<PAGE>   1
                                                                    EXHIBIT 10.6



                                 INCONTROL, INC.

                1996 STOCK OPTION PLAN FOR NONEMPLOYEE DIRECTORS
                    AS AMENDED AND RESTATED ON AUGUST 5, 1997


                               SECTION 1. PURPOSES

        The purposes of the InControl, Inc. 1996 Stock Option Plan for
Nonemployee Directors (this "Plan") are to attract and retain the services of
experienced and knowledgeable nonemployee directors for InControl, Inc. (the
"Company") and to provide added incentive to such directors by providing an
opportunity for stock ownership in the Company.


                            SECTION 2. ADMINISTRATION

        The administrator of this Plan (the "Plan Administrator") shall be the
Board of Directors of the Company (the "Board"). Subject to the terms of this
Plan, the Plan Administrator shall have the power to construe the provisions of
this Plan, to determine all questions arising hereunder and to adopt and amend
such rules and regulations for the administration of this Plan as it may deem
desirable. No member of the Plan Administrator shall participate in any vote by
the Plan Administrator on any matter materially affecting the rights of any such
member under this Plan.


                      SECTION 3. SHARES SUBJECT TO THE PLAN

        Subject to adjustment in accordance with Section 6 hereof, the total
number of shares of the Company's common stock (the "Common Stock") for which
options may be granted under this Plan is 300,000, as such Common Stock was
constituted on the effective date of this Plan (the "Shares"). The Shares shall
be shares currently authorized but unissued or subsequently acquired by the
Company as treasury shares and shall include shares representing the unexercised
portion of any option granted under this Plan which expires or terminates
without being exercised in full.


                SECTION 4. ELIGIBILITY; PARTICIPATION IN THE PLAN

        4.1    ELIGIBLE DIRECTORS

        Each member of the Board elected or appointed who is not otherwise an
employee of the Company or any parent or subsidiary corporation (an "Eligible
Director") shall be eligible to participate in this Plan.

        4.2    INITIAL GRANTS

        Each existing member of the Board immediately prior to the effective
date of this Plan who will continue service as an Eligible Director immediately
following the 1996 Annual Meeting of Stockholders shall automatically receive
the grant of an option to purchase 20,000 Shares on the effective date of this
Plan.




--------------------------------------------------------------------------------
InControl, Inc. 1996 Stock Option Plan For Nonemployee Directors          Page 1


<PAGE>   2

        Commencing with the effective date of this Plan, immediately following
his or her initial election or appointment to the Board, each Eligible Director
shall automatically receive an Option to purchase 30,000 Shares.

        4.3    ANNUAL GRANTS

        Commencing with the 1997 Annual Meeting of Stockholders each Eligible
Director continuing service as an Eligible Director immediately following an
Annual Meeting of Stockholders shall automatically receive an option to purchase
10,000 Shares immediately following each year's Annual Meeting of Stockholders
as an annual grant; provided that an Eligible Director who has received an
initial grant of 30,000 Shares on such date shall not receive an annual grant
until the next Annual Meeting.

        4.4    SUPPLEMENTAL GRANTS

        In addition to the grants under Sections 4.2 and 4.3, from time to time,
during any fiscal year, the Plan Administrator may grant to each Eligible
Director additional options to purchase in the aggregate no more than 15,000
Shares.

        4.5    AVAILABILITY OF SHARES

        No grant shall be made under this Plan if the effect of such grant would
be to obligate the Company to issue more Shares than are reserved under Section
3. If insufficient Shares are reserved under Section 3 to fully fund one or more
grants to be made under this Section 4 on the same date of grant, then the
Shares available shall be divided by the number of Eligible Directors then
entitled to a grant and each such Eligible Director shall be granted an option
for that number of Shares.


                   SECTION 5. TERMS AND CONDITIONS OF OPTIONS

        Each option granted to an Eligible Director under this Plan (such an
Eligible Director, an "Optionee") and the issuance of Shares thereunder shall be
subject to the following terms:

        5.1    OPTION AGREEMENT

        Each option shall be evidenced by an option agreement (an "Agreement")
duly executed on behalf of the Company. Each Agreement shall comply with and be
subject to the terms and conditions of this Plan. Any Agreement may contain such
other terms, provisions and conditions not inconsistent with this Plan as may be
determined by the Plan Administrator.

        5.2    OPTION EXERCISE PRICE

        The option exercise price for an option shall be the closing price, or
if there is no closing price, the mean between the high and the low sales price
of shares of Common Stock as reported on the Nasdaq Stock Market on the day the
option is granted or, if no Common Stock was traded on such date, on the next
succeeding day on which Common Stock is so traded.




--------------------------------------------------------------------------------
InControl, Inc. 1996 Stock Option Plan For Nonemployee Directors          Page 2


<PAGE>   3
        5.3    VESTING AND EXERCISABILITY

        Each stock option granted hereunder shall vest and become exercisable in
accordance with the following schedule:

<TABLE>
<CAPTION>
                     Period of Eligible Director's      Portion of Total
                              Continuous                 Option Which Is
                Service as a Director With the Company     Exercisable
                  From the Date the Option is Granted
                -------------------------------------   ----------------
                       <S>                                    <C>
                       Less than twelve months                 0%

                            Twelve months                      33 1/3%

                          Twenty-four months                   66 2/3%

                          Thirty-six months                   100%
</TABLE>

        5.4    TIME AND MANNER OF EXERCISE OF OPTION

        Each option may be exercised in whole or in part at any time and from
time to time, subject to stockholder approval of this Plan; provided, however,
that no fewer than 20% of the Shares purchasable under the option (or the
remaining Shares then purchasable under the option, if less than 20%) may be
purchased upon any exercise of any option hereunder and that only whole Shares
will be issued pursuant to the exercise of any option.

        Any option may be exercised by giving written notice, signed by the
person exercising the option, to the Company stating the number of Shares with
respect to which the option is being exercised, accompanied by payment in full
for such Shares, which payment may be in whole or in part (a) in cash or by
check, (b) in shares of Common Stock already owned for at least six months by
the person exercising the option, valued at fair market value at the time of
such exercise, or (c) by delivery of a properly executed exercise notice,
together with irrevocable instructions to a broker, to properly deliver to the
Company the amount of sale or loan proceeds to pay the exercise price, all in
accordance with the regulations of the Federal Reserve Board.

        5.5    TERM OF OPTIONS

        Each option shall expire ten years from the date of the granting
thereof, but shall be subject to earlier termination as follows:

               (a) In the event that an Optionee ceases to be a director of the
Company for any reason other than the death of the Optionee, the unvested
portion of the options granted to such Optionee shall terminate immediately and
the vested portion of the options granted to such Optionee may be exercised by
him or her only within three months after the date such Optionee ceases to be a
director of the Company.

               (b) In the event of the death of an Optionee, whether during the
Optionee's service as a director or during the three-month period referred to in
Section 5.5(a), the unvested portion of the options granted to such Optionee
shall terminate immediately and the vested portion of the options granted to
such Optionee shall be exercisable, and such options shall expire unless




--------------------------------------------------------------------------------
InControl, Inc. 1996 Stock Option Plan For Nonemployee Directors          Page 3


<PAGE>   4

exercised within twelve months after the date of the Optionee's death, by the
legal representatives or the estate of such Optionee, by any person or persons
whom the Optionee shall have designated in writing on forms prescribed by and
filed with the Company or, if no such designation has been made, by the person
or persons to whom the Optionee's rights have passed by will or the laws of
descent and distribution.

        5.6    TRANSFERABILITY

        During an Optionee's lifetime, an option may be exercised only by the
Optionee or a permitted transferee or assignee. Options granted under this Plan
and the rights and privileges conferred thereby shall not be subject to
execution, attachment or similar process and may not be transferred, assigned,
pledged or hypothecated in any manner (whether by operation of law or otherwise)
other than by (a) will or by the applicable laws of descent and distribution,
(b) designation by the Optionee in writing during the Optionee's lifetime of a
beneficiary to receive and exercise options in the event of the Optionee's death
(as provided in Section 5.5(b)) or (c) by gift or other transfer of an option to
either (i) a spouse or other immediate family member of the Optionee or (ii) any
trust, partnership or other entity in which the original Optionee or such
Optionee's spouse or other immediate family member has a substantial interest
except that any option so assigned or transferred shall be subject to all the
same terms and conditions contained in this Plan . Any attempt to transfer,
assign, pledge, hypothecate or otherwise dispose of any option under this Plan
or of any right or privilege conferred thereby, contrary to the provisions of
this Plan, or the sale or levy or any attachment or similar process upon the
rights and privileges conferred hereby, shall be null and void.

        5.7    HOLDING PERIOD

        Shares of Common Stock obtained upon the exercise of any option granted
under this Plan may not be sold by persons subject to Section 16 of the Exchange
Act until six (6) months after the date the option was granted; provided that
this restriction shall lapse to the extent the vesting of an option is
accelerated pursuant to Section 6.2.

        5.8    PARTICIPANT'S OR SUCCESSOR'S RIGHTS AS STOCKHOLDER

        Neither an Optionee nor the Optionee's successor in interest shall have
any rights as a stockholder of the Company with respect to any Shares subject to
an option granted to such person until such person becomes a holder of record of
such Shares.

        5.9    LIMITATION AS TO DIRECTORSHIP

        Neither this Plan, nor the granting of an option, nor any other action
taken pursuant to this Plan shall constitute or be evidence of any agreement or
understanding, express or implied, that an Optionee has a right to continue as a
director for any period of time or at any particular rate of compensation.




--------------------------------------------------------------------------------
InControl, Inc. 1996 Stock Option Plan For Nonemployee Directors          Page 4


<PAGE>   5

        5.10   REGULATORY APPROVAL AND COMPLIANCE

        The Company shall not be required to issue any certificate or
certificates for Shares upon the exercise of an option granted under this Plan,
or record as a holder of record of Shares the name of the individual exercising
an option under this Plan, without obtaining to the complete satisfaction of the
Company the approval of all regulatory bodies deemed necessary by the Company,
and without complying, to the Company's complete satisfaction, with all rules
and regulations under federal, state or local law deemed applicable by the
Company.


              SECTION 6. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION

        6.1    RECAPITALIZATION

        The aggregate number and class of shares for which options may be
granted under this Plan, the number and class of shares covered by each
outstanding option and the exercise price per share thereof (but not the total
price), and the number and class of shares that may be made subject to options
as set forth in Section 4 of the Plan, shall all be proportionately adjusted for
any increase or decrease in the number of issued shares of Common Stock of the
Company resulting from a split or consolidation of shares or any like capital
adjustment, or the payment of any stock dividend.

        6.2    EFFECT OF LIQUIDATION OR REORGANIZATION

        Upon a merger (other than a merger of the Company in which the holders
of shares of Common Stock immediately prior to the merger have the same
proportionate ownership of shares of Common Stock in the surviving corporation
immediately after the merger), consolidation, acquisition of property or stock,
separation, reorganization (other than a mere reincorporation or the creation of
a holding company) or liquidation of the Company (each a "corporate
transaction"), as a result of which the stockholders of the Company receive
cash, stock or other property in exchange for or in connection with their shares
of Common Stock, then the exercisability of each option outstanding under the
Plan shall be automatically accelerated so that each such option shall,
immediately prior to the specified effective date for any such transaction,
become fully exercisable with respect to the total number of shares of Common
Stock purchasable under such option and may be exercised for all or any portion
of such shares. To the extent such option is not exercised, it shall terminate,
except that in the event of a corporate transaction in which stockholders of the
Company receive capital stock of another corporation in exchange for their
shares of Common Stock, such unexercised option shall be assumed or an
equivalent option shall be substituted by the successor corporation or a parent
or subsidiary of such successor corporation. Any such assumed or equivalent
option shall be 100% vested and exercisable with respect to the total number of
shares purchasable under such option. Upon a merger of the Company in which the
holders of Common Stock immediately prior to the merger have the same
proportionate ownership of Common Stock in the surviving corporation immediately
after the merger or a mere reincorporation or the creation of a holding company,
each option outstanding under the Plan shall be assumed or an equivalent option
shall be substituted by the successor corporation or a parent or subsidiary of
such corporation, and the vesting schedule set forth in the option agreement
shall continue to apply to such assumed or equivalent option.




--------------------------------------------------------------------------------
InControl, Inc. 1996 Stock Option Plan For Nonemployee Directors          Page 5


<PAGE>   6

        6.3    FRACTIONAL SHARES

        In the event of any adjustment in the number of shares covered by any
option, any fractional shares resulting from such adjustment shall be
disregarded and each such option shall cover only the number of full shares
resulting from such adjustment.


                               SECTION 7. EXPENSES

        All costs and expenses of the adoption and administration of this Plan
shall be borne by the Company; none of such expenses shall be charged to any
Optionee.


                      SECTION 8. COMPLIANCE WITH RULE 16b-3

        It is the intention of the Company that this Plan comply in all respects
with the requirements for a "formula plan" within the meaning attributed to that
term for purposes of Rule 16b-3 under Section 16(b) of the Exchange Act.
Therefore, if any Plan provision is later found not to be in compliance with
such requirements, that provision shall be deemed null and void, and in all
events this Plan shall be construed in favor of its meeting such requirements.


                      SECTION 9. AMENDMENT AND TERMINATION

The Board may amend, terminate or suspend this Plan at any time, in its sole and
absolute discretion; provided, however, that if required to qualify this Plan as
a formula plan for purposes of Rule 16b-3 under Section 16(b) of the Exchange
Act, no amendment may be made more than once every six months that would change
the amount, price, timing or vesting of the options, other than to comply with
changes in the Internal Revenue Code of 1986, as amended, or the rules and
regulations thereunder; provided further that to the extent required by any
applicable law or regulation, no amendment shall be made without the approval of
the Company's stockholders.


                     SECTION 10. EFFECTIVE DATE AND DURATION

        This Plan shall be effective upon approval of the Company's stockholders
at or before the next Annual Meeting of Stockholders of the Company as defined
in the Company's Bylaws. This Plan shall continue in effect unless it is
terminated by action of the Board or the Company's stockholders, but such
termination shall not affect the then-outstanding terms of any options.

        Adopted by the Company's Board of Directors on February 27, 1996 and
approved by the Company's stockholders on May 7, 1996. Amended and Restated on
September 24, 1996. Amended and Restated on August 5, 1997.










--------------------------------------------------------------------------------
InControl, Inc. 1996 Stock Option Plan For Nonemployee Directors          Page 6