LARSON DAVIS INCORPORATED

                       1997 EMPLOYEE STOCK PURCHASE PLAN
                       Adopted by the Board of Directors
                           Effective February 1, 1997



     1.   Purposes.  The 1997 Employee Stock Purchase Plan of Larson Davis
Incorporated (the "Plan"), is intended to provide a method whereby employees of
LarsonoDavis Incorporated and any subsidiary corporation thereof (hereinafter
referred to, unless the context otherwise requires, as the "Company"), will have
an opportunity to acquire a proprietary interest in the Company through the
purchase of shares of common stock of the Company, $0.001 par value (the "Common
Stock").  It is the intention of the Company to have the Plan qualify as an
"employee stock purchase plan" under section 423 of the Internal Revenue Code of
1986, as amended (the "Code").  The provisions of the Plan shall, accordingly,
be construed so as to extend and limit participation in a manner consistent with
the requirements of that section of the Code.

     2.   Eligibility.

          (a)  Any person (an "Employee") who has been employed for more than 6
     months by (i) the Company, or (ii) any subsidiary corporation that is
     designated as a participant in the Plan by the board of directors and would
     be a "subsidiary corporation" as that term is defined in section 424 of the
     Code, shall be eligible to participate in the Plan.

          (b)  Any provision of the Plan to the contrary notwithstanding, no
     Employee shall be granted an option to participate in the Plan:

               (i)  if, immediately after the grant, such Employee would own
          stock, and/or hold outstanding options to purchase stock, possessing
          5% or more of the total combined voting power or value of all classes
          of stock of the Company or of any subsidiary of the Company (for
          purposes of this paragraph the rules of section 424(d) of the Code
          shall apply in determining stock ownership of any Employee); or

               (ii) which permits his or her rights to purchase stocks under all
          employee stock purchase plans of the Company and its subsidiaries to
          accrue at a rate which exceeds $25,000 of the fair market value of the
          stock (determined at the time such option is granted) for each
          calendar year in which such option is outstanding at any time.

     3.   Offering Period.  The Plan will be implemented as four offerings
per year (the "Offerings") on the date that is ten business days subsequent
to the filing of each of the Company's quarterly reports on Form 10-Q and
annual report on Form 10-K (each an "Offering Date") until December 31, 1998
(the "Offering Termination Date").  The period from the first Offering Date
to the Offering Termination Date shall be referred to herein as the
"Offering Period."

     4.   Participation.

          (a)  Participation in the Plan for any eligible Employee may begin
     only as of the date the Plan has been approved by the board of directors
     (January 30, 1997) and a registration statement has been filed by the
     Company (the "Effective Date") of the Plan and on each subsequent January 1
     and July 1 of each calendar year (each a "Plan Entry Date"). All eligible
     Employees may participate in the Plan as of the Effective Date of the Plan
     by delivering, within 14 days after such Effective Date, a completed form
     to the treasurer of the Company or his designee (the "Plan Administrator")
     indicating the Employee's intention to participate. Subsequently, all
     eligible Employees may participate in the Plan by delivering prior to each
     subsequent Plan Entry Date a completed form to the Plan Administrator
     indicating the Employee's intention to participate as of such subsequent
     Plan Entry Date.  The Company will maintain an account (a "Payment
     Account") for all Employees participating in the Plan. No interest will be
     paid or allowed on any money paid into the Plan or credited to the Payment
     Account of any participating Employee.

          (b)  A participating Employee may authorize a payroll deduction into
     his or her Payment Account of a specified dollar amount per pay period  or
     may make separate lump sum payments into such Payment Account during the
     Offering Period; provided however, that the aggregate of all payroll
     deductions and lump sum payments into such Payment Account may not exceed
     20% of his or her monetary compensation during the Offering Period.  The
     term "monetary compensation" means regular straight-time earnings, payments
     for overtime, shift differentials, and sales commissions, all prior to
     deduction of taxes and other withholding charges, but excludes incentive
     compensation, bonuses, and other special payments. An Employee may elect to
     authorize a payroll deduction from the Employee's compensation by
     completing an authorization for payroll deduction on the form provided by
     the Company and filing it with the office of the Plan Administrator. An
     Employee may make lump sum payments into his or her Payment Account by
     delivering a personal or official bank check in the amount of such payment
     to the Plan Administrator.

          (c)  A participating Employee may alter the amount of his or her
     payroll deductions during the Offering Period by filing an amended payroll
     deduction authorization with the Plan Administrator at least 3 days prior
     to the Effective Date of such change.  In no event may an Employee make any
     such alteration more frequently than monthly.

     5.   Granting of Option.

          (a)  Subject to the provisions of paragraph 2(b) and paragraph 6, a
     participating Employee shall be deemed to have been granted on each
     Offering Date, and to have exercised on such date, an option (an "Option")
     to purchase that number of shares of Common Stock determined by dividing
     the amount in the Employee's Payment Account by the Option Exercise Price
     on the Offering Date determined as provided in subparagraph (b) below.

          (b)  The purchase price of a share of Common Stock purchased pursuant
     to the Plan (the "Option Exercise Price") shall be 85% of the Fair Market
     Value (defined below) of a share of Common Stock on the date of grant of
     such option.  As used herein, the term "Fair Market Value" shall mean the
     closing price of the Common Stock on the Nasdaq Stock Market on the
     applicable Offering Date (or on the most recent preceding day on which
     shares of Common Stock were traded in the event that no shares of Common
     Stock shall have been traded on the Offering Date), or, if the Common
     Stock is not then traded on the Nasdaq Stock Market, the reported price
     for the Common Stock on the Offering Date or the most recent preceding
     day for which such quotations are available as reported by the exchange
     or market on which the Common Stock is then traded, or, if no such
     quotations are available for a date within a reasonable time prior to
     the Offering Date, the value of the Common Stock as determined by the
     board of directors of the Company using any reasonable means.

     6.   Exercise of Option.  With respect to the Offerings during the Offering
Period:

          (a)  Unless a participating Employee gives written notice to the Plan
     Administrator as provided in paragraph (d) below that the Employee elects
     not to exercise the Employee's Options or as provided in paragraph 8 below
     that the Employee elects to withdraw from the Plan, his or her unexercised
     Options, if any, will be deemed to have been exercised automatically on the
     Offering Date for the purchase of the number of full shares of Common Stock
     which the accumulated amount in his or her Payment Account at that time
     will purchase at the applicable Option Exercise Price.

          (b)  The Plan Administrator shall reduce the Employee's Payment
     Account on each Offering Date in the aggregate amount of the Option
     Exercise Price for the Common Stock purchased.

          (c)  The exercise of Options to purchase shares of Common Stock shall
     not be less than 25 shares.  Fractional shares will not be issued under the
     Plan.  Any accumulated payroll deductions and lump sum payments which would
     have been used to purchase fractional shares shall be retained in the
     employee's Payment Account.

          (d)  An Employee may elect not to exercise available Options by
     providing written notice of such election to the Plan Administrator at
     least three days prior to any Offering Date.  Such election shall remain in
     effect until revoked in writing, which revocation shall be effective three
     days after such written notice is provided to the Plan Administrator.

          (e)  Any excess in an Employee's Payment Account on the Offering
     Termination Date will be distributed to the Employee.

     7.   Delivery.  As promptly as practicable after the exercise or deemed
exercise of a participating Employee's Options on each Offering Date, the
Company will deliver to each Employee, as appropriate, the certificate or
certificates representing the shares of Common Stock purchased upon the exercise
or deemed exercise of such Employee's Options.

     8.   Withdrawal.

          (a)  A participating Employee may withdraw payroll deductions and lump
     sum payments remaining in his or her Payment Account at any time prior to
     the Offering Termination Date by giving written notice of withdrawal to the
     Plan Administrator. Any such withdrawal shall not be effective until three
     days after delivery of notice to the Plan Administrator.  All of the
     Employee's payroll deductions and lump sum payments remaining in his or her
     Payment Account will be paid to the Employee promptly after receipt of such
     notice of withdrawal and no further payroll deductions will be made from
     his or her pay and no further lump sum payments will be accepted during the
     Offering Period, except as provided herein.  The Company may, at its
     option, treat an attempt by an Employee to borrow on the security of his or
     her Payment Account as an election, under this paragraph 8, to withdraw
     such amounts in the Payment Account.

          (b)  An Employee who withdraws or is deemed to have withdrawn amounts
     from his or her Payment Account in accordance with this paragraph 8 may not
     participate in another Offering  until the next Plan Entry Date following
     such withdrawal.  An Employee's withdrawal from an Offering will not have
     any effect upon his or her eligibility to participate in any similar plan
     which may hereafter be adopted by the Company.

          (c)  Upon termination of the Employee's employment for any reason,
     including retirement but excluding death or disability while in the employ
     of the Company or a subsidiary, the payroll deductions and lump sum
     payments credited to his or her Payment Account will be returned to the
     Employee or, in the case of his or her death subsequent to the termination
     of employment, to the person or persons entitled thereto under paragraph
     11.

          (d)  Upon termination of the Employee's employment because of
     disability or death, the Employee or his or her beneficiary (as defined in
     paragraph 11) shall have the right to elect, by written notice given to the
     Plan Administrator prior to the expiration of the period of 30 days
     commencing with the date of the disability or death of the Employee,
     either:

               (i)  to withdraw all of the payroll deductions and lump sum
          payments credited to the Employee's Payment Account under the Plan; or

               (ii) to exercise the Employee's Options for the purchase of the
          number of full shares of Common Stock which the accumulated payroll
          deductions and lump sum payments in the Employee's Payment Account at
          the date of the Employee's disability or death will purchase at the
          applicable Option Exercise Price, and any excess in such account will
          be returned to the Employee or said beneficiary.

          In the event that no such written notice of election shall be duly
     received by the office of the Plan Administrator, the Employee or
     beneficiary shall automatically be deemed to have elected to withdraw the
     payroll deductions and lump sum payments remaining in the Employee's
     Payment Account at the date of the Employee's disability or death and the
     same will be paid promptly to the Employee or said beneficiary.

     9.   Stock.

          (a)  The maximum number of shares of Common Stock which shall be made
     available for sale under the Plan is 100,000 shares (subject to further
     adjustment upon changes in capitalization of the Company as provided in
     paragraph 14).  If the total number of shares for which Options are
     exercised exceeds the number of shares of Common Stock which remain
     available for issue under the Plan, the Company shall make a pro rata
     allocation of the shares available for delivery and distribution in as
     nearly a uniform manner as shall be practicable and as it shall determine
     to be equitable, and the balance of payroll deductions and lump sum
     payments credited to the Payment Account of each participating Employee
     under the Plan shall be returned to him or her as promptly as possible.
     The Company may purchase shares on the open market in order to have shares
     available for purchase by Employees in the Offering.

          (b)  No Employee will have any interest in Common Stock covered by his
     or her Option until such Option has been exercised.

          (c)  Common Stock to be delivered to an Employee under the Plan will
     be registered in the name of the Employee, or, if the Employee so directs,
     by written notice to the Company prior to the Offering Date, in the names
     of the Employee and one such other person as may be designated by the
     Employee, as joint tenants with rights of survivorship, to the extent
     permitted by applicable law.

     10.  Administration.  The Plan shall be administered by the board of
directors of the Company.  The board shall designate an individual to carry out
the decisions of the board of directors who shall be designated as the Plan
Administrator.  The interpretation and construction of any provision of the Plan
and the adoption of rules and regulations for administering the Plan shall be
made by the Plan Administrator or the board of directors.  Determinations made
by the board with respect to any matter or provision contained in the Plan shall
be final, conclusive, and binding upon the Company and upon all Employees, their
heirs, or legal representatives.  Any rule or regulation adopted by the board of
directors shall remain in full force and effect unless and until altered,
amended, or repealed by the board. The Company, the Plan Administrator and the
board of directors, or their representatives, employees and agents, shall not be
liable to any Employee or any other person for losses sustained or liabilities
incurred as a result of any good faith error in judgment or mistake of law or
fact, or for any act done or omitted to be done in good faith in administering
the Plan, unless such error, mistake, act or omission was performed or omitted
fraudulently or constituted willful misconduct.  The Company shall indemnify
board members and the Plan Administrator, to the fullest extent permitted by
applicable statute, for any expenses incurred in defending a civil or criminal
action or proceeding, arising out of action taken or omitted to be taken with
respect to administration of the Plan, in advance of the final disposition of
such action or proceeding, upon receipt of an undertaking by the person
indemnified to repay such payment if such member shall be adjudicated not to
have acted in good faith in the reasonable belief that such member's action was
in the best interest of the Company.

     11.  Designation of Beneficiary.  A participating Employee may file a
written designation of a beneficiary who is to receive any shares of Common
Stock and/or cash in the event of the death of the Employee prior to the
delivery of such shares or cash to the Employee.  Such designation of
beneficiary may be changed by the Employee at any time by written notice to the
Plan Administrator. Upon the death of a participating Employee and upon receipt
by the Company of proof of the identity and existence at the Employee's death of
a beneficiary validly designated by the Employee under the Plan, and notice of
election of the beneficiary to exercise the Option, the Company shall deliver
such stock and/or cash to such beneficiary.  In the event of the death of a
participating Employee and in the absence of a beneficiary validly designated
under the Plan who is living at the time of such Employee's death, the Company
shall deliver such stock and/or cash to the executor or administrator of the
estate of the Employee, or if no such executor or administrator has been
appointed (to the knowledge of the Plan Administrator), the Company, in its
discretion, may deliver such stock and/or cash to the spouse or to any one or
more dependents of the Employee as the Company may designate.  No beneficiary
shall, prior to the death of the Employee by whom he has been designated,
acquire any interest in the stock or cash credited to the Employee under the
Plan.

     12.  Transferability.  Neither payroll deductions and lump sum payments
credited to a participating Employee's Payment Account nor any rights with
regard to the exercise of an Option or to receive stock under the Plan may be
assigned, transferred, pledged, or otherwise disposed of in any way by the
Employee otherwise than by will or the laws of descent and distribution.  Any
such attempted assignment, transfer, pledge, or other disposition shall be
without effect, except that the Company may treat such act as an election to
withdraw funds in accordance with paragraph 8.

     13.  Use of Funds.  All payroll deductions and lump sum payments received
or held by the Company under this Plan may be used by the Company for any
corporate purpose and the Company shall not be obligated to segregate such
amounts.

     14.  Effect of Changes of Common Stock.

          (a)  In the event of any changes of outstanding shares of the Common
     Stock by reason of stock dividends, subdivisions, combinations, and
     exchanges of shares, recapitalizations, or mergers in which the Company is
     the surviving corporation, the aggregate number and class of shares
     available under this Plan and the Option Exercise Price per share shall be
     appropriately adjusted by the board of directors of the Company, whose
     determination shall be conclusive.  Any such adjustments may provide for
     the elimination of any fractional shares which would otherwise become
     subject to any Options.

          (b)  If the Company shall at any time merge into or consolidate with
     another corporation and the Company is the surviving entity, the holder of
     each Option then outstanding will thereafter be entitled to receive upon
     the exercise of such Option for each share as to which such Option shall be
     exercised the securities or property which a holder of one share of the
     Common Stock was entitled to receive upon and at the time of such merger or
     consolidation, and the board of directors of the Company shall take such
     steps in connection with such merger or consolidation as the board of
     directors shall deem necessary to assure that the provisions of (a) above
     shall thereafter be applicable, as nearly as reasonably may be, in relation
     to the said securities or property as to which such holder of such option
     might thereafter be entitled to receive thereunder.  In the event of a
     merger of consolidation in which the Company is not the surviving entity,
     or of a sale of assets in which the Company is not the surviving entity,
     the Plan shall terminate, and all payroll deductions and lump sum payments
     credited to participating Employees' Payment Accounts shall be returned to
     them.

     15.  Amendment or Termination.  The board of directors of the Company may
at any time terminate or amend the Plan.  Except as hereinafter provided, no
such termination can affect Options previously granted, nor may an amendment
make any change in any Option theretofore granted which would adversely affect
the rights of any Employee nor may an amendment be made without the approval of
the stockholders of the Company within 12 months of such amendment if such
amendment would (a) materially increase the benefits accruing to Employees under
the Plan, (b) materially increase the number of shares which may be issued under
the Plan, or (c) materially modify the requirements as to eligibility for
participation under the Plan.

     16.  Withholding Taxes.  All withholding and employment taxes payable with
respect to the amount of payroll deductions remitted to any participating
Employee's Payment Account will be deducted from the salary or other
compensation paid by the Company to such participating Employee and will not
reduce the amounts remitted to the Employee's Payment Account hereunder.

     17.  Notices.  All notices or other communications by an Employee to the
Company under or in connection with the Plan shall be deemed to have been duly
given when received by the Plan Administrator.

     18.  Approval of Stockholders.  The Plan has been adopted by the board of
directors of the Company, but is subject to the approval of the stockholders of
the Company within 12 months of the date of adoption of the Plan by the board of
directors.

                                   Adopted by the Board of Directors
                                   effective                , 1997
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                                   Approved by the Shareholders
                                   effective                , 1997
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