      For purposes of the Plan, a "change in control" shall be deemed to have
occurred upon the acquisition of thirty (30%) percent or more of the Company's
outstanding shares of capital stock having general voting rights by an
unaffiliated person, entity or group. The Board shall promptly notify, in
writing, each holder of an outstanding option of the occurrence of any such
change in control. Notwithstanding any other provision of the Plan or any option
agreement, all options shall become fully exercisable on receipt of such notice.
All outstanding options shall expire if not exercised within 30 days of receipt
of the notice of a change of control.

13.   EFFECTIVE DATE

      The effective date of this Plan is January 17, 1996, the date of adoption
of this Plan by the shareholders of the Company.

14.   DEFINITIONS

      Any terms or provisions used herein which are defined in Section 83 of the
Internal Revenue Code, as amended, or the regulations thereunder or
corresponding provisions of subsequent laws and regulations in effect at the
time options are made hereunder, shall have the meanings as therein defined.

15.   GOVERNING LAW

      To the extent not inconsistent with the provisions of the Internal Revenue
Code that relate to non-qualified stock options, this Plan and any option
agreement adopted pursuant to it shall be construed under the laws of the
Commonwealth of Pennsylvania.

Dated as of October 19, 1995        ARROW INTERNATIONAL, INC.

Amended as of January 19, 2000


                                    By:   _______________________________
                                          Marlin Miller, Jr.
                                          Chairman, and Chief Executive Officer

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Date of Shareholder Approval of Plan: January 17, 1996

Date of Shareholder Approval of Amendments to Plan: January 19, 2000