COMPOSITE DIRECTORS? STOCK OPTION PLAN1

Exhibit 10.4

COMPOSITE DIRECTORS’ STOCK OPTION PLAN ¹

ARTICLE I

PURPOSE

The purpose of the AMEDISYS, INC. Directors’ Stock Option Plan (the “Plan”) is to secure for AMEDISYS, INC. and its stockholders the benefits arising from stock ownership by its Directors. The Plan will provide a means whereby eligible Directors may purchase shares of the common stock, $.001 par value, of AMEDISYS, INC. pursuant to options granted in accordance with the Plan.

ARTICLE II

DEFINITIONS

The following capitalized terms used in the Plan shall have the respective meanings set forth in this Article:

2.1 “ Annual Grant Date ” shall mean July 1 of each calendar year commencing July 1, 1998 during the term of the Plan or the nearest preceding business day if July 1 falls on a weekend or holiday.

2.2 “ Board ” shall mean the Board of Directors of AMEDISYS, INC.

2.3 “ Chairman ” shall mean the duly appointed Chairman of any standing Committee of the Board.

2.4 “ Change of Control ” shall mean the occurrence of any of the following acts:

(a) The acquisition by any person, entity or “group” within the meaning of Section 13(d) or 14(d) of the Securities Exchange Act of 1934 (the “Exchange Act”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of thirty (30%) percent or more of either the then outstanding shares of the Company’s Common Stock or the combined voting power of the Company’s then outstanding voting securities entitled to vote generally in the election of directors; provided, however, the purchase by underwriters in a firm commitment public offering of the Company’s securities shall not constitute a Change of Control; or

(b) If the individuals who serve on the Company’s Board as of July 1, 1998 (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, any person who becomes a Director subsequent to July 1, 1998, whose election or nomination for election by the Company’s stockholders was approved by a vote of at least a majority of the Directors then compiling the Incumbent Board, shall for purposes of this Agreement be considered as if such person was a member of the Incumbent Board; or

(c) Approval by the Company’s stockholders of: (i) a merger, reorganization or consolidation whereby the Company’s stockholders immediately prior to such approval do not, immediately after consummation of such reorganization, merger or consolidation own more than 50% of the combined voting power entitled to vote generally in the election of directors of the surviving entity’s then outstanding voting securities; or (ii) liquidation or dissolution of the Company; or (iii) the sale of all or substantially all of the assets of the Company.

2.5 “ Committee ” shall mean a duly appointed standing committee of the Board.

2.6 “ Common Stock ” shall mean the common stock, $.001 par value of the Company.

2.7 “ Company ” shall mean Amedisys, Inc. and any of its subsidiaries.

2.8 “ Director ” shall mean any person who is a member of the Board of the Company.

2.9 “ Eligible Director ” shall be any Director who is not a full or part-time employee of the Company.

2.10 “ Exchange Act ” shall mean the Securities Exchange Act of 1934, as amended.

2.11 “ Exercise Price ” shall mean the price per share at which an Option may be exercised.

2.12 “ Fair Market Value ” shall mean the closing price of a share of Common Stock on the principal securities exchange on which such Common Stock is traded on the last preceding business day prior to the date as to which Fair Market Value is being determined, or on the next preceding business day on which such Common Stock is traded, if no shares of Common Stock were traded on such date. If the Common Stock is not traded on a securities exchange, Fair Market Value shall be the closing sales price of the Common Stock as reported on the NASDAQ-National Market System for the last preceding business day prior to the date on which Fair Market Value is to be determined or on the next preceding business day if the Common Stock was not traded on such date. If the Common Stock is not quoted on the NASDAQ-National Market System, Fair Market Value shall be the average of the high bid and low asked prices of the Common Stock in the over-the-counter market on the last preceding business day prior to the day as of which Fair Market Value is being determined, or on the next preceding day on which such high bid and low asked prices were recorded. If the Common Stock is not publicly traded, Fair Market Value shall be determined by the Board, in good faith, but only during any period in which no equity security of the Company’s is registered pursuant to Section 12 of the Exchange Act. In no case shall Fair Market Value be less than the par value per share of the Common Stock. Fair market value shall be determined without regard to any restriction other than a restriction which, by its terms, will never lapse.

2.13 “ Grant Date ” shall mean the Initial Grant Date or the Annual Grant Date as appropriate.

2.14 “ Initial Grant Date ” shall mean with respect to each Eligible Director, the date such Eligible Director is first elected as a member of the Board.

2.15 “ Option ” shall mean an Option, including a Reload Option, to purchase shares granted pursuant to the Plan.

2.16 “ Option Agreement ” shall mean the written agreement described in Article VI herein.

2.17 “ Permanent Disability ” shall mean the condition of an Eligible Director who is unable to participate as a member of the Board by reason of any medically determined physical or mental impairment which can be expected to result in death or which can be expected to last for a continuous period of not less than twelve (12) months.

2.18 “ Purchase Price ” shall be the Exercise Price multiplied by the number of whole shares of Common Stock with respect to which an Option may be exercised.

2.19 “ Plan ” shall mean this Amedisys, Inc. Directors’ Stock Option Plan.

2.20 “ Reload Option ” means an option granted to an Eligible Director equal to the number of shares of Common Stock delivered by the Eligible Director to pay for the exercise of an Option as more fully described in Article XIII - RELOAD OPTIONS.

ARTICLE III

ADMINISTRATION

3.1 General . This Plan shall be administered by the Board in accordance with the express provisions of this Plan, subject to the restrictions contained in Section 16 of the Exchange Act.

3.2 Powers of the Board . The Board shall have full and complete authority to adopt such rules and regulations and to make all such other determinations not inconsistent with the Plan or Section 16 of the Exchange Act (once the Common Stock is registered pursuant to Section 12 of the Exchange Act), as may be necessary for the administration of the Plan.

3.3 Section 16 Compliance . It is the intention of the Company that the Plan, and the administration of the Plan (once the Company’s Common Stock is registered pursuant to Section 12 of the Exchange Act) comply in all respects with Section 16 of the Exchange Act and the rules and regulations promulgated thereunder. If any Plan provision, or any aspect of the administration of the Plan, is found not to be in compliance with Section 16 of the Exchange Act, the provision or administration shall be deemed null and void, and in all events the Plan shall be construed in favor of its meeting the requirements of Rule 16b-3 promulgated under the Exchange Act.

ARTICLE IV

SHARES SUBJECT TO PLAN

Subject to adjustment in accordance with Articles IX and XII an aggregate of 400,000 shares of Common Stock are reserved for issuance under the Plan. Shares of Common Stock reserved under this Plan may be either authorized, but unissued shares of Common Stock or reacquired shares of Common Stock. If an Option, or any portion thereof, shall expire or terminate for any reason without having been exercised in full, the unpurchased shares of Common Stock covered by such Option shall be available for future grants of Options.

ARTICLE V

NON-DISCRETIONARY GRANTS

5.1 Initial Gran ts. On the Initial Grant Date, each Eligible Director shall receive, at the discretion of the Board, the grant of an Option to purchase up to 10,000 shares of Common Stock.

5.2 Annual Grants . On each Annual Grant Date, each Eligible Director shall receive, at the discretion of the Board, the grant of an Option to purchase up to 10,000 sha