EXHIBIT 10.27

                                                                   Date Adopted:
                                                                January 10, 1997

                                SRC VISION, INC.

                             1997 STOCK OPTION PLAN


1.  PURPOSE OF PLAN

     1.1  Purpose.  The purpose of the Plan is to enable the Company to grant to
selected  Eligible Persons a favorable  opportunity to acquire Common Stock and,
thereby,  to create an incentive  for them to remain in the employ of or provide
services to the Company or any Affiliate and to contribute to its success.

     1.2 Nature of  Options.  Options  granted  under the Plan may be  Incentive
Options or Nonqualified  Options, as determined by the Administrator at the time
of grant.

     1.3 Rule 701.  At the time the Plan is being  adopted,  the  Company is not
subject to the reporting requirements of section 13 or 15(d) of the Exchange Act
and is not an investment  company  registered or required to be registered under
the Investment  Company Act of 1940. As such, the Company's  offers and sales of
Common Stock under the Plan are, to the extent  determined by the  Administrator
in accordance with Applicable Laws,  intended to be exempt from the registration
requirements of the Securities Act under Rule 701 under the Securities Act.

2.  CERTAIN DEFINITIONS; CONSTRUCTION

     2.1  Definitions.  When used  herein,  the  following  terms shall have the
meaning indicated:

     (a)  "Administrator"   means  the  Board  or  any  Committee  as  shall  be
administering the Plan.

     (b)  "Affiliate"  means,  with  respect  to any  entity,  any  "parent"  or
"subsidiary"  of the entity as those terms are  defined in  sections  424(e) and
424(f), respectively, of the Code.

     (c) "Applicable Laws" means the laws, rules and regulations relating to the
adoption,   implementation  and  administration  of  stock  option  plans  under
applicable state corporate laws, federal and state securities laws and the Code.

     (d) "Board" means the Board of Directors of the Company.

     (e)  "Code"  means the  Internal  Revenue  Code of 1986,  as  amended,  and
applicable Treasury Regulations promulgated thereunder.

     (f) "Committee" means a committee appointed by the Board in accordance with
section 4.1 hereof.

     (g)  "Common  Stock"  means the common  stock,  $.0001  par  value,  of the
Company.

     (h) "Company" means SRC Vision, Inc., an Oregon corporation.

     (i) "Disability" means total and permanent disability as defined in section
22(e)(3) of the Code.

     (j) "Eligible Persons" means directors, officers and other employees of the
Company or of any Affiliate of the Company, as well as non-employee  consultants
and  advisors  who may  perform  significant  services  for or on  behalf of the
Company or any Affiliate.

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

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

          (1) if the Common Stock is listed on  established  stock exchange or a
     national market system,  including  without  limitation the Nasdaq National
     Market of the National  Association of Securities  Dealers,  Inc. Automated
     Quotation  ("NASDAQ")  System,  the Fair Market  Value of a share of Common
     Stock shall be the closing  sales price for such stock (or the closing bid,
     if no sales were  reported)  as quoted on such system or  exchange  (or the
     exchange  with the greatest  volume of trading in Common Stock) on the last
     market  trading day prior to the day of  determination,  as reported in The
     Wall  Street  Journal  or such  other  source  as the  Administrator  deems
     reliable;

          (2) if the Common Stock is quoted on the Nasdaq System (but not on the
     Nasdaq  National  Market  thereof) or is  regularly  quoted by a recognized
     securities  dealer but  selling  prices are not  reported,  the Fair Market
     Value of a share of Common Stock shall be the mean between the high bid and
     low asked prices for the Common Stock on the last market  trading day prior
     to the day of determination, as reported in The Wall Street Journal or such
     other source as the Administrator deems reliable; and

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

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

     (n) "Nonqualified Option" means any Option other than an Incentive Option.

     (o) "Notice of Grant" means a written notice  specifying  certain terms and
conditions of an Option grant.

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

     (q) "Option Agreement" means a written agreement between the Company and an
Optionee  evidencing  the terms and  conditions of an Option,  together with any
Notice of Grant relating to the Option.

     (r) "Optionee"  means an Eligible Person or permitted  transferee who holds
an outstanding Option.

     (s) "Plan" means this 1997 Stock Option Plan, as originally  adopted and as
amended from time to time as herein provided.

     (t) "Plan of Exchange" means any agreement, plan or arrangement under which
an outstanding  Option may be surrendered in exchange for a newly granted Option
with a lower  exercise  price or other terms which  differ from the terms of the
Option surrendered.

     (u) "Section 16" means section 16 of the Securities Exchange Act.

     (v) "Securities Act" means the Securities Act of 1933, as amended.

     (w) "Subsidiary"  shall have the meaning set forth in Section 424(f) of the
Code.

     (x)  "Termination  of  Employment"  shall mean the date when any  employee-
employer  relationship between an Optionee and the Company is terminated for any
reason, including, but not limited to, a termination by resignation,  discharge,
death, disability or retirement, but excluding (1) terminations where there is a
simultaneous  reemployment  or  continuing  employment  of an  Optionee  by  the
Company,  (2) at the discretion of the Administrator,  terminations which result
in a temporary severance of the employee-employer  relationship,  and (3) at the
discretion  of  the  Administrator,  terminations  which  are  followed  by  the
simultaneous  establishment of a consulting relationship by the Company with the
former employee. The Administrator,  in its absolute discretion, shall determine
the effect of all matters and questions relating to Termination of Employment.

     2.2  Construction.  The Plan  shall be  construed  in  accordance  with the
following provisions:

     (a) the  adoption  of the Plan shall not affect any other  compensation  or
incentive  plans  in  effect  for the  Company.  Nothing  in the  Plan  shall be
construed to limit the right of the Company (1) to establish  any other forms of
incentives  or  compensation  for  employees of the Company,  or (2) to grant or
assume options or other rights  otherwise than under the Plan in connection with
any proper corporate purpose, including, but not by way of limitation, the grant
or assumption of options in connection with the acquisition by purchase,  lease,
merger,  consolidation  or otherwise,  of the  business,  stock or assets of any
corporation, partnership, firm or association;

     (b) the  existence of  outstanding  Options under the Plan shall not affect
the Company's right to effect adjustments, recapitalizations, reorganizations or
other changes in its or any other  corporation's  capital structure or business,
any merger or  consolidation,  any issuance of bonds,  debentures,  preferred or
prior  preference  stock ahead of or affecting  Common Stock, the dissolution or
liquidation of the Company's or any other corporation's  assets or business,  or
any other  corporate  act,  whether  similar  to the events  described  above or
otherwise; and

     (c) nothing in the Plan or in any Option  Agreement  shall  confer upon any
Optionee  any right to continue in the employ of the Company or shall  interfere
with  or  restrict  in any way the  rights  of the  Company,  which  are  hereby
expressly  reserved,  to  discharge  any  Optionee  at any time  for any  reason
whatsoever, with or without cause.

3. STOCK SUBJECT TO THE PLAN

     3.1 Common  Stock.  Subject to  adjustment as provided in section 9 hereof,
the stock to be  offered  and  issued  under the Plan  shall be shares of Common
Stock,  which may be either  authorized and unissued shares or treasury  shares.
The  cumulative  aggregate  number of shares of Common  Stock to be offered  and
issued  under the Plan  shall not  exceed  396,000,  subject  to  adjustment  as
provided in section 9 hereof.

     3.2  Calculation of Shares.  If an Option shall expire or terminate for any
reason without having been fully exercised, or is surrendered pursuant to a Plan
of Exchange or otherwise,  the unpurchased shares subject thereto shall again be
available for the purposes of the Plan. Where the exercise price of an Option is
paid by means of the Optionee's  surrender of previously  owned shares of Common
Stock or the Company's withholding of shares otherwise issuable upon exercise of
the Option as permitted  herein,  only the net number of shares issued and which
remain outstanding in connection with such exercise shall be deemed "issued" and
no longer available for issuance under the Plan.

     3.3 Reservation of Shares. The Company will at all times during the term of
the Plan  reserve and keep  available  such number of shares of Common  Stock as
shall be sufficient to satisfy the requirements of the Plan.

4. ADMINISTRATION

     4.1  Administrator.  The Plan shall be administered by the Board or, either
in its  entirety or only  insofar as it relates to Eligible  Persons  subject to
section 16 (if any), by a committee of the Board established for this purpose in
accordance with Applicable Laws. If necessary in order to comply with Rule 16b-3
under the  Exchange Act as  contemplated  below,  the  Committee  shall,  in the
Board's discretion,  be comprised solely of "non-employee  directors" within the
meaning of said Rule 16b-3. The foregoing notwithstanding, the Administrator may
delegate nondiscretionary administrative duties to such employees of the Company
as it deems proper and the Board,  in its absolute  discretion,  may at any time
and  from  time  to  time  exercise  any  and  all  rights  and  duties  of  the
Administrator under the Plan.

     4.2 Expenses;  Exculpation.  All expenses and liabilities  which members of
the Administrator incur in connection with the administration of this Plan shall
be borne by the Company.  The Administrator  may employ attorneys,  consultants,
accountants,  appraisers,  brokers  or other  persons.  The  Administrator,  the
Company and the  Company's  directors,  officers  and other  employees  shall be
entitled to rely upon the advice, opinions or valuations of any such persons. No
member  of  the  Administrator  shall  be  personally  liable  for  any  action,
determination or interpretation made in good faith with respect to the Plan.

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

     (a) to determine whether and to what extent Options are granted  hereunder;

     (b) to select from among Eligible Persons those individuals to whom Options
shall be granted hereunder;

     (c) to determine the number of shares of Common Stock to be covered by each
Option granted hereunder;

     (d) to approve forms of Option  Agreements  and other  instruments  for use
under the Plan;

     (e) to determine the terms and conditions,  not inconsistent with the terms
of the Plan, of any Option granted  hereunder,  the exercise price,  the time or
times when the Option may be  exercised  (which may be based on  performance  or
other criteria), any vesting, acceleration or waiver of forfeiture restrictions,
and any  restriction or limitation  regarding the Option or the shares of Common
Stock relating thereto, based in each case on such factors as the Administrator,
in its sole discretion, shall determine;

     (f) to determine the Fair Market Value of Common Stock;

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

     (h) to construe and interpret  the terms and  provisions of the Plan and of
any Option Agreement and all Options granted under the Plan;

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

     (j) to modify or amend  each  Option  (subject  to  section  12.2  hereof),
including   the   discretionary   authority   to  extend  the   post-termination
exercisability period of any Option longer than is otherwise provided for in the
Plan;

     (k) to  authorize  any  person to  execute  on behalf  of the  Company  any
instrument  required to effectuate the grant or exercise of an Option authorized
by the Administrator;

     (l) to institute from time to time a Plan of Exchange; and

     (m) to make all other  determinations  it deems  necessary or advisable for
administering the Plan or any Option Agreement or Option.

     The Administrator's decisions,  determinations and interpretations shall be
final and binding on all Optionees and other persons.

5. PARTICIPATION

     Eligible Persons shall be eligible for selection to participate in the Plan
upon approval by the  Administrator;  provided,  however,  that only "employees"
(within  the  meaning of section  3401(c) of the Code) of the  Company  shall be
eligible for the grant of Incentive Options.  An individual who has been granted
an Option may,  if  otherwise  eligible,  be granted  additional  Options if the
Administrator shall so determine.  No Eligible person is entitled to participate
in the Plan by matter of right;  only those Eligible Persons who are selected by
the Administrator in its discretion shall participate in the Plan.

6. OPTION AGREEMENT; TERMS OF OPTIONS

     6.1  Option  Agreement.  Each  Option  shall  be  evidenced  by  an  Option
Agreement,  which shall be subject to the terms and  conditions  of the Plan and
shall contain such other terms and conditions that are not inconsistent with the
Plan as the  Administrator  may deem appropriate in each case. In the event of a
conflict  between the terms or conditions  of an Option  Agreement and the terms
and  conditions of the Plan,  the terms and conditions of the Plan shall govern.
Failure of an Optionee to execute an Option  Agreement  shall not  invalidate or
render void the grant of an Option hereunder.

     6.2 Exercise  Price.  The exercise price of each Incentive  Option shall be
determined  by the  Administrator,  but  shall not be less than 100% of the Fair
Market  Value of Common Stock on the date of grant.  If an  Incentive  Option is
granted to an  employee  who at the time of grant owns  (within  the  meaning of
section 424(d) of the Code) more than 10% of the total combined  voting power of
all classes of capital stock of the Company,  the Option exercise price shall be
at least 110% of the Fair Market Value of Common Stock on the date of grant. The
exercise  price of each  Nonqualified  Option  also shall be  determined  by the
Administrator, but shall not be less than 85% of the Fair Market Value of Common
Stock on the date of grant.  The status of each Option granted under the Plan as
either an Incentive Option or a Nonstatutory Stock Option shall be determined by
the  Administrator at the time the Administrator  acts to grant the option,  and
shall be designated as such in the related Option Agreement.

     6.3 "Reload" Options.  At the time of grant or at any time thereafter,  the
Administrator  may determine that an Optionee who has paid the exercise price of
an Option by  surrendering  previously  owned  shares of Common  Stock or by the
Company's  withholding of shares otherwise  issuable upon exercise of the Option
shall automatically receive a new Option hereunder to purchase additional shares
of Common Stock equal to the number of shares so surrendered or withheld and may
specify the terms and conditions of such "reload" options.

     6.4 Payment of Exercise Price.  Except as provided  below,  payment in full
shall be made for all  shares  of Common  Stock  purchased  at the time  written
notice of  exercise of an Option is given to the  Company,  either in cash or by
delivery by the Optionee of Common Stock already owned by the Optionee,  for all
or part of the aggregate  exercise price of the shares as to which the Option is
being  exercised,  provided  that the Fair Market  Value of such Common Stock is
equal on the date of exercise to the aggregate  exercise  price of the shares as
to which the Option is being exercised.  In this regard,  consecutive book-entry
exercises, or so-called pyramiding,  shall be permitted in the discretion of the
Administrator. At the time an Option is granted or exercised, the Administrator,
in its discretion, may authorize one or more of the following additional methods
of payment:

     (a)  acceptance  of the  Optionee's  full  recourse  promissory  note for a
portion of the aggregate  exercise price of the shares as to which the Option is
being  exercised,  payable on such terms and bearing such interest as determined
by the  Administrator,  which promissory note may be either secured or unsecured
in  such  manner  as  the  Administrator  shall  approve   (including,   without
limitation,  by a security  interest in the shares of Common Stock so acquired);
provided,  however,  that not less than the aggregate par value of the shares of
Common Stock to be issued shall be paid in cash;

     (b)  any  other  property,  so  long as  such  property  constitutes  valid
consideration  under  Applicable  Laws for the  shares as to which the Option is
being exercised and is surrendered in good form for transfer; and

     (c) by means of so-called  cashless exercises as permitted under applicable
rules and regulations of the Securities and Exchange  Commission and the Federal
Reserve Board.

     6.5 Withholding.  Irrespective of the form of payment of the exercise price
of an Option, the delivery of shares pursuant to the exercise of an Option shall
be conditioned upon payment by the Optionee to the Company of amounts sufficient
to enable the Company to pay all federal,  state,  and local  withholding  taxes
applicable,  in the Company's judgment,  to the exercise. In the sole discretion
of the  Administrator,  such payment to the Company may be effected  through (a)
the Company's  withholding  from the number of shares of Common Stock that would
otherwise  be delivered to the Optionee by the Company on exercise of the Option
a number of shares of Common  Stock  equal in value (as  determined  by the Fair
Market  Value  of  Common  Stock  on the  date  of  exercise)  to the  aggregate
withholding  taxes,  (b) payment by the Optionee to the Company of the aggregate
withholding  taxes in cash,  (c)  withholding  by the Company from other amounts
contemporaneously  owed by the Company to the Optionee,  or (iv) any combination
of these three methods.

     6.6 Vesting and Exercise.

     (a) Each Option  granted  under the Plan shall become  exercisable  and the
total number of shares subject thereto shall be purchasable, in a lump sum or in
such  installments,  which  need  not  be  equal,  as  the  Administrator  shall
determine;  provided, however, that each Option shall become exercisable in full
no later than 10 years after such option is granted; and provided, further, that
if an Optionee  shall not in any given  installment  period  purchase all of the
shares which such Optionee is entitled to purchase in such  installment  period,
such Optionee's  right to purchase any shares not purchased in such  installment
period  shall  continue  until  the  expiration  or  sooner  termination  of the
Optionee's  Option.  The Administrator may, at any time after grant of an Option
and from  time to  time,  increase  the  number  of  shares  purchasable  in any
installment, subject to the total number of shares subject to the Option and the
limitations set forth in paragraph (f) of this section 6.6. At any time and from
time to time  prior  to the time  when any  exercisable  Option  or  exercisable
portion thereof becomes  unexercisable  under the Plan or the applicable  Option
Agreement,  such Option or portion thereof may be exercised in whole or in part;
provided,  however,  that the  Administrator  may,  by the  terms of the  Option
Agreement,  require  any  partial  exercise  to be with  respect to a  specified
minimum number of shares. No Option or installment  thereof shall be exercisable
except  with  respect  to whole  shares.  Fractional  share  interests  shall be
disregarded,  except that they may be  accumulated  as provided above and except
that if such a fractional share interest  constitutes the total shares of Common
Stock remaining  available for purchase under an Option at the time of exercise,
the  Optionee  shall be  entitled  to receive on  exercise a  certified  or bank
cashier's  check in an amount equal to the Fair Market Value of such  fractional
share of stock.

     (b) To the extent that the aggregate  Fair Market Value  (determined on the
date of grant) of Common Stock with respect to which an Incentive Option granted
hereunder (together with any Incentive Options granted to the Optionee under all
other plans of the Company) are exercisable for the first time by an Optionee in
any calendar year under the Plan exceeds $100,000,  such Option shall be treated
as a Nonqualified  Option to the extent required by section 422 of the Code. The
rule set forth in the preceding sentence shall be applied by taking Options into
account in the order in which they were granted.

     (c)  Exercising an Option in any manner shall decrease the number of shares
thereafter available for purposes of the Plan, and for sale under the Option, by
the number of shares as to which the Option is exercised.

     (d) The  Administrator  may, at any time,  extend the exercise period of an
Option as stated in the relevant  Option  Agreement for any period not exceeding
the original  expiration  date of the Option on such terms and  conditions as it
may determine.

     (e)  Notwithstanding  any  provision of this section 6.6, in no event shall
any Option be exercised after the expiration date of the Option set forth in the
applicable Option Agreement.

     (f) If Common  Stock  acquired  upon  exercise of any  Incentive  Option is
disposed of in a disposition  that, under section 422 of the Code,  disqualifies
the Optionee from the  application  of section 421(a) of the Code, the holder of
the Common  Stock  immediately  before the  disposition  shall  comply  with any
requirements imposed by the Company in order to enable the Company to secure the
related income tax deduction to which it is entitled in such event.

7. TERMINATION OF EMPLOYMENT, DEATH OR DISABILITY

     7.1  Termination  of Employment.

     (a) Upon  Termination  of  Employment  of an Optionee,  other than upon the
Optionee's death or Disability, the Optionee may exercise his or her Option, but
only within such period of time as is specified in the Notice of Grant, and only
to the extent  that the  Optionee  was  entitled  to  exercise it at the date of
termination  (but in no event later than the  expiration  date of the Option set
forth in the applicable Option  Agreement).  In the case of an Incentive Option,
such period of time for exercise  shall not exceed three months from the date of
termination.  In the absence of a specified  time in the Option  Agreement,  the
Option  shall  remain  exercisable  for three months  following  Termination  of
Employment of the Optionee. If, on the date of termination,  the Optionee is not
entitled to exercise the  Optionee's  entire  Option,  the shares covered by the
unexercisable  portion  of the  Option  shall  revert  to the  Plan.  If,  after
termination,  the Optionee  does not exercise his or her Option  within the time
specified  by the  Administrator,  the Option  shall  terminate,  and the Shares
covered by the Option shall revert to the Plan.  Notwithstanding  the above,  in
the event of an  Optionee's  change  in  status  from  employee  to  nonemployee
consultant or advisor,  any Incentive Option held by the Optionee shall cease to
be treated as an  Incentive  Option and shall be treated  for tax  purposes as a
Nonqualified Option three months and one day following such change of status.

     (b)  The   Administrator   may  in  its  sole  discretion   accelerate  the
exercisability  of all or part of an Option upon  termination  or  employment or
cessation of services.

     7.2 Disability.  In the event of a Termination of Employment of an Optionee
as a result of the Optionee's  Disability,  the Optionee may exercise his or her
Option at any time within twelve months from the date of such  termination,  but
only to the extent that the  Optionee was entitled to exercise it at the date of
such  termination (but in no event later than the expiration of the term of such
Option as set forth in the Notice of Grant). If, at the date of termination, the
Optionee  is not  entitled  to  exercise  his or her entire  Option,  the shares
covered by the unexercisable portion of the Option shall revert to the Plan. If,
after  termination,  the Optionee does not exercise his or her Option within the
time specified  herein,  the Option shall  terminate,  and the Shares covered by
such Option also shall revert to the Plan.

     7.3 Death.  In the event of the Termination of Employment of an Optionee by
reason of his or her  death,  the  Option may be  exercised  at any time  within
twelve  months  following  the date of death  (but in no  event  later  than the
expiration of the term of such Option as set forth in the Option Agreement),  by
the  Optionee's  estate or by a person who  acquired  the right to exercise  the
Option by bequest or inheritance.  If, after an Optionee's death, the Optionee's
estate or a person who  acquired  the right to exercise the Option by bequest or
inheritance is not entitled to exercise the entire Option, the shares covered by
the  unexercisable  portion of the Option  shall  revert to the Plan.  If, after
death, the Optionee's  estate or a person who acquired the right to exercise the
Option by bequest or  inheritance  does not exercise the Option  within the time
specified  herein,  the Option shall  terminate,  and the Shares covered by such
Option shall revert to the Plan.

     7.4 Leave of Absence.  Unless otherwise  provided in the applicable  Option
Agreement, and to the extent permitted by section 422 of the Code, an Optionee's
employment  shall not be deemed to terminate  by reason of sick leave,  military
leave or other  leave of absence  approved  by the  Company if the period of any
such leave does not exceed a period  approved  by the  Company,  or such  longer
period, if any, for which the Optionee's right to reemployment by the Company is
guaranteed either  contractually or by statute;  provided,  however,  that, with
respect  to  Incentive  Options,  a leave  of  absence  or other  change  in the
employee-employer  relationship shall constitute a Termination of Employment if,
and to the  extent  that,  such  leave of  absence  or other  change  interrupts
employment  for the  purposes  of  section  422(a)(2)  of the  Code and the then
applicable  regulations and revenue rulings under said section.  For purposes of
Incentive  Options,  no such leave may exceed 90 days, unless  reemployment upon
expiration of such leave is guaranteed by statute or contract.  If  reemployment
upon  expiration  of a  leave  of  absence  approved  by the  Company  is not so
guaranteed,  on the 91st day of such  leave  any  Incentive  Option  held by the
Optionee  shall cease to be treated as an Incentive  Option and shall be treated
for tax purposes as a Nonqualified  Option.  Unless otherwise  determined by the
Administrator in its discretion,  vesting of options shall be suspended during a
leave of absence.

     7.5 Transfer to Related  Corporation.  In the event an employee  leaves the
employ of the  Company to become an  employee of a  Subsidiary  or any  employee
leaves  the  employ of a  Subsidiary  to become an  employee  of the  Company or
another Subsidiary, such employee shall be deemed to continue as an employee for
purposes of this Plan.

8. TRANSFERABILITY OF OPTIONS

     8.1 Options  Generally  Nontransferable.  Except as provided in section 8.2
hereof,  each Option shall,  by its terms,  be  nontransferable  by the Optionee
other  than  by will or the  laws of  descent  and  distribution  and  shall  be
exercisable during the Optionee's lifetime only by the Optionee or by his or her
guardian or legal  representative.  More particularly,  but without limiting the
generality of the  immediately  preceding  sentence,  an Option may not be sold,
assigned,  transferred,  pledged or hypothecated (whether by operation of law or
otherwise),  and  shall not be  subject  to  execution,  attachment  or  similar
process.  Any attempted sale,  assignment,  transfer,  pledge,  hypothecation or
other  disposition of any Option  contrary to the provisions of the Plan and the
applicable Option  Agreement,  and any levy of any attachment or similar process
upon an Option,  shall be null and void, and otherwise  without effect,  and the
Administrator may, in its sole discretion, upon the happening of any such event,
terminate such Option forthwith.

     8.2 Permitted Transfers. In the discretion of the Administrator and subject
to Applicable  Laws, a  Nonqualified  Option may be  transferred by the Optionee
pursuant  to a  qualified  domestic  relations  order (as  defined by the Code).
However,  any Nonqualified Option so transferred shall continue to be subject to
all the terms and conditions  contained in the Option Agreement  evidencing such
Option.

9. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION, DISSOLUTION, MERGER OR ASSET SALE

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

     9.2 Dissolution or Liquidation. In the event of the proposed dissolution or
liquidation of the Company, to the extent that an Option has not been previously
exercised,  it will  terminate  immediately  prior to the  consummation  of such
proposed action.  The Administrator  may, in the exercise of its sole discretion
in such instances, declare that any Option shall terminate as of a date fixed by
the Administrator and give each Optionee the right to exercise his or her Option
as to all or any part of the Common Stock covered  thereby,  including shares as
to which the Option would not otherwise be exercisable.

     9.3 Merger or Sale of Assets.  In the event of a merger of the Company with
or into another  corporation,  or the sale of substantially all of the assets of
the Company,  each outstanding  Option shall be assumed or an equivalent  option
substituted  by the  successor  corporation  or any  Affiliate of the  successor
corporation.  In the event that the successor  corporation  refuses to assume or
substitute  for the Option,  the  Optionee  shall have the right to exercise the
Option as to all of the shares covered thereby,  including shares as to which it
would not  otherwise  be  exercisable.  If an Option is  exercisable  in lieu of
assumption  or  substitution  in the  event of a merger or sale of  assets,  the
Administrator  shall  notify  the  Optionee  that  the  Option  shall  be  fully
exercisable for a period of less than 15 days from the date of such notice,  and
the Option shall  terminate upon the expiration of the period  specified in such
notice.

     9.4 Fractional  Shares. No fractional share of Common Stock shall be issued
under the Plan on account of any adjustment  under any provision of this section
9.

10. DATE OF GRANT AND EXERCISE

     10.1  Date of  Grant.  The date of grant of an  Option  shall  be,  for all
purposes,  the date on which the Administrator  makes the determination to grant
such Option,  or such other later date as is  determined  by the  Administrator.
Notice  of the  determination  shall  be  provided  to each  Optionee  within  a
reasonable time after the date of such grant.

     10.2 Date of Exercise.  An Option shall be deemed to be exercised  when the
Secretary  of the Company  receives  written  notice  from the  Optionee of such
exercise,  payment of the  exercise  price  determined  pursuant  to section 6.4
hereof  and  set  forth  in  the  Option  Agreement,  and  all  representations,
indemnifications and documents reasonably requested by the Administrator.

     10.3 Issuance of Share  Certificates.  The Company shall not be required to
issue or deliver any  certificate  or  certificates  for shares of Common  Stock
purchased  upon  the  exercise  of  any  Option  or  portion  thereof  prior  to
fulfillment of all of the following conditions:

     (a) the admission of such shares to listing on all stock exchanges on which
such class of stock is then listed;

     (b) the  completion  of any  registration  or other  qualification  of such
shares under any state or federal law, or under the rule or  regulations  of the
Securities and Exchange  Commission or any other  governmental  regulatory  body
which the  Administrator  shall, in its absolute  discretion,  deem necessary or
advisable;

     (c) the  obtaining  of any  approval or other  clearance  from any state or
federal  governmental  agency  which the  Administrator  shall,  in its absolute
discretion, determine to be necessary or advisable;

     (d) the lapse of such  reasonable  period of time following the exercise of
the  option as the  Administrator  may  establish  from time to time  solely for
reasons of administrative convenience; and

     (e) the receipt by the Company of full payment for such  shares,  including
payment of any applicable withholding tax.

     10.4 Rights of  Optionees  and  Beneficiaries.  The  Company  shall pay all
amounts payable hereunder only to the Optionee or beneficiaries entitled thereto
pursuant to the Plan.  The Company shall not be liable for the debts,  contracts
or engagements of any optionee or his or her  beneficiaries,  and rights to cash
payments  under  the  Plan  may not be  taken  in  execution  by  attachment  or
garnishment, or by any other legal or equitable proceeding while in the hands of
the Company.

     10.5 Government Regulations. The Plan, and the grant hereunder and exercise
of Options and the issuance  and  delivery of shares of Common Stock  subject to
Options,  shall be subject to compliance  with all applicable  federal and state
laws,  rules and  regulations  (including  but not  limited to state and federal
securities  laws) and federal margin  requirements  and to such approvals by any
listing,  regulatory or governmental authority as may, in the opinion of counsel
for the  Company,  be  necessary  or  advisable  in  connection  therewith.  Any
securities  delivered under the Plan shall be subject to such restrictions,  and
the person acquiring such securities shall, if requested by the Company, provide
such  assurances  and  representations  to the  Company as the  Company may deem
necessary  or  desirable  to  assure   compliance  with  all  applicable   legal
requirements.

11. LIABILITY OF COMPANY

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

     11.2  Grants in  Excess  of  Available  Shares.  If shares of Common  Stock
covered  by an Option  exceeds,  as of the date of grant,  the  number of shares
which may be issued under the Plan without additional stockholder approval, such
Option  shall be void with  respect to such excess  shares,  unless  stockholder
approval of an amendment sufficiently increasing the number of shares subject to
the Plan is timely obtained in accordance with section 12.2(c) hereof.

12. EFFECTIVE DATE; AMENDMENT AND TERMINATION

     12.1  Effective  Date.  The Plan shall be  effective  as of the date of the
Board's adoption of the Plan; provided that the Plan shall have been approved by
the stockholders of the Company within twelve months before or after the date of
adoption  by the  Board.  Options  may be  granted  but not  exercised  prior to
stockholder  approval of the Plan. If any Options are so granted and stockholder
approval  shall  not have  been  obtained  within  twelve  months of the date of
adoption of the Plan by the Board, such Options shall terminate retroactively as
of the date they were granted.

     12.2 Amendment.

     (a) The Plan shall  terminate  automatically  as of the  earlier of (1) the
sale of all  shares  available  for  issuance  under the Plan,  (2) the close of
business on the day preceding the tenth  anniversary date of its adoption by the
Board, or (3) earlier as provided below.

     (b) The Administrator may at any time suspend,  amend or terminate the Plan
and may, with the consent of an Optionee,  make such  modifications of the terms
and conditions of such Optionee's  Option as it shall deem advisable.  No Option
may be granted during any suspension of the Plan or after such termination.  The
amendment,  suspension or termination of the Plan shall not, without the consent
of the  Optionee  affected  thereby,  alter or impair any rights or  obligations
under any Option  theretofore  granted  under the Plan. No Option may be granted
during any period of suspension nor after termination of the Plan.

     (c) The Company shall obtain stockholder  approval of any Plan amendment to
the extent  necessary  or desirable to comply with Rule 16b-3 under the Exchange
Act or  section  422 of the  Code (or any  successor  rule or  statute  or other
Applicable Law,  including the  requirements of any exchange or quotation system
on which the Common Stock is listed or quoted).  Such stockholder  approval,  if
required,  shall  be  obtained  in such a  manner  and to such a  degree  as the
Administrator determines is required by Applicable Laws.

13. MISCELLANEOUS

     13.1 Privileges of Stock Ownership;  Investment  Intent.  An Optionee shall
not be entitled to the  privilege of stock  ownership as to any shares of Common
Stock not actually issued to the Optionee.  Upon exercise of an Option at a time
when there is not in effect under the Securities  Act a  Registration  Statement
relating to the Common  Stock  issuable  upon  exercise or payment  therefor and
available for delivery a Prospectus meeting the requirements of section 10(a)(3)
of the Securities  Act, the Optionee  shall  represent and warrant in writing to
the Company that the shares  purchased are being acquired for investment and not
with a view to the distribution thereof.

     13.2 Reports to Optionees. The Company shall furnish to each Optionee under
the Plan the Company's annual report and such other periodic reports, if any, as
are disseminated by the Company in the ordinary course to its stockholders.

     13.3 Legend Conditions.

     (a) In order to enforce any  restrictions  imposed upon Common Stock issued
upon  exercise  of an Option or to which such Common  Stock may be subject,  the
Administrator  may  cause  a  legend  or  legends  to be  placed  on  any  share
certificates  representing such Common Stock, which legend or legends shall make
appropriate  reference to such  restrictions,  including,  but not limited to, a
restriction  against  sale of such Common Stock for any period of time as may be
required by Applicable  Laws. If any restriction  with respect to which a legend
was placed on any  certificate  ceases to apply to Common Stock  represented  by
such certificate,  the owner of the Common Stock represented by such certificate
may require the Company to cause the issuance of a new  certificate  not bearing
the legend.

     (b)  Additionally,  and not by way of  limitation,  the  Administrator  may
impose such  restrictions  on any Common Stock issued pursuant to the Plan as it
may deem  advisable,  including,  without  limitation,  restrictions  under  the
requirements of any stock exchange upon which Common Stock is then traded.

     13.4 Use of Proceeds. Proceeds realized pursuant to the exercise of Options
shall constitute general funds of the Company.

     13.5  Governing Law. The Plan shall be governed by, and construed in accor-
dance with the laws of the State of Oregon  (without  giving effect to conflicts
of law principles). * * *