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                                                                    EXHIBIT 10.5

Quinton Cardiology Systems, Inc.
Management Incentive Plan - 2004

      -     Eligibility - Sr. Management, Directors, Managers & Selected Key
            Contributors

      -     Funding - Bonus pool funded through accrual of 8% of consolidated
            pretax income; 25% of pretax income after budget is met;
            Compensation Committee may approve additional funding in its
            discretion

      -     Minimum Profitability - No bonuses unless Quinton achieves at least
            2/3 of budgeted pretax income ($4.2 million)

      -     Target Payout - Up to 10% of salary

      -     Stretch Target - Up to 15% of salary (10% target plus 5%
            additional), based on consolidated pre-tax income/bonus pool
            availability

      -     Formula for Payout:

            -     Managers - 40% of target (4% of salary) based on personal
                  objectives set by supervisor

            -     Directors - 20% of target (2% of salary) based on personal
                  objectives set by supervisor

            -     Remainder based on bonus pool, divided among participants in
                  proportion to salary (deducting personal objective payouts
                  first)

            -     Total payouts limited to bonus accrual, so if "earned" bonus
                  amounts based on individual objectives exceed total accrual
                  amount, payouts are reduced ratably in proportion to shortfall

            -     Pro-rated for partial year participation. Must be employed at
                  the time of payment to be eligible.

            -     Subject to change at any time in the sole determination of the
                  Compensation Committee of the Board of Directors.

            -     Payout based on audited results, within 30 days of 2004
                  earnings release.

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Quinton Cardiology Systems, Inc.
Management Incentive Plan - 2004
Addendum for Senior Executives

      -     Eligibility - Named Senior Executives

      -     Funding - Bonus pool funded through accrual of 3% of consolidated
            pretax income; 25% of pretax income after budget is met;
            Compensation Committee may approve additional funding in its
            discretion

      -     No bonuses unless Quinton earns at least 2/3 of budgeted pretax
            income ($4.2 million)

      -     Payout - Up to 50% of salary, including amounts paid out under the
            general MIP plan

      -     Formula for Payout:

            -     Payout amounts determined by dividing bonus pool among
                  participants in proportion to salary up to a cap of 50% of
                  salary (including payouts from regular MIP plan first)

            -     Pro-rated for partial year participation. Must be employed at
                  the time of payment to be eligible.

            -     Subject to change at any time in the sole determination of the
                  Compensation Committee of the Board of Directors.

            -     Payout based on audited results, within 30 days of 2004
                  earnings release.

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Quinton Cardiology Systems, Inc.
Management Incentive Plan - 2004

Senior Executives Participating in MIP Program

Allan Criss, VP Acute Care
Darryl Lustig, VP Primary Care

Senior Executives Participating in Senior Management MIP Program

John Hinson, CEO
Mike Matysik, CFO
Dave Hadley, VP R&D
Atul Jhalani, VP Marketing
Feroze Motafram, VP Operations