Document:

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                                                                   Exhibit 10.06

                                 FIRST AMENDMENT

             THIS FIRST AMENDMENT TO THE RETENTION AGREEMENT (this "Amendment")
is made as of November 2, 2005 by and among ALARIS Medical Systems, Inc.,
(which has been given the legal designation of Cardinal Health 303, Inc.) a
Delaware corporation (the "Company") and David L. Schlotterbeck (the "Employee,"
and, together with the Company, the "Parties").

                                   WITNESSETH:

            WHEREAS, the Parties are the parties to a Retention Agreement dated
August 31, 2004 (the "Agreement"), and desire to amend the Agreement as set
forth herein (all capitalized terms set forth in this Amendment but not defined
herein shall have the meanings ascribed to them in the Agreement).

            NOW, THEREFORE, the Parties agree as follows:

            1. Target Date. The Agreement is hereby amended to provide that all
references to the "Target Date" (other than those in Section 1 of the Agreement,
which shall continue to refer to June 28, 2006) shall refer to January 25, 2008,
and the definition of Target Date in Section 1 of the Agreement shall be
superseded by this Section 1 of this Amendment and deemed deleted. Nothing in
this First Amendment to the Retention Agreement shall modify the vesting and
termination payment provisions with respect to the Retention Bonus in the
Agreement.

            2. Section 1. Section 1 is hereby amended to provide that if the
Retention Bonus is earned, it shall, instead of being paid within 15 days
following June 28, 2006, be paid (with interest accruing from June 28, 2006
through the Retention Bonus Deferred Payment Date at the RATE OF 6.00%) as soon
as practicable following the first to occur of (x) the Employee's death or (y)
within 15 days following the first date after June 30, 2008 on which Employee
could be paid the Retention Bonus without the Company being subject to the
limitations on deductibility imposed by Section 162(m) of the Code. The final
sentence of Section 1 of the Agreement shall be restated in its entirety as
follows: "In addition, if at anytime after June 28, 2006 (the "Target Date") the
Employee voluntarily departs from the Company, the Company shall pay to the
Employee a one time lump sum cash bonus equal to one hundred percent (100%) of
the Employee's base annual pay as of the date of termination, as soon as
practicable following the date of termination (or if the Employee is a
"specified employee" (as defined in Section 409A(a)(2)(B)(i) of the Code), the
six-month anniversary of the date of termination)."

             3. 2008 Payouts. In the event that the Employee terminates
employment on or subsequent to the Target Date (during the fiscal year
concluding on June 30, 2008), the Employee shall be entitled to receive (1) at
the same time that annual bonuses are distributed to other participants in the
annual bonus plan in which the Employee is participating for such fiscal year, a
prorated bonus payment (calculated based on application of the same factors that
the Company utilizes with respect to annual bonuses of similarly situated plan
participants for such fiscal year), and (2) at the same time any cash incentive
payments are distributed to participants in any then applicable cash incentive
plans (in addition to the annual bonus plan) in which the Employee is then
participating, a prorated cash payout of an amount (calculated based on
application
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of the same factors that the Company utilizes with respect to similarly situated
plan participants with respect to such plan). In the event the Employee receives
any payments pursuant to this paragraph, each such payment shall be in lieu of
any payment to which the Employee may be entitled with respect to the applicable
annual bonus or other cash incentive plans. The parties will work in good faith
to establish the specific provisions of any incentive awards potentially subject
to this paragraph in a manner that avoids imposition of taxes pursuant to
Section 409A.

            4. Section 4(b)(ii). The Agreement is hereby amended to provide that
Section 4(b)(ii) thereof shall have no application with respect to any Payment
Termination that occurs subsequent to June 28, 2006.

            5. Miscellaneous. This Amendment may be executed by facsimile and in
one or more counterparts, all of which shall be considered one and the same
agreement. Except as expressly amended hereby, the terms and conditions of the
Agreement shall remain in full force and effect. This Amendment shall be
governed by and construed in accordance with the choice of law and dispute
resolution provisions of the Agreement.

            IN WITNESS WHEREOF, and intending to be legally bound hereby, the
Parties have executed the foregoing Amendment as of the 2nd day of November,
2005.

                                           CARDINAL HEALTH 303, INC.

                                           By: /s/ George L. Fotiades
                                               --------------------------
                                               Name:  George L. Fotiades
                                               Title: President and Chief
                                                      Operating Officer
                                                      Cardinal Health, Inc.

                                           /s/ David L. Schlotterbeck
                                           -------------------------------------
                                           David L. Schlotterbeck

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                                                                   Exhibit 10.07

                        DIRECTORS' STOCK OPTION AGREEMENT
                                    UNDER THE
             AMENDED AND RESTATED EQUITY INCENTIVE PLAN, AS AMENDED

      Cardinal Health, Inc., an Ohio corporation (the "Company"), has granted to
_____________ (the "Grantee"), an option (the "Option") to purchase _____ Common
Shares, without par value (the "Shares"), of the Company for a total purchase
price of $__________ (i.e., the equivalent of $____ for each full Share). The
Option has been granted pursuant to the Cardinal Health, Inc. Amended and
Restated Equity Incentive Plan, as amended (the "Plan"), and shall include and
be subject to all provisions of the Plan, which are hereby incorporated herein
by reference, and shall be subject to the following provisions of this
agreement. Capitalized terms used herein which are not specifically defined
herein shall have the meanings ascribed to such terms in the Plan. This Option,
unless previously forfeited, shall vest and become exercisable on ___________,
and shall expire on ___________. Notwithstanding the foregoing, in the event of
a Change of Control prior to Grantee's termination of service on the Company's
Board of Directors (the "Board"), the Option shall vest in full.

      Section 1. Method of Exercise. At any time when the Option is exercisable
under the Plan, the Option shall be exercisable from time to time by written
notice to the Company (the date such notice is received by the Company, the
"Exercise Date") which shall:

            (a) state that the Option is thereby being exercised, the number of
      Shares with respect to which the Option is being exercised, each person in
      whose name any certificates for the Shares should be registered and his or
      her address and social security number;

            (b) be signed by the person or persons entitled to exercise the
      Option and, if the Option is being exercised by anyone other than the
      Grantee, be accompanied by proof satisfactory to counsel for the Company
      of the right of such person or persons to exercise the Option under the
      Plan and all applicable laws and regulations; and

            (c) contain such representations, warranties and agreements with
      respect to the investment intent of such person or persons in form and
      substance satisfactory to counsel for the Company.

      Section 2. Payment of Exercise Price. The full exercise price for the
Option shall be paid to the Company: (i) in cash, (ii) by delivery of Shares
with a fair market value equal to the total exercise price at the time of
exercise, (iii) by attestation of ownership of such already-owned Shares, (iv)
by delivery of cash on the extension of credit by a broker-dealer to whom the
Grantee (or other person authorized to exercise the Option) has submitted a
notice of exercise or an irrevocable election to effect such extension of
credit, or (v) by a combination of the preceding methods. Any Shares delivered
or attested to in payment of an exercise price shall be valued as of the
Exercise Date.

      Section 3. Transferability. The Option shall be transferable (I) at the
Grantee's death, by the Grantee by will or pursuant to the laws of descent and
distribution, and (II) by the Grantee during the Grantee's lifetime, without
payment of consideration, to (a) the spouse, former spouse, parents,
stepparents, grandparents, parents-in-law, siblings, siblings-in-law, children,
stepchildren, children-in-law, grandchildren, nieces, or nephews of the Grantee,
or any other persons sharing the Grantee's household (other than tenants or
employees) (collectively, "Family Members"), (b) a trust or trusts for the
primary benefit of the Grantee or such Family Members, (c) a foundation in which
the Grantee or such Family Members control the management of assets, or (d) a
partnership in which the Grantee or

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such Family Members are the majority or controlling partners; provided, however,
that subsequent transfers of the transferred Option shall be prohibited, except
(X) if the transferee is an individual, at the transferee's death by the
transferee by will or pursuant to the laws of descent and distribution, and (Y)
without payment of consideration to the individuals or entities listed in
Subsections II(a), (b), or (c), above, with respect to the original Grantee. The
Committee may, in its discretion, permit transfers to other persons and entities
as permitted by the Plan. Neither a transfer under a domestic relations order in
settlement of marital property rights nor a transfer to an entity in which more
than fifty percent (50%) of the voting interests are owned by the Grantee or
Family Members in exchange for an interest in that entity shall be considered to
be a transfer for consideration. Within ten days of any transfer, the Grantee
shall notify the Stock Option Administrator of the Company in writing of the
transfer. Following transfer, the Option shall continue to be subject to the
same terms and conditions as were applicable immediately prior to transfer and,
except as otherwise provided in the Plan or this agreement, references to the
original Grantee shall be deemed to refer to the transferee. The events of
Grantee's termination of service on the Board provided in Section 4 hereof shall
continue to be applied with respect to the original Grantee, following which the
Option shall be exercisable by the transferee only to the extent, and for the
periods, specified in Section 4. The conduct prohibited of Grantee in Section 5
hereof shall continue to be prohibited of Grantee following transfer to the same
extent as immediately prior to transfer and the Option (or its economic value,
as applicable) shall be subject to forfeiture by the transferee and recoupment
from the Grantee to the same extent as would have been the case of the Grantee
had the Option not been transferred. The Company shall have no obligation to
notify any transferee of the Option of the Grantee's termination of service on
the Board for any reason. The Grantee shall remain subject to the recoupment
provisions of Section 5 of this agreement and tax withholding provisions of
Section 13(d) of the Plan following transfer of the Option.

      Section 4. Termination of Service on the Board.

            (a) Termination of Service by Death. If the Grantee ceases to be a
      member of the Board by reason of death, any unvested portion of the Option
      shall vest upon and become exercisable in full from and after such death.
      The Option may thereafter be exercised by any transferee of Grantee, if
      applicable, or by the legal representative of the estate or by the legatee
      of Grantee under the will of Grantee until expiration of the original term
      of the Option.

            (b) Other Termination of Service. If the Grantee ceases to be a
      member of the Board for any reason other than death, any unexercised
      portion of the Option which has not vested on such date of termination of
      service on the Board will automatically terminate on the date of such
      termination of service. Any unexercised portion of the Option which
      otherwise is exercisable by the Grantee (or any transferee) shall remain
      exercisable until expiration of the original term of the Option; provided,
      however, that upon the discharge of the Grantee as a Director of the
      Company for Cause (as defined in the Plan), the Option (whether then held
      by Grantee or any transferee) shall immediately lapse and be of no further
      force or effect.

      Section 5. Special Forfeiture/Repayment Rules. For so long as Grantee
continues as a Director of the Company and for three years following Grantee's
termination of service on the Board, Grantee agrees not to engage in Triggering
Conduct. If Grantee engages in Triggering Conduct during the time period set
forth in the preceding sentence or in Competitor Triggering Conduct during the
time period set forth in the definition of such conduct below, then: (a) the
Option (or any part thereof that has not been exercised) shall immediately and
automatically terminate, be forfeited, and shall cease to be exercisable at any
time; and (b) the Grantee shall, within 30 days following written notice from
the Company, pay to the Company an amount equal to the gross option gain
realized or obtained by the Grantee or any transferee resulting from the
exercise of such Option, measured at the date of exercise (i.e., the difference

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between the market value of the Shares underlying the Option on the exercise
date and the exercise price paid for such Shares underlying the Option), with
respect to any portion of the Option that has already been exercised at any time
within three years prior to the Triggering Conduct (the "Look-Back Period"),
less $1.00. If Grantee engages only in Competitor Triggering Conduct, then the
Look-Back Period shall be shortened to exclude any period more than one year
prior to Grantee's termination of service on the Board, but including any period
between the time of Grantee's termination of service on the Board and the time
Grantee engaged in Competitor Triggering Conduct.

      As used herein, "Triggering Conduct" shall include disclosing or using in
any capacity other than as necessary in the performance of duties as a Director
of the Company any confidential information, trade secrets or other business
sensitive information or material concerning the Company or its subsidiaries
(collectively, the "Cardinal Group"); violation of Company policies, including
conduct which would constitute a breach of the then-most recent version of the
Certificate of Compliance with Company Policies and/or Certificate of Compliance
with Company Business Ethics Policies signed by the Grantee; directly or
indirectly employing, contacting concerning employment, or participating in any
way in the recruitment for employment of (whether as an employee, officer,
director, agent, consultant or independent contractor), any person who was or is
an employee, representative, officer, or director of the Cardinal Group at any
time within the twelve (12) months prior to the termination of employment or
service with the Cardinal Group; any action by Grantee and/or Grantee's
representatives that either does or could reasonably be expected to undermine,
diminish or otherwise damage the relationship between the Cardinal Group and any
of its customers, potential customers, vendors and/or suppliers that were known
to Grantee; and breaching any provision of any benefit or severance agreement
with a member of the Cardinal Group. As used herein, "Competitor Triggering
Conduct" shall include, either during Grantee's service as a Director or within
one year following Grantee's termination of service on the Board, accepting
employment with or serving as a consultant, advisor, or any other capacity to an
entity that is in competition with the business conducted by any member of the
Cardinal Group (a "Competitor") including, but not limited to, employment or
another business relationship with any Competitor if Grantee has been introduced
to trade secrets, confidential information or business sensitive information
during Grantee's service as a Director of the Company and such information would
aid the Competitor because the threat of disclosure of such information is so
great that, for purposes of this agreement, it must be assumed that such
disclosure would occur. For purposes of this agreement, the nature and extent of
Grantee's activities, if any, disclosed to and reviewed by the Nominating and
Governance Committee of the Board (the "Nominating Committee") prior to the date
of Grantee's termination of service on the Board shall not, unless specified to
the contrary by the Nominating Committee in a written notice given to Grantee,
be deemed to be Competitor Triggering Conduct. The Committee shall resolve in
good faith any disputes concerning whether particular conduct constitutes
Triggering Conduct or Competitor Triggering Conduct, and any such determination
by the Committee shall be conclusive and binding on all interested persons. The
Grantee may be released from Grantee's obligations under this Section 5 only if
the Committee (or its duly appointed designee) determines, in writing and in its
sole discretion, that such action is in the best interests of the Company.

      Nothing in this Section 5 constitutes a so-called "noncompete" covenant.
However, this Section 5 does prohibit certain conduct while Grantee is
associated with the Cardinal Group and thereafter and does provide for the
forfeiture or repayment of the benefits granted by this agreement under certain
circumstances, including but not limited to the Grantee's acceptance of
employment with a Competitor. Grantee agrees to provide the Company with at
least ten (10) days written notice prior to directly or indirectly accepting
employment with or serving as a consultant, advisor, or in any other capacity to
a Competitor, and further agrees to inform any such new employer, before
accepting employment, of the terms of this Section 5 and of the Grantee's
continuing obligations contained herein.

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      No provision of this agreement shall diminish, negate, or otherwise impact
any separate noncompete or other agreement to which Grantee may be a party,
including but not limited to the then-most recent version of the Certificate of
Compliance with Company Policies and/or Certificate of Compliance with Company
Business Ethics Policies; provided, however, that to the extent that any
provisions contained in any other agreement are inconsistent in any manner with
the restrictions and covenants of Grantee contained in this agreement, the
provisions of this agreement shall take precedence and such other inconsistent
provisions shall be null and void. Grantee acknowledges and agrees that the
provisions contained in this Section 5 are being made for the benefit of the
Company in consideration of Grantee's receipt of the Option, in consideration of
exposing Grantee to the Company's business operations and confidential
information, and for other good and valuable consideration, the adequacy of
which consideration is hereby expressly confirmed. Grantee further acknowledges
that the receipt of the Option and execution of this agreement are voluntary
actions on the part of Grantee, and that the Company is unwilling to provide the
Option to Grantee without including the restrictions and covenants of Grantee
contained in this agreement. Further, the parties agree and acknowledge that the
provisions contained in this Section 5 are ancillary to or part of an otherwise
enforceable agreement at the time the agreement is made.

      Section 6. Right of Set-Off. By accepting this Option, the Grantee
consents to a deduction from and set-off against any amounts owed to the Grantee
by the Company from time to time (including but not limited to amounts owed to
the Grantee as Director fees, severance payments, or other fringe benefits) to
the extent of the amounts owed to the Company by the Grantee under this
agreement.

      Section 7. Restrictions on Exercise. The Option is subject to all
restrictions in this agreement or in the Plan. As a condition of any exercise of
the Option, the Company may require the Grantee or his or her transferee or
successor to make such representation and warranties and to enter into such
agreements as are necessary to comply with any applicable law or regulation or
to confirm any factual matters reasonably requested by counsel for the Company.

      Section 8. Governing Law/Venue. This agreement shall be governed by the
laws of the State of Ohio, without regard to principles of conflicts of law,
except to the extent superceded by the laws of the United States of America. The
parties agree and acknowledge that the laws of the State of Ohio bear a
substantial relationship to the parties and/or this agreement and that the
Option and benefits granted herein would not be granted without the governance
of the agreement by the laws of the State of Ohio. In addition, all legal
actions or proceedings relating to this agreement shall be brought in state or
federal courts located in Franklin County, Ohio, and the parties executing this
agreement hereby consent to the personal jurisdiction of such courts. Grantee
acknowledges that the covenants contained in Section 5 of this agreement are
reasonable in nature, are fundamental for the protection of the Company's
legitimate business and proprietary interests, and do not adversely affect the
Grantee's ability to earn a living in any capacity that does not violate such
covenants. The parties further agree that, in the event of any violation by
Grantee of any such covenants, the Company will suffer immediate and irreparable
injury for which there is no adequate remedy at law. In the event of any
violation or attempted violations of the restrictions and covenants of Grantee
contained in this Agreement, the Company shall be entitled to specific
performance and injunctive relief or other equitable relief, including the
issuance ex parte of a temporary restraining order, without any showing of
irreparable harm or damage, such irreparable harm being acknowledged and
admitted by Grantee, and Grantee hereby waives any requirement for the securing
or posting of any bond in connection with such remedy, without prejudice to the
rights and remedies afforded the Company hereunder or by law. In the event that
it becomes necessary for the Company to institute legal proceedings under this
agreement, Grantee shall be responsible to the Company for all costs and
reasonable legal fees incurred by the Company with regard to such proceedings.
Any provision of this agreement which is determined by a court of competent
jurisdiction

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to be invalid or unenforceable should be construed or limited in a manner that
is valid and enforceable and that comes closest to the business objectives
intended by such provision, without invalidating or rendering unenforceable the
remaining provisions of this agreement.

      Section 9. Action by the Committee. The parties agree that the
interpretation of this agreement shall rest exclusively and completely within
the sole discretion of the Committee. The parties agree to be bound by the
decisions of the Committee with regard to the interpretation of this agreement
and with regard to any and all matters set forth in this agreement. The
Committee may delegate its functions under this agreement to an officer of the
Company designated by the Committee (hereinafter the "designee"). In fulfilling
its responsibilities hereunder, the Committee or its designee may rely upon
documents, written statements of the parties, or such other material as the
Committee or its designee deems appropriate. The parties agree that there is no
right to be heard or to appear before the Committee or its designee and that any
decision of the Committee or its designee relating to this agreement, including
without limitation whether particular conduct constitutes Triggering Conduct or
Competitor Triggering Conduct, shall be final and binding unless such decision
is arbitrary and capricious.

                                                  CARDINAL HEALTH, INC.

DATE OF GRANT:                                    By: __________________________
                                                  Its: _________________________

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                             ACCEPTANCE OF AGREEMENT

      The Grantee hereby: (a) acknowledges receiving a copy of the Plan, which
has either been previously delivered or is attached to this Agreement, and
represents that he/she is familiar with all provisions of the Plan; and (b)
accepts this Agreement and the Option granted to him/her under this Agreement
subject to all provisions of the Plan and this Agreement. The Grantee further
acknowledges receiving a copy of the Company's most recent annual report to
shareholders and communications routinely distributed to the Company's
shareholders and a copy of the Plan Description dated ___________, pertaining to
the Plan.

                                                     ___________________________
                                                     Grantee Signature

                                                     ___________________________
                                                     Social Security Number

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