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                                                                   Exhibit 10.28

                             STERILE RECOVERIES, INC.


                             1998 STOCK OPTION PLAN



         Sterile Recoveries, Inc. establishes the following 1998 Stock Option
Plan for the exclusive benefit of its eligible employees:


                                   ARTICLE I

                           PURPOSE AND INTERPRETATION


         1.1     PURPOSE.  The purpose of this Plan is to further the interests
of the Company, its Subsidiaries (if any), and its shareholders by providing
incentives in the form of Stock Options to key employees who contribute
materially to the success and profitability of the Company.  The Plan will
enable the Company to attract and retain key employees, to reward outstanding
individual contributions, and to give selected key employees an interest in the
Company parallel to that of its shareholders, thus enhancing their proprietary
interest in the Company's continued success and progress.

         1.2     DEFINITIONS.  As used in this Plan, the following capitalized
terms have the respective definitions attributed to them:

               "ADMINISTRATIVE COMMITTEE" means the Board of Directors or any
         Board Committee to whom the Board of Directors has delegated the
         administration of this Plan pursuant to section 2.1.

               "AFFILIATE" means a Subsidiary of the Company, a corporation
         that directly or indirectly owns 80% or more of the voting securities
         of the Company, or a corporation of which 80% or more of the
         voting securities is owned directly or indirectly by the same
         corporation that directly or indirectly by a parent corporation of
         the Company.

               "BOARD OF DIRECTORS" means the Board of Directors of the
       Company.

               "CHANGE IN CONTROL" means any of the following:  (a) the
       shareholders of the Company approve a liquidation of all or
       substantially all the consolidated assets of the Company and its
       Subsidiaries, other than a liquidation of a Subsidiary into the Company
       or another Subsidiary (unless the transaction is subsequently abandoned
       or otherwise fails to occur); (b) the shareholders of the Company
       approve a sale, lease, exchange, or other transfer to any person other
       than the Company or a Subsidiary (in a single transaction or related
       series of transactions) of all or substantially all of consolidated






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       assets of the Company and its Subsidiaries, excluding the creation (but
       not the foreclosure) of a lien, mortgage, or security interest (unless
       the transaction is subsequently abandoned or otherwise fails to occur);
       (c) the shareholders of the Company approve a merger, consolidation,
       reorganization, tender offer, exchange offer, or share exchange in which
       the Company will not be the surviving corporation or will become a
       majority-owned subsidiary of a person other than a Subsidiary (unless
       the transaction is subsequently abandoned or otherwise fails to occur);
       or (d) the occurrence of any event, transaction, or arrangement that
       results in any person or group becoming a beneficial owner of (i) a
       majority of the outstanding Common Stock of the Company or any
       Subsidiary that contributed more than 50% of the Company's consolidated
       revenues for its last fiscal year, (ii) securities of the Company
       representing a majority of the combined voting power of all the
       outstanding securities of the Company that are entitled to vote
       generally in the election of its directors, or (iii) with respect to any
       Subsidiary that contributed more than 50% of the Company's consolidated
       revenues for its last fiscal year, securities of that Subsidiary
       representing a majority of the combined voting power of all the
       outstanding securities of that Subsidiary that are entitled to vote
       generally in the election of its directors, unless in each case
       enumerated in this clause (d) the beneficial owner is the Company, a
       Subsidiary, an employee benefit plan sponsored by the Company, a person
       or group who is a record or beneficial owner of 25% or more of the
       outstanding Shares on the Date of Grant, or a person who becomes a
       beneficial owner of 25% or more of the outstanding Shares solely by
       becoming a trustee of an inter vivos trust created by a person who is
       the record or beneficial owner of 25% or more of the outstanding Shares
       on the Date of Grant.

         "COMMON STOCK" means the common stock, $.001 par value, of the
Company.

         "COMPANY" means Sterile Recoveries, Inc., a Florida corporation and
the sponsor of this Plan.

         "DATE OF GRANT" means, with respect to a Stock Option, the date as of
when it is granted to a Participant.

         "EMPLOYEE" means a person who is employed by the Company or a
Subsidiary on a full-time, salaried basis for at least 30 hours each week.

         "EXCHANGE ACT" means the United States Securities Exchange Act of
1934, as amended, and includes all rules and regulations of the Securities and
Exchange Commission promulgated under that act.



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         "INCENTIVE OPTION" means a Stock Option granted under this Plan that
is intended to qualify as an "incentive stock option," as defined in section
422 of the Internal Revenue Code, as in effect on the Date of Grant of the
Stock Option.

         "INTERNAL REVENUE CODE" means the United States Internal Revenue Code
of 1986, as amended from time to time, or any United States income tax law
subsequently enacted in substitution for that code.

         "MARKET VALUE" means, as of any particular date, the mean average of
the high bid and low asked prices of the Shares that were quoted on the
National Association of Securities Dealers Automated Quotation System on that
date, or the weighted mean average of the high and low sales prices of the
Shares on the American Stock Exchange or the New York Stock Exchange, if the
Shares become listed for trading on either of those securities exchanges.

         "NONQUALIFIED OPTION" means a Stock Option granted under this Plan
that is not designated as an Incentive Option.

         "OPTION AGREEMENT" means an agreement between the Company and a
Participant that sets forth the terms, conditions, limitations, and
restrictions applicable to the Participant's performance requirements, and
limitations applicable to a Stock Option.

         "OPTION YEAR" means, with respect to a Stock Option granted under this
Plan, a period of 12 consecutive months beginning on its Date of Grant or an
anniversary of its Date of Grant.

         "PARTICIPANT" means an Employee who is selected by the Administrative
Committee to receive a Stock Option pursuant to this Plan, in the person's
capacity as a participant under the Plan.

         "PLAN" means this 1998 Stock Option Plan of Sterile Recoveries, Inc.,
as originally adopted and as subsequently amended, modified, or supplemented in
accordance with its terms.

         "PROPRIETARY PROPERTY" means all ideas, plans, methods, discoveries,
inventions, developments, improvements, trade secrets, intellectual property,
and other proprietary data, knowledge, and information that a Participant
solely or jointly knows, creates, conceives, develops, or reduces to practice
while employed by the Company or any Subsidiary and that directly or indirectly
benefits, relates to, or is connected in any way with, the Participant's
employment with the Company or a Subsidiary, or any process, product, formula,
business, facility, research, equipment, machinery, technique, experiment,
computer program, software, source code, or user interface screen or other
development of the Company or any Subsidiary.






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         "SECURITIES ACT" means the United States Securities Act of 1933, as
amended, and includes all rules and regulations of the Securities and Exchange
Commission promulgated under that Act.

         "SHARES" means shares of the Common Stock or any securities issued in
exchange or substitution for those shares pursuant to a transaction described
in section 5.1.

         "STOCK OPTION" means an option to purchase Shares from the Company
that is granted to a Participant pursuant to this Plan, whether as an Incentive
Option or a Nonqualified Option.

         "SUBSIDIARY" means a corporation of which 80% of its voting securities
are owned directly or indirectly by the Company and includes any corporation
that qualifies as a "subsidiary corporation" as defined in section 424(f) of
the Internal Revenue Code.

         1.3     OTHER WORDS.  As used in this Plan, (a) the word "or" is not
exclusive, (b) the words "consent" and "approval" are synonymous, (c) the word
"including" is always without limitation, (d) words in the singular number
include words in the plural number and vice versa, and (e) the following
uncapitalized words and terms have the respective meanings ascribed to them:

                 "AFFILIATE" has the meaning attributed to it in Rule 12b-2
         under the Exchange Act.

                 "BENEFICIAL OWNER" has the meaning attributed to it under Rule
         13d-3 under the Exchange Act, and the terms "BENEFICIALLY OWNED" and
         "BENEFICIAL OWNERSHIP" have the same meaning as "BENEFICIAL OWNER."

                 "BUSINESS DAY" has the meaning attributed to it in Rule
         14d-1(c)(6) under the Exchange Act.

                 "DISABILITY" means a total and permanent disability as defined
         in section 22(e)(3) of the Internal Revenue Code.

                 "GROUP" has the meaning attributed to that term in Rule
         13d-5(b)(1) under the Exchange Act and includes two or more persons
         who agree to act in concert for the purpose of voting, acquiring, or
         holding any securities of the Company or any Subsidiary.

                 "PARENT CORPORATION" has the meaning attributed to that term
         in section 424(e) of the Internal Revenue Code.





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         1.4      HEADINGS AND REFERENCES.  The titles and headings preceding
the text of the articles and sections of this Plan are solely for convenient
reference and neither constitute a part of this Plan nor affect its meaning,
interpretation, or effect.  Unless otherwise expressly stated, a reference in
this Plan to a section refers to a section of this Plan.

         1.5      LIMITATION OF RIGHTS.  Nothing in this Plan, whether express
or implied, is intended or should be construed to confer upon, or to grant to,
any person (other than the Participants and their respective heirs, guardians,
and personal representatives) any claim, right, remedy, or privilege under or
because of this Plan or any provision of it, except that every member of the
Administrative Committee is a third-party beneficiary of the provisions of
sections 2.2 and 2.4.  An employee of the Company or any Subsidiary does not
have any claim or right to participate in this Plan, and the grant of a Stock
Option to a Participant does not create or extend any right of the Participant
to continue to serve as an employee of the Company or any Subsidiary, to
participate in any other stock option or employee benefit plan of the Company or
any Subsidiary, or to receive the same employee benefits as any other employee
of the Company or any Subsidiary.  Furthermore, an employee's selection as a
Participant does not restrict in any way the right of the Company or a
Subsidiary to terminate at any time the Participant's employment with it either
at will or as provided in any written employment agreement between it and the
Participant.

         1.6      GOVERNING LAW.  The validity, construction, enforcement, and
interpretation of this Plan are governed by the laws of the United States of
America and the State of Florida, excluding the laws of those jurisdictions
relating to resolution of conflicts with laws of other jurisdictions.


                                   ARTICLE II
                              PLAN ADMINISTRATION

         2.1      ADMINISTRATIVE COMMITTEE. This Plan will be administered by
the Board of Directors, or, at its election, the Board of Directors may delegate
administration of this Plan to an Administrative Committee consisting of two or
more directors who are appointed by the Board of Directors and satisfy the
criteria described below.  The members of the Administrative Committee will
serve for unspecified terms at the discretion of the Board of Directors.  The
Board of Directors has the exclusive power to increase or decrease the size of
the Administrative Committee, appoint additional members of the Administrative
Committee, remove a member of the Administrative Committee (as such) at any
time, with or without cause, and appoint a successor to fill any vacancy on the
Administrative Committee.  The Board of Directors shall not appoint as a member
of the Administrative Committee any director who (a) is an officer or employee
of the Company, any Subsidiary, or any parent corporation of the Company or who
does not qualify as an "outside director" for purposes of section 162(m) of the
Internal Revenue Code, (b) receives directly or







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indirectly from the Company, and Subsidiary, or any parent corporation of the
Company a dollar amount of compensation for services rendered as a consultant
or in any capacity other than as a director for which disclosure would be
required pursuant to Item 404(a) of Regulation S-K under the Exchange Act and
the Securities Act, (c) possesses an interest in any other transaction to which
the Company or any Subsidiary was or will be a party and for which disclosure
would be required pursuant to Item 404(a) of Regulation S-K under the Exchange
Act and the Securities Act, or (d) has a business relationship for which
disclosure would be required pursuant to Item 404(b) of Regulation S-K under
the Exchange Act and the Securities Act.  If the Board of Directors is unable
to appoint an Administrative Committee comprising two or more directors who
satisfy the foregoing criteria, or if the Administrative Committee ceases at
any time to comprise directors who satisfy those criteria, the Board of
Directors shall serve as the Administrative Committee for this Plan, and all
grants of Stock Options under this Plan must be approved by the Board of
Directors.

         2.2     POWER AND AUTHORITY.  Subject to compliance with all
applicable rules and regulations of any relevant authorities, including stock
exchanges and the Securities and Exchange Commission, the Administrative
Committee has the exclusive power and authority, and the sole and absolute
discretion, to do the following:  (a) construe and interpret this Plan; (b)
select the Employees who will be Participants in this Plan; (c) adopt, amend,
and rescind forms, rules, procedures, and regulations relating to this Plan
(all of which must be approved by the Board of Directors if a Board Committee
serves as the Administrative Committee); (d) grant Stock Options under the
Plan, either conditionally or unconditionally; (e) determine when Stock Options
will be granted under the Plan; (f) determine the number of Shares subject to
each Stock Option; (g) determine the Market Value of a Share in accordance with
the provisions of this Plan; (h) determine the terms and conditions of each
Stock Option, including the exercise price (which must comply with section
3.4), the methods of exercising the Stock Option, the methods for payment of
the exercise price, the time or times when the Stock Option will become
exercisable and the duration of the exercise period (which must not exceed the
limitations specified in section 3.4), the conditions under which the Stock
Option will vest and become exercisable, and any limitations, restrictions,
performance criteria, or forfeiture conditions applicable to the Stock Option
or any Shares purchased pursuant to it; (i) determine the consideration for the
grant of each Stock Option and the consideration to be paid for Shares
purchased pursuant to a Stock Option, which may consist of cash, other Shares,
or any combination of the foregoing; (j) to approve and recommend amendments to
the Plan for adoption by the Board of Directors and (if necessary or desirable)
the shareholders of the Company; (k) authorize any officer or director of the
Company to execute in the name and on behalf of the Company any agreement,
certificate, instrument, or other document required to carry out the purposes
of this Plan; (l) engage the services of any agent, expert, or professional
advisor in furtherance of the Plan's purposes; (m) amend any outstanding Option
Agreement, subject to complying with applicable legal restrictions and
obtaining the approval of the Participant who is a party to the Option
Agreement; and (n) take all other actions, and make all other determinations,
that are advisable or necessary for the Plan's





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administration.  In the absence of fraud or mistake, any action, decision,
interpretation, or determination by the Administrative Committee will be final
and binding on all persons.

         The Board of Directors may reserve to itself any of the power and
authority conferred on the Administrative Committee, and it may exercise all
the power and authority of the Administrative Committee at any time to the
exclusion of any Board Committee.  All references in this Plan to the
Administrative Committee include the Board of Directors whenever it is
exercising the power and authority of the Administrative Committee.

         2.3     APPROVAL PROCEDURES.  All actions and determinations of the
Administrative Committee must be unanimous, unless the Board of Directors is
exercising the power and authority of the Administrative Committee.  All
actions and determinations of the Board of Directors with respect to this Plan
must be approved in the manner provided by the Company's Bylaws and applicable
corporate law.  Every action or determination of the Administrative Committee
that is expressly required or permitted under this Plan will be valid only if
undertaken pursuant to a vote, consent, or approval that is evidenced by either
(a) a resolution adopted by the affirmative vote of the requisite number of
members of the Administrative Committee at a meeting, or (b) a written consent
signed by the requisite number of members of the Administrative Committee.  The
members of the Administrative Committee may execute a written consent in
counterparts. Each executed counterpart will constitute an original document,
and all of them, together, will constitute the same document.  A properly
executed written consent will be effective as of the date specified in it or,
if an effective date is not so specified, on the date when it is signed by the
last director whose signature is necessary to validate it, and will be valid if
it is executed before, after, or concurrently with the action or determination
to which it applies.

         2.4     INDEMNIFICATION.  A member of the Administrative Committee is
not liable for, and the Company releases each member of the Administrative
Committee from all liability for, any punitive, incidental, compensatory,
consequential, or other damages or obligation to the Company or any Employee,
Participant, or other person for any act or omission by the member of the
Administrative Committee (including the person's own negligence), or by any
agent, employee, professional advisor, or other expert used or engaged by the
Administrative Committee, if the act or omission does not constitute gross
negligence or willful misconduct and is done or omitted in good faith, on
behalf of the Company, and in a manner reasonably believed by the member of the
Administrative Committee to be both in the best interests of the Company and
within the scope of the authority granted to the Administrative Committee by
this Plan.  The Company shall indemnify each member of the Administrative
Committee, and shall reimburse the member from the Company's assets, for any
cost, loss, damage, expense, or liability (including fines, amounts paid in
settlement, and legal fees and expenses) incurred by the member by reason of
any act or omission for which the member is released from liability pursuant to
this section.





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<PAGE>   8

                                  ARTICLE III
                         STOCK OPTIONS AND PARTICIPANTS

          3.1      STOCK OPTIONS.  Benefits under this Plan will consist of
Stock Options.  The Administrative Committee may designate any Stock Option as
an Incentive Option, in which case the Stock Option must comply with the
requirements of section 3.5.  If no designation is made, a Stock Option will
constitute a Nonqualified Option.  The Administrative Committee may grant a
Participant both Incentive Options and Nonqualified Options, at the same time
or at different times.

          3.2      PARTICIPANTS. Every Employee is eligible to be selected by
the Administrative Committee to participate in this Plan.  The Administrative
Committee's designation of an Employee as a Participant at any particular time
does not require the Administrative Committee to designate that Employee to
receive any Stock Options at any other time or to receive the same Stock
Options as any other Participant at any time.  The Administrative Committee may
consider factors that it considers pertinent in selecting Participants and in
determining the terms and conditions of Stock Options awarded to them,
including the following:  (a) the consolidated financial condition of the
Company; (b) the expected net income of the Company for the current or future
years; (c) the contributions of an Employee to the success and profitability of
the Company; and (d) the adequacy of the Employee's other compensation.  The
Administrative Committee may award Stock Options to an Employee even if Stock
Options previously were granted to the Employee under this or another plan of
the Company or an Affiliate, and whether or not the previously granted benefits
have been fully exercised.  An Employee who participates in another benefit
plan of the Company or an Affiliate also may participate in this Plan.

         3.3     BENEFIT LIMITATIONS.  The total number of Shares that are
authorized to be issued pursuant to the exercise of Stock Options granted under
this Plan is limited to 300,000 Shares.  This amount will be adjusted
automatically in accordance with section 5.1.  If a Stock Option lapses,
expires, or is cancelled, forfeited, or terminated as a whole or in part for
any reason other than its exercise, or if Shares issued pursuant to the
exercise of a Stock Option are forfeited pursuant to section 4.5, the forfeited
Shares or the Shares subject to the unexercised portion of that Stock Option
(or the part of it so cancelled, forfeited, or terminated) will be available
for the future grant of Stock Options under this Plan.  If a Participant pays
the exercise price for Shares purchased pursuant to the exercise of a Stock
Option by delivering to the Company previously acquired Shares, the number of
Shares available for future grants of Stock Options under this Plan will be
reduced only by the net amount of Shares issued in connection with the exercise
of the Stock Option (that is the number of Shares issuable pursuant to the
exercise of the Stock Option, less the number of Shares retained by, or
delivered to, the Company in payment of the exercise price).

         3.4     EXERCISE PRICE AND DATES.  The purchase price for each Share
issuable pursuant to the exercise of a Stock Option must be not less than the
Market Value of a





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<PAGE>   9

Share on the Date of Grant of the Stock Option.  Every Stock Option must expire
not later than ten years after its Date of Grant, and, except as otherwise
provided in sections 4.4 and 5.2 or in the Option Agreement, it will expire on
the 90th day following the date when the Participant ceases to be an Employee.
However, if a Participant owns (within the meaning of section 422(b)(6) of the
Internal Revenue Code) at the time when an Incentive Option is granted to the
Participant stock representing more than 10% of the total combined voting power
of all classes of outstanding stock of the Company, any Subsidiary, or any
parent corporation of the Company, then: (a) the Incentive Option must expire
not later than five years after its Date of Grant; and (b) the exercise price
of the Incentive Option must be not less than 110% of the Market Value of a
Share on the Date of Grant of the Incentive Option.  Stock Options are not
exercisable until they have been accepted by the Participant.  An award of a
Stock Option to a Participant will be cancelled automatically if the
Participant does not accept the award within 30 calendar days following the
date when the Participant is given written notice of the award.  Unless a
Participant's Option Agreement expressly provides otherwise, every Stock Option
will be exercisable in serial increments after each Option Year as follows:

                                              Percentage Exercisable
   After Option Year              Per Option Year             Cumulatively

         1                              20%                        20%
         2                              20%                        40%
         3                              20%                        60%
         4                              20%                        80%
         5                              20%                       100%


In no event, however, is any Stock Option permitted to be exercisable during
the first six months after its Date of Grant. Subject to the foregoing
limitations, the Administrative Committee may impose on an award of a Stock
Option any terms and conditions that it determines to be desirable, including
performance criteria, forfeiture provisions, and additional or different
vesting conditions.  Extension of the expiration date of a Stock Option is not
permitted.  In calculating the stock ownership of any person for purposes of
the foregoing, the attribution rules of section 424(d) of the Internal Revenue
Code will apply.

          3.5      INCENTIVE OPTIONS.  Notwithstanding anything in this Plan to
the contrary, an Incentive Option must satisfy the following additional
requirements:

         (a)     The Incentive Option must be designated as an "incentive stock
option" by the Administrative Committee when it is granted;

         (b)     This Plan must be approved by the shareholders of the Company
within 12 months before or after its effective date;






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<PAGE>   10

         (c)     The maximum number of Shares subject to any Stock Options
granted to a Participant must not result in the Participant having the right to
exercise for the first time during any one calendar year, under all incentive
stock options granted to the Participant under all benefit plans of the
Company, its Subsidiaries, and any parent corporation of the Company, options
to purchase Shares having a Market Value in excess of $100,000 (determined as
of the date of grant of each incentive stock option); and

         (d)     The Incentive Option must satisfy all conditions and
requirements imposed by the Internal Revenue Code for incentive stock options
and any policies adopted by the Administrative Committee with respect to
incentive stock options.

         If an Incentive Option is granted for a number of Shares having an
aggregate Market Value on the Date of Grant in excess of $100,000, then,
notwithstanding anything in this or the relevant Option Agreement to the
contrary, the Incentive Option will be exercisable in each calendar year as to
only that number of Shares having a Market Value on the Date of Grant of not
more than $100,000.  However, the number of Shares as to which an Incentive
Option is exercisable in any one calendar year is cumulative, so, if the
Incentive Option is not exercised to the fullest extent allowed in any one
calendar year, the unexercised portion will accumulate and carry forward to
ensuing years.  For example, if in 1998, the Company were to grant an Employee
an Incentive Option to purchase 100,000 Shares at an exercise price of $5.00
per share (which was the then current Market Value), the Incentive Option would
be exercisable with respect to only 20,000 Shares during 1998, and the
Incentive Option would become exercisable with respect to 20,000 additional
Shares in each successive year (1999 through 2002).  If the Participant elected
to purchase only 10,000 Shares pursuant to the Incentive Option during 1998,
the Participant could purchase up to 30,000 Shares in 1999, and, if no
additional purchases were made in 1999, the Participant could purchase up to
50,000 Shares in 2000 (carry forward of 10,000 Shares from 1998 and 20,000
Shares from 1999; plus 20,000 Shares in 2000).

         3.6.NONTRANSFERABILITY OF STOCK OPTIONS.  EXCEPT TO THE EXTENT PROVIDED
IN THE OPTION AGREEMENT, A Participant is prohibited from transferring a Stock
Option, any interest in it, or any right under an Option Agreement by any means
other than by will or the law of descent and distribution.  Any prohibited
transfer (whether by gift, sale, pledge, assignment, hypothecation, or
otherwise) will be invalid and ineffective as to the Company.  In addition, a
Stock Option and the Participant's rights under it and the related Option
Agreement are not subject to any lien, levy, attachment, execution, or similar
process by creditors.  The Company may cancel any Stock Option by notice to the
Participant to whom it was granted, if the Participant attempts to make a
prohibited transfer, or if the Stock Option, any interest in it, or any right
under the related Option Agreement becomes subject to a lien, levy, attachment,
execution, or similar process by any creditor.





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<PAGE>   11

                                   ARTICLE IV
                           EXERCISE OF STOCK OPTIONS

         4.1      EXERCISE METHOD.  Subject to limitations imposed by this Plan
and the Option Agreement, a Participant may exercise a Stock Option as a whole
or in part in increments of at least 100 shares at any time and from time to
time before it expires.  A partial exercise of a Stock Option will not affect a
Participant's subsequent right to exercise the Stock Option as to the
remaining Shares subject to the Stock Option.  A Stock Option must be exercised
for a number of whole Shares and is not exercisable for a fraction of a Share.
To exercise a Stock Option, a Participant must do the following:  (a) deliver
to the Company a written notice of exercise in such form as prescribed by the
Administrative Committee; (b) tender to the Company full payment for the Shares
to be purchased pursuant to the exercise of the Stock Option; (c) pay to the
Company, or make an arrangement satisfactory to the Administrative Committee
for the payment of, any tax withholding required in connection with the
exercise of the Stock Option (including FICA, Medicare, and local, state, or
federal income taxes); and (d) comply with any and all other reasonable
requirements established by the Administrative Committee for the exercise of
Stock Options.  The exercise date of a Stock Option will be the date when (i)
the Company has received the written notice of exercise and full payment of the
exercise price, (ii) the Participant has paid to the Company or made a
satisfactory arrangement for the payment of any requisite tax withholding, and
(iii) any and all other requirements of exercise established by the
Administrative Committee have been satisfied.

         4.2     PAYMENT OF EXERCISE PRICE.  A Participant may pay all or any
part of the exercise price and any applicable tax withholding for any Shares to
be purchased pursuant to exercise of a Stock Option by any combination of the
following methods:

                 (a)      By bank draft, money order, or personal check payable
         to the order of the Company; or

                 (b)      By delivering to the Company the Participant's
         written election for the Company to withhold a portion of the Shares
         otherwise issuable to the Participant pursuant to the exercise of the
         Stock Option;

                 (c)      By transferring to the Company outstanding Shares
         that have been owned by the Participant for more than six months on
         the exercise date of the Stock Option; or

                 (d)      To the extent approved in advance by the
         Administrative Committee, by delivering to the Company a copy of
         irrevocable instructions that have been provided by the Participant to
         a financial institution or a securities broker-dealer to pay promptly
         to the Company all or a portion of the proceeds from either a sale of
         the Shares to be purchased pursuant to the






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<PAGE>   12

         exercise of the Stock Option or a loan to be secured by a pledge of
         all or a portion of those Shares.

Shares that are transferred to, or withheld by, the Company in payment of the
exercise price or any tax withholding will be valued for purposes of payment at
their Market Value on the exercise date of the Stock Option, as determined
pursuant to section 4.1.  The foregoing provision does not preclude the
exercise of a Stock Option by any other proper legal method specifically
approved in advance by the Administrative Committee.  The Administrative
Committee shall determine the acceptable methods for tendering or withholding
Shares as payment of the exercise price of a Stock Option and may impose
limitations and prohibitions on the use of Shares to pay the exercise price of
a Stock Option as it considers appropriate for tax, legal, business, or
accounting reasons.  No one has the rights of a shareholder with respect to
Shares subject to a Stock Option until a certificate representing those Shares
has been delivered to the person exercising the Stock Option.

         4.3     TAX WITHHOLDING.  The Administrative Committee, in its sole
discretion, may require a Participant to pay to the Company when the
Participant exercises a Stock Option the amount (if any) that the Company
considers necessary to satisfy its legal obligation to withhold any local,
state, or federal taxes (including FICA, income, and Medicare taxes) imposed by
any governmental authority as a result of the exercise of the Stock Option, and
the Company may defer delivery of any Shares purchased pursuant to the Stock
Option until it has been paid or indemnified to its satisfaction for those
taxes.  A Participant may pay to the Company any requisite tax withholding by
any of the methods of payment authorized for payment of the exercise price for
Shares purchased pursuant to the Stock Option.  If an exercise of a Stock
Option does not give rise to any tax withholding obligation on the date of
exercise but is reasonably expected to do so at a future time, the
Administrative Committee (in its sole discretion) may require the Participant
to place the Shares purchased pursuant to the Stock Option in escrow for the
benefit of the Company until tax withholding is required for the amounts
included in the Participant's gross income as a result of the Participant's
exercise of the Stock Option.  At that time, the Administrative Committee (in
its discretion) may require the Participant to pay to it an amount that it
considers sufficient to satisfy the tax withholding obligation incurred by it
as a result of the Participant's exercise of the Stock Option, in which case
the Company shall promptly release to the Participant the escrowed Shares.

        4.4    EXERCISE CONDITIONS.  A  Stock Option expires and ceases to be
exercisable on the 90th day after the Participant to whom it was granted ceases
to be an Employee, except as otherwise provided in this Plan and in the Option
Agreement.  If a Participant's employment with the Company or a Subsidiary is
terminated (voluntarily or involuntarily), the Participant may exercise her or
his Stock Option within 90 calendar days following the date of termination of
employment. If a Participant dies or ceases to be an Employee because of a
disability at a time when the Participant is entitled to exercise a Stock
Option, the Stock Option will continue to be exercisable for one year after the
Participant's death or





                                    -12-

<PAGE>   13

disability by the Participant or the Participant's guardian (in the case of
disability) or the Participant's heir or personal representative (in the case
of death).  Notwithstanding the foregoing, a Stock Option is never exercisable
later than its stated expiration date.  After the death, disability, or
termination of employment of a Participant, a Stock Option of the Participant
will be exercisable only with respect to the number of Shares (if any) that
could have been exercised as of the date when the Participant ceased to be an
Employee (subject to any adjustment required by section 5.1). A Stock Option
will terminate to the extent that it ceases to be exercisable for any of the
Shares subject to it.

        4.5    CANCELLATION AND RESCISSION OF STOCK OPTIONS.  Unless the
Stock Option Agreement specifies otherwise, the Administrative Committee may
cancel any Stock Options at any time if the Participant is not in compliance
with all applicable provisions of the Plan, the Stock Option Agreement, and
with the following conditions:

                 (a)      A Participant shall not render services for any
organization or engage directly or indirectly in any business which, in the
judgment of the chief executive officer of the Company or other senior officer
designated by the Administrative Committee, is or becomes competitive with the
Company, or which organization or business, or the rendering of services to
such organization or business is or becomes otherwise prejudicial to or in
conflict with the interests of the Company.  For a Participant whose employment
has terminated, the judgment of the chief executive officer shall be based on
the Participant's position and responsibilities while employed by the Company,
the Participant's post-employment responsibilities and position with the other
organization or business, the extent of past, current, and potential
competition or conflict between the Company and the other organization or
business, the effect on the Company's customers, suppliers, and competitors of
the Participant's assuming the post-employment position, guidelines for
business conduct established by the Company, and such other considerations as
are deemed relevant given the applicable facts and circumstances.  A
Participant who has retired shall be free, however, to purchase as an
investment or otherwise, stock or other securities of such organization or
business so long as they are listed upon a recognized securities exchange or
traded over-the-counter, and such investment does not represent a substantial
investment to the Participant or a greater than 10 percent equity interest in
the organization or business.

                 (b)      A Participant shall not, without prior written
authorization from the Company, disclose to anyone outside the Company, or use
in other than the Company's business, any confidential information or material
relating to the business of the Company, acquired by the Participant either
during or after employment with the Company.

                 (c)      A Participant shall disclose promptly and assign to
the Company all right, title, and interest in any invention or idea, patentable
or not, made or conceived by the Participant during employment by the Company,
relating in any manner to the actual or anticipated business, research or
development work of the Company and shall do anything






                                    -13-

<PAGE>   14

reasonably necessary to enable the Company to secure a patent where appropriate
in the United States and in other countries.

                 (d)      Upon exercise pursuant to a Stock Option, the
Participant shall certify in the notice of exercise that he or she is in
compliance with the terms and conditions of the Plan.  Failure to comply with
the provisions of paragraph (a), (b), or (c) of this section 4.5 prior to, or
during the six months after, any exercise pursuant to a Stock Option shall
cause such exercise to be rescinded.  The Company shall notify the Participant
in writing of any such rescission within two years after such exercise.  Within
ten days after receiving such a notice from the Company, the Participant shall
pay to the Company the amount of any gain realized as a result of the rescinded
exercise, pursuant to a Stock Option.  Such payment shall be made either in
cash or by returning to the Company the number of Shares that the Participant
received in connection with the rescinded exercise.

         4.6     RESERVATION, LISTING, AND DELIVERY OF SHARES.  The Company
shall reserve from its authorized but unissued Shares and keep available until
the termination of this Plan, solely for issuance upon the exercise of Stock
Options, the number of Shares issuable at any time pursuant to the exercise of
Stock Options granted or available for grant under this Plan.  In addition, the
Company shall take all requisite action to assure that it validly and legally
may issue fully-paid, nonassessable Shares upon the exercise of each Stock
Option.  Also, if the Shares are traded in the Nasdaq Stock Market or on any
United States national securities exchange, the Company, at its sole expense,
shall reserve for quotation or listing on that market or exchange, upon
official notice of issuance pursuant to the exercise of Stock Options, the
number of Shares issuable at any time upon the exercise of Stock Options
granted or available for grant under this Plan, and the Company shall maintain
that listing until this Plan terminates.  Promptly after a Stock Option is
validly exercised, the Company shall issue and deliver to the order of the
person who exercised the Stock Option a stock certificate representing that
number of fully-paid and nonassessable Shares that were purchased pursuant to
the exercise of the Stock Option, plus, instead of any fractional Share to
which that person otherwise would be entitled, a cash sum equal to the product
of (a) that fraction, multiplied by (b) the Market Value of one full Share as
of the exercise date of the Stock Option.  The Company shall pay all costs and
excise taxes associated with the original issuance of stock certificates
representing Shares purchased pursuant to the exercise of Stock Options.

         4.7     LEGAL COMPLIANCE.  Stock Options are exercisable, and Shares
are issuable under this Plan, only in compliance with all applicable state and
federal laws and regulations (including securities laws) and the rules of all
stock markets or exchanges on which the Shares are quoted or listed for
trading.  Any certificate representing Shares issued under the Plan will bear
such legends and statements as the Administrative Committee considers advisable
to assure compliance with those laws, rules, and regulations.  In addition, the
Administrative Committee may require a Participant, as a condition to the grant
or exercise of a Stock Option, to provide to the Company any agreements,
representations, and






                                    -14-

<PAGE>   15

warranties that, in the opinion of counsel for the Company, are desirable or
necessary to comply with applicable laws and all rules and regulations of any
stock market or exchange on which the Shares are traded or quoted, including a
representation that the Shares issuable pursuant to exercise of the Stock
Option are or will be acquired for investment purposes without a view to
distribute them to others.  A Stock Option is not exercisable, and the Company
shall not issue any Shares under this Plan, until the Company has obtained any
consent or approval required from any state or federal regulatory body having
jurisdiction.  Upon the exercise of a Stock Option by an heir, guardian, or
personal representative of a Participant, the Administrative Committee may
require reasonable evidence of the person's legal ownership of the Stock Option
and any consents and releases of governmental authorities as it determines are
advisable.

                                   ARTICLE V
                             ADDITIONAL PROVISIONS

         5.1     ANTIDILUTION.  If the Company does any of the following (a
"Dilutive Event") at any time before the exercise or expiration of a Stock
Option:  (a) splits or subdivides its then-outstanding Shares into a greater or
different number of Shares; (b) reduces the then-outstanding number of Shares
by a reverse stock-split or by otherwise combining those Shares into a smaller
number of Shares; (c) effects any other capital adjustment, recapitalization,
reorganization, or reclassification that has the effect of increasing or
decreasing proportionately the number of outstanding Shares then held by each
shareholder; (d) distributes any of its assets to its shareholders pro rata as
a partial liquidation or return of capital; or (e) declares, issues, or
distributes to the holders of its Common Stock, without separate payment
therefor, (i) a noncash dividend payable in any property or securities of the
Company, including additional Shares, or (ii) any cash, property, or securities
in connection with a spin-off, split-up, reclassification, recapitalization,
combination of shares, or similar rearrangement of the Company's capital stock;
then, upon the subsequent exercise of a Stock Option after the record date for,
or the occurrence of, each Dilutive Event, the Participant will be entitled to
receive, in exchange for the exercise price specified in the Stock Option, and
in addition to (or in substitution for in the case of a reduced number of
Shares), the Shares otherwise issuable upon exercise of the Stock Option, the
additional (or reduced) amount of Shares and other securities and property
(including cash) resulting from the Dilutive Event that he would have been
entitled to receive if (A) he had exercised the Stock Option on the Date of
Grant (even if the Stock Option was not exercisable then) and had been the
record owner of the number of Shares resulting from the exercise during the
period beginning on that date and ending on the actual exercise date of the
Stock Option, and (B) he had retained all Shares and other securities and
property (including cash) receivable by him during that period, after giving
effect to all the Dilutive Events that occurred during that period.





                                    -15-
<PAGE>   16



         5.2     CHANGE IN CONTROL.

                 (a)      Generally.  If a Change in Control occurs, all
outstanding Stock Options will become fully vested and exercisable as of the
earlier of the effective date of the shareholder approval or the effective date
of any of the Change in Control transaction (the "Effective Date") and, at the
election of the Board of Directors, the Company may terminate the Plan, in
which case the holder of each outstanding Stock Option will be entitled to
payment of the amount by which the Market Value of all Shares subject to the
Stock Option on the Effective Date exceeds the Market Value of all those Shares
as of the Date of Grant of the Stock Option, in full settlement of all the
holder's rights and interests in the Stock Option.

                 (b)      Special Rules Governing Mergers and Stock Exchanges.
In the case of a merger, share exchange, or other transaction in which the
shareholders of the Company receive securities of the acquirer, at the election
of the Board of Directors, the Company may (but is not obligated to) elect to
continue this Plan and each Stock Option granted under the Plan will be
converted into an option to purchase securities of the acquirer being issued in
the transaction.  In such case, the exercise price and number of Shares subject
to the Stock Option will be adjusted based on the exchange or conversion ratio
(the "Ratio") used to convert Shares into securities of the acquirer.  The
adjusted exercise price will be the exercise price per Share, divided by the
Ratio.  The adjusted number of Shares subject to the Stock Option will be the
product of the Ratio multiplied by the number of Shares subject to the Stock
Option before the transaction.

                 (c)      Special Rules in Case of Cash Acquisition.  In the
case of a Change in Control transaction in which the Shareholders will receive
consideration for their Shares (such as cash or debt) other than common stock
of the acquirer and the Company has elected pursuant to (a) above to terminate
the Plan and pay the spread of the Market Value on the Effective Date over the
Market Value on the Date of Grant, each holder of a stock option may elect to
defer the payment and settlement following termination of the Plan by up to six
months and one day after the Effective Date.

         5.3     AMENDMENT, AND TERMINATION. The Board of Directors may alter,
amend, suspend, or terminate this Plan at any time without approval of the
Company's shareholders, unless the approval of the Company's shareholders is
required to comply with applicable law or any rule or regulation of a stock
market or exchange on which the Shares are traded or quoted.  An amendment or
termination of this Plan, whether with or without the approval of the Company's
shareholders, that would adversely affect any right or obligation of a
Participant under an outstanding Stock Option will not be valid or effective as
to that Stock Option without that Participant's written consent.






                                    -16-

<PAGE>   17

         5.4     EXPENSES AND PROCEEDS.  The Company shall pay all expenses of
the Plan.  The Company may use the cash proceeds received from Participants
upon the exercise of Stock Options for general corporate purposes.

         5.5     MARKET VALUE DETERMINATIONS.  If trading in the Shares, or a
price quotation for the Shares, does not occur on a date when the Market Value
is required to be determined under either this Plan or an Option Agreement, the
next preceding date when Shares were traded or a price was quoted will control
the determination of the Market Value.

         5.6     SECTION 16(b) EXEMPTIONS.  With respect to Participants
subject to section 16 of the Exchange Act, transactions under this Plan are
intended to comply with all applicable conditions of SEC Rules 16b-3 and 16b-6
and any rule promulgated by the Securities and Exchange Commission under the
Exchange Act in substitution for either of those rules.  To the extent any
provision of this Plan or action by the Administrative Committee fails to so
comply, it shall be null and void to the extent permitted by law and determined
by the Administrative Committee.  In furtherance of the foregoing objective,
the Administrative Committee may include in an Option Agreement with a
Participant who is subject to section 16 of the Exchange Act any additional
conditions or restrictions that are required to qualify the grant and exercise
of the Stock Option for exemption under Rules 16b-3 and 16b-6 or any future
rule providing an exemption for the award, grant, and exercise of stock
options.

         5.7     DURATION AND EFFECTIVE DATE.  This Plan will become effective
as of February ____, 1998, subject to approval by the Company's shareholders
within 12 months after that date, and will terminate on the tenth anniversary
of its effective date.  The Company is not authorized to award any Stock
Options after the termination date of this Plan.

EFFECTIVE DATE: FEBRUARY ___, 1998

ADOPTED BY BOARD OF DIRECTORS                ADOPTED BY SHAREHOLDERS ON
ON FEBRUARY ____, 1998                       MAY ___, 1998

                                             STERILE RECOVERIES, INC.

                                             By:___________________________
                                                  Bertram T. Martin, Jr.
                                                  President
ATTEST:                                        [CORPORATE SEAL]

_____________________________
James T. Boosales, Secretary





                                    -17-