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                                                                   Exhibit 10.34
                          SUMMIT MEDICAL SYSTEMS INC.

                      NONSTATUTORY STOCK OPTION AGREEMENT

          This Nonstatutory Stock Option Agreement is made this  31st day of
December 1996 (the "Effective Date"), by and between Summit Medical Systems,
Inc. (the "Company") and Donald F. Fortin, M.D. (the "Employee").

          WHEREAS, the Company and Employee desire to enter into an Employment
Agreement of even date herewith (the "Employment Agreement"), pursuant to which
Employee would serve as Vice-President and Chief Scientific Officer of the
Company; and

          WHEREAS, an option to purchase shares of the Company's common stock is
an essential inducement for Employee to enter into the Employment Agreement.

          NOW THEREFORE, in consideration of the premises and of the mutual
covenants herein contained, the parties hereto agree as follows:
 
     1.   Grant of Option.  The Company hereby grants to the Employee an option
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(the "Option") to purchase 300,000 shares of the Company's Common Stock on the
terms and conditions set forth herein.

     2.   Purchase Price.  The purchase price of the Company's Common Stock
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shall be $7.50 per share (subject to adjustment as noted below).

     3.   Nonstatutory Option.  The Option is not intended to be an incentive
          -------------------                                                
stock option within the meaning of Section 422 of the Internal Revenue Code of
1986, as amended.

     4.   Exercise.  The holder hereof may exercise this Option for up to
          --------                                                       
300,000 shares of the Company's Common Stock in cumulative installments, each
exercisable in whole or in part, at any time from the date first exercisable up
to ten (10) years from the Effective Date (the "Expiration Date"), as follows:

<TABLE>
<CAPTION>
                                           Number of shares as to
          Date First Exercisable           which Option is exercisable
          ----------------------           ---------------------------
          <S>                              <C>
          Effective Date                            45,000 
          December 31, 1997                         85,000 
          December 31, 1998                         85,000 
          December 31, 1999                         85,000  
 
</TABLE>
<PAGE>
 
The Option may be exercised only while the Employee is actively employed by the
Company, or alternatively as provided in Section 6, dealing with termination of
employment.

     5.   Transferability. This Option is not transferable except by will or the
          ---------------                                                       
laws of descent and distribution, or with the prior written consent of the
Company.

     6.   Termination of Employment.  The holder hereof shall have the right to
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exercise the Option only to the extent of the full number of shares of the
Company's Common Stock the Employee was entitled to purchase under the Option on
the effective date of termination of the Employment Agreement; provided,
however, that if Employee's employment with the Company terminates due to
Employee's death, disablement or without cause in accordance with Sections
9.1(a), (b) or (d), respectively, of the Employment Agreement, the Option shall
be exercisable as to all 300,000 shares of the Company's Common Stock
immediately upon the effective date of such termination, notwithstanding Section
4 above.  In the event of termination of Employee's employment with the Company
for any and all reasons, the Option may be exercised by the holder hereof until
the Expiration Date, subject to the extent provided in this Section 6.

     7.   Service.  This Agreement shall in no way restrict the right of the
          -------                                                           
Company or Summit Affiliate to terminate Employee's employment at any time.

     8.   Method of Exercise.  The Option may be exercised, subject to the terms
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and conditions of this Agreement by written notice to the Company.  The notice
shall be in the form attached to this Agreement and will be accompanied by
payment by check (bank check, certified check or personal check) or by delivery
to the Company for cancellation shares of Common Stock having a Market Price
(defined in Section 11(f) below) equal to the full purchase price of the shares
to be issued on the date the notice of exercise is received by the Company, and
in the event of an exercise by an executor or administrator or other person
authorized under Section 5, appropriate proof of the right of such person to
exercise the Option. The Company will issue and deliver certificates
representing the number of shares purchased under the Option, registered in the
name of the holder hereof as soon as practicable after receipt of the notice.

     9.   Withholding. In any case where withholding is required or advisable
          -----------                                                        
under federal, state or local law in connection with any exercise by the
Employee hereunder, Employee may elect to (i) authorize the Company to withhold
appropriate amounts from amounts payable to the Employee, (ii) remit to the
Company an amount equal to such appropriate withholding, or (iii) have the
Company withhold a portion of the shares of Common Stock otherwise to be

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delivered upon exercise of such option having a Market Price equal to the amount
of such appropriate withholding.

     10.  Registration.  Company shall use commercially reasonable efforts to
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register the shares of Common Stock that Employee obtains pursuant to an
exercise of the Option on a registration statement on Form S-8 (or any successor
form) and the Company shall use commercially reasonable efforts to maintain the
effectiveness of such registration statement for so long as any portion of the
Option remains exercisable by Employee hereunder.

     11.  Anti-Dilution Adjustments.  The above provisions are, however, subject
          -------------------------                                             
to the following:

          (a)  The purchase price set forth in Section 2 above shall, from and
     after the date of issuance of this Option, be subject to adjustment from
     time to time as hereinafter provided.  Upon each adjustment of the purchase
     price, the holder hereof shall thereafter be entitled to purchase, at the
     purchase price resulting from such adjustment, the number of shares
     obtained by multiplying the purchase price in effect immediately prior to
     such adjustment by the number of shares purchasable pursuant hereto immedi
     ately prior to such adjustment and dividing the product thereof by the
     purchase price resulting from such adjustment.

          (b)  In case the Company shall at any time subdivide its outstanding
     shares of Common Stock into a greater number of shares, including any
     dividend declared to effect a subdivision of the outstanding shares of
     Common Stock, the purchase price in effect immediately prior to such
     subdivision shall be proportionately reduced, and conversely, in case the
     outstanding shares of Common Stock of the Company shall be combined into a
     smaller number of shares, the purchase price in effect immediately prior to
     such combination shall be proportionately increased.

          (c)  If any capital reorganization or reclassification of the capital
     stock of the Company, or consolidation or merger of the Company with
     another corporation, or the sale of all or substantially all of its assets
     to another corporation shall be effected in such a way that holders of
     Common Stock shall be entitled to receive stock, securities or assets with
     respect to or in exchange for Common Stock, then, as a condition of such
     reorganization, reclassification, consolidation, merger or sale, lawful and
     adequate provision shall be made whereby the holder hereof shall thereafter
     have the right to purchase and receive, upon the basis and upon the terms
     and conditions specified in this Option and in lieu of the shares of Common
     Stock of the 

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     Company immediately theretofore purchasable and receivable upon the
     exercise of the rights represented hereby, such shares of stock, securities
     or assets as may be issued or payable with respect to or in exchange for a
     number of outstanding shares of such Common Stock equal to the number of
     shares of such stock immediately theretofore purchasable and receivable
     upon the exercise of the rights represented hereby had such reorganization,
     reclassification, consolidation, merger or sale not taken place, and in any
     such case appropriate provision shall be made with respect to the rights
     and interests of the holder hereof to the end that the provisions hereof
     (including without limitation provisions for adjustments of the purchase
     price and of the number of shares purchasable upon the exercise of this
     Option) shall thereafter be applicable, as nearly as may be, in relation to
     any shares of stock, securities or assets thereafter deliverable upon the
     exercise hereof. The Company shall not effect any such consolidation,
     merger or sale, unless prior to the consummation thereof the successor
     corporation (if other than the Company) resulting from such consolidation
     or merger or the corporation purchasing such assets shall assume, by
     written instrument executed and mailed to the registered holder hereof at
     the last address of such holder appearing on the books of the Company, the
     obligation to deliver to such holder such shares of stock, securities or
     assets as, in accordance with the foregoing provisions, such holder may be
     entitled to purchase.

          (d)  Upon any adjustment of the purchase price, then and in each such
     case the Company shall give written notice thereof, by first-class mail,
     postage prepaid, addressed to the registered holder of this Option at the
     address of such holder as shown on the books of the Company, which notice
     shall state the purchase price resulting from such adjustment and the
     increase or decrease, if any, in the number of shares purchasable at such
     price upon the exercise of this Option, setting forth in reasonable detail
     the method of calculation and the facts upon which such calculation is
     based.

          (e)  If any event occurs as to which the other provisions of this
     Section 11 are not strictly applicable or if strictly applicable would not
     fairly protect the purchase rights of the holder of this Option or of
     Common Stock in accordance with the essential intent and principles of such
     provisions, then this Option shall be adjusted in the application of such
     provisions, in accordance with such essential intent and principles, so as
     to protect such purchase rights as aforesaid.

          (f)  No fractional shares of Common Stock shall be issued upon the
     exercise of this Option, but, instead of any fraction of a share which
     would otherwise be issuable, the Company shall pay a cash adjustment (which
     may 

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     be effected as a reduction of the amount to be paid by the holder hereof
     upon such exercise) in respect of such fraction in an amount equal to the
     same fraction of the Market Price per share of Common Stock on the date of
     the written notice of exercise required by Section 8 above. "Market Price"
     for purposes of this Section 11(f), Sections 8 and 9 hereof, and for the
     purpose of determining the option purchase price shall mean, if the Common
     Stock is traded on a securities exchange or on the Nasdaq National Market,
     the closing price of the Common Stock on such exchange or the Nasdaq
     National Market, or, if the Common Stock is otherwise traded in the over-
     the-counter market, the closing bid price, in each case averaged over a
     period of 5 consecutive business days prior to the date as of which "Market
     Price" is being determined. If at any time the Common Stock is not traded
     on an exchange or the Nasdaq National Market, or otherwise traded in the
     over-the-counter market, the "Market Price" shall be deemed to be the
     higher of (i) the book value thereof as determined by any firm of
     independent public accountants of recognized standing selected by the Board
     of Directors of the Company as of the last day of any month ending within
     60 days preceding the date as of which the determination is to be made, or
     (ii) the fair value thereof determined in good faith by the Board of
     Directors of the Company as of a date which is within 15 days of the date
     as of which the determination is to be made.

     12.  Common Stock.  As used herein, the term "Common Stock" shall mean and
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include the Company's presently authorized Common Stock and shall also include
any capital stock of any class of the Company hereafter authorized which shall
not be limited to a fixed sum or percentage in respect of the rights of the
holders thereof to participate in dividends or in the distribution of assets
upon the voluntary or involuntary liquidation, dissolution or winding up of the
Company; provided that the shares purchasable pursuant to this Option shall
include shares designated as Common Stock of the Company on the date of original
issue of this Option or, in the case of any reclassification of the outstanding
shares thereof, the stock, securities or assets provided for in Section 11(c)
above.

     13.  No Voting Rights.  This Option shall not entitle the holder hereof to
          ----------------                                                     
any voting rights or other rights as a shareholder of the Company.

     14.  Optional Conversion.
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          (a)  In addition to and without limiting the rights of the holder of
     this Option under the terms of this Option, such holder shall have the
     right (the "Conversion Right") to convert this Option or any portion
     thereof into shares of Common Stock as provided in this Section 14 at any
     time from and 

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     after the Effective Date and to and including the Expiration Date, subject
     to the restrictions set forth in Section 4. Upon exercise of the Conversion
     Right with respect to a particular number of shares subject to this Option
     (the "Converted Option Shares"), the Company shall deliver to the holder of
     this Option, without payment by the holder of any exercise price or any
     cash or other consideration, that number of shares of Common Stock equal to
     the quotient obtained by dividing the Net Value (as hereinafter defined) of
     the Converted Option Shares by the Market Price of a single share of Common
     Stock, determined in each case as of the close of business on the
     Conversion Date (as hereinafter defined). The "Net Value" of the Converted
     Option Shares shall be determined by subtracting the aggregate option
     purchase price of the Converted Option Shares from the Market Price of the
     Converted Option Shares. Notwithstanding anything in this Section 14 to the
     contrary, the Conversion Right cannot be exercised with respect to a number
     of Converted Option Shares having a Net Value below $100. No fractional
     shares shall be issuable upon exercise of the Conversion Right, and if the
     number of shares to be issued in accordance with the foregoing formula is
     other than a whole number, the Company shall pay to the holder of this
     Option an amount in cash equal to the fair market value of the resulting
     fractional share.

          (b)  The Conversion Right may be exercised by the holder of this
     Option by the surrender of this Option at the principal office of the
     Company together with a written statement specifying that the holder
     thereby intends to exercise the Conversion Right and indicating the number
     of shares subject to this Option which are being surrendered (referred to
     in paragraph (a) above as the Converted Option Shares) in exercise of the
     Conversion Right. Such conversion shall be effective upon receipt by the
     Company of this Option together with the aforesaid written statement, or on
     such later date as is specified therein (the "Conversion Date"), but not
     later than the Expiration Date. Certificates for the shares of Common Stock
     issuable upon exercise of the Conversion Right, together with a check in
     payment of any fractional share and, in the case of a partial exercise, a
     new option evidencing the shares remaining subject to this Option, shall be
     issued as of the Conversion Date and shall be delivered to the holder of
     this Option within 7 days following the Conversion Date.

     15.  Governing Law.  All questions concerning this Option will be governed
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and interpreted and enforced in accordance with the internal law of the State of
Minnesota without regard for principles of conflict of law.

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                                        SUMMIT MEDICAL SYSTEMS, INC.



ACCEPTED:                               By____________________________________


                                          Its_________________________________
_______________________________
Donald F. Fortin, M.D.

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                          SUMMIT MEDICAL SYSTEMS, INC.
                          ----------------------------

                       NOTICE OF EXERCISE OF STOCK OPTION
                       ----------------------------------


To:  Board of Directors
     SUMMIT MEDICAL SYSTEMS, INC.

     I hereby exercise my Option dated __________ to purchase _____ shares of
$.01 par value common stock of the Company at the option exercise price of
$__________ per share.  Enclosed is a certified or cashier's check in the total
amount of $__________, or payment in such other form as the Company has
specified.
     I request that my shares be issued in my name as follows:

     ________________________________________________________________________
               (Print your name in the form in which you wish to
                          have the shares registered)

     ________________________________________________________________________
                            (Social Security Number)

     ________________________________________________________________________
                              (Street and Number)
                                        
     ________________________________________________________________________
          (City)                                       (State)     (Zip Code)

     Dated:  __________, 19__.
                                    Signature:_______________________________