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                           STRATEGIC DIAGNOSTICS INC.
                        1998 EMPLOYEE STOCK PURCHASE PLAN



I. Purpose.
   --------

                     The Strategic Diagnostics Inc. 1998 Employee Stock Purchase
Plan (the "Plan") is broadly based and intended to encourage and facilitate the
purchase of Shares of the Common Stock of Strategic Diagnostics Inc. (the
"Company"), by employees of the Company and any Participating Companies, thereby
providing employees with a personal stake in the Company and a long range
inducement to remain in the employ of the Company and Participating Companies.
It is the intention of the Company that the Plan qualify as an "employee stock
purchase plan" within the meaning of Section 423 of the Code.

II. Definitions.
    -----------

                   "Account" means a bookkeeping account established by the
Committee on behalf of a Participant to hold Payroll Deductions.

                  "Approved Leave of Absence" means a leave of absence that has
been approved by the applicable Participating Company in such a manner as the
Board may determine from time to time.

                  "Board" means the Board of Directors of the Company.

                  "Code" means the Internal Revenue Code of 1986, as amended.

                   "Committee" means the Committee appointed pursuant to Section
14 of the Plan.

                   "Company" means Strategic Diagnostics Inc. and any
successor(s). "Compensation" means an Employee's cash compensation payable for
services to a Participating Company.

                   "Election Form" means the form acceptable to the Committee
which an Employee shall use to make an election to purchase Shares through
Payroll Deductions pursuant to the Plan.

                   "Eligible Employee" means an Employee who meets the
requirements for eligibility under Section 3 of the Plan.

                   "Employee" means a person who is an employee of a
Participating Company.



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                  "Fair Market Value" means the closing price per Share on the
principal national securities exchange on which the shares are listed or
admitted to trading or, if not listed or traded on any such exchange, on the
Nasdaq National Market, or if not listed or traded on any such exchange or
market, the fair market value as reasonably determined by the Board, which
determination shall be conclusive.

                   "Five Percent Owner" means an Employee who, with respect to a
Participating Company, is described in Section 423(b) of the Code.

                   "Offering" means an offering of Shares to Eligible Employees
pursuant to the Plan.

                  "Offering Commencement Date" means the first day of each
January, April, July and October beginning on or after adoption of the Plan by
the Board, until the Plan Termination Date, provided that the first Offering
Commencement Date may be delayed until (i) the first day of the second month
after adoption of the Plan, if necessary to permit Participants to make
elections in accordance with Section 3(e) of the Plan, or (ii) the first day of
any calendar quarter following adoption of the Plan.

                  "Offering Period" means the period extending from an Offering
Commencement Date through the following Offering Termination Date.

                  "Offering Termination Date" means the last day of each March,
June, September and December following an Offering Commencement Date.

                  "Option Price" means ninety percent (90%) of the lesser of:
(1) the Fair Market Value per Share on the Offering Commencement Date, or if
such date is not a trading day, then on the next trading day thereafter or (2)
the Fair Market Value per Share on the Offering Termination Date, or if such
date is not a trading day, then on the next trading day thereafter.

                   "Participant" means an Employee who meets the requirements
for eligibility under Section 3 of the Plan and who has timely delivered an
Election Form to the Committee.

                  "Participating Company" means, as provided in Schedule A, the
Company and subsidiaries of the Company, within the meaning of Section 424(f) of
the Code, if any, that are approved by the Board from time to time and whose
employees are designated as Employees by the Board.

                  "Payroll Deductions" means amounts withheld from a
Participant's Compensation pursuant to the Plan, as described in Section 5 of
the Plan.

                   "Plan" means Strategic Diagnostics Inc. 1998 Employee Stock
Purchase Plan, as set forth in this document, and as may be amended from time to
time.

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                  "Plan Termination Date" means the earlier of:

                  The Offering Termination Date for the Offering in which the
maximum number of Shares specified in Section 5 of the Plan have been issued
pursuant to the Plan; or

                   The date as of which the Board chooses to terminate the Plan
as provided in Section 15 of the Plan.

                  "Shares" means shares of Common Stock of the Company.

                  "Successor-in-Interest" means the Participant's executor or
administrator, or such other person or entity to whom the Participant's rights
under the Plan shall have passed by will or the laws of descent and
distribution.

                  "Termination Form" means the form acceptable to the Committee
which an Employee shall use to withdraw from an Offering pursuant to Section 8
of the Plan.

III. Eligibility and Participation.
     ------------------------------

                   Initial Eligibility. Except as provided in Section 3(b) of
the Plan, each Employee shall be eligible to participate in the Plan.

                   Ineligibility. An Employee shall not be eligible to
participate in the Plan if such Employee:

                   Is a Five Percent Owner;

                   Is a temporary Employee;

                   Has been employed by a Participating Company on a full-time
basis for less than a 6-consecutive-month period ending on the last day of the
month immediately preceding the effective date of an election to purchase Shares
pursuant to the Plan;

                   Has not customarily worked more than 20 hours per week during
a 24-consecutive-month period ending on the last day of the month immediately
preceding the effective date of an election to purchase Shares pursuant to the
Plan; or

                   Is restricted from participating under Section 3(d) of the
Plan.

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                   Leave of Absence. For purposes of participation in the Plan,
an Employee on an Approved Leave of Absence shall be deemed to be an Employee
for the first 90 days of such Approved Leave of Absence and such Employee's
employment shall be deemed to have terminated for purposes of participation
under the Plan at the close of business on the 90th day of such Approved Leave
of Absence unless such Employee shall have returned to regular non-temporary
employment before the close of business on such 90th day. Termination by the
Participating Company of an Employee's Approved Leave of Absence, other than
termination or return to non-temporary employment, shall terminate an Employee's
employment for all purposes of the Plan and shall terminate such Employee's
participation in the Plan and the right to exercise any option. An Approved
Leave of Absence shall be considered active employment for purposes of Sections
3(b)(3) and 3(b)(4) of the Plan.

                   Restrictions on Participation. Notwithstanding any provisions
of the Plan to the contrary, no Employee shall be granted an option to
participate in the Plan if:

                   Immediately after the grant, such Employee would be a Five
Percent Owner; or

                   Such option would permit such Employee's rights to purchase
stock under all employee stock purchase plans of the Participating Companies
which meet the requirements of Section 423(b) of the Code to accrue at a rate
which exceeds $25,000 in fair market value (as determined pursuant to Section
423(b)(8) of the Code) for each calendar year in which such option is
outstanding.

                  Commencement of Participation. An Employee who meets the
eligibility requirements of Sections 3(a) and 3(b) of the Plan and whose
participation is not restricted under Section 3(d) of the Plan shall become a
Participant by completing an Election Form and filing it with the Committee on
or before the 15th day of the month immediately preceding the Offering
Commencement Date for the first Offering to which such Election Form applies.
Payroll Deductions for a Participant shall commence on the applicable Offering
Commencement Date when his or her authorization for Payroll Deductions becomes
effective, and shall end on the Plan Termination Date, unless sooner terminated
by the Participant pursuant to Section 8 of the Plan.

IV. Shares Per Offering.
    --------------------

                  The Plan shall be implemented by a series of Offerings that
shall terminate on the Plan Termination Date. Offerings shall be made with
respect to Compensation payable for each calendar month of the Company's fiscal
year for the period commencing with the first day of the month first occurring
on or after adoption of the Plan by the Board and ending with the Plan
Termination Date. Shares available for any Offering shall be the difference
between the maximum number of Shares that may be issued under the Plan, as
determined pursuant to Section 10(a) of the Plan, for all of the Offerings, less
the actual number of Shares purchased by Participants pursuant to prior
Offerings. If the total number of Shares for which options are exercised on any
Offering Termination Date exceeds the maximum number of Shares available, the
Committee shall make a pro rata allocation of Shares available for delivery and
distribution in as nearly a uniform manner as practicable, and as it shall
determine to be fair and equitable, and the unapplied Account balances shall be
returned to Participants as soon as practicable following the Offering
Termination Date.
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V. Payroll Deductions.
   -------------------

                  Amount of Payroll Deductions. An Eligible Employee who wishes
to participate in the Plan shall file an Election Form with the Committee at
least 15 days before the Offering Commencement Date for the first Offering for
which such Election Form is effective on which he or she may elect to have
Payroll Deductions of such amounts designated by the Committee on the Election
Form from time to time made from his or her Compensation on each regular payday
during the time he or she is a Participant in the Plan, provided that the rules
established by the Committee shall be consistent with Section 423(b)(5) of the
Code.

                  Participants' Accounts. All Payroll Deductions with respect to
a Participant pursuant to Section 5(a) of the Plan shall be credited to the
Participant's Account under the Plan.

                  Changes in Payroll Deductions. A Participant may discontinue
his or her participation in the Plan as provided in Section 8(a) of the Plan,
but no other change can be made during an Offering, including, but not limited
to, changes in the amount of Payroll Deductions for such Offering. A Participant
may change the amount of Payroll Deductions for subsequent Offerings by giving
written notice of such change to the Committee on or before the 15th day of the
month immediately preceding the Offering Commencement Date for the Offering for
which such change is effective.

                  Leave of Absence. A Participant who goes on an Approved Leave
of Absence before the Offering Termination Date after having filed an Election
Form with respect to such Offering may:

                   Withdraw the balance credited to his or her Account pursuant
to Section 8(b) of the Plan;

                   Discontinue contributions to the Plan but remain a
Participant in the Plan through the Offering Termination Date; or

                  Remain a Participant in the Plan during such Approved Leave of
Absence through the Offering Termination Date and continue the authorization for
the Participating Company to make Payroll Deductions for each payroll period out
of continuing payments to such Participant, if any.
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VI. Granting of Options.
    --------------------

                  On each Offering Termination Date, each Participant shall be
deemed to have been granted an option to purchase a minimum of one (1) Share and
a maximum number of Shares that shall be a number of whole Shares equal to the
quotient obtained by dividing the balance credited to the Participant's Account
as of the Offering Termination Date, by the Option Price.

VII. Exercise of Options.
     --------------------

                  Automatic Exercise. With respect to each Offering, a
Participant's option for the purchase of Shares granted pursuant to Section 6 of
the Plan shall be deemed to have been exercised automatically on the Offering
Termination Date applicable to such Offering.

                  Fractional Shares and Minimum Number of Shares. Fractional
Shares shall not be issued under the Plan. Amounts credited to an Account
remaining after the application of such Account to the exercise of options for a
minimum of one (1) full Share shall be credited to the Participant's Account for
the next succeeding Offering, or, at the Participant's election, returned to the
Participant as soon as practicable following the Offering Termination Date,
without interest.

                  Transferability of Option. No option granted to a Participant
pursuant to the Plan shall be transferable other than by will or by the laws of
descent and distribution, and no such option shall be exercisable during the
Participant's lifetime other than by the Participant.

                  Delivery of Certificates for Shares. The Company shall deliver
certificates for Shares acquired on the exercise of options during an Offering
Period as soon as practicable following the Offering Termination Date.

VIII. Withdrawals.
      ------------

                  Withdrawal of Account. A Participant may elect to withdraw the
balance credited to the Participant's Account by providing a Termination Form to
the Committee at any time before the Offering Termination Date applicable to any
Offering.

                  Amount of Withdrawal. A Participant may withdraw all, but not
less than all, of the amounts credited to the Participant's Account by giving a
Termination Form to the Committee. All amounts credited to such Participant's
Account shall be paid as soon as practicable following the Committee's receipt
of the Participant's Termination Form, and no further Payroll Deductions will be
made with respect to the Participant.

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                  Effect of Withdrawal on Subsequent Participation. A
Participant who elects to withdraw from an Offering pursuant to Section 8(a) of
the Plan shall be deemed to have elected not to participate in each of the two
succeeding Offerings following the date on which the Participant gives a
Termination Form to the Committee.

                  Termination of Employment. Upon termination of a Participant's
employment for any reason other than death, including termination due to
disability or continuation of a leave of absence beyond 90 days, all amounts
credited to such Participant's Account shall be returned to the Participant. In
the event of a Participant's (1) termination of employment due to death or (2)
death after termination of employment but before the Participant's Account has
been returned, all amounts credited to such Participant's Account shall be
returned to the Participant's Successor-in-Interest without interest.

                  Leave of Absence. A Participant who is on an Approved Leave of
Absence shall, subject to the Participant's election pursuant to Section 5(d) of
the Plan, continue to be a Participant in the Plan until the end of the first
Offering ending after commencement of such Approved Leave of Absence. A
Participant who has been on an Approved Leave of Absence for more than 90 days
shall not be eligible to participate in any Offering that begins on or after the
commencement of such Approved Leave of Absence so long as such leave of absence
continues.

IX. Interest.
    ---------

                   No interest shall be paid or allowed with respect to amounts
paid into the Plan or credited to any Participant's Account.

X. Shares.
   -------

                   Maximum Number of Shares. No more than 661,157 Shares may be
issued under the Plan. Such Shares may be unissued shares or treasury shares of
the Company or may be outstanding shares purchased in the open market or
otherwise on behalf of the Plan upon such terms as the Committee may approve for
delivery under the Plan. The number of Shares available for any Offering and all
Offerings shall be adjusted if the number of outstanding Shares of the Company
is increased or reduced by split-up, reclassification, stock dividend or the
like. All Shares issued pursuant to the Plan shall be validly issued, fully paid
and nonassessable.

                   Participant's Interest in Shares. A Participant shall have no
interest in Shares subject to an option until such option has been exercised.

                   Registration of Shares. Shares to be delivered to a
Participant under the Plan shall be registered in the name of the Participant.

<PAGE>

                  Restrictions on Exercise. The Board may, in its discretion,
require as conditions to the exercise of any option such conditions as it may
deem necessary to assure that the exercise of options is in compliance with
applicable securities laws.

XI. Expenses.
    ---------

                   The Participating Companies shall pay all fees and expenses
incurred (excluding individual Federal, state, local or other taxes) in
connection with the Plan. No charge or deduction for any such expenses will be
made to a Participant upon the termination of his or her participation under the
Plan or upon the distribution of certificates representing Shares purchased with
his or her contributions.

XII. Taxes.
     -----

                  The Participating Companies shall have the right to withhold
from each Participant's Compensation an amount equal to all Federal, state, city
or other taxes as the Participating Companies shall determine are required to be
withheld by them. In connection with such withholding, the Participating
Companies may make any such arrangements as are consistent with the Plan as it
may deem appropriate, including the right to withhold from Compensation paid to
a Participant other than in connection with the Plan.

XIII. Plan and Contributions Not to Affect Employment.
      ------------------------------------------------

                   The Plan shall not confer upon any Eligible Employee any
right to continue in the employ of the Participating Companies.

XIV. Administration.
     ---------------
               
                   The Plan shall be administered by the Board, which may
delegate responsibility for such administration to a committee of the Board (the
"Committee") or to a third party administrator under Board or Committee
supervision. If the Board fails to appoint the Committee, any references in the
Plan to the Committee shall be treated as references to the Board. The Board, or
the Committee, shall have authority to interpret the Plan, to prescribe, amend
and rescind rules and regulations relating to it, to delegate administrative
functions to a third party administrator and to make all other determinations
deemed necessary or advisable in administering the Plan, with or without the
advice of counsel. The determinations of the Board or the Committee on the
matters referred to in this Section 14 shall be conclusive and binding upon all
persons in interest.


<PAGE>


XV. Amendment and Termination.
    --------------------------

                  The Board may terminate the Plan at any time and may amend the
Plan from time to time in any respect; provided, however, that upon any
termination of the Plan, all Shares or Payroll Deductions (to the extent not yet
applied to the purchase of Shares) under the Plan shall be distributed to the
Participants, provided further, that no amendment to the Plan shall affect the
right of a Participant to receive his or her proportionate interest in the
Shares or his or her Payroll Deductions (to the extent not yet applied to the
purchase of Shares) under the Plan, and provided further that the Company may
seek stockholder approval of an amendment to the Plan if such approval is
determined to be required by or advisable under the regulations of the
Securities and Exchange Commission or the Internal Revenue Service, the rules of
any stock exchange or system on which the Shares are listed or other applicable
law or regulation.

XVI. Effective Date.
     ---------------

                   The Plan shall be effective on the date it is adopted by the
Board. In the event that the Plan is not approved by the Company's stockholders
within one year of the adoption of the Plan by the Board, the tax treatment of
Section 423 of the Code may not apply with respect to Shares transferred to
Participants on the exercise of options pursuant to Section 7 of the Plan.

XVII. Government and Other Regulations.
      ---------------------------------

                   In General. The purchase of Shares under the Plan shall be
subject to all applicable laws, rules and regulations, and to such approvals by
any governmental agencies as may be required.

                   Securities Law. The Committee shall have the power to make
each grant under the Plan subject to such conditions as it deems necessary or
appropriate to comply with the then-existing requirements of the Securities Act
of 1933, as amended, and the Securities Exchange Act of 1934, as amended,
including Rule 16b-3 (or any similar rule) of the Securities and Exchange
Commission.

XVIII. Non-Alienation.
       ---------------

                   No Participant shall be permitted to assign, alienate, sell,
transfer, pledge or otherwise encumber his or her interest under the Plan prior
to the distribution to him or her of Share certificates. Any attempt at
assignment, alienation, sale, transfer, pledge or other encumbrance shall be
void and of no effect.
<PAGE>





XIX. Notices.
     --------

                  Any notice required or permitted hereunder shall be
sufficiently given only if delivered personally, telecopied, or sent by first
class mail, postage prepaid, and addressed:

         If to the Company:

         Strategic Diagnostics Inc.
         111 Pencader Drive
         Newark, DE  19702
         Attn: Chief Financial Officer
         Or any other address provided pursuant to written notice.

         If to the Participant:

         At the address on file with the Company from time to time, or to such
other address as either party may hereafter designate in writing by notice
similarly given by one party to the other.

XX. Successors.
    -----------

                  The Plan shall be binding upon and inure to the benefit of any
successor, successors or assigns of the Company.

XXI. Severability.
     -------------

                  If any part of this Plan shall be determined to be invalid or
void in any respect, such determination shall not affect, impair, invalidate or
nullify the remaining provisions of this Plan which shall continue in full force
and effect.

XXII. Acceptance.
      -----------

                  The election by any Eligible Employee to participate in this
Plan constitutes his or her acceptance of the terms of the Plan and his or her
agreement to be bound hereby.

XXIII. Applicable Law.
       ---------------

                   This Plan shall be construed in accordance with the laws of
the state of Delaware, to the extent not preempted by applicable Federal law.
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                                   SCHEDULE A

                            Participating Companies

                           Strategic Diagnostics Inc.

                              TSD BioServices Inc.

                             HTI Bio-Products Inc.

                       Strategic Diagnostics Inc. Europe