Exhibit 10.4(b)


                             WILLIAMS CONTROLS, INC.
                             1993 STOCK OPTION PLAN




         I. Purposes of and Benefits Under the Plan. This 1993 Stock Option Plan
            ----------------------------------------
(the "Plan") is intended to encourage stock ownership by employees, officers and
directors  (whether or not they are  employees) of and  consultants  to WILLIAMS
CONTROLS,  INC., its divisions,  Subsidiary corporations and Parent corporations
(the  "Corporation"),  so that they may  acquire or increase  their  proprietary
interest  in  the  Corporation,  to  (i)  induce  qualified  persons  to  become
employees,  officers or directors of or  consultants  to the  Corporation;  (ii)
reward  employees,   directors,   and  consultants  for  past  services  to  the
Corporation  and (iii)  encourage  such  persons  to remain in the  employ of or
associated with the Corporation and to put forth maximum efforts for the success
of the business of the Corporation.

         It is  intended  that  options  granted by the  Committee  pursuant  to
Section 6(a) of this Plan shall constitute "incentive stock options" ("Incentive
Stock  Options")  within the  meaning of Section  422 of the Code,  and  options
granted by the Committee  pursuant to Section 6(b) of this Plan shall constitute
"non-qualified stock options" ("Non-qualified Stock Options").

     1. Definitions. As used in this Plan, the following words and phrases shall
        -----------
have the meanings indicated:

          (a) "Board" means the Board of Directors of the Corporation.

          (b) "Code" means  Internal  Revenue Code of 1986, as amended from time
     to time.

          (c)  "Committee"  means the  Compensation  Committee  appointed by the
     Board, if one has been appointed.  If no Committee has been appointed,  the
     term "Committee" shall mean the Board.

          (d) "Common Stock" mean the Corporation's $.01 par value common stock.

          (e)  "Disability"  means a  Recipient's  inability  to  engage  in any
     substantial  gainful  activity  by  reason  of any  medically  determinable
     physical  or mental  impairment  that can be expected to result in death or
     that has lasted or can be expected to last for a  continuous  period of not
     less than 12 months,  or such other meaning ascribed in Section 22(e)(3) or
     any  successor  provision of the Code.  If the  Recipient  has a disability
     insurance  policy,  the  term  "Disability"  shall be as  defined  therein;
     provided that said definition is not inconsistent with the meaning ascribed
     in Section 22(e)(3) or any successor provision of the Code.

          (f) "Exchange Act" means  Securities  Exchange Act of 1934, as amended
     from time to time.

          (g) "Fair Market  Value" per share as of a  particular  date means the
     last sale price of the Corporation's Common Stock as reported on a national
     securities  exchange  or on the NASDAQ  National  Market  System or, if the
     quotation for the last sale reported is not available for the Corporation's
     Common  Stock,  the  average  of the  closing  bid and asked  prices of the
     Corporation's  Common  Stock as  reported  by NASDAQ  or on the  electronic
     bulletin board or, if none,  the National  Quotation  Bureau,  Inc.'s "Pink
     Sheets" or, if such quotations are unavailable, the value determined by the
     Committee in accordance  with its  discretion  in making a bona fide,  good
     faith  determination  of fair  market  value.  Fair  Market  Value shall be
     determined  without  regard to any  restriction  other  than a  restriction
     which, by its terms, never will lapse.

 
                                      1
<PAGE>

          (h) "Option" means either an Incentive Stock Option or a Non-qualified
     Stock Option, or either or both of them.

          (i) "Option  Price" means the  purchase  price of the shares of Common
     Stock  covered by an Option  determined  in  accordance  with  Section 7(c)
     hereunder.

          (j) "Parent" means any corporation which is a "parent  corporation" as
     defined in Section 424(e) of the Code, with respect to the Corporation.

          (k) "Plan" means this 1993 Stock Option Plan.

          (l) "Recipient" means any person granted an Option hereunder.

          (m) "Securities Act" means the Securities Act of 1933, as amended from
     time to time.

          (n)  "Subsidiary"   means  any  corporation  which  is  a  "subsidiary
     corporation"  as defined in Section 424(f) of the Code, with respect to the
     Corporation.

         2.    Administration.
               --------------

          (a) The Plan shall be  administered  by the  Committee.  The Committee
     shall have the authority in its discretion, subject to and not inconsistent
     with the express  provisions  of the Plan,  to  administer  the Plan and to
     exercise all the powers and authorities either specifically conferred under
     the Plan or  necessary  or  advisable  in the  administration  of the Plan,
     including the authority to grant Options;  to determine which Options shall
     be Incentive Stock Options and which shall be Non-qualified  Stock Options;
     to determine the vesting schedules and other restrictions, if any, relating
     to Options;  to determine  the Option  Price;  to determine  the persons to
     whom,  and the  time or times  at  which,  Options  shall  be  granted;  to
     determine  the number of shares to be covered by each Option;  to determine
     Fair Market Value per share; to interpret the Plan; to prescribe, amend and
     rescind rules and regulations  relating to the Plan; to determine the terms
     and  provisions  of the Option  agreements  (which  need not be  identical)
     entered into in connection with Options granted under the Plan; and to make
     all  other   determinations   deemed   necessary  or   advisable   for  the
     administration  of the Plan.  The  Committee may delegate to one or more of
     its members or to one or more agents such  administrative  duties as it may
     deem  advisable,  and the  Committee or any person to whom it has delegated
     duties as aforesaid  may employ one or more  persons to render  advice with
     respect to any  responsibility  the Committee or such person may have under
     the Plan.

          (b) Options  granted under the Plan shall be evidenced by duly adopted
     resolutions  of the  Committee  included  in the  minutes of the meeting at
     which they are adopted or in a unanimous written consent.

                                       2
<PAGE>


          (c) With respect to persons subject to Section 16 of the Exchange Act,
     transactions  under this Plan are  intended to comply  with all  applicable
     conditions  of Rule 16b-3 or any  successor  regulation  under the Exchange
     Act. To the extent any  provision  of this Plan or action by the  Committee
     fails to so  comply,  it shall be  deemed  null  and  void,  to the  extent
     permitted by law and deemed advisable by the Committee.  Any Option granted
     hereunder  which would subject or subjects the Recipient to liability under
     Section 16(b) of the Exchange Act is void ab initio as if it had never been
     granted.

          (d) No member of the  Committee  or the Board  shall be liable for any
     action taken or  determination  made in good faith with respect to the Plan
     or any Option granted hereunder.

         3.       Eligibility.
                  -----------

          (a) Subject to certain limitations  hereinafter set forth, Options may
     be granted to employees,  officers and  directors  (whether or not they are
     employees)  of and  consultants  to the  Corporation.  In  determining  the
     persons to whom  Options  shall be  granted  and the number of shares to be
     covered by each Option, the Committee shall take into account the duties of
     the respective  persons,  their present and potential  contributions to the
     success of the  Corporation  and such other factors as the Committee  shall
     deem relevant to accomplish the purposes of the Plan.

          (b) A Recipient shall be eligible to receive more than one grant of an
     Option  during  the term of the  Plan,  on the  terms  and  subject  to the
     restrictions herein set forth.

         4.       Stock Reserved.
                  --------------

          (a) The stock subject to Options  hereunder  shall be shares of Common
     Stock.  Such shares,  in whole or in part,  may be authorized  but unissued
     shares or shares  that  shall  have been or that may be  reacquired  by the
     Corporation.  The  aggregate  number of shares of Common  Stock as to which
     Options  may be granted  from time to time  under the Plan (the  "Available
     Shares")  initially shall not exceed 3,000,000 shares;  provided,  however,
     that the  number  of  Available  Shares  automatically  shall  be  adjusted
     annually on January 1 to a number  equal to 4.3% of the number of shares of
     Common  Stock  of  the  Corporation  outstanding  on  December  31  of  the
     immediately  preceding year.  Notwithstanding  the foregoing,  no more than
     3,000,000  shares  of  Common  Stock  shall be  available  for the grant of
     Incentive  Stock  Options  under the Plan.  The number of Available  Shares
     shall be subject to adjustment as provided in Section 7(i) hereof.

          (b) If any outstanding Option under the Plan for any reason expires or
     is terminated  without  having been exercised in full, the shares of Common
     Stock  allocable  to the  unexercised  portion of such Option  shall become
     available for subsequent  grants of Options under the Plan, unless the Plan
     shall have been terminated.

                                       3
<PAGE>

         5.       Stock Options
                  -------------

          (a) Incentive Stock Options.

               (1) Options granted pursuant to this Section 6(a) are intended to
          constitute  Incentive  Stock  Options  and  shall  be  subject  to the
          following  special  terms and  conditions,  in addition to the general
          terms and conditions  specified in Section 7 hereof. Only employees of
          the Corporation  (as the term  "employees" is defined for the purposes
          of the Internal  Revenue Code) shall be entitled to receive  Incentive
          Stock Options.

               (2) The aggregate  Fair Market Value  (determined  as of the date
          the  Incentive  Stock Option is granted) of the shares of Common Stock
          with respect to which  Incentive  Stock Options granted under this and
          any  other  plan  of the  Corporation  or any  Parent  corporation  or
          Subsidiary  corporation  are  exercisable  for  the  first  time by an
          Recipient during any calendar year may not exceed the amount set forth
          in Section  422(d) of the Code,  as amended from time to time.  On the
          date this Plan was  adopted,  the  maximum  dollar  amount as to which
          Incentive Stock Options could first become exercisable in any calendar
          year was $100,000.

               (3) Incentive  Stock Options granted under this Plan are intended
          to satisfy all  requirements for incentive stock options under Section
          422  of  the  Code  and  the  Treasury  Regulations   thereunder  and,
          notwithstanding  any other  provision  of this Plan,  the Plan and all
          Incentive  Stock Options  granted under it shall be so construed,  and
          all contrary  provisions  shall be so limited in scope and effect and,
          to the extent they cannot be so limited they shall be void,  except as
          otherwise provided in Section 14 hereof.

          (b)  Non-qualified  Stock Options.  Options  granted  pursuant to this
     Section 6(b) are intended to  constitute  Non-qualified  Stock  Options and
     shall be subject  only to the general  terms and  conditions  specified  in
     Section 7 hereof.

         6. Terms and Conditions of Options. Each Option granted pursuant to the
            -------------------------------
Plan shall be evidenced by a written Option  agreement  between the  Corporation
and the Recipient, which agreement shall be in substantially the form of Exhibit
A hereto as modified from time to time by the Committee in its  discretion,  and
which shall comply with and be subject to the following terms and conditions:

          (a) Number of Shares.  Each Option agreement shall state the number of
     shares of Common Stock covered by the Option.

          (b) Type of Option. Each Option agreement shall specifically  identify
     the portion,  if any, of the Option which  constitutes  an Incentive  Stock
     Option and the portion,  if any, which  constitutes a  Non-qualified  Stock
     Option.

          (c) Option Price.  Each Option agreement shall state the Option Price,
     which shall be determined  by the  Committee  subject only to the following
     restrictions:

               (1) The Option Price of any  Incentive  Stock Option shall be not
          less than 100% of the Fair Market Value per share on the date of grant
          of the Option;  provided,  however,  that any  Incentive  Stock Option
          granted under the Plan to a person owning more than ten percent of the
          total  combined  voting power of the Common Stock shall have an Option
          Price of not less than 110% of the Fair Market  Value per share on the
          date of grant of the Incentive Stock Option.

                                       4
<PAGE>

               (2) Any  Non-qualified  Stock Option granted under the Plan shall
          be at a price no less than 80% of the Fair  Market  Value per share on
          the date of grant thereof.

               (3) The Option Price shall be subject to  adjustment  as provided
          in Section 7(i) hereof.

          (d) Term of  Option.  Each  Option  agreement  shall  state the period
     during  and  times at which  the  Option  shall be  exercisable;  provided,
     however:

               (1) The date on which the Committee adopts a resolution expressly
          granting an Option shall be considered the day on which such Option is
          granted,  unless  a  future  date  is  specified  in  the  resolution;
          provided,  however, the Recipient shall have no rights under the grant
          until the Recipient has executed an Option  agreement  with respect to
          such Option.

               (2)  Except as  further  restricted  in  paragraph  7(d)(3),  the
          exercise  period  shall not exceed ten years from the date of grant of
          the Option.

               (3) Incentive  Stock Options granted to a person owning more than
          ten percent of the total combined  voting power of the Common Stock of
          the Corporation shall be for no more than five years.

               (4) The  Committee  shall have the  authority  to  accelerate  or
          extend the  exercisability of any outstanding  Option at such time and
          under  such  circumstances  as  it,  in  its  sole  discretion,  deems
          appropriate.  No exercise  period may be extended to increase the term
          of the Option beyond ten years from the date of the grant.

               (5) The exercise  period shall be subject to earlier  termination
          as provided in Sections 7(f) and 7(g) hereof and,  furthermore,  shall
          be terminated  upon  surrender of the Option by the holder  thereof if
          such surrender has been authorized in advance by the Committee.

          (e) Method of Exercise and Medium and Time of Payment.

               (1) An Option may be  exercised  as to any or all whole shares of
          Common Stock as to which it then is exercisable.

               (2) Each  exercise  of an Option  granted  hereunder,  whether in
          whole or in part,  shall be by written  notice to the secretary of the
          Corporation designating the number of shares as to which the Option is
          being  exercised,  and shall be  accompanied by payment in full of the
          Option Price for the number of shares so designated, together with any
          written statements required by any applicable securities laws.

               (3) The Option  Price shall be paid in cash,  in shares of Common
          Stock  having a Fair Market  Value  equal to such  Option  Price or in
          property or in a combination of cash, shares and property and, subject
          to approval of the Committee,  may be effected in whole or in part (A)
          with monies received from the Corporation at the time of exercise as a
          compensatory  cash  payment,  or (B)  with  monies  borrowed  from the
          Corporation  pursuant to repayment  terms and  conditions  as shall be
          determined  from  time to time by the  Committee,  in its  discretion,
          separately  with  respect  to each  exercise  of an  Option  and  each
          Recipient;  provided,  however,  that  each such  method  and time for
          payment  and each  such  borrowing  and the terms  and  conditions  of
          repayment  shall be permitted by and be in compliance  with applicable
          law.

                                       5
<PAGE>


               (4) The Committee shall have the sole and absolute  discretion to
          determine  whether or not property other than cash or Common Stock may
          be used to purchase the shares of Common Stock  hereunder  and, if so,
          to determine the value of the property received.

               (5)  Applicable  withholding  taxes  shall be paid in the  manner
          specified by Section 8 hereof.

          (f)  Termination.  Except as  provided  herein,  an Option  may not be
     exercised unless the Recipient then is an employee,  officer or director of
     or  consultant  to the  Corporation  or a  Subsidiary  of or  Parent to the
     Corporation,  and unless the  Recipient  has  remained  continuously  as an
     employee, officer or director of or consultant to the Corporation since the
     date of grant of the Option.

               (1)  If  the  Recipient  ceases  to be an  employee,  officer  or
          director of, or  consultant  to, the  Corporation  or a Subsidiary  or
          Parent to the Corporation  (other than by reason of death,  Disability
          or retirement),  other than for cause, all Options theretofore granted
          to such Recipient but not theretofore  exercised shall terminate three
          months after the date the Recipient ceased to be an employee,  officer
          or director of, or consultant to, the Corporation.

               (2) Nothing in the Plan or in any Option granted  hereunder shall
          confer  upon an  individual  any right to continue in the employ of or
          other  relationship  with the Corporation or interfere in any way with
          the right of the  Corporation  to terminate  such  employment or other
          relationship between the individual and the Corporation.

          (g) Death, Disability or Retirement of Recipient. If a Recipient shall
     die while an  employee,  officer  or  director  of or a  consultant  to the
     Corporation,  or if the Recipient's employment,  officer or director status
     or  consulting  relationship,  shall  terminate by reason of  Disability or
     retirement,  all Options theretofore granted to such Recipient,  whether or
     not otherwise  exercisable,  unless earlier  terminated in accordance  with
     their terms, may be exercised by the Recipient or by the Recipient's estate
     or by a person who acquired  the right to exercise  such Options by bequest
     or  inheritance  or otherwise by reason of the death or  Disability  of the
     Recipient,  at any time within one year after the date of death, Disability
     or  retirement of the  Recipient;  provided,  however,  that in the case of
     Incentive  Stock  Options  such  one-year  period shall be limited to three
     months in the case of retirement.

          (h)  Transferability  Restriction.  (1) Options granted under the Plan
     shall not be transferable  other than by will or by the laws of descent and
     distribution or pursuant to a qualified domestic relations order as defined
     by the Code or Title I of the Employee  Retirement  Income  Security Act of
     1974,  or the  rules  thereunder.  Options  may be  exercised,  during  the
     lifetime of the Recipient, only by the Recipient and thereafter only by his
     legal representative.

               (2) Any attempted  sale,  pledge,  assignment,  hypothecation  or
          other transfer of an Option contrary to the provisions  hereof and the
          levy of any  execution,  attachment or similar  process upon an Option
          shall be null and void and without force or effect and shall result in
          a termination of the Option.

                                       6
<PAGE>
               (3)(A) As a  condition  to the  transfer  of any shares of Common
          Stock issued upon exercise of an Option  granted under this Plan,  the
          Corporation  may  require an opinion of counsel,  satisfactory  to the
          Corporation, to the effect that such transfer will not be in violation
          of the Securities Act or any other applicable  securities laws or that
          such transfer has been  registered  under  federal and all  applicable
          state  securities  laws.  (B)  Further,   the  Corporation   shall  be
          authorized to refrain from delivering or transferring shares of Common
          Stock issued under this Plan until the Committee  determines that such
          delivery or transfer will not violate  applicable  securities laws and
          the Recipient has tendered to the  Corporation  any federal,  state or
          local tax owed by the Recipient as a result of  exercising  the Option
          or  disposing  of any Common  Stock when the  Corporation  has a legal
          liability to satisfy such tax. (C) The Corporation shall not be liable
          for  damages  due to delay in the  delivery  or  issuance of any stock
          certificate for any reason whatsoever,  including, but not limited to,
          a delay caused by listing  requirements of any securities  exchange or
          the National  Association of Securities  Dealers,  or any registration
          requirements  under the Securities Act, the Exchange Act, or under any
          other state or federal law, rule or regulation. (D) The Corporation is
          under no  obligation  to take any action or incur any expense in order
          to register  or qualify  the  delivery or transfer of shares of Common
          Stock under  applicable  securities  laws or to perfect any  exemption
          from  such  registration  or  qualification.   (E)  Furthermore,   the
          Corporation will not be liable to any Recipient for failure to deliver
          or transfer  shares of Common  Stock if such failure is based upon the
          provisions of this paragraph.

          (i) Effect of Certain Changes.

          (1) If there is any  change in the  number  of shares of Common  Stock
     through the declaration of stock dividends,  or through a  recapitalization
     resulting in stock splits, or combinations or exchanges of such shares, the
     number of shares of Common  Stock  available  for Options and the number of
     such shares  covered by  outstanding  Options,  and the exercise  price per
     share of the outstanding Options, shall be proportionately  adjusted by the
     Committee  to reflect  any  increase  or  decrease  in the number of issued
     shares of Common  Stock;  provided,  however,  that any  fractional  shares
     resulting from such adjustment shall be eliminated.

          (2) In the event of the proposed  dissolution  or  liquidation  of the
     Corporation,  or any corporate separation or division,  including,  but not
     limited to, split-up,  split-off or spin-off,  or a merger or consolidation
     of the Corporation with another corporation, the Committee may provide that
     the holder of each Option then exercisable shall have the right to exercise
     such  Option (at its then  current  Option  Price)  solely for the kind and
     amount  of shares of stock  and  other  securities,  property,  cash or any
     combination   thereof   receivable  upon  such  dissolution,   liquidation,
     corporate separation or division, or merger or consolidation by a holder of
     the number of shares of Common  Stock for which such Option might have been
     exercised immediately prior to such dissolution,  liquidation, or corporate
     separation or division,  or merger or consolidation;  or in the alternative
     the  Committee  may provide that each Option  granted  under the Plan shall
     terminate as of a date fixed by the Committee;  provided, however, that not
     less than 30 days'  written  notice of the date so fixed  shall be given to
     each  Recipient,  who shall  have the  right,  during the period of 30 days
     preceding such termination, to exercise the Option as to all or any part of
     the shares of Common Stock covered  thereby,  including  shares as to which
     such Option would not otherwise be exercisable.

          (3)  Paragraph (2) of this Section 7(i) shall not apply to a merger or
     consolidation  in which the  Corporation is the surviving  corporation  and
     shares of Common  Stock are not  converted  into or  exchanged  for  stock,
     securities  of any other  corporation,  cash or any  other  thing of value.
     Notwithstanding  the preceding  sentence,  in case of any  consolidation or
     merger of another corporation into the Corporation in which the Corporation
     is the surviving  corporation and in which there is a  reclassification  or
     change  (including a change  which  results in the right to receive cash or
     other  property)  of the shares of Common Stock (other than a change in par
     value,  or from par value to no par value,  or as a result of a subdivision
     or  combination,  but  including any change in such shares into two or more
     classes or series of shares),  the Committee may provide that the holder of
     each Option then  exercisable  shall have the right to exercise such Option
     solely  for the kind and  amount of  shares  of stock and other  securities
     (including those of any new direct or indirect Parent of the  Corporation),
     property,   cash  or  any   combination   thereof   receivable   upon  such
     reclassification,  change,  consolidation  or merger  by the  holder of the
     number of shares of Common  Stock for which  such  Option  might  have been
     exercised.
                                       7
<PAGE>


          (4)  Notwithstanding  paragraph (2) of this Section 7(i), in the event
     of any  merger  or  consolidation  in  which  the  Corporation  is not  the
     surviving  corporation or any sale or transfer by the Corporation of all or
     substantially  all its assets or any tender offer or exchange  offer for or
     the  acquisition,  directly or indirectly,  by any person or group for more
     than _____% of the then outstanding  voting  securities of the Corporation,
     all  Options  granted  under the Plan  shall  become  exercisable  in full,
     notwithstanding  any  other  provision  of the  Plan or of any  outstanding
     Options granted thereunder,  including  provisions  providing for staggered
     vesting  of  options,  on and  after  (i) the  fifteenth  day  prior to the
     effective date of such merger, consolidation, sale, transfer or acquisition
     or (ii) the date of commencement of such tender offer or exchange offer, as
     the case may be. To the extent  that  Section  422(d) of the Code would not
     permit the provisions of the foregoing sentence to apply to any outstanding
     Incentive  Stock Options,  such Incentive  Stock Options shall  immediately
     upon the occurrence of the event  described in the foregoing  sentence,  be
     treated for all  purposes of the Plan as  Non-qualified  Stock  Options and
     shall be  immediately  exercisable  as such as  provided  in the  foregoing
     sentence.  Notwithstanding  the foregoing,  in no event shall any Option be
     exercisable  after the date of termination  of the exercise  period of such
     Option specified in Section 7(d).

          (5) If there is a change in the  Common  Stock of the  Corporation  as
     presently  constituted,  which  is  limited  to a  change  of  all  of  its
     authorized  shares  with par value  into the same  number of shares  with a
     different  par value or without par value,  the shares  resulting  from any
     such change  shall be deemed to be the Common  Stock  within the meaning of
     the Plan.

          (6) To the extent that the  foregoing  adjustments  relate to stock or
     securities  of the  Corporation,  such  adjustments  shall  be  made by the
     Committee,  whose determination in that respect shall be final, binding and
     conclusive,  provided that each Incentive Stock Option granted  pursuant to
     this Plan shall not be adjusted in a manner that causes such option to fail
     to continue to qualify as an Incentive  Stock Option  within the meaning of
     Section 422 of the Code,  except as otherwise  provided in Section  7(i)(4)
     hereof.

          (7) Except as expressly  provided in this Section 7(i),  the Recipient
     shall  have no  rights by reason of any  subdivision  or  consolidation  of
     shares of stock of any class or the  payment of any stock  dividend  or any
     other increase or decrease in the number of shares of stock of any class or
     by reason of any  dissolution,  liquidation,  merger,  or  consolidation or
     split-up,  split-off or spin-off of assets or stock of another corporation;
     and any  issue by the  Corporation  of  shares  of stock of any  class,  or
     securities convertible into shares of stock of any class, shall not affect,
     and no  adjustment  by reason  thereof  shall be made with  respect to, the
     number or price of shares of Common Stock subject to the Option.  The grant
     of an Option  under the Plan shall not affect in any way the right or power
     of the Corporation to make adjustments, reclassifications,  reorganizations
     or  changes  of its  capital  or  business  structures  or to  merge  or to
     consolidate  or to dissolve,  liquidate or sell, or transfer all or part of
     its business or assets.

                                       8
<PAGE>

          (j) Rights as Shareholder - Non-Distributive Intent.

               (1)  Neither  a person to whom an  Option  is  granted,  nor such
          person's legal representative,  heir, legatee or distributee, shall be
          deemed to be the  holder  of, or to have any  rights of a holder  with
          respect to, any shares of Common  Stock  subject to such Option  until
          after the Option is exercised  and the shares are issued to the person
          exercising such Option.

               (2)  Upon  exercise  of an  Option  at a time  when  there  is no
          registration  statement in effect under the Securities Act relating to
          the  shares  issuable  upon  exercise,  shares  may be  issued  to the
          Recipient only if the Recipient  represents and warrants in writing to
          the  Corporation  that the shares  purchased  are being  acquired  for
          investment  and  not  with a  view  to the  distribution  thereof  and
          provides the Corporation  with sufficient  information to establish an
          exemption from the registration  requirements of the Securities Act. A
          form of subscription agreement is attached hereto as Exhibit B.

               (3) No shares  shall be  issued  upon the  exercise  of an Option
          unless  and  until  there  shall  have been  compliance  with any then
          applicable requirements of the Securities and Exchange Commission,  or
          any  other   regulatory   agencies   having   jurisdiction   over  the
          Corporation.

               (4) No  adjustment  shall  be made  for  dividends  (ordinary  or
          extraordinary,  whether  in cash,  securities  or other  property)  or
          distribution or other rights for which the record date is prior to the
          date such stock  certificate is issued,  except as provided in Section
          7(i) hereof.

          (k) Other  Provisions.  Option agreements  evidencing  Options granted
     under the Plan shall  contain  such other  provisions,  including,  without
     limitation,  (i) the  imposition  of  restrictions  upon the exercise of an
     Option, and (ii) in the case of an Incentive Stock Option, the inclusion of
     any condition not inconsistent  with such Option qualifying as an Incentive
     Stock Option, as the Committee shall deem advisable.

         7. Agreement by Recipient  Regarding  Withholding Taxes. Each Recipient
            ----------------------------------------------------
agrees that the  Corporation,  to the extent permitted or required by law, shall
deduct a sufficient  number of shares due to the Recipient  upon exercise of the
Option to allow the  Corporation  to pay  federal,  state and local taxes of any
kind  required by law to be withheld  upon the  exercise of such Option from any
payment of any kind otherwise due to the Recipient. The Corporation shall not be
obligated  to advise any  Recipient  of the  existence  of any tax or the amount
which the Corporation will be so required to withhold.

         8. Term of Plan. Options may be granted under this Plan from time to
            ------------
time  within a period  of ten  years  from the date the Plan is  adopted  by the
Board.

         9. Amendment and Termination of the Plan. The Committee at any time and
            -------------------------------------
from time to time may suspend,  terminate,  modify or amend the Plan.  Except as
provided  in  Section 7 hereof,  no  suspension,  termination,  modification  or
amendment of the Plan may adversely affect any Option previously granted, unless
the written consent of the Recipient is obtained.

                                       9
<PAGE>

         10.  Assumption.  Subject to Section 7, the terms and conditions of any
              ----------
outstanding Options granted under this Plan shall be assumed by, be binding upon
and shall inure to the benefit of any successor  corporation to the  Corporation
and  continue  to be  governed  by,  to the  extent  applicable,  the  terms and
conditions  of this  Plan.  Such  successor  corporation  may but  shall  not be
obligated to assume this Plan.

         11. Termination of Right of Action. Every right of action arising out
              ------------------------------
of or in connection with the Plan by or on behalf of the Corporation,  or by any
shareholder of the Corporation against any past, present or future member of the
Board,  or against any  employee,  or by an employee  (past,  present or future)
against  the  Corporation,  irrespective  of the place  where an  action  may be
brought  and of the place of  residence  of any such  shareholder,  director  or
employee,  will cease and be barred by the  expiration  of three  years from the
date of the act or  omission in respect of which such right of action is alleged
to have risen or such shorter period as may be provided by law.

         12. Tax Litigation.  The Corporation  shall have the right, but not the
             --------------
obligation,   to  contest,   at  its  expense,   any  tax  ruling  or  decision,
administrative or judicial,  on any issue which is related to the Plan and which
the Committee  believes to be important to holders of Options  granted under the
Plan and to conduct any such contest or any  litigation  arising  therefrom to a
final decision.

         13. Adoption.
             --------


               (a) This Plan was  originally  approved by the Board of Directors
          of the Corporation on September 20, 1993 and  subsequently  amended to
          increase the number of shares available for grant.

               (b) This Plan was originally  approved by the shareholders of the
          Corporation on March 15, 1994.


                             WILLIAMS CONTROLS, INC.

                                                     By /s/ Thomas W. Itin
                                                       -------------------------
                                                       Thomas W. Itin, President


                                       10
<PAGE>