Document:

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                                                                    Exhibit 10.5

NORTH CAROLINA

HYDE COUNTY

     THIS AGREEMENT made this the 1st day of April, 1999, by and between The
East Carolina Bank, a North Carolina corporation ("ECB") and J. Dorson White,
Jr. a resident of Pitt County, North Carolina (the "Officer") WITNESSETH:

     WHEREAS the Officer has been working for ECB for a period of time;

     AND WHEREAS the parties hereto wish to formalize their arrangement as set
out herein;

     AND WHEREAS both parties fully understand the terms of this agreement and
stipulate that the same are just, fair, and equitable to both parties hereto;

     NOW THEREFORE, the parties hereto agree as follows:

     1.   ECB hereby engages the employment of the Officer and the Officer
hereby accepts such engagement of employment upon the terms and conditions as
herein stated;

     2.   The Officer shall render such administrative, managerial, and other
services to ECB, its parents, subsidiaries, and sister companies as are
customarily performed by persons situated in a similar capacity as well as such
other and additional duties and services as may be directed by the Board of
Directors, the President, and all officers having authority senior to that of
the Officer. The Officer shall perform his duties and responsibilities under
this agreement in accordance with reasonable standards expected of employees
with comparable organizations and the Bank's policies and procedures and as may
be established by the Board of Directors of ECB and its designees. Because ECB
is contracting for the unique and personal skills of the Officer, the Officer
shall be precluded from assigning or delegating his rights or duties hereunder;

     3.   During the term of this agreement, ECB shall pay to the Officer for
the services to be rendered by him for ECB a base salary in such amounts and at
such intervals as may be commensurate with his duties and responsibilities
hereunder as determined by the Board of Directors and its designees. In addition
ECB will provide the Officer such additional incentives, compensations, bonuses
and other benefits as it may determine from time to time;

     4.   Either party shall have the absolute right to terminate this agreement
at any time, without cause, upon giving the other party thirty (30) days prior
written notice. ECB shall have the right, but not the obligation, to pay to the
Officer thirty (30) days salary in lieu of any notice to be given by it. ECB
shall have the right to waive any notice to which it might be entitled hereunder
and to immediately terminate the employment of the Officer without further
payment at such time as the Officer gives ECB notice of his intention to
terminate this

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agreement. ECB shall have the right to immediately terminate this agreement at
any time with cause without further obligation to the Officer. The term "with
cause" includes, but is not limited to, personal dishonesty, incompetence,
wilful material misconduct, breach of fiduciary duty, failure to perform the
obligations of the Officer as stated herein, wilful violation of any law, rule,
or regulation (other than minor traffic infractions), or, any material breach of
any provision of this agreement;

     5.   In the event of the involuntary termination of the Officer's
employment without cause within ninety (90) days of any change of control of ECB
or its parent company, or, in the event of a voluntary termination of the
Officer's employment within ninety (90) days after any change of control of ECB
under which the Officer shall have incurred a reduction of salary or in
responsibilities, then the Officer shall be entitled to receive the greater of:

     (a)  The severance payment offered by the corporation in such notice of
          termination, or,

     (b)  A lump sum equal to 150.00% of the average annual salary paid to the
          Officer over the three prior 12 month periods, plus a lump sum equal
          to 150.00% of the average annual cash bonuses and cash incentives paid
          to the Officer over the three prior 12 month periods (exclusive of any
          stock options, stock grants, or the exercise of any stock options),
          plus the Officer will be carried on the medical insurance program (if
          any) of the Corporation for 18 calendar months after such termination.

     The provisions of this P. 5 shall only be applicable to situations relating
to a change of control of ECB or its parent company. As use herein, the phrase
"change of control" shall mean the direct or indirect acquisition by another
person, firm or corporation, by merger, share exchange, consolidation, purchase
or otherwise, all or substantially all of the assets or stock of ECB or its
parent company;

     6.   The Officer agrees that he will devote his full efforts and entire
business time to the performance of his duties and responsibilities under this
agreement;

     7.   The Officer will hold in strict confidence, during the term of this
agreement and at all times thereafter, all knowledge and information of a
confidential nature with respect to the business of ECB, its parent company, its
subsidiaries, and it sister corporations, received during the term of his
employment with ECB and will not disclose or make use of such information
without the prior written consent of ECB;

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     8.   The Officer stipulates that it would be difficult or impossible to
ascertain the amount of monetary damages in the event of a breach by the Officer
under the provisions of (P)(P) 6 or 7 hereof. The Officer further stipulates
that in the event of a breach of one or more of those two paragraphs injunctive
relief enforcing the terms of the same, alone or together with additional forms
of relief, is an appropriate remedy;

     9.   This agreement shall be governed in all respects, whether as to
validity, construction, capacity, performance, or otherwise, by the laws of the
State of North Carolina, and any action relating to or arising from this
agreement shall be litigated only in the North Carolina General Court of
Justice;

     10.  This agreement shall inure to the benefit of, and be binding upon, any
corporate or other successor of ECB and its parent company which shall acquire,
directly or indirectly by merger, share exchange, consolidation, purchase or
otherwise, all or substantially all of the assets or stock of ECB or its parent
company;

     11.  The employee stipulates that he has read this agreement and
understands the same, and that he has been advised that he should consult
independent counsel prior to executing this document;

     12.  No provision of this agreement can be modified, waived, or discharged
unless such waiver, modification, or discharge has been agreed to in writing,
signed by the Officer and on behalf of ECB by such person as has been
specifically designated by the Board of Directors of ECB or its parent company.
No waiver by either party hereto at any time of any breach by the other party
hereto shall be deemed a waiver of the right for such other party to insist on
the full compliance with this agreement at any future time. All prior
negotiations, agreements, and discussions between the parties hereto are merged
herein;

     13.  Where applicable, any obligations and duties of the Officer to ECB
hereunder shall include a like obligation to ECB's parent company, its
subsidiaries and its sister companies; and,

     14.  The provisions of this agreement shall be deemed severable and the
invalidity or unenforceability of any provision shall not affect the validity or
the enforceability of the other provisions hereof.

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     IN TESTIMONY WHEREOF, ECB has caused this instrument to be signed in its
corporate name by its president by authority duly given by its Board of
Directors and the Officer has hereunto set his hand and seal, the day and year
first above written in duplicate originals, one of which is retained by each of
the parties hereto.

                                        The East Carolina Bank

                                        By: ____________________________________
                                            Arthur H. Keeney, III

                                        __________________________________(SEAL)
                                        J. Dorson White, Jr.

                                        4<PAGE>

                                                                    Exhibit 10.1

                                THERASENSE, INC.

                                 1997 STOCK PLAN

                        (Amended as of February 15, 2002)

     1.      Purposes of the Plan. The purposes of this Stock Option Plan are to
             --------------------
attract and retain the best available personnel for positions of substantial
responsibility, to provide additional incentive to Employees, Directors and
Consultants and to promote the success of the Company's business. Options
granted under the Plan may be Incentive Stock Options or Nonstatutory Stock
Options, as determined by the Administrator at the time of grant.

     2.      Definitions. As used herein, the following definitions shall apply:
             -----------

             (a)  "Administrator" means the Board or any of its Committees as
                   -------------
shall be administering the Plan, in accordance with Section 4 hereof.

             (b)  "Applicable Laws" means the requirements relating to the
                   ---------------
administration of stock option plans under U.S. state corporate laws, U.S.
federal and state securities laws, the Code, any stock exchange or quotation
system on which the Common Stock is listed or quoted and the applicable laws of
any foreign country or jurisdiction where Options are granted under the Plan.

             (c)  "Board" means the Board of Directors of the Company.
                   -----

             (d)  "Code" means the Internal Revenue Code of 1986, as amended.
                   ----

             (e)  "Committee"  means a committee of Directors appointed by the
                   ---------
Board in accordance with Section 4 hereof.

             (f)  "Common Stock" means the Common Stock of the Company.
                   ------------

             (g)  "Company" means Therasense, Inc., a Delaware corporation.
                   -------

             (h)  "Consultant" means any person who is engaged by the Company or
                   ----------
any Parent or Subsidiary to render consulting or advisory services and is
compensated for such services.

             (i)  "Director" means a member of the Board of Directors of the
                   --------
Company.
             (j)  "Employee" means any person, including Officers and Directors,
                   --------
employed by the Company or any Parent or Subsidiary of the Company. A Service
Provider shall not cease to be an Employee in the case of (i) any leave of
absence approved by the Company or (ii) transfers between locations of the
Company or between the Company, its Parent, any Subsidiary, or any successor.
For purposes of Incentive Stock Options, no such leave may exceed ninety days,
unless

                                      -1-

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reemployment upon expiration of such leave is guaranteed by statute or contract.
If reemployment upon expiration of a leave of absence approved by the Company is
not so guaranteed, on the 181st day of such leave any Incentive Stock Option
held by the Optionee shall cease to be treated as an Incentive Stock Option and
shall be treated for tax purposes as a Nonstatutory Stock Option. Neither
service as a Director nor payment of a director's fee by the Company shall be
sufficient to constitute "employment" by the Company.

             (k)   "Exchange Act" means the Securities Exchange Act of 1934, as
                    ------------
amended.

             (l)   "Fair Market Value" means, as of any date, the value of
                    -----------------
Common Stock determined as follows:

                    (i)   If the Common Stock is listed on any established stock
exchange or a national market system, including without limitation the Nasdaq
National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its
Fair Market Value shall be the closing sales price for such stock (or the
closing bid, if no sales were reported) as quoted on such exchange or system for
the last market trading day prior to the time of determination, as reported in
The Wall Street Journal or such other source as the Administrator deems
reliable;

                    (ii)  If the Common Stock is regularly quoted by a
recognized securities dealer but selling prices are not reported, its Fair
Market Value shall be the mean between the high bid and low asked prices for the
Common Stock on the last market trading day prior to the day of determination,
or;

                    (iii) In the absence of an established market for the Common
Stock, the Fair Market Value thereof shall be determined in good faith by the
Administrator.

             (m)   "Incentive Stock Option" means an Option intended to qualify
                    ----------------------
as an incentive stock option within the meaning of Section 422 of the Code.

             (n)   "Nonstatutory Stock Option" means an Option not intended to
                    -------------------------
qualify as an Incentive Stock Option.

             (o)   "Officer" means a person who is an officer of the Company
                    -------
within the meaning of Section 16 of the Exchange Act and the rules and
regulations promulgated thereunder.

             (p)   "Option" means a stock option granted pursuant to the Plan.
                    ------

             (q)   "Option Agreement" means an agreement between the Company and
                    ----------------
an Optionee evidencing the terms and conditions of an individual Option grant.
The Option Agreement is subject to the terms and conditions of the Plan.

             (r)   "Option Exchange Program" means a program whereby outstanding
                    -----------------------
Options are exchanged for Options with a lower exercise price.

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             (s)   "Optioned Stock" means the Common Stock subject to an Option.
                    --------------

             (t)   "Optionee" means the holder of an outstanding Option granted
                    --------
under the Plan.

             (u)   "Parent" means a "parent corporation," whether now or
                    ------
hereafter existing, as defined in Section 424(e) of the Code.

             (v)    "Plan" means this 1997 Stock Option Plan.
                     ----

             (w)    "Section 16(b)" means Section 16(b) of the Securities
                    -------------
Exchange Act of 1934, as amended.

             (x)    "Service Provider" means an Employee, Director or
                     ----------------
Consultant.

             (y)    "Share" means a share of the Common Stock, as adjusted in
                     -----
accordance with Section 11 below.

             (z)    "Subsidiary" means a "subsidiary corporation," whether now
                     ----------
 or hereafter existing, as defined in Section 424(f) of the Code.

     3.      Stock Subject to the Plan. Subject to the provisions of Section 11
             -------------------------
of the Plan, the maximum aggregate number of Shares which may be optioned and
sold under the Plan is 8,107,032 Shares. The Shares may be authorized, but
unissued, or reacquired Common Stock.

             If an Option expires or becomes unexercisable without having been
exercised in full, or is surrendered pursuant to an Option Exchange Program, the
unpurchased Shares which were subject thereto shall become available for future
grant or sale under the Plan (unless the Plan has terminated); provided,
                                                               --------
however, that Shares that have actually been issued under the Plan shall not be
-------
returned to the Plan and shall not become available for future distribution
under the Plan, except that if unvested Shares are repurchased by the Company at
their original purchase price, such Shares shall become available for future
grant under the Plan.

     4.      Administration of the Plan.
             --------------------------

             (a)    Procedure. The Plan shall be administered by the Board or a
                    ---------
Committee appointed by the Board, which Committee shall be constituted to comply
with Applicable laws.

             (b)    Powers of the Administrator. Subject to the provisions of
                    ---------------------------
the Plan and, in the case of a Committee, the specific duties delegated by the
Board to such Committee, the Administrator shall have the authority, in its
discretion:

                    (i)    to determine the Fair Market Value;

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                    (ii)   to select the Service Providers to whom Options may
from time to time be granted hereunder;

                    (iii)  to determine the number of shares of Common Stock to
be covered by each such award granted hereunder;

                    (iv)   to approve forms of agreement for use under the Plan;

                    (v)    to determine the terms and conditions of any option
granted hereunder;

                    (vi)   to determine whether and under what circumstances an
Option may be settled in cash under subsection 9(e) instead of Common Stock;

                    (vii)  to reduce the exercise price of any Option to the
then current Fair Market Value if the Fair Market Value of the Common Stock
covered by such Option has declined since the date the Option was granted;

                    (viii) to institute an Option Exchange Program;

                    (ix)   to prescribe, amend and rescind rules and
regulations relating to the Plan, including rules and regulations relating to
sub-plans established for the purpose of qualifying for preferred tax treatment
under foreign tax laws;

                    (x)    to allow Optionees to satisfy withholding tax
obligations by electing to have the Company withhold from the Shares to be
issued upon exercise of an Option that number of Shares having a Fair Market
Value equal to the amount required to be withheld. The Fair Market Value of the
Shares to be withheld shall be determined on the date that the amount of tax to
be withheld is to be determined. All elections by an Optionee to have Shares
withheld for this purpose shall be made in such form and under such conditions
as the Administrator may deem necessary or advisable; and

                    (ix)   to construe and interpret the terms of the Plan and
awards granted pursuant to the Plan.

            (c)     Effect of Administrator's Decision. All decisions,
                    ----------------------------------
determinations and interpretations of the Administrator shall be final and
binding on all Optionees.

      5.    Eligibility.
            -----------

            (a)     Nonstatutory Stock Options may be granted to Service
Providers. Incentive Stock Options may be granted only to Employees.

            (b)     Each Option shall be designated in the Option Agreement as
either an Incentive Stock Option or a Nonstatutory Stock Option. However,
notwithstanding such

                                     - 4 -

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designation, to the extent that the aggregate Fair Market Value of the Shares
with respect to which Incentive Stock Options are exercisable for the first time
by the Optionee during any calendar year (under all plans of the Company and any
Parent or Subsidiary) exceeds $100,000, such Options shall be treated as
Nonstatutory Stock Options. For purposes of this Section 5(b), Incentive Stock
Options shall be taken into account in the order in which they were granted. The
Fair Market Value of the Shares shall be determined as of the time the Option
with respect to such Shares is granted.

             (c)    The Plan shall not confer upon any Optionee any right with
respect to continuing the Optionee's relationship as a Service Provider with the
Company, nor shall it interfere in any way with his or her right or the
Company's right to terminate such relationship at any time, with or without
cause.

     6.      Term of Plan. The Plan shall become effective upon its adoption by
             ------------
the Board. It shall continue in effect for a term of ten (10) years unless
sooner terminated under Section 13 of the Plan.

     7.      Term of Option. The term of each Option shall be stated in the
             --------------
Option Agreement; provided, however, that the term shall be no more than ten
(10) years from the date of grant thereof. In the case of an Incentive Stock
Option granted to an Optionee who, at the time the Option is granted, owns stock
representing more than ten percent (10%) of the voting power of all classes of
stock of the Company or any Parent or Subsidiary, the term of the Option shall
be five (5) years from the date of grant or such shorter term as may be provided
in the Option Agreement.

     8.      Option Exercise Price and Consideration.
             ---------------------------------------

             (a)    The per share exercise price for the Shares to be issued
pursuant to exercise of an Option shall be such price as is determined by the
Administrator, but shall be subject to the following:

                    (i)    In the case of an Incentive Stock Option

                           (A)    granted to an Employee who, at the time of the
grant of such Incentive Stock Option, owns stock representing more than ten
percent (10%) of the voting power of all classes of stock of the Company or any
Parent or Subsidiary, the exercise price shall be no less than 110% of the Fair
Market Value per Share on the date of grant.

                           (B)    granted to any Employee other than an Employee
described in the preceding subparagraph, the per Share exercise price shall be
no less than 100% of the Fair Market Value per Share on the date of grant.

                    (ii)   In the case of a Nonstatutory Stock Option

                           (A)    granted to a Service Provider who, at the
time the Option is granted, owns stock representing more than ten percent (10%)
of the voting power of all classes of

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stock of the Company or any Parent or Subsidiary, the exercise price shall be no
less than 110% of the Fair Market Value per Share on the date of the grant.

                             (B)     granted to any Service Provider other than
a Service Provider described in the preceding subparagraph, the exercise price
shall be no less than 85% of the Fair Market Value per Share on the date of
grant.

                     (iii)   Notwithstanding the foregoing, Options may be
granted with a per Share exercise price of less than 100% of Fair Market Value
on the date of grant pursuant to a merger or other corporate transaction.

             (b)     The consideration to be paid for the Shares to be issued
upon exercise of an Option, including the method of payment, shall be determined
by the Administrator (and, in the case of an Incentive Stock Option, shall be
determined at the time of grant) and may consist entirely of (1) cash, (2)
check, (3) promissory note, (4) other Shares which (x) in the case of Shares
acquired upon exercise of an Option have been owned by the Optionee for more
than six months on the date of surrender and (y) have a Fair Market Value on the
date of surrender equal to the aggregate exercise price of the Shares as to
which said Option shall be exercised, (5) consideration received by the Company
under a formal cashless exercise program adopted by the Company in connection
with the Plan, or (6) any combination of the foregoing methods of payment. In
making its determination as to the type of consideration to accept, the
Administrator shall consider if acceptance of such consideration may be
reasonably expected to benefit the Company.

     9.      Exercise of Option.
             ------------------

             (a)    Procedure for Exercise; Rights as a Stockholder. Any Option
                    -----------------------------------------------
granted hereunder shall be exercisable according to the terms of the Plan and at
such times and under such conditions as determined by the Administrator and set
forth in the Option Agreement, but in no case at a rate of less than 20% per
year over five (5) years from the date of grant. An Option may not be exercised
for a fraction of a Share.

                    An Option shall be deemed exercised when the Company
receives: (i) written or electronic notice of exercise (in accordance with the
Option Agreement) from the person entitled to exercise the Option, and (ii) full
payment for the Shares with respect to which the Option is exercised. Full
payment may consist of any consideration and method of payment authorized by the
Administrator and permitted by the Option Agreement and the Plan. Shares issued
upon exercise of an Option shall be issued in the name of the Optionee or, if
requested by the Optionee, in the name of the Optionee and his or her spouse.
Until the Shares are issued (as evidenced by the appropriate entry on the books
of the Company or of a duly authorized transfer agent of the Company), no right
to vote or receive dividends or any other rights as a stockholder shall exist
with respect to the Shares, notwithstanding the exercise of the Option. The
Company shall issue (or cause to be issued) such Shares promptly after the
Option is exercised. No adjustment will be made for a dividend or other right
for which the record date is prior to the date the Shares are issued, except as
provided in Section 11 of the Plan.

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<PAGE>

             Exercise of an Option in any manner shall result in a decrease in
the number of Shares thereafter available, both for purposes of the Plan and for
sale under the Option, by the number of Shares as to which the Option is
exercised.

             (b) Termination of Relationship as a Service Provider. If an
                 -------------------------------------------------
Optionee ceases to be a Service Provider, other than upon the Optionee's death
or Disability, the Optionee may exercise his or her Option within such period of
time (of at least thirty (30) days) as is specified in the Option Agreement to
the extent that the Option is vested on the date of termination (but in no event
later than the expiration of the term of such Option as set forth in the Option
Agreement). In the absence of a specified time in the Option Agreement, the
Option shall remain exercisable for three (3) months following the Optionee's
termination. If, on the date of termination, the Optionee is not vested as to
his or her entire Option, the Shares covered by the unvested portion of the
Option shall revert to the Plan. If, after termination, the Optionee does not
exercise his or her Option within the time specified by the Administrator, the
Option shall terminate, and the Shares covered by such Option shall revert to
the Plan.

             (c) Disability of Optionee. If an Optionee ceases to be a Service
                 ----------------------
Provider as a result of the Optionee's disability, the Optionee may exercise an
Option to the extent the Option is vested on the date of termination, but only
within twelve (12) months from the date of such termination (and in no event
later than the expiration date of the term of such Option as set forth in the
Option Agreement). If such disability is not a "disability" as such term is
defined in Section 22(e)(3) of the Code, in the case of an Incentive Stock
Option such Incentive Stock Option shall automatically cease to be treated as an
Incentive Stock Option and shall be treated for tax purposes as a Nonstatutory
Stock Option on the day three months and one day following such termination. If,
on the date of termination, the Optionee is not vested as to the entire Option,
the Shares covered by the unvested portion of the Option shall revert to the
Plan. If, after termination, the Option is not exercised within the time
specified herein, the Option shall terminate, and the Shares covered by such
Option shall revert to the Plan.

             (d) Death of Optionee. If an Optionee dies while a Service
                 -----------------
Provider, the Option may be exercised at any time within twelve (12) months
following the date of death (but in no event later than the expiration of the
term of such Option as set forth in the Notice of Grant) to the extent vested on
the date of death. If, at the time of death, the Optionee is not vested as to
the entire Option, the Shares covered by the unvested portion of the Option
shall revert to the Plan. The Option may be exercised by the executor or
administrator of the Optionee's estate or, if none, by the person(s) entitled to
exercise the Option under the Optionee's will or the laws of descent or
distribution. If the Option is not so exercised within the time specified
herein, the Option shall terminate, and the Shares covered by such Option shall
revert to the Plan.

             (e) Buyout Provisions. The Administrator may at any time offer to
                 -----------------
buy out for a payment in cash or Shares, an Option previously granted, based on
such terms and conditions as the Administrator shall establish and communicate
to the Optionee at the time that such offer is made.

                                     - 7 -

<PAGE>

     10.  Non-Transferability of Options. Unless determined otherwise by the
          ------------------------------
Administrator, an Option may not be sold, pledged, assigned, hypothecated,
transferred, or disposed of in any manner other than by will or by the laws of
descent or distribution and may be exercised, during the lifetime of the
Optionee, only by the Optionee. If the Administrator makes an Option
transferable, such Option shall contain such additional terms and conditions, as
the Administrator deems appropriate.

     11.  Adjustments Upon Changes in Capitalization or Merger.
          ----------------------------------------------------

          (a)   Changes in Capitalization. Subject to any required action by the
                -------------------------
stockholders of the Company, the number of shares of Common Stock covered by
each outstanding Option, and the number of shares of Common Stock which have
been authorized for issuance under the Plan but as to which no Options have yet
been granted or which have been returned to the Plan upon cancellation or
expiration of an Option, as well as the price per share of Common Stock covered
by each such outstanding Option, shall be proportionately adjusted for any
increase or decrease in the number of issued shares of Common Stock resulting
from a stock split, reverse stock split, stock dividend, combination or
reclassification of the Common Stock, or any other increase or decrease in the
number of issued shares of Common Stock effected without receipt of
consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration." Such adjustment shall be made by the
Administrator, whose determination in that respect shall be final, binding and
conclusive. Except as expressly provided herein, no issuance by the Company of
shares of stock of any class, or securities convertible into shares of stock of
any class, shall affect, and no adjustment by reason thereof shall be made with
respect to, the number or price of shares of Common Stock subject to an Option.

          (b)   Dissolution or Liquidation. In the event of the proposed
                --------------------------
dissolution or liquidation of the Company, the Administrator shall notify the
Optionee at least fifteen (15) days prior to such proposed action. To the extent
it has not been previously exercised, the Option will terminate immediately
prior to the consummation of such proposed action.

          (c)   Merger. In the event of a merger of the Company with or into
                ------
another corporation, the Option may be assumed or an equivalent option may be
substituted by such successor corporation or a parent or subsidiary of such
successor corporation. If, in such event, the Option is not assumed or
substituted, the Option shall terminate as of the date of the closing of the
merger. For the purposes of this paragraph, the Option shall be considered
assumed if, following the merger, the option confers the right to purchase, for
each Share of Optioned Stock subject to the Option immediately prior to the
merger, the consideration (whether stock, cash, or other securities or property)
received in the merger by holders of Common Stock for each Share held on the
effective date of the transaction (and if holders were offered a choice of
consideration, the type of consideration chosen by the holders of a majority of
the outstanding Shares); provided, however, that if such consideration received
in the merger was not solely common stock of the successor corporation or its
Parent, the Administrator may, with the consent of the successor corporation,
provide for the consideration to be received upon the exercise of the Option for
each Share of

                                     - 8 -

<PAGE>

Optioned Stock subject to the Option to be solely common stock of the successor
corporation or its Parent equal in fair market value to the per share
consideration received by holders of Common Stock in the merger.

     12.   Date of Grant. The date of grant of an Option shall, for all
           -------------
purposes, be the date on which the Administrator makes the determination
granting such Option, or such other date as is determined by the Board. Notice
of the determination shall be given to each Service Provider to whom an Option
is so granted within a reasonable time after the date of such grant.

     13.   Amendment and Termination of the Plan.
           -------------------------------------

           (a)   Amendment and Termination. The Board may at any time amend,
                 -------------------------
alter, suspend or terminate the Plan.

           (b)   Stockholder Approval. The Board shall obtain stockholder
                 --------------------
approval of any Plan amendment to the extent necessary and desirable to comply
with Applicable Laws.

           (c)   Effect of Amendment or Termination. No amendment, alteration,
                 ----------------------------------
suspension or termination of the Plan shall impair the rights of any Optionee,
unless mutually agreed otherwise between the Optionee and the Administrator,
which agreement must be in writing and signed by the Optionee and the Company.
Termination of the Plan shall not affect the Administrator's ability to exercise
the powers granted to it hereunder with respect to Options granted under the
Plan prior to the date of such termination.

     14.   Conditions Upon Issuance of Shares.
           ----------------------------------

           (a)   Legal Compliance. Shares shall not be issued pursuant to the
                 ----------------
exercise of an Option unless the exercise of such Option and the issuance and
delivery of such Shares shall comply with Applicable Laws and shall be further
subject to the approval of counsel for the Company with respect to such
compliance.

           (b)   Investment Representations. As a condition to the exercise of
                 --------------------------
an Option, the Administrator may require the person exercising such Option to
represent and warrant at the time of any such exercise that the Shares are being
purchased only for investment and without any present intention to sell or
distribute such Shares if, in the opinion of counsel for the Company, such a
representation is required.

     15.   Inability to Obtain Authority. The inability of the Company to obtain
           -----------------------------
authority from any regulatory body having jurisdiction, which authority is
deemed by the Company's counsel to be necessary to the lawful issuance and sale
of any Shares hereunder, shall relieve the Company of any liability in respect
of the failure to issue or sell such Shares as to which such requisite authority
shall not have been obtained.

                                     - 9 -

<PAGE>

     16. Reservation of Shares. The Company, during the term of this Plan, shall
         ---------------------
at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.

     17. Stockholder Approval. The Plan shall be subject to approval by the
         --------------------
stockholders of the Company within twelve (12) months after the date the Plan is
adopted. Such stockholder approval shall be obtained in the manner and to the
degree required under Applicable Laws.

     18. Information to Optionees and Purchasers. The Company shall provide to
         ---------------------------------------
each Optionee, not less frequently than annually, copies of annual financial
statements. The Company shall also provide such statements to each individual
who acquires Shares pursuant to the Plan while such individual owns such Shares.
The Company shall not be required to provide such statements to Service
Providers whose duties in connection with the Company assure their access to
equivalent information.

                                     - 10 -

<PAGE>

                                THERASENSE, INC.
                                 1997 STOCK PLAN
                             STOCK OPTION AGREEMENT

     Unless otherwise defined herein, the terms defined in the 1997 Stock Plan
(the "Plan") shall have the same defined meanings in this Option Agreement.

     1. NOTICE OF STOCK OPTION GRANT

Name
Address

     The undersigned Optionee has been granted an Option to purchase Common
Stock of the Company, subject to the terms and conditions of the Plan and this
Option Agreement, as follows:

Grant Number                                 _______________________

Date of Grant                                _______________________

Vesting Commencement Date                    Vest_Date

Exercise Price per Share                     $

Total Number of Shares Granted               Shares_Granted

Total Exercise Price                         $Total_Price

Type of Option:                              ____    Incentive Stock Option
                                             ____    Nonstatutory Stock Option

Term/Expiration Date:                        10 years from date of grant

                                       -1-

<PAGE>

Vesting Schedule:
----------------

     This Option shall be exercisable according to the following vesting
schedule:
Vest_Schedule

Termination Period:
------------------

     This Option shall be exercisable for 30 days after Optionee ceases to be a
Service Provider. Upon Optionee's death or disability, this Option may be
exercised for such longer period as provided in the Plan. In no event may
Optionee exercise this Option after the Term/Expiration Date as provided above.

     2. AGREEMENT

             (a) Grant of Option. The Plan Administrator of the Company hereby
                 ---------------
grants to the Optionee named in the Notice of Grant (the "Optionee"), an option
(the "Option") to purchase the number of Shares set forth in the Notice of
Grant, at the exercise price per Share set forth in the Notice of Grant (the
"Exercise Price"), and subject to the terms and conditions of the Plan, which is
incorporated herein by reference. Subject to Section 13(c) of the Plan, in the
event of a conflict between the terms and conditions of the Plan and this Option
Agreement, the terms and conditions of the Plan shall prevail.

             If designated in the Notice of Grant as an Incentive Stock Option
("ISO"), this Option is intended to qualify as an Incentive Stock Option as
defined in Section 422 of the Code. Nevertheless, to the extent that it exceeds
the $100,000 rule of Code Section 422(d), this Option shall be treated as a
Nonstatutory Stock Option ("NSO").

             (b)  Exercise of Option.
                  ------------------

                     (i) Right to Exercise. This Option shall be exercisable
                         -----------------
during its term in accordance with the Vesting Schedule set out in the Notice of
Grant and with the applicable provisions of the Plan and this Option Agreement.

                     (ii) Method of Exercise. This Option shall be exercisable
                          ------------------
by delivery of an exercise notice in the form attached as Exhibit A (the
                                                          ---------
"Exercise Notice") which shall state the election to exercise the Option, the
number of Shares with respect to which the Option is being exercised, and such
other representations and agreements as may be required by the Company. The
Exercise Notice shall be accompanied by payment of the aggregate Exercise Price
as to all Exercised Shares. This Option shall be deemed to be exercised upon
receipt by the Company of such fully executed Exercise Notice accompanied by the
aggregate Exercise Price. No Shares shall be issued pursuant to the exercise of
an Option unless such issuance and such exercise complies with Applicable Laws.
Assuming such compliance, for income tax purposes the Shares shall be considered
transferred to the Optionee on the date on which the Option is exercised with
respect to such Shares.

                                      - 2 -

<PAGE>

             (c) Optionee's Representations. In the event the Shares have not
                 --------------------------
been registered under the Securities Act of 1933, as amended, at the time this
Option is exercised, the Optionee shall, if required by the Company,
concurrently with the exercise of all or any portion of this Option, deliver to
the Company his or her Investment Representation Statement in the form attached
hereto as Exhibit B, and shall read the applicable rules of the Commissioner of
          ---------
Corporations attached to such Investment Representation Statement.

             (d) Lock-Up Period. Optionee hereby agrees that, if so requested by
                 --------------
the Company or any representative of the underwriters (the "Managing
Underwriter") in connection with any registration of the offering of any
securities of the Company under the Securities Act, Optionee shall not sell or
otherwise transfer any Shares or other securities of the Company during the
180-day period (or such other period as may be requested in writing by the
Managing Underwriter and agreed to in writing by the Company) (the "Market
Standoff Period") following the effective date of a registration statement of
the Company filed under the Securities Act. Such restriction shall apply only to
the first registration statement of the Company to become effective under the
Securities Act that includes securities to be sold on behalf of the Company to
the public in an underwritten public offering under the Securities Act. The
Company may impose stop-transfer instructions with respect to securities subject
to the foregoing restrictions until the end of such Market Standoff Period.

             (e) Method of Payment. Payment of the aggregate Exercise Price
                 -----------------
shall be by any of the following, or a combination thereof, at the election of
the Optionee:

                     (i) cash or check;

                     (ii) consideration received by the Company under a formal
cashless exercise program adopted by the Company in connection with the Plan; or

                     (iii) surrender of other Shares which, (i) in the case of
Shares acquired upon exercise of an option, have been owned by the Optionee for
more than six (6) months on the date of surrender, and (ii) have a Fair Market
Value on the date of surrender equal to the aggregate Exercise Price of the
Exercised Shares.

             (f) Restrictions on Exercise. This Option may not be exercised
                 ------------------------
until such time as the Plan has been approved by the stockholders of the
Company, or if the issuance of such Shares upon such exercise or the method of
payment of consideration for such shares would constitute a violation of any
Applicable Law.

             (g) Non-Transferability of Option. This Option may not be
                 -----------------------------
transferred in any manner otherwise than by will or by the laws of descent or
distribution and may be exercised during the lifetime of Optionee only by
Optionee. The terms of the Plan and this Option Agreement shall be binding upon
the executors, administrators, heirs, successors and assigns of the Optionee.

             (h) Term of Option. This Option may be exercised only within the
                 --------------
term set out in the Notice of Grant, and may be exercised during such term only
in accordance with the Plan and the terms of this Option.

                                      - 3 -

<PAGE>

             (i) Tax Consequences. Set forth below is a brief summary as of the
                 ----------------
date of this Option of some of the federal tax consequences of exercise of this
Option and disposition of the Shares. THIS SUMMARY IS NECESSARILY INCOMPLETE,
AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. THE OPTIONEE SHOULD
CONSULT A TAX ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE SHARES.

                     (i) Exercise of ISO. If this Option qualifies as an ISO,
                         ---------------
there will be no regular federal income tax liability upon the exercise of the
Option, although the excess, if any, of the Fair Market Value of the Shares on
the date of exercise over the Exercise Price will be treated as an adjustment to
the alternative minimum tax for federal tax purposes and may subject the
Optionee to the alternative minimum tax in the year of exercise.

                     (ii) Exercise of ISO Following Disability. If the Optionee
                          ------------------------------------
ceases to be an Employee as a result of a disability that is not a total and
permanent disability as defined in Section 22(e)(3) of the Code, to the extent
permitted on the date of termination, the Optionee must exercise an ISO within
three months of such termination for the ISO to be qualified as an ISO.

                     (iii) Exercise of Nonstatutory Stock Option. There may be a
                           -------------------------------------
regular federal income tax liability upon the exercise of a Nonstatutory Stock
Option. The Optionee will be treated as having received compensation income
(taxable at ordinary income tax rates) equal to the excess, if any, of the Fair
Market Value of the Shares on the date of exercise over the Exercise Price. If
Optionee is an Employee or a former Employee, the Company will be required to
withhold from Optionee's compensation or collect from Optionee and pay to the
applicable taxing authorities an amount in cash equal to a percentage of this
compensation income at the time of exercise, and may refuse to honor the
exercise and refuse to deliver Shares if such withholding amounts are not
delivered at the time of exercise.

                     (iv) Disposition of Shares. In the case of an NSO, if
                          ---------------------
Shares are held for at least one year, any gain realized on disposition of the
Shares will be treated as long-term capital gain for federal income tax
purposes. In the case of an ISO, if Shares transferred pursuant to the Option
are held for at least one year after exercise and of at least two years after
the Date of Grant, any gain realized on disposition of the Shares will also be
treated as long-term capital gain for federal income tax purposes. If Shares
purchased under an ISO are disposed of within one year after exercise or two
years after the Date of Grant, any gain realized on such disposition will be
treated as compensation income (taxable at ordinary income rates) to the extent
of the difference between the Exercise Price and the lesser of (1) the Fair
Market Value of the Shares on the date of exercise, or (2) the sale price of the
Shares. Any additional gain will be taxed as capital gain, short-term or
long-term depending on the period that the ISO Shares were held.

                     (v) Notice of Disqualifying Disposition of ISO Shares. If
                         -------------------------------------------------
the Option granted to Optionee herein is an ISO, and if Optionee sells or
otherwise disposes of any of the Shares acquired pursuant to the ISO on or
before the later of (1) the date two years after the Date of Grant, or (2) the
date one year after the date of exercise, the Optionee shall immediately notify
the Company in writing of such disposition. Optionee agrees that Optionee may be
subject to income tax withholding by the Company on the compensation income
recognized by the Optionee.

                                      - 4 -

<PAGE>

             (j) Entire Agreement; Governing Law. The Plan is incorporated
                 -------------------------------
herein by reference. The Plan and this Option Agreement constitute the entire
agreement of the parties with respect to the subject matter hereof and supersede
in their entirety all prior undertakings and agreements of the Company and
Optionee with respect to the subject matter hereof, and may not be modified
adversely to the Optionee's interest except by means of a writing signed by the
Company and Optionee. This agreement is governed by the internal substantive
laws but not the choice of law rules of California.

             (k) No Guarantee of Continued Service. OPTIONEE ACKNOWLEDGES AND
                 ---------------------------------
AGREES THAT THE VESTING OF SHARES PURSUANT TO THE VESTING SCHEDULE HEREOF IS
EARNED ONLY BY CONTINUING AS A SERVICE PROVIDER AT THE WILL OF THE COMPANY (NOT
THROUGH THE ACT OF BEING HIRED, BEING GRANTED THIS OPTION OR ACQUIRING SHARES
HEREUNDER). OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, THE
TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO
NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS A
SERVICE PROVIDER FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND SHALL
NOT INTERFERE IN ANY WAY WITH OPTIONEE'S RIGHT OR THE COMPANY'S RIGHT TO
TERMINATE OPTIONEE'S RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME, WITH OR
WITHOUT CAUSE.

             Optionee acknowledges receipt of a copy of the Plan and represents
that he or she is familiar with the terms and provisions thereof, and hereby
accepts this Option subject to all of the terms and provisions thereof. Optionee
has reviewed the Plan and this Option in their entirety, has had an opportunity
to obtain the advice of counsel prior to executing this Option and fully
understands all provisions of the Option. Optionee hereby agrees to accept as
binding, conclusive and final all decisions or interpretations of the
Administrator upon any questions arising under the Plan or this Option. Optionee
further agrees to notify the Company upon any change in the residence address
indicated below.

                                      - 5 -

<PAGE>

OPTIONEE: Name                                  THERASENSE, INC.

---------------------------------               --------------------------------
Signature                                       By

---------------------------------               --------------------------------
Print Name                                      Title

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

---------------------------------
Residence Address

                                      - 6 -

<PAGE>

                                    EXHIBIT A
                                    ---------

                                 1997 STOCK PLAN
                                 EXERCISE NOTICE

TheraSense, Inc.
1360 South Loop Road
Alameda, CA  94502
Attention: Secretary

     1. Exercise of Option. Effective as of today, ___________, 20____, the
        ------------------
undersigned ("Optionee") hereby elects to exercise Optionee's Option to
purchase _________ shares of the Common Stock (the "Shares") of TheraSense, Inc.
(the "Company") under and pursuant to the 1997 Stock Plan (the "Plan") and the
Stock Option Agreement dated ________________, 20____(the "Option Agreement").

     1. Delivery of Payment. Purchaser herewith delivers to the Company the full
        -------------------
purchase price of the Shares, as set forth in the Option Agreement.

     2. Representations of Optionee. Optionee acknowledges that Optionee has
        ---------------------------
received, read and understood the Plan and the Option Agreement and agrees to
abide by and be bound by their terms and conditions.

     3. Rights as Stockholder. Until the issuance of the Shares (as evidenced by
        ---------------------
the appropriate entry on the books of the Company or of a duly authorized
transfer agent of the Company), no right to vote or receive dividends or any
other rights as a stockholder shall exist with respect to the Optioned Stock,
notwithstanding the exercise of the Option. The Shares shall be issued to the
Optionee as soon as practicable after the Option is exercised. No adjustment
shall be made for a dividend or other right for which the record date is prior
to the date of issuance except as provided in Section 11 of the Plan.

     4. Company's Right of First Refusal. Before any Shares held by Optionee or
        --------------------------------
any transferee (either being sometimes referred to herein as the "Holder") may
be sold or otherwise transferred (including transfer by gift or operation of
law), the Company or its assignee(s) shall have a right of first refusal to
purchase the Shares on the terms and conditions set forth in this Section (the
"Right of First Refusal").

             (a) Notice of Proposed Transfer. The Holder of the Shares shall
                 ---------------------------
deliver to the Company a written notice (the "Notice") stating: (i) the Holder's
bona fide intention to sell or otherwise transfer such Shares; (ii) the name of
each proposed purchaser or other transferee ("Proposed Transferee"); (iii) the
number of Shares to be transferred to each Proposed Transferee; and (iv) the
bona fide cash price or other consideration for which the Holder proposes to
transfer the Shares (the "Offered Price"), and the Holder shall offer the Shares
at the Offered Price to the Company or its assignee(s).

                                       -1-

<PAGE>

             (b) Exercise of Right of First Refusal. At any time within thirty
                 ----------------------------------
(30) days after receipt of the Notice, the Company and/or its assignee(s) may,
by giving written notice to the Holder, elect to purchase all, but not less than
all, of the Shares proposed to be transferred to any one or more of the Proposed
Transferees, at the purchase price determined in accordance with subsection (c)
below.

             (c) Purchase Price. The purchase price ("Purchase Price") for the
                 --------------
Shares purchased by the Company or its assignee(s) under this Section shall be
the Offered Price. If the Offered Price includes consideration other than cash,
the cash equivalent value of the non-cash consideration shall be determined by
the Board of Directors of the Company in good faith.

             (d) Payment. Payment of the Purchase Price shall be made, at the
                 -------
option of the Company or its assignee(s), in cash (by check), by cancellation of
all or a portion of any outstanding indebtedness of the Holder to the Company
(or, in the case of repurchase by an assignee, to the assignee), or by any
combination thereof within 30 days after receipt of the Notice or in the manner
and at the times set forth in the Notice.

             (e) Holder's Right to Transfer. If all of the Shares proposed in
                 --------------------------
the Notice to be transferred to a given Proposed Transferee are not purchased by
the Company and/or its assignee(s) as provided in this Section, then the Holder
may sell or otherwise transfer such Shares to that Proposed Transferee at the
Offered Price or at a higher price, provided that such sale or other transfer is
consummated within 120 days after the date of the Notice, that any such sale or
other transfer is effected in accordance with any applicable securities laws and
that the Proposed Transferee agrees in writing that the provisions of this
Section shall continue to apply to the Shares in the hands of such Proposed
Transferee. If the Shares described in the Notice are not transferred to the
Proposed Transferee within such period, a new Notice shall be given to the
Company, and the Company and/or its assignees shall again be offered the Right
of First Refusal before any Shares held by the Holder may be sold or otherwise
transferred.

             (f) Exception for Certain Family Transfers. Anything to the
                 --------------------------------------
contrary contained in this Section notwithstanding, the transfer of any or all
of the Shares during the Optionee's lifetime or on the Optionee's death by will
or intestacy to the Optionee's immediate family or a trust for the benefit of
the Optionee's immediate family shall be exempt from the provisions of this
Section. "Immediate Family" as used herein shall mean spouse, lineal descendant
or antecedent, father, mother, brother or sister. In such case, the transferee
or other recipient shall receive and hold the Shares so transferred subject to
the provisions of this Section, and there shall be no further transfer of such
Shares except in accordance with the terms of this Section.

             (g) Termination of Right of First Refusal. The Right of First
                 -------------------------------------
Refusal shall terminate as to any Shares upon the first sale of Common Stock of
the Company to the general public pursuant to a registration statement filed
with and declared effective by the Securities and Exchange Commission under the
Securities Act of 1933, as amended.

5.   Tax Consultation. Optionee understands that Optionee may suffer adverse tax
     ----------------
consequences as a result of Optionee's purchase or disposition
of the Shares. Optionee represents

                                     - 2 -

<PAGE>

that Optionee has consulted with any tax consultants Optionee deems advisable in
connection with the purchase or disposition of the Shares and that Optionee is
not relying on the Company for any tax advice.

    6. Restrictive Legends and Stop-Transfer Orders.
       ---------------------------------------------

          (a)  Legends. Optionee understands and agrees that the Company shall
               -------
cause the legends set forth below or legends substantially equivalent thereto,
to be placed upon any certificate(s) evidencing ownership of the Shares together
with any other legends that may be required by the Company or by state or
federal securities laws:

          THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
          SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND MAY NOT BE
          OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS
          AND UNTIL REGISTERED UNDER THE ACT OR, IN THE OPINION OF COMPANY
          COUNSEL SATISFACTORY TO THE ISSUER OF THESE SECURITIES, SUCH OFFER,
          SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS IN COMPLIANCE THEREWITH.

          THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
          RESTRICTIONS ON TRANSFER AND A RIGHT OF FIRST REFUSAL HELD BY THE
          ISSUER OR ITS ASSIGNEE(S) AS SET FORTH IN THE EXERCISE NOTICE BETWEEN
          THE ISSUER AND THE ORIGINAL HOLDER OF THESE SHARES, A COPY OF WHICH
          MAY BE OBTAINED AT THE PRINCIPAL OFFICE OF THE ISSUER. SUCH TRANSFER
          RESTRICTIONS AND RIGHT OF FIRST REFUSAL ARE BINDING ON TRANSFEREES OF
          THESE SHARES.

          (b) Stop-Transfer Notices. Optionee agrees that, in order to ensure
              ---------------------
compliance with the restrictions referred to herein, the Company may issue
appropriate "stop transfer" instructions to its transfer agent, if any, and
that, if the Company transfers its own securities, it may make appropriate
notations to the same effect in its own records.

          (c) Refusal to Transfer. The Company shall not be required (i) to
              -------------------
transfer on its books any Shares that have been sold or otherwise transferred in
violation of any of the provisions of this Agreement or (ii) to treat as owner
of such Shares or to accord the right to vote or pay dividends to any purchaser
or other transferee to whom such Shares shall have been so transferred.

    7. Successors and Assigns. The Company may assign any of its rights under
       ----------------------
this Agreement to single or multiple assignees, and this Agreement shall inure
to the benefit of the successors and assigns of the Company. Subject to the
restrictions on transfer herein set forth, this Agreement shall be binding upon
Optionee and his or her heirs, executors, administrators, successors and
assigns.
                                     - 3 -

<PAGE>

     8. Interpretation. Any dispute regarding the interpretation of this
        --------------
Agreement shall be submitted by Optionee or by the Company forthwith to the
Administrator which shall review such dispute at its next regular meeting. The
resolution of such a dispute by the Administrator shall be final and binding on
all parties.

     9. Governing Law; Severability. This Agreement is governed by the internal
        ---------------------------
substantive laws but not the choice of law rules, of California.

     10. Entire Agreement. The Plan and Option Agreement are incorporated herein
         ----------------
by reference. This Exercise Notice, the Plan, the Option Agreement and the
Investment Representation Statement constitute the entire agreement of the
parties with respect to the subject matter hereof and supersede in their
entirety all prior undertakings and agreements of the Company and Optionee with
respect to the subject matter hereof, and may not be modified adversely to the
Optionee's interest except by means of a writing signed by the Company and
Optionee.

Submitted by:                             Accepted by:

OPTIONEE: Name                            THERASENSE, INC.

----------------------------------        --------------------------------------
Signature                                 By

----------------------------------        --------------------------------------
Print Name                                Its

Address:                                  Address:
-------                                   -------

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

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

                                          --------------------------------------
                                          Date Received

                                      - 4 -

<PAGE>

                                    EXHIBIT B
                                    ---------

                       INVESTMENT REPRESENTATION STATEMENT

OPTIONEE:                   Name
COMPANY:                    THERASENSE, INC.
SECURITY:                   COMMON STOCK
AMOUNT:
DATE:

     In connection with the purchase of the above-listed Securities, the
undersigned Optionee represents to the Company the following:

                     (i)    Optionee is aware of the Company's business affairs
and financial condition and has acquired sufficient information about the
Company to reach an informed and knowledgeable decision to acquire the
Securities. Optionee is acquiring these Securities for investment for Optionee's
own account only and not with a view to, or for resale in connection with, any
"distribution" thereof within the meaning of the Securities Act of 1933, as
amended (the "Securities Act").

                     (ii)   Optionee acknowledges and understands that the
Securities constitute "restricted securities" under the Securities Act and have
not been registered under the Securities Act in reliance upon a specific
exemption therefrom, which exemption depends upon, among other things, the bona
fide nature of Optionee's investment intent as expressed herein. In this regard,
Optionee understands that, in the view of the Securities and Exchange
Commission, the statutory basis for such exemption may be unavailable if
Optionee's representation was predicated solely upon a present intention to hold
these Securities for the minimum capital gains period specified under tax
statutes, for a deferred sale, for or until an increase or decrease in the
market price of the Securities, or for a period of one year or any other fixed
period in the future. Optionee further understands that the Securities must be
held indefinitely unless they are subsequently registered under the Securities
Act or an exemption from such registration is available. Optionee further
acknowledges and understands that the Company is under no obligation to register
the Securities. Optionee understands that the certificate evidencing the
Securities will be imprinted with a legend which prohibits the transfer of the
Securities unless they are registered or such registration is not required in
the opinion of counsel satisfactory to the Company, and any other legend
required under applicable state securities laws.

                     (iii)  Optionee is familiar with the provisions of Rule 701
and Rule 144, each promulgated under the Securities Act, which, in substance,
permit limited public resale of "restricted securities" acquired, directly or
indirectly from the issuer thereof, in a non-public offering subject to the
satisfaction of certain conditions. Rule 701 provides that if the issuer
qualifies under Rule 701 at the time of the grant of the Option to the Optionee,
the exercise will be exempt from registration under the Securities Act. In the
event the Company becomes subject to the reporting requirements of Section 13 or
15(d) of the Securities Exchange Act of 1934, ninety (90) days thereafter (or
such longer period as any market stand-off agreement may require) the Securities
exempt under Rule 701 may be resold, subject to the satisfaction of certain of
the conditions

                                      -1-

<PAGE>

specified by Rule 144, including: (1) the resale being made through a broker in
an unsolicited "broker's transaction" or in transactions directly with a market
maker (as said term is defined under the Securities Exchange Act of 1934); and,
in the case of an affiliate, (2) the availability of certain public information
about the Company, (3) the amount of Securities being sold during any three
month period not exceeding the limitations specified in Rule 144(e), and (4) the
timely filing of a Form 144, if applicable.

                     In the event that the Company does not qualify under Rule
701 at the time of grant of the Option, then the Securities may be resold in
certain limited circumstances subject to the provisions of Rule 144, which
requires the resale to occur not less than one year after the later of the date
the Securities were sold by the Company or the date the Securities were sold by
an affiliate of the Company, within the meaning of Rule 144; and, in the case of
acquisition of the Securities by an affiliate, or by a non-affiliate who
subsequently holds the Securities less than two years, the satisfaction of the
conditions set forth in sections (1), (2), (3) and (4) of the paragraph
immediately above.

                     (iv) Optionee further understands that in the event all of
the applicable requirements of Rule 701 or 144 are not satisfied, registration
under the Securities Act, compliance with Regulation A, or some other
registration exemption will be required; and that, notwithstanding the fact that
Rules 144 and 701 are not exclusive, the Staff of the Securities and Exchange
Commission has expressed its opinion that persons proposing to sell private
placement securities other than in a registered offering and otherwise than
pursuant to Rules 144 or 701 will have a substantial burden of proof in
establishing that an exemption from registration is available for such offers or
sales, and that such persons and their respective brokers who participate in
such transactions do so at their own risk. Optionee understands that no
assurances can be given that any such other registration exemption will be
available in such event.

                                          Signature of Optionee:

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

                                          Date:                      , 20
                                                ---------------------    -------

                                      - 2 -

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