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                                                                    Exhibit 10.1

                              BIOSITE INCORPORATED

                AMENDED AND RESTATED EMPLOYEE STOCK PURCHASE PLAN

         SECTION 1.  PURPOSE OF THE PLAN.

         The Plan was adopted by the Company's Board of Directors on December 5,
1996. On February 27, 1998, and January 19, 2001 the Plan was amended to
increase the number of shares available under the Plan. The purpose of the Plan
is to provide Eligible Employees with an opportunity to increase their
proprietary interest in the success of the Company by purchasing Stock from the
Company on favorable terms and to pay for such purchases through payroll
deductions. The Plan is intended to qualify under section 423 of the Internal
Revenue Code of 1986, as amended.

         SECTION 2.  ADMINISTRATION OF THE PLAN.

         (a) THE COMMITTEE. The Plan shall be administered by the Committee. The
interpretation and construction by the Committee of any provision of the Plan or
of any right to purchase Stock granted under the Plan shall be conclusive and
binding on all persons.

         (b) RULES AND FORMS. The Committee may adopt such rules and forms under
the Plan as it considers appropriate.

         SECTION 3.  ENROLLMENT AND PARTICIPATION.

         (a) OFFERING PERIODS. While the Plan is in effect, two overlapping
Offering Periods shall commence in each calendar year. Except for the first
Offering Period, Offering Periods shall consist of the 24-month periods
commencing on each January 1 and July 1. The first Offering Period shall
commence on the effective date of the Company's initial public offering and end
on December 31, 1996.

         (b) ACCUMULATION PERIODS. While the Plan is in effect, two Accumulation
Periods shall commence in each calendar year. Except for the first Accumulation
Period, Accumulation Periods shall consist of the six-month periods commencing
on each January 1 and July 1. The first Accumulation Period shall commence on
the effective date of the Company's initial public offering and end on June 30,
1997.

         (c) ENROLLMENT. Any individual who, on the day preceding the first day
of an Offering Period, qualifies as an Eligible Employee may elect to become a
Participant in the Plan for such Offering Period by executing the enrollment
form prescribed for this purpose by the Committee. The enrollment form shall be
filed with the Company not late than one week prior to the last working day
prior to the commencement of such Offering Period.

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         (d) DURATION OF PARTICIPATION. Once enrolled in the Plan, a Participant
shall continue to participate until he or she ceases to be an Eligible Employee,
withdraws from the Plan or reaches the end of the Accumulation Period in which
he or she discontinued contributions. A Participant who discontinued
contributions under Section 4(d) or withdrew from the Plan under Section 5(a)
may again become a Participant, if he or she then is an Eligible Employee, by
following the procedure described in Subsection (c) above.

         (e) APPLICABLE OFFERING PERIOD. For the purposes of calculating the
Purchase Price under Section 7(b), the applicable Offering Period shall be
determined as follows:

                  (i) Once a Participant is enrolled in the Plan for an Offering
         Period, such Offering Period shall continue to apply to him or her
         until the earliest of (A) the end of such Offering Period, (B) the end
         of his or her participation under Subsection (d) above or (C)
         reenrollment in a subsequent Offering Period under Paragraph (ii)
         below.

                  (ii) In the event that the Fair Market Value of Stock on the
         last trading day before the commencement of the Offering Period in
         which the Participant is enrolled is higher than on the last trading
         day before the commencement of any subsequent Offering Period, the
         Participant shall automatically be re-enrolled for such subsequent
         Offering Period.

                  (iii) When a Participant reaches the end of an Offering Period
         but his or her participation is to continue, then such Participant
         shall automatically be re-enrolled for the Offering Period that
         commences immediately after the end of the prior Offering Period.

         SECTION 4.  EMPLOYEE CONTRIBUTIONS.

         (a) FREQUENCY OF PAYROLL DEDUCTIONS. A Participant may purchase shares
of Stock under the Plan solely by means of payroll deductions. Payroll
deductions, as designated by the Participant pursuant to Subsection (b) below,
shall occur on each payday during participation in the Plan.

         (b) AMOUNT OF PAYROLL DEDUCTIONS. An Eligible Employee shall designate
on the enrollment form the portion of his or her Compensation that he or she
elects to have withheld for the purchase of Stock. Such portion shall be a whole
percentage of the Eligible Employee's Compensation, but not less than 1% percent
nor more than 15%.

         (c) CHANGING WITHHOLDING RATE. If a Participant wishes to change the
rate of payroll withholding, he or she may do so by filing a new enrollment form
with the Company not later than one week prior to the last working day prior to
the commencement of the Accumulation Period for which such change is to be
effective.

         (d) DISCONTINUING PAYROLL DEDUCTIONS. If a Participant wishes to
discontinue employee contributions entirely, he or she may do so by filing a new
enrollment form at any time. Payroll withholding shall cease as soon as
reasonably practicable after such form has been received by the Company.

         SECTION 5.  WITHDRAWAL FROM THE PLAN.

         (a) WITHDRAWAL. A Participant may elect to withdraw from the Plan by
filing the prescribed form with the Company at any time before the last day of
an Accumulation Period. As soon as reasonably practicable thereafter, payroll
deductions shall cease and the entire amount credited to the Participant's Plan
Account shall be refunded to him or her in cash, without interest. No partial
withdrawals shall be permitted.

         (b) RE-ENROLLMENT AFTER WITHDRAWAL. A former Participant who has
withdrawn from the Plan shall not be a Participant until he or she re-enrolls in
the Plan under Section 3(b).

         SECTION 6.  CHANGE IN EMPLOYMENT STATUS.

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         (a) TERMINATION OF EMPLOYMENT. Termination of employment as an Eligible
Employee for any reason, including death, shall be treated as an automatic
withdrawal from the Plan under Section 5(a). (A transfer from one Participating
Company to another shall not be treated as a termination of employment.)

         (b) DEATH. In the event of the Participant's death, the amount credited
to his or her Plan Account shall be paid to a beneficiary designated by him or
her for this purpose on the prescribed form or, if none, to the Participant's
estate. Such form shall be valid only if it was filed with the Company before
the Participant's death.

         SECTION 7.  PLAN ACCOUNTS AND PURCHASE OF SHARES.

         (a) PLAN ACCOUNTS. The Company shall maintain a Plan Account on its
books in the name of each Participant. Whenever an amount is deducted from the
Participant's Compensation under the Plan, such amount shall be credited to the
Participant's Plan Account. No interest shall be credited to Plan Accounts.

         (b) PURCHASE PRICE. The Purchase Price for each share of Stock
purchased at the close of an Accumulation Period shall be the lower of:

                  (i) 85% of the Fair Market Value of such share on the last
         trading day before the commencement of the applicable Offering Period
         (as determined under Section 3(e); or

                  (ii) 85% of the Fair Market Value of such share on the last
         trading day in such Accumulation Period.

         (c) NUMBER OF SHARES PURCHASED. As of the last day of each Accumulation
Period, each Participant shall be deemed to have elected to purchase the number
of shares of Stock calculated in accordance with this Subsection (c), unless the
Participant has previously elected to withdraw from the Plan in accordance with
Section 5(a). The amount then in the Participant's Plan Account shall be divided
by the Purchase Price, and the number of shares that results shall be purchased
from the Company with the funds in the Participant's Plan Account. The foregoing
notwithstanding, no Participant shall purchase more than a maximum of 2,500
shares of Stock with respect to any Accumulation Period nor shares of Stock in
excess of the amounts set forth in Sections 8 and 12(a). The Committee may
determine with respect to all Participants that any fractional share, as
calculated under this Subsection (c), shall be rounded down to the next lower
whole share.

         (d) AVAILABLE SHARES INSUFFICIENT. In the event that as of the
beginning of an Accumulation Period the Committee determines that the aggregate
number of shares that all Participants are projected or are likely to elect
during an Accumulation Period exceeds the maximum number of shares remaining
available for issuance under Section 12(a), including in connection with an
Offering Period beginning prior to the date of the Accumulation Period with
insufficient shares, then the Committee may either determine that such shares
shall not be made in connection with any previous Offering Period but shall be
added to any new increase in the shares available under the Plan in a new
Offering Period starting on the date of the Accumulation Period with
insufficient shares, or the number of shares to which each Participant is
entitled in any Offering Period shall be determined by multiplying the number of
Shares available for issuance by a fraction, the numerator of which is the
number of shares that such Participant has elected to purchase and the
denominator of which is the number of shares that all Participants have elected
to purchase. In the event the Committee does not make any determination, the
default method for dealing with insufficient shares in an Accumulation Period
shall be the fractional method described in the preceding sentence.

         (e) ISSUANCE OF STOCK. Certificates representing the number of shares
of Stock purchased by a Participant under the Plan shall be issued to him or her
as soon as reasonably practicable after the close of the applicable Accumulation
Period, except that the Committee may determine that such shares shall be held
for each Participant's benefit by a broker designated by the Committee (unless
the Participant has elected that certificates be issued to him or her). Shares
may be registered in the name of the Participant or jointly in the name of the
Participant and his or her spouse as joint tenants with right of survivorship or
as community property.

         (f) UNUSED CASH BALANCES. An amount remaining in the Participant's Plan
Account that represents the Purchase Price for any fractional share shall be
carried over in the Participant's Plan Account to the next Accumulation Period.
Any amount remaining in the Participant's Plan Account that represents the
Purchase Price for whole shares that

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could not be purchased by reason of Subsection (c) above, Section 8 or Section
12(a) shall be refunded to the Participant in cash, without interest.

         (g) FAILURE OF STOCKHOLDERS TO APPROVE PLAN. In the event stockholders
of the Company do not approve this Plan, the Participant's Plan Account shall be
repaid to the Participant in cash and no Company shares will be purchased for
the Participant under this Plan.

         SECTION 8.  LIMITATIONS ON STOCK OWNERSHIP.

         Any other provision of the Plan notwithstanding, no Participant shall
be granted a right to purchase Stock under the Plan if:

         (a) Such Participant, immediately after his or her election to purchase
such Stock, would own stock possessing more than 5% of the total combined voting
power or value of all classes of stock of the Company or any Parent or
Subsidiary of the Company; or

         (b) Under the terms of the Plan, such Participant's rights to purchase
stock under this and all other qualified employee stock purchase plans of the
Company or any Parent or Subsidiary of the Company would accrue at a rate that
exceeds $25,000 of the fair market value of such stock (determined at the time
when such right is granted) for each calendar year for which such right or
option is outstanding at any time.

         Ownership of stock shall be determined after applying the attribution
rules of section 424(d) of the Internal Revenue Code of 1986, as amended. For
purposes of this Section 8, each Participant shall be considered to own any
stock that he or she has a right or option to purchase under this or any other
plan, and each Participant shall be considered to have the right to purchase
2,500 shares of Stock under this Plan with respect to each Accumulation Period.

         SECTION 9.  RIGHTS NOT TRANSFERABLE.

         The rights of any Participant under the Plan, or any Participant's
interest in any Stock or moneys to which he or she may be entitled under the
Plan, shall not be transferable by voluntary or involuntary assignment or by
operation of law, or in any other manner other than by beneficiary designation
or the laws of descent and distribution. If a Participant in any manner attempts
to transfer, assign or otherwise encumber his or her rights or interest under
the Plan, other than by beneficiary designation or the laws of descent and
distribution, then such act shall be treated as an election by the Participant
to withdraw from the Plan under Section 5(a).

         SECTION 10.  NO RIGHTS AS AN EMPLOYEE.

         Nothing in the Plan shall be construed to give any person the right to
remain in the employ of a Participating Company. Each Participating Company
reserves the right to terminate the employment of any person at any time, with
or without cause.

         SECTION 11.  NO RIGHTS AS A STOCKHOLDER.

         A Participant shall have no rights as a stockholder with respect to any
shares that he or she has purchased, or may have a right to purchase, under the
Plan until the date of issuance of a stock certificate for such shares.

         SECTION 12.  STOCK OFFERED UNDER THE PLAN.

         (a) AUTHORIZED SHARES. The aggregate number of shares of Stock
available for purchase under the Plan shall be 550,000, subject to adjustment
pursuant to this Section 12.

         (b) ANTI-DILUTION ADJUSTMENTS. The aggregate number of shares of Stock
offered under the Plan, the 2,500-share limitation described in Section 7(c) and
the price of shares that any Participant has elected to purchase shall be
adjusted proportionately by the Committee for any increase or decrease in the
number of outstanding shares of Stock

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resulting from a subdivision or consolidation of shares, the payment of a stock
dividend, any other increase or decrease in such shares effected without receipt
or payment of consideration by the Company, or the distribution of the shares of
a Subsidiary to the Company's stockholders.

         (c) REORGANIZATIONS. In the event of a dissolution or liquidation of
the Company, or a merger or consolidation to which the Company is a constituent
corporation, the Plan shall terminate unless the plan of merger, consolidation
or reorganization provides otherwise, and all amounts that have been withheld
but not yet applied to purchase Stock hereunder shall be refunded, without
interest. The Plan shall in no event be construed to restrict in any way the
Company's right to undertake a dissolution, liquidation, merger, consolidation
or other reorganization.

         SECTION 13.  AMENDMENT OR DISCONTINUANCE.

         The Board of Directors shall have the right to amend, suspend or
terminate the Plan at any time and without notice. Except as provided in Section
12, any increase in the aggregate number of shares of Stock to be issued under
the Plan shall be subject to approval by a vote of the stockholders of the
Company. In addition, any other amendment of the Plan shall be subject to
approval by a vote of the stockholders of the Company to the extent required by
an applicable law or regulation.

         SECTION 14.  DEFINITIONS.

         (a) "ACCUMULATION PERIOD" means a six-month period during which
contributions may be made toward the purchase of Stock under the Plan, as
determined pursuant to Section 3(b).

         (b) "BOARD OF DIRECTORS" means the Board of Directors of the Company,
as constituted from time to time.

         (c) "COMMITTEE" means a committee of the Board of Directors, consisting
of one or more directors appointed by the Board of Directors.

         (d) "COMPANY" means Biosite Diagnostics Incorporated, a Delaware
corporation.

         (e) "COMPENSATION" means the total compensation paid in cash to a
Participant by a Participating Company, including salaries, wages, overtime pay
and commissions, but excluding bonuses, incentive compensation, moving or
relocation allowances, car allowances, imputed income attributable to cars or
life insurance, taxable fringe benefits and similar items, all as determined by
the Committee.

         (f)  "ELIGIBLE EMPLOYEE" means any employee of a Participating Company:

                  (i) Whose customary employment is for more than five months
         per calendar year and for more than 20 hours per week; and

                  (ii) Who has been an employee of a Participating Company for
         not less than one month.

         (g) "FAIR MARKET VALUE" shall mean the market price of Stock,
determined by the Committee as follows:

                  (i) If the Stock was traded over-the-counter on the date in
         question but was not traded on the Nasdaq Stock Market or the Nasdaq
         National Market, then the Fair Market Value shall be equal to the mean
         between the last reported representative bid and asked prices quoted
         for such date by the principal automated inter-dealer quotation system
         on which Stock is quoted or, if the Stock is not quoted on any such
         system, by the "Pink Sheets" published by the National Quotation
         Bureau, Inc.;

                  (ii) If the Stock was traded over-the-counter on the date in
         question and was traded on the Nasdaq Stock Market or the Nasdaq
         National Market, then the Fair Market Value shall be equal to the
         last-transaction price quoted for such date by the Nasdaq Stock Market
         or the Nasdaq National Market;

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                  (iii) If the Stock was traded on a stock exchange on the date
         in question, then the Fair Market Value shall be equal to the closing
         price reported by the applicable composite transactions report for such
         date; and

                  (iv) If none of the foregoing provisions is applicable, then
         the Fair Market Value shall be determined by the Committee in good
         faith on such basis as it deems appropriate.

Whenever possible, the determination of Fair Market Value by the Committee shall
be based on the prices reported in the Western Edition of THE WALL STREET
JOURNAL or as reported directly to the Company by Nasdaq or a comparable
exchange. Such determination shall be conclusive and binding on all persons.

         (h) "OFFERING PERIOD" means a 24-month period with respect to which the
right to purchase Stock my be granted under the Plan, as determined pursuant to
Section 3(a).

         (i) "PARTICIPANT" means an Eligible Employee who elects to participate
in the Plan, as provided in Section 3(c).

         (j) "PARTICIPATING COMPANY" means the Company and each present or
future Subsidiary, except Subsidiaries excluded by the Committee.

         (k) "PLAN" means this Biosite Diagnostics Incorporated Employee Stock
Purchase, as amended from time to time.

         (l) "PLAN ACCOUNT" means the account established for each Participant
pursuant to Section 6(a).

         (m) "PURCHASE PRICE" means the price at which Participants may purchase
Stock under the Plan, as determined pursuant to Section 7(b).

         (n)  "STOCK" means the Common Stock of the Company.

         (o) "SUBSIDIARY" means a corporation, 50% or more of the total combined
voting power of all classes of stock of which is owned by the Company or by
another Subsidiary.

         SECTION 15.  EXECUTION.

         To record the adoption of the Plan by the Board of Directors, the
Company has caused its duly authorized officer to affix the corporate name and
seal hereto.

                                       BIOSITE INCORPORATED

                                       By
                                          ------------------------------

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                                                                    Exhibit 10.1

                              BIOSITE INCORPORATED

                              AMENDED AND RESTATED

                              STOCK INCENTIVE PLAN

ARTICLE 1 INTRODUCTION.

         The Plan was adopted by the Board on December 5, 1996, and was approved
by the Company's stockholders on December 6, 1996. The Plan is effective
December 1, 1996. However, Articles 7, 8 and 9 shall not apply prior to the
Company's initial public offering. On February 27, 1998, the Plan was amended by
the Board to increase the number of shares under the Plan. The Plan was amended
again on March 26, 1999, January 28, 2000 and January 19, 2001, to increase the
number of shares under the Plan and on April 20, 1999, to remove provisions
permitting the repricing of options at lower exercise prices.

         The purpose of the Plan is to promote the long-term success of the
Company and the creation of stockholder value by (a) encouraging Key Employees
to focus on critical long-range objectives, (b) encouraging the attraction and
retention of Key Employees with exceptional qualifications and (c) linking Key
Employees directly to stockholder interests through increased stock ownership.
The Plan seeks to achieve this purpose by providing for Awards in the form of
Restricted Shares, Stock Units, Options (which may constitute incentive stock
options or nonstatutory stock options) or stock appreciation rights.

         The Plan shall be governed by, and construed in accordance with, the
laws of the State of California.

ARTICLE 2 ADMINISTRATION.

         2.1 COMMITTEE COMPOSITION. The Plan shall be administered by the
Committee. Except as provided below, the Committee shall consist exclusively of
directors of the Company, who shall be appointed by the Board. In addition, the
composition of the Committee shall satisfy:

                  (a) Such requirements, if any, as the Securities and Exchange
         Commission may establish for administrators acting under plans intended
         to qualify for exemption under Rule 16b-3 (or its successor) under the
         Exchange Act; and

                  (b) Such requirements as the Internal Revenue Service may
         establish for outside directors acting under plans intended to qualify
         for exemption under section 162(m)(4)(C) of the Code.

The Board may act on its own behalf with respect to Outside Directors and may
also appoint one or more separate committees composed of one or more officers of
the Company who need not be directors of the Company and who need not satisfy
the foregoing requirements, who may administer the Plan with respect to Key
Employees who are not "covered employees" under section 162(m)(3) of the Code
and who are not required to report pursuant to ss. 16(a) of the Exchange Act.

         2.2 COMMITTEE RESPONSIBILITIES. The Committee shall (a) select the Key
Employees who are to receive Awards under the Plan, (b) determine the type,
number, vesting requirements and other features and conditions of such Awards,
(c) interpret the Plan and (d) make all other decisions relating to the
operation of the Plan. The Committee may adopt such rules or guidelines as it
deems appropriate to implement the Plan. The Committee's determinations under
the Plan shall be final and binding on all persons.

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ARTICLE 3 SHARES AVAILABLE FOR GRANTS.

         3.1 BASIC LIMITATION. Common Shares issued pursuant to the Plan may be
authorized but unissued shares or treasury shares. The aggregate number of
Common Shares available for Restricted Shares, Stock Units, Options and SARs
awarded under the Plan shall not exceed 4,400,000. Of the Common Shares
available hereunder, no more than 20% in aggregate shall be available with
respect to Outside Directors. The limitation of this Section 3.1 shall be
subject to adjustment pursuant to Article 10. The number of Common Shares
available under this Plan shall be increased by unexercised or forfeited Common
Shares under the Company's 1989 Stock Plan.

         3.2 ADDITIONAL SHARES. If Stock Units, Options or SARs are forfeited or
if Options or SARs terminate for any other reason before being exercised, then
the corresponding Common Shares shall again become available for Awards under
the Plan. If Restricted Shares are forfeited before any dividends have been paid
with respect to such Shares, then such Shares shall again become available for
Awards under the Plan. If Stock Units are settled, then only the number of
Common Shares (if any) actually issued in settlement of such Stock Units shall
reduce the number available under Section 3.1 and the balance shall again become
available for Awards under the Plan. If SARs are exercised, then only the number
of Common Shares (if any) actually issued in settlement of such SARs shall
reduce the number available under Section 3.1 and the balance shall again become
available for Awards under the Plan.

         3.3 DIVIDEND EQUIVALENTS. Any dividend equivalents distributed under
the Plan shall not be applied against the number of Restricted Shares, Stock
Units, Options or SARs available for Awards, whether or not such dividend
equivalents are converted into Stock Units.

ARTICLE 4 ELIGIBILITY.

         4.1 GENERAL RULES. Only Key Employees (including, without limitation,
independent contractors who are not members of the Board) shall be eligible for
designation as Participants by the Committee.

         4.2 OUTSIDE DIRECTORS. The Committee may provide that the NSOs that
otherwise would be granted to an Outside Director under this Plan shall instead
be granted to an affiliate of such Outside Director. Such affiliate shall then
be deemed to be an Outside Director for purposes of the Plan, provided that the
service-related vesting and termination provisions pertaining to the NSOs shall
be applied with regard to the service of the Outside Director.

         4.3 INCENTIVE STOCK OPTIONS. Only Key Employees who are common-law
employees of the Company, a Parent or a Subsidiary shall be eligible for the
grant of ISOs. In addition, a Key Employee who owns more than 10% of the total
combined voting power of all classes of outstanding stock of the Company or any
of its Parents or Subsidiaries shall not be eligible for the grant of an ISO
unless the requirements set forth in section 422(c)(6) of the Code are
satisfied.

ARTICLE 5 OPTIONS.

         5.1 STOCK OPTION AGREEMENT. Each grant of an Option under the Plan
shall be evidenced by a Stock Option Agreement between the Optionee and the
Company. Such Option shall be subject to all applicable terms of the Plan and
may be subject to any other terms that are not inconsistent with the Plan. The
Stock Option Agreement shall specify whether the Option is an ISO or an NSO. The
provisions of the various Stock Option Agreements entered into under the Plan
need not be identical. Options may be granted in consideration of a cash payment
or in consideration of a reduction in the Optionee's other compensation. A Stock
Option Agreement may provide that a new Option will be granted automatically to
the Optionee when he or she exercises a prior Option and pays the Exercise Price
in the form described in Section 6.2.

         5.2 NUMBER OF SHARES. Each Stock Option Agreement shall specify the
number of Common Shares subject to the Option and shall provide for the
adjustment of such number in accordance with Article 10.

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Options granted to any Optionee in a single calendar year shall in no event
cover more than 250,000 Common Shares, subject to adjustment in accordance with
Article 10.

         5.3 EXERCISE PRICE. Each Stock Option Agreement shall specify the
Exercise Price; provided that the Exercise Price under an ISO shall in no event
be less than 100% of the Fair Market Value of a Common Share on the date of
grant and the Exercise Price under an NSO shall in no event be less than the par
value of the Common Shares subject to such NSO. In the case of an NSO, a Stock
Option Agreement may specify an Exercise Price that varies in accordance with a
predetermined formula while the NSO is outstanding, provided that prior to the
Company's initial public offering, the NSO Exercise Price shall be at least 85%
(110% for 10% shareholders) of the Fair Market Value of a Common Share of Stock
on the date of grant.

         5.4 EXERCISABILITY AND TERM. Each Stock Option Agreement shall specify
the date when all or any installment of the Option is to become exercisable,
provided that prior to the Company's initial public offering, Options shall
become exercisable pursuant to a schedule providing for at least 20% vesting per
year over a five-year period (or, in the case of performance options, to the
extent permitted under applicable regulations of the California Department of
Corporations). The Stock Option Agreement shall also specify the term of the
Option; provided that the term of an ISO shall in no event exceed 10 years from
the date of grant. A Stock Option Agreement may provide for accelerated
exercisability in the event of the Optionee's death, disability or retirement or
other events and may provide for expiration prior to the end of its term in the
event of the termination of the Optionee's service. Notwithstanding the
foregoing, no Options may be accelerated prior to the Company's initial public
offering.

         Options may be awarded in combination with SARs, and such an Award may
provide that the Options will not be exercisable unless the related SARs are
forfeited. NSOs may also be awarded in combination with Restricted Shares or
Stock Units, and such an Award may provide that the NSOs will not be exercisable
unless the related Restricted Shares or Stock Units are forfeited.

         Prior to the Company's initial public offering, Options must be
exercised within 30 days of the termination of employment (six months for
termination on account of death or disability).

         5.5 EFFECT OF CHANGE IN CONTROL. The Committee may determine, at the
time of granting an Option or thereafter, that such Option shall become fully
exercisable as to all Common Shares subject to such Option in the event that a
Change in Control occurs with respect to the Company.

         5.6 MODIFICATION OR ASSUMPTION OF OPTIONS. Within the limitations of
the Plan, the Committee may modify, extend or assume outstanding options or may
accept the cancellation of outstanding options (whether granted by the Company
or by another issuer) in return for the grant of new options for the same or a
different number of shares and at the same or different exercise price;
provided, however, that with respect to the shares subject to the new Option,
there shall be no decrease in the aggregate exercise price of such shares,
determined on an adjusted basis. The foregoing notwithstanding, no modification
of an Option shall, without the consent of the Optionee, alter or impair his or
her rights or obligations under such Option.

         5.7 OTHER REQUIREMENTS PRIOR TO COMPANY'S INITIAL PUBLIC OFFERING.
Prior to the Company's initial public offering, Optionees shall receive Company
financial statements at least annually.

ARTICLE 6 PAYMENT FOR OPTION SHARES.

         6.1 General Rule. The entire Exercise Price of Common Shares issued
upon exercise of Options shall be payable in cash at the time when such Common
Shares are purchased, except as follows:

                  (a) In the case of an ISO granted under the Plan, payment
         shall be made only pursuant to the express provisions of the applicable
         Stock Option Agreement. The Stock Option Agreement may specify that
         payment may be made in any form(s) described in this Article 6.

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                  (b) In the case of an NSO, the Committee may at any time
         accept payment in any form(s) described in this Article 6.

         6.2 SURRENDER OF STOCK. To the extent that this Section 6.2 is
applicable, payment for all or any part of the Exercise Price may be made with
Common Shares which have already been owned by the Optionee for more than six
months. Such Common Shares shall be valued at their Fair Market Value on the
date when the new Common Shares are purchased under the Plan.

         6.3 EXERCISE/SALE. To the extent that this Section 6.3 is applicable,
payment may be made by the delivery (on a form prescribed by the Company) of an
irrevocable direction to a securities broker approved by the Company to sell
Common Shares and to deliver all or part of the sales proceeds to the Company in
payment of all or part of the Exercise Price and any withholding taxes.

         6.4 EXERCISE/PLEDGE. To the extent that this Section 6.4 is applicable,
payment may be made by the delivery (on a form prescribed by the Company) of an
irrevocable direction to pledge Common Shares to a securities broker or lender
approved by the Company, as security for a loan, and to deliver all or part of
the loan proceeds to the Company in payment of all or part of the Exercise Price
and any withholding taxes.

         6.5 PROMISSORY NOTE. To the extent that this Section 6.5 is applicable,
payment may be made with a full-recourse promissory note; provided that the par
value of the Common Shares shall be paid in cash.

         6.6 OTHER FORMS OF PAYMENT. To the extent that this Section 6.6 is
applicable, payment may be made in any other form that is consistent with
applicable laws, regulations and rules.

ARTICLE 7 STOCK APPRECIATION RIGHTS.

         7.1 SAR AGREEMENT. Each grant of an SAR under the Plan shall be
evidenced by an SAR Agreement between the Optionee and the Company. Such SAR
shall be subject to all applicable terms of the Plan and may be subject to any
other terms that are not inconsistent with the Plan. The provisions of the
various SAR Agreements entered into under the Plan need not be identical. SARs
may be granted in consideration of a reduction in the Optionee's other
compensation.

         7.2 NUMBER OF SHARES. Each SAR Agreement shall specify the number of
Common Shares to which the SAR pertains and shall provide for the adjustment of
such number in accordance with Article 10. SARs granted to any Optionee in a
single calendar year shall in no event pertain to more than 250,000 Common
Shares, subject to adjustment in accordance with Article 10.

         7.3 EXERCISE PRICE. Each SAR Agreement shall specify the Exercise
Price. An SAR Agreement may specify an Exercise Price that varies in accordance
with a predetermined formula while the SAR is outstanding.

         7.4 EXERCISABILITY AND TERM. Each SAR Agreement shall specify the date
when all or any installment of the SAR is to become exercisable. The SAR
Agreement shall also specify the term of the SAR. An SAR Agreement may provide
for accelerated exercisability in the event of the Optionee's death, disability
or retirement or other events and may provide for expiration prior to the end of
its term in the event of the termination of the Optionee's service. SARs may
also be awarded in combination with Options, Restricted Shares or Stock Units,
and such an Award may provide that the SARs will not be exercisable unless the
related Options, Restricted Shares or Stock Units are forfeited. An SAR may be
included in an ISO only at the time of grant but may be included in an NSO at
the time of grant or thereafter. An SAR granted under the Plan may provide that
it will be exercisable only in the event of a Change in Control.

         7.5 EFFECT OF CHANGE IN CONTROL. The Committee may determine, at the
time of granting an SAR or thereafter, that such SAR shall become fully
exercisable as to all Common Shares subject to such SAR in the event that a
Change in Control occurs with respect to the Company.

                                       4
<PAGE>

         7.6 EXERCISE OF SARS. The exercise of an SAR shall be subject to the
restrictions imposed by Rule 16b-3 (or its successor) under the Exchange Act, if
applicable. If, on the date when an SAR expires, the Exercise Price under such
SAR is less than the Fair Market Value on such date but any portion of such SAR
has not been exercised or surrendered, then such SAR shall automatically be
deemed to be exercised as of such date with respect to such portion. Upon
exercise of an SAR, the Optionee (or any person having the right to exercise the
SAR after his or her death) shall receive from the Company (a) Common Shares,
(b) cash or (c) a combination of Common Shares and cash, as the Committee shall
determine. The amount of cash and/or the Fair Market Value of Common Shares
received upon exercise of SARs shall, in the aggregate, be equal to the amount
by which the Fair Market Value (on the date of surrender) of the Common Shares
subject to the SARs exceeds the Exercise Price.

         7.7 MODIFICATION OR ASSUMPTION OF SARS. Within the limitations of the
Plan, the Committee may modify, extend or assume outstanding SARs or may accept
the cancellation of outstanding SARs (whether granted by the Company or by
another issuer) in return for the grant of new SARs for the same or a different
number of shares and at the same or a different exercise price. The foregoing
notwithstanding, no modification of an SAR shall, without the consent of the
Optionee, alter or impair his or her rights or obligations under such SAR.

ARTICLE 8 RESTRICTED SHARES AND STOCK UNITS.

         8.1 TIME, AMOUNT AND FORM OF AWARDS. Awards under the Plan may be
granted in the form of Restricted Shares, in the form of Stock Units, or in any
combination of both. Restricted Shares or Stock Units may also be awarded in
combination with NSOs or SARs, and such an Award may provide that the Restricted
Shares or Stock Units will be forfeited in the event that the related NSOs or
SARs are exercised.

         8.2 PAYMENT FOR AWARDS. To the extent that an Award is granted in the
form of newly issued Restricted Shares, the Award recipient, as a condition to
the grant of such Award, shall be required to pay the Company in cash an amount
equal to the par value of such Restricted Shares. To the extent that an Award is
granted in the form of Restricted Shares from the Company's treasury or in the
form of Stock Units, no cash consideration shall be required of the Award
recipients.

         8.3 VESTING CONDITIONS. Each Award of Restricted Shares or Stock Units
shall become vested, in full or in installments, upon satisfaction of the
conditions specified in the Stock Award Agreement. A Stock Award Agreement may
provide for accelerated vesting in the event of the Participant's death,
disability or retirement or other events. The Committee may determine, at the
time of making an Award or thereafter, that such Award shall become fully vested
in the event that a Change in Control occurs with respect to the Company.

         8.4 FORM AND TIME OF SETTLEMENT OF STOCK UNITS. Settlement of vested
Stock Units may be made in the form of (a) cash, (b) Common Shares or (c) any
combination of both, as determined by the Committee. The actual number of Stock
Units eligible for settlement may be larger or smaller than the number included
in the original Award, based on predetermined performance factors. Methods of
converting Stock Units into cash may include (without limitation) a method based
on the average Fair Market Value of Common Shares over a series of trading days.
Vested Stock Units may be settled in a lump sum or in installments. The
distribution may occur or commence when all vesting conditions applicable to the
Stock Units have been satisfied or have lapsed, or it may be deferred to any
later date. The amount of a deferred distribution may be increased by an
interest factor or by dividend equivalents. Until an Award of Stock Units is
settled, the number of such Stock Units shall be subject to adjustment pursuant
to Article 10.

         8.5 DEATH OF RECIPIENT. Any Stock Units Award that becomes payable
after the recipient's death shall be distributed to the recipient's beneficiary
or beneficiaries. Each recipient of a Stock Units Award under the Plan shall
designate one or more beneficiaries for this purpose by filing the prescribed
form with the Company. A beneficiary designation may be changed by filing the
prescribed form with the Company at any time before the Award recipient's death.
If no beneficiary was designated or if no designated beneficiary survives the
Award recipient, then any Stock Units Award that becomes payable after the
recipient's death shall be distributed to the recipient's estate.

         8.6 CREDITORS' RIGHTS. A holder of Stock Units shall have no rights
other than those of a general creditor of the Company. Stock Units represent an
unfunded and unsecured obligation of the Company, subject to the terms and
conditions of the applicable Stock Award Agreement.

                                       5
<PAGE>

ARTICLE 9 VOTING AND DIVIDEND RIGHTS.

         9.1 RESTRICTED SHARES. The holders of Restricted Shares awarded under
the Plan shall have the same voting, dividend and other rights as the Company's
other stockholders. A Stock Award Agreement, however, may require that the
holders of Restricted Shares invest any cash dividends received in additional
Restricted Shares. Such additional Restricted Shares shall be subject to the
same conditions and restrictions as the Award with respect to which the
dividends were paid. Such additional Restricted Shares shall not reduce the
number of Common Shares available under Article 3.

         9.2 STOCK UNITS. The holders of Stock Units shall have no voting
rights. Prior to settlement or forfeiture, any Stock Unit awarded under the Plan
may, at the Committee's discretion, carry with it a right to dividend
equivalents. Such right entitles the holder to be credited with an amount equal
to all cash dividends paid on one Common Share while the Stock Unit is
outstanding. Dividend equivalents may be converted into additional Stock Units.
Settlement of dividend equivalents may be made in the form of cash, in the form
of Common Shares, or in a combination of both. Prior to distribution, any
dividend equivalents which are not paid shall be subject to the same conditions
and restrictions as the Stock Units to which they attach.

ARTICLE 10 PROTECTION AGAINST DILUTION.

         10.1 ADJUSTMENTS. In the event of a subdivision of the outstanding
Common Shares, a declaration of a dividend payable in Common Shares, a
declaration of a dividend payable in a form other than Common Shares in an
amount that has a material effect on the price of Common Shares, a combination
or consolidation of the outstanding Common Shares (by reclassification or
otherwise) into a lesser number of Common Shares, a recapitalization, a spinoff
or a similar occurrence, the Committee shall make such adjustments as it, in its
sole discretion, deems appropriate in one or more of (a) the number of Options,
SARs, Restricted Shares and Stock Units available for future Awards under
Article 3, (b) the limitations set forth in Sections 5.2 and 7.2, (c) the number
of NSOs to be granted to Outside Directors under Section 4.2, (d) the number of
Stock Units included in any prior Award which has not yet been settled, (e) the
number of Common Shares covered by each outstanding Option and SAR or (f) the
Exercise Price under each outstanding Option and SAR. Except as provided in this
Article 10, a Participant shall have no rights by reason of any issue by the
Company of stock of any class or securities convertible into stock of any class,
any subdivision or consolidation of shares of stock of any class, the payment of
any stock dividend or any other increase or decrease in the number of shares of
stock of any class.

         10.2 REORGANIZATIONS. In the event that the Company is a party to a
merger or other reorganization, outstanding Options, SARs, Restricted Shares and
Stock Units shall be subject to the agreement of merger or reorganization. Such
agreement may provide, without limitation, for the assumption of outstanding
Awards by the surviving corporation or its parent, for their continuation by the
Company (if the Company is a surviving corporation), for accelerated vesting and
accelerated expiration (provided the Company has previously had its initial
public offering), or for settlement in cash.

ARTICLE 11 AWARDS UNDER OTHER PLANS.

         The Company may grant awards under other plans or programs. Such awards
may be settled in the form of Common Shares issued under this Plan. Such Common
Shares shall be treated for all purposes under the Plan like Common Shares
issued in settlement of Stock Units and shall, when issued, reduce the number of
Common Shares available under Article 3.

ARTICLE 12 PAYMENT OF DIRECTOR'S FEES IN SECURITIES.

         12.1 EFFECTIVE DATE. No provision of this Article 12 shall be effective
unless and until the Board has determined to implement such provision.

                                       6
<PAGE>

         12.2 ELECTIONS TO RECEIVE NSOS, RESTRICTED SHARES OR STOCK UNITS. An
Outside Director may elect to receive his or her annual retainer payments and
meeting fees from the Company in the form of cash, NSOs, Restricted Shares,
Stock Units, or a combination thereof, as determined by the Board. Such NSOs,
Restricted Shares and Stock Units shall be issued under the Plan. An election
under this Article 12 shall be filed with the Company on the prescribed form.

         12.3 NUMBER AND TERMS OF NSOS, RESTRICTED SHARES OR STOCK UNITS. The
number of NSOs, Restricted Shares or Stock Units to be granted to Outside
Directors in lieu of annual retainers and meeting fees that would otherwise be
paid in cash shall be calculated in a manner determined by the Board. The terms
of such NSOs, Restricted Shares or Stock Units shall also be determined by the
Board.

ARTICLE 13 LIMITATION ON RIGHTS.

         13.1 RETENTION RIGHTS. Neither the Plan nor any Award granted under the
Plan shall be deemed to give any individual a right to remain an employee,
consultant or director of the Company, a Parent or a Subsidiary. The Company and
its Parents and Subsidiaries reserve the right to terminate the service of any
employee, consultant or director at any time, with or without cause, subject to
applicable laws, the Company's certificate of incorporation and by-laws and a
written employment agreement (if any).

         13.2 STOCKHOLDERS' RIGHTS. A Participant shall have no dividend rights,
voting rights or other rights as a stockholder with respect to any Common Shares
covered by his or her Award prior to the issuance of a stock certificate for
such Common Shares. No adjustment shall be made for cash dividends or other
rights for which the record date is prior to the date when such certificate is
issued, except as expressly provided in Articles 8, 9 and 10.

         13.3 REGULATORY REQUIREMENTS. Any other provision of the Plan
notwithstanding, the obligation of the Company to issue Common Shares under the
Plan shall be subject to all applicable laws, rules and regulations and such
approval by any regulatory body as may be required. The Company reserves the
right to restrict, in whole or in part, the delivery of Common Shares pursuant
to any Award prior to the satisfaction of all legal requirements relating to the
issuance of such Common Shares, to their registration, qualification or listing
or to an exemption from registration, qualification or listing.

ARTICLE 14 LIMITATION ON PAYMENTS.

         14.1 BASIC RULE. Any provision of the Plan to the contrary
notwithstanding, in the event that the independent auditors most recently
selected by the Board (the "Auditors") determine that any payment or transfer by
the Company under the Plan to or for the benefit of a Participant (a "Payment")
would be nondeductible by the Company for federal income tax purposes because of
the provisions concerning "excess parachute payments" in section 280G of the
Code, then the aggregate present value of all Payments shall be reduced (but not
below zero) to the Reduced Amount; provided that the Committee, at the time of
making an Award under this Plan or at any time thereafter, may specify in
writing that such Award shall not be so reduced and shall not be subject to this
Article 14. For purposes of this Article 14, the "Reduced Amount" shall be the
amount, expressed as a present value, which maximizes the aggregate present
value of the Payments without causing any Payment to be nondeductible by the
Company because of section 280G of the Code.

         14.2 REDUCTION OF PAYMENTS. If the Auditors determine that any Payment
would be nondeductible by the Company because of section 280G of the Code, then
the Company shall promptly give the Participant notice to that effect and a copy
of the detailed calculation thereof and of the Reduced Amount, and the
Participant may then elect, in his or her sole discretion, which and how much of
the Payments shall be eliminated or reduced (as long as after such election the
aggregate present value of the Payments equals the Reduced Amount) and shall
advise the Company in writing of his or her election within 10 days of receipt
of notice. If no such election is made by the Participant within such 10-day
period, then the Company may elect which and how much of the Payments shall be
eliminated or reduced (as long as after such election the aggregate present
value of the Payments equals the Reduced Amount) and shall notify the
Participant promptly of such election. For purposes of this Article 14, present
value shall be determined in

                                       7
<PAGE>

accordance with section 280G(d)(4) of the Code. All determinations made by the
Auditors under this Article 14 shall be binding upon the Company and the
Participant and shall be made within 60 days of the date when a Payment becomes
payable or transferable. As promptly as practicable following such determination
and the elections hereunder, the Company shall pay or transfer to or for the
benefit of the Participant such amounts as are then due to him or her under the
Plan and shall promptly pay or transfer to or for the benefit of the Participant
in the future such amounts as become due to him or her under the Plan.

         14.3 OVERPAYMENTS AND UNDERPAYMENTS. As a result of uncertainty in the
application of section 280G of the Code at the time of an initial determination
by the Auditors hereunder, it is possible that Payments will have been made by
the Company which should not have been made (an "Overpayment") or that
additional Payments which will not have been made by the Company could have been
made (an "Underpayment"), consistent in each case with the calculation of the
Reduced Amount hereunder. In the event that the Auditors, based upon the
assertion of a deficiency by the Internal Revenue Service against the Company or
the Participant which the Auditors believe has a high probability of success,
determine that an Overpayment has been made, such Overpayment shall be treated
for all purposes as a loan to the Participant which he or she shall repay to the
Company, together with interest at the applicable federal rate provided in
section 7872(f)(2) of the Code; provided, however, that no amount shall be
payable by the Participant to the Company if and to the extent that such payment
would not reduce the amount which is subject to taxation under section 4999 of
the Code. In the event that the Auditors determine that an Underpayment has
occurred, such Underpayment shall promptly be paid or transferred by the Company
to or for the benefit of the Participant, together with interest at the
applicable federal rate provided in section 7872(f)(2) of the Code.

         14.4 RELATED CORPORATIONS. For purposes of this Article 14, the term
"Company" shall include affiliated corporations to the extent determined by the
Auditors in accordance with section 280G(d)(5) of the Code.

ARTICLE 15 WITHHOLDING TAXES.

         15.1 GENERAL. To the extent required by applicable federal, state,
local or foreign law, a Participant or his or her successor shall make
arrangements satisfactory to the Company for the satisfaction of any withholding
tax obligations that arise in connection with the Plan. The Company shall not be
required to issue any Common Shares or make any cash payment under the Plan
until such obligations are satisfied.

         15.2 SHARE WITHHOLDING. The Committee may permit a Participant to
satisfy all or part of his or her withholding or income tax obligations by
having the Company withhold all or a portion of any Common Shares that otherwise
would be issued to him or her or by surrendering all or a portion of any Common
Shares that he or she previously acquired. Such Common Shares shall be valued at
their Fair Market Value on the date when taxes otherwise would be withheld in
cash. Any payment of taxes by assigning Common Shares to the Company may be
subject to restrictions, including any restrictions required by rules of the
Securities and Exchange Commission.

ARTICLE 16 ASSIGNMENT OR TRANSFER OF AWARDS.

         16.1 GENERAL. An Award granted under the Plan shall not be anticipated,
assigned, attached, garnished, optioned, transferred or made subject to any
creditor's process, whether voluntarily, involuntarily or by operation of law,
except as approved by the Committee. Notwithstanding the foregoing, ISOs and,
prior to the Company's initial public offering, NSOs may not be transferable.
However, this Article 16 shall not preclude a Participant from designating a
beneficiary who will receive any outstanding Awards in the event of the
Participant's death, nor shall it preclude a transfer of Awards by will or by
the laws of descent and distribution.

         16.2 TRUSTS. Neither this Article 16 nor any other provision of the
Plan shall preclude a Participant from transferring or assigning Restricted
Shares to (a) the trustee of a trust that is revocable by such Participant
alone, both at the time of the transfer or assignment and at all times
thereafter prior to such Participant's death, or (b) the trustee of any other
trust to the extent approved in advance by the Committee in writing. A transfer
or assignment of Restricted Shares from such trustee to any person other than
such Participant shall be permitted only to the extent approved in advance by
the Committee in writing, and Restricted Shares held by such trustee shall be
subject

                                       8
<PAGE>

to all of the conditions and restrictions set forth in the Plan and in the
applicable Stock Award Agreement, as if such trustee were a party to such
Agreement.

ARTICLE 17 FUTURE OF THE PLAN.

         17.1 TERM OF THE PLAN. The Plan, as set forth herein, was adopted on
December 5, 1996, and became effective December 1, 1996, except that Articles 7,
8 and 9 shall not be effective prior to the date of the Company's initial public
offering. The Plan shall remain in effect until it is terminated under Section
17.2, except that no ISOs shall be granted after November 30, 2006.

         17.2 AMENDMENT OR TERMINATION. The Board may, at any time and for any
reason, amend or terminate the Plan. An amendment of the Plan shall be subject
to the approval of the Company's stockholders only to the extent required by
applicable laws, regulations or rules. No Awards shall be granted under the Plan
after the termination thereof. The termination of the Plan, or any amendment
thereof, shall not affect any Award previously granted under the Plan.

ARTICLE 18 DEFINITIONS.

         18.1 "AWARD" means any award of an Option, an SAR, a Restricted Share
or a Stock Unit under the Plan.

         18.2 "BOARD" means the Company's Board of Directors, as constituted
from time to time.

         18.3 "CHANGE IN CONTROL" shall mean the occurrence of any of the
following events:

                  (a) The consummation of a merger or consolidation of the
         Company with or into another entity or any other corporate
         reorganization, if more than 50% of the combined voting power of the
         continuing or surviving entity's securities outstanding immediately
         after such merger, consolidation or other reorganization is owned by
         persons who were not stockholders of the Company immediately prior to
         such merger, consolidation or other reorganization;

                  (b) A change in the composition of the Board, as a result of
         which fewer than one-half of the incumbent directors are directors who
         either:

                           (A) Had been directors of the Company 24 months prior
                  to such change; or

                           (B) Were elected, or nominated for election, to the
                  Board with the affirmative votes of at least a majority of the
                  directors who had been directors of the Company 24 months
                  prior to such change and who were still in office at the time
                  of the election or nomination; or

                  (c) Any "person" (as such term is used in sections 13(d) and
         14(d) of the Exchange Act) by the acquisition or aggregation of
         securities is or becomes the beneficial owner, directly or indirectly,
         of securities of the Company representing 50% or more of the combined
         voting power of the Company's then outstanding securities ordinarily
         (and apart from rights accruing under special circumstances) having the
         right to vote at elections of directors (the "Base Capital Stock");
         except that any change in the relative beneficial ownership of the
         Company's securities by any person resulting solely from a reduction in
         the aggregate number of outstanding shares of Base Capital Stock, and
         any decrease thereafter in such person's ownership of securities, shall
         be disregarded until such person increases in any manner, directly or
         indirectly, such person's beneficial ownership of any securities of the
         Company.

The term "Change in Control" shall not include the Company's initial public
offering or a transaction, the sole purpose of which is to change the state of
the Company's incorporation.

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

                                       9
<PAGE>

         18.5 "COMMITTEE" means a committee of the Board, as described in
Article 2.

         18.6 "COMMON SHARE" means one share of the common stock of the Company.

         18.7 "COMPANY" means Biosite Diagnostics Incorporated, a Delaware
corporation.

         18.8 "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.

         18.9 "EXERCISE PRICE," in the case of an Option, means the amount for
which one Common Share may be purchased upon exercise of such Option, as
specified in the applicable Stock Option Agreement. "Exercise Price," in the
case of an SAR, means an amount, as specified in the applicable SAR Agreement,
which is subtracted from the Fair Market Value of one Common Share in
determining the amount payable upon exercise of such SAR.

         18.10 "FAIR MARKET VALUE" means the market price of Common Shares,
determined by the Committee as follows:

                  (a) If the Common Shares were traded over-the-counter on the
         date in question but was not traded on the Nasdaq Stock Market or the
         Nasdaq National Market, then the Fair Market Value shall be equal to
         the mean between the last reported representative bid and asked prices
         quoted for such date by the principal automated inter-dealer quotation
         system on which the Common Shares are quoted or, if the Common Shares
         are not quoted on any such system, by the "Pink Sheets" published by
         the National Quotation Bureau, Inc.;

                  (b) If the Common Shares were traded over-the-counter on the
         date in question and were traded on the Nasdaq Stock Market or the
         Nasdaq National Market, then the Fair Market Value shall be equal to
         the last-transaction price quoted for such date by the Nasdaq Stock
         Market or the Nasdaq National Market;

                  (c) If the Common Shares were traded on a stock exchange on
         the date in question, then the Fair Market Value shall be equal to the
         closing price reported by the applicable composite transactions report
         for such date; and

                  (d) If none of the foregoing provisions is applicable, then
         the Fair Market Value shall be determined by the Committee in good
         faith on such basis as it deems appropriate.

Whenever possible, the determination of Fair Market Value by the Committee shall
be based on the prices reported in the Western Edition of THE WALL STREET
JOURNAL. Such determination shall be conclusive and binding on all persons.

         18.11 "ISO" means an incentive stock option described in section 422(b)
of the Code.

         18.12 "KEY EMPLOYEE" means (a) a common-law employee of the Company, a
Parent or a Subsidiary, (b) an Outside Director and (c) a consultant or adviser
who provides services to the Company, a Parent or a Subsidiary as an independent
contractor. Service as an Outside Director or as an independent contractor shall
be considered employment for all purposes of the Plan, except as provided in
Sections 4.2 and 4.3.

         18.13 "NSO" means a stock option not described in sections 422 or 423
of the Code.

         18.14 "OPTION" means an ISO or NSO granted under the Plan and entitling
the holder to purchase one Common Share.

         18.15 "OPTIONEE" means an individual or estate who holds an Option or
SAR.

         18.16 "OUTSIDE DIRECTOR" shall mean a member of the Board who is not a
common-law employee of the Company, a Parent or a Subsidiary.

         18.17 "PARENT" means any corporation (other than the Company) in an
unbroken chain of corporations ending with the Company, if each of the
corporations other than the Company owns stock possessing 50%

                                       10
<PAGE>

or more of the total combined voting power of all classes of stock in one of the
other corporations in such chain. A corporation that attains the status of a
Parent on a date after the adoption of the Plan shall be considered a Parent
commencing as of such date.

         18.18 "PARTICIPANT" means an individual or estate who holds an Award.

         18.19 "PLAN" means this 1996 Stock Incentive Plan of Biosite
Diagnostics Incorporated, as amended from time to time.

         18.20 "RESTRICTED SHARE" means a Common Share awarded under the Plan.

         18.21 "SAR" means a stock appreciation right granted under the Plan.

         18.22 "SAR AGREEMENT" means the agreement between the Company and an
Optionee which contains the terms, conditions and restrictions pertaining to his
or her SAR.

         18.23 "STOCK AWARD AGREEMENT" means the agreement between the Company
and the recipient of a Restricted Share or Stock Unit which contains the terms,
conditions and restrictions pertaining to such Restricted Share or Stock Unit.

         18.24 "STOCK OPTION AGREEMENT" means the agreement between the Company
and an Optionee which contains the terms, conditions and restrictions pertaining
to his or her Option.

         18.25 "STOCK UNIT" means a bookkeeping entry representing the
equivalent of one Common Share, as awarded under the Plan.

         18.26 "SUBSIDIARY" means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company, if each of the
corporations other than the last corporation in the unbroken chain owns stock
possessing 50% or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain. A corporation that attains
the status of a Subsidiary on a date after the adoption of the Plan shall be
considered a Subsidiary commencing as of such date.

ARTICLE 19 EXECUTION.

         To record the adoption of the Plan by the Board, the Company has caused
its duly authorized officer to affix the corporate name and seal hereto.

                                       BIOSITE INCORPORATED

                                       By
                                          -------------------------------------

                                       11

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