ROYAL PRECISION, INC.

                                STOCK OPTION PLAN

                                   ----------

                                 OCTOBER 5, 1997

            (RESTATED TO REFLECT AMENDMENT ADOPTED NOVEMBER 30, 1999)

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                                    PREAMBLE:

     1. Royal Precision,  Inc. a Delaware corporation (the "COMPANY"),  by means
of this Stock Option Plan (the  "PLAN"),  desires to attract and retain  capable
employees,  officers,  directors and  consultants  and to provide them with long
term incentives to continue their services to the Company, to maximize the value
of the  Company  to its  stockholders  and to  acquire  a  continuing  ownership
interest in the Company.

     2. The  Company  has  determined  that  the  foregoing  objectives  will be
promoted by granting Options (as hereinafter defined) under this Plan to certain
employees,  officers, directors and consultants of the Company and of its Parent
and Subsidiaries, if any, pursuant to this Plan.

                                     TERMS:

ARTICLE 1. DEFINITIONS.

     Section  1.1.  GENERAL.  Certain  words and phrases used in this Plan shall
have the meanings given to them below in this section:

     "BOARD OF DIRECTORS" means the board of directors of the Company.

     "CODE"  means  the  Internal  Revenue  Code  of 1986  and  the  regulations
thereunder, as now in effect or hereafter amended.

     "COMMITTEE"  means the Board of  Directors  or a committee  of the Board of
Directors that administers the Plan under Section 2.1 below.

     "COMMON  STOCK" means the common stock with a par value of one mil ($0.001)
per share, of the Company.

     "CONSULTANT"  means any person who provides services to any Employer (other
than as an  Employee or a Director  or in  connection  with the offer or sale of
securities  of the  Employer  in a  capital  raising  transaction)  and who is a
consultant  or an  adviser  to  the  Employer  within  the  meaning  of  General
Instruction  A.1. to Form S-8 promulgated by the SEC under the Securities Act of
1933.

     "DATE OF GRANT" means the date an Option is first granted.

     "DIRECTOR" means a member of the Board of Directors.

     "EFFECTIVE  DATE" means the date this Plan is first adopted by the Board of
Directors.

     "EMPLOYEE" means any common law employee of an Employer.

     "EMPLOYER"  means the  Company or any Parent or  Subsidiary  of the Company
which employs a given Employee or has engaged a given Consultant.

     "EXCHANGE  ACT"  means  the  Securities   Exchange  Act  of  1934  and  the
regulations thereunder, as now in effect or hereafter amended.

     "EXERCISE  PRICE"  means,  with  respect  to  an  Option,   the  amount  of
consideration  that must be  delivered  to the  Company  in order to  purchase a
single Share thereunder.
<PAGE>
     "FAIR MARKET VALUE OF A SHARE" means the amount  determined  to be the fair
market value of a single Share by the Committee  based upon the trading price of
the Shares,  their offering price in public and private offerings by the Company
and  such  other  factors  as it  deems  relevant.  In  the  absence  of  such a
determination, the Fair Market Value of a Share shall be deemed to be (a) if the
Shares are listed or  admitted to trading on a national  securities  exchange or
the NASDAQ - National Market System,  the per Share closing price regular way on
the  principal  national  securities  exchange  or the NASDAQ - National  Market
System on which the Shares are listed or admitted to trading on the day prior to
the date of determination or, if no closing price can be determined for the date
of  determination,  the most recent date for which such price can  reasonably be
ascertained,  or (b) if the Shares are not  listed or  admitted  to trading on a
national  securities  exchange or the NASDAQ - National Market System,  the mean
between   the   representative   bid  and  asked   per   Share   prices  in  the
over-the-counter  market  at the  closing  of the  day  prior  to  the  date  of
determination  or the most recent such bid and asked prices then  available,  as
reported by NASDAQ or if the Shares are not then  quoted by NASDAQ as  furnished
by any market maker selected from time to time by the Company for that purpose.

     "GRANTEE" means any Participant to whom an Option has been granted.

     "HOLDER"  means any Grantee who holds a valid  Option and any heir or legal
representative to whom such Grantee's Option has been transferred by will or the
laws of descent and distribution.

     "INCENTIVE  STOCK OPTION" or "ISO" means a Stock Option  intended to comply
with the terms and conditions set forth in Section 422 of the Code.

     "MEETING DATE" means the date of each annual meeting of the stockholders of
the Company at which Directors are elected.

     "NONQUALIFIED  OPTION"  means a Stock Option other than an Incentive  Stock
Option.

     "OFFICER"  means an  officer of the  Company  as  defined  in 17  C.F.R.ss.
240.16a-1(f) as now in effect or hereafter amended.

     "OPTION" or "STOCK OPTION" means a right granted under Article 5, 6 or 7 of
the Plan to a Grantee to purchase a stated number of Shares at a stated Exercise
Price.

     "OPTION AGREEMENT" means an agreement evidencing an Option substantially in
the form of Exhibit A, Exhibit B or Exhibit C attached hereto.

     "PARENT"  means a parent of a given  corporation as such term is defined in
Section 424(e) of the Code.

     "PARTICIPANT" means a person who is eligible to receive an Option under the
Plan.

     "PLAN" means this Plan as it may be amended or restated from time to time.

     "RULE 16b-3" means Rule 16b-3 (17 C.F.R. ss.  240.16b-3)  promulgated under
Section 16(b) of the Exchange Act as now in effect or hereafter amended.

     "SEC" means the Securities and Exchange Commission.

     "SHARES" means shares of Common Stock.

     "SUBSIDIARY"  means a  subsidiary  of a given  corporation  as such term is
defined in Section 424(f) of the Code.

     "TAX OFFSET PAYMENT" means a payment in cash which may be authorized by the
Committee  to be  paid  to a  Grantee  of a  Nonqualified  Option  in an  amount
determined by the following formula:

                            1-[A + (1-A) + B]
                            -----------------     -    C = D
                                   C

where  "A"  is  the  maximum  federal   marginal  income  tax  rate  imposed  on
individuals,  "B" is the maximum marginal income tax rate imposed on individuals
by the State in which the Grantee is domiciled,  "C" is the  difference  between
the Exercise Price and the Fair Market Value of a Share at the time of exercise,
times the number of Shares  subject to such  exercise,  and "D" is the amount of

                                      -2-
<PAGE>
the Tax Offset Payment. If at the time of exercise of a Nonqualified Option with
respect to which a Tax Offset  Payment has been  authorized,  in the  reasonable
opinion of the chief  financial  officer of the  Company,  (a) the  Company  may
offset from income an amount equal to the full amount of the Tax Offset Payment,
the  Tax  Offset  Payment  shall  be  paid at such  time  by  first  paying  any
withholding  taxes due with  respect to the exercise and grant of the Tax Offset
Payment,  and then by paying to the Grantee the balance,  or (b) the Company may
not  offset  from  income an amount  equal to the full  amount of the Tax Offset
Payment,  only that  portion of the Tax  Offset  Payment,  if any,  equal to the
amount of the tax  benefit  available  to the Company or its  stockholders  (the
"Partial  Tax Offset  Payment")  shall be paid at such time by first  paying any
withholding  taxes due with  respect to the exercise and grant of the Tax Offset
Payment,  and then by paying to the Grantee the balance,  if any, of the Partial
Tax Offset Payment.  The balance of the Tax Offset Payment shall be paid to such
Grantee as and when the Company may utilize the tax benefit resulting therefrom.

     "TEN PERCENT  STOCKHOLDER"  means a person who owns stock  possessing  more
than 10% of the  total  combined  voting  power of all  classes  of stock of the
Company or any Parent or Subsidiary  of the Company.  Ownership  shall,  for the
purposes of the previous  sentence,  be determined  under the rules set forth in
Section 424 of the Code.

     "TERMINATION  WITHOUT  CAUSE"  means a  termination  by an  Employer of the
employment or consulting relationship of a Grantee with the Employer that is not
for cause and is not occasioned by the  resignation,  death or disability of the
Grantee.

     Section  1.2.  ACCOUNTING  TERMS.  All  accounting  terms not  specifically
defined  herein  shall  be  construed  in  accordance  with  generally  accepted
accounting principles.

     Section 1.3.  EFFECT OF  DEFINITIONS.  The definitions set forth in Section
1.1 above shall apply equally to the singular, plural, adjectival, adverbial and
other forms of any of the words and phrases  defined  regardless of whether they
are capitalized.

ARTICLE 2. ADMINISTRATION.

     Section 2.1.  COMMITTEE.  The Plan shall be  administered by a committee of
the Board of Directors  consisting of two or more  Directors,  each of whom is a
"Non-Employee Director" as described in paragraph (b)(3) of Rule 16b-3 and is an
"outside  director"  as described  in Code  Section  162(m) and the  regulations
thereunder.  Unless the Board of Directors  designates another of its committees
to  administer  the Plan,  the Plan  shall be  administered  by (a) a  committee
consisting  of those  members  of the  Compensation  Committee  of the  Board of
Directors who are disinterested  persons and are outside directors,  but, if the
Compensation  Committee  is  abolished  or its  membership  does not contain two
persons who comply with the  requirements  of the first sentence of this Section
2.1, the Board of Directors shall either reconstitute the Compensation Committee
in  compliance  with,  or create  another  Committee  that  complies  with,  the
requirements of the first sentence of this Section 2.1 to administer the Plan or
(b) the Board of Directors.

     Section 2.2.  AUTHORITY.  Subject to the express provisions of the Plan and
in addition to the powers  granted by other  sections of the Plan, the Committee
has the authority, in its discretion,  to (a) determine the Participants,  grant
Options,  determine  whether Tax Offset  Payments  should be authorized  and, if
authorized, the percentage of such Tax Offset Payment, and determine the timing,
pricing  and amount of the  Options;  (b) define,  prescribe,  amend and rescind
rules, regulations,  procedures,  terms and conditions relating to the Plan; (c)
make all other determinations  necessary or advisable for administering the Plan
including,  but not  limited  to,  interpreting  the Plan,  correcting  defects,
reconciling  inconsistencies  and  resolving  ambiguities;  and (d)  review  and
resolve all claims of Employees,  Consultants,  Directors, Grantees, Holders and
Participants. The actions and determinations of the Committee on matters related
to the Plan shall be conclusive  and binding upon the Company and all Employees,
Consultants, Directors, Grantees, Holders and Participants.

ARTICLE 3. SHARES.

     Section 3.1.  NUMBER.  The  aggregate  number of Shares in respect of which
Options may be granted under the Plan shall not exceed 750,000,  which number of

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Shares is hereby  reserved for issuance under the Plan out of the authorized but
unissued Shares.

     Section  3.2.  CANCELLATIONS.  If any  portion  of an Option  is  canceled,
terminates or expires for any reason without having been  exercised,  the Shares
related to such unexercised  portion,  shall be available again for the purposes
of the Plan.

     Section 3.3. ANTI-DILUTION.

          (a) If the Shares are split or if a dividend  of Shares is paid on the
Shares,  the number of Shares on which each then outstanding Option is based and
the number of Shares as to which Options may be granted under this Plan shall be
increased  automatically  by the ratio between the number of Shares  outstanding
immediately  after such event and the number of Shares  outstanding  immediately
before such event (ignoring for this purpose any provision for the repurchase or
cash payment of  fractional  shares) and the  Exercise  Price  thereof  shall be
decreased  automatically  by the same ratio.  If the Shares are combined  into a
lesser  number of Shares,  the number of Shares for which each then  outstanding
Option is based and the  number of  Shares as to which  Options  may be  granted
under the Plan shall be decreased  automatically  by such ratio and the Exercise
Price thereof shall be increased automatically by such ratio.

          (b)   If  any   other   change   occurs   in   the   Shares,   through
recapitalization,  merger,  consolidation  or exchange  of shares or  otherwise,
there  shall   automatically  be  substituted  for  each  Share  subject  to  an
unexercised  Option and each Share  available for additional  grants of Options,
the number and kind of shares or other  securities  or property  into which each
outstanding  Share was  changed,  and the  Exercise  Price shall be increased or
decreased proportionally so that the aggregate Exercise Price for the securities
subject to each Option shall remain the same as  immediately  before such event.
In addition,  the Committee may make such further  equitable  adjustments in the
Plan and the then outstanding Options as are deemed necessary and appropriate by
the  Committee  including,  but not  limited to,  changing  the number of Shares
reserved under the Plan or covered by outstanding Options, the Exercise Price of
outstanding Options and the vesting conditions of outstanding Options.

     Section  3.4.  SOURCE.  Except  as  otherwise  determined  by the  Board of
Directors,  the Shares  issued under the Plan shall be drawn from the  Company's
authorized but unissued Shares.  However, Shares which are to be delivered under
the Plan may be obtained by the Company from its  treasury,  by purchases on the
open  market or from  private  sources,  as well as by  issuing  authorized  but
unissued  Shares.  The  proceeds of the  exercise of any Option shall be general
corporate funds of the Company. No Shares may be sold under any Option Agreement
for less than the par value  thereof.  No  fractional  Shares shall be issued or
sold  under  the Plan nor will any cash  payment  be made in lieu of  fractional
Shares.

     Section 3.5.  RIGHTS OF A  STOCKHOLDER.  No Holder nor any person  claiming
under or through any Holder shall have any right, title or interest in or to any
Shares  allocated or reserved  under the Plan or subject to any Option except as
to such Shares,  if any, for which  certificates  representing  such Shares have
been issued to such Holder upon the due exercise of an Option.

     Section 3.6.  SECURITIES  LAWS.  No Option shall be exercised nor shall any
Shares or other securities be issued or transferred pursuant to an Option unless
and until all applicable  requirements  imposed by federal and state  securities
laws and by any stock  exchanges upon which the Shares may be listed,  have been
fully  complied  with. As a condition  precedent to the exercise of an Option or
the  issuance of Shares  pursuant  to the grant or  exercise  of an Option,  the
Company  may  require  the  Holder  to take any  reasonable  action to meet such
requirements including providing undertakings as to the investment intent of the
Holder,  accepting transfer  restrictions on the Shares issuable  thereunder and
providing opinions of counsel, in form and substance  acceptable to the Company,
as to the availability of exemptions from such requirements.

ARTICLE 4. ELIGIBILITY.

     Section 4.1. ARTICLE 5. Only Employees shall be eligible to receive Options
under Article 5 below.

     Section  4.2.  ARTICLE 6. Only  Consultants  shall be  eligible  to receive
Options under Article 6 below.

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<PAGE>
     Section 4.3. ARTICLE 7. Only Directors shall be eligible to receive Options
under Article 7 below.

ARTICLE 5. EMPLOYEES' STOCK OPTIONS.

     Section  5.1.   DETERMINATIONS.   The  Committee   shall   determine  which
Participants  shall be granted Options,  which  Participants will be granted Tax
Offset  Payments  and the  percentage  of Tax  Offset  Payments,  the  manner of
payment, the number of Shares for which the Options may be exercised,  the times
when they shall receive them and the terms and  conditions of individual  Option
grants (which need not be identical).

     Section 5.2.  EXERCISE  PRICE.  The Committee  shall determine the Exercise
Price of each Option at the time that it is  granted,  but in no event shall the
Exercise Price of an Option be less than the Fair Market Value of a Share on the
Date of Grant. If no express determination of the Exercise Price of an Option is
made by the  Committee,  the Exercise  Price thereof is equal to the Fair Market
Value of a Share on the Date of Grant.

     Section 5.3. TERM. Subject to the rule set forth in the next sentence,  the
Committee  shall  determine  the times when an Option  vests and the term during
which an Option is exercisable  at the time that it is granted.  No Option shall
be exercisable  after the expiration of ten years from the Date of Grant.  If no
express  determination  of the times when Options are exercisable is made by the
Committee:

          (a) each Option  shall vest and first become  exercisable  (subject to
the rule set forth in Section  5.4(c) below) as to 25% of the Shares  subject to
such  Option  on each of the  first  four  anniversaries  of the  Date of  Grant
provided the Grantee has been an Employee continuously during the time beginning
on the Date of Grant and  ending on the date when such  portion  vests and first
becomes exercisable and further provided that no portion of an Option shall vest
and become  exercisable  after the employment of the Grantee by his Employer has
terminated, regardless of the reason for such termination.

          (b) any  portion of an Option  that has vested and become  exercisable
shall lapse and cease to be exercisable upon the earliest of:

               (i) the expiration of ten years from the Date of Grant,

               (ii) subject to the rule set forth in Section 5.4(d) below,  nine
months  after  the  Grantee  ceases  to be  an  Employee  because  of  death  or
disability,

               (iii) three months  after the  termination  without  cause of the
Grantee's employment with all Employers, or

               (iv)  immediately  upon  termination of the Grantee's  employment
with all  Employers by the  applicable  Employers  for cause or by the Grantee's
resignation.

Where both an Incentive Stock Option and a Nonqualified Option are granted,  the
number of Shares  which  become  exercisable  under  clause (a) of the  previous
sentence at any time shall be calculated on the basis of the total of the Shares
subject to both  Options and the Options  shall  become  exercisable  as to that
number of Shares  first  under the  Incentive  Stock  Option  and then under the
Nonqualified  Option,  unless the rule set forth in Section  5.4(c)  below would
defer the  exercisability  of such  Incentive  Stock Option,  in which case such
Nonqualified Options shall become exercisable first.

     Section 5.4. INCENTIVE STOCK OPTIONS.

          (a) The Committee shall  determine  whether any Option is an Incentive
Stock Option or a Nonqualified  Option at the time that it is granted and, if no
express   determination  is  made  by  the  Committee,   all  Options  shall  be
Nonqualified Options.

          (b) If the Committee grants Incentive Stock Options,  they shall be on
such terms and  conditions as may be necessary to render them  "incentive  stock
options" pursuant to Section 422 of the Code.

          (c) The  aggregate  Fair Market Value of the Shares,  determined as of
the time the  Option  is  granted,  which  first  become  exercisable  under all
Incentive  Stock Options granted to any one Grantee under this Plan or any other
plan of the Company or any Parent or Subsidiary of the Company, shall not exceed
$100,000  during any calendar year and, if the foregoing limit would be exceeded

                                      -5-
<PAGE>
in any given  calendar year by the terms of any Incentive  Stock Option  granted
hereunder,  the  exercisability  of such  portion of such Option as would exceed
such limit shall be deferred to the first day of the next  calendar year and, if
such  excess  involves  more than one  Option,  the  exercisability  of the most
recently granted Option shall be deferred first.

          (d) If the  employment  of a  Grantee,  who  holds  an ISO,  with  any
Employer is terminated because of a "disability"  (within the meaning of Section
22(e)(3) of the Code), the unexercised  portion of the ISO may be exercised only
within six months after the date on which employment was terminated, and only to
the extent that such Grantee could have  otherwise  exercised such ISO as of the
date of termination.  If a Grantee,  who holds an ISO, dies while employed by an
Employer (or within six months after  termination  of  employment by reason of a
disability or within 30 days after termination of employment without cause), the
unexercised portion of the ISO at the time of death may be exercised only within
six  months  after the date of death,  and only to the extent  that the  Grantee
could have  otherwise  exercised  such ISO at the time of death.  In such event,
such ISO may be  exercised  by the executor or  administrator  of the  Grantee's
estate or by any Holder.

          (e) No Ten Percent  Stockholder  shall be granted an  Incentive  Stock
Option unless, at the time such Incentive Stock Option is granted,  the Exercise
Price  thereof is at least 110% of the Fair Market  Value of a Share on the Date
of Grant and the Incentive Stock Option,  by its terms, is not exercisable after
the expiration of five years from the Date of Grant.

          (f) If a Holder  exercises an  Incentive  Stock Option and disposes of
any of the Shares  received by such Holder as a result of such  exercise  within
two years from the Date of Grant or within one year after the  issuance  of such
Shares to such Holder upon such  exercise,  such Holder shall notify the Company
of such disposition and the  consideration  received as a result thereof and pay
or provide for the withholding  taxes on such disposition as required by Section
8.3 below.

          (g) An Option that is designated as a  Nonqualified  Option under this
Plan shall not be treated as an "incentive stock option" as such term is defined
in Section 422(b) of the Code.

     Section 5.5. EXERCISE.

          (a) An  Option  shall  be  exercised  by the  delivery  of the  Option
Agreement  therefor,  with the  notice of  exercise  attached  thereto  properly
completed  and duly  executed by the Holder,  to the  Treasurer  of the Company,
together with the aggregate  Exercise Price for the number of Shares as to which
the  Option  is  being  exercised,  after  the  Option  has  vested  and  become
exercisable and before it has lapsed and ceased to be exercisable.

          (b) An  Option  may be  exercised  as to less  than all of the  Shares
purchasable  thereunder,  but not  for a  fractional  share.  No  Option  may be
exercised  as to less than 100 Shares  unless it is  exercised  as to all of the
Shares then available thereunder.  If an Option is exercised as to less than all
of the Shares  purchasable  thereunder,  a new duly  executed  Option  Agreement
reflecting the decreased  number of Shares  exercisable  under such Option,  but
otherwise of the same tenor, shall be returned to the Holder.

          (c) The Committee may, in its sole  discretion and upon such terms and
conditions  as it shall  determine  at or after  the Date of Grant,  permit  the
Exercise  Price to be paid in cash, by the tender to the Company of Shares owned
by the Holder, or by a combination  thereof. If the Committee does not make such
determination, the Exercise Price shall be paid in cash.

          (d) If any  portion of the  Exercise  Price of an Option is payable in
cash,  it may be paid by (i) delivery of a certified or cashier's  check payable
to the order of the Company in such amount,  (ii) wire  transfer of  immediately
available  funds to a bank account  designated by the Company or (iii) reduction
of a debt of the Company to the Holder.

          (e) If any  portion of the  Exercise  Price of an Option is payable in
Shares,  it may be paid by delivery  of  certificates  representing  a number of
Shares  having a total fair  market  value on the date of  exercise  equal to or
greater than the required amount, duly endorsed for transfer with all signatures

                                      -6-
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guaranteed by a medallion signature guarantee. If more Shares than are necessary
to pay such  Exercise  Price  based on their  fair  market  value on the date of
exercise  are  delivered  to the  Company,  it  shall  return  to the  Holder  a
certificate for the balance of the whole number of Shares and a check payable to
the order of the Holder for any fraction of a Share. Shares may not be delivered
to the Company as payment for the exercise of an Option if such Shares have been
owned by the Holder  (together  with his decedent or testator) for less than six
months or if the disposition of such Shares would require the giving of a notice
under Section 5.4(f) above.

          (f) Promptly after an Option is properly exercised,  the Company shall
issue to the Holder a certificate representing the Shares purchased thereunder.

     Section  5.6.  OPTION  AGREEMENT.  Promptly  after the Date of  Grant,  the
Company  shall  duly  execute  and  deliver to the  Grantee an Option  Agreement
setting  forth the terms of the Option.  Option  Agreements  are not  negotiable
instruments  or securities  (as such term is defined in Article 8 of the Uniform
Commercial  Code).  Lost and destroyed Option Agreements may be replaced without
bond.

     Section 5.7. NEW HIRES. A person to whom the Company is offering employment
may be granted a  Nonqualified  Option  under this Article 5, but any such grant
shall lapse if the person does not subsequently  become an Employee  pursuant to
such offer.

ARTICLE 6. CONSULTANTS' STOCK OPTIONS.

     Section  6.1.   DETERMINATIONS.   The  Committee   shall   determine  which
Participants  shall be  granted  Options,  the  number of  Shares  for which the
Options may be  exercised,  the times when they shall receive them and the terms
and conditions of individual Option grants (which need not be identical).

     Section 6.2.  EXERCISE  PRICE.  The Committee  shall determine the Exercise
Price of each Option at the time that it is  granted,  but in no event shall the
Exercise Price of an Option be less than the Fair Market Value of a Share on the
Date of Grant. If no express determination of the Exercise Price of an Option is
made by the  Committee,  the Exercise  Price thereof is equal to the Fair Market
Value of a Share on the Date of Grant.

     Section 6.3. TERM. Subject to the rule set forth in the next sentence,  the
Committee  shall  determine  the times when an Option  vests and the term during
which an Option is exercisable  at the time that it is granted.  No Option shall
be exercisable  after the expiration of ten years from the Date of Grant.  If no
express  determination  of the times when Options are exercisable is made by the
Committee:

          (a) each Option shall vest and first become  exercisable  as to 25% of
the Shares subject to such Option on each of the first four anniversaries of the
Date of Grant provided the Grantee has been a Consultant continuously during the
time  beginning  on the Date of Grant and  ending on the date when such  portion
vests and first becomes  exercisable and further  provided that no portion of an
Option shall vest and become  exercisable after the termination of the Grantee's
consulting  relation  with  his  Employer,  regardless  of the  reason  for such
termination.

          (b) any  portion of an Option  that has vested and become  exercisable
shall lapse and cease to be exercisable upon the earliest of:

               (i) the expiration of ten years from the Date of Grant,

               (ii) nine  months  after the  Grantee  ceases to be a  Consultant
because of death or disability, or

               (iii) three months  after the  termination  without  cause of the
Grantee's consulting relation with the Employer, or

               (iv)  immediately  upon  termination of the Grantee's  consulting
relation with the Employer for cause or by the Grantee's resignation.

     Section 6.4. NOT INCENTIVE  STOCK  OPTIONS.  An Option under this Article 6
shall not be treated as an Incentive Stock Option.

     Section 6.5. EXERCISE.

          (a) An  Option  shall  be  exercised  by the  delivery  of the  Option
Agreement  therefor,  with the  notice of  exercise  attached  thereto  properly

                                      -7-
<PAGE>
completed  and duly  executed by the Holder,  to the  Treasurer  of the Company,
together with the aggregate  Exercise Price for the number of Shares as to which
the  Option  is  being  exercised,  after  the  Option  has  vested  and  become
exercisable and before it has lapsed and ceased to be exercisable.

          (b) An  Option  may be  exercised  as to less  than all of the  Shares
purchasable  thereunder,  but not  for a  fractional  share.  No  Option  may be
exercised  as to less than 100 Shares  unless it is  exercised  as to all of the
Shares then available thereunder.  If an Option is exercised as to less than all
of the Shares  purchasable  thereunder,  a new duly  executed  Option  Agreement
reflecting the decreased  number of Shares  exercisable  under such Option,  but
otherwise of the same tenor, shall be returned to the Holder.

          (c) The Committee may, in its sole  discretion and upon such terms and
conditions  as it shall  determine  at or after  the Date of Grant,  permit  the
Exercise  Price to be paid in cash, by the tender to the Company of Shares owned
by the Holder, or by a combination  thereof. If the Committee does not make such
determination, the Exercise Price shall be paid in cash.

          (d) If any  portion of the  Exercise  Price of an Option is payable in
cash,  it may be paid by (i) delivery of a certified or cashier's  check payable
to the order of the Company in such amount,  (ii) wire  transfer of  immediately
available  funds to a bank account  designated by the Company or (iii) reduction
of a debt of the Company to the Holder.

          (e) If any  portion of the  Exercise  Price of an Option is payable in
Shares,  it may be paid by delivery  of  certificates  representing  a number of
Shares  having a total fair  market  value on the date of  exercise  equal to or
greater than the required amount, duly endorsed for transfer with all signatures
guaranteed by a medallion signature guarantee. If more Shares than are necessary
to pay such  Exercise  Price  based on their  fair  market  value on the date of
exercise  are  delivered  to the  Company,  it  shall  return  to the  Holder  a
certificate for the balance of the whole number of Shares and a check payable to
the order of the Holder for any fraction of a Share. Shares may not be delivered
to the Company as payment for the exercise of an Option if such Shares have been
owned by the Holder  (together  with his decedent or testator) for less than six
months or if the disposition of such Shares would require the giving of a notice
under Section 5.4(f) above.

          (f) Promptly after an Option is properly exercised,  the Company shall
issue to the Holder a certificate representing the Shares purchased thereunder.

     Section  6.6.  OPTION  AGREEMENT.  Promptly  after the Date of  Grant,  the
Company  shall  duly  execute  and  deliver to the  Grantee an Option  Agreement
setting forth the terms of the Option.  Option Agreements are neither negotiable
instruments  nor securities (as such term is defined in Article 8 of the Uniform
Commercial  Code).  Lost and destroyed Option Agreements may be replaced without
bond.

ARTICLE 7. DIRECTORS' OPTIONS.

     Section 7.1. GRANT. On each Meeting Date, an Option shall be  automatically
granted to each  Director who is eligible to receive  Options  under Section 4.3
above and who attended at least  seventy five per cent (75%) of the total number
of meetings of the Board of Directors (and  committees  thereof of which he is a
member) during the most recently ended fiscal year of the Company. The number of
Shares subject to each Option granted under this Section 7.1 shall be determined
by a resolution adopted by the  [{Committee}{Board of Directors}] on or before a
Meeting Date,  uniformly applying to all eligible Directors,  which establishes,
increases  or  decreases  the number of Shares  subject to such  Option Any such
resolution  shall  continue  in force for the next  Meeting  Date,  unless it is
amended or repealed, the Meeting Date is more than ten years after the Effective
Date or there are not a sufficient  number of Shares  remaining  available under
Section 3.1 above.  This Section 7.1 shall not be  operative  until such time as
such a resolution is adopted.

     Section 7.2. EXERCISE PRICE. The Exercise Price of an Option shall be equal
to the Fair Market Value of a Share on the Date of Grant.

     Section 7.3. TERM.

          (a) Each Option shall vest and first become  exercisable  as to 25% of
the Shares  originally  subject to the Option on each Meeting Date which is held

                                      -8-
<PAGE>
more than six months after the Date of Grant if the Grantee is a Director at the
time of the adjournment of the meeting of stockholders held on such Meeting Date
and  further  provided  that no  portion  of an  Option  shall  vest and  become
exercisable  after the Grantee has ceased to be a  Director,  regardless  of the
reason for such cessation.

          (b) any  portion of an Option  that has vested and become  exercisable
shall lapse and cease to be exercisable upon the earliest of:

               (i) the expiration of ten years from the Date of Grant,

               (ii) nine  months  after  the  Grantee  ceases  to be a  Director
because of his death or disability,

               (iii)  immediately upon resignation by the Grantee as a Director,
or

               (iv) three months  after the Grantee  ceases to be a Director for
any reason other than his death, disability or resignation.

     Section 7.4. NOT INCENTIVE  STOCK  OPTIONS.  An Option under this Article 7
shall not be treated as an Incentive Stock Option.

     Section 7.5. EXERCISE.

          (a) An  Option  shall  be  exercised  by the  delivery  of the  Option
Agreement  therefor,  with the  notice of  exercise  attached  thereto  properly
completed  and duly  executed by the Holder,  to the  Treasurer  of the Company,
together with the aggregate  Exercise Price for the number of Shares as to which
the  Option  is  being  exercised,  after  the  Option  has  vested  and  become
exercisable and before it has lapsed and ceased to be exercisable.

          (b) An  Option  may be  exercised  as to less  than all of the  Shares
purchasable  thereunder  but  not  for a  fractional  Share.  No  Option  may be
exercised  as to less than 100 Shares  unless it is  exercised  as to all of the
Shares then available thereunder.  If an Option is exercised as to less than all
of the Shares  purchasable  thereunder,  a new duly  executed  Option  Agreement
reflecting the decreased  number of Shares  exercisable  under such Option,  but
otherwise of the same tenor, shall be returned to the Holder.

          (c) The Committee may, in its sole  discretion and upon such terms and
conditions  as it shall  determine  at or after  the Date of Grant,  permit  the
Exercise  Price to be paid in cash, by the tender to the Company of Shares owned
by the Holder, or by a combination  thereof. If the Committee does not make such
determination, the Exercise Price shall be paid in cash.

          (d) If any  portion of the  Exercise  Price of an Option is payable in
cash,  it may be paid by (i) delivery of a certified or cashier's  check payable
to the order of the Company in such amount,  (ii) wire  transfer of  immediately
available  funds to a bank account  designated by the Company or (iii) reduction
of a debt of the Company to the Holder.

          (e) If any  portion of the  Exercise  Price of an Option is payable in
Shares,  it may be paid by delivery  of  certificates  representing  a number of
Shares  having a total fair  market  value on the date of  exercise  equal to or
greater than the required amount, duly endorsed for transfer with all signatures
guaranteed by a medallion signature guarantee. If more Shares than are necessary
to pay such  Exercise  Price  based on their  fair  market  value on the date of
exercise  are  delivered  to the  Company,  it  shall  return  to the  Holder  a
certificate for the balance of the whole number of Shares and a check payable to
the order of the Holder for any fraction of a Share. Shares may not be delivered
to the Company as payment for the exercise of an Option if such Shares have been
owned by the Holder  (together  with his decedent or testator) for less than six
months or if the disposition of such Shares would require the giving of a notice
under Section 5.4(f) above.

          (f) Promptly after an Option is properly exercised,  the Company shall
issue to the Holder a certificate  representing the Shares purchased thereunder.

     Section  7.6.  OPTION  AGREEMENT.  Promptly  after the Date of  Grant,  the
Company  shall  duly  execute  and  deliver to the  Grantee an Option  Agreement
setting forth the terms of the Option.  Option Agreements are neither negotiable
instruments  nor securities (as such term is defined in Article 8 of the Uniform
Commercial  Code).  Lost and destroyed Option Agreements may be replaced without
bond.

                                      -9-
<PAGE>
ARTICLE 8. PROVISIONS APPLICABLE TO ALL TYPES OF OPTIONS.

     Section 8.1.  MAXIMUM SHARES.  Notwithstanding  any other provision of this
Plan,  the maximum number of Shares with respect to which Options may be granted
during any fiscal year of the Company to any Employee shall be 250,000 Shares.

     Section 8.2.  CORPORATE MERGERS AND  ACQUISITIONS.  The Committee may grant
Options having terms and conditions  which vary from those specified in the Plan
if such  Options are granted in  substitution  for,  or in  connection  with the
assumption of, existing  options granted by another  business entity and assumed
or otherwise  agreed to be provided for by the Company  pursuant to or by reason
of a  transaction  involving  a merger or  consolidation  of or  acquisition  of
substantially  all of the assets or stock of another business entity that is not
a Subsidiary of the Company prior to such acquisition, with or by the Company or
its Subsidiaries.

     Section 8.3. WITHHOLDING. The Company shall have the right to withhold from
any  payments  due under any  Option or due to any  Holder  from the  Company as
compensation or otherwise the amounts of any federal, state or local withholding
taxes  not paid by the  Holder at the time of the  exercise  or  vesting  of any
Option  or upon a  disposition  of  Shares  received  upon  the  exercise  of an
Incentive Stock Option. If cash payments  sufficient to allow for withholding of
taxes are not made at the time of exercise  or vesting of an Option,  the Holder
exercising  such  Option  shall  pay to  the  Company  an  amount  equal  to the
withholding required to be made less the withholding  otherwise made in cash or,
if allowed by the Committee in its  discretion  and pursuant to rules adopted by
the Committee  consistent with Section 5.5 above, Shares previously owned by the
Holder.  The Company may make such other  provisions as it deems  appropriate to
withhold  any taxes the  Company  determines  are  required  to be  withheld  in
connection with the exercise of any Option or upon a  disqualifying  disposition
of Shares  received upon the exercise of an Incentive  Stock Option,  including,
but not limited to, the withholding of Shares from an Option upon such terms and
conditions as the  Committee may provide.  The Company may require the Holder to
satisfy  any  relevant   withholding   requirements  before  issuing  Shares  or
delivering any Option to the Holder.

     Section 8.4. DISABILITY. If a Grantee who is an Employee or a Consultant is
absent from work because of a physical or mental disability, for purposes of the
Plan  such  Grantee  will not be  considered  to have  ended his  employment  or
consulting relationship with the Company while such Grantee has that disability,
unless he resigns or  terminates  such  relationship  or the  Committee  decides
otherwise.  If a Grantee who is a Director is absent from  meetings of the Board
of  Directors  because of a physical or mental  disability,  for purposes of the
Plan such  Grantee  will not be  considered  to have ended his service  with the
Board of Directors while such Grantee has that disability,  unless he resigns or
is not re-elected by the stockholders.

     Section 8.5.  MERGER OF THE COMPANY.  If the Company merges or consolidates
with or sells  substantially  all of its assets to a person  that was not one of
its  affiliates  before such  transaction,  or any such  unaffiliated  person or
corporation  has publicly  announced a tender offer to purchase more than 20% of
the outstanding voting securities of the Company,  all Options shall immediately
vest and may  thereafter,  but not beyond  the ten year  period  referred  to in
Sections 5.3, 6.3, and 7.3 above and the five year period referred to in Section
5.4(e) above, be exercised in whole or in part If such transaction is not timely
completed, any exercise or vesting of any Option shall be unwound.

     Section 8.6. SURRENDER AND EXCHANGE. The Committee may permit the voluntary
surrender of all or a portion of any Option to be conditioned  upon the granting
to the Holder of a new Option  for the same or a  different  number of Shares as
the Option  surrendered,  or may require such voluntary surrender as a condition
precedent to a grant of a new Option to such Holder.  Subject to the  provisions
of the Plan,  such new Option  shall be  exercisable  at the  price,  during the
period and on such other terms and  conditions as are specified by the Committee
at the time the new Option is granted.  Upon surrender,  the Option  surrendered
shall be canceled and the Shares previously subject to it shall be available for
the grant of other Options.

                                      -10-
<PAGE>
     Section 8.7. ACCELERATION.  Notwithstanding  anything else in the Plan, the
Committee  may,  in its  sole  discretion,  at any  time or from  time to  time,
accelerate  the time at which any Options mature or vest or waive any provisions
of the Plan relating to the manner of payment or procedures  for the exercise or
maturity of any Option.  Any such  acceleration  may be made  effective (a) with
respect to one or more or all  Holders,  (b) with  respect to some or all of the
Shares subject to or forming the basis for any Option to any Holder or (c) for a
period of time ending at or before the expiration date of any Option.

     Section 8.8.  ACTIONS BY COMMITTEE  AFTER GRANT.  The Committee shall have,
subject  to the  written  consent  of the  Holder  where the  action  impairs or
adversely alters the rights of the Holder,  the right, at any time and from time
to time  after  the Date of Grant of any  Option,  to  modify  the  terms of any
Option.

ARTICLE 9. GENERAL PROVISIONS.

     Section 9.1. NO RIGHT TO  EMPLOYMENT.  Nothing in the Plan or any Option or
any  instrument  executed  pursuant to the Plan will confer upon any Grantee any
right to continue to be employed by or provide services to the Company or affect
the right of the Company to terminate the employment of any Grantee or its other
relationship  with  any  Grantee.  Nothing  in the  Plan  or any  Option  or any
instrument  executed pursuant to the Plan will confer upon any Grantee any right
to  continue  to be a  Director  of the  Company  or  affect  the  right  of the
stockholders to terminate the directorship of any Grantee.

     Section 9.2.  LIMITED  LIABILITY.  The  liability of the Company under this
Plan or in  connection  with  any  exercise  of any  Option  is  limited  to the
obligations  expressly set forth in the Plan and in the grant of any Option, and
no term or provision of this Plan nor of any Option shall be construed to impose
any duty,  obligation or liability on the Company not expressly set forth in the
Plan or any grant of any Option.

     Section 9.3. ASSUMPTION OF OPTIONS.  Upon the dissolution or liquidation of
the Company,  or upon a  reorganization,  merger or consolidation of the Company
with one or more  other  entities  as a result of which the  Company  is not the
surviving  entity, or upon a sale of substantially all the assets of the Company
to another entity, any Options outstanding theretofore granted or sold hereunder
must  be  assumed  by the  surviving  or  purchasing  entity,  with  appropriate
adjustments as to the number and kind of shares and price.

     Section 9.4. NO TRANSFER.  No Option or other benefit under the Plan may be
sold, pledged or otherwise transferred other than by will or the laws of descent
and distribution;  and no Option may be exercised during the life of the Grantee
to whom it was granted except by such Grantee.

     Section 9.5.  EXPENSES.  All costs and expenses incurred in connection with
the  administration  of the Plan  including  any  excise  tax  imposed  upon the
transfer of Shares  pursuant to the  exercise of an Option shall be borne by the
Company.

     Section  9.6.  NOTICES.   Notices  and  other  communications  required  or
permitted  to be made under the Plan shall be in writing  and shall be deemed to
have been duly given only if personally delivered or if sent by first class mail
addressed (a) if to a Holder,  at his residence address set forth in the records
of the  Company or (b) if to the  Company,  to its  President  at its  principal
executive office.

     Section 9.7. THIRD PARTIES. Nothing herein expressed or implied is intended
or shall be  construed  to give any person  other than the Holders any rights or
remedies under this Plan.

                                      -11-
<PAGE>
     Section 9.8. SATURDAYS, SUNDAYS AND HOLIDAYS. Where this Plan authorizes or
requires a payment or performance on a Saturday,  Sunday or public holiday, such
payment  or  performance  shall  be  deemed  to be  timely  if made on the  next
succeeding business day; PROVIDED,  HOWEVER,  that this Section 9.8 shall not be
construed to extend the ten year period  referred to in Sections  5.3,  6.3, and
7.3 above or the five year period referred to in Section 5.4(e) above.

     Section  9.9.  RULES OF  CONSTRUCTION.  The  captions  and section  numbers
appearing in this Plan are inserted only as a matter of convenience. They do not
define, limit or describe the scope or intent of the provisions of this Plan. In
this Plan words in the  singular  number  include the plural,  and in the plural
include the singular; and words of the masculine gender include the feminine and
the neuter  and,  when the sense so  indicates,  words of the neuter  gender may
refer to any gender.

     Section  9.10.  GOVERNING  LAW.  The  validity,   terms,   performance  and
enforcement of this Plan shall be governed by laws of the State of Delaware that
are  applicable  to  agreements  negotiated,  executed,  delivered and performed
solely in the State of Delaware.

     Section 9.11.  EFFECTIVE DATE OF THE PLAN. The Plan shall become  effective
upon its  approval by the  affirmative  vote of the holders of a majority of the
outstanding  Shares present or represented  and entitled to vote at a meeting of
the stockholders of the Company.  Options may be granted by the Committee before
such approval,  but all Options so granted shall be conditioned on such approval
and  shall be void if such  approval  is not given  within  12 months  after the
Effective Date.

     Section 9.12.  AMENDMENT AND TERMINATION.  No Option shall be granted under
the Plan more than ten years after the  Effective  Date.  The Board of Directors
may at any time  terminate the Plan or make such amendment of the Plan as it may
deem advisable;  PROVIDED, HOWEVER, that no amendment shall be effective without
the approval of the  stockholders of the Company by the affirmative  vote of the
holders of a majority  of the  outstanding  Shares  present or  represented  and
entitled to vote at a meeting of stockholders duly held, if it were to:

          (a) authorize the grant of Options that may be exercised more than ten
years after the Date of Grant or that have an Exercise  Price which is less than
the Fair Market Value of a Share on the Date of Grant; or

          (b) materially increase the number of Shares which may be issued under
the Plan;

and, FURTHER,  PROVIDED,  HOWEVER,  that no amendment or termination of the Plan
shall be effective to materially  impair the rights of a Holder under any Option
granted  before the adoption of such  amendment or  termination  by the Board of
Directors,  without  the  written  consent of such  Holder.  No  termination  or
amendment  of this Plan or any  Option  nor  waiver of any right or  requirement
under this Plan or any Option shall be binding on the Company  unless it is in a
writing duly entered into its records and executed by a duly authorized Officer.

                                      -12-
<PAGE>
                                                                       EXHIBIT A
                                                     EMPLOYEES' OPTION AGREEMENT


                              ROYAL PRECISION, INC.
                          15170 N. HAYDEN ROAD, SUITE 1
                              SCOTTSDALE, AZ 85260


                                (Date of Grant)


(Name of Grantee)
(Street)
(City, State, Zip)


     Congratulations.  You have been granted a Stock Option under the  Company's
Stock Option Plan dated October 5, 1997 (the "PLAN") on the following terms:

1.   NUMBER OF SHARES.  The number of Shares of Common Stock of the Company that
     you may purchase under this Option is: (Number)

2.   EXERCISE PRICE. The Exercise Price to purchase Shares under this Option is:
     $(Price) per Share.

3.   VESTING.  [25%] of the Shares  originally  subject to this Option will vest
     and become  exercisable  on the first [four]  anniversaries  of the date of
     this  Agreement  if you have been an Employee  of the Company  continuously
     from the date of this  Agreement  through the date when such portion of the
     Option  vests[  subject to the  special  rule  referred  to in  paragraph 5
     below].  No portion of this Option shall vest and become  exercisable after
     your employment with your Employer has terminated, regardless of the reason
     for such termination.

4.   LAPSE. This Option will lapse and cease to be exercisable upon the earliest
     of:

     (i)   the expiration of 10 years from the date of this Agreement,

     (ii)  nine [six] months  after you cease to be an Employee  because of your
           death or disability,

     (iii) three months after a  termination  without  cause of your  employment
           with your Employer, or

     (iv)  immediately upon termination of your employment with your Employer by
           such Employer for cause or by your resignation.

5.   TAXATION.  This  Option  is  [an  Incentive  Stock  Option][a  Nonqualified
     Option].  [Because  this Option is an Incentive  Stock Option  vesting of a
     portion of this Option or of other  Incentive Stock Options held by you may
     be deferred  under a special rule set forth in Section 5.4 (c) of the Plan.
     If you  exercise  this Option and dispose of any of the Shares  received by
     you as a result of such  exercise  within  two years from the date above or
     within  one year  after  the  issuance  of such  Shares  to you  upon  such
     exercise,  you must notify the Company of such  disposition  and the amount
     received as a result thereof and pay or provide for the  withholding  taxes
     on such  disposition.]  [You will have taxable  income upon the exercise of
     this Option.  At that time,  you must pay to the Company an amount equal to
     the required federal, state, and local tax withholding less any withholding
     otherwise  made from your salary or bonus.  You must  satisfy any  relevant
     withholding requirements before the Company issues Shares to you.]
<PAGE>
6.   EXERCISE.  This Option may be exercised by the delivery of this  Agreement,
     with the notice of exercise  attached hereto properly  completed and signed
     by you,  to the  Treasurer  of the  Company,  together  with the  aggregate
     Exercise  Price for the  number  of Shares as to which the  Option is being
     exercised, after the Option has become exercisable and before it has ceased
     to be exercisable.  The Exercise Price must be paid in cash by (a) delivery
     of a certified  or cashier's  check  payable to the order of the Company in
     such amount,  (b) wire transfer of  immediately  available  funds to a bank
     account  designated  by the  Company,  or (c)  reduction  of a debt  of the
     Company to you.  This  Option may be  exercised  as to less than all of the
     Shares purchasable hereunder, but not for a fractional share, nor may it be
     exercised  as to less than 100 Shares  unless it is  exercised as to all of
     the Shares then  available  hereunder.  [You have been  granted a ____% Tax
     Offset Payment.]

7.   NO TRANSFER. This Option may not be sold, pledged nor otherwise transferred
     other than by will or the laws of descent and  distribution;  and it may be
     exercised  during your lifetime  only by you.  This  Agreement is neither a
     negotiable  instrument nor a security (as such term is defined in Article 8
     of the Uniform Commercial Code).

8.   NOT AN EMPLOYMENT AGREEMENT.  This Agreement is not an employment agreement
     and nothing contained herein gives you any right to continue to be employed
     by or provide  services  to the Company or affects the right of the Company
     to terminate your employment or other relationship with you.

9.   PLAN  CONTROLS.  This  Agreement  is an Option  Agreement  (as such term is
     defined  in the  Plan)  under  Article  5 of the  Plan.  The  terms of this
     Agreement are subject to, and  controlled  by, the terms of the Plan, as it
     is now in effect or may be amended from time to time  hereafter,  which are
     incorporated herein as if they were set forth in full. Any words or phrases
     defined in the Plan have the same meanings in this  Agreement.  The Company
     will provide you with a copy of the Plan promptly upon your written or oral
     request made to its Treasurer.

10.  MISCELLANEOUS.  This  Agreement  sets  forth the  entire  agreement  of the
     parties with respect to the subject  matter  hereof and it  supersedes  and
     discharges all prior agreements  (written or oral) and negotiations and all
     contemporaneous  oral  agreements  concerning  such  subject  matter.  This
     Agreement  may not be amended or terminated  except by a writing  signed by
     the party against whom any such amendment or termination is sought.  If any
     one or more  provisions of this  Agreement  shall be found to be illegal or
     unenforceable  in any  respect,  the  validity  and  enforceability  of the
     remaining  provisions  hereof  shall not in any way be affected or impaired
     thereby.  This  Agreement  shall be  governed  by the laws of the  State of
     Delaware.

     Please  acknowledge  your  acceptance  of this  Agreement  by  signing  the
enclosed  copy in the space  provided  below and  returning  it  promptly to the
Company.

                                   ROYAL PRECISION, INC.


                                   By: _________________________________________
                                              (Name of Officer), (Title)

Accepted and Agreed to as of
the date first set forth above:


--------------------------------------------
             (Name of Grantee)

                                      -2-
<PAGE>
                              OPTION EXERCISE FORM

     The  undersigned  hereby  exercises the right to purchase  ________________
shares of Common  Stock of the Company  pursuant to the Option  Agreement  dated
(Date of Grant) under the Company's Stock Option Plan dated October 5, 1997. The
undersigned  hereby  represents  and  warrants  to the  Company  that  he is not
exercising  such  rights  or  planning  to  transfer  such  shares  while in the
possession of material inside information relating to the Company.




Date:  _____________________            ________________________________________
                                                    (Name of Holder)


______________________________________________________________
Sign and complete this Option Exercise Form and deliver it to:


                              ROYAL PRECISION, INC.
                                Attn.: Treasurer
                          15170 N. Hayden Road, Suite 1
                              Scottsdale, AZ 85260

together  with the  Exercise  Price in cash by (a)  delivery of a  certified  or
cashier's  check  payable to the order of the Company in such  amount,  (b) wire
transfer of  immediately  available  funds to a bank account  designated  by the
Company, or (c) reduction of a debt of the Company to you.

                                      -3-
<PAGE>
                                                                       EXHIBIT B
                                                   CONSULTANTS' OPTION AGREEMENT


                              ROYAL PRECISION, INC.
                          15170 N. HAYDEN ROAD, SUITE 1
                              SCOTTSDALE, AZ 85260


                                (Date of Grant)


(Name of Grantee)
(Street)
(City, State, Zip)


     Congratulations.  You have been granted a Stock Option under the  Company's
Stock Option Plan dated October 5, 1997 (the "PLAN") on the following terms:

1.   NUMBER OF SHARES.  The number of Shares of Common Stock of the Company that
     you may purchase under this Option is: (Number)

2.   EXERCISE PRICE. The exercise price to purchase Shares under this Option is:
     $(Price) per Share.

3.   VESTING.  [25%] of the Shares  originally  subject to this Option will vest
     and become  exercisable  on the first [four]  anniversaries  of the date of
     this  Agreement if you have been a Consultant  to the Company  continuously
     from the date of this  Agreement  through the date when such portion of the
     Option vests.  No portion of this Option shall vest and become  exercisable
     after the termination of the your  consulting  relation with your Employer,
     regardless of the reason for such termination.

4.   LAPSE. This Option will lapse and cease to be exercisable upon the earliest
     of:

     (i)   the expiration of 10 years from the date of this Agreement,

     (ii)  nine months after you cease to be a Consultant  because of your death
           or disability,

     (iii) three months after a  termination  without  cause of your  consulting
           relationship with your Employer; or

     (iv) immediately upon termination of your consulting relationship with your
          Employer for cause or by your resignation.

5.   TAXATION.  This  Option is a  Nonqualified  Option.  You will have  taxable
     income upon the exercise of this Option.  At that time, you must pay to the
     Company  an amount  equal to the  required  federal,  state,  and local tax
     withholding less any withholding  otherwise made from compensation  payable
     to you. You must satisfy any relevant  withholding  requirements before the
     Company issues Shares to you.

6.   EXERCISE.  This Option may be exercised by the delivery of this  Agreement,
     with the notice of exercise  attached hereto properly  completed and signed
     by you,  to the  Treasurer  of the  Company,  together  with the  aggregate
     Exercise  Price for the  number  of Shares as to which the  Option is being
     exercised, after the Option has become exercisable and before it has ceased
     to be exercisable.  The Exercise Price must be paid in cash by (a) delivery
     of a certified  or cashier's  check  payable to the order of the Company in
     such amount,  (b) wire transfer of  immediately  available  funds to a bank
     account  designated  by the  Company,  or (c)  reduction  of a debt  of the
<PAGE>
     Company to you.  This  Option may be  exercised  as to less than all of the
     Shares purchasable hereunder, but not for a fractional share, nor may it be
     exercised  as to less than 100 Shares  unless it is  exercised as to all of
     the Shares then available hereunder.

7.   NO TRANSFER. This Option may not be sold, pledged nor otherwise transferred
     other than by will or the laws of descent and  distribution;  and it may be
     exercised  during your lifetime  only by you.  This  Agreement is neither a
     negotiable  instrument nor a security (as such term is defined in Article 8
     of the Uniform Commercial Code).

8.   NOT A CONSULTING  AGREEMENT.  This Agreement is not a consulting  agreement
     and  nothing  contained  herein  gives you any right to continue to provide
     services to the Company or affect the right of the Company to terminate the
     consulting relationship with you.

9.   PLAN  CONTROLS.  This  Agreement  is an Option  Agreement  (as such term is
     defined  in the  Plan)  under  Article  6 of the  Plan.  The  terms of this
     Agreement are subject to, and  controlled  by, the terms of the Plan, as it
     is now in effect or may be amended from time to time  hereafter,  which are
     incorporated herein as if they were set forth in full. Any words or phrases
     defined in the Plan have the same meanings in this  Agreement.  The Company
     will provide you with a copy of the Plan promptly upon your written or oral
     request made to its Treasurer.

10.  MISCELLANEOUS.  This  Agreement  sets  forth the  entire  agreement  of the
     parties with respect to the subject  matter  hereof and it  supersedes  and
     discharges all prior agreements  (written or oral) and negotiations and all
     contemporaneous  oral  agreements  concerning  such  subject  matter.  This
     Agreement  may not be amended or terminated  except by a writing  signed by
     the party against whom any such amendment or termination is sought.  If any
     one or more  provisions of this  Agreement  shall be found to be illegal or
     unenforceable  in any  respect,  the  validity  and  enforceability  of the
     remaining  provisions  hereof  shall not in any way be affected or impaired
     thereby.  This  Agreement  shall be  governed  by the laws of the  State of
     Delaware.

     Please  acknowledge  your  acceptance  of this  Agreement  by  signing  the
enclosed  copy in the space  provided  below and  returning  it  promptly to the
Company.

                                      ROYAL PRECISION, INC.


                                      By: ______________________________________
                                                 (Name of Officer), (Title)


Accepted and Agreed to as of the date first set forth above:


------------------------------------------------------------
                   (Name of Grantee)

                                      -2-
<PAGE>
                              OPTION EXERCISE FORM

     The  undersigned  hereby  exercises the right to purchase  ________________
shares of Common Stock of the Company pursuant to the Option Agreement dated
(Date of Grant) under the Company's Stock Option Plan dated October 5, 1997.





Date: __________________________        ________________________________________
                                                    (Name of Holder)


--------------------------------------------------------------
Sign and complete this Option Exercise Form and deliver it to:


                              ROYAL PRECISION, INC.
                                Attn.: Treasurer
                          15170 N. Hayden Road, Suite 1
                              Scottsdale, AZ 85260

together  with the  Exercise  Price in cash by (a)  delivery of a  certified  or
cashier's  check  payable to the order of the Company in such  amount,  (b) wire
transfer of  immediately  available  funds to a bank account  designated  by the
Company, or (c) reduction of a debt of the Company to you.

                                      -3-
<PAGE>
                                                                       EXHIBIT C
                                                     DIRECTORS' OPTION AGREEMENT


                              ROYAL PRECISION, INC.
                          15170 N. HAYDEN ROAD, SUITE 1
                              SCOTTSDALE, AZ 85260


                                (Date of Grant)


(Name of Grantee)
(Street)
(City, State, Zip)


     Congratulations.  You have been granted a Stock Option under the  Company's
Stock Option Plan dated October 5, 1997 (the "PLAN") on the following terms:

1.   NUMBER OF SHARES.  The number of Shares of Common Stock of the Company that
     you may purchase under this Option is:(Number)

2.   EXERCISE PRICE. The exercise price to purchase Shares under this Option is:
     $(Price) per Share.

3.   VESTING.  [25%] of the Shares  originally  subject to this Option will vest
     and become  exercisable  on each  Meeting  Date which  occurs more than six
     months  after the date of this  Agreement if you are a Director at the time
     of the  adjournment  of the meeting of  stockholders  held on such  Meeting
     Date.

4.   LAPSE. This Option will lapse and cease to be exercisable upon the earliest
     of:

     (i)  the expiration of 10 years from the date of this Agreement,

     (ii) nine months after you cease to be a Director  because of your death or
          Disability,

     (iii) immediately upon your resignation as a Director, or

     (iv) three  months  after you cease to be a Director  for any reason  other
          than your death, disability or resignation.

5.   TAXATION.  This  Option is a  Nonqualified  Option.  You will have  taxable
     income upon the exercise of this Option.

6.   EXERCISE.  This Option may be exercised by the delivery of this  Agreement,
     with the notice of exercise  attached hereto properly  completed and signed
     by you,  to the  Treasurer  of the  Company,  together  with the  aggregate
     Exercise  Price for the  number  of Shares as to which the  Option is being
     exercised, after the Option has become exercisable and before it has ceased
     to be exercisable.  The Exercise Price must be paid in cash by (a) delivery
     of a certified  or cashier's  check  payable to the order of the Company in
     such amount,  (b) wire transfer of  immediately  available  funds to a bank
     account  designated  by the  Company,  or (c)  reduction  of a debt  of the
     Company to you.  This  Option may be  exercised  as to less than all of the
     Shares purchasable hereunder, but not for a fractional share, nor may it be
     exercised  as to less than 100 Shares  unless it is  exercised as to all of
     the Shares then available hereunder.

7.   NO TRANSFER. This Option may not be sold, pledged nor otherwise transferred
     other than by will or the laws of descent and  distribution;  and it may be
     exercised  during your lifetime  only by you.  This  Agreement is neither a
     negotiable  instrument nor a security (as such term is defined in Article 8
     of the Uniform Commercial Code).

8.   NOT AN EMPLOYMENT AGREEMENT.  This Agreement is not an employment agreement
     and  nothing  contained  herein  gives  you any right to  continue  to be a
     Director  of the  Company  or  affect  the  right  of the  stockholders  to
     terminate your directorship.

9.   PLAN  CONTROLS.  This  Agreement  is an Option  Agreement  (as such term is
     defined  in the  Plan)  under  Article  7 of the  Plan.  The  terms of this
     Agreement are subject to, and  controlled  by, the terms of the Plan, as it
     is now in effect or may be amended from time to time  hereafter,  which are
     incorporated herein as if they were set forth in full. Any words or phrases
     defined in the Plan have the same meanings in this  Agreement.  The Company
     will provide you with a copy of the Plan promptly upon your written or oral
     request made to its Treasurer.

10.  MISCELLANEOUS.  This  Agreement  sets  forth the  entire  agreement  of the
     parties with respect to the subject  matter  hereof and it  supersedes  and
     discharges all prior agreements  (written or oral) and negotiations and all
     contemporaneous  oral  agreements  concerning  such  subject  matter.  This
     Agreement  may not be amended or terminated  except by a writing  signed by
     the party against whom any such amendment or termination is sought.  If any
     one or more  provisions of this  Agreement  shall be found to be illegal or
     unenforceable  in any  respect,  the  validity  and  enforceability  of the
     remaining  provisions  hereof  shall not in any way be affected or impaired
     thereby.  This  Agreement  shall be  governed  by the laws of the  State of
     Delaware.

     Please  acknowledge  your  acceptance  of this  Agreement  by  signing  the
enclosed  copy in the space  provided  below and  returning  it  promptly to the
Company.

                                      ROYAL PRECISION, INC.


                                      By: ______________________________________
                                                 (Name of Officer), (Title)

Accepted and Agreed to as of the date first set forth above:


-------------------------------------------
             (Name of Grantee)
<PAGE>
                              OPTION EXERCISE FORM

     The  undersigned  hereby  exercises the right to purchase  ________________
shares of Common  Stock of the Company  pursuant to the Option  Agreement  dated
(Date of Grant) under the Company's Stock Option Plan, dated October 5, 1997.




Date: _____________________             ________________________________________
                                                     (Name of Holder)


--------------------------------------------------------------
Sign and complete this Option Exercise Form and deliver it to:

                              ROYAL PRECISION, INC.
                                Attn.: Treasurer
                          15170 N. Hayden Road, Suite 1
                              Scottsdale, AZ 85260

together  with the  Exercise  Price in cash by (a)  delivery of a  certified  or
cashier's  check  payable to the order of the Company in such  amount,  (b) wire
transfer of  immediately  available  funds to a bank account  designated  by the
Company, or (c) reduction of a debt of the Company to you.