<PAGE>

                                                                    Exhibit 10.3

                           STRATEGIC DIAGNOSTICS INC.

                        RESTRICTED STOCK GRANT AGREEMENT
                        --------------------------------


         THIS RESTRICTED STOCK GRANT AGREEMENT (the "Agreement") is dated as of
September 2, 2003 (the "Date of Grant"), by and between Strategic Diagnostics
Inc., a Delaware corporation (the "Company"), and Matthew Knight (the
"Grantee").



                                    RECITALS

         WHEREAS, the Company desires to employ the Grantee and the Grantee
desires to become employed by the Company; and

         WHEREAS, the Board of Directors of the Company (the "Board") has
decided to grant restricted stock to the Grantee in connection with his
acceptance of employment with the Company and as an inducement for the Grantee
to promote the best interests of the Company and its stockholders; and

         WHEREAS, the Company maintains the Strategic Diagnostics Inc. 2000
Stock Incentive Plan, as amended through March 16, 2001 (the "Plan"); and

         WHEREAS, this restricted stock grant is made outside of the Plan; and

         WHEREAS, although this restricted stock grant is being made outside the
Plan, where noted, terms herein shall have the same meaning as such terms have
under the Plan; and

         WHEREAS, except as specifically indicated otherwise, all references in
this Agreement to the "Board" shall be deemed to refer to the Compensation
Committee.

         NOW, THEREFORE, in consideration of the foregoing, and of the mutual
provisions and covenants contained herein and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the Company and the
Grantee, intending to be legally bound, hereby agree as follows:

1.       Restricted Stock Grant. Subject to the terms and conditions of this
Agreement, the Company hereby grants to the Grantee 75,000 shares of the
Company's common stock, par value $0.01 per share (the "Restricted Stock"),
subject to the restrictions set forth below. The Company acknowledges payment by
the Grantee for the Restricted Stock of $750.00 in cash (representing par value
of the shares at $0.01 per share). Shares of Restricted Stock may not be
transferred by the Grantee or subjected to any security interest until the
shares have become vested pursuant to Section 2 of this Agreement.

2.       Vesting and Nonassignability of Restricted Stock.

         (a) The shares of Restricted Stock shall become vested, and the
restrictions described in Sections 2(d) and 2(e) shall lapse in accordance with
the following schedule, if the Grantee continues to provide service to the
Company from the Date of Grant until the applicable vesting date:

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                                                                    Exhibit 10.3

------------------------------------- ------------------------------------------
            VESTING DATE                            SHARES VESTED

------------------------------------- ------------------------------------------
       Date of Grant + 1 year                          33-1/3%

------------------------------------- ------------------------------------------
       Date of Grant + 2 years                         33-1/3%

------------------------------------- ------------------------------------------
       Date of Grant + 3 years                         33-1/3%

------------------------------------- ------------------------------------------


         (b) Notwithstanding the provisions of Section 2(a) above, if the
Grantee's employment terminates on account of (i) termination by the Company
without Cause (as defined in the written employment agreement between the
Grantee and the Company dated September 2, 2003 (the "Employment Agreement")),
(ii) the Grantee's resignation for Good Reason (as defined in the Employment
Agreement) or (iii) Non-Renewal (as defined in the Employment Agreement) at any
time during the period before the shares of Restricted Stock vest (the
"Restriction Period"), and the Grantee executes and does not revoke the Release
(as defined in the Employment Agreement) the restrictions and conditions on the
restricted stock shall immediately lapse and the shares shall become fully
vested.

         (c) Notwithstanding the provisions of Section 2(a) and 2(b) above, if a
Change of Control (as defined in the Plan) occurs during the Restriction Period,
the restrictions and conditions on the restricted stock shall immediately lapse
and the shares shall become fully vested.

         (d) If the Grantee's employment with the Company terminates for any
reason during the Restriction Period, the Company may elect, during the 90-day
period following the date of the Grantee's termination of employment, to require
that the shares of Restricted Stock that are not then vested be forfeited and be
immediately returned to the Company. In the event the Company fails to make such
an election, there shall be no forfeiture.

         (e) During the Restriction Period, the non-vested Restricted Stock may
not be assigned, transferred, pledged or otherwise disposed of by the Grantee.
Any attempt to assign, transfer, pledge or otherwise dispose of the shares
contrary to the provisions hereof, and the levy of any execution, attachment or
similar process upon the shares, shall be null, void and without effect.

3.       Issuance of Certificates.

         (a) Stock certificates representing the Restricted Stock may be issued
by the Company and held in escrow by the Company until the Restricted Stock
vests, or the Company may hold non-certificated shares until the Restricted
Stock vests. During the Restriction Period, the Grantee shall receive any cash
dividends with respect to the shares of Restricted Stock and may participate in
any distribution pursuant to a plan of dissolution or complete liquidation of
the Company. In the event of a dividend or distribution payable in stock or
other property or a reclassification, split up or similar event during the
Restriction Period, the shares or other property issued or declared with respect
to the non-vested shares of Restricted Stock shall be subject to the same terms
and conditions relating to vesting as the shares to which they relate.

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                                                                    Exhibit 10.3

         (b) When the Grantee obtains a vested right to shares of Restricted
Stock, a certificate representing the vested shares shall be issued to the
Grantee, free of the restrictions under Section 2 of this Agreement.

         (c) The obligation of the Company to deliver shares upon the vesting of
the Restricted Stock shall be subject to all applicable laws, rules, and
regulations and such approvals by governmental agencies as may be deemed
appropriate to comply with relevant securities laws and regulations.

4.  Change of Control. Except as otherwise provided in this Agreement, the
provisions of the Plan applicable to a Change of Control shall apply to the
Restricted Stock, and, in the event of a Change of Control, the Board may take
such actions as it deems appropriate.

5.  Grant Subject to Board Determinations. The Agreement is subject to
interpretations, regulations and determinations of the Board in accordance with
the terms hereof, including, but not limited to, provisions pertaining to (i)
rights and obligations with respect to withholding taxes, (ii) the registration,
qualification or listing of the shares, (iii) changes in capitalization of the
Company, and (iv) other requirements of applicable law. The Board shall have the
authority to interpret and construe the Agreement and its decisions shall be
conclusive as to any questions arising hereunder.

6.  Withholding. The Grantee shall be required to pay to the Company, or make
other arrangements satisfactory to the Company to provide for the payment of,
any federal, state, local or other taxes that the Company is required to
withhold with respect to the Restricted Stock. Subject to Board approval, the
Grantee may elect to satisfy any tax withholding obligation of the Company with
respect to the Restricted Stock by having shares withheld up to an amount that
does not exceed the minimum applicable withholding tax rate for federal
(including FICA), state, local and other tax liabilities.

7.  Tax Consequences. The Grantee has reviewed with the Grantee's own tax
advisors the federal, state, local and foreign tax consequences of this
investment and the transactions contemplated by this Agreement. The Grantee is
relying solely on such advisors and not on any statements or representations of
the Company or any of its agents. The Grantee understands that the Grantee (and
not the Company) shall be responsible for the Grantee's own tax liability that
may arise as a result of this investment or the transactions contemplated by
this Agreement. The Grantee understands that section 83 of the Code taxes as
ordinary income the difference between the amount paid for the Restricted Stock
and the fair market value of the Restricted Stock as of the date any
restrictions on the Restricted Stock lapse pursuant to Section 2 of this
Agreement. The Grantee understands that the Grantee may elect to be taxed at the
time the Restricted Stock is granted rather than when and as the vesting period
expires by filing an election under section 83(b) of the Code with the Internal
Revenue Service within thirty (30) days from the Date of Grant. A memorandum
describing the tax consequences under Code section 83 and the form for making a
Section 83(b) election is attached as Exhibit A hereto.

         THE GRANTEE ACKNOWLEDGES THAT IT IS THE GRANTEE'S SOLE RESPONSIBILITY
AND NOT THE COMPANY'S TO TIMELY FILE THE ELECTION UNDER SECTION 83(b), EVEN IF
THE GRANTEE REQUESTS THE COMPANY OR ITS REPRESENTATIVES TO MAKE THIS FILING ON
THE GRANTEE'S BEHALF.

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8.  No Service or Other Rights. This Agreement shall not confer upon the Grantee
any right to be retained by or in the service of the Company and shall not
interfere in any way with the right of the Company to terminate the Grantee's
service at any time. The right of the Company to terminate at will the Grantee's
service at any time for any reason is specifically reserved, except as may be
otherwise provided in the written employment agreement between the Grantee and
the Company, dated September 2, 2003.

9.  Assignment by the Company. The rights and protections of the Company
hereunder shall extend to any successors or assigns of the Company and to the
Company's parents, subsidiaries, and affiliates. This Agreement may be assigned
by the Company without the Grantee's consent.

10. Applicable Law. The validity, construction, interpretation and effect of
this instrument shall be governed by and construed in accordance with the laws
of the State of Delaware, without giving effect to the conflicts of laws
provisions thereof.

11. Notice. Any notice to the Company provided for in this instrument shall be
addressed to the Company in care of the Chief Financial Officer at Strategic
Diagnostics Inc., 111 Pencader Drive, Newark, DE 19702, and any notice to the
Grantee shall be addressed to such Grantee at the current address shown on the
payroll of the Company, or to such other address as the Grantee may designate to
the Company in writing. Any notice shall be delivered by hand, sent by telecopy
or enclosed in a properly sealed envelope addressed as stated above, registered
and deposited, postage prepaid, in a post office regularly maintained by the
United States Postal Service.

         IN WITNESS WHEREOF, the Company has caused its duly authorized officers
to execute this instrument, and the Grantee has placed his signature hereon,
effective as of the day and year first set forth above.

                           STRATEGIC DIAGNOSTICS INC.

                           By:      /s/ Grover C. Wrenn
                              -----------------------------------------


         I hereby accept the grant of the Restricted Stock described in this
Agreement. I have read the Strategic Diagnostics, Inc. 2000 Stock Incentive
Plan, as amended through March 16, 2001 and I understand that the capitalized
terms herein where indicated shall have the same meaning as those terms have
under the Plan. I hereby agree to be bound by those terms and the terms of this
Agreement and any determinations of the Board with respect thereto.

                              /s/ Matthew H. Knight
                           --------------------------------------------



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