EXHIBIT 10.31

                                    EMCON
                            1998 STOCK OPTION PLAN


         1.       ESTABLISHMENT, PURPOSE AND TERM OF PLAN.

                  1.1  Establishment.  The EMCON  1998  Stock  Option  Plan (the
"Plan") is hereby  established  effective  as of the date of its approval by the
shareholders of the Company (the "Effective Date").

                  1.2  Purpose.  The  purpose  of the  Plan  is to  advance  the
interests of the  Participating  Company Group and its shareholders by providing
an incentive to attract,  retain and reward persons performing  services for the
Participating  Company Group and by motivating such persons to contribute to the
growth and profitability of the Participating Company Group.

                  1.3 Term of Plan.  The Plan shall continue in effect until the
earlier of its  termination  by the Board or the date on which all of the shares
of Stock  available  for  issuance  under  the Plan  have  been  issued  and all
restrictions  on such  shares  under  the  terms of the Plan and the  agreements
evidencing  Options granted under the Plan have lapsed.  However,  all Incentive
Stock  Options  shall be  granted,  if at all,  within  ten (10)  years from the
earlier  of the date the Plan is  adopted  by the  Board or the date the Plan is
duly approved by the shareholders of the Company.

         2.       DEFINITIONS AND CONSTRUCTION.

                  2.1  Definitions.  Whenever used herein,  the following  terms
shall have their respective meanings set forth below:

                  (a) "Board"  means the Board of Directors  of the Company.  If
one or more  Committees have been appointed by the Board to administer the Plan,
"Board" also means such Committee(s).

                  (b)  "Code"  means  the  Internal  Revenue  Code of  1986,  as
amended, and any applicable regulations promulgated thereunder.

                  (c)  "Committee"  means the  Compensation  Committee  or other
committee  of the Board duly  appointed to  administer  the Plan and having such
powers as shall be  specified by the Board.  Unless the powers of the  Committee
have been  specifically  limited,  the Committee shall have all of the powers of
the Board granted herein, including,  without limitation,  the power to amend or
terminate  the  Plan at any  time,  subject  to the  terms  of the  Plan and any
applicable limitations imposed by law.

                  (d) "Company"  means EMCON, a California  corporation,  or any
successor corporation thereto.

                  (e)  "Consultant"  means any  person,  including  an  advisor,
engaged by a Participating  Company to render services other than as an Employee
or a Director.

                  (f) "Director"  means a member of the Board or of the board of
directors of any other Participating Company.

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                  (g)  "Disability"  means the permanent and total disability of
the Optionee within the meaning of Section 22(e)(3) of the Code.

                  (h)  "Employee"  means  any  person  treated  as  an  employee
(including  an officer or a Director  who is also treated as an employee) in the
records of a  Participating  Company and,  with respect to any  Incentive  Stock
Option granted to such person, who is an employee for purposes of Section 422 of
the Code; provided, however, that neither service as a Director nor payment of a
director's fee shall be sufficient to constitute  employment for purposes of the
Plan.  The  Company  shall  determine  in good faith and in the  exercise of its
discretion  whether an individual has become or has ceased to be an Employee and
the effective date of such individual's employment or termination of employment,
as the case may be. For purposes of an  individual's  rights,  if any, under the
Plan as of the time of the Company's  determination,  all such determinations by
the Company shall be final,  binding and  conclusive,  notwithstanding  that the
Company or any governmental agency subsequently makes a contrary determination.

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

                  (j) "Fair Market Value" means,  as of any date, the value of a
share of Stock  or  other  property  as  determined  by the  Board,  in its sole
discretion,  or by the Company, in its sole discretion, if such determination is
expressly allocated to the Company herein, subject to the following:  (i) If, on
such date,  there is a public  market for the Stock,  the Fair Market Value of a
share of Stock  shall be the  closing  price of a share of Stock (or the mean of
the closing  bid and asked  prices of a share of Stock if the Stock is so quoted
instead) as quoted on the Nasdaq National Market, the Nasdaq Small-Cap Market or
such  other   national  or  regional   securities   exchange  or  market  system
constituting  the primary  market for the Stock,  as reported in the Wall Street
Journal or such other source as the Company deems reliable. If the relevant date
does not fall on a day on which the Stock has traded on such securities exchange
or market  system,  the date on which the Fair Market Value shall be established
shall be the last day on which the Stock  was so  traded  prior to the  relevant
date, or such other  appropriate day as shall be determined by the Board, in its
sole discretion. (ii) If, on such date, there is no public market for the Stock,
the Fair Market  Value of a share of Stock shall be as  determined  by the Board
without regard to any restriction other than a restriction  which, by its terms,
will never lapse.

                  (k)  "Incentive  Stock Option" means an Option  intended to be
(as set forth in the Option Agreement) and which qualifies as an incentive stock
option within the meaning of Section 422(b) of the Code.

                  (l) "Insider" means an officer or a Director of the Company or
any other  person whose  transactions  in Stock are subject to Section 16 of the
Exchange Act.

                  (m)  "Nonstatutory  Stock Option" means an Option not intended
to be (as set forth in the Option  Agreement)  or which  does not  qualify as an
Incentive Stock Option.

                  (n)  "Option"  means a right to  purchase  Stock  (subject  to
adjustment as provided in Section 4.2)  pursuant to the terms and  conditions of
the Plan,  including  an  Outside  Director  Option.  An Option may be either an
Incentive Stock Option or a Nonstatutory Stock Option.

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                  (o) "Option  Agreement" means a written  agreement between the
Company and an Optionee setting forth the terms,  conditions and restrictions of
the Option  granted to the  Optionee and any shares  acquired  upon the exercise
thereof.

                  (p) "Optionee" means a person who has been granted one or more
Options.

                  (q) "Outside  Director" means a Director of the Company who is
not an Employee or an individual who performs services,  whether as an employee,
partner, principal, sole proprietor,  director, trustee, independent contractor,
or  consultant of any entity which owns more than five percent (5%) of the total
combined voting power of all classes of stock of the Company.

                  (r) "Outside  Director  Option" means an Option  granted to an
Outside Director pursuant to Section 7 below.  Outside Director Options shall be
Nonstatutory Stock Options.

                  (s) "Parent  Corporation"  means any present or future "parent
corporation" of the Company, as defined in Section 424(e) of the Code.

                  (t)  "Participating  Company"  means the Company or any Parent
Corporation or Subsidiary Corporation.

                  (u) "Participating Company Group" means, at any point in time,
all corporations collectively which are then Participating Companies.

                  (v) "Rule 16b-3"  means Rule 16b-3 under the Exchange  Act, as
amended from time to time, or any successor rule or regulation.

                  (w) "Section 162(m)" means Section 162(m) of the Code.

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

                  (y) "Service"  means an Optionee's  employment or service with
the  Participating  Company  Group,  whether in the capacity of an  Employee,  a
Director or a  Consultant.  An  Optionee's  Service  shall not be deemed to have
terminated  merely  because of a change in the  capacity  in which the  Optionee
renders  Service  to  the  Participating  Company  Group  or  a  change  in  the
Participating Company for which the Optionee renders such Service, provided that
there is no interruption or termination of the Optionee's Service.  Furthermore,
an Optionee's  Service with the Participating  Company Group shall not be deemed
to have  terminated if the Optionee  takes any military  leave,  sick leave,  or
other bona fide leave of absence  approved by the  Company;  provided,  however,
that if any such leave exceeds ninety (90) days, on the ninety-first  (91st) day
of such leave the Optionee's  Service shall be deemed to have terminated  unless
the Optionee's right to return to Service with the  Participating  Company Group
is  guaranteed by statute or contract.  Notwithstanding  the  foregoing,  unless
otherwise designated by the Company or required by law, a leave of absence shall
not be  treated  as  Service  for  purposes  of  determining  vesting  under the
Optionee's  Option  Agreement.  An  Optionee's  Service  shall be deemed to have
terminated either upon an actual  termination of Service or upon the corporation
for which the Optionee  performs Service ceasing to be a Participating  Company.
Subject to the foregoing,  the Company, in its sole discretion,  shall determine
whether an Optionee's  Service has  terminated  and the  effective  date of such
termination.


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                  (z) "Stock" means the common stock of the Company, as adjusted
from time to time in accordance with Section 4.2.

                  (aa)  "Subsidiary  Corporation"  means any  present  or future
"subsidiary  corporation"  of the Company,  as defined in Section  424(f) of the
Code.

                  (bb) "Ten Percent  Owner  Optionee"  means an Optionee who, at
the time an Option is granted to the Optionee,  owns stock  possessing more than
ten percent (10%) of the total combined  voting power of all classes of stock of
a Participating Company within the meaning of Section 422(b)(6) of the Code.

             2.2  Construction.  Captions  and titles  contained  herein are for
convenience  only and shall not affect  the  meaning  or  interpretation  of any
provision of the Plan.  Except when  otherwise  indicated  by the  context,  the
singular shall include the plural and the plural shall include the singular. Use
of the term "or" is not  intended to be  exclusive,  unless the context  clearly
requires otherwise.

         3.  ADMINISTRATION.

             3.1  Administration by the Board. The Plan shall be administered by
the Board. All questions of interpretation of the Plan or of any Option shall be
determined by the Board, and such determinations shall be final and binding upon
all  persons  having an interest  in the Plan or such  Option.  Any officer of a
Participating  Company  shall have the authority to act on behalf of the Company
with respect to any matter, right,  obligation,  determination or election which
is the  responsibility of or which is allocated to the Company herein,  provided
the  officer  has  apparent  authority  with  respect  to  such  matter,  right,
obligation, determination or election.

             3.2  Administration  with  Respect  to  Insiders.  With  respect to
participation  by  Insiders  in the  Plan,  at any time that any class of equity
security of the  Company is  registered  pursuant to Section 12 of the  Exchange
Act, the Plan shall be administered in compliance with the requirements, if any,
of Rule 16b-3.

             3.3 Committee  Complying with Section  162(m).  If a  Participating
Company is a "publicly held  corporation"  within the meaning of Section 162(m),
the Board may establish a Committee of "outside directors" within the meaning of
Section  162(m) to approve  the grant of any Option  which might  reasonably  be
anticipated  to  result in the  payment  of  employee  remuneration  that  would
otherwise  exceed the limit on employee  remuneration  deductible for income tax
purposes pursuant to Section 162(m).

             3.4 Powers of the Board.  In addition to any other powers set forth
in the Plan and subject to the  provisions of the Plan, the Board shall have the
full and final power and authority, in its sole discretion: (a) to determine the
persons to whom,  and the time or times at which,  Options  shall be granted and
the number of shares of Stock to be subject to each Option;

                  (b)  to  designate  Options  as  Incentive  Stock  Options  or
Nonstatutory Stock Options;

                  (c) to  determine  the Fair Market Value of shares of Stock or
other property;

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                  (d)  to  determine  the  terms,  conditions  and  restrictions
applicable to each Option (which need not be identical) and any shares  acquired
upon the exercise thereof, including, without limitation, (i) the exercise price
of the Option, (ii) the method of payment for shares purchased upon the exercise
of the  Option,  (iii)  the  method  for  satisfaction  of any  tax  withholding
obligation  arising in connection  with the Option or such shares,  including by
the  withholding  or  delivery of shares of stock,  (iv) the  timing,  terms and
conditions  of the  exercisability  of the  Option or the  vesting of any shares
acquired  upon  the  exercise  thereof,  (v) the time of the  expiration  of the
Option,  (vi) the  effect of the  Optionee's  termination  of  Service  with the
Participating Company Group on any of the foregoing,  and (vii) all other terms,
conditions  and  restrictions  applicable  to the  Option  or  such  shares  not
inconsistent with the terms of the Plan;

                  (e) to approve one or more forms of Option Agreement;

                  (f) to amend, modify,  extend,  cancel,  renew, or grant a new
Option  in  substitution  for,  any  Option  or to  waive  any  restrictions  or
conditions  applicable  to any Option or any shares  acquired  upon the exercise
thereof;

                  (g)   to   accelerate,   continue,   extend   or   defer   the
exercisability  of any Option or the  vesting of any  shares  acquired  upon the
exercise  thereof,  including with respect to the period following an Optionee's
termination of Service with the Participating Company Group;

                  (h) to  prescribe,  amend or  rescind  rules,  guidelines  and
policies  relating  to the Plan,  or to adopt  supplements  to,  or  alternative
versions  of,  the Plan,  including,  without  limitation,  as the  Board  deems
necessary  or desirable  to comply with the laws of, or to  accommodate  the tax
policy or  custom  of,  foreign  jurisdictions  whose  citizens  may be  granted
Options; and

                  (i) to correct any defect,  supply any  omission or  reconcile
any  inconsistency  in the Plan or any  Option  Agreement  and to make all other
determinations  and take such  other  actions  with  respect  to the Plan or any
Option as the Board may deem  advisable to the extent  consistent  with the Plan
and applicable law.

         4.  SHARES SUBJECT TO PLAN.

             4.1 Maximum  Number of Shares  Issuable.  Subject to  adjustment as
provided in Section  4.2, the maximum  aggregate  number of shares of Stock that
may be issued under the Plan shall be one million  (1,000,000) and shall consist
of  authorized  but unissued or  reacquired  shares of Stock or any  combination
thereof.  If an  outstanding  Option for any reason  expires or is terminated or
canceled,  or if shares of Stock are  acquired  upon the  exercise  of an Option
subject to a Company repurchase option and are repurchased by the Company at the
Optionee's  exercise  price,  the shares of Stock  allocable to the  unexercised
portion  of such  Option  or such  repurchased  shares of Stock  shall  again be
available for issuance under the Plan.

             4.2 Adjustments for Changes in Capital  Structure.  In the event of
any  stock  dividend,  stock  split,  reverse  stock  split,   recapitalization,
combination,  reclassification or similar change in the capital structure of the
Company, appropriate adjustments shall be made in the number and class of shares
subject to the Plan and to any outstanding  Options, in the Section 162(m) Grant
Limit set forth in Section 5.4, to the automatic  Outside  Director Option grant
provisions  set forth in Section 7.1 and in the exercise  price per share of any
outstanding  Options. If a majority of the shares which are of the same class as
the shares that are subject to outstanding  Options are exchanged for, converted
into, or otherwise become (whether or not pursuant to an Ownership Change Event,
as

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defined in Section 9.1) shares of another  corporation  (the "New Shares"),  the
Board may  unilaterally  amend the  outstanding  Options  to  provide  that such
Options are exercisable for New Shares. In the event of any such amendment,  the
number  of  shares  subject  to,  and the  exercise  price  per  share  of,  the
outstanding  Options  shall  be  adjusted  in a fair  and  equitable  manner  as
determined by the Board, in its sole discretion.  Notwithstanding the foregoing,
any fractional  share resulting from an adjustment  pursuant to this Section 4.2
shall be rounded up or down to the nearest  whole  number,  as determined by the
Board,  and in no event may the exercise  price of any Option be decreased to an
amount less than the par value, if any, of the stock subject to the Option.  The
adjustments determined by the Board pursuant to this Section 4.2 shall be final,
binding and conclusive.

         5.  ELIGIBILITY AND OPTION LIMITATIONS.

             5.1 Persons  Eligible for  Options.  Options may be granted only to
Employees,  Consultants and Directors.  For purposes of the foregoing  sentence,
"Employees",  "Consultants" and "Directors" shall include prospective Employees,
prospective Consultants and prospective Directors to whom Options are granted in
connection with written offers of employment or other service  relationship with
the Participating  Company Group.  Eligible persons may be granted more than one
(1) Option.

             5.2 Option Grant Restrictions. Any person who is not an Employee on
the effective  date of the grant of an Option to such person may be granted only
a Nonstatutory  Stock Option. An Incentive Stock Option granted to a prospective
Employee upon the condition  that such person become an Employee shall be deemed
granted  effective on the date such person commences Service as an Employee with
a Participating  Company,  with an exercise price  determined as of such date in
accordance with Section 6.1. An Outside Director Option may be granted only to a
person who at the time of grant is an Outside Director.

             5.3 Fair  Market  Value  Limitation.  To the  extent  that  options
designated as Incentive  Stock Options  (granted under all stock option plans of
the Participating  Company Group,  including the Plan) become  exercisable by an
Optionee  for the first  time  during  any  calendar  year for  stock  having an
aggregate  Fair  Market  Value  greater  than  One  Hundred   Thousand   Dollars
($100,000),  the portion of such  options  which  exceeds  such amount  shall be
treated as Nonstatutory Stock Options. For purposes of this Section 5.3, options
designated  as Incentive  Stock Options shall be taken into account in the order
in which  they  were  granted,  and the  Fair  Market  Value  of stock  shall be
determined  as of the time the option with respect to such stock is granted.  If
the Code is amended to provide for a different limitation from that set forth in
this Section 5.3, such different  limitation shall be deemed incorporated herein
effective  as of the  date and with  respect  to such  Options  as  required  or
permitted by such amendment to the Code. If an Option is treated as an Incentive
Stock Option in part and as a Nonstatutory Stock Option in part by reason of the
limitation  set forth in this Section 5.3,  the  Optionee  may  designate  which
portion of such  Option  the  Optionee  is  exercising.  In the  absence of such
designation,  the Optionee shall be deemed to have exercised the Incentive Stock
Option portion of the Option first. Separate certificates representing each such
portion shall be issued upon the exercise of the Option.


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             5.4 Section  162(m) Grant Limit.  Subject to adjustment as provided
in Section 4.2, at any such time as a Participating  Company is a "publicly held
corporation"  within the meaning of Section 162(m), no Employee shall be granted
one or more Options within any fiscal year of the Company which in the aggregate
are for the  purchase of more than one hundred  twenty-five  thousand  (125,000)
shares (the "Section  162(m) Grant  Limit").  An Option which is canceled in the
same fiscal year of the  Company in which it was  granted  shall  continue to be
counted against the Section 162(m) Grant Limit for such period.

         6.  TERMS AND CONDITIONS OF OPTIONS.

             Options  shall be evidenced  by Option  Agreements  specifying  the
number of shares of Stock covered thereby,  in such form as the Board shall from
time to time  establish.  No Option  or  purported  Option  shall be a valid and
binding  obligation of the Company unless  evidenced by a fully executed  Option
Agreement. Option Agreements may incorporate all or any of the terms of the Plan
by reference  and,  except as  otherwise  set forth in Section 7 with respect to
Outside  Director  Options,  shall  comply with and be subject to the  following
terms and conditions:

             6.1 Exercise  Price.  The  exercise  price for each Option shall be
established in the sole discretion of the Board; provided, however, that (a) the
exercise  price per share for an  Incentive  Stock Option shall be not less than
the Fair Market Value of a share of Stock on the effective  date of grant of the
Option,  (b) the exercise price per share for a Nonstatutory  Stock Option shall
be not less than  eighty-five  percent (85%) of the Fair Market Value of a share
of Stock on the  effective  date of grant of the  Option,  and (c) no  Incentive
Stock  Option  granted to a Ten Percent  Owner  Optionee  shall have an exercise
price per share less than one  hundred  ten  percent  (110%) of the Fair  Market
Value  of a share  of  Stock  on the  effective  date of  grant  of the  Option.
Notwithstanding the foregoing, an Option (whether an Incentive Stock Option or a
Nonstatutory  Stock Option) may be granted with an exercise price lower than the
minimum  exercise price set forth above if such Option is granted pursuant to an
assumption or substitution  for another option in a manner  qualifying under the
provisions of Section 424(a) of the Code.

             6.2 Exercise  Period.  Options shall be exercisable at such time or
times,  or upon such event or events,  and  subject to such  terms,  conditions,
performance  criteria,  and restrictions as shall be determined by the Board and
set forth in the Option  Agreement  evidencing such Option;  provided,  however,
that (a) no Incentive Stock Option shall be exercisable  after the expiration of
ten  (10)  years  after  the  effective  date of grant  of such  Option,  (b) no
Incentive  Stock  Option  granted  to a Ten  Percent  Owner  Optionee  shall  be
exercisable  after the  expiration of five (5) years after the effective date of
grant of such  Option,  and (c) no Option  granted  to a  prospective  Employee,
prospective  Consultant or prospective  Director may become exercisable prior to
the date on which such person  commences  Service with a Participating  Company.
Subject to the foregoing,  unless otherwise  specified by the Board in the grant
of an Option,  any Option granted  hereunder shall have a term of five (5) years
from the effective date of the grant of the Option.


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             6.3 Payment of Exercise Price.

                  (a) Forms of  Consideration  Authorized.  Except as  otherwise
provided below,  payment of the exercise price for the number of shares of Stock
being  purchased  pursuant to any Option shall be made (i) in cash, by check, or
cash equivalent, (ii) by tender to the Company, or attestation to the ownership,
of  shares  of  Stock  owned by the  Optionee  having a Fair  Market  Value  (as
determined by the Company without regard to any restrictions on  transferability
applicable  to such  stock by  reason of  federal  or state  securities  laws or
agreements  with an  underwriter  for the  Company)  not less than the  exercise
price, (iii) by the assignment of the proceeds of a sale or loan with respect to
some or all of the  shares  being  acquired  upon  the  exercise  of the  Option
(including,   without  limitation,   through  an  exercise  complying  with  the
provisions  of  Regulation  T as  promulgated  from time to time by the Board of
Governors of the Federal Reserve System) (a "Cashless Exercise"),  (iv) provided
that the Optionee is an Employee,  by the Optionee's  promissory  note in a form
approved by the Company,  (v) by such other  consideration as may be approved by
the Board from time to time to the extent  permitted by applicable  law, or (vi)
by any combination  thereof.  The Board may at any time or from time to time, by
adoption of or by amendment to the standard forms of Option Agreement  described
in Section 8, or by other means,  grant  Options  which do not permit all of the
foregoing forms of  consideration to be used in payment of the exercise price or
which otherwise restrict one or more forms of consideration.

                  (b) Limitations on Forms of Consideration.

                       (i) Tender of Stock.  Notwithstanding  the foregoing,  an
Option may not be  exercised  by tender to the Company,  or  attestation  of the
ownership,  of shares of Stock to the extent such tender or  attestation  to the
ownership of Stock would  constitute a violation of the  provisions  of any law,
regulation or agreement  restricting  the  redemption  of the  Company's  stock.
Unless otherwise provided by the Board, an Option may not be exercised by tender
to the Company, or attestation to the ownership,  of shares of Stock unless such
shares  either have been owned by the  Optionee  for more than six (6) months or
were not acquired, directly or indirectly, from the Company.

                       (ii) Cashless Exercise.  The Company reserves, at any and
all  times,  the  right,  in the  Company's  sole and  absolute  discretion,  to
establish,  decline to approve or terminate  any program or  procedures  for the
exercise of Options by means of a Cashless Exercise.

                       (iii)  Payment by Promissory  Note.  No  promissory  note
shall be permitted if the exercise of an Option using a promissory note would be
a violation of any law. Any permitted  promissory note shall be on such terms as
the Board shall  determine  at the time the Option is  granted.  The Board shall
have the  authority to permit or require the  Optionee to secure any  promissory
note used to  exercise  an Option  with the  shares of Stock  acquired  upon the
exercise  of the  Option or with other  collateral  acceptable  to the  Company.
Unless otherwise provided by the Board, if the Company at any time is subject to
the  regulations  promulgated  by the Board of Governors of the Federal  Reserve
System or any other  governmental  entity  affecting  the extension of credit in
connection with the Company's securities,  any promissory note shall comply with
such applicable regulations, and the Optionee shall pay the unpaid principal and
accrued interest, if any, to the extent necessary to comply with such applicable
regulations.

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<PAGE>



             6.4 Tax Withholding.  The Company shall have the right, but not the
obligation,  to deduct from the shares of Stock issuable upon the exercise of an
Option,  or to accept from the  Optionee the tender of, a number of whole shares
of Stock having a Fair Market Value, as determined by the Company,  equal to all
or any part of the federal,  state, local and foreign taxes, if any, required by
law to be  withheld  by the  Participating  Company  Group with  respect to such
Option or the shares  acquired upon the exercise  thereof.  Alternatively  or in
addition,  in its sole  discretion,  the Company shall have the right to require
the Optionee, through payroll withholding, cash payment or otherwise,  including
by means of a Cashless  Exercise,  to make  adequate  provision for any such tax
withholding obligations of the Participating Company Group arising in connection
with the Option or the shares  acquired upon the exercise  thereof.  The Company
shall have no  obligation  to deliver  shares of Stock  until the  Participating
Company Group's tax withholding obligations have been satisfied by the Optionee.

             6.5 Effect of Termination of Service.

                  (a) Option  Exercisability.  Subject to earlier termination of
the Option as otherwise provided herein, an Option shall be exercisable after an
Optionee's termination of Service as follows:

                       (i)  Disability.  If  the  Optionee's  Service  with  the
Participating  Company  Group is  terminated  because of the  Disability  of the
Optionee,  the Option, to the extent  unexercised and exercisable on the date on
which the Optionee's  Service  terminated,  may be exercised by the Optionee (or
the  Optionee's  guardian  or legal  representative)  at any  time  prior to the
expiration of six (6) months (or such longer period of time as determined by the
Board, in its sole  discretion)  after the date on which the Optionee's  Service
terminated,  but in any  event no  later  than  the  date of  expiration  of the
Option's term as set forth in the Option  Agreement  evidencing such Option (the
"Option Expiration Date").

                       (ii)  Death.   If  the   Optionee's   Service   with  the
Participating  Company Group is terminated because of the death of the Optionee,
the Option,  to the extent  unexercised and exercisable on the date on which the
Optionee's  Service  terminated,  may  be  exercised  by  the  Optionee's  legal
representative  or other person who acquired the right to exercise the Option by
reason of the  Optionee's  death at any time prior to the  expiration of six (6)
months (or such longer period of time as  determined  by the Board,  in its sole
discretion) after the date on which the Optionee's  Service  terminated,  but in
any event no later than the Option Expiration Date. The Optionee's Service shall
be deemed to have terminated on account of death if the Optionee dies within one
(1) month after the Optionee's termination of Service.

                       (iii) Other  Termination  of Service.  If the  Optionee's
Service with the Participating  Company Group terminates for any reason,  except
Disability,  death or Cause, as provided in Section 6.5(d) below, the Option, to
the extent  unexercised and exercisable by the Optionee on the date on which the
Optionee's Service  terminated,  may be exercised by the Optionee within one (1)
month (or such longer  period of time as  determined  by the Board,  in its sole
discretion) after the date on which the Optionee's  Service  terminated,  but in
any event no later than the Option Expiration Date.


                                       30
<PAGE>



                  (b)  Extension if Exercise  Prevented by Law.  Notwithstanding
the foregoing,  if the exercise of an Option within the applicable  time periods
set forth in Section  6.5(a) is prevented by the provisions of Section 12 below,
the  Option  shall  remain  exercisable  until one (1) month  after the date the
Optionee is notified by the Company that the Option is  exercisable,  but in any
event no later than the Option Expiration Date.

                  (c)   Extension   if  Optionee   Subject  to  Section   16(b).
Notwithstanding the foregoing,  if a sale within the applicable time periods set
forth in Section 6.5(a) of shares acquired upon the exercise of the Option would
subject the Optionee to suit under Section 16(b) of the Exchange Act, the Option
shall remain exercisable until the earliest to occur of (i) the tenth (10th) day
following  the  date on which a sale of such  shares  by the  Optionee  would no
longer be subject to such suit,  (ii) the one hundred and ninetieth  (190th) day
after the  Optionee's  termination  of Service,  or (iii) the Option  Expiration
Date.

         7. TERMS AND CONDITIONS OF OUTSIDE DIRECTOR OPTIONS.

             Outside  Director  Options shall be evidenced by Option  Agreements
specifying  the number of shares of Stock covered  thereby,  in such form as the
Board shall from time to time establish.  Such Option Agreements may incorporate
all or any of the terms of the Plan by  reference  and shall  comply with and be
subject to the following terms and conditions:

             7.1  Automatic  Grant.  Outside  Director  Options shall be granted
automatically and without further action of the Board, as follows:

                  (a) Annual Option Grant. Effective upon the completion of each
annual meeting of the  shareholders  of the Company which occurs on or after the
Effective  Date (an  "Annual  Meeting"),  each  person who is the  serving as an
Outside  Director  shall be granted an Option to purchase two  thousand  (2,000)
shares of Stock, subject to adjustment as provided in Section 4.2.

                  (b) Right to Decline Outside Director Option.  Notwithstanding
the foregoing, any person may elect not to receive an Outside Director Option by
delivering  written  notice of such  election to the Board no later than the day
prior to the date such Outside  Director  Option would  otherwise be granted.  A
person so declining an Outside Director Option shall receive no payment or other
consideration in lieu of such declined Outside Director Option. A person who has
declined  an Outside  Director  Option may revoke such  election  by  delivering
written  notice of such  revocation  to the Board no later than the day prior to
the date such Outside  Director Option would be granted pursuant to this Section
7.1.

             7.2 Exercise  Price.  The exercise price per share of Stock subject
to an Outside Director Option shall be the Fair Market Value of a share of Stock
on the date the Outside Director Option is granted.

             7.3 Exercise  Period.  Each Outside Director Option shall terminate
and cease to be  exercisable  on the date five (5) years after the date of grant
of the Outside Director Option unless earlier  terminated  pursuant to the terms
of the Plan or the Option Agreement.


                                       31
<PAGE>



             7.4 Right to Exercise Outside Director Options. Except as otherwise
provided in the Plan or in the Option  Agreement,  each Outside  Director Option
shall  become  fully  vested  and  exercisable  on the first day of the  January
immediately following the date of grant, provided the Optionee's Service has not
terminated prior to such date.

             7.5 Effect of Termination of Service on Outside Director Options.

                  (a) Option  Exercisability.  Subject to earlier termination of
the Outside  Director  Option as otherwise  provided  herein,  if the Optionee's
Service  with  the  Participating  Company  Group  terminates  for  any  reason,
including the Disability or death of the Optionee,  the Outside Director Option,
to the extent  unexercised  and  exercisable on the date on which the Optionee's
Service  terminated,  may  be  exercised  by the  Optionee  (or  the  Optionee's
guardian,  legal  representative  or other  person  who  acquired  the  right to
exercise the Outside  Director Option by reason of the Optionee's  death) at any
time  prior to the  expiration  of two (2)  years  after  the date on which  the
Optionee's  Service  terminated,  but in any  event  no later  than  the  Option
Expiration Date.

                  (b)  Extension if Exercise  Prevented by Law.  Notwithstanding
the  foregoing,  if the  exercise  of an  Outside  Director  Option  within  the
applicable  time  periods  set  forth in  Section  7.5(a)  is  prevented  by the
provisions  of  Section 12 below,  the  Outside  Director  Option  shall  remain
exercisable  until three (3) months  after the date the  Optionee is notified by
the Company that the Outside Director Option is exercisable, but in any event no
later than the Option Expiration Date.

                  (c)   Extension   if  Optionee   Subject  to  Section   16(b).
Notwithstanding the foregoing,  if a sale within the applicable time periods set
forth in Section  6.5(a) of shares  acquired  upon the  exercise  of the Outside
Director  Option would  subject the Optionee to suit under  Section 16(b) of the
Exchange Act, the Outside  Director  Option shall remain  exercisable  until the
earliest to occur of (i) the tenth (10th) day following the date on which a sale
of such shares by the Optionee would no longer be subject to such suit, (ii) the
one  hundred  and  ninetieth  (190th) day after the  Optionee's  termination  of
Service, or (iii) the Option Expiration Date.

         8.  STANDARD FORMS OF OPTION AGREEMENT.

             8.1 Incentive Stock Options. Unless otherwise provided by the Board
at the time the Option is granted,  an Option  designated as an "Incentive Stock
Option" shall comply with and be subject to the terms and  conditions  set forth
in the appropriate form of Incentive Stock Option Agreement adopted by the Board
concurrently with its adoption of the Plan and as amended from time to time.

             8.2  Nonstatutory   Stock  Options  (Other  than  Outside  Director
Option).  Unless  otherwise  provided  by the  Board at the time the  Option  is
granted,  an Option  designated as a "Nonstatutory  Stock Option" (other than an
Outside  Director  Option)  shall  comply  with and be  subject to the terms and
conditions  set  forth in the  appropriate  form of  Nonstatutory  Stock  Option
Agreement adopted by the Board concurrently with its adoption of the Plan and as
amended from time to time.


                                       32
<PAGE>



             8.3 Outside  Director  Option.  Each Outside  Director Option shall
comply  with  and be  subject  to the  terms  and  conditions  set  forth in the
appropriate  form of  Nonstatutory  Stock  Option  Agreement  (Outside  Director
Option) adopted by the Board  concurrently  with its adoption of the Plan and as
amended from time to time.

             8.4  Authority  to Vary Terms.  The Board shall have the  authority
from  time to time to vary the  terms  of any of the  standard  forms of  Option
Agreement  described  in this Section 8 either in  connection  with the grant or
amendment of an individual  Option or in connection with the  authorization of a
new standard form or forms; provided,  however, that the terms and conditions of
any such new,  revised or amended standard form or forms of Option Agreement are
not inconsistent with the terms of the Plan.

         9.  CHANGE IN CONTROL.

             9.1  Definitions.  The following terms shall have their  respective
meanings set forth below:

                  (a) An  "Ownership  Change  Event"  shall  be  deemed  to have
occurred if any of the following occurs with respect to the Company:

                       (i) the direct or  indirect  sale or exchange in a single
or series of related  transactions  by the  shareholders  of the Company of more
than fifty percent (50%) of the voting stock of the Company;

                       (ii) a merger or  consolidation in which the Company is a
party;

                       (iii)  the  sale,   exchange,   or  transfer  of  all  or
substantially  all of the  assets  of the  Company;  or  (iv) a  liquidation  or
dissolution of the Company.

                  (b) A "Change in Control" shall mean an Ownership Change Event
or a series of related Ownership Change Events (collectively, the "Transaction")
wherein the  shareholders of the Company  immediately  before the Transaction do
not  retain  immediately  after  the  Transaction,  in  substantially  the  same
proportions  as  their  ownership  of  shares  of  the  Company's  voting  stock
immediately before the Transaction,  direct or indirect beneficial  ownership of
more  than  fifty  percent  (50%)  of the  total  combined  voting  power of the
outstanding  voting stock of the Company or the  corporation or  corporations to
which  the   assets  of  the   Company   were   transferred   (the   "Transferee
Corporation(s)"),  as the case may be. For purposes of the  preceding  sentence,
indirect beneficial  ownership shall include,  without  limitation,  an interest
resulting from ownership of the voting stock of one or more corporations  which,
as  a  result  of  the   Transaction,   own  the   Company  or  the   Transferee
Corporation(s),  as the case may be,  either  directly  or  through  one or more
subsidiary  corporations.  The Board shall have the right to  determine  whether
multiple  sales or  exchanges  of the voting  stock of the  Company or  multiple
Ownership  Change  Events are  related,  and its  determination  shall be final,
binding and conclusive.


                                       33
<PAGE>



             9.2  Effect of  Change in  Control  on  Options.  In the event of a
Change  in  Control,  the  surviving,   continuing,   successor,  or  purchasing
corporation or parent  corporation  thereof,  as the case may be (the "Acquiring
Corporation"),  may either assume the  Company's  rights and  obligations  under
outstanding  Options  or  substitute  for  outstanding   Options   substantially
equivalent options for the Acquiring  Corporation's  stock. For purposes of this
Section  9.2,  an Option  shall be deemed  assumed if,  following  the Change in
Control,  the Option confers the right to purchase in accordance  with its terms
and conditions,  for each share of Stock subject to the Option immediately prior
to the  Change in  Control,  the  consideration  (whether  stock,  cash or other
securities  or property) to which a holder of a share of Stock on the  effective
date of the  Change  in  Control  was  entitled.  The  Board  may,  in its  sole
discretion,  provide in any Option Agreement (other than an agreement evidencing
an Outside  Director  Option)  that,  in the event of a Change in  Control,  the
exercisability  and vesting of the outstanding Option shall accelerate upon such
circumstances and to such extent as specified in such Option  Agreement.  In the
event of a Change in Control,  any  unexercisable  or  unvested  portion of each
Outside  Director Option shall be immediately  exercisable and vested in full as
of the date ten (10)  days  prior to the  date of the  Change  in  Control.  The
exercise  or vesting of any Option that is  permissible  solely by reason of the
foregoing  provisions  related to a Change in Control shall be conditioned  upon
the consummation of the Change in Control. Any Options which are neither assumed
or substituted for by the Acquiring Corporation in connection with the Change in
Control nor  exercised as of the date of the Change in Control  shall  terminate
and cease to be  outstanding  effective as of the date of the Change in Control.
Notwithstanding the foregoing,  if the corporation the stock of which is subject
to the  outstanding  Options  immediately  prior to an  Ownership  Change  Event
described in Section 9.1(a)(i) constituting a Change in Control is the surviving
or continuing corporation and immediately after such Ownership Change Event less
than fifty percent (50%) of the total combined  voting power of its voting stock
is held by another  corporation or by other  corporations that are members of an
affiliated  group  within the  meaning of  Section  1504(a) of the Code  without
regard to the provisions of Section 1504(b) of the Code, the outstanding Options
shall not terminate unless the Board otherwise provides in its sole discretion.

         10. PROVISION OF INFORMATION.

             Each Optionee shall be given access to  information  concerning the
Company equivalent to that information generally made available to the Company's
common shareholders.

         11. TRANSFERABILITY OF OPTIONS.

             During the lifetime of the Optionee, an Option shall be exercisable
only by the  Optionee or the  Optionee's  guardian or legal  representative.  No
Option shall be assignable or transferable by the Optionee, except by will or by
the  laws  of  descent  and  distribution.   Notwithstanding  the  foregoing,  a
Nonstatutory  Stock Option shall be  assignable  or  transferable  to the extent
permitted  by the Board and set forth in the Option  Agreement  evidencing  such
Option.

         12. COMPLIANCE WITH SECURITIES LAW.

             The grant of  Options  and the  issuance  of  shares of Stock  upon
exercise  of  Options  shall  be  subject  to  compliance  with  all  applicable
requirements of federal,  state or foreign law with respect to such  securities.
Options may not be exercised  if the  issuance of shares of Stock upon  exercise
would  constitute  a  violation  of any  applicable  federal,  state or  foreign
securities  laws or other law or  regulations or the  requirements  of any stock
exchange or market system upon which the Stock may then be listed.  In addition,
no  Option  may be  exercised  unless  (a) a  registration  statement  under the
Securities  Act shall at the time of  exercise  of the Option be in effect  with
respect to the shares


                                       34
<PAGE>



issuable  upon  exercise of the Option or (b) in the opinion of legal counsel to
the Company,  the shares  issuable  upon exercise of the Option may be issued in
accordance  with the  terms of an  applicable  exemption  from the  registration
requirements  of the Securities Act. The inability of the Company to obtain from
any regulatory  body having  jurisdiction  the authority,  if any, deemed by the
Company's  legal counsel to be necessary to the lawful  issuance and sale of any
shares  hereunder  shall  relieve the Company of any liability in respect of the
failure to issue or sell such shares as to which such requisite  authority shall
not have been  obtained.  As a condition  to the  exercise  of any  Option,  the
Company  may require the  Optionee  to satisfy  any  qualifications  that may be
necessary or  appropriate,  to evidence  compliance  with any  applicable law or
regulation and to make any  representation  or warranty with respect  thereto as
may be requested by the Company.

         13. INDEMNIFICATION.

             In addition  to such other  rights of  indemnification  as they may
have as members  of the Board or  officers  or  employees  of the  Participating
Company  Group,  members  of the  Board and any  officers  or  employees  of the
Participating  Company  Group  to whom  authority  to act for the  Board  or the
Company is delegated  shall be indemnified by the Company against all reasonable
expenses,  including  attorneys'  fees,  actually  and  necessarily  incurred in
connection with the defense of any action, suit or proceeding,  or in connection
with any appeal  therein,  to which they or any of them may be a party by reason
of any action taken or failure to act under or in  connection  with the Plan, or
any right granted hereunder,  and against all amounts paid by them in settlement
thereof  (provided  such  settlement  is approved by  independent  legal counsel
selected by the  Company) or paid by them in  satisfaction  of a judgment in any
such action,  suit or  proceeding,  except in relation to matters as to which it
shall be adjudged in such action,  suit or proceeding that such person is liable
for gross negligence,  bad faith or intentional misconduct in duties;  provided,
however,  that within sixty (60) days after the institution of such action, suit
or  proceeding,  such  person  shall  offer  to the  Company,  in  writing,  the
opportunity at its own expense to handle and defend the same.

         14. TERMINATION OR AMENDMENT OF PLAN.

             The Board  may  terminate  or amend the Plan at any time.  However,
subject to changes in  applicable  law,  regulations  or rules that would permit
otherwise,  without the approval of the Company's  shareholders,  there shall be
(a) no increase in the maximum  aggregate  number of shares of Stock that may be
issued under the Plan (except by operation of the  provisions  of Section  4.2),
(b) no  change in the class of  persons  eligible  to  receive  Incentive  Stock
Options,  and (c) no other amendment of the Plan that would require  approval of
the Company's  shareholders under any applicable law, regulation or rule. In any
event,  no  termination  or amendment of the Plan may adversely  affect any then
outstanding  Option or any unexercised  portion thereof,  without the consent of
the  Optionee,  unless such  termination  or  amendment is required to enable an
Option  designated as an Incentive Stock Option to qualify as an Incentive Stock
Option or is necessary to comply with any applicable law, regulation or rule.

             IN  WITNESS  WHEREOF,  the  undersigned  Secretary  of the  Company
certifies  that the  foregoing  EMCON 1998 Stock Option Plan was duly adopted by
the Board on February 5, 1998.


                                            /s/ R. Michael Momboisse
                                            ------------------------


                                       35
<PAGE>



                                  PLAN HISTORY


February              5, 1998 Board adopts Plan,  with an initial  share reserve
                      of 1,000,000 shares.

May 28, 1998          Shareholders  approve  Plan, with an initial share reserve
                      of 1,000,000 shares.



                                       36

<PAGE>











                                STANDARD FORM OF
                                      EMCON
                        INCENTIVE STOCK OPTION AGREEMENT





                                       37
<PAGE>



                                      EMCON
                        INCENTIVE STOCK OPTION AGREEMENT

                  THIS INCENTIVE STOCK OPTION AGREEMENT (the "Option Agreement")
is made and entered into as of ______________ , 199__ , by and between EMCON and
________________________________ (the "Optionee").

                  The Company has granted to the Optionee  pursuant to the EMCON
1998 Stock  Option  Plan (the  "Plan") an option to purchase  certain  shares of
Stock,  upon the terms and  conditions  set forth in this Option  Agreement (the
"Option").  The  Option  shall in all  respects  be  subject  to the  terms  and
conditions  of the Plan,  the  provisions  of which are  incorporated  herein by
reference.

        1.   DEFINITIONS AND CONSTRUCTION.

             1.1  Definitions.  Whenever used herein,  the following terms shall
have their respective meanings set forth below:

                  (a) "Date of Option Grant" means  ___________________ , 199 __
 .

                  (b) "Number of Option Shares" means ________________ shares of
Stock, as adjusted from time to time pursuant to Section 9.

                  (c)  "Exercise  Price"  means $  _______________  per share of
Stock, as adjusted from time to time pursuant to Section 9.

                  (d) "Initial  Vesting  Date" means the date  occurring one (1)
year after (check one):

                       TM the Date of Option Grant.

                       TM  ________________  , 199 __ , the date the  Optionee's
Service commenced.

                  (e)  "Option  Expiration  Date"  means the date five (5) years
after the Date of Option Grant.


                                       38
<PAGE>



                  (f) "Vested Percentage" means, on any relevant date, except as
otherwise provided herein, the percentage determined as follows:

                                                              Vested Percentage
                                                              -----------------
                  Prior to Initial Vesting Date                       0%

                  On  Initial  Vesting  Date,  provided  the
                  Optionee's   Service  has  not  terminated
                  prior to such date                                 25%

                  Plus:

                  For each full year of the Optionee's  continuous  Service from
                  the Initial  Vesting Date until the Vested  Percentage  equals
                  100%, an additional 25%

                  (g) "Board"  means the Board of Directors  of the Company.  If
one or more  Committees have been appointed by the Board to administer the Plan,
"Board" shall also mean such Committee(s).

                  (h)  "Code"  means  the  Internal  Revenue  Code of  1986,  as
amended, and any applicable regulations promulgated thereunder.

                  (i)  "Committee"  means the  Compensation  Committee  or other
committee  of the Board duly  appointed to  administer  the Plan and having such
powers as shall be  specified by the Board.  Unless the powers of the  Committee
have been  specifically  limited,  the Committee shall have all of the powers of
the Board granted in the Plan, including, without limitation, the power to amend
or  terminate  the Plan at any  time,  subject  to the terms of the Plan and any
applicable limitations imposed by law.

                  (j) "Company"  means EMCON, a California  corporation,  or any
successor corporation thereto.

                  (k)  "Consultant"  means any  person,  including  an  advisor,
engaged by a Participating  Company to render services other than as an Employee
or a Director.

                  (l) "Director"  means a member of the Board or of the board of
directors of any other Participating Company.

                  (m)  "Disability"  means the permanent and total disability of
the Optionee within the meaning of Section 22(e)(3) of the Code.


                                       39
<PAGE>



                  (n)  "Employee"  means  any  person  treated  as  an  employee
(including  an officer or a Director  who is also treated as an employee) in the
records of a  Participating  Company  and who is an  employee  for  purposes  of
Section 422 of the Code; provided,  however,  that neither service as a Director
nor payment of a director's fee shall be sufficient to constitute employment for
this purpose.  The Company shall  determine in good faith and in the exercise of
its discretion  whether an individual has become or has ceased to be an Employee
and the  effective  date of  such  individual's  employment  or  termination  of
employment,  as the case may be. For purposes of an individual's rights, if any,
under  the  Plan  as of  the  time  of the  Company's  determination,  all  such
determinations   by  the  Company  shall  be  final,   binding  and  conclusive,
notwithstanding that the Company or any governmental agency subsequently makes a
contrary determination.

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

                  (p) "Fair Market Value" means,  as of any date, the value of a
share of stock  or  other  property  as  determined  by the  Board,  in its sole
discretion,  or by the Company, in its sole discretion, if such determination is
expressly allocated to the Company herein, subject to the following:

                       (i) If, on such  date,  there is a public  market for the
Stock, the Fair Market Value of a share of Stock shall be the closing sale price
of a share of Stock (or the mean of the closing bid and asked  prices of a share
of Stock if the Stock is so quoted  instead)  as quoted on the  Nasdaq  National
Market,  the  Nasdaq  Small-Cap  Market  or  such  other  national  or  regional
securities  exchange or market system  constituting  the primary  market for the
Stock,  as  reported  in the Wall  Street  Journal or such  other  source as the
Company deems reliable. If the relevant date does not fall on a day on which the
Stock has traded on such securities exchange or market system, the date on which
the Fair Market  Value shall be  established  shall be the last day on which the
Stock was so traded prior to the relevant date, or such other appropriate day as
shall be determined by the Board, in its sole discretion.

                       (ii) If, on such date,  there is no public market for the
Stock,  the Fair Market Value of a share of Stock shall be as  determined by the
Board without regard to any restriction  other than a restriction  which, by its
terms, will never lapse.

                  (q) "Insider" means an officer or a Director of the Company or
any other  person whose  transactions  in Stock are subject to Section 16 of the
Exchange Act.

                  (r) "Parent  Corporation"  means any present or future "parent
corporation" of the Company, as defined in Section 424(e) of the Code.

                  (s)  "Participating  Company"  means the Company or any Parent
Corporation or Subsidiary Corporation.

                  (t) "Participating Company Group" means, at any point in time,
all corporations collectively which are then Participating Companies.

                  (u) "Rule 16b-3"  means Rule 16b-3 under the Exchange  Act, as
amended from time to time, or any successor rule or regulation.

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


                                       40
<PAGE>



                  (w) "Service" means the Optionee's  employment or service with
the  Participating  Company  Group,  whether in the capacity of an  Employee,  a
Director or a  Consultant.  The  Optionee's  Service shall not be deemed to have
terminated  merely  because of a change in the  capacity  in which the  Optionee
renders  Service  to  the  Participating  Company  Group  or  a  change  in  the
Participating Company for which the Optionee renders such Service, provided that
there is no interruption or termination of the Optionee's Service.  Furthermore,
the Optionee's Service with the Participating  Company Group shall not be deemed
to have  terminated if the Optionee  takes any military  leave,  sick leave,  or
other bona fide leave of absence  approved by the  Company;  provided,  however,
that if any such leave exceeds ninety (90) days, on the ninety-first  (91st) day
of such leave the Optionee's  Service shall be deemed to have terminated  unless
the Optionee's right to return to Service with the  Participating  Company Group
is  guaranteed by statute or contract.  Notwithstanding  the  foregoing,  unless
otherwise designated by the Company or required by law, a leave of absence shall
not be treated as Service for  purposes of  determining  the  Optionee's  Vested
Percentage.  The Optionee's  Service shall be deemed to have  terminated  either
upon an actual  termination  of  Service or upon the  corporation  for which the
Optionee performs Service ceasing to be a Participating Company.  Subject to the
foregoing,  the Company,  in its sole  discretion,  shall determine  whether the
Optionee's Service has terminated and the effective date of such termination.

                  (x) "Stock" means the common stock of the Company, as adjusted
from time to time in accordance with Section 9.

                  (y)  "Subsidiary  Corporation"  means  any  present  or future
"subsidiary  corporation"  of the Company,  as defined in Section  424(f) of the
Code.

             1.2  Construction.  Captions  and titles  contained  herein are for
convenience  only and shall not affect  the  meaning  or  interpretation  of any
provision  of this Option  Agreement.  Except when  otherwise  indicated  by the
context,  the singular shall include the plural and the plural shall include the
singular.  Use of the term "or" is not  intended  to be  exclusive,  unless  the
context clearly requires otherwise.

        2.   TAX CONSEQUENCES.

             2.1  Tax  Status  of  Option.  This  Option  is  intended  to be an
Incentive Stock Option within the meaning of Section 422(b) of the Code, but the
Company does not  represent or warrant that this Option  qualifies as such.  The
Optionee  should consult with the  Optionee's own tax advisor  regarding the tax
effects of this Option and the requirements necessary to obtain favorable income
tax  treatment  under  Section 422 of the Code,  including,  but not limited to,
holding period requirements.  (NOTE TO OPTIONEE: If the Option is exercised more
than three (3) months after the date on which you cease to be an Employee (other
than by reason of your death or  permanent  and total  disability  as defined in
Section  22(e)(3)  of the Code),  the Option  will be treated as a  Nonstatutory
Stock  Option and not as an  Incentive  Stock  Option to the extent  required by
Section 422 of the Code.)

             2.2 Fair  Market  Value  Limitation.  To the extent that the Option
(together  with all Incentive  Stock Options  granted to the Optionee  under all
stock option  plans of the  Participating  Company  Group,  including  the Plan)
becomes  exercisable  for the first  time  during any  calendar  year for shares
having a Fair Market Value greater than One Hundred Thousand Dollars ($100,000),
the  portion  of such  options  which  exceeds  such  amount  will be treated as
Nonstatutory Stock Options. For purposes of this Section 2.2, options designated
as  Incentive  Stock  Options are taken into  account in the order in which they
were granted, and the Fair Market Value of stock is determined as


                                       41
<PAGE>



of the time the option  with  respect to such stock is  granted.  If the Code is
amended  to  provide  for a  different  limitation  from  that set forth in this
Section 2.2,  such  different  limitation  shall be deemed  incorporated  herein
effective as of the date required or permitted by such amendment to the Code. If
the Option is treated as an Incentive Stock Option in part and as a Nonstatutory
Stock Option in part by reason of the  limitation set forth in this Section 2.2,
the  Optionee  may  designate  which  portion  of such  Option the  Optionee  is
exercising. In the absence of such designation,  the Optionee shall be deemed to
have exercised the Incentive Stock Option portion of the Option first.  Separate
certificates representing each such portion shall be issued upon the exercise of
the Option.  (NOTE TO OPTIONEE:  If the aggregate  Exercise  Price of the Option
(that is, the Exercise Price multiplied by the Number of Option Shares) plus the
aggregate  exercise price of any other Incentive Stock Options you hold (whether
granted pursuant to the Plan or any other stock option plan of the Participating
Company Group) is greater than $100,000,  you should contact the Chief Financial
Officer of the Company to ascertain  whether the entire  Option  qualifies as an
Incentive Stock Option.)

        3.   ADMINISTRATION.

             All questions of  interpretation  concerning this Option  Agreement
shall be determined by the Board. All determinations by the Board shall be final
and binding upon all persons having an interest in the Option.  Any officer of a
Participating  Company  shall have the authority to act on behalf of the Company
with  respect  to any  matter,  right,  obligation,  or  election  which  is the
responsibility  of or which is  allocated  to the Company  herein,  provided the
officer has apparent authority with respect to such matter,  right,  obligation,
or election.

        4.   EXERCISE OF THE OPTION.

             4.1 Right to Exercise.  Except as otherwise  provided  herein,  the
Option shall be exercisable  on and after the Initial  Vesting Date and prior to
the  termination  of the Option (as  provided  in Section 6) in an amount not to
exceed the Number of Option Shares  multiplied by the Vested Percentage less the
number of shares  previously  acquired upon exercise of the Option.  In no event
shall the  Option  be  exercisable  for more  shares  than the  Number of Option
Shares.

             4.2 Method of Exercise.  Exercise of the Option shall be by written
notice to the Company which must state the election to exercise the Option,  the
number of whole shares of Stock for which the Option is being exercised and such
other representations and agreements as to the Optionee's investment intent with
respect to such shares as may be required  pursuant  to the  provisions  of this
Option Agreement.  The written notice must be signed by the Optionee and must be
delivered in person, by certified or registered mail, return receipt  requested,
by confirmed facsimile  transmission,  or by such other means as the Company may
permit,  to the Chief  Financial  Officer of the  Company,  or other  authorized
representative of the Participating  Company Group,  prior to the termination of
the  Option  as set forth in  Section  6,  accompanied  by full  payment  of the
aggregate Exercise Price for the number of shares of Stock being purchased.  The
Option  shall be deemed to be  exercised  upon  receipt  by the  Company of such
written notice and the aggregate Exercise Price.


                                       42
<PAGE>



             4.3 Payment of Exercise Price.

                  (a) Forms of  Consideration  Authorized.  Except as  otherwise
provided below, payment of the aggregate Exercise Price for the number of shares
of Stock for which the Option is being  exercised  shall be made (i) in cash, by
check, or cash equivalent,  (ii) by tender to the Company, or attestation to the
ownership,  of whole shares of Stock owned by the Optionee  having a Fair Market
Value (as  determined  by the  Company  without  regard to any  restrictions  on
transferability  applicable  to  such  stock  by  reason  of  federal  or  state
securities laws or agreements with an underwriter for the Company) not less than
the aggregate Exercise Price, (iii) by means of a Cashless Exercise,  as defined
in Section 4.3(b), or (iv) by any combination of the foregoing.

                  (b) Limitations on Forms of Consideration.

                       (i) Tender of Stock.  Notwithstanding the foregoing,  the
Option may not be  exercised  by tender to the Company,  or  attestation  to the
ownership,  of shares of Stock to the extent such tender,  or attestation to the
ownership,  of Stock would  constitute a violation of the provisions of any law,
regulation or agreement  restricting the redemption of the Company's  stock. The
Option may not be  exercised  by tender to the Company,  or  attestation  to the
ownership,  of shares of Stock unless such shares  either have been owned by the
Optionee  for  more  than  six (6)  months  or were not  acquired,  directly  or
indirectly, from the Company.

                       (ii) Cashless Exercise.  A "Cashless  Exercise" means the
assignment in a form acceptable to the Company of the proceeds of a sale or loan
with respect to some or all of the shares of Stock acquired upon the exercise of
the  Option  pursuant  to  a  program  or  procedure  approved  by  the  Company
(including,   without  limitation,   through  an  exercise  complying  with  the
provisions  of  Regulation  T as  promulgated  from time to time by the Board of
Governors of the Federal Reserve System).  The Company reserves,  at any and all
times, the right, in the Company's sole and absolute  discretion,  to decline to
approve or terminate any such program or procedure.

             4.4 Tax Withholding.  At the time the Option is exercised, in whole
or in part, or at any time thereafter as requested by the Company,  the Optionee
hereby authorizes  withholding from payroll and any other amounts payable to the
Optionee,  and  otherwise  agrees to make adequate  provision for  (including by
means of a Cashless  Exercise to the extent permitted by the Company),  any sums
required  to satisfy the  federal,  state,  local and  foreign  tax  withholding
obligations  of  the  Participating  Company  Group,  if  any,  which  arise  in
connection with the Option, including,  without limitation,  obligations arising
upon (i) the exercise, in whole or in part, of the Option, (ii) the transfer, in
whole or in part, of any shares acquired upon exercise of the Option,  (iii) the
operation of any law or regulation providing for the imputation of interest,  or
(iv) the lapsing of any  restriction  with respect to any shares  acquired  upon
exercise  of the  Option.  The  Optionee  is  cautioned  that the  Option is not
exercisable unless the tax withholding  obligations of the Participating Company
Group are satisfied.  Accordingly,  the Optionee may not be able to exercise the
Option when desired even though the Option is vested, and the Company shall have
no obligation to issue a certificate for such shares.

             4.5  Certificate  Registration.  Except in the  event the  Exercise
Price is paid by means of a Cashless Exercise, the certificate for the shares as
to  which  the  Option  is  exercised  shall  be  registered  in the name of the
Optionee, or, if applicable, in the names of the heirs of the Optionee.


                                       43
<PAGE>



             4.6 Restrictions on Grant of the Option and Issuance of Shares. The
grant of the Option and the  issuance  of shares of Stock upon  exercise  of the
Option  shall be subject  to  compliance  with all  applicable  requirements  of
federal,  state or foreign law with respect to such  securities.  The Option may
not be  exercised  if the  issuance  of  shares  of Stock  upon  exercise  would
constitute a violation of any applicable  federal,  state or foreign  securities
laws or other law or  regulations or the  requirements  of any stock exchange or
market system upon which the Stock may then be listed.  In addition,  the Option
may not be exercised  unless (i) a registration  statement  under the Securities
Act shall at the time of exercise of the Option be in effect with respect to the
shares  issuable  upon  exercise  of the Option or (ii) in the  opinion of legal
counsel to the Company,  the shares  issuable upon exercise of the Option may be
issued  in  accordance  with  the  terms  of an  applicable  exemption  from the
registration  requirements of the Securities Act. THE OPTIONEE IS CAUTIONED THAT
THE OPTION MAY NOT BE EXERCISED  UNLESS THE FOREGOING  CONDITIONS ARE SATISFIED.
ACCORDINGLY,  THE  OPTIONEE  MAY NOT BE ABLE TO EXERCISE THE OPTION WHEN DESIRED
EVEN THOUGH THE OPTION IS VESTED.  The  inability  of the Company to obtain from
any regulatory  body having  jurisdiction  the authority,  if any, deemed by the
Company's  legal counsel to be necessary to the lawful  issuance and sale of any
shares  subject to the Option  shall  relieve  the Company of any  liability  in
respect of the failure to issue or sell such  shares as to which such  requisite
authority  shall not have been  obtained.  As a condition to the exercise of the
Option, the Company may require the Optionee to satisfy any qualifications  that
may be necessary or appropriate,  to evidence compliance with any applicable law
or regulation and to make any representation or warranty with respect thereto as
may be requested by the Company.

             4.7 Fractional  Shares.  The Company shall not be required to issue
fractional shares upon the exercise of the Option.

         5.  NONTRANSFERABILITY OF THE OPTION.

             The Option may be  exercised  during the  lifetime of the  Optionee
only by the Optionee or the Optionee's guardian or legal  representative and may
not be assigned or  transferred  in any manner  except by will or by the laws of
descent and  distribution.  Following the death of the Optionee,  the Option, to
the extent  provided  in Section 7, may be  exercised  by the  Optionee's  legal
representative or by any person empowered to do so under the deceased Optionee's
will or under the then applicable laws of descent and distribution.

         6.  TERMINATION OF THE OPTION.

             The Option  shall  terminate  and may no longer be exercised on the
first  to  occur  of (a) the  Option  Expiration  Date,  (b) the  last  date for
exercising  the  Option  following  termination  of the  Optionee's  Service  as
described  in Section 7, or (c) a Change in  Control to the extent  provided  in
Section 8.

         7.  EFFECT OF TERMINATION OF SERVICE.

             7.1 Option Exercisability.

                  (a)   Disability.   If  the   Optionee's   Service   with  the
Participating  Company  Group is  terminated  because of the  Disability  of the
Optionee,  the Option, to the extent  unexercised and exercisable on the date on
which the Optionee's  Service  terminated,  may be exercised by the Optionee (or
the  Optionee's  guardian  or legal  representative)  at any  time  prior to the
expiration of six


                                       44
<PAGE>



(6) months after the date on which the Optionee's Service terminated, but in any
event no later than the Option Expiration Date.

                  (b) Death.  If the Optionee's  Service with the  Participating
Company Group is terminated because of the death of the Optionee, the Option, to
the  extent  unexercised  and  exercisable  on the date on which the  Optionee's
Service terminated,  may be exercised by the Optionee's legal  representative or
other  person who  acquired  the right to  exercise  the Option by reason of the
Optionee's death at any time prior to the expiration of six (6) months after the
date on which the Optionee's Service terminated,  but in any event no later than
the Option  Expiration  Date.  The  Optionee's  Service  shall be deemed to have
terminated  on account of death if the Optionee  dies within one (1) month after
the Optionee's termination of Service.

                  (c) Other  Termination of Service.  If the Optionee's  Service
with  the  Participating   Company  Group  terminates  for  any  reason,  except
Disability or death,  the Option,  to the extent  unexercised and exercisable by
the  Optionee on the date on which the  Optionee's  Service  terminated,  may be
exercised by the Optionee  within one (1) month (or such other longer  period of
time as determined by the Board, in its sole discretion) after the date on which
the  Optionee's  Service  terminated,  but in any event no later than the Option
Expiration Date.

             7.2  Extension if Exercise  Prevented by Law.  Notwithstanding  the
foregoing,  if the exercise of the Option within the applicable time periods set
forth in Section 7.1 is prevented by the  provisions  of Section 4.6, the Option
shall  remain  exercisable  until one (1) month  after the date the  Optionee is
notified  by the  Company  that the Option is  exercisable,  but in any event no
later than the Option Expiration Date. The Company makes no representation as to
the tax consequences of any such delayed  exercise.  The Optionee should consult
with the  Optionee's  own tax  advisor  as to the tax  consequences  of any such
delayed exercise.

             7.3 Extension if Optionee Subject to Section 16(b). Notwithstanding
the foregoing, if a sale within the applicable time periods set forth in Section
7.1 of shares  acquired  upon the  exercise  of the  Option  would  subject  the
Optionee to suit under  Section  16(b) of the  Exchange  Act,  the Option  shall
remain  exercisable  until the  earliest  to occur of (i) the tenth  (10th)  day
following  the  date on which a sale of such  shares  by the  Optionee  would no
longer be subject to such suit,  (ii) the one hundred and ninetieth  (190th) day
after the  Optionee's  termination  of Service,  or (iii) the Option  Expiration
Date. The Company makes no representation as to the tax consequences of any such
delayed  exercise.  The  Optionee  should  consult with the  Optionee's  own tax
advisor as to the tax consequences of any such delayed exercise.

         8.  CHANGE IN CONTROL.

             8.1 Definitions.

                  (a) An  "Ownership  Change  Event"  shall  be  deemed  to have
occurred if any of the following occurs with respect to the Company:

                       (i) the direct or  indirect  sale or exchange in a single
or series of related  transactions  by the  shareholders  of the Company of more
than fifty percent (50%) of the voting stock of the Company;

                       (ii) a merger or  consolidation in which the Company is a
party; or


                                       45
<PAGE>



                       (iii)  the  sale,   exchange,   or  transfer  of  all  or
substantially all of the assets of the Company; or

                       (iv) a liquidation or dissolution of the Company.

                  (b) A "Change in Control" shall mean an Ownership Change Event
or a series of related Ownership Change Events (collectively, the "Transaction")
wherein the  shareholders of the Company  immediately  before the Transaction do
not  retain  immediately  after  the  Transaction,  in  substantially  the  same
proportions  as  their  ownership  of  shares  of  the  Company's  voting  stock
immediately before the Transaction,  direct or indirect beneficial  ownership of
more  than  fifty  percent  (50%)  of the  total  combined  voting  power of the
outstanding  voting stock of the Company or the  corporation or  corporations to
which  the   assets  of  the   Company   were   transferred   (the   "Transferee
Corporation(s)"),  as the case may be. For purposes of the  preceding  sentence,
indirect beneficial  ownership shall include,  without  limitation,  an interest
resulting from ownership of the voting stock of one or more corporations  which,
as  a  result  of  the   Transaction,   own  the   Company  or  the   Transferee
Corporation(s),  as the case may be,  either  directly  or  through  one or more
subsidiary  corporations.  The Board shall have the right to  determine  whether
multiple  sales or  exchanges  of the voting  stock of the  Company or  multiple
Ownership  Change  Events are  related,  and its  determination  shall be final,
binding and conclusive.

             8.2 Effect of Change in Control on Option. In the event of a Change
in Control, the surviving,  continuing,  successor, or purchasing corporation or
parent corporation  thereof,  as the case may be (the "Acquiring  Corporation"),
may either  assume the  Company's  rights  and  obligations  under the Option or
substitute for the Option a  substantially  equivalent  option for the Acquiring
Corporation's  stock.  For  purposes of this  Section  8.2,  the Option shall be
deemed assumed if, following the Change in Control, the Option confers the right
to purchase in accordance with its terms and conditions, for each share of Stock
subject  to  the  Option  immediately  prior  to  the  Change  in  Control,  the
consideration  (whether stock,  cash or other securities or property) to which a
holder of a share of Stock on the  effective  date of the Change in Control  was
entitled. The Option shall terminate and cease to be outstanding effective as of
the date of the  Change in  Control  to the  extent  that the  Option is neither
assumed or substituted  for by the Acquiring  Corporation in connection with the
Change  in  Control  nor  exercised  as of the date of the  Change  in  Control.
Notwithstanding the foregoing,  if the corporation the stock of which is subject
to the Option  immediately  prior to an  Ownership  Change  Event  described  in
Section  8.1(a)(i)  constituting  a  Change  in  Control  is  the  surviving  or
continuing  corporation and immediately  after such Ownership  Change Event less
than fifty percent (50%) of the total combined  voting power of its voting stock
is held by another  corporation or by other  corporations that are members of an
affiliated  group  within the  meaning of  Section  1504(a) of the Code  without
regard to the  provisions of Section  1504(b) of the Code,  the Option shall not
terminate unless the Board otherwise provides in its sole discretion.

         9.  ADJUSTMENTS FOR CHANGES IN CAPITAL STRUCTURE.

             In the event of any stock  dividend,  stock  split,  reverse  stock
split, recapitalization, combination, reclassification, or similar change in the
capital structure of the Company,  appropriate  adjustments shall be made in the
number,  Exercise Price and class of shares of stock subject to the Option. If a
majority  of the  shares  which  are of the same  class as the  shares  that are
subject to the Option are exchanged  for,  converted  into, or otherwise  become
(whether  or not  pursuant  to an  Ownership  Change  Event)  shares of  another
corporation (the "New Shares"),  the Board may unilaterally  amend the Option to
provide that the Option is exercisable for New Shares.  In the event of any such
amendment,  the Number of Option Shares and the Exercise Price shall be adjusted
in a


                                       46
<PAGE>



fair and equitable  manner,  as determined by the Board, in its sole discretion.
Notwithstanding the foregoing, any fractional share resulting from an adjustment
pursuant  to this  Section 9 shall be  rounded up or down to the  nearest  whole
number,  as determined by the Board,  and in no event may the Exercise  Price be
decreased to an amount less than the par value,  if any, of the stock subject to
the Option.  The adjustments  determined by the Board pursuant to this Section 9
shall be final, binding and conclusive.

         10. RIGHTS AS A SHAREHOLDER, EMPLOYEE OR CONSULTANT.

             The Optionee shall have no rights as a shareholder  with respect to
any shares covered by the Option until the date of the issuance of a certificate
for the  shares for which the Option has been  exercised  (as  evidenced  by the
appropriate  entry on the books of the Company or of a duly authorized  transfer
agent of the Company). No adjustment shall be made for dividends,  distributions
or other rights for which the record date is prior to the date such  certificate
is issued, except as provided in Section 9. If the Optionee is an Employee,  the
Optionee  understands and acknowledges  that, except as otherwise  provided in a
separate,  written employment agreement between a Participating  Company and the
Optionee,  the Optionee's  employment is "at will" and is for no specified term.
Nothing in this Option  Agreement  shall  confer upon the  Optionee any right to
continue in the Service of a Participating  Company or interfere in any way with
any right of the Participating Company Group to terminate the Optionee's Service
as an Employee or Consultant, as the case may be, at any time.

         11.  NOTICE OF SALES UPON DISQUALIFYING DISPOSITION.

             The Optionee shall dispose of the shares  acquired  pursuant to the
Option only in  accordance  with the  provisions  of this Option  Agreement.  In
addition,  the Optionee shall promptly notify the Chief Financial Officer of the
Company if the Optionee  disposes of any of the shares acquired  pursuant to the
Option within one (1) year after the date of the Optionee  exercises all or part
of the Option or within two (2) years after the Date of Option Grant. Until such
time as the  Optionee  disposes of such shares in a manner  consistent  with the
provisions of this Option Agreement,  unless otherwise  expressly  authorized by
the Company,  the Optionee shall hold all shares acquired pursuant to the Option
in the  Optionee's  name (and not in the name of any  nominee)  for the one-year
period  immediately  after the  exercise of the Option and the  two-year  period
immediately  after Date of Option  Grant.  At any time  during the  one-year  or
two-year  periods  set  forth  above,  the  Company  may  place a legend  on any
certificate  representing  shares acquired pursuant to the Option requesting the
transfer  agent  for the  Company's  stock to  notify  the  Company  of any such
transfers.  The  obligation  of the  Optionee  to notify the Company of any such
transfer  shall  continue  notwithstanding  that a legend has been placed on the
certificate pursuant to the preceding sentence.

         12. LEGENDS.

             The  Company  may  at  any  time  place  legends   referencing  any
applicable  federal,  state  or  foreign  securities  law  restrictions  on  all
certificates  representing  shares of stock  subject to the  provisions  of this
Option  Agreement.  The Optionee shall, at the request of the Company,  promptly
present to the Company any and all  certificates  representing  shares  acquired
pursuant to the Option in the  possession  of the Optionee in order to carry out
the provisions of this Section.


                                       47
<PAGE>



         13. BINDING EFFECT.

             Subject to the  restrictions  on transfer  set forth  herein,  this
Option  Agreement  shall inure to the benefit of and be binding upon the parties
hereto and their respective  heirs,  executors,  administrators,  successors and
assigns.

         14. TERMINATION OR AMENDMENT.

             The Board  may  terminate  or amend  the Plan or the  Option at any
time;  provided,  however,  that except as provided in Section 8.2 in connection
with a Change in Control,  no such termination or amendment may adversely affect
the Option or any unexercised portion hereof without the consent of the Optionee
unless such  termination or amendment is necessary to comply with any applicable
law or  government  regulation or is required to enable the Option to qualify as
an Incentive  Stock  Option.  No amendment or addition to this Option  Agreement
shall be effective unless in writing.

         15. NOTICES.

             Any  notice  required  or  permitted  hereunder  shall  be given in
writing and shall be deemed  effectively  given  (except to the extent that this
Option  Agreement  provides for  effectiveness  only upon actual receipt of such
notice) upon personal delivery or upon deposit in the United States Post Office,
by registered or certified mail, with postage and fees prepaid, addressed to the
other party at the address  shown below that party's  signature or at such other
address as such party may  designate  in writing  from time to time to the other
party.

         16. INTEGRATED AGREEMENT.

             This  Option   Agreement  and  the  Plan   constitute   the  entire
understanding and agreement of the Optionee and the Participating  Company Group
with respect to the subject matter contained herein and therein and there are no
agreements, understandings,  restrictions,  representations, or warranties among
the Optionee and the  Participating  Company  Group with respect to such subject
matter other than those as set forth or provided  for herein or therein.  To the
extent contemplated  herein or therein,  the provisions of this Option Agreement
shall  survive  any  exercise  of the Option and shall  remain in full force and
effect.



<PAGE>



         17. APPLICABLE LAW.

             This Option Agreement shall be governed by the laws of the State of
California as such laws are applied to agreements between  California  residents
entered into and to be performed entirely within the State of California.

                  EMCON



                  By:
                      ---------------------------------------
                  Title:
                         ------------------------------------
                  Address:  400 S. El Camino Real, Suite 1200
                               San Mateo, California 94402



                                       49

<PAGE>





         The Optionee  represents  that the Optionee is familiar  with the terms
and provisions of this Option Agreement and hereby accepts the Option subject to
all of the terms and provisions thereof. The Optionee hereby agrees to accept as
binding, conclusive and final all decisions or interpretations of the Board upon
any questions arising under this Option Agreement.


                                         OPTIONEE

Date:
      -----------------------------       ------------------------------------

                                          Optionee Address:

                                          ------------------------------------

                                          ------------------------------------




                                       50
<PAGE>









                                STANDARD FORM OF
                                      EMCON
                       NONSTATUTORY STOCK OPTION AGREEMENT







                                       51
<PAGE>



                                      EMCON
                       NONSTATUTORY STOCK OPTION AGREEMENT

        THIS  NONSTATUTORY  STOCK OPTION  AGREEMENT (the "Option  Agreement") is
made and entered into as of  ______________  , 199__ , by and between  EMCON and
________________________________ (the "Optionee").

        The Company has granted to the Optionee pursuant to the EMCON 1998 Stock
Option Plan (the "Plan") an option to purchase certain shares of Stock, upon the
terms and conditions  set forth in this Option  Agreement  (the  "Option").  The
Option shall in all respects be subject to the terms and conditions of the Plan,
the provisions of which are incorporated herein by reference.

         1.  DEFINITIONS AND CONSTRUCTION.

             1.1  Definitions.  Whenever used herein,  the following terms shall
have their respective meanings set forth below:

                  (a) "Date of Option Grant" means  ___________________ , 199 __
 .

                  (b) "Number of Option Shares" means ________________ shares of
Stock, as adjusted from time to time pursuant to Section 9.

                  (c)  "Exercise  Price"  means $  _______________  per share of
Stock, as adjusted from time to time pursuant to Section 9.

                  (d) "Initial  Vesting  Date" means the date  occurring one (1)
year after (check one):

                       TM the Date of Option Grant.

                       TM  ________________  , 199 __ , the date the  Optionee's
Service commenced.

                  (e)  "Option  Expiration  Date"  means the date five (5) years
after the Date of Option Grant.



                                       52

<PAGE>



                  (f) "Vested Percentage" means, on any relevant date, except as
otherwise provided herein, the percentage determined as follows:

                                                              Vested Percentage
                                                              -----------------
                  Prior to Initial Vesting Date                        0%

                  On  Initial  Vesting  Date,  provided  the
                  Optionee's   Service  has  not  terminated
                  prior to such date                                  25%

                  Plus:

                  For  each  full  year  of  the  Optionee's
                  continuous   Service   from  the   Initial
                  Vesting  Date until the Vested  Percentage
                  equals 100%, an additional                          25%

                  (g) "Board"  means the Board of Directors  of the Company.  If
one or more  Committees have been appointed by the Board to administer the Plan,
"Board" shall also mean such Committee(s).

                  (h)  "Code"  means  the  Internal  Revenue  Code of  1986,  as
amended, and any applicable regulations promulgated thereunder.

                  (i)  "Committee"  means the  Compensation  Committee  or other
committee  of the Board duly  appointed to  administer  the Plan and having such
powers as shall be  specified by the Board.  Unless the powers of the  Committee
have been  specifically  limited,  the Committee shall have all of the powers of
the Board granted in the Plan, including, without limitation, the power to amend
or  terminate  the Plan at any  time,  subject  to the terms of the Plan and any
applicable limitations imposed by law.

                  (j) "Company"  means EMCON, a California  corporation,  or any
successor corporation thereto.

                  (k)  "Consultant"  means any  person,  including  an  advisor,
engaged by a Participating  Company to render services other than as an Employee
or a Director.

                  (l) "Director"  means a member of the Board or of the board of
directors of any other Participating Company.

                  (m)  "Disability"  means the permanent and total disability of
the Optionee within the meaning of Section 22(e)(3) of the Code.



                                       53

<PAGE>



                  (n)  "Employee"  means  any  person  treated  as  an  employee
(including  an officer or a Director  who is also treated as an employee) in the
records of a Participating Company; provided, however, that neither service as a
Director  nor payment of a  director's  fee shall be  sufficient  to  constitute
employment  for this purpose.  The Company shall  determine in good faith and in
the exercise of its discretion whether an individual has become or has ceased to
be an  Employee  and  the  effective  date of such  individual's  employment  or
termination of employment,  as the case may be. For purposes of an  individual's
rights,  if any,  under the Plan as of the time of the Company's  determination,
all such  determinations by the Company shall be final,  binding and conclusive,
notwithstanding that the Company or any governmental agency subsequently makes a
contrary determination.

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

                  (p) "Fair Market Value" means,  as of any date, the value of a
share of stock  or  other  property  as  determined  by the  Board,  in its sole
discretion,  or by the Company, in its sole discretion, if such determination is
expressly allocated to the Company herein, subject to the following:  (i) If, on
such date,  there is a public  market for the Stock,  the Fair Market Value of a
share of Stock shall be the closing  sale price of a share of Stock (or the mean
of the  closing  bid and  asked  prices  of a share of Stock if the  Stock is so
quoted instead) as quoted on the Nasdaq National  Market,  the Nasdaq  Small-Cap
Market or such other national or regional  securities  exchange or market system
constituting  the primary  market for the Stock,  as reported in the Wall Street
Journal or such other source as the Company deems reliable. If the relevant date
does not fall on a day on which the Stock has traded on such securities exchange
or market  system,  the date on which the Fair Market Value shall be established
shall be the last day on which the Stock  was so  traded  prior to the  relevant
date, or such other  appropriate day as shall be determined by the Board, in its
sole discretion.

                       (ii) If, on such date,  there is no public market for the
Stock,  the Fair Market Value of a share of Stock shall be as  determined by the
Board without regard to any restriction  other than a restriction  which, by its
terms, will never lapse.

                  (q) "Insider" means an officer or a Director of the Company or
any other  person whose  transactions  in Stock are subject to Section 16 of the
Exchange Act.

                  (r) "Parent  Corporation"  means any present or future "parent
corporation" of the Company, as defined in Section 424(e) of the Code.

                  (s)  "Participating  Company"  means the Company or any Parent
Corporation or Subsidiary Corporation.

                  (t) "Participating Company Group" means, at any point in time,
all corporations collectively which are then Participating Companies.

                  (u) "Rule 16b-3"  means Rule 16b-3 under the Exchange  Act, as
amended from time to time, or any successor rule or regulation.

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


                                       54
<PAGE>



                  (w) "Service" means the Optionee's  employment or service with
the  Participating  Company  Group,  whether in the capacity of an  Employee,  a
Director or a  Consultant.  The  Optionee's  Service shall not be deemed to have
terminated  merely  because of a change in the  capacity  in which the  Optionee
renders  Service  to  the  Participating  Company  Group  or  a  change  in  the
Participating Company for which the Optionee renders such Service, provided that
there is no interruption or termination of the Optionee's Service.  Furthermore,
the Optionee's Service with the Participating  Company Group shall not be deemed
to have  terminated if the Optionee  takes any military  leave,  sick leave,  or
other bona fide leave of absence  approved by the  Company;  provided,  however,
that if any such leave exceeds ninety (90) days, on the ninety-first  (91st) day
of such leave the Optionee's  Service shall be deemed to have terminated  unless
the Optionee's right to return to Service with the  Participating  Company Group
is  guaranteed by statute or contract.  Notwithstanding  the  foregoing,  unless
otherwise designated by the Company or required by law, a leave of absence shall
not be treated as Service for  purposes of  determining  the  Optionee's  Vested
Percentage.  The Optionee's  Service shall be deemed to have  terminated  either
upon an actual  termination  of  Service or upon the  corporation  for which the
Optionee performs Service ceasing to be a Participating Company.  Subject to the
foregoing,  the Company,  in its sole  discretion,  shall determine  whether the
Optionee's Service has terminated and the effective date of such termination.

                  (x) "Stock" means the common stock of the Company, as adjusted
from time to time in accordance with Section 9.

                  (y)  "Subsidiary  Corporation"  means  any  present  or future
"subsidiary  corporation"  of the Company,  as defined in Section  424(f) of the
Code.

             1.2  Construction.  Captions  and titles  contained  herein are for
convenience  only and shall not affect  the  meaning  or  interpretation  of any
provision  of this Option  Agreement.  Except when  otherwise  indicated  by the
context,  the singular shall include the plural and the plural shall include the
singular.  Use of the term "or" is not  intended  to be  exclusive,  unless  the
context clearly requires otherwise.

         2.  TAX STATUS OF OPTION.

             This Option is intended to be a Nonstatutory Stock Option and shall
not be treated as an Incentive Stock Option within the meaning of Section 422(b)
of the Code.

         3.  ADMINISTRATION.

             All questions of  interpretation  concerning this Option  Agreement
shall be determined by the Board. All determinations by the Board shall be final
and binding upon all persons having an interest in the Option.  Any officer of a
Participating  Company  shall have the authority to act on behalf of the Company
with  respect  to any  matter,  right,  obligation,  or  election  which  is the
responsibility  of or which is  allocated  to the Company  herein,  provided the
officer has apparent authority with respect to such matter,  right,  obligation,
or election.


                                       55
<PAGE>



         4.  EXERCISE OF THE OPTION.

             4.1 Right to Exercise.  Except as otherwise  provided  herein,  the
Option shall be exercisable  on and after the Initial  Vesting Date and prior to
the  termination  of the Option (as  provided  in Section 6) in an amount not to
exceed the Number of Option Shares  multiplied by the Vested Percentage less the
number of shares  previously  acquired upon exercise of the Option.  In no event
shall the  Option  be  exercisable  for more  shares  than the  Number of Option
Shares.

             4.2 Method of Exercise.  Exercise of the Option shall be by written
notice to the Company which must state the election to exercise the Option,  the
number of whole shares of Stock for which the Option is being exercised and such
other representations and agreements as to the Optionee's investment intent with
respect to such shares as may be required  pursuant  to the  provisions  of this
Option Agreement.  The written notice must be signed by the Optionee and must be
delivered in person, by certified or registered mail, return receipt  requested,
by confirmed facsimile  transmission,  or by such other means as the Company may
permit,  to the Chief  Financial  Officer of the  Company,  or other  authorized
representative of the Participating  Company Group,  prior to the termination of
the  Option  as set forth in  Section  6,  accompanied  by full  payment  of the
aggregate Exercise Price for the number of shares of Stock being purchased.  The
Option  shall be deemed to be  exercised  upon  receipt  by the  Company of such
written notice and the aggregate Exercise Price.

             4.3 Payment of Exercise Price.

                  (a) Forms of  Consideration  Authorized.  Except as  otherwise
provided below, payment of the aggregate Exercise Price for the number of shares
of Stock for which the Option is being  exercised  shall be made (i) in cash, by
check, or cash equivalent,  (ii) by tender to the Company, or attestation to the
ownership,  of whole shares of Stock owned by the Optionee  having a Fair Market
Value (as  determined  by the  Company  without  regard to any  restrictions  on
transferability  applicable  to  such  stock  by  reason  of  federal  or  state
securities laws or agreements with an underwriter for the Company) not less than
the aggregate Exercise Price, (iii) by means of a Cashless Exercise,  as defined
in Section 4.3(b), or (iv) by any combination of the foregoing.

                  (b) Limitations on Forms of Consideration.

                       (i) Tender of Stock.  Notwithstanding the foregoing,  the
Option may not be  exercised  by tender to the Company,  or  attestation  to the
ownership,  of shares of Stock to the extent such tender,  or attestation to the
ownership,  of Stock would  constitute a violation of the provisions of any law,
regulation or agreement  restricting the redemption of the Company's  stock. The
Option may not be  exercised  by tender to the Company,  or  attestation  to the
ownership,  of shares of Stock unless such shares  either have been owned by the
Optionee  for  more  than  six (6)  months  or were not  acquired,  directly  or
indirectly, from the Company.

                       (ii) Cashless Exercise.  A "Cashless  Exercise" means the
assignment in a form acceptable to the Company of the proceeds of a sale or loan
with respect to some or all of the shares of Stock acquired upon the exercise of
the  Option  pursuant  to  a  program  or  procedure  approved  by  the  Company
(including,   without  limitation,   through  an  exercise  complying  with  the
provisions  of  Regulation  T as  promulgated  from time to time by the Board of
Governors of the Federal Reserve System).  The Company reserves,  at any and all
times, the right, in the Company's sole and absolute  discretion,  to decline to
approve or terminate any such program or procedure.


                                       56
<PAGE>



             4.4 Tax Withholding.  At the time the Option is exercised, in whole
or in part, or at any time thereafter as requested by the Company,  the Optionee
hereby authorizes  withholding from payroll and any other amounts payable to the
Optionee,  and  otherwise  agrees to make adequate  provision for  (including by
means of a Cashless  Exercise to the extent permitted by the Company),  any sums
required  to satisfy the  federal,  state,  local and  foreign  tax  withholding
obligations  of  the  Participating  Company  Group,  if  any,  which  arise  in
connection with the Option, including,  without limitation,  obligations arising
upon (i) the exercise, in whole or in part, of the Option, (ii) the transfer, in
whole or in part, of any shares acquired upon exercise of the Option,  (iii) the
operation of any law or regulation providing for the imputation of interest,  or
(iv) the lapsing of any  restriction  with respect to any shares  acquired  upon
exercise  of the  Option.  The  Optionee  is  cautioned  that the  Option is not
exercisable unless the tax withholding  obligations of the Participating Company
Group are satisfied.  Accordingly,  the Optionee may not be able to exercise the
Option when desired even though the Option is vested, and the Company shall have
no obligation to issue a certificate for such shares.

             4.5  Certificate  Registration.  Except in the  event the  Exercise
Price is paid by means of a Cashless Exercise, the certificate for the shares as
to  which  the  Option  is  exercised  shall  be  registered  in the name of the
Optionee, or, if applicable, in the names of the heirs of the Optionee.

             4.6 Restrictions on Grant of the Option and Issuance of Shares. The
grant of the Option and the  issuance  of shares of Stock upon  exercise  of the
Option  shall be subject  to  compliance  with all  applicable  requirements  of
federal,  state or foreign law with respect to such  securities.  The Option may
not be  exercised  if the  issuance  of  shares  of Stock  upon  exercise  would
constitute a violation of any applicable  federal,  state or foreign  securities
laws or other law or  regulations or the  requirements  of any stock exchange or
market system upon which the Stock may then be listed.  In addition,  the Option
may not be exercised  unless (i) a registration  statement  under the Securities
Act shall at the time of exercise of the Option be in effect with respect to the
shares  issuable  upon  exercise  of the Option or (ii) in the  opinion of legal
counsel to the Company,  the shares  issuable upon exercise of the Option may be
issued  in  accordance  with  the  terms  of an  applicable  exemption  from the
registration  requirements of the Securities Act. THE OPTIONEE IS CAUTIONED THAT
THE OPTION MAY NOT BE EXERCISED  UNLESS THE FOREGOING  CONDITIONS ARE SATISFIED.
ACCORDINGLY,  THE  OPTIONEE  MAY NOT BE ABLE TO EXERCISE THE OPTION WHEN DESIRED
EVEN THOUGH THE OPTION IS VESTED.  The  inability  of the Company to obtain from
any regulatory  body having  jurisdiction  the authority,  if any, deemed by the
Company's  legal counsel to be necessary to the lawful  issuance and sale of any
shares  subject to the Option  shall  relieve  the Company of any  liability  in
respect of the failure to issue or sell such  shares as to which such  requisite
authority  shall not have been  obtained.  As a condition to the exercise of the
Option, the Company may require the Optionee to satisfy any qualifications  that
may be necessary or appropriate,  to evidence compliance with any applicable law
or regulation and to make any representation or warranty with respect thereto as
may be requested by the Company.

             4.7 Fractional  Shares.  The Company shall not be required to issue
fractional shares upon the exercise of the Option.

         5.  NONTRANSFERABILITY OF THE OPTION.

             The Option may be  exercised  during the  lifetime of the  Optionee
only by the Optionee or the Optionee's guardian or legal  representative and may
not be assigned or  transferred  in any manner  except by will or by the laws of
descent and  distribution.  Following the death of the Optionee,  the Option, to
the extent provided in Section 7, may be exercised by the Optionee's legal


                                       57
<PAGE>



representative or by any person empowered to do so under the deceased Optionee's
will or under the then applicable laws of descent and distribution.

         6.  TERMINATION OF THE OPTION.

             The Option  shall  terminate  and may no longer be exercised on the
first  to  occur  of (a) the  Option  Expiration  Date,  (b) the  last  date for
exercising  the  Option  following  termination  of the  Optionee's  Service  as
described  in Section 7, or (c) a Change in  Control to the extent  provided  in
Section 8.

         7.  EFFECT OF TERMINATION OF SERVICE.

             7.1   Option Exercisability.

                  (a)   Disability.   If  the   Optionee's   Service   with  the
Participating  Company  Group is  terminated  because of the  Disability  of the
Optionee,  the Option, to the extent  unexercised and exercisable on the date on
which the Optionee's  Service  terminated,  may be exercised by the Optionee (or
the  Optionee's  guardian  or legal  representative)  at any  time  prior to the
expiration  of six (6)  months  after the date on which the  Optionee's  Service
terminated, but in any event no later than the Option Expiration Date.

                  (b) Death.  If the Optionee's  Service with the  Participating
Company Group is terminated because of the death of the Optionee, the Option, to
the  extent  unexercised  and  exercisable  on the date on which the  Optionee's
Service terminated,  may be exercised by the Optionee's legal  representative or
other  person who  acquired  the right to  exercise  the Option by reason of the
Optionee's death at any time prior to the expiration of six (6) months after the
date on which the Optionee's Service terminated,  but in any event no later than
the Option  Expiration  Date.  The  Optionee's  Service  shall be deemed to have
terminated  on account of death if the Optionee  dies within one (1) month after
the Optionee's termination of Service.

                  (c) Other  Termination of Service.  If the Optionee's  Service
with  the  Participating   Company  Group  terminates  for  any  reason,  except
Disability or death,  the Option,  to the extent  unexercised and exercisable by
the  Optionee on the date on which the  Optionee's  Service  terminated,  may be
exercised by the Optionee  within one (1) month (or such other longer  period of
time as determined by the Board, in its sole discretion) after the date on which
the  Optionee's  Service  terminated,  but in any event no later than the Option
Expiration Date.

             7.2  Extension if Exercise  Prevented by Law.  Notwithstanding  the
foregoing,  if the exercise of the Option within the applicable time periods set
forth in Section 7.1 is prevented by the  provisions  of Section 4.6, the Option
shall  remain  exercisable  until one (1) month  after the date the  Optionee is
notified  by the  Company  that the Option is  exercisable,  but in any event no
later than the Option Expiration Date. The Company makes no representation as to
the tax consequences of any such delayed  exercise.  The Optionee should consult
with the  Optionee's  own tax  advisor  as to the tax  consequences  of any such
delayed exercise.


                                       58
<PAGE>



             7.3 Extension if Optionee Subject to Section 16(b). Notwithstanding
the foregoing, if a sale within the applicable time periods set forth in Section
7.1 of shares  acquired  upon the  exercise  of the  Option  would  subject  the
Optionee to suit under  Section  16(b) of the  Exchange  Act,  the Option  shall
remain  exercisable  until the  earliest  to occur of (i) the tenth  (10th)  day
following  the  date on which a sale of such  shares  by the  Optionee  would no
longer be subject to such suit,  (ii) the one hundred and ninetieth  (190th) day
after the  Optionee's  termination  of Service,  or (iii) the Option  Expiration
Date. The Company makes no representation as to the tax consequences of any such
delayed  exercise.  The  Optionee  should  consult with the  Optionee's  own tax
advisor as to the tax consequences of any such delayed exercise.

         8.  CHANGE IN CONTROL.

             8.1 Definitions.

                  (a) An  "Ownership  Change  Event"  shall  be  deemed  to have
occurred if any of the following occurs with respect to the Company:

                       (i) the direct or  indirect  sale or exchange in a single
or series of related  transactions  by the  shareholders  of the Company of more
than fifty percent (50%) of the voting stock of the Company;

                       (ii) a merger or  consolidation in which the Company is a
party; or

                       (iii)  the  sale,   exchange,   or  transfer  of  all  or
substantially all of the assets of the Company; or

                       (iv) a liquidation or dissolution of the Company.

                  (b) A "Change in Control" shall mean an Ownership Change Event
or a series of related Ownership Change Events (collectively, the "Transaction")
wherein the  shareholders of the Company  immediately  before the Transaction do
not  retain  immediately  after  the  Transaction,  in  substantially  the  same
proportions  as  their  ownership  of  shares  of  the  Company's  voting  stock
immediately before the Transaction,  direct or indirect beneficial  ownership of
more  than  fifty  percent  (50%)  of the  total  combined  voting  power of the
outstanding  voting stock of the Company or the  corporation or  corporations to
which  the   assets  of  the   Company   were   transferred   (the   "Transferee
Corporation(s)"),  as the case may be. For purposes of the  preceding  sentence,
indirect beneficial  ownership shall include,  without  limitation,  an interest
resulting from ownership of the voting stock of one or more corporations  which,
as  a  result  of  the   Transaction,   own  the   Company  or  the   Transferee
Corporation(s),  as the case may be,  either  directly  or  through  one or more
subsidiary  corporations.  The Board shall have the right to  determine  whether
multiple  sales or  exchanges  of the voting  stock of the  Company or  multiple
Ownership  Change  Events are  related,  and its  determination  shall be final,
binding and conclusive.

             8.2 Effect of Change in Control on Option. In the event of a Change
in Control, the surviving,  continuing,  successor, or purchasing corporation or
parent corporation  thereof,  as the case may be (the "Acquiring  Corporation"),
may either  assume the  Company's  rights  and  obligations  under the Option or
substitute for the Option a  substantially  equivalent  option for the Acquiring
Corporation's  stock.  For  purposes of this  Section  8.2,  the Option shall be
deemed assumed if, following the Change in Control, the Option confers the right
to purchase in accordance with its terms and conditions, for each share of Stock
subject to the Option immediately prior to the


                                       59
<PAGE>



Change in Control, the consideration (whether stock, cash or other securities or
property)  to which a holder  of a share of Stock on the  effective  date of the
Change in Control  was  entitled.  The Option  shall  terminate  and cease to be
outstanding effective as of the date of the Change in Control to the extent that
the Option is neither assumed or substituted for by the Acquiring Corporation in
connection with the Change in Control nor exercised as of the date of the Change
in Control. Notwithstanding the foregoing, if the corporation the stock of which
is  subject  to the  Option  immediately  prior  to an  Ownership  Change  Event
described in Section 8.1(a)(i) constituting a Change in Control is the surviving
or continuing corporation and immediately after such Ownership Change Event less
than fifty percent (50%) of the total combined  voting power of its voting stock
is held by another  corporation or by other  corporations that are members of an
affiliated  group  within the  meaning of  Section  1504(a) of the Code  without
regard to the  provisions of Section  1504(b) of the Code,  the Option shall not
terminate unless the Board otherwise provides in its sole discretion.

         9.  ADJUSTMENTS FOR CHANGES IN CAPITAL STRUCTURE.

             In the event of any stock  dividend,  stock  split,  reverse  stock
split, recapitalization, combination, reclassification, or similar change in the
capital structure of the Company,  appropriate  adjustments shall be made in the
number,  Exercise Price and class of shares of stock subject to the Option. If a
majority  of the  shares  which  are of the same  class as the  shares  that are
subject to the Option are exchanged  for,  converted  into, or otherwise  become
(whether  or not  pursuant  to an  Ownership  Change  Event)  shares of  another
corporation (the "New Shares"),  the Board may unilaterally  amend the Option to
provide that the Option is exercisable for New Shares.  In the event of any such
amendment,  the Number of Option Shares and the Exercise Price shall be adjusted
in a fair  and  equitable  manner,  as  determined  by the  Board,  in its  sole
discretion.  Notwithstanding the foregoing,  any fractional share resulting from
an  adjustment  pursuant  to this  Section 9 shall be  rounded up or down to the
nearest  whole  number,  as  determined  by the  Board,  and in no event may the
Exercise Price be decreased to an amount less than the par value, if any, of the
stock subject to the Option. The adjustments determined by the Board pursuant to
this Section 9 shall be final, binding and conclusive.

         10. RIGHTS AS A SHAREHOLDER, EMPLOYEE OR CONSULTANT.

             The Optionee shall have no rights as a shareholder  with respect to
any shares covered by the Option until the date of the issuance of a certificate
for the  shares for which the Option has been  exercised  (as  evidenced  by the
appropriate  entry on the books of the Company or of a duly authorized  transfer
agent of the Company). No adjustment shall be made for dividends,  distributions
or other rights for which the record date is prior to the date such  certificate
is issued, except as provided in Section 9. If the Optionee is an Employee,  the
Optionee  understands and acknowledges  that, except as otherwise  provided in a
separate,  written employment agreement between a Participating  Company and the
Optionee,  the Optionee's  employment is "at will" and is for no specified term.
Nothing in this Option  Agreement  shall  confer upon the  Optionee any right to
continue in the Service of a Participating  Company or interfere in any way with
any right of the Participating Company Group to terminate the Optionee's Service
as an Employee or Consultant, as the case may be, at any time.

         11. LEGENDS.

             The  Company  may  at  any  time  place  legends   referencing  any
applicable  federal,  state  or  foreign  securities  law  restrictions  on  all
certificates  representing  shares of stock  subject to the  provisions  of this
Option Agreement. The Optionee shall, at the request of the Company, promptly


                                       60
<PAGE>



present to the Company any and all  certificates  representing  shares  acquired
pursuant to the Option in the  possession  of the Optionee in order to carry out
the provisions of this Section.

         12. BINDING EFFECT.

             Subject to the  restrictions  on transfer  set forth  herein,  this
Option  Agreement  shall inure to the benefit of and be binding upon the parties
hereto and their respective  heirs,  executors,  administrators,  successors and
assigns.

         13. TERMINATION OR AMENDMENT.

             The Board  may  terminate  or amend  the Plan or the  Option at any
time;  provided,  however,  that except as provided in Section 8.2 in connection
with a Change in Control,  no such termination or amendment may adversely affect
the Option or any unexercised portion hereof without the consent of the Optionee
unless such  termination or amendment is necessary to comply with any applicable
law or government regulation.  No amendment or addition to this Option Agreement
shall be effective unless in writing.

         14. NOTICES.

             Any  notice  required  or  permitted  hereunder  shall  be given in
writing and shall be deemed  effectively  given  (except to the extent that this
Option  Agreement  provides for  effectiveness  only upon actual receipt of such
notice) upon personal delivery or upon deposit in the United States Post Office,
by registered or certified mail, with postage and fees prepaid, addressed to the
other party at the address  shown below that party's  signature or at such other
address as such party may  designate  in writing  from time to time to the other
party.

         15. INTEGRATED AGREEMENT.

             This  Option   Agreement  and  the  Plan   constitute   the  entire
understanding and agreement of the Optionee and the Participating  Company Group
with respect to the subject matter contained herein and therein and there are no
agreements, understandings,  restrictions,  representations, or warranties among
the Optionee and the  Participating  Company  Group with respect to such subject
matter other than those as set forth or provided  for herein or therein.  To the
extent contemplated  herein or therein,  the provisions of this Option Agreement
shall  survive  any  exercise  of the Option and shall  remain in full force and
effect.


                                       61
<PAGE>



         16. APPLICABLE LAW.

             This Option Agreement shall be governed by the laws of the State of
California as such laws are applied to agreements between  California  residents
entered into and to be performed entirely within the State of California.

                  EMCON



                                  By:
                                      ---------------------------------------
                                  Title:
                                        -------------------------------------
                                  Address:  400 S. El Camino Real, Suite 1200
                                            San Mateo, California 94402



                                       62
<PAGE>



         The Optionee  represents  that the Optionee is familiar  with the terms
and provisions of this Option Agreement and hereby accepts the Option subject to
all of the terms and provisions thereof. The Optionee hereby agrees to accept as
binding, conclusive and final all decisions or interpretations of the Board upon
any questions arising under this Option Agreement.


                                          OPTIONEE

Date:
      -------------------------------     ------------------------------------

                                          Optionee Address:

                                          ------------------------------------

                                          ------------------------------------



                                       63

<PAGE>










                                STANDARD FORM OF
                                      EMCON
                       NONSTATUTORY STOCK OPTION AGREEMENT
                            (OUTSIDE DIRECTOR OPTION)





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                                      EMCON
                       NONSTATUTORY STOCK OPTION AGREEMENT
                            (Outside Director Option)

         THIS  NONSTATUTORY  STOCK OPTION AGREEMENT (the "Option  Agreement") is
made and entered into as of  ______________  , 199__ , by and between  EMCON and
________________________________ (the "Optionee").

         The  Company  has  granted to the  Optionee  pursuant to the EMCON 1998
Stock  Option Plan (the "Plan") an option to purchase  certain  shares of Stock,
upon the terms and conditions set forth in this Option Agreement (the "Option").
The Option shall in all respects be subject to the terms and  conditions  of the
Plan, the provisions of which are incorporated herein by reference.

         1.  DEFINITIONS AND CONSTRUCTION.

             1.1  Definitions.  Whenever used herein,  the following terms shall
have their respective meanings set forth below:

                  (a) "Date of Option Grant" means  ___________________ , 199 __
 .

                  (b) "Number of Option Shares" means ________________ shares of
Stock, as adjusted from time to time pursuant to Section 9.

                  (c)  "Exercise  Price"  means $  _______________  per share of
Stock, as adjusted from time to time pursuant to Section 9.

                  (d) "Vesting Date" means the first day of January  immediately
following the Date of Option Grant.

                  (e)  "Option  Expiration  Date"  means the date five (5) years
after the Date of Option Grant.

                  (f) "Vested Percentage" means, on any relevant date, except as
otherwise provided herein, the percentage determined as follows:

                                                               Vested Percentage
                                                               -----------------
                  Prior to Vesting Date                                0%

                  On Vesting Date,  provided the  Optionee's
                  Service has not  terminated  prior to such
                  date                                               100%

                  (g) "Board"  means the Board of Directors  of the Company.  If
one or more  Committees have been appointed by the Board to administer the Plan,
"Board" shall also mean such Committee(s).

                  (h)  "Code"  means  the  Internal  Revenue  Code of  1986,  as
amended, and any applicable regulations promulgated thereunder.


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                  (i)  "Committee"  means the  Compensation  Committee  or other
committee  of the Board duly  appointed to  administer  the Plan and having such
powers as shall be  specified by the Board.  Unless the powers of the  Committee
have been  specifically  limited,  the Committee shall have all of the powers of
the Board granted in the Plan, including, without limitation, the power to amend
or  terminate  the Plan at any  time,  subject  to the terms of the Plan and any
applicable limitations imposed by law.

                  (j) "Company"  means EMCON, a California  corporation,  or any
successor corporation thereto.

                  (k)  "Consultant"  means any  person,  including  an  advisor,
engaged by a Participating  Company to render services other than as an Employee
or a Director.

                  (l) "Director"  means a member of the Board or of the board of
directors of any other Participating Company.

                  (m)  "Disability"  means the permanent and total disability of
the Optionee within the meaning of Section 22(e)(3) of the Code.

                  (n)  "Employee"  means  any  person  treated  as  an  employee
(including  an officer or a Director  who is also treated as an employee) in the
records of a Participating Company; provided, however, that neither service as a
Director  nor payment of a  director's  fee shall be  sufficient  to  constitute
employment  for this purpose.  The Company shall  determine in good faith and in
the exercise of its discretion whether an individual has become or has ceased to
be an  Employee  and  the  effective  date of such  individual's  employment  or
termination of employment,  as the case may be. For purposes of an  individual's
rights,  if any,  under the Plan as of the time of the Company's  determination,
all such  determinations by the Company shall be final,  binding and conclusive,
notwithstanding that the Company or any governmental agency subsequently makes a
contrary determination.

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

                  (p) "Fair Market Value" means,  as of any date, the value of a
share of stock  or  other  property  as  determined  by the  Board,  in its sole
discretion,  or by the Company, in its sole discretion, if such determination is
expressly allocated to the Company herein, subject to the following:

                       (i) If, on such  date,  there is a public  market for the
Stock, the Fair Market Value of a share of Stock shall be the closing sale price
of a share of Stock (or the mean of the closing bid and asked  prices of a share
of Stock if the Stock is so quoted  instead)  as quoted on the  Nasdaq  National
Market,  the  Nasdaq  Small-Cap  Market  or  such  other  national  or  regional
securities  exchange or market system  constituting  the primary  market for the
Stock,  as  reported  in the Wall  Street  Journal or such  other  source as the
Company deems reliable. If the relevant date does not fall on a day on which the
Stock has traded on such securities exchange or market system, the date on which
the Fair Market  Value shall be  established  shall be the last day on which the
Stock was so traded prior to the relevant date, or such other appropriate day as
shall be determined by the Board, in its sole discretion.

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                       (ii) If, on such date,  there is no public market for the
Stock,  the Fair Market Value of a share of Stock shall be as  determined by the
Board without regard to any restriction  other than a restriction  which, by its
terms, will never lapse.

                  (q) "Insider" means an officer or a Director of the Company or
any other  person whose  transactions  in Stock are subject to Section 16 of the
Exchange Act.

                  (r) "Parent  Corporation"  means any present or future "parent
corporation" of the Company, as defined in Section 424(e) of the Code.

                  (s)  "Participating  Company"  means the Company or any Parent
Corporation or Subsidiary Corporation.

                  (t) "Participating Company Group" means, at any point in time,
all corporations collectively which are then Participating Companies.

                  (u) "Rule 16b-3"  means Rule 16b-3 under the Exchange  Act, as
amended from time to time, or any successor rule or regulation.

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

                  (w) "Service" means the Optionee's  employment or service with
the  Participating  Company  Group,  whether in the capacity of an  Employee,  a
Director or a  Consultant.  The  Optionee's  Service shall not be deemed to have
terminated  merely  because of a change in the  capacity  in which the  Optionee
renders  Service  to  the  Participating  Company  Group  or  a  change  in  the
Participating Company for which the Optionee renders such Service, provided that
there is no interruption or termination of the Optionee's Service.  Furthermore,
the Optionee's Service with the Participating  Company Group shall not be deemed
to have  terminated if the Optionee  takes any military  leave,  sick leave,  or
other bona fide leave of absence  approved by the  Company;  provided,  however,
that if any such leave exceeds ninety (90) days, on the ninety-first  (91st) day
of such leave the Optionee's  Service shall be deemed to have terminated  unless
the Optionee's right to return to Service with the  Participating  Company Group
is  guaranteed by statute or contract.  Notwithstanding  the  foregoing,  unless
otherwise designated by the Company or required by law, a leave of absence shall
not be treated as Service for  purposes of  determining  the  Optionee's  Vested
Percentage.  The Optionee's  Service shall be deemed to have  terminated  either
upon an actual  termination  of  Service or upon the  corporation  for which the
Optionee performs Service ceasing to be a Participating Company.  Subject to the
foregoing,  the Company,  in its sole  discretion,  shall determine  whether the
Optionee's Service has terminated and the effective date of such termination.

                  (x) "Stock" means the common stock of the Company, as adjusted
from time to time in accordance with Section 9.

                  (y)  "Subsidiary  Corporation"  means  any  present  or future
"subsidiary  corporation"  of the Company,  as defined in Section  424(f) of the
Code.

             1.2  Construction.  Captions  and titles  contained  herein are for
convenience  only and shall not affect  the  meaning  or  interpretation  of any
provision  of this Option  Agreement.  Except when  otherwise  indicated  by the
context,  the singular shall include the plural and the plural shall include the
singular.  Use of the term "or" is not  intended  to be  exclusive,  unless  the
context clearly requires otherwise.


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         2.  TAX STATUS OF OPTION.

             This Option is intended to be a Nonstatutory Stock Option and shall
not be treated as an Incentive Stock Option within the meaning of Section 422(b)
of the Code.

         3.  ADMINISTRATION.

             All questions of  interpretation  concerning this Option  Agreement
shall be determined by the Board. All determinations by the Board shall be final
and binding upon all persons having an interest in the Option.  Any officer of a
Participating  Company  shall have the authority to act on behalf of the Company
with  respect  to any  matter,  right,  obligation,  or  election  which  is the
responsibility  of or which is  allocated  to the Company  herein,  provided the
officer has apparent authority with respect to such matter,  right,  obligation,
or election.

         4.  EXERCISE OF THE OPTION.

             4.1 Right to Exercise.  Except as otherwise  provided  herein,  the
Option shall be exercisable  on and after the Initial  Vesting Date and prior to
the  termination  of the Option (as  provided  in Section 6) in an amount not to
exceed the Number of Option Shares  multiplied by the Vested Percentage less the
number of shares  previously  acquired upon exercise of the Option.  In no event
shall the  Option  be  exercisable  for more  shares  than the  Number of Option
Shares.

             4.2 Method of Exercise.  Exercise of the Option shall be by written
notice to the Company which must state the election to exercise the Option,  the
number of whole shares of Stock for which the Option is being exercised and such
other representations and agreements as to the Optionee's investment intent with
respect to such shares as may be required  pursuant  to the  provisions  of this
Option Agreement.  The written notice must be signed by the Optionee and must be
delivered in person, by certified or registered mail, return receipt  requested,
by confirmed facsimile  transmission,  or by such other means as the Company may
permit,  to the Chief  Financial  Officer of the  Company,  or other  authorized
representative of the Participating  Company Group,  prior to the termination of
the  Option  as set forth in  Section  6,  accompanied  by full  payment  of the
aggregate Exercise Price for the number of shares of Stock being purchased.  The
Option  shall be deemed to be  exercised  upon  receipt  by the  Company of such
written notice and the aggregate Exercise Price.

             4.3 Payment of Exercise Price.

                  (a) Forms of  Consideration  Authorized.  Except as  otherwise
provided below, payment of the aggregate Exercise Price for the number of shares
of Stock for which the Option is being  exercised  shall be made (i) in cash, by
check, or cash equivalent,  (ii) by tender to the Company, or attestation to the
ownership,  of whole shares of Stock owned by the Optionee  having a Fair Market
Value (as  determined  by the  Company  without  regard to any  restrictions  on
transferability  applicable  to  such  stock  by  reason  of  federal  or  state
securities laws or agreements with an underwriter for the Company) not less than
the aggregate Exercise Price, (iii) by means of a Cashless Exercise,  as defined
in Section 4.3(b), or (iv) by any combination of the foregoing.

                  (b) Limitations on Forms of Consideration.



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                       (i) Tender of Stock.  Notwithstanding the foregoing,  the
Option may not be  exercised  by tender to the Company,  or  attestation  to the
ownership,  of shares of Stock to the extent such tender,  or attestation to the
ownership,  of Stock would  constitute a violation of the provisions of any law,
regulation or agreement  restricting the redemption of the Company's  stock. The
Option may not be  exercised  by tender to the Company,  or  attestation  to the
ownership,  of shares of Stock unless such shares  either have been owned by the
Optionee  for  more  than  six (6)  months  or were not  acquired,  directly  or
indirectly, from the Company.

                       (ii) Cashless Exercise.  A "Cashless  Exercise" means the
assignment in a form acceptable to the Company of the proceeds of a sale or loan
with respect to some or all of the shares of Stock acquired upon the exercise of
the  Option  pursuant  to  a  program  or  procedure  approved  by  the  Company
(including,   without  limitation,   through  an  exercise  complying  with  the
provisions  of  Regulation  T as  promulgated  from time to time by the Board of
Governors of the Federal Reserve System).  The Company reserves,  at any and all
times, the right, in the Company's sole and absolute  discretion,  to decline to
approve or terminate any such program or procedure.

             4.4 Tax Withholding.  At the time the Option is exercised, in whole
or in part, or at any time thereafter as requested by the Company,  the Optionee
hereby authorizes  withholding from payroll and any other amounts payable to the
Optionee,  and  otherwise  agrees to make adequate  provision for  (including by
means of a Cashless  Exercise to the extent permitted by the Company),  any sums
required  to satisfy the  federal,  state,  local and  foreign  tax  withholding
obligations  of  the  Participating  Company  Group,  if  any,  which  arise  in
connection with the Option, including,  without limitation,  obligations arising
upon (i) the exercise, in whole or in part, of the Option, (ii) the transfer, in
whole or in part, of any shares acquired upon exercise of the Option,  (iii) the
operation of any law or regulation providing for the imputation of interest,  or
(iv) the lapsing of any  restriction  with respect to any shares  acquired  upon
exercise  of the  Option.  The  Optionee  is  cautioned  that the  Option is not
exercisable unless the tax withholding  obligations of the Participating Company
Group are satisfied.  Accordingly,  the Optionee may not be able to exercise the
Option when desired even though the Option is vested, and the Company shall have
no obligation to issue a certificate for such shares.

             4.5  Certificate  Registration.  Except in the  event the  Exercise
Price is paid by means of a Cashless Exercise, the certificate for the shares as
to  which  the  Option  is  exercised  shall  be  registered  in the name of the
Optionee, or, if applicable, in the names of the heirs of the Optionee.

             4.6 Restrictions on Grant of the Option and Issuance of Shares. The
grant of the Option and the  issuance  of shares of Stock upon  exercise  of the
Option  shall be subject  to  compliance  with all  applicable  requirements  of
federal,  state or foreign law with respect to such  securities.  The Option may
not be  exercised  if the  issuance  of  shares  of Stock  upon  exercise  would
constitute a violation of any applicable  federal,  state or foreign  securities
laws or other law or  regulations or the  requirements  of any stock exchange or
market system upon which the Stock may then be listed.  In addition,  the Option
may not be exercised  unless (i) a registration  statement  under the Securities
Act shall at the time of exercise of the Option be in effect with respect to the
shares  issuable  upon  exercise  of the Option or (ii) in the  opinion of legal
counsel to the Company,  the shares  issuable upon exercise of the Option may be
issued  in  accordance  with  the  terms  of an  applicable  exemption  from the
registration  requirements of the Securities Act. THE OPTIONEE IS CAUTIONED THAT
THE OPTION MAY NOT BE EXERCISED  UNLESS THE FOREGOING  CONDITIONS ARE SATISFIED.
ACCORDINGLY,  THE  OPTIONEE  MAY NOT BE ABLE TO EXERCISE THE OPTION WHEN DESIRED
EVEN THOUGH THE OPTION IS VESTED. The


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inability of the Company to obtain from any regulatory body having  jurisdiction
the authority,  if any, deemed by the Company's legal counsel to be necessary to
the lawful  issuance and sale of any shares  subject to the Option shall relieve
the  Company of any  liability  in respect of the  failure to issue or sell such
shares as to which such requisite  authority shall not have been obtained.  As a
condition to the exercise of the Option, the Company may require the Optionee to
satisfy any  qualifications  that may be necessary or  appropriate,  to evidence
compliance with any applicable law or regulation and to make any  representation
or warranty with respect thereto as may be requested by the Company.

             4.7 Fractional  Shares.  The Company shall not be required to issue
fractional shares upon the exercise of the Option.

         5.  NONTRANSFERABILITY OF THE OPTION.

             The Option may be  exercised  during the  lifetime of the  Optionee
only by the Optionee or the Optionee's guardian or legal  representative and may
not be assigned or  transferred  in any manner  except by will or by the laws of
descent and  distribution.  Following the death of the Optionee,  the Option, to
the extent  provided  in Section 7, may be  exercised  by the  Optionee's  legal
representative or by any person empowered to do so under the deceased Optionee's
will or under the then applicable laws of descent and distribution.

         6.  TERMINATION OF THE OPTION.

             The Option  shall  terminate  and may no longer be exercised on the
first  to  occur  of (a) the  Option  Expiration  Date,  (b) the  last  date for
exercising  the  Option  following  termination  of the  Optionee's  Service  as
described  in Section 7, or (c) a Change in  Control to the extent  provided  in
Section 8.

         7.  EFFECT OF TERMINATION OF SERVICE.

             7.1  Option  Exercisability.  If the  Optionee's  Service  with the
Participating Company Group terminates for any reason,  including the Disability
or death of the Optionee,  the Option, to the extent unexercised and exercisable
by the Optionee on the date on which the Optionee's Service  terminated,  may be
exercised by the Optionee (or the Optionee's guardian or legal representative or
other  person who  acquired  the right to  exercise  the Option by reason of the
Optionee's  death)  within two (2) years after the date on which the  Optionee's
Service terminated, but in any event no later than the Option Expiration Date.

             7.2  Extension if Exercise  Prevented by Law.  Notwithstanding  the
foregoing,  if the exercise of the Option within the applicable time periods set
forth in Section 7.1 is prevented by the  provisions  of Section 4.6, the Option
shall  remain  exercisable  until one (1) month  after the date the  Optionee is
notified  by the  Company  that the Option is  exercisable,  but in any event no
later than the Option Expiration Date. The Company makes no representation as to
the tax consequences of any such delayed  exercise.  The Optionee should consult
with the  Optionee's  own tax  advisor  as to the tax  consequences  of any such
delayed exercise.

             7.3 Extension if Optionee Subject to Section 16(b). Notwithstanding
the foregoing, if a sale within the applicable time periods set forth in Section
7.1 of shares  acquired  upon the  exercise  of the  Option  would  subject  the
Optionee to suit under  Section  16(b) of the  Exchange  Act,  the Option  shall
remain  exercisable  until the  earliest  to occur of (i) the tenth  (10th)  day
following  the  date on which a sale of such  shares  by the  Optionee  would no
longer be subject to such


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suit,  (ii) the one  hundred  and  ninetieth  (190th)  day after the  Optionee's
termination of Service,  or (iii) the Option  Expiration Date. The Company makes
no representation  as to the tax consequences of any such delayed exercise.  The
Optionee  should  consult  with the  Optionee's  own tax  advisor  as to the tax
consequences of any such delayed exercise.

         8.  CHANGE IN CONTROL.

             8.1 Definitions.

                  (a) An  "Ownership  Change  Event"  shall  be  deemed  to have
occurred if any of the following occurs with respect to the Company:

                       (i) the direct or  indirect  sale or exchange in a single
or series of related  transactions  by the  shareholders  of the Company of more
than fifty percent (50%) of the voting stock of the Company;

                       (ii) a merger or  consolidation in which the Company is a
party; or

                       (iii)  the  sale,   exchange,   or  transfer  of  all  or
substantially all of the assets of the Company; or

                       (iv) a liquidation or dissolution of the Company.

                  (b) A "Change in Control" shall mean an Ownership Change Event
or a series of related Ownership Change Events (collectively, the "Transaction")
wherein the  shareholders of the Company  immediately  before the Transaction do
not  retain  immediately  after  the  Transaction,  in  substantially  the  same
proportions  as  their  ownership  of  shares  of  the  Company's  voting  stock
immediately before the Transaction,  direct or indirect beneficial  ownership of
more  than  fifty  percent  (50%)  of the  total  combined  voting  power of the
outstanding  voting stock of the Company or the  corporation or  corporations to
which  the   assets  of  the   Company   were   transferred   (the   "Transferee
Corporation(s)"),  as the case may be. For purposes of the  preceding  sentence,
indirect beneficial  ownership shall include,  without  limitation,  an interest
resulting from ownership of the voting stock of one or more corporations  which,
as  a  result  of  the   Transaction,   own  the   Company  or  the   Transferee
Corporation(s),  as the case may be,  either  directly  or  through  one or more
subsidiary  corporations.  The Board shall have the right to  determine  whether
multiple  sales or  exchanges  of the voting  stock of the  Company or  multiple
Ownership  Change  Events are  related,  and its  determination  shall be final,
binding and conclusive.

             8.2 Effect of Change in Control on Option. In the event of a Change
in  Control,  any  unexercised  portion  of  the  Option  shall  be  immediately
exercisable and vested in full as of the date ten (10) days prior to the date of
the Change in Control. Any exercise of the Option that was permissible solely by
reason of this Section 8.2 shall be  conditioned  upon the  consummation  of the
Change in  Control.  In  addition,  the  surviving,  continuing,  successor,  or
purchasing  corporation or parent corporation  thereof,  as the case may be (the
"Acquiring Corporation"), may either assume the Company's rights and obligations
under the Option or substitute for the Option a substantially  equivalent option
for the  Acquiring  Corporation's  stock.  For purposes of this Section 8.2, the
Option shall be deemed assumed if,  following the Change in Control,  the Option
confers the right to purchase in accordance with its terms and  conditions,  for
each share of Stock  subject to the  Option  immediately  prior to the Change in
Control, the consideration (whether stock, cash or other securities or property)
to which a holder  of a share of Stock on the  effective  date of the  Change in
Control was


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entitled. The Option shall terminate and cease to be outstanding effective as of
the date of the  Change in  Control  to the  extent  that the  Option is neither
assumed or substituted  for by the Acquiring  Corporation in connection with the
Change  in  Control  nor  exercised  as of the date of the  Change  in  Control.
Notwithstanding the foregoing,  if the corporation the stock of which is subject
to the Option  immediately  prior to an  Ownership  Change  Event  described  in
Section  8.1(a)(i)  constituting  a  Change  in  Control  is  the  surviving  or
continuing  corporation and immediately  after such Ownership  Change Event less
than fifty percent (50%) of the total combined  voting power of its voting stock
is held by another  corporation or by other  corporations that are members of an
affiliated  group  within the  meaning of  Section  1504(a) of the Code  without
regard to the  provisions of Section  1504(b) of the Code,  the Option shall not
terminate unless the Board otherwise provides in its sole discretion.

         9.  ADJUSTMENTS FOR CHANGES IN CAPITAL STRUCTURE.

             In the event of any stock  dividend,  stock  split,  reverse  stock
split, recapitalization, combination, reclassification, or similar change in the
capital structure of the Company,  appropriate  adjustments shall be made in the
number,  Exercise Price and class of shares of stock subject to the Option. If a
majority  of the  shares  which  are of the same  class as the  shares  that are
subject to the Option are exchanged  for,  converted  into, or otherwise  become
(whether  or not  pursuant  to an  Ownership  Change  Event)  shares of  another
corporation (the "New Shares"),  the Board may unilaterally  amend the Option to
provide that the Option is exercisable for New Shares.  In the event of any such
amendment,  the Number of Option Shares and the Exercise Price shall be adjusted
in a fair  and  equitable  manner,  as  determined  by the  Board,  in its  sole
discretion.  Notwithstanding the foregoing,  any fractional share resulting from
an  adjustment  pursuant  to this  Section 9 shall be  rounded up or down to the
nearest  whole  number,  as  determined  by the  Board,  and in no event may the
Exercise Price be decreased to an amount less than the par value, if any, of the
stock subject to the Option. The adjustments determined by the Board pursuant to
this Section 9 shall be final, binding and conclusive.

         10. RIGHTS AS A SHAREHOLDER, EMPLOYEE OR CONSULTANT.

             The Optionee shall have no rights as a shareholder  with respect to
any shares covered by the Option until the date of the issuance of a certificate
for the  shares for which the Option has been  exercised  (as  evidenced  by the
appropriate  entry on the books of the Company or of a duly authorized  transfer
agent of the Company). No adjustment shall be made for dividends,  distributions
or other rights for which the record date is prior to the date such  certificate
is issued, except as provided in Section 9. If the Optionee is an Employee,  the
Optionee  understands and acknowledges  that, except as otherwise  provided in a
separate,  written employment agreement between a Participating  Company and the
Optionee,  the Optionee's  employment is "at will" and is for no specified term.
Nothing in this Option  Agreement  shall  confer upon the  Optionee any right to
continue in the Service of a Participating  Company or interfere in any way with
any right of the Participating Company Group to terminate the Optionee's Service
as an Employee or Consultant, as the case may be, at any time.


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         11. LEGENDS.

             The  Company  may  at  any  time  place  legends   referencing  any
applicable  federal,  state  or  foreign  securities  law  restrictions  on  all
certificates  representing  shares of stock  subject to the  provisions  of this
Option  Agreement.  The Optionee shall, at the request of the Company,  promptly
present to the Company any and all  certificates  representing  shares  acquired
pursuant to the Option in the  possession  of the Optionee in order to carry out
the provisions of this Section.

         12. BINDING EFFECT.

             Subject to the  restrictions  on transfer  set forth  herein,  this
Option  Agreement  shall inure to the benefit of and be binding upon the parties
hereto and their respective  heirs,  executors,  administrators,  successors and
assigns.

         13. TERMINATION OR AMENDMENT.

             The Board  may  terminate  or amend  the Plan or the  Option at any
time;  provided,  however,  that except as provided in Section 8.2 in connection
with a Change in Control,  no such termination or amendment may adversely affect
the Option or any unexercised portion hereof without the consent of the Optionee
unless such  termination or amendment is necessary to comply with any applicable
law or government regulation.  No amendment or addition to this Option Agreement
shall be effective unless in writing.

         14. NOTICES.

             Any  notice  required  or  permitted  hereunder  shall  be given in
writing and shall be deemed  effectively  given  (except to the extent that this
Option  Agreement  provides for  effectiveness  only upon actual receipt of such
notice) upon personal delivery or upon deposit in the United States Post Office,
by registered or certified mail, with postage and fees prepaid, addressed to the
other party at the address  shown below that party's  signature or at such other
address as such party may  designate  in writing  from time to time to the other
party.

         15. INTEGRATED AGREEMENT.

             This  Option   Agreement  and  the  Plan   constitute   the  entire
understanding and agreement of the Optionee and the Participating  Company Group
with respect to the subject matter contained herein and therein and there are no
agreements, understandings,  restrictions,  representations, or warranties among
the Optionee and the  Participating  Company  Group with respect to such subject
matter other than those as set forth or provided  for herein or therein.  To the
extent contemplated  herein or therein,  the provisions of this Option Agreement
shall  survive  any  exercise  of the Option and shall  remain in full force and
effect.


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<PAGE>



         16. APPLICABLE LAW.

             This Option Agreement shall be governed by the laws of the State of
California as such laws are applied to agreements between  California  residents
entered into and to be performed entirely within the State of California.

                                       EMCON



                                       By:
                                           ------------------------------------
                                       Title:
                                              ---------------------------------
                   Address: 400 S. El Camino Real, Suite 1200
                           San Mateo, California 94402



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<PAGE>



             The  Optionee  represents  that the  Optionee is familiar  with the
terms and  provisions  of this Option  Agreement  and hereby  accepts the Option
subject to all of the terms and provisions  thereof.  The Optionee hereby agrees
to accept as binding,  conclusive and final all decisions or  interpretations of
the Board upon any questions arising under this Option Agreement.


                                         OPTIONEE
Date:
      ------------------------------     ------------------------------------
                                         Optionee Address:

                                         ------------------------------------

                                         ------------------------------------


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