LARSON DAVIS INCORPORATED

                        1996 DIRECTOR STOCK OPTION PLAN


     Larson Davis Incorporated, a Nevada corporation (the "Company"), hereby
adopts this "1996 Director Stock Option Plan" (the "Plan"), effective as of May
9, 1996, under which options to acquire stock of the Company are granted to
individuals who are serving as directors of the Company, on the terms and
conditions set forth herein.

     1.   Purpose of the Plan.  The Plan is intended to aid the Company in
maintaining and developing a management team, attracting qualified directors
capable of assisting in the future success of the Company, and rewarding those
individuals who have contributed to the success of the Company.  It is designed
to aid the Company in retaining the services of current directors and in
attracting new directors when needed for future operations and growth and to
provide such individuals with an incentive to remain directors of the Company,
to use their best efforts to promote the success of the Company's business, and
to provide them with an opportunity to obtain or increase a proprietary interest
in the Company.  The above aims will be effectuated through the granting of
options ("Options") to purchase shares of common stock of the Company, par value
$0.001 per share (the "Stock"), subject to the terms and conditions of this
Plan.  It is intended that the Options issued pursuant to this Plan include,
when designated as such at the time of grant, options which qualify as Incentive
Stock Options ("Incentive Options") within the meaning of section 422 of the
Internal Revenue Code of 1986, as amended (the "Code"), or any amendment or
successor provision of like tenor.

     2.   Shareholder Approval.  The Plan shall become effective immediately on
adoption by the board of directors of the Company (the "Board").  However, any
rights granted under the Plan shall be conditioned on the approval of the Plan
by the Company's shareholders in the manner set forth below:

          (a)  Within 12 months after the Plan has been adopted by the Board,
     the Plan shall be submitted for approval by those shareholders of the
     Company who are entitled to vote on such matters at a duly held
     shareholders' meeting or approved by the written consent of the holders of
     a majority (or, to qualify for the issuance of Incentive Options, the
     written consent of the holders of all) of the issued and outstanding Stock
     of the Company.  If the Plan is presented at a shareholders' meeting, it
     shall be approved by the affirmative vote of the holders of a majority of
     the issued and outstanding Stock in attendance, in person or by proxy, at
     such meeting.  Notwithstanding the foregoing, the Plan may be approved by
     the shareholders in any other manner not inconsistent with the Company's
     articles of incorporation and bylaws, the applicable provisions of state
     corporate laws, and the applicable provisions of the Code and regulations
     adopted thereunder.

          (b)  In the event the Plan is so approved, the secretary of the
     Company shall, as soon as practicable following the date of final approval,
     prepare and attach to this Plan certified copies of all relevant
     resolutions adopted by the shareholders and the Board.  All Options
     previously granted under this Plan shall be deemed to have been granted as
     of the date of approval by the shareholders.

          (c)  In the event the Plan is not approved by the shareholders on or
     before the date that is one year subsequent to the date of this Plan, all
     Options previously granted under the Plan shall be deemed to have been
     granted as of the date that is one year subsequent to the adoption of this
     Plan by the Board and any Options granted thereafter shall be deemed to be
     granted as of the date of approval by the board of directors or other
     administrator under the terms of this Plan.  As a result of the failure to
     obtain shareholder approval within the time specified, none of the Options
     issued under this Plan will qualify as Incentive Options.  In addition,
     none of the Options issued or deemed issued prior to shareholder approval
     will qualify for the exemption provided in Rule 16b-3 promulgated under the
     Securities Exchange Act of 1934, as amended (the "Exchange Act").

     3.   Administration of the Plan.  Administration of the Plan shall be
determined by the Board.  Subject to compliance with applicable provisions of
the governing law, the Board may delegate administration of the Plan or specific
administrative duties with respect to the Plan, on such terms and to such
committees of the Board as it deems proper.  Any action taken with respect to
the Plan by the Board shall be approved by a majority vote of those members of
the Board in attendance at a meeting at which a quorum is present.  Any action
taken with respect to the Plan by a committee designated by the Board shall be
approved as specified by the Board at the time of delegation.  The
interpretation and construction of the terms of the Plan by the Board or a duly
authorized committee shall be final and binding on all participants in the Plan
absent a showing of demonstrable error.  No member of the Board or duly
authorized committee shall be liable for any action taken or determination made
in good faith with respect to the Plan.

     Transactions under this Plan involving officers, directors, and beneficial
owners of more than 10% of any class of equity security registered pursuant to
section 12 of the Exchange Act are intended to comply with all applicable
conditions of Rule 16b-3 ("Rule 16b-3") promulgated under the Exchange Act, or
any amendment or successor rule of like tenor.  To the extent any provisions of
the Plan, or any action taken by an administrator fails to so comply, it shall
be deemed null and void to the extent permitted by law and deemed advisable by
the Board or the duly authorized committee.

     4.   Shares of Stock Subject to the Plan.  A total of 1,400,000 shares of
Stock may be subject to, or issued pursuant to, Options granted under the terms
of this Plan.  To the extent permitted for plans qualifying under Rule 16b-3,
(i) any shares subject to an Option under the Plan, which Option for any reason
expires or is forfeited, terminated, or surrendered unexercised as to such
shares, shall be added back to the total number of shares reserved for issuance
under the terms of this Plan, and (ii) if any right to acquire Stock granted
under the Plan is exercised by the delivery of shares of Stock or the
relinquishment of rights to shares of Stock, only the net shares of Stock issued
(the shares of Stock issued less the shares of Stock surrendered) shall count
against the total number of shares reserved for issuance under the terms of this
Plan.

     5.   Term.  This Plan shall be in effect from the date hereof until close
of business May 3, 1999.

     6.   Grant to Board Members.  Each individual who is a member of the Board
as of the effective date of this Plan and each individual who becomes a member
of the Board during the term of this Plan shall be awarded an Option to acquire
200,000 shares of Stock at an exercise price equal to the closing bid price for
the Stock on the date of grant or the date of extension of an offer to become a
director, as designated by the Board at the time, as reported on the National
Association of Securities Dealers Automated Quotation system ("Nasdaq"), or, if
the Stock is not then listed on Nasdaq, as reported by another reliable
quotation medium with respect to the principal trading market for the Stock of
the Company; provided that, if such Option is intended to qualify as an
Incentive Option and the recipient owns (either of record or beneficially) Stock
possessing more than 10% of the combined voting power of the issued and
outstanding securities of the Company as determined under the provisions of the
Code and the rules and regulations promulgated thereunder, the exercise price
shall be 110% of such bid price.  Options granted under this Plan are intended
to be granted under the terms of a "formula plan" as that term is defined
pursuant to rule 16b-3 promulgated under the Exchange Act and, to the extent
that the recipient is also an employee of the Company or otherwise qualified
under the Code, to qualify as Incentive Options and, as such, are subject to the
limitations set forth in this Plan and the applicable statutes, regulations, and
rules governing the issuance, transfer, exercise, and holding of such options.

     7.   Reservation of Stock on Granting of Option.  At the time of granting
any Option under the terms of this Plan, there will be reserved for issuance on
the exercise of the Option the number of shares of Stock of the Company subject
to such Option.  The Company may reserve either authorized but unissued shares
or issued shares that have been reacquired by the Company.

     8.   Term of Options and Certain Limitations on Right to Exercise.

          (a)  The Options shall be exercisable with respect to the shares
     subject to such Options for a period of five years after the right to
     acquire such shares become vested as provided below.

          (b)  The term of the Option, once it is granted, may be reduced only
     as provided for in this Plan under the written provisions of the Option.

          (c)  Unless otherwise specifically provided by the written provisions
     of the Option, no holder or his or her legal representative, legatee, or
     distributee will be, or shall be deemed to be, a holder of any shares
     subject to an Option unless and until the holder exercises his or her right
     to acquire all or a portion of the Stock subject to the Option and delivers
     the required consideration to the Company in accordance with the terms of
     this Plan and then only to the extent of the number of shares of Stock
     acquired.  Except as specifically provided in this Plan or as otherwise
     specifically provided by the written provisions of the Option, no
     adjustment to the exercise price or the number of shares of Stock subject
     to the Option shall be made for dividends or other rights for which the
     record date is prior to the date the Stock subject to the Option is
     acquired by the holder.

          (d)  Options under the Plan shall vest and become exercisable twenty-
     five percent (25%) at the time of the grant of the Option and an additional
     twenty-five percent (25%) on each of the first three anniversaries of the
     original date of grant; provided that, the holder of the Option is a
     director of the Company as of such anniversaries.  If the holder is no
     longer a director of the Company for any reason, all invested Options shall
     terminate and shall thereafter be null and void.

          (e)  If any individual who receives an Option under the terms of this
     Plan is terminated or resigns from the Company within six months of such
     Option being granted, the unexercised portion of the Option, whether or not
     vested, shall be null and void, and such individual shall have no further
     rights thereunder as of the date of such termination or resignation.

          (f)  In no event may an Option be exercised after the expiration of
     its term.

     9.   Payment of Exercise Price.  The exercise of any Option shall be
contingent on receipt by the Company of cash, certified bank check to its order,
or other consideration acceptable to the Company; provided that, payment may be
made in whole or in part in shares of Stock of the Company or by the surrender
of Options to acquire Stock from the Company, which Stock or Options shall be
valued at their then fair market value as determined by the Board or a duly
authorized committee; provided, however, that if, at the time of grant of an
Option, the Company is subject to the provisions of section 16(b) of the
Exchange Act, such Stock and/or Options surrendered must have been owned by the
optionee for more than six months.

     10.  Withholding.  If the grant or exercise of an Option pursuant to this
Plan is subject to withholding or other trust fund payment requirements of the
Code or applicable state or local laws, the holder of such Option must, as a
condition precedent to exercising the Options, deliver to the Company cash equal
to such withholding obligation or evidence satisfactory to the Company that such
withholding obligation has otherwise been met.

     11.  Incentive Options--Additional Provisions.  In addition to the other
restrictions and provisions of this Plan, any Option granted hereunder that is
intended to be an Incentive Option shall meet the following further
requirements:

          (a)  The exercise price of an Incentive Option shall not be less than
     the fair market value of the Stock on the date of grant as determined by
     the Board or a duly authorized committee and permitted by the applicable
     provisions of the Code

          (b)  No Incentive Option may be granted under the Plan to any
     individual that owns (either of record or beneficially) Stock possessing
     more than 10% of the combined voting power of the Company or any parent or
     subsidiary corporation unless both the exercise price is at least 110% of
     the fair market value of the Stock on the date the Option is granted and
     the Incentive Option by its terms is not exercisable more than five years
     after the date it is granted.

          (c)  Incentive Options may be granted only to employees of the Company
     or its subsidiaries and only in connection with that employee's employment
     by the Company or the subsidiary.  Notwithstanding the above, directors and
     other individuals who have contributed to the success of the Company or its
     subsidiaries may be granted Incentive Options under the Plan, subject to,
     and to the extent permitted by, applicable provisions of the Code and
     regulations promulgated thereunder, as they may be amended from time to
     time.

          (d)  The aggregate fair market value (determined as of the date the
     Incentive Option is granted) of the shares of Stock with respect to which
     Incentive Options are exercisable for the first time by any individual
     during any calendar year under the Plan (and all other plans of the Company
     and its subsidiaries) may not exceed $100,000.
     
          (e)  No Incentive Option shall be transferable other than by will or
     the laws of descent and distribution and shall be exercisable, during the
     lifetime of the optionee, only by the optionee to whom the Incentive Option
     is granted.

          (f)  No stock appreciation rights or other rights can be granted in
     tandem with an Incentive Option.

          (g)  No individual acquiring shares of Stock pursuant to any Incentive
     Option granted under this Plan shall sell, transfer, or otherwise convey
     the Stock until after the date that is both two years from the date the
     Incentive Option was granted and one year from the date the Stock was
     acquired pursuant to the exercise of the Incentive Option.  If any
     individual makes a disqualifying disposition, he or she shall notify the
     Company within 30 days of such transaction.

          (h)  No Incentive Option may be exercised unless the holder was,
     within three months of such exercise, and had been since the date the
     Incentive Option was granted, an eligible employee of the Company as
     specified in the applicable provisions of the Code, unless the employment
     was terminated as a result of the death or disability (as defined in the
     Code and the regulations promulgated thereunder as they may be amended from
     time to time) of the employee or the employee dies within three months of
     the termination.  In the event of termination as a result of disability,
     the holder shall have a one year period following termination in which to
     exercise the Incentive Option.  In the event of death of the holder, the
     Incentive Option must be exercised within six months of the issuance of
     letters testamentary or administration or the appointment of an
     administrator, executor, or personal representative, but not later than one
     year after the date of termination of employment.  An authorized absence or
     leave approved by the Board or a duly authorized committee for a period of
     90 days or less shall not be considered an interruption of employment for
     any purpose under the Plan.

          (i)  All Incentive Options shall be deemed to contain such other
     limitations and restrictions as are necessary to conform the Incentive
     Option to the requirements for "incentive stock options" as defined in
     section 422 of the Code, or any amendment or successor statute of like
     tenor.

All of the foregoing restrictions and limitations are based on the governing
provisions of the Code as of the date of adoption of this Plan.  If at any time
the Code is amended to permit the qualification of an Option as an incentive
stock option without one or more of the foregoing restrictions or limitations or
the terms of such restrictions or limitations are modified, the Board or a duly
authorized committee may grant Incentive Options, and may modify outstanding
Incentive Options in accordance with such changes, all to the extent that such
action by the Board or duly authorized committee does not disqualify the Options
from treatment as incentive stock options under the provisions of the Code as
may be amended from time to time.

     12.  Awards to Directors and Officers.  To the extent the Company is
subject to section 16(b) of the Exchange Act, Options granted under the Plan to
directors and officers (as defined in Rule 16a-1 promulgated under the Exchange
Act or any amendment or successor rule of like tenor) intended to qualify for
the exemption from section 16(b) of the Exchange Act provided in Rule 16b-3
shall be subject to the following requirements, in addition to the other
restrictions and limitations set forth in this Plan:

          (a)  With respect to any award, the exercise price may not be less
     than the minimum required by applicable state law.

          (b)  Approval of the Plan by the shareholders of the Company shall
     have been solicited substantially in accordance with the rules and
     regulations in effect under section 14(a) of the Exchange Act or any
     amendment or successor statute in effect at the time of the approval or, if
     the Company is not subject to section 14(a) of the Exchange Act at the time
     of shareholder approval, such information as would have been required
     concerning the Plan under section 14(a) is provided to the shareholders at
     the first annual meeting of shareholders subsequent to the Company becoming
     subject to such rules.

          (c)  An Option or, if exercised, the Stock acquired on exercise, may
     not be transferred prior to the date that is more than six months
     subsequent to the date of the grant of the Option.

          (d)  An Option may not be transferred other than by will or the laws
     of descent and distribution, pursuant to a qualified domestic relations
     order as defined by the Code or Title 1 of the Employee Retirement Income
     Security Act, or as otherwise permitted by the provisions of 16b-3, or
     successor statute of like tenor, as they may be amended from time to time.

          (e)  Any cash settlement of Options, withholding of shares of Stock to
     satisfy the tax withholding obligations of the Company under the Code, or
     surrender or withholding of shares of Stock to pay the exercise price of
     the Option, shall be made in accordance with the requirements of Rule 16b-3
     or any amendment or successor rule of like tenor.

All of the foregoing restrictions and limitations are based on the governing
provisions of the Exchange Act and the rules and regulations promulgated
thereunder as of the date of adoption of this Plan.  If at any time the
governing provisions are amended to permit an Option to be granted or exercised
pursuant to Rule 16b-3 or any amendment or successor rule of like tenor without
one or more of the foregoing restrictions or limitations, or the terms of such
restrictions or limitations are modified, the Board or a duly authorized
committee may award Options to directors and officers, and may modify
outstanding Options, in accordance with such changes, all to the extent that
such action by the Board or a duly authorized committee does not disqualify the
Options from exemption under the provisions of Rule 16b-3 or any amendment or
successor rule of similar tenor.

     13.  Dilution or Other Adjustment.  In the event that the number of shares
of Stock of the Company from time to time issued and outstanding is increased
pursuant to a stock split or a stock dividend, the number of shares of Stock
then covered by each outstanding Option granted hereunder shall be increased
proportionately, with no increase in the total purchase price of the shares then
so covered, and the number of shares of Stock subject to the Plan shall be
increased by the same proportion.  In the event that the number of shares of
Stock of the Company from time to time issued and outstanding is reduced by a
combination or consolidation of shares, the number of shares of Stock then
covered by each outstanding Option granted hereunder shall be reduced
proportionately, with no reduction in the total purchase price of the shares
then so covered, and the number of shares of Stock subject to the Plan shall be
reduced by the same proportion.  In the event that the Company should transfer
assets to another corporation and distribute the stock of such other corporation
without the surrender of Stock of the Company, and if such distribution is not
taxable as a dividend and no gain or loss is recognized by reason of section 355
of the Code or any amendment or successor statute of like tenor, then the total
purchase price of the Stock then covered by each outstanding Option shall be
reduced by an amount that bears the same ratio to the total purchase price then
in effect as the market value of the stock distributed in respect of a share of
the Stock of the Company, immediately following the distribution, bears to the
aggregate of the market value at such time of a share of the Stock of the
Company plus the stock distributed in respect thereof.  In the event that the
Company distributes the stock of a subsidiary to its shareholders, makes a
distribution of a major portion of its assets, or otherwise distributes
significant portion of the value of its issued and outstanding Stock to its
shareholders, the number of shares then subject to each outstanding Option and
the Plan, or the exercise price of each outstanding Option, may be adjusted in
the reasonable discretion of the Board or a duly authorized committee.  All such
adjustments shall be made by the Board or duly authorized committee, whose
determination upon the same, absent demonstrable error, shall be final and
binding on all participants under the Plan.  No fractional shares shall be
issued, and any fractional shares resulting from the computations pursuant to
this section shall be eliminated from the respective Option Award.  No
adjustment shall be made for cash dividends, for the issuance of additional
shares of Stock for consideration approved by the Board, or for the issuance to
stockholders of rights to subscribe for additional Stock or other securities.

     14.  Assignment.  No Option granted under this Plan shall be transferable
other than by will or the laws of descent and distribution, pursuant to a
qualified domestic relations order as defined in the Code or, to the extent
permitted by section 16b-3, to family members of the Option holder or entities
created for their benefit.  Except as permitted by the foregoing, each Option
granted under the Plan and the rights and privileges thereby conferred shall not
be transferred, assigned, pledged, or hypothecated in any way (whether by
operation of law or otherwise), and shall not be subject to execution,
attachment, or similar process.  On any attempt to transfer, assign, pledge,
hypothecate, or otherwise dispose of the Option, or of any right or privilege
conferred thereby, contrary to the provisions thereof, or on the levy of any
attachment or similar process on such rights and privileges, the Option and such
rights and privileges shall immediately become null and void.

     15.  Listing and Registration of Shares.  Each Option shall be subject to
the requirement that if at any time the Board shall determine, in its sole
discretion, that it is necessary or desirable to list, register, or qualify the
shares covered thereby on any securities exchange or under any state or federal
law, or obtain the consent or approval of any governmental agency or regulatory
body as a condition of, or in connection with, the granting of such Option or
the issuance or purchase of shares thereunder, such Option may not be exercised
in whole or in part unless and until such listing, registration, consent, or
approval shall have been effected or obtained free of any conditions not
acceptable to the Board.

     16.  Options.  Options granted under the Plan shall be represented by a
written agreement which shall be executed by the Company and which shall contain
such terms and conditions as may be permitted under the terms of this Plan.

     17.  No Right of Employment.  Nothing contained in this Plan or any Option
shall be construed as conferring on a director, officer, or employee any right
to continue or remain as a director, officer, or employee of the Company or its
subsidiaries.

     18.  Amendment of the Plan.  This Plan may not be amended more than once
during any six month period, other than to comport with changes in the Code or
the Employee Retirement Income Security Act or the rules and regulations
promulgated thereunder.  Subject to the foregoing and, if the Company is subject
to the provisions of section 16(b) of the Exchange Act, the limitations of Rule
16b-3 promulgated under the Exchange Act or any amendment or successor rule of
like tenor, the Board or a duly authorized committee may modify and amend the
Plan in any respect; provided, however, that to the extent such amendment or
modification would cause the Plan to no longer comply with the applicable
provisions of the Exchange Act with respect to Options granted to officers or
directors under Rule 16b-3 or any amendment or successor rule of like tenor or
with the provisions of the Code governing incentive stock options as they may be
amended from time to time, such amendment or modification shall also be approved
by the shareholders of the Company.

     Subject only to the foregoing, the Plan shall be deemed to be automatically
amended as is necessary (i) with respect to the issuance of Incentive Options,
to maintain the Plan in compliance with the provisions of section 422 of the
Code, and regulations promulgated thereunder from time to time, or any amendment
or successor statute thereto, and (ii) with respect to Options granted to
officers and directors of the Company, to maintain the Plan in compliance with
the provisions of Rule 16b-3 promulgated under the Exchange Act or any amendment
or successor rule of like tenor.

                                   ATTEST:


                                      /s/ Brian G. Larson
                                   Brian G. Larson, Chairman



                            SECRETARY'S CERTIFICATE

     The undersigned, the duly constituted and elected secretary of Larson Davis
Incorporated, hereby certifies that a duly constituted meeting of the
shareholders held on                , 1996, pursuant to notice and at which a
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quorum was present in accordance with the requirements of law and the Company's
articles of incorporation and bylaws, the foregoing 1996 Director Stock Option
Plan was approved by the affirmative vote of the holders of a majority of the
shares of common stock voted at such meeting.

     DATED this       day of                , 1996.
                -----        ---------------

                                   LARSON DAVIS INCORPORATED


                                   By
                                     Dan J. Johnson, Secretary