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ACUSON CORPORATION                                                 EXHIBIT 10.23
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                              ACUSON CORPORATION
                           1995 STOCK INCENTIVE PLAN

              Adopted by the Board of Directors on March 1, 1995
                   Approved by stockholders on May 31, 1995
            Amended by the Board of Directors on February 29, 1996
              Amendment approved by stockholders on July 23, 1996
            Amended by the Board of Directors on February 19, 1999

1.   Establishment, Purpose, and Definitions.
     --------------------------------------- 

          (a)  Acuson Corporation (the "Company") hereby adopts the Acuson
     Corporation 1995 Stock Incentive Plan (the "Plan").

          (b)  The purpose of the Plan is to allow the Company to provide
     incentives to Eligible Individuals (as defined in Section 4, below) for
     employment, increased efforts and successful achievements on behalf of or
     in the interests of the Company and its Affiliates and to maximize the
     rewards due them for those efforts and achievements. In the case of
     Employees (including officers and directors who are Employees) of the
     Company and of its Affiliates such incentives include (i) an opportunity to
     purchase shares of common stock, par value $.0001 per share, of the Company
     ("Stock") pursuant to options which may qualify as incentive stock options
     (referred to as "incentive stock options") under Section 422 of the
     Internal Revenue Code of 1986, as amended (the "Code"), (ii) an opportunity
     to purchase shares of Stock pursuant to options which are not described in
     Sections 422 or 423 of the Code (referred to as "nonqualified stock
     options"), (iii) the sale or bonus of restricted Stock ("Restricted
     Stock"), and (iv) the grant of stock appreciation rights ("SARs"), either
     separately or in relation ("tandem") with stock options, entitling holders
     to compensation measured by appreciation in the value of Stock. The Plan
     also provides for the grant of similar incentives (other than incentive
     stock options) to independent contractors and consultants to the Company
     and its Affiliates. Finally, the Plan provides for the automatic,
     nondiscretionary grant of nonqualified stock options to directors of the
     Company who are not Employees of the Company or any Affiliate ("Non-
     Employee Directors").

          (c)  Except for purposes of Section 12, the term "Affiliate" means
     parent or subsidiary corporations of the Company, as defined in Sections
     424(e) and (f) of the Code (but substituting "the Company" for "employer
     corporation"), including parents or subsidiaries of the Company that become
     such after adoption of the Plan.

          (d)  The term "Employee" means any person, including officers and
     directors, who is an employee of the Company or an Affiliate for purposes
     of income tax withholding under the Code. Neither service as a director nor

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     payment of a director's fee by the Company shall be sufficient to
     constitute a person an Employee.

2.   Administration of the Plan.
     -------------------------- 

          (a)  The Plan may be administered by different committees with respect
     to: (i) Non-Employee Directors; (ii) Eligible Individuals who are (A)
     officers or directors subject to Section 16(b) of the Securities Exchange
     Act of 1934, as amended (the "Exchange Act"), or (B) "covered employees"
     within the meaning of Section 162(m)(3) of the Code ("Covered Employees");
     and (iii) Eligible Individuals who are neither officers or directors
     subject to Section 16(b) of the Exchange Act nor Covered Employees. Each
     committee, in addition to satisfying any specific requirements imposed by
     this Section 2, shall also satisfy any legal requirements relating to the
     administration of stock-based compensation plans under applicable state
     corporate and securities laws and the Code ("Applicable Laws"). References
     herein to the "Plan Administrator" shall refer to the applicable
     committee(s) or, if the Board of Directors of the Company (the "Board")
     does not delegate administration of some aspects of the Plan to a
     committee, shall be construed to refer to the Board.

          (b)  With respect to awards made to Eligible Individuals who are
     officers or directors subject to Section 16(b) of the Exchange Act or
     Covered Employees, the Plan shall be administered by a committee of the
     Board, which committee shall be constituted (i) in such manner as to permit
     such grants and related transactions under the Plan to be exempt from
     Section 16(b) of the Exchange Act in accordance with Rule 16b-3 (or any
     successor thereto) promulgated under the Exchange Act ("Rule 16b-3") and as
     a (ii) "committee comprised solely of two or more outside directors" for
     purposes of Section 162(m) of the Code. Once appointed, such committee
     shall continue to serve in its designated capacity until otherwise directed
     by the Board. From time to time, the Board may increase the size of the
     committee and appoint additional members, remove members (with or without
     cause) and substitute new members, fill vacancies (however caused), all to
     the extent permitted by Rule 16b-3, Section 162(m) of the Code, the rules
     and regulations with respect to each, and Applicable Laws. The committee
     shall select one of its members as chair of the committee and shall hold
     meetings at such times and places as it may determine. To the extent
     permitted by Rule 16b-3, Section 162(m) of the Code, the rules and
     regulations with respect to each, and Applicable Laws, a majority of the
     committee shall constitute a quorum, and acts of the committee at which a
     quorum is present, or acts reduced to or approved in writing by all the
     members of the committee, shall be the valid acts of the committee.

          (c)  With respect to awards made to Eligible Individuals who are
     neither officers nor directors subject to Section 16(b) of the Exchange Act
     nor Covered Employees, the Plan shall be administered by (i) the Board; or
     (ii) a committee of one or more persons (which may be the committee
     established pursuant to Section 2(b), above) designated by the Board. Once
     appointed, such committee 

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     shall continue to serve in its designated capacity until otherwise directed
     by the Board. From time to time, the Board may increase the size of the
     committee and appoint additional members, remove members (with or without
     cause) and substitute new members, fill vacancies (however caused), and
     remove all members of the committee and thereafter directly administer the
     Plan, all to the extent permitted by Applicable Laws. The committee shall
     select one of its members as chair of the committee and shall hold meetings
     at such times and places as it may determine. To the extent permitted by
     Applicable Laws, a majority of the committee shall constitute a quorum, and
     acts of the committee at which a quorum is present, or acts reduced to or
     approved in writing by all the members of the committee, shall be the valid
     acts of the committee.

          (d)  The Plan Administrator shall determine which Eligible Individuals
     shall be granted options under the Plan, the timing of such grants, the
     terms thereof (including any restrictions on the Stock), and the number of
     shares subject to such options.

          (e)  The Plan Administrator shall also determine which Eligible
     Individuals shall be granted or issued SARs or Restricted Stock (other than
     pursuant to the exercise of options) under the Plan, the timing of such
     grants or issuances, the terms thereof (including any restrictions and the
     consideration, if any, to be paid therefor) and the number of shares or
     SARs to be granted.

          (f)  The Plan Administrator may amend the terms of any outstanding
     option or SAR granted under this Plan, but any amendment that would
     adversely affect the holder's rights under an outstanding option or SAR
     shall not be made without the holder's written consent. The Plan
     Administrator may, with the holder's written consent, cancel any
     outstanding option or SAR or accept any outstanding option or SAR in
     exchange for a new option or SAR. The Plan Administrator also may amend any
     Restricted Stock purchase agreement or Restricted Stock bonus agreement
     relating to sales or bonuses of Restricted Stock under the Plan, but any
     amendment that would adversely affect the individual's rights to the
     Restricted Stock shall not be made without his or her written consent.

          (g)  The Plan Administrator shall have the sole authority, in its
     absolute discretion, to adopt, amend, and rescind such rules and
     regulations as, in its opinion, may be advisable for the administration of
     the Plan, to construe and interpret the Plan, the rules and the
     regulations, and the instruments evidencing options, SARs or Restricted
     Stock granted or issued under the Plan and to make all other determinations
     deemed necessary or advisable for the administration of the Plan. All
     decisions, determinations, and interpretations of the Plan Administrator
     shall be binding on all participants.

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3.   Stock Subject to the Plan.
     ------------------------- 

          (a)  The maximum aggregate number of shares of Stock available for
     issuance under the Plan and during the life of the Plan shall equal
     3,500,000 shares, subject to adjustment from time to time in accordance
     with this Section 3. The Stock subject to the Plan may be unissued shares,
     treasury shares or shares purchased by the Company on the open market or
     otherwise.

          (b)  For purposes of the limitation specified in Section 3(a), the
     following principles shall apply:

               (1)  the following transactions, if granted pursuant to this
       Plan, shall count against and decrease the number of shares of Stock that
       may be issued for purposes of Section 3(a): (i) shares of Stock subject
       to outstanding options, outstanding shares of Restricted Stock, and
       shares subject to SARs granted independently of options (based upon a
       good faith estimate by the Company or the Plan Administrator of the
       maximum number of shares for which the SAR may be settled (assuming
       payment in full in shares of Stock), and (ii) in the case of options
       granted in tandem with SARs, the greater of the number of shares of Stock
       that would be counted if one or the other alone was outstanding
       (determined as described in clause (i) above);

               (2)  the following shall be added back to the number of shares of
       Stock that may be issued for purposes of Section 3(a): (i) shares of
       Stock with respect to which options, SARs granted independent of options,
       or Restricted Stock awards expire, are cancelled, or otherwise terminate
       without being exercised, converted, or vested, as applicable, and (ii) in
       the case of options granted in tandem with SARs, shares of Stock as to
       which an option has been surrendered in connection with the exercise of a
       tandem SAR, to the extent the number surrendered exceeds the number
       issued upon exercise of the SAR; provided that, in any case, the holder
                                        -------------
       of such awards did not receive any dividends or other benefits of
       ownership with respect to the underlying shares being added back, other
       than voting rights and the accumulation (but not payment) of dividends of
       Stock;

               (3)  shares of Stock subject to SARs granted independently of
       options (calculated as provided in clause (1) above) that are exercised
       and paid in cash shall be added back to the number of shares of Stock
       that may be issued for purposes of Section 3(a), provided that the holder
       of such SAR did not receive any dividends or other benefits of ownership,
       other than voting rights and the accumulation (but not payment) of
       dividends, relative to the shares of Stock subject to the SARs;

               (4)  shares of Stock that are transferred by a holder of an award
       (or withheld by the Company) as full or partial payment to the Company of
       the purchase price of shares of Stock subject to an option or the
       Company's or any Affiliate's tax withholding obligations shall not be
       added back to the

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       number of shares of Stock that may be issued for purposes of Section 3(a)
       and shall not again be subject to awards; and

               (5)  if the number of shares of Stock counted against the number
       of shares that may be issued for purposes of Section 3(a) is based upon
       an estimate made by the Company or the Plan Administrator as provided in
       clause (1) above and the actual number of shares of Stock issued pursuant
       to the applicable award is greater or less than the estimated number,
       then upon such issuance, the number of shares of Stock that may be issued
       pursuant to Section 3(a) shall be further reduced by the excess issuance
       or increased by the shortfall, as applicable.

          (c)  If there is any change in the Stock through merger,
     consolidation, reorganization, recapitalization, reincorporation, stock
     split, stock dividend (in excess of 2%), or other change in the capital
     structure of the Company, appropriate adjustments shall be made by the Plan
     Administrator, in order to preserve but not to increase the benefits to the
     outstanding options, SARs and Restricted Stock purchase or Restricted Stock
     bonus awards under the Plan, including adjustments to the aggregate number
     and kind of shares subject to the Plan, or to outstanding Restricted Stock
     purchase or Restricted Stock bonus agreements, or SAR agreements, and the
     number and kind of shares and the price per share subject to outstanding
     options. 

          (d)  The Plan Administrator shall have the discretion, to the extent
     permitted by Applicable Law, to include provisions in any agreements
     evidencing awards granted under the Plan providing that, in the event of a
     dissolution, liquidation, merger or consolidation of the Company, or any
     other event that the Plan Administrator deems to have effected a change in
     control of the Company, any such awards shall accelerate and become fully
     vested, and all forfeiture and/or transfer restrictions with respect
     thereto shall lapse, regardless of whether such awards are otherwise to be
     assumed or replaced in connection with such event.

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4.   Eligible Individuals.  Individuals who shall be eligible to have the Plan
     --------------------                                                     
Administrator grant to them options, SARs or Restricted Stock under the Plan
("Eligible Individuals") shall be such employees, officers (including officers
who are directors of the Company), independent contractors, and consultants of
the Company or an Affiliate as the Plan Administrator, in its discretion, shall
designate from time to time.  Notwithstanding the foregoing, only Employees
shall be eligible to receive incentive stock options.  Eligible Individuals
shall not include Non-Employee Directors.  Non-Employee Directors shall receive
automatic and nondiscretionary option grants pursuant to Section 5 and will not
be otherwise eligible to receive any other option grants or awards of SARs or
Restricted Stock under the Plan or any other stock plan of the Company or any
Affiliate.

5.   Automatic Option Grants to Non-Employee Directors.
     ------------------------------------------------- 

          (a)  All grants of options pursuant to this Section 5 shall be
     automatic and nondiscretionary and shall be made strictly in accordance
     with the provisions of this Section 5. No person shall have any discretion
     to determine which Non-Employee Directors shall be granted options, the
     number of shares of Stock to be covered by options granted to Non-Employee
     Directors, the timing of such option grants or the exercise price thereof.

          (b)  An option to purchase 7,500 shares of Stock shall be granted to
     each Non-Employee Director continuing in office immediately following each
     annual meeting of the Company's stockholders which occurs on or after the
     date of approval of the Plan by the stockholders of the Company and prior
     to the termination of the Plan.

          (c)  The term of each option granted pursuant to this Section 5 shall
     be ten years from the date of grant, unless a shorter period is required to
     comply with any Applicable Law, and except for the early termination
     provisions contained in the written stock option agreement in the form of
     Exhibit A hereto, in either of which cases such shorter period shall apply.

          (d)  Each option granted pursuant to this Section 5 shall vest and
     become fully exercisable as to fifty percent (50%) of the shares subject to
     the option on the date which is six (6) months from the date the option is
     granted, then daily thereafter as to 1/365th of the total shares subject to
     the option so that the option is fully exercisable no later than one year
     following the date the option is granted.

          (e)  Each option grant to an Non-Employee Director pursuant to this
     Section 5 shall be evidenced by a written stock option agreement, in the
     form of Exhibit A hereto, executed by the Company and the Non-Employee
     Director to whom such option is automatically granted.

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6.   Terms and Conditions of Options.
     ------------------------------- 

          (a)  Each option granted pursuant to the Plan will be evidenced by a
     written stock option agreement executed by the Company and the person to
     whom such option is granted.

          (b)  Except for options granted under Section 5 above, the Plan
     Administrator shall determine the term of each option granted under the
     Plan; provided, however, that the term of an incentive stock option shall
     not be for more than ten years and that, in the case of an incentive stock
     option granted to a person possessing more than 10% of the combined voting
     power of the Company or an Affiliate on the date the option is granted, the
     term of each incentive stock option shall be no more than five years.

          (c)  In the case of incentive stock options, the aggregate fair market
     value (determined as of the time such option is granted) of the Stock with
     respect to which incentive stock options are exercisable for the first time
     by an Eligible Individual in any calendar year (under this Plan and any
     other plans of the Company or its Affiliates) shall not exceed $100,000. If
     the aggregate fair market value of the Stock with respect to which
     incentive stock options are exercisable by an optionee for the first time
     in any calendar year exceeds $100,000, such options shall be treated, to
     the minimum extent required to preserve incentive stock option treatment
     for as many options as possible, as nonqualified stock options. The rule
     set forth in the preceding sentence shall be applied by taking options into
     account in the order in which they were granted.
          
          (d)  The exercise price of each incentive stock option shall be not
     less than the per share fair market value of the Stock subject to such
     option on the date the option is granted. The exercise price of each
     nonqualified stock option shall be as determined by the Plan Administrator.
     Notwithstanding the foregoing, (i) in the case of an incentive stock option
     granted to a person possessing more than 10% of the combined voting power
     of the Company or an Affiliate on the date the option is granted, the
     exercise price shall be not less than 110% of the fair market value of the
     Stock on the date the option is granted, and (ii) in the case of an option
     granted pursuant to Section 5 above, the exercise price shall be not less
     than the per share fair market value of the Stock subject to such option on
     the date the option is granted. The exercise price of an option shall be
     subject to adjustment to the extent provided in Section 3(c), above.

          (e)  The stock option agreement may contain such other terms,
     provisions, and conditions consistent with this Plan as may be determined
     by the Plan Administrator. If an option, or any part thereof, is intended
     to qualify as an incentive stock option, the stock option agreement shall
     contain those terms and conditions which are necessary to so qualify it.

          (f)  The maximum number of shares of Stock with respect to which SARs
     or options to acquire Stock may be granted to any individual during any

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     calendar year shall not exceed 1,000,000 shares (which number may be
     increased without stockholder approval to reflect adjustments under Section
     3(c), above, to the extent such increase does not cause the grant to fail
     to qualify as remuneration payable solely on account of one or more
     performance goals within the meaning of Section 162(m) of the Code). To the
     extent required by Section 162(m) of the Code or the regulations
     thereunder, in applying the foregoing limitation with respect to any
     employee, if any option is cancelled, the cancelled option shall continue
     to count against the maximum number of shares for which options may be
     granted to the employee under this Section 6(f). For this purpose, the
     repricing of an option shall be treated as a cancellation of the existing
     option and the grant of a new option to the extent required by Section
     162(m) of the Code or the regulations thereunder.

7.   Payment Upon Exercise of Options.
     -------------------------------- 

          (a)  Payment of the purchase price upon exercise of any option granted
     under this Plan shall be made in cash, by optionee's personal check, a
     certified check, bank draft, or postal or express money order payable to
     the order of the Company in lawful money of the United States
     (collectively, "Cash Consideration"); provided, however, that, except for
     options granted under Section 5 above, the Plan Administrator, in its sole
     discretion, may permit an optionee to pay the option price in whole or in
     part (i) with shares of Stock owned by the optionee or with shares of Stock
     withheld from the shares otherwise deliverable to the optionee upon
     exercise of an option; (ii) by delivery on a form prescribed by the Company
     of an irrevocable direction to a securities broker approved by the Company
     to sell shares of Stock and deliver all or a portion of the proceeds to the
     Company in payment for the Stock; (iii) by delivery of the optionee's
     promissory note with such recourse, interest, security, and redemption
     provisions as the Plan Administrator in its discretion determines
     appropriate; or (iv) in any combination of the foregoing. The exercise
     price of any options granted under Section 5 above, shall be paid in Cash
     Consideration, the consideration specified in clauses (i) or (ii) of the
     preceding sentence or in any combination thereof. Any Stock used to
     exercise options shall be valued at its fair market value on the date of
     the exercise of the option. In addition, the Plan Administrator, in its
     sole discretion, may authorize the surrender by an optionee of all or part
     of an unexercised option (excluding options granted under Section 5 above)
     and authorize a payment in consideration thereof of an amount equal to the
     difference between the aggregate fair market value of the Stock subject to
     such option and the aggregate option price of such Stock. In the Plan
     Administrator's discretion, such payment may be made in cash, shares of
     Stock with a fair market value on the date of surrender equal to the
     payment amount, or some combination thereof.

          (b)  In the event that the exercise price is satisfied by shares
     withheld from the shares of Stock otherwise deliverable to the optionee,
     the Plan Administrator may issue the optionee an additional option, with
     terms identical to the option agreement under which the option was
     exercised, entitling the 

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     optionee to purchase additional shares of Stock equal to the number of
     shares so withheld but at an exercise price equal to the fair market value
     of the Stock on the grant date of the new option; provided, however, that
     no Such additional options may be granted with respect to options granted
     pursuant to Section 5, above.

8.   Terms and Conditions of Restricted Stock Purchases and Bonuses.
     -------------------------------------------------------------- 

          (a)  Each sale (other than upon exercise of options) or bonus grant of
     Restricted Stock pursuant to the Plan will be evidenced by a written
     Restricted Stock purchase or Restricted Stock bonus agreement, as
     applicable, executed by the Company and the person to whom such Restricted
     Stock is sold or granted.

          (b)  The Restricted Stock purchase agreement or Restricted Stock bonus
     agreement may contain such terms, provisions, and conditions consistent
     with this Plan as may be determined by the Plan Administrator, including
     not by way of limitation, payment terms, restrictions on transfer,
     forfeiture provisions, repurchase provisions, and vesting provisions.

          (c)  The Plan Administrator may condition the award or the exercise of
     any right under an award under this Section 8 upon the attainment of one or
     more preestablished objective performance goals meeting the requirements of
     Section 162(m) of the Code and the regulations thereunder.

9.   Terms and Conditions of SARs.  The Plan Administrator may, under such terms
     ----------------------------                                               
and conditions as it deems appropriate, authorize the issuance of SARs evidenced
by a written SAR agreement (which, in the case of tandem options, may be part of
the option agreement to which the SAR relates) executed by the Company and the
person to whom the SARs are granted.  The SAR agreement shall specify the term
for the SARs covered thereby and contain such other terms, provisions and
conditions consistent with this Plan as may be determined by the Plan
Administrator.

10.  Withholding Taxes.
     ----------------- 

          (a)  No Stock shall be granted or sold under the Plan to any Eligible
     Individual, and no SAR may be exercised, until the individual has made
     arrangements acceptable to the Plan Administrator for the satisfaction of
     federal, state, and local income and employment tax withholding
     obligations, including without limitation obligations incident to the
     receipt of Stock under the Plan, the lapsing of restrictions applicable to
     such Stock, the failure to satisfy the conditions for treatment as
     incentive stock options under applicable tax law, or the receipt of cash
     payments. Upon the exercise of an option or the lapsing of a restriction on
     Stock issued under the Plan, the Company (or the optionee's or
     stockholder's employer) may withhold from the shares otherwise deliverable
     to the optionee upon such exercise, or require the stockholder to surrender
     shares of Stock as to which the restriction has lapsed, such number of
     shares having a 

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     fair market value sufficient to satisfy federal, state and local income and
     employment tax withholding obligations.

          (b)  In the event that such tax withholding is satisfied by the
     Company or the optionee's employer withholding shares of Stock otherwise
     deliverable to the optionee, the Plan Administrator may issue the optionee
     an additional option, with terms identical to the option agreement under
     which the option was exercised, entitling the optionee to purchase
     additional shares of Stock equal to the number of shares so withheld but at
     an exercise price equal to the fair market value of the Stock on the grant
     date of the new option; provided, however, that no such additional options
     may be granted with respect to options granted pursuant to Section 5,
     above.

11.  Assignability.  Incentive stock options may not be sold, pledged, assigned,
     -------------                                                              
hypothecated, transferred, or disposed of in any manner other than by will or by
the laws of descent or distribution and may be exercised, during the lifetime of
the optionee, only by the optionee.  Nonqualified stock options and SARs shall
be transferable to the extent provided in the stock option or SAR agreement or
as determined by the Plan Administrator.  Stock subject to a Restricted Stock
purchase agreement or a Restricted Stock bonus agreement shall be transferable
only as provided in such agreement.

12.  Change in Control.
     ----------------- 

          (a)  Notwithstanding anything to the contrary contained in the Plan,
     each stock option, SAR, Restricted Stock bonus or Restricted Stock purchase
     agreement (or an amendment thereto) evidencing an option, SAR, Restricted
     Stock bonus or Restricted Stock purchase hereunder shall automatically and
     without further action be fully vested, nonforfeitable and become
     exercisable, and any Restricted Stock covered by such an agreement shall be
     released from restrictions on transfer and repurchase or forfeiture rights,
     on the twenty-second day after any Share Acquisition Date, unless prior to
     such twenty-second day a majority of the Continuing Directors then in
     office has determined that the transaction pursuant to which a Person has
     become an Acquiring Person is an Approved Transaction.

          (b)  Certain Definitions.  For purposes of this Section 12, the 
               -------------------                  
     following definitions shall apply:

     "Acquiring Person" means any Person who or which, together with all
      ----------------                                                  
Affiliates and Associates of such Person, shall be the Beneficial Owner of 20%
or more of the Common Shares then outstanding, but shall not include the
Company, any Subsidiary of the Company or any employee benefit plan of the
Company or any Subsidiary of the Company, or any entity holding Common Shares
for or pursuant to the terms of any such plan.  Notwithstanding the foregoing,
no Person shall become an "Acquiring Person" as the result of an acquisition of
Common Shares by the Company which, by reducing the number of shares
outstanding, increases the proportionate number of shares beneficially owned by
such Person to 20% or more of the Common Shares of

                                       10
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the Company then outstanding; provided, however, that if a Person becomes the
                              --------  -------
Beneficial Owner of 20% or more of the Common Shares of the Company then
outstanding by reason of share purchases by the Company and shall, after such
share purchases by the Company, becomes the Beneficial Owner of any additional
Common Shares of the Company, then such Person shall be deemed to be an
"Acquiring Person".

     "Affiliate" and "Associate" have the respective meanings ascribed to such
      ---------       ---------                                               
terms in Rule 12b-2 of the General Rules and Regulations under the Exchange Act.

     "Approved Transaction" means any transaction that occurs at a time when
      --------------------                                                  
Continuing Directors are in office and a majority of the Continuing Directors
then in office has determined that the transaction is in the best interest of
the Company and its stockholders.

     A Person shall be deemed the "Beneficial Owner" of and shall be deemed to
                                   ----------------                           
"beneficially own" any securities: (i) which such Person or any of such Person's
Affiliates or Associates beneficially owns, directly or indirectly; (ii) which
such Person or any of such Person's Affiliates or Associates has (A) the right
to acquire (whether such right is exercisable immediately or only after the
passage of time) pursuant to any agreement, arrangement or understanding, or
upon the exercise of conversion rights, exchange rights, rights (other than the
Rights), warrants or options, or otherwise; provided, however, that a Person
                                            --------  -------               
shall not be deemed the Beneficial Owner of, or to beneficially own, securities
tendered pursuant to a tender or exchange offer made by or on behalf of such
Person or any of such Person's Affiliates or Associates until such tendered
securities are accepted for purchase or exchange; or (B) the right to vote
pursuant to any agreement, arrangement or understanding; provided, however, that
                                                         --------  -------      
a Person shall not be deemed the Beneficial Owner of, or to beneficially own,
any security if the agreement, arrangement or understanding to vote such
security (1) arises solely from a revocable proxy or consent given to such
person in response to a public proxy or consent solicitation made pursuant to,
and in accordance with, the applicable rules and regulations of the Exchange Act
and (2) is not also then reportable on Schedule 13D under the Exchange Act (or
any comparable or successor report); or (iii) which are beneficially owned,
directly or indirectly, by any other Person with which such Person or any of
such Person's Affiliates or Associates has any agreement, arrangement or
understanding for the purpose of acquiring, holding, voting (except to the
extent contemplated by the proviso to clause (ii)(B) of this definition) or
disposing of any securities of the Company; provided further, however, that
nothing in this Section 12 shall cause a Person to be the Beneficial Owner of,
or to beneficially own, any securities (x) acquired through such Person's
participation in the business of underwriting securities in good faith in a firm
commitment underwriting until the expiration of forty days after the date of
such acquisition or (y) which such Person has reported on Schedule 13G under the
Exchange Act and has not ceased to be eligible to report on Schedule 13G
pursuant to Rule 13d-1 under the Exchange Act.

     "Common Shares" means the shares of common stock, par value $.0001 per
      -------------                                                        
share, of the Company.

                                       11
<PAGE>
 
     "Continuing Director" means (i) any member of the Board of Directors of the
      -------------------                                                       
Company, while such Person is a member of the Board, who is not an Acquiring
Person, or an Affiliate or Associate of an Acquiring Person, or a representative
of an Acquiring Person or of any such Affiliate or Associate, and who was, if
applicable, a member of the Board prior to the time that any Person becomes an
Acquiring Person, or (ii) any Person who subsequently becomes a member of the
Board, while such Person is a member of the Board, who is not an Acquiring
Person, or an Affiliate or Associate of an Acquiring Person, or a representative
of an Acquiring Person or of any such Affiliate or Associate, if such Person's
nomination for election or election to the Board is recommended or approved by a
majority of Continuing Directors.

     "Exchange Act" means the Securities Exchange Act of 1934, as amended, and
      ------------                                                            
the rules and regulations promulgated thereunder.

     "Person" means any individual, firm, partnership, corporation or other
      ------                                                               
entity, and shall include any successor (by merger or otherwise) of such entity.

     "Rights" means the rights granted to the Company's shareholders to purchase
      ------                                                                    
additional Common Shares under certain circumstances, as described in that
certain Rights Agreement, dated as of May 5, 1988, by and between the Company
and The First National Bank of Boston, as rights agent.

     "Share Acquisition Date" means the first date of public announcement by the
      ----------------------                                                    
Company or an Acquiring Person that a Person has become an Acquiring Person.

     "Subsidiary" of any Person means any corporation or other entity of which a
      ----------                                                                
majority of the voting power of the voting equity securities or equity interest
is owned, directly or indirectly, by such Person, or which is otherwise
controlled by such Person.

13.  Amendment, Suspension, or Termination of the Plan.
     ------------------------------------------------- 

          (a)  The Board may at any time amend, suspend or terminate the Plan as
     it deems advisable; provided that such amendment, suspension or termination
     complies with all applicable requirements of state and federal law,
     including any applicable requirement that the Plan or an amendment to the
     Plan be approved by the stockholders, and provided further that, except as
     provided in Section 3(c) above, the Board shall in no event amend the Plan
     in the following respects without the consent of stockholders then
     sufficient to approve the Plan in the first instance:

               (1)  To materially increase the benefits accruing to participants
     under the Plan;

               (2)  To materially increase the number of shares of Stock
     available under the Plan or to increase the number of shares of Stock
     available for grant of incentive stock options under the Plan; or

                                       12
<PAGE>
 
               (3)  To materially modify the eligibility requirements for
     participation in the Plan or the class of employees eligible to receive
     options under the Plan or to change the designation or class of persons
     eligible to receive incentive stock options under the Plan.

          (b)  No option or SAR may be granted nor may any Stock be issued
     (other than upon exercise of outstanding options) under the Plan during any
     suspension or after the termination of the Plan, and no amendment,
     suspension, or termination of the Plan shall, without the affected
     individual's consent, alter or impair any rights or obligations under any
     option or SAR previously granted under the Plan.


14.  Term of Plan.  The Plan shall terminate with respect to the grant of
     ------------                                                        
additional awards on the tenth anniversary of the date the Plan is approved by
the stockholders, unless previously terminated by the Board pursuant to Section
13.

15.  Use of Proceeds.  Cash proceeds realized from the exercise of options
     ---------------                                                      
granted under the Plan or from other sales of Stock under the Plan shall
constitute general funds of the Company.

16.  Stockholder Approval.  The Plan was adopted by the Board on March 1, 1995
     --------------------                                                     
and became effective when approved by the Company's stockholders on May 31,
1995.  On February 29, 1996, the Board adopted and approved an amendment to
increase the automatic option grants to Non-Employee Directors from 5,000 to
7,500 shares of Stock which became effective when approved by the Company's
stockholders on July 23, 1996.  On February 19, 1999, the Board adopted and
approved an amendment and restatement of the Plan to reflect amendments
promulgated by the Securities and Exchange Commission to Rule 16b-3 applicable
to the Plan, which amendment and restatement was not subject to stockholder
approval.

17.  No Employment Right.  Nothing in this Plan or any instrument executed or
     -------------------                                                     
any award granted pursuant thereto shall confer upon any employee, independent
contractor, consultant or director any right to continue in the employ of the
Company or any Affiliate (or to continue acting as an independent contractor,
consultant or director) or shall affect the right of the Company or any
Affiliate to terminate the employment, contractual or consulting relationship or
directorship of any person, with or without cause.

                                       13
<PAGE>
 
                              ACUSON CORPORATION
         NON-EMPLOYEE DIRECTORS' NON-QUALIFIED STOCK OPTION AGREEMENT

     This agreement (the "Agreement") is made as of __________ 199_ (the "Grant
Date") between Acuson Corporation (the "Company") and ("Optionee").

     WITNESSETH:

     WHEREAS, the Company has adopted the Acuson Corporation 1995 Stock
Incentive Plan (the "Plan"), which Plan is incorporated in this Agreement by
reference and made a part of it (capitalized terms shall have the meaning
ascribed to them in the Plan); and

     WHEREAS, the Plan provides for automatic option grants to Non-Employee
Directors of the Company;

     NOW, THEREFORE, in consideration of the mutual covenants hereinafter set
forth, the parties to this Agreement hereby agree as follows:

     1.  Option Grant. The Company hereby grants to Optionee the right and
         ------------
option to purchase from the Company on the terms and conditions hereinafter
set forth, all or any part of an aggregate of Seven Thousand Five Hundred
(7,500) shares of the Common Stock, $.0001 par value, of the Company (the
"Stock").The exercise price of the Stock subject to this option shall be $___
per share, which is not less than the fair market value per share of the Stock
on the Grant Date. This grant is an automatic option grant under Section 5 of
the Plan.

     2.  Option Period. This option shall be exercisable only during the period
         -------------
(the "Option Period") commencing on the Grant Date and, except as provided in
paragraph 3, ending on the date (the "Terminal Date") which shall be ten years
from the Grant Date. During the Option Period, the exercisability of this option
shall be subject to the limitations of paragraph 3 and the vesting provisions of
paragraph 4.

     3.  Limits on Option Period.  The Option Period may end before the Terminal
         -----------------------                                                
Date, as follows:

               (a)  If Optionee ceases to be a director on the Company's Board
     of Directors (the "Board") for any reason other than death, disability
     (within the meaning of subparagraph (c) below) or cause during the Option
     Period, the Option Period shall terminate on the earlier of (i) the last
     day of the period, beginning on the day next following the day on which the
     Optionee ceases to be a director, which equals in length the most recent
     period of the Optionee's continuous service as a director (including all
     portions of such period prior to the Grant Date), (ii) three years after
     the

                                       14
<PAGE>
 
     date Optionee ceases to be a director, or (iii) the Terminal Date. In each
     case this option shall be exercisable only to the extent exercisable under
     paragraph 4 on the date Optionee ceases to be a director.

               (b)  If Optionee should die while serving on the Board, the
     Option Period shall terminate three years after the date of death or on the
     Terminal Date, whichever shall first occur, and this option shall be
     exercisable only to the extent exercisable under paragraph 4 on the date of
     Optionee's death. In the event of Optionee's death, Optionee's executor or
     administrator or the person or persons to whom Optionee's rights under this
     option shall pass by will or by the applicable laws of descent and
     distribution may exercise the entire unexercised portion of this option to
     the extent exercisable on the date of Optionee's death.

               (c)  If Optionee ceases to be a director by reason of disability,
     as defined below, the Option Period shall terminate three years after the
     date Optionee ceases to be a director or on the Terminal Date, whichever
     shall first occur, and this option shall be exercisable only to the extent
     exercisable under paragraph 4 on the date Optionee ceases to be a director.
     For purposes of this subparagraph (c), an individual is disabled if he or
     she is unable to engage in any substantial gainful activity by reason of
     any medically determinable physical or mental impairment which can be
     expected to result in death or which has lasted or can be expected to last
     for a continuous period of not less than 12 months. An individual shall not
     be considered to be disabled unless he or she furnishes proof of the
     existence thereof in such form and manner, and at such times, as the Board
     may require.

               (d)  If Optionee is removed from the Board for cause during the
     Option Period, the Option Period shall terminate on the date of such
     Optionee's removal as a director and shall not thereafter be exercisable to
     any extent.


     4.   Vesting of Right to Exercise Options.
          ------------------------------------ 
               (a)  This option shall vest as to fifty percent (50%) of the
     number of shares originally covered by this option on the date which is six
     months from the Grant Date, then daily thereafter in installments of
     1/365th of the total shares subject to this option so that this option will
     become fully vested and exercisable no later than one (1) year following
     the Grant Date.

               (b)  Vesting of this option will cease prior to this option
     becoming fully vested at such time that Optionee ceases to be a director of
     the Company, including by reason of death or disability.

                                       15
<PAGE>
 
               (c) Fractional shares shall not vest until such time as
     additional fractional shares included in other installments allocated to
     this option can be combined with the existing fractional shares to
     constitute one or more whole shares.

               (d)  Notwithstanding the foregoing, this option shall be fully
     vested and nonforfeitable and shall become fully exercisable under the
     circumstances specified in Section 12 of the Plan.


     5.   Method of Exercise.
          ------------------
 
               (a)  Optionee may exercise this option with respect to all or any
     part of the shares of Stock then subject to such exercise by giving the
     Company written notice of such exercise, specifying the number of such
     shares as to which this option is exercised. Such notice shall be
     accompanied by an amount equal to the exercise price of such shares, in any
     of the forms permitted under Section 7 of the Plan.

               (b)  If required by the Company, Optionee shall give the Company
     satisfactory assurance in writing, signed by Optionee or Optionee's legal
     representative, as the case may be, that such shares are being purchased
     for investment and not with a view to the distribution thereof, provided
     that such assurance shall be deemed inapplicable to (i) any sale of such
     shares by such Optionee made in accordance with the terms of a registration
     statement covering such sale, which has heretofore been (or may hereafter
     be) filed and become effective under the Securities Act of 1933, as
     amended, and with respect to which no stop order suspending the
     effectiveness thereof has been issued, and (ii) any other sale of such
     shares with respect to which, in the opinion of counsel for the Company,
     such assurance is not required to be given in order to comply with the
     provisions of the Securities Act of 1933, as amended.

               (c)  As soon as practicable after receipt of the notice required
     in paragraph 5(a) and satisfaction of the conditions set forth in paragraph
     5(b), the Company shall, without transfer or issue tax and without other
     incidental expense to Optionee, deliver to Optionee at the office of the
     Company at 1220 Charleston Road, Mountain View, CA 94043, attention of the
     Corporate Secretary, or such other place as may be mutually acceptable to
     the Company and Optionee, a certificate or certificates for such shares of
     Stock; provided, however, that the time of such delivery may be postponed
     by the Company for such period as may be required for it with reasonable
     diligence to comply with applicable registration requirements under the
     Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as
     amended, any applicable listing requirements of any national securities
     exchange, and requirements under any other law or regulation applicable to
     the issuance or transfer of such shares. If Optionee fails to accept
     delivery of and pay for all or any part of

                                       16
<PAGE>
 
     the number of shares specified in such notice upon tender or delivery
     thereof, Optionee's right to purchase such shares may be terminated by the
     Company at its election. In no event shall the Company be required to issue
     fractional shares upon the exercise of this option.

     6.  Withholding.  Optionee agrees to make appropriate arrangements with
         -----------
the Company for satisfaction of any applicable federal, state or local income
tax withholding requirements or social security requirements .


     7.  Changes in Capitalization.  If there should be any change in a class 
         -------------------------
of  Stock subject to this option, through merger, consolidation, reorganization,
recapitalization, reincorporation, stock split, stock dividend (in excess of two
percent) or other change in the capital structure of the Company, appropriate
adjustments shall be made in order to preserve, but not to increase, the
benefits to Optionee, including adjustments of the number and kind of shares of
such Stock subject to this option and of the price per share.  Any adjustment
made pursuant to this paragraph 7 as a consequence of a change in the capital
structure of the Company shall not entitle Optionee to acquire a number of
shares of such Stock of the Company or shares of stock of any successor company
greater than the number of shares Optionee would receive if, prior to such
change, Optionee had actually held a number of shares of such Stock equal to the
number of shares subject to this option.

     8.  Transferability.  This Option may be transferred by the Optionee in a
         ---------------
manner and to the extent acceptable to the Plan Administrator as evidenced by a
writing signed by the Company and the Optionee.

     9.  No Stockholder Rights.  Neither Optionee nor any person entitled to
         ---------------------
exercise Optionee's rights in the event of Optionee's death shall have any of
the rights of a stockholder with respect to the shares of Stock subject to this
option except to the extent the certificates for such shares shall have been
issued upon the exercise of this option.

     10.  No Employment Right.  Nothing in the Plan or this Agreement shall
          --------------------
confer upon the Optionee any right to continue service as a director of the
Company or any Affiliate or shall affect the right of the Company or any
Affiliate or the shareholders of the Company or any Affiliate, as the case may
be, to terminate the directorship of Optionee, with or without cause.

     11.  Notice.  Any notice required to be given to the Company under the
          ------
terms of this Agreement shall be given in writing and addressed to the Company
in care of its Corporate Secretary at the office of the Company at 1220
Charleston Road, Mountain View, CA 94043, and any notice to be given to Optionee
shall be given in writing and addressed to Optionee at the address given by
Optionee beneath Optionee's signature to this Agreement, or such other address
as either party to this Agreement may hereafter designate in writing to the
other. Any such notice shall be deemed to have been duly given when

                                       17
<PAGE>
 
enclosed in a properly sealed envelope addressed as aforesaid, registered or
certified and deposited (postage and registration or certification fee prepaid)
in a post office or branch post office regularly maintained by the United
States.

     12.  Successors.  This Agreement shall be binding upon and inure to the
          ----------
benefit of any successor or successors of the Company. Where the context
permits, "Optionee" as used in this Agreement shall include Optionee's executor,
administrator or other legal representative or the person or persons to whom
Optionee's rights pass by will or the applicable laws of descent and
distribution.

     13.  Applicable Law.  The interpretation, performance, and enforcement of
          --------------
this Agreement shall be governed by the laws of the State of California.

     IN  WITNESS WHEREOF, this Agreement has been executed as of the day and 
year first written above.

                              Acuson Corporation
                              a Delaware corporation

                              By:___________________________________

                              Title:________________________________


                              Optionee
                              Signature:____________________________

                              Address:______________________________
                                      ______________________________
                                      ______________________________  

                                       18