Exhibit 10.2


                           SIERRA MONITOR CORPORATION

                                 1996 STOCK PLAN

                            (As amended May 10, 2001)

     1. Purposes of the Plan. The purposes of this Stock Plan are:

     o    to attract and retain the best  available  personnel  for positions of
          substantial responsibility,

     o    to provide additional incentive to Employees and Consultants, and

     o    to promote the success of the Company's business.

          Options  granted  under the Plan may be  Incentive  Stock  Options  or
     Nonstatutory Stock Options,  as determined by the Administrator at the time
     of grant. Stock Purchase Rights may also be granted under the Plan.

     2.   Definitions. As used herein, the following definitions shall apply:

          (a) "Administrator"  means the Board or any of its Committees as shall
be administering the Plan, in accordance with Section 4 of the Plan.

          (b)  "Applicable  Laws" means the legal  requirements  relating to the
administration  of stock option  plans under U. S. state  corporate  laws,  U.S.
federal  and state  securities  laws,  the Code and the  applicable  laws of any
foreign country or  jurisdiction  where Options or Stock Purchase Rights are, or
will be, granted under the Plan.

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

          (d) "Code" means the Internal Revenue Code of 1986, as amended.

          (e) "Committee" means a Committee appointed by the Board in accordance
with Section 4 of the Plan.

          (f) "Common Stock" means the Common Stock of the Company.

          (g)  "Company"   means  Sierra  Monitor   Corporation,   a  California
corporation.

          (h) "Consultant"  means any person,  including an advisor,  engaged by
the Company or a Parent or Subsidiary to render  services and who is compensated
for such services.  The term  "Consultant"  shall not include  Directors who are
paid only a  director's  fee by the  Company or who are not  compensated  by the
Company for their services as Directors.

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          (i)  "Continuous  Status as an Employee or Consultant"  means that the
employment  or  consulting   relationship  with  the  Company,  any  Parent,  or
Subsidiary,  is not interrupted or terminated.  Continuous Status as an Employee
or Consultant  shall not be considered  interrupted in the case of (i) any leave
of absence  approved by the Company or (ii) transfers  between  locations of the
Company or between the Company, its Parent, any Subsidiary,  or any successor. A
leave of absence  approved by the Company  shall  include  sick leave,  military
leave, or any other personal leave approved by an authorized  representative  of
the Company.  For purposes of Incentive Stock Options,  no such leave may exceed
ninety days, unless  reemployment upon expiration of such leave is guaranteed by
statute or  contract.  If  reemployment  upon  expiration  of a leave of absence
approved by the Company is not so guaranteed, on the 181st day of such leave any
Incentive  Stock  Option  held by the  Optionee  shall cease to be treated as an
Incentive  Stock Option and shall be treated for tax purposes as a  Nonstatutory
Stock Option.

          (j) "Director" means a member of the Board.

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

          (l)  "Employee"  means any person,  including  Officers and Directors,
employed  by the Company or any Parent or  Subsidiary  of the  Company.  Neither
service as a Director  nor payment of a director's  fee by the Company  shall be
sufficient to constitute "employment" by the Company.

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

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

               (i) If the  Common  Stock  is  listed  on any  established  stock
exchange or a national market system,  including  without  limitation the Nasdaq
National Market or The Nasdaq  SmallCap  Market of The Nasdaq Stock Market,  its
Fair  Market  Value  shall be the  closing  sales  price for such  stock (or the
closing bid, if no sales were reported) as quoted on such exchange or system for
the last market trading day prior to the time of  determination,  as reported in
The  Wall  Street  Journal  or such  other  source  as the  Administrator  deems
reliable;

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

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

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          (o) "Incentive Stock Option" means an Option intended to qualify as an
incentive  stock  option  within the  meaning of Section 422 of the Code and the
regulations promulgated thereunder.

          (p)  "Nonstatutory  Stock  Option"  means an Option  not  intended  to
qualify as an Incentive Stock Option.

          (q) "Notice of Grant" means a written notice evidencing  certain terms
and conditions of an individual Option or Stock Purchase Right grant. The Notice
of Grant is part of the Option Agreement.

          (r) "Officer"  means a person who is an officer of the Company  within
the  meaning  of Section 16 of the  Exchange  Act and the rules and  regulations
promulgated thereunder.

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

          (t) "Option  Agreement" means a written  agreement between the Company
and an Optionee  evidencing  the terms and  conditions of an  individual  Option
grant. The Option Agreement is subject to the terms and conditions of the Plan.

          (u) "Option  Exchange  Program"  means a program  whereby  outstanding
options are surrendered in exchange for options with a lower exercise price.

          (v)  "Optioned  Stock" means the Common Stock  subject to an Option or
Stock Purchase Right.

          (w)   "Optionee"   means  an  Employee  or  Consultant  who  holds  an
outstanding Option or Stock Purchase Right.

          (x) "Parent"  means a "parent  corporation",  whether now or hereafter
existing, as defined in Section 424(e) of the Code.

          (y) "Plan" means this 1996 Stock Plan.

          (z) "Restricted  Stock" means shares of Common Stock acquired pursuant
to a grant of Stock Purchase Rights under Section 11 below.

          (aa) "Restricted  Stock Purchase  Agreement" means a written agreement
between the  Company  and the  Optionee  evidencing  the terms and  restrictions
applying to stock purchased under a Stock Purchase Right.  The Restricted  Stock
Purchase  Agreement is subject to the terms and  conditions  of the Plan and the
Notice of Grant.

          (bb)  "Rule  16b-3"  means  Rule  16b-3  of  the  Exchange  Act or any
successor to Rule 16b-3,  as in effect when  discretion is being  exercised with
respect to the Plan.

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          (cc) "Section  16(b)" means Section 16(b) of the  Securities  Exchange
Act of 1934, as amended.

          (dd)  "Share"  means a share  of the  Common  Stock,  as  adjusted  in
accordance with Section 13 of the Plan.

          (ee) "Stock  Purchase  Right" means the right to purchase Common Stock
pursuant to Section 11 of the Plan, as evidenced by a Notice of Grant.

          (ff)  "Subsidiary"  means a "subsidiary  corporation,"  whether now or
hereafter existing, as defined in Section 424(f) of the Code.

     3. Stock  Subject to the Plan.  Subject to the  provisions of Section 13 of
the Plan, the maximum  aggregate number of Shares which may be optioned and sold
under the Plan is 1,600,000 Shares. The Shares may be authorized,  but unissued,
or reacquired Common Stock.

     If an Option or Stock  Purchase  Right  expires  or  becomes  unexercisable
without having been  exercised in full, or is surrendered  pursuant to an Option
Exchange Program, the unpurchased Shares which were subject thereto shall become
available  for  future  grant  or sale  under  the  Plan  (unless  the  Plan has
terminated); provided, however, that Shares that have actually been issued under
the Plan,  whether upon exercise of an Option or Right, shall not be returned to
the Plan and shall not become available for future  distribution under the Plan,
except  that if Shares of  Restricted  Stock are  repurchased  by the Company at
their original purchase price, and the original purchaser of such Shares did not
receive any  benefits of  ownership  of such  Shares,  such Shares  shall become
available  for  future  grant  under the Plan.  For  purposes  of the  preceding
sentence, voting rights shall not be considered a benefit of Share ownership.

     4. Administration of the Plan.

          (a) Procedure.

               (i) Multiple  Administrative  Bodies. If permitted by Rule 16b-3,
the Plan may be  administered  by different  bodies with  respect to  Directors,
Officers who are not  Directors,  and  Employees  who are neither  Directors nor
Officers.

               (ii)  Administration  With  Respect  to  Directors  and  Officers
Subject to Section 16(b).  With respect to Option or Stock Purchase Right grants
made to Employees who are also Officers or Directors subject to Section 16(b) of
the Exchange Act, the Plan shall be  administered by (A) the Board, if the Board
may  administer  the Plan in a manner  complying with the rules under Rule 16b-3
relating to the  disinterested  administration  of employee  benefit plans under
which Section 16(b) exempt  discretionary grants and awards of equity securities
are to be made, or (B) a committee  designated  by the Board to  administer  the
Plan,  which  committee shall be constituted to comply with the rules under Rule
16b-3 relating to the  disinterested  administration  of employee  benefit plans
under  which  Section  16(b)  exempt  discretionary  grants and awards of equity
securities are to be made.  Once  appointed,  such  Committee  shall continue to
serve in its designated  capacity until  otherwise  directed by the Board.  From
time to time the

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Board may increase the size of the  Committee  and appoint  additional  members,
remove  members  (with or  without  cause)  and  substitute  new  members,  fill
vacancies  (however  caused),  and  remove  all  members  of the  Committee  and
thereafter  directly  administer  the Plan,  all to the extent  permitted by the
rules under Rule 16b-3 relating to the disinterested  administration of employee
benefit plans under which Section 16(b) exempt  discretionary  grants and awards
of equity securities are to be made.

               (iii) Administration With Respect to Other Persons.  With respect
to Option or Stock Purchase  Right grants made to Employees or  Consultants  who
are  neither  Directors  nor  Officers  of  the  Company,   the  Plan  shall  be
administered by (A) the Board or (B) a committee  designated by the Board, which
committee shall be constituted to satisfy Applicable Laws. Once appointed,  such
Committee shall serve in its designated capacity until otherwise directed by the
Board.  The Board may increase the size of the Committee and appoint  additional
members, remove members (with or without cause) and substitute new members, fill
vacancies  (however  caused),  and  remove  all  members  of the  Committee  and
thereafter  directly  administer  the  Plan,  all to  the  extent  permitted  by
Applicable Laws.

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

               (i) to determine  the Fair Market Value of the Common  Stock,  in
accordance with Section 2(n) of the Plan;

               (ii) to select the  Consultants and Employees to whom Options and
Stock Purchase Rights may be granted hereunder;

               (iii) to determine  whether and to what extent  Options and Stock
Purchase Rights or any combination thereof, are granted hereunder;

               (iv) to  determine  the  number of  shares of Common  Stock to be
covered by each Option and Stock Purchase Right granted hereunder;

               (v) to approve forms of agreement for use under the Plan;

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

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

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<PAGE>

               (viii) to construe and interpret the terms of the Plan and awards
granted pursuant to the Plan;

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

               (x) to  modify  or amend  each  Option  or Stock  Purchase  Right
(subject to Section 15(c) of the Plan), including the discretionary authority to
extend the  post-termination  exercisability  period of Options  longer  than is
otherwise provided for in the Plan;

               (xi) to authorize  any person to execute on behalf of the Company
any instrument required to effect the grant of an Option or Stock Purchase Right
previously granted by the Administrator;

               (xii) to institute an Option Exchange Program;

               (xiii)  to make all  other  determinations  deemed  necessary  or
advisable for administering the Plan.

          (c) Effect of Administrator's Decision. The Administrator's decisions,
determinations and  interpretations  shall be final and binding on all Optionees
and any other holders of Options or Stock Purchase Rights.

     5. Eligibility. Nonstatutory Stock Options and Stock Purchase Rights may be
granted to Employees  and  Consultants.  Incentive  Stock Options may be granted
only to Employees. If otherwise eligible, an Employee or Consultant who has been
granted an Option or Stock Purchase Right may be granted  additional  Options or
Stock Purchase Rights.

     6. Limitations.

          (a) Each Option shall be designated in the written option agreement as
either an  Incentive  Stock  Option or a  Nonstatutory  Stock  Option.  However,
notwithstanding  such designation,  to the extent that the aggregate Fair Market
Value  of  the  Shares  with  respect  to  which  Incentive  Stock  Options  are
exercisable  for the first time by the Optionee  during any calendar year (under
all plans of the Company and any Parent or Subsidiary)  exceeds  $100,000,  such
Options shall be treated as  Nonstatutory  Stock  Options.  For purposes of this
Section 6(a),  Incentive  Stock Options shall be taken into account in the order
in which  they  were  granted.  The Fair  Market  Value of the  Shares  shall be
determined as of the time the Option with respect to such Shares is granted.

          (b)  Neither  the Plan nor any Option or Stock  Purchase  Right  shall
confer upon an Optionee  any right with  respect to  continuing  the  Optionee's
employment or consulting relationship with the Company, nor shall they interfere
in any way with the  Optionee's  right or the Company's  right to terminate such
employment or consulting relationship at any time, with or without cause.

                                      -6-

<PAGE>

          (c) The  following  limitations  shall  apply to grants of  Options to
Employees:

               (i) No  Employee  shall be  granted,  in any  fiscal  year of the
Company, Options to purchase more than 100,000 Shares.

               (ii)  In  connection  with  his or  her  initial  employment,  an
Employee may be granted  Options to purchase up to an  additional  25,000 Shares
which shall not count against the limit set forth in subsection (i) above.

               (iii) The foregoing limitations shall be adjusted proportionately
in connection  with any change in the Company's  capitalization  as described in
Section 13.

               (iv) If an Option is  cancelled  in the same  fiscal  year of the
Company in which it was granted  (other than in  connection  with a  transaction
described  in Section  13),  the  cancelled  Option will be counted  against the
limits set forth in  subsections  (i) and (ii) above.  For this purpose,  if the
exercise  price of an Option is reduced,  the  transaction  will be treated as a
cancellation of the Option and the grant of a new Option.

     7. Term of Plan.  Subject to Section 19 of the Plan,  the Plan shall become
effective upon the earlier to occur of its adoption by the Board or its approval
by the  shareholders  of the Company as described in Section 19 of the Plan.  It
shall continue in effect for a term of ten (10) years unless terminated  earlier
under Section 15 of the Plan.

     8. Term of Option. The term of each Option shall be stated in the Notice of
Grant;  provided,  however,  that in the case of an Incentive Stock Option,  the
term shall be ten (10) years from the date of grant or such  shorter term as may
be provided in the Notice of Grant.  Moreover, in the case of an Incentive Stock
Option  granted to an Optionee  who, at the time the  Incentive  Stock Option is
granted, owns stock representing more than ten percent (10%) of the voting power
of all classes of stock of the Company or any Parent or Subsidiary,  the term of
the  Incentive  Stock  Option  shall be five (5) years from the date of grant or
such shorter term as may be provided in the Notice of Grant.

     9. Option Exercise Price and Consideration.

          (a) Exercise Price.  The per share exercise price for the Shares to be
issued   pursuant  to  exercise  of  an  Option  shall  be   determined  by  the
Administrator, subject to the following:

               (i) In the case of an Incentive Stock Option

                    (A)  granted to an Employee  who, at the time the  Incentive
Stock Option is granted,  owns stock representing more than ten percent (10%) of
the  voting  power of all  classes  of stock of the  Company  or any  Parent  or
Subsidiary,  the per Share exercise price shall be no less than 110% of the Fair
Market Value per Share on the date of grant.

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<PAGE>

                    (B) granted to any Employee other than an Employee described
in paragraph (A)  immediately  above,  the per Share  exercise price shall be no
less than 100% of the Fair Market Value per Share on the date of grant.

               (ii) In the case of a  Nonstatutory  Stock Option,  the per Share
exercise price shall be determined by the Administrator.

                    (b) Waiting Period and Exercise Dates. At the time an Option
is granted,  the Administrator  shall fix the period within which the Option may
be exercised and shall determine any conditions  which must be satisfied  before
the Option may be exercised.  In so doing, the Administrator may specify that an
Option may not be exercised until the completion of a service period.

          (c) Form of  Consideration.  The  Administrator  shall  determine  the
acceptable form of consideration for exercising an Option,  including the method
of payment.  In the case of an Incentive Stock Option,  the Administrator  shall
determine  the  acceptable  form of  consideration  at the time of  grant.  Such
consideration may consist entirely of:

               (i) cash;

               (ii) check;

               (iii) promissory note;

               (iv) other Shares which (A) in the case of Shares  acquired  upon
exercise of an option,  have been owned by the Optionee for more than six months
on the  date of  surrender,  and (B)  have a Fair  Market  Value  on the date of
surrender  equal to the aggregate  exercise price of the Shares as to which said
Option shall be exercised;

               (v) delivery of a properly executed exercise notice together with
such other  documentation as the  Administrator  and the broker,  if applicable,
shall require to effect an exercise of the Option and delivery to the Company of
the sale or loan proceeds required to pay the exercise price;

               (vi) a reduction  in the amount of any Company  liability  to the
Optionee,  including any liability attributable to the Optionee's  participation
in any Company-sponsored deferred compensation program or arrangement;

               (vii) any combination of the foregoing methods of payment; or

               (viii)  such other  consideration  and method of payment  for the
issuance of Shares to the extent permitted by Applicable Laws.

     10. Exercise of Option.

               (a) Procedure for Exercise;  Rights as a Shareholder.  Any Option
granted hereunder shall be exercisable according to the terms of the Plan and at
such times and under such conditions as determined by the  Administrator and set
forth in the Option Agreement.

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<PAGE>

               An Option may not be exercised for a fraction of a Share.

               An Option shall be deemed  exercised  when the Company  receives:
(i) written notice of exercise (in accordance  with the Option  Agreement)  from
the person entitled to exercise the Option, and (ii) full payment for the Shares
with respect to which the Option is  exercised.  Full payment may consist of any
consideration  and  method  of  payment  authorized  by  the  Administrator  and
permitted by the Option  Agreement and the Plan.  Shares issued upon exercise of
an Option  shall be issued in the name of the  Optionee  or, if requested by the
Optionee,  in the name of the  Optionee  and his or her spouse.  Until the stock
certificate  evidencing  such Shares is issued (as evidenced by the  appropriate
entry on the books of the Company or of a duly authorized  transfer agent of the
Company),  no  right to vote or  receive  dividends  or any  other  rights  as a
shareholder shall exist with respect to the Optioned Stock,  notwithstanding the
exercise of the Option.  The  Company  shall issue (or cause to be issued)  such
stock certificate promptly after the Option is exercised.  No adjustment will be
made for a dividend  or other  right for which the  record  date is prior to the
date the stock  certificate  is issued,  except as provided in Section 13 of the
Plan.

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

               (b)  Termination of Employment or Consulting  Relationship.  Upon
termination  of an Optionee's  Continuous  Status as an Employee or  Consultant,
other than upon the Optionee's  death or  Disability,  the Optionee may exercise
his or her Option  within such period of time as is  specified  in the Notice of
Grant to the extent  that he or she is  entitled  to  exercise it on the date of
termination  (but in no  event  later  than the  expiration  of the term of such
Option as set forth in the Notice of Grant).  In the absence of a specified time
in the Notice of Grant, the Option shall remain exercisable for three (3) months
following the Optionee's termination.  In the case of an Incentive Stock Option,
such period of time for exercise shall not exceed three (3) months from the date
of termination.  If, on the date of termination, the Optionee is not entitled to
exercise  his or her  entire  Option,  the Shares  covered by the  unexercisable
portion of the Option  shall  revert to the Plan.  If,  after  termination,  the
Optionee  does not exercise his or her Option  within the time  specified by the
Administrator, the Option shall terminate, and the Shares covered by such Option
shall revert to the Plan.

               Notwithstanding  the above, in the event of an Optionee's  change
in status from Consultant to Employee or Employee to Consultant,  the Optionee's
Continuous Status as an Employee or Consultant shall not automatically terminate
solely as a result of such change in status.  In such event,  an Incentive Stock
Option  held by the  Optionee  shall cease to be treated as an  Incentive  Stock
Option and shall be treated for tax  purposes  as a  Nonstatutory  Stock  Option
three months and one day following such change of status.

               (c)  Disability of Optionee.  Upon  termination  of an Optionee's
Continuous  Status as an Employee or  Consultant  as a result of the  Optionee's
Disability,  the  Optionee  may  exercise  his or her Option at any time  within
twelve (12) months from the date of termination, but only to the extent that the
Optionee is entitled to exercise it on the date of termination  (and in no event
later than the  expiration  of the term of the Option as set forth in the Notice
of Grant).  If,

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on the date of termination,  the Optionee is not entitled to exercise his or her
entire  Option,  the Shares covered by the  unexercisable  portion of the Option
shall revert to the Plan. If, after termination,  the Optionee does not exercise
his or her Option within the time specified herein,  the Option shall terminate,
and the Shares covered by such Option shall revert to the Plan.

               (d) Death of Optionee.  Upon the death of an Optionee, the Option
may be exercised  at any time within  twelve (12) months  following  the date of
death (but in no event later than the  expiration  of the term of such Option as
set forth in the Notice of Grant),  by the Optionee's  estate or by a person who
acquires the right to exercise the Option by bequest or inheritance, but only to
the extent that the Optionee  would have been entitled to exercise the Option on
the date of death.  If, at the time of death,  the  Optionee is not  entitled to
exercise  his or her  entire  Option,  the Shares  covered by the  unexercisable
portion of the Option shall  immediately  revert to the Plan. If the  Optionee's
estate or the person who acquires the right to exercise the Option by bequest or
inheritance does not exercise the Option within the time specified  herein,  the
Option shall  terminate,  and the Shares  covered by such Option shall revert to
the Plan.

               (e) Buyout Provisions. The Administrator may at any time offer to
buy out for a payment in cash or Shares, an Option  previously  granted based on
such terms and conditions as the  Administrator  shall establish and communicate
to the Optionee at the time that such offer is made.

               (f) Rule 16b-3. Options granted to individuals subject to Section
16 of the Exchange Act ("Insiders")  must comply with the applicable  provisions
of Rule 16b-3 and shall contain such  additional  conditions or  restrictions as
may be required  thereunder to qualify for the maximum exemption from Section 16
of the Exchange Act with respect to Plan transactions.

     11. Stock Purchase Rights.

               (a)  Rights to  Purchase.  Stock  Purchase  Rights  may be issued
either alone,  in addition to, or in tandem with other awards  granted under the
Plan  and/or  cash  awards  made  outside of the Plan.  After the  Administrator
determines  that it will offer Stock  Purchase  Rights under the Plan,  it shall
advise the  offeree  in  writing,  by means of a Notice of Grant,  of the terms,
conditions and restrictions related to the offer, including the number of Shares
that the offeree  shall be entitled to purchase,  the price to be paid,  and the
time within  which the offeree  must accept such offer,  which shall in no event
exceed  six (6)  months  from the date  upon  which the  Administrator  made the
determination  to grant the Stock Purchase Right. The offer shall be accepted by
execution of a Restricted Stock Purchase Agreement in the form determined by the
Administrator.

               (b)  Repurchase  Option.  Unless  the  Administrator   determines
otherwise,  the Restricted  Stock Purchase  Agreement  shall grant the Company a
repurchase option  exercisable upon the voluntary or involuntary  termination of
the purchaser's  employment with the Company for any reason  (including death or
Disability).   The  purchase  price  for  Shares  repurchased  pursuant  to  the
Restricted  Stock  purchase  agreement  shall be the original  price paid by the

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<PAGE>

purchaser and may be paid by cancellation  of any  indebtedness of the purchaser
to the Company.  The repurchase  option shall lapse at a rate  determined by the
Administrator.

               (c) Rule 16b-3.  Stock Purchase  Rights granted to Insiders,  and
Shares purchased by Insiders in connection with Stock Purchase Rights,  shall be
subject to any restrictions applicable thereto in compliance with Rule 16b-3. An
Insider  may only  purchase  Shares  pursuant  to the grant of a Stock  Purchase
Right,  and may only  sell  Shares  purchased  pursuant  to the grant of a Stock
Purchase Right, during such time or times as are permitted by Rule 16b-3.

               (d) Other  Provisions.  The Restricted  Stock Purchase  Agreement
shall contain such other terms,  provisions and conditions not inconsistent with
the Plan as may be determined by the  Administrator in its sole  discretion.  In
addition, the provisions of Restricted Stock Purchase Agreements need not be the
same with respect to each purchaser.

               (e) Rights as a  Shareholder.  Once the Stock  Purchase  Right is
exercised,  the  purchaser  shall  have  the  rights  equivalent  to  those of a
shareholder, and shall be a shareholder when his or her purchase is entered upon
the records of the duly authorized  transfer agent of the Company. No adjustment
will be made for a dividend or other right for which the record date is prior to
the date the Stock Purchase Right is exercised, except as provided in Section 13
of the Plan.

     12.  Non-Transferability of Options and Stock Purchase Rights. An Option or
Stock  Purchase  Right  may  not  be  sold,  pledged,  assigned,   hypothecated,
transferred,  or disposed of in any manner  other than by will or by the laws of
descent  or  distribution  and may be  exercised,  during  the  lifetime  of the
Optionee, only by the Optionee.

     13.  Adjustments  Upon Changes in  Capitalization,  Dissolution,  Merger or
Asset Sale.

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

                                      -11-

<PAGE>

respect to, the number or price of shares of Common  Stock  subject to an Option
or Stock Purchase Right.

               (b)  Dissolution  or  Liquidation.  In the event of the  proposed
dissolution or liquidation of the Company,  the Administrator  shall notify each
Optionee as soon as  practicable  prior to the  effective  date of such proposed
transaction.  The Administrator in its discretion may provide for an Optionee to
have the right to exercise  his or her Option  until ten (10) days prior to such
transaction as to all of the Optioned Stock covered thereby, including Shares as
to which the  Option  would not  otherwise  be  exercisable.  In  addition,  the
Administrator  may provide that any Company  repurchase option applicable to any
Shares  purchased  upon exercise of an Option shall lapse as to all such Shares,
provided the proposed  dissolution or liquidation takes place at the time and in
the manner contemplated.  To the extent it has not been previously exercised, an
Option will terminate  immediately  prior to the  consummation  of such proposed
action.

               (c) Merger or Asset Sale. In the event of a merger of the Company
with or into another corporation, or the sale of substantially all of the assets
of the  Company,  each  outstanding  Option and Stock  Purchase  Right  shall be
assumed  or  an  equivalent   option  or  right  substituted  by  the  successor
corporation or a Parent or Subsidiary of the successor corporation. In the event
that the successor corporation refuses to assume or substitute for the Option or
Stock Purchase  Right,  the Optionee shall have the right to exercise the Option
or Stock Purchase Right as to all of the Optioned Stock,  including Shares as to
which it would not  otherwise  be  exercisable.  If an Option or Stock  Purchase
Right is  exercisable  in lieu of assumption or  substitution  in the event of a
merger or sale of assets,  the Administrator  shall notify the Optionee that the
Option  or Stock  Purchase  Right  shall be fully  exercisable  for a period  of
fifteen (15) days from the date of such notice, and the Option or Stock Purchase
Right shall  terminate upon the  expiration of such period.  For the purposes of
this paragraph,  the Option or Stock Purchase Right shall be considered  assumed
if,  following  the merger or sale of assets,  the option or right  confers  the
right to purchase or receive,  for each Share of Optioned  Stock  subject to the
Option  or Stock  Purchase  Right  immediately  prior to the  merger  or sale of
assets, the consideration (whether stock, cash, or other securities or property)
received  in the merger or sale of assets by  holders  of Common  Stock for each
Share held on the effective date of the transaction (and if holders were offered
a choice of consideration,  the type of consideration chosen by the holders of a
majority  of  the  outstanding  Shares);   provided,   however,   that  if  such
consideration  received  in the merger or sale of assets  was not solely  common
stock of the successor  corporation or its Parent,  the Administrator  may, with
the consent of the successor  corporation,  provide for the  consideration to be
received upon the exercise of the Option or Stock Purchase Right, for each Share
of Optioned  Stock subject to the Option or Stock Purchase  Right,  to be solely
common  stock of the  successor  corporation  or its Parent equal in fair market
value to the per share consideration  received by holders of Common Stock in the
merger or sale of assets.

     14. Date of Grant.  The date of grant of an Option or Stock  Purchase Right
shall  be,  for all  purposes,  the date on which  the  Administrator  makes the
determination  granting such Option or Stock Purchase Right, or such other later
date as is determined by the Administrator.

                                      -12-

<PAGE>

Notice  of the  determination  shall  be  provided  to each  Optionee  within  a
reasonable time after the date of such grant.

     15. Amendment and Termination of the Plan.

               (a) Amendment and  Termination.  The Board may at any time amend,
alter, suspend or terminate the Plan.

               (b) Shareholder  Approval.  The Company shall obtain  shareholder
approval of any Plan  amendment to the extent  necessary and desirable to comply
with  Rule  16b-3 or with  Section  422 of the Code  (or any  successor  rule or
statute or other applicable law, rule or regulation,  including the requirements
of any  exchange  or  quotation  system on which the  Common  Stock is listed or
quoted).  Such shareholder  approval,  if required,  shall be obtained in such a
manner  and to such a degree  as is  required  by the  applicable  law,  rule or
regulation.

               (c) Effect of Amendment or Termination. No amendment, alteration,
suspension or  termination  of the Plan shall impair the rights of any Optionee,
unless mutually  agreed  otherwise  between the Optionee and the  Administrator,
which  agreement  must be in writing and signed by the Optionee and the Company.

     16. Conditions Upon Issuance of Shares.

               (a) Legal Compliance.  Shares shall not be issued pursuant to the
exercise of an Option or Stock Purchase Right unless the exercise of such Option
or Stock  Purchase  Right and the  issuance  and  delivery of such Shares  shall
comply with all relevant provisions of law, including,  without limitation,  the
Securities Act of 1933, as amended,  the Exchange Act, the rules and regulations
promulgated  thereunder,  Applicable  Laws,  and the  requirements  of any stock
exchange or quotation system upon which the Shares may then be listed or quoted,
and shall be further  subject to the  approval of counsel  for the Company  with
respect to such compliance.

               (b) Investment Representations. As a condition to the exercise of
an Option or Stock Purchase Right, the Company may require the person exercising
such Option or Stock  Purchase Right to represent and warrant at the time of any
such  exercise  that the  Shares are being  purchased  only for  investment  and
without  any  present  intention  to sell or  distribute  such Shares if, in the
opinion of counsel for the Company, such a representation is required.

     17. Liability of Company.

               (a) Inability to Obtain  Authority.  The inability of the Company
to  obtain  authority  from  any  regulatory  body  having  jurisdiction,  which
authority  is deemed by the  Company's  counsel  to be  necessary  to the lawful
issuance  and sale of any Shares  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.

                                      -13-

<PAGE>

               (b) Grants  Exceeding  Allotted  Shares.  If the  Optioned  Stock
covered by an Option or Stock Purchase  Right exceeds,  as of the date of grant,
the  number of Shares  which may be  issued  under the Plan  without  additional
shareholder  approval,  such Option or Stock  Purchase  Right shall be void with
respect  to such  excess  Optioned  Stock,  unless  shareholder  approval  of an
amendment  sufficiently  increasing  the number of Shares subject to the Plan is
timely obtained in accordance with Section 15(b) of the Plan.

     18. Reservation of Shares. The Company,  during the term of this Plan, will
at all  times  reserve  and keep  available  such  number  of Shares as shall be
sufficient to satisfy the requirements of the Plan.

     19.  Shareholder  Approval.  Continuance  of the Plan  shall be  subject to
approval by the  shareholders of the Company within twelve (12) months before or
after the date the Plan is adopted.  Such shareholder approval shall be obtained
in the manner and to the degree required under  Applicable Laws and the rules of
any stock exchange upon which the Common Stock is listed.

                                      -14-

<PAGE>

                                 1996 STOCK PLAN


                             STOCK OPTION AGREEMENT


     Unless otherwise  defined herein,  the terms defined in the Plan shall have
the same defined meanings in this Option Agreement.

I.   NOTICE OF STOCK OPTION GRANT

Optionee's Name and Address

     You have been  granted an option to purchase  Common  Stock of the Company,
subject to the terms and  conditions of the Plan and this Option  Agreement,  as
follows:

         Grant Number                       _________________________

         Date of Grant                      _________________________

         Vesting Commencement Date          _________________________

         Exercise Price per Share           $________________________

         Total Number of Shares Granted     _________________________

         Total Exercise Price               $________________________

         Type of Option:                    ___   Incentive Stock Option

                                            ___   Nonstatutory Stock Option

         Term/Expiration Date:              _________________________

Vesting Schedule:

     This Option may be exercised,  in whole or in part, in accordance  with the
following schedule:

     25% of the Shares  subject to the Option shall vest twelve months after the
Vesting  Commencement  Date,  and 1/48 of the Shares subject to the Option shall
vest each month thereafter.

Termination Period:

     This  Option  may  be  exercised  for  90  days  after  termination  of the
Optionee's  employment or  consulting  relationship  with the Company.  Upon the
death or  Disability  of the  Optionee,  this Option may be  exercised  for such
longer period as provided in the Plan. In the event of the Optionee's  change in
status from  Employee to  Consultant  or  Consultant  to  Employee,  this Option
Agreement  shall  remain in effect.  In no event shall this Option be  exercised
later than the Term/Expiration Date as provided above.

<PAGE>

II.      AGREEMENT

     20. Grant of Option. The Plan Administrator of the Company hereby grants to
the Optionee  named in the Notice of Grant  attached as Part I of this Agreement
(the  "Optionee") an option (the "Option") to purchase the number of Shares,  as
set forth in the Notice of Grant,  at the exercise  price per share set forth in
the Notice of Grant (the "Exercise Price"),  subject to the terms and conditions
of the Plan, which is incorporated herein by reference. Subject to Section 15(c)
of the Plan, in the event of a conflict  between the terms and conditions of the
Plan and the  terms  and  conditions  of this  Option  Agreement,  the terms and
conditions of the Plan shall prevail.

         If  designated  in the  Notice of Grant as an  Incentive  Stock  Option
("ISO"),  this Option is intended to qualify as an Incentive  Stock Option under
Section 422 of the Code.  However, if this Option is intended to be an Incentive
Stock  Option,  to the extent that it exceeds the $100,000  rule of Code Section
422(d) it shall be treated as a Nonstatutory Stock Option ("NSO").

     21. Exercise of Option.

          (a) Right to Exercise.  This Option is exercisable  during its term in
accordance  with the  Vesting  Schedule  set out in the  Notice of Grant and the
applicable  provisions  of the Plan and this Option  Agreement.  In the event of
Optionee's death,  Disability or other  termination of Optionee's  employment or
consulting  relationship,  the  exercisability  of the Option is governed by the
applicable provisions of the Plan and this Option Agreement.

          (b) Method of Exercise.  This Option is  exercisable by delivery of an
exercise  notice,  in the form  attached as Exhibit A (the  "Exercise  Notice"),
which shall state the election to exercise  the Option,  the number of Shares in
respect of which the Option is being  exercised (the  "Exercised  Shares"),  and
such other  representations  and  agreements  as may be  required by the Company
pursuant to the provisions of the Plan.  The Exercise  Notice shall be signed by
the  Optionee  and shall be  delivered  in person  or by  certified  mail to the
Secretary of the Company. The Exercise Notice shall be accompanied by payment of
the aggregate  Exercise Price as to all Exercised  Shares.  This Option shall be
deemed to be  exercised  upon  receipt by the  Company  of such  fully  executed
Exercise Notice accompanied by such aggregate Exercise Price.

               No Shares shall be issued pursuant to the exercise of this Option
unless such issuance and exercise  complies with all relevant  provisions of law
and the  requirements of any stock exchange or quotation  service upon which the
Shares are then listed.  Assuming such  compliance,  for income tax purposes the
Exercised Shares shall be considered transferred to the Optionee on the date the
Option is exercised with respect to such Exercised Shares.

     22. Method of Payment.  Payment of the aggregate Exercise Price shall be by
any of the following, or a combination thereof, at the election of the Optionee:

     (a) cash;

     (b) check;

     (c) delivery of a properly  executed  exercise  notice  together  with such
other  documentation as the Administrator  and the broker, if applicable,  shall
require to effect an exercise


<PAGE>

of the Option and delivery to the Company of the sale or loan proceeds  required
to pay the exercise price;

          (d) surrender of other Shares which (i) in the case of Shares acquired
upon  exercise of an option,  have been owned by the  Optionee for more than six
(6) months on the date of  surrender,  and (ii) have a Fair Market  Value on the
date of surrender equal to the aggregate Exercise Price of the Exercised Shares;
or

     23.  Non-Transferability  of Option.  This Option may not be transferred in
any manner  otherwise than by will or by the laws of descent or distribution and
may be exercised during the lifetime of Optionee only by the Optionee. The terms
of the Plan and this  Option  Agreement  shall be  binding  upon the  executors,
administrators, heirs, successors and assigns of the Optionee.

     24. Term of Option.  This Option may be exercised  only within the term set
out in the  Notice  of  Grant,  and may be  exercised  during  such term only in
accordance with the Plan and the terms of this Option Agreement.

     25.  Tax  Consequences.  Some of the  federal  and state  tax  consequences
relating to this  Option,  as of the date of this  Option,  are set forth below.
THIS SUMMARY IS NECESSARILY  INCOMPLETE,  AND THE TAX LAWS AND  REGULATIONS  ARE
SUBJECT TO CHANGE.  THE OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE  EXERCISING
THIS OPTION OR DISPOSING OF THE SHARES.

          (a) Exercising the Option.

               (i)  Nonstatutory  Stock  Option.  The Optionee may incur regular
federal  income tax and state income tax  liability  upon exercise of a NSO. The
Optionee  will be treated as having  received  compensation  income  (taxable at
ordinary income tax rates) equal to the excess, if any, of the Fair Market Value
of the Exercised  Shares on the date of exercise over their  aggregate  Exercise
Price. If the Optionee is an Employee or a former Employee,  the Company will be
required to withhold from his or her  compensation  or collect from Optionee and
pay to the applicable taxing authorities an amount in cash equal to a percentage
of this compensation income at the time of exercise, and may refuse to honor the
exercise  and  refuse to  deliver  Shares if such  withholding  amounts  are not
delivered at the time of exercise.

               (ii) Incentive Stock Option.  If this Option qualifies as an ISO,
the  Optionee  will have no  regular  federal  income  tax or state  income  tax
liability  upon its  exercise,  although the excess,  if any, of the Fair Market
Value of the  Exercised  Shares on the date of  exercise  over  their  aggregate
Exercise Price will be treated as an adjustment to alternative  minimum  taxable
income for federal tax  purposes  and may  subject the  Optionee to  alternative
minimum tax in the year of exercise.  In the event that the Optionee undergoes a
change of status from Employee to Consultant,  any Incentive Stock Option of the
Optionee that remains  unexercised  shall cease to qualify as an Incentive Stock
Option and will be treated for tax  purposes as a  Nonstatutory  Stock Option on
the ninety-first (91st) day following such change of status.

                                      -2-

<PAGE>

          (b) Disposition of Shares.

               (i) NSO. If the Optionee  holds NSO Shares for at least one year,
any gain  realized on  disposition  of the Shares  will be treated as  long-term
capital gain for federal income tax purposes.

               (ii) ISO. If the Optionee  holds ISO Shares for at least one year
after  exercise  and two years  after  the  grant  date,  any gain  realized  on
disposition of the Shares will be treated as long-term  capital gain for federal
income tax  purposes.  If the  Optionee  disposes of ISO Shares  within one year
after  exercise  or two years after the grant  date,  any gain  realized on such
disposition  will be treated as compensation  income (taxable at ordinary income
rates) to the extent of the excess,  if any, of the lesser of (A) the difference
between the Fair Market Value of the Shares acquired on the date of exercise and
the aggregate  Exercise Price,  or (B) the difference  between the sale price of
such Shares and the aggregate Exercise Price.

          (c) Notice of Disqualifying Disposition of ISO Shares. If the Optionee
sells or otherwise  disposes of any of the Shares acquired pursuant to an ISO on
or  before  the later of (i) two years  after the grant  date,  or (ii) one year
after the exercise date, the Optionee  shall  immediately  notify the Company in
writing of such  disposition.  The Optionee agrees that he or she may be subject
to income tax withholding by the Company on the compensation  income  recognized
from such  early  disposition  of ISO  Shares by  payment  in cash or out of the
current earnings paid to the Optionee.

     26. Entire  Agreement;  Governing Law. The Plan is  incorporated  herein by
reference. The Plan and this Option Agreement constitute the entire agreement of
the parties with  respect to the subject  matter  hereof and  supersede in their
entirety all prior  undertakings and agreements of the Company and Optionee with
respect to the subject matter hereof,  and may not be modified  adversely to the
Optionee's  interest  except by means of a writing  signed  by the  Company  and
Optionee.  This  agreement is governed by California law except for that body of
law pertaining to conflict of laws.

     27. NO GUARANTEE OF EMPLOYMENT.  OPTIONEE  ACKNOWLEDGES AND AGREES THAT THE
VESTING OF SHARES  PURSUANT  TO THE  VESTING  SCHEDULE  HEREOF IS EARNED ONLY BY
CONTINUING  SERVICE AS AN EMPLOYEE OR CONSULTANT AT THE WILL OF THE COMPANY (AND
NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED AN OPTION OR PURCHASING SHARES
HEREUNDER).  OPTIONEE FURTHER  ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT,  THE
TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO
NOT  CONSTITUTE  AN EXPRESS OR IMPLIED  PROMISE OF  CONTINUED  ENGAGEMENT  AS AN
EMPLOYEE OR CONSULTANT FOR THE VESTING  PERIOD,  FOR ANY PERIOD,  OR AT ALL, AND
SHALL NOT INTERFERE WITH  OPTIONEE'S  RIGHT OR THE COMPANY'S  RIGHT TO TERMINATE
OPTIONEE'S  EMPLOYMENT OR CONSULTING  RELATIONSHIP  AT ANY TIME, WITH OR WITHOUT
CAUSE.

     By your signature and the signature of the Company's  representative below,
you and the Company  agree that this Option is granted under and governed by the
terms  and  conditions  of the Plan  and this  Option  Agreement.  Optionee  has
reviewed  the Plan and  this  Option  Agreement  in their  entirety,  has had an
opportunity  to obtain the  advice of counsel  prior to  executing  this  Option

                                      -3-

<PAGE>

Agreement and fully understands all provisions of the Plan and Option Agreement.
Optionee hereby agrees to accept as binding,  conclusive and final all decisions
or  interpretations of the Administrator upon any questions relating to the Plan
and Option  Agreement.  Optionee  further  agrees to notify the Company upon any
change in the residence address indicated below.


OPTIONEE:                                 SIERRA MONITOR CORPORATION


____________________________________      By:___________________________________

Signature


____________________________________      Title:________________________________

Print Name


                                          Dated:________________________________


____________________________________

Residence Address

____________________________________


Dated:______________________________


                                      -4-

<PAGE>

                                CONSENT OF SPOUSE



     The  undersigned  spouse of Optionee has read and hereby approves the terms
and conditions of the Plan and this Option  Agreement.  In  consideration of the
Company's  granting his or her spouse the right to purchase  Shares as set forth
in the Plan and this  Option  Agreement,  the  undersigned  hereby  agrees to be
irrevocably  bound by the  terms  and  conditions  of the  Plan and this  Option
Agreement  and further  agrees that any  community  property  interest  shall be
similarly bound.  The undersigned  hereby appoints the  undersigned's  spouse as
attorney-in-fact  for the undersigned  with respect to any amendment or exercise
of rights under the Plan or this Option Agreement.



                                                     ___________________________
                                                     Spouse of Optionee

<PAGE>

                                    EXHIBIT A

                                 1996 STOCK PLAN



                                 EXERCISE NOTICE



Sierra Monitor Corporation
1991 Tarob Court
Milpitas, CA 95035

Attention:  Corporate Secretary

     28. Exercise of Option. Effective as of today, ________________, 199__, the
undersigned  ("Purchaser") hereby elects to purchase  ______________ shares (the
"Shares")  of the Common Stock of Sierra  Monitor  Corporation  (the  "Company")
under and  pursuant  to the 1996 Stock Plan (the  "Plan")  and the Stock  Option
Agreement  dated  _____________ , 19___ (the "Option  Agreement").  The purchase
price for the Shares shall be $__________, as required by the Option Agreement.

     29.  Delivery of Payment.  Purchaser  herewith  delivers to the Company the
full purchase price for the Shares.

     30. Representations of Purchaser. Purchaser acknowledges that Purchaser has
received,  read and understood  the Plan and the Option  Agreement and agrees to
abide by and be bound by their terms and conditions.

     31.  Rights  as  Shareholder.  Until  the  issuance  (as  evidenced  by the
appropriate  entry on the books of the Company or of a duly authorized  transfer
agent of the Company) of the stock certificate  evidencing such Shares, no right
to vote or receive  dividends or any other rights as a  shareholder  shall exist
with respect to the Optioned Stock,  notwithstanding the exercise of the Option.
A share  certificate for the number of Shares so acquired shall be issued to the
Optionee as soon as practicable after exercise of the Option. No adjustment will
be made for a dividend  or other right for which the record date is prior to the
date the stock  certificate  is issued,  except as provided in Section 13 of the
Plan.

     32. Tax  Consultation.  Purchaser  understands  that  Purchaser  may suffer
adverse tax  consequences as a result of Purchaser's  purchase or disposition of
the Shares.  Purchaser  represents  that  Purchaser has  consulted  with any tax
consultants  Purchaser  deems  advisable  in  connection  with the  purchase  or
disposition  of the Shares and that  Purchaser is not relying on the Company for
any tax advice.

     33.  Entire  Agreement;  Governing  Law. The Plan and Option  Agreement are
incorporated  herein  by  reference.  This  Agreement,  the Plan and the  Option
Agreement  constitute  the entire

<PAGE>

agreement of the parties with respect to the subject matter hereof and supersede
in their  entirety  all prior  undertakings  and  agreements  of the Company and
Purchaser  with respect to the subject  matter  hereof,  and may not be modified
adversely to the Purchaser's interest except by means of a writing signed by the
Company and  Purchaser.  This agreement is governed by California law except for
that body of law pertaining to conflict of laws.

Submitted by:                               Accepted by:

PURCHASER:                                  SIERRA MONITOR CORPORATION


__________________________________          By: ________________________________

Signature


__________________________________          Its: _______________________________

Print Name

Address:                                    Address:


___________________________                 1991 Tarob Court


___________________________                 Milpitas, CA 95035


                                      -2-

<PAGE>

                                    EXHIBIT B


                               SECURITY AGREEMENT



     This  Security  Agreement is made as of  _________,  19___  between  Sierra
Monitor Corporation, a California corporation ("Pledgee"), and__________________
("Pledgor").

                                    Recitals



     Pursuant  to  Pledgor's  election  to  purchase  Shares  under  the  Option
Agreement  dated  ________  (the  "Option"),  between  Pledgor and Pledgee under
Pledgee's 1996 Stock Plan, and Pledgor's  election under the terms of the Option
to pay for such  shares  with his  promissory  note (the  "Note"),  Pledgor  has
purchased  _________  shares of Pledgee's Common Stock (the "Shares") at a price
of $________ per share, for a total purchase price of $__________.  The Note and
the obligations thereunder are as set forth in Exhibit C to the Option.

     NOW, THEREFORE, it is agreed as follows:

     34. Creation and Description of Security Interest.  In consideration of the
transfer of the Shares to Pledgor under the Option Agreement,  Pledgor, pursuant
to the  California  Commercial  Code,  hereby pledges all of such Shares (herein
sometimes  referred to as the  "Collateral")  represented by certificate  number
______,  duly  endorsed in blank or with  executed  stock  powers,  and herewith
delivers  said  certificate  to the Secretary of Pledgee  ("Pledgeholder"),  who
shall hold said certificate subject to the terms and conditions of this Security
Agreement.

     The pledged stock (together with an executed blank stock assignment for use
in  transferring  all or a  portion  of the  Shares to  Pledgee  if, as and when
required pursuant to this Security  Agreement) shall be held by the Pledgeholder
as  security  for the  repayment  of the Note,  and any  extensions  or renewals
thereof,  to be executed by Pledgor pursuant to the terms of the Option, and the
Pledgeholder  shall not encumber or dispose of such Shares  except in accordance
with the provisions of this Security  Agreement.

     35.  Pledgor's  Representations  and Covenants.  To induce Pledgee to enter
into this Security Agreement,  Pledgor represents and covenants to Pledgee,  its
successors and assigns, as follows:

          (a) Payment of Indebtedness. Pledgor will pay the principal sum of the
Note secured  hereby,  together  with interest  thereon,  at the time and in the
manner provided in the Note.

          (b)  Encumbrances.  The  Shares  are free of all  other  encumbrances,
defenses and liens, and Pledgor will not further encumber the Shares without the
prior written consent of Pledgee.

          (c) Margin  Regulations.  In the event that Pledgee's  Common Stock is
now or later becomes  margin-listed  by the Federal Reserve Board and Pledgee is
classified as a "lender" within the meaning of the regulations under Part 207 of
Title 12 of the Code of Federal Regulations


<PAGE>

("Regulation  G"),  Pledgor  agrees to  cooperate  with  Pledgee  in making  any
amendments  to  the  Note  or  providing  any  additional  collateral  as may be
necessary to comply with such regulations.

     36.  Voting  Rights.  During  the  term of this  pledge  and so long as all
payments of  principal  and interest are made as they become due under the terms
of the Note,  Pledgor  shall  have the right to vote all of the  Shares  pledged
hereunder.

     37. Stock Adjustments.  In the event that during the term of the pledge any
stock dividend, reclassification,  readjustment or other changes are declared or
made in the capital  structure of Pledgee,  all new,  substituted and additional
shares  or  other  securities  issued  by  reason  of any such  change  shall be
delivered to and held by the Pledgee under the terms of this Security  Agreement
in the same manner as the Shares originally pledged  hereunder.  In the event of
substitution  of  such  securities,  Pledgor,  Pledgee  and  Pledgeholder  shall
cooperate and execute such  documents as are reasonable so as to provide for the
substitution  of such  Collateral  and,  upon such  substitution,  references to
"Shares" in this  Security  Agreement  shall include the  substituted  shares of
capital stock of Pledgor as a result thereof.

     38. Options and Rights.  In the event that, during the term of this pledge,
subscription  Options or other rights or options  shall be issued in  connection
with the pledged Shares, such rights,  Options and options shall be the property
of Pledgor and, if exercised by Pledgor,  all new stock or other  securities  so
acquired  by  Pledgor  as  it  relates  to  the  pledged  Shares  then  held  by
Pledgeholder  shall be immediately  delivered to Pledgeholder,  to be held under
the terms of this Security Agreement in the same manner as the Shares pledged.

     39.  Default.  Pledgor  shall be deemed to be in default of the Note and of
this Security Agreement in the event:

          (a) Payment of principal  or interest on the Note shall be  delinquent
for a period of 10 days or more; or

          (b)  Pledgor  fails to perform any of the  covenants  set forth in the
Option or contained  in this  Security  Agreement  for a period of 10 days after
written notice thereof from Pledgee.

     In the case of an event of Default, as set forth above,  Pledgee shall have
the right to accelerate payment of the Note upon notice to Pledgor,  and Pledgee
shall  thereafter  be  entitled  to pursue  its  remedies  under the  California
Commercial Code.

     40. Release of Collateral.  Subject to any applicable  contrary rules under
Regulation  G, there shall be released from this pledge a portion of the pledged
Shares held by  Pledgeholder  hereunder  upon  payments of the  principal of the
Note.  The number of the pledged  Shares  which shall be released  shall be that
number of full Shares which bears the same  proportion to the initial  number of
Shares pledged  hereunder as the payment of principal  bears to the initial full
principal amount of the Note.

                                      -2-

<PAGE>

     41.  Withdrawal  or  Substitution  of  Collateral.  Pledgor shall not sell,
withdraw,  pledge,  substitute  or  otherwise  dispose of all or any part of the
Collateral without the prior written consent of Pledgee.

     42. Term.  The within pledge of Shares shall  continue until the payment of
all indebtedness secured hereby, at which time the remaining pledged stock shall
be promptly delivered to Pledgor, subject to the provisions for prior release of
a portion of the Collateral as provided in paragraph 7 above.

     43.  Insolvency.   Pledgor  agrees  that  if  a  bankruptcy  or  insolvency
proceeding is instituted by or against it, or if a receiver is appointed for the
property  of  Pledgor,  or if Pledgor  makes an  assignment  for the  benefit of
creditors, the entire amount unpaid on the Note shall become immediately due and
payable, and Pledgee may proceed as provided in the case of default.

     44. Pledgeholder  Liability. In the absence of willful or gross negligence,
Pledgeholder  shall not be liable to any party for any of his acts, or omissions
to act, as Pledgeholder.

     45. Invalidity of Particular Provisions. Pledgor and Pledgee agree that the
enforceability  or  invalidity  of any  provision or provisions of this Security
Agreement  shall not render any other provision or provisions  herein  contained
unenforceable or invalid.

     46. Successors or Assigns.  Pledgor and Pledgee agree that all of the terms
of this Security  Agreement shall be binding on their respective  successors and
assigns, and that the term "Pledgor" and the term "Pledgee" as used herein shall
be deemed to include, for all purposes,  the respective  designees,  successors,
assigns, heirs, executors and administrators.

     47.  Governing  Law.  This  Security  Agreement  shall be  interpreted  and
governed under the laws of the State of California.

                                      -3-

<PAGE>

     IN WITNESS  WHEREOF,  the parties hereto have executed this Agreement as of
the day and year first above written.

         "PLEDGOR"                  By:  _____________________________________

                                    __________________________________________

                                    Print Name

                                    Address:

                                    __________________________________________

                                    __________________________________________

         "PLEDGEE"                  Sierra Monitor Corporation,

                                    a California corporation

                                    By:  _____________________________________

                                    Title:  __________________________________

         "PLEDGEHOLDER"             __________________________________________

                                    Secretary of Sierra Monitor Corporation


                                      -4-

<PAGE>



                                    EXHIBIT C


                                      NOTE



$_______________                                            Milpitas, California

                                                           ______________, 19___

     FOR VALUE  RECEIVED,  _______________  promises  to pay to  Sierra  Monitor
Corporation,  a California corporation (the "Company"),  or order, the principal
sum of _______________________  ($_____________),  together with interest on the
unpaid  principal  hereof  from the date  hereof at the rate of  _______________
percent (____%) per annum, compounded semiannually.

     Principal  and  interest  shall be due and  payable on  __________,  19___.
Should the undersigned  fail to make full payment of principal or interest for a
period of 10 days or more after the due date thereof,  the whole unpaid  balance
on this Note of principal  and  interest  shall  become  immediately  due at the
option of the holder of this Note.  Payments of principal and interest  shall be
made in lawful money of the United States of America.

     The  undersigned may at any time prepay all or any portion of the principal
or interest owing hereunder.

     This  Note  is   subject  to  the  terms  of  the   Option,   dated  as  of
________________.  This Note is  secured  in part by a pledge  of the  Company's
Common Stock under the terms of a Security  Agreement of even date  herewith and
is subject to all the provisions thereof.

     The holder of this Note shall have full recourse  against the  undersigned,
and shall not be required to proceed  against the collateral  securing this Note
in the event of default.


     In the event the undersigned shall cease to be an employee or consultant of
the Company for any reason,  this Note shall,  at the option of the Company,  be
accelerated,  and the whole unpaid balance on this Note of principal and accrued
interest shall be immediately due and payable.


     Should any  action be  instituted  for the  collection  of this  Note,  the
reasonable  costs and attorneys' fees therein of the holder shall be paid by the
undersigned.



                                               _________________________________


                                               _________________________________

<PAGE>



                                 1996 STOCK PLAN


                     NOTICE OF GRANT OF STOCK PURCHASE RIGHT


     Unless otherwise  defined herein,  the terms defined in the Plan shall have
the same defined meanings in this Notice of Grant.



[Grantee's Name and Address]



     You have been  granted the right to purchase  Common  Stock of the Company,
subject to the Company's Repurchase Option and your ongoing Continuous Status as
an Employee or Consultant (as described in the Plan and the attached  Restricted
Stock Purchase Agreement), as follows:

         Grant Number                                _________________________

         Date of Grant                               _________________________

         Price Per Share                             $________________________

         Total Number of Shares Subject              _________________________

           to This Stock Purchase Right

         Expiration Date:                            _________________________


     YOU MUST EXERCISE THIS STOCK PURCHASE  RIGHT BEFORE THE EXPIRATION  DATE OR
IT WILL TERMINATE AND YOU WILL HAVE NO FURTHER RIGHT TO PURCHASE THE SHARES.  By
your signature and the signature of the Company's  representative below, you and
the Company agree that this Stock  Purchase  Right is granted under and governed
by the terms and  conditions  of the 1996  Stock Plan and the  Restricted  Stock
Purchase  Agreement,  attached  hereto as Exhibit A-1,  both of which are made a
part of this  document.  You further  agree to execute the  attached  Restricted
Stock  Purchase  Agreement  as a condition to  purchasing  any shares under this
Stock Purchase Right.



GRANTEE:                                    SIERRA MONITOR CORPORATION



___________________________                 By:      ___________________________

Signature



___________________________                 Title:   ___________________________

Print Name


<PAGE>



                                   EXHIBIT A-1


                                 1996 STOCK PLAN


                       RESTRICTED STOCK PURCHASE AGREEMENT


     Unless otherwise  defined herein,  the terms defined in the Plan shall have
the same defined meanings in this Restricted Stock Purchase Agreement.

     WHEREAS the Purchaser named in the Notice of Grant, (the "Purchaser") is an
Employee  or  Consultant  of  the  Company,   and  the   Purchaser's   continued
participation  is  considered  by the Company to be important  for the Company's
continued growth; and

     WHEREAS in order to give the Purchaser an  opportunity to acquire an equity
interest in the Company as an incentive for the Purchaser to  participate in the
affairs of the Company,  the  Administrator has granted to the Purchaser a Stock
Purchase Right subject to the terms and conditions of the Plan and the Notice of
Grant,  which  are  incorporated  herein  by  reference,  and  pursuant  to this
Restricted Stock Purchase Agreement (the "Agreement").

     NOW THEREFORE, the parties agree as follows:

     48. Sale of Stock.  The Company  hereby agrees to sell to the Purchaser and
the  Purchaser  hereby agrees to purchase  shares of the Company's  Common Stock
(the  "Shares"),  at the per Share purchase price and as otherwise  described in
the Notice of Grant.

     49.  Payment of Purchase  Price.  The purchase  price for the Shares may be
paid by delivery to the Company at the time of  execution  of this  Agreement of
cash, a check, or some combination thereof.

     50. Repurchase Option.

          (a) In the event the Purchaser's  Continuous  Status as an Employee or
Consultant  terminates  for any or no  reason  (including  death or  disability)
before all of the Shares are released from the Company's  Repurchase Option (see
Section 4), the Company shall,  upon the date of such termination (as reasonably
fixed and determined by the Company) have an irrevocable,  exclusive option (the
"Repurchase  Option")  for a  period  of  sixty  (60)  days  from  such  date to
repurchase up to that number of shares which  constitute the  Unreleased  Shares
(as  defined  in  Section  4) at the  original  purchase  price per  share  (the
"Repurchase  Price"). The Repurchase Option shall be exercised by the Company by
delivering  written notice to the Purchaser or the Purchaser's  executor (with a
copy to the Escrow  Holder) AND, at the Company's  option,  (i) by delivering to
the Purchaser or the Purchaser's executor a check in the amount of the aggregate
Repurchase   Price,   or  (ii)  by  cancelling  an  amount  of  the  Purchaser's
indebtedness to the Company equal to the aggregate Repurchase Price, or (iii) by
a combination of (i) and (ii) so that the combined  payment and  cancellation of
indebtedness equals the aggregate Repurchase Price. Upon delivery of such notice
and the payment of the aggregate  Repurchase Price, the Company shall become the
legal and beneficial  owner of the Shares being  repurchased  and all rights and
interests therein or relating  thereto,  and the Company


<PAGE>

shall have the right to retain and transfer to its own name the number of Shares
being repurchased by the Company.

          (b) Whenever  the Company  shall have the right to  repurchase  Shares
hereunder, the Company may designate and assign one or more employees, officers,
directors or  shareholders of the Company or other persons or  organizations  to
exercise all or a part of the Company's purchase rights under this Agreement and
purchase all or a part of such Shares. If the Fair Market Value of the Shares to
be repurchased on the date of such  designation or assignment  (the  "Repurchase
FMV")  exceeds the  aggregate  Repurchase  Price of such Shares,  then each such
designee or assignee shall pay the Company cash equal to the difference  between
the Repurchase FMV and the aggregate Repurchase Price of such Shares.

     51. Release of Shares From Repurchase Option.

          (a)  _______________________  percent (______%) of the Shares shall be
released from the Company's  Repurchase  Option one year after the Date of Grant
and __________________  percent (______%) of the Shares at the end of each month
thereafter,  provided that the Purchaser's  Continuous  Status as an Employee or
Consultant has not terminated prior to the date of any such release.

          (b) Any of the  Shares  that  have  not yet  been  released  from  the
Repurchase Option are referred to herein as "Unreleased Shares."

          (c) The Shares  that have been  released  from the  Repurchase  Option
shall be delivered to the Purchaser at the Purchaser's request (see Section 6).

     52.  Restriction on Transfer.  Except for the escrow described in Section 6
or the transfer of the Shares to the Company or its  assignees  contemplated  by
this Agreement,  none of the Shares or any beneficial  interest therein shall be
transferred,  encumbered  or otherwise  disposed of in any way until such Shares
are  released  from the  Company's  Repurchase  Option  in  accordance  with the
provisions  of this  Agreement,  other than by will or the laws of  descent  and
distribution.

     53. Escrow of Shares.

          (a) To  ensure  the  availability  for  delivery  of  the  Purchaser's
Unreleased  Shares upon  repurchase  by the Company  pursuant to the  Repurchase
Option,  the Purchaser  shall,  upon  execution of this  Agreement,  deliver and
deposit with an escrow holder  designated  by the Company (the "Escrow  Holder")
the share  certificates  representing the Unreleased  Shares,  together with the
stock  assignment  duly endorsed in blank,  attached  hereto as Exhibit A-2. The
Unreleased  Shares  and stock  assignment  shall be held by the  Escrow  Holder,
pursuant to the Joint Escrow  Instructions of the Company and Purchaser attached
hereto as  Exhibit  A-3,  until  such time as the  Company's  Repurchase  Option
expires.  As a  further  condition  to  the  Company's  obligations  under  this
Agreement,  the Company may require the spouse of Purchaser,  if any, to execute
and deliver to the Company the Consent of Spouse attached hereto as Exhibit A-4.


                                      -2-

<PAGE>

          (b) The  Escrow  Holder  shall not be liable  for any act it may do or
omit to do with respect to holding the Unreleased  Shares in escrow while acting
in good faith and in the exercise of its judgment.

          (c) If the Company or any assignee  exercises  the  Repurchase  Option
hereunder,  the Escrow  Holder,  upon receipt of written notice of such exercise
from the proposed transferee,  shall take all steps necessary to accomplish such
transfer.

          (d)  When  the  Repurchase   Option  has  been  exercised  or  expires
unexercised  or a portion of the Shares has been  released  from the  Repurchase
Option, upon request the Escrow Holder shall promptly cause a new certificate to
be issued for the  released  Shares and shall  deliver  the  certificate  to the
Company or the Purchaser, as the case may be.

          (e)  Subject to the terms  hereof,  the  Purchaser  shall have all the
rights of a  shareholder  with  respect  to the  Shares  while  they are held in
escrow,  including  without  limitation,  the  right to vote the  Shares  and to
receive any cash dividends  declared  thereon.  If, from time to time during the
term of the Repurchase Option,  there is (i) any stock dividend,  stock split or
other change in the Shares,  or (ii) any merger or sale of all or  substantially
all of the  assets  or  other  acquisition  of the  Company,  any and  all  new,
substituted  or  additional  securities  to which the  Purchaser  is entitled by
reason of the Purchaser's  ownership of the Shares shall be immediately  subject
to this escrow,  deposited  with the Escrow  Holder and included  thereafter  as
"Shares" for purposes of this Agreement and the Repurchase Option.

     54. Legends.  The share certificate  evidencing the Shares issued hereunder
shall be endorsed with the following  legend (in addition to any legend required
under applicable state securities laws):

     THE  SHARES   REPRESENTED  BY  THIS  CERTIFICATE  ARE  SUBJECT  TO  CERTAIN
RESTRICTIONS UPON TRANSFER AND RIGHTS OF REPURCHASE AS SET FORTH IN AN AGREEMENT
BETWEEN  THE COMPANY  AND THE  SHAREHOLDER,  A COPY OF WHICH IS ON FILE WITH THE
SECRETARY OF THE COMPANY.

     55.  Adjustment for Stock Split. All references to the number of Shares and
the  purchase  price of the  Shares  in this  Agreement  shall be  appropriately
adjusted  to reflect any stock  split,  stock  dividend  or other  change in the
Shares which may be made by the Company after the date of this Agreement.

     56. Tax  Consequences.  The Purchaser has reviewed with the Purchaser's own
tax advisors  the federal,  state,  local and foreign tax  consequences  of this
investment and the transactions contemplated by this Agreement. The Purchaser is
relying solely on such advisors and not on any statements or  representations of
the Company or any of its agents.  The Purchaser  understands that the Purchaser
(and not the Company) shall be responsible for the Purchaser's own tax liability
that may arise as a result of the  transactions  contemplated by this Agreement.
The Purchaser  understands that Section 83 of the Internal Revenue Code of 1986,
as amended (the "Code"),  taxes as ordinary  income the  difference  between the
purchase  price for the Shares and the Fair Market Value of the Shares as of the
date any  restrictions  on the  Shares  lapse.  In this  context,  "restriction"
includes  the

                                      -3-

<PAGE>

right of the Company to buy back the Shares  pursuant to the Repurchase  Option.
The Purchaser  understands  that the Purchaser may elect to be taxed at the time
the Shares are purchased  rather than when and as the Repurchase  Option expires
by filing an  election  under  Section  83(b) of the Code with the IRS within 30
days from the date of purchase. The form for making this election is attached as
Exhibit A-5 hereto.

     THE PURCHASER  ACKNOWLEDGES THAT IT IS THE PURCHASER'S SOLE  RESPONSIBILITY
AND NOT THE COMPANY'S TO FILE TIMELY THE ELECTION UNDER SECTION  83(b),  EVEN IF
THE PURCHASER REQUESTS THE COMPANY OR ITS REPRESENTATIVES TO MAKE THIS FILING ON
THE PURCHASER'S BEHALF.

     57. General Provisions.

          (a) This  Agreement  shall  be  governed  by the laws of the  State of
California. This Agreement,  subject to the terms and conditions of the Plan and
the Notice of Grant,  represents the entire  agreement  between the parties with
respect to the purchase of the Shares by the Purchaser. Subject to Section 15(c)
of the Plan, in the event of a conflict  between the terms and conditions of the
Plan and the terms and conditions of this Agreement, the terms and conditions of
the Plan shall prevail.  Unless otherwise  defined herein,  the terms defined in
the Plan shall have the same defined meanings in this Agreement.

          (b) Any notice, demand or request required or permitted to be given by
either the  Company or the  Purchaser  pursuant  to the terms of this  Agreement
shall be in writing  and shall be deemed  given  when  delivered  personally  or
deposited in the U.S. mail, First Class with postage  prepaid,  and addressed to
the  parties  at the  addresses  of the  parties  set  forth  at the end of this
Agreement or such other address as a party may request by notifying the other in
writing.

          Any notice to the Escrow Holder shall be sent to the Company's address
with a copy to the other party hereto.

          (c)  The  rights  of  the  Company  under  this  Agreement   shall  be
transferable  to any one or more  persons or  entities,  and all  covenants  and
agreements  hereunder  shall inure to the benefit of, and be  enforceable by the
Company's  successors and assigns.  The rights and  obligations of the Purchaser
under this Agreement may only be assigned with the prior written  consent of the
Company.

          (d) Either party's  failure to enforce any provision of this Agreement
shall not in any way be construed as a waiver of any such provision, nor prevent
that party from thereafter enforcing any other provision of this Agreement.  The
rights granted both parties  hereunder are cumulative and shall not constitute a
waiver of either party's right to assert any other legal remedy available to it.

          (e) The Purchaser agrees upon request to execute any further documents
or  instruments  necessary  or  desirable to carry out the purposes or intent of
this Agreement.

          (f)  PURCHASER  ACKNOWLEDGES  AND  AGREES  THAT THE  VESTING OF SHARES
PURSUANT TO SECTION 4 HEREOF IS EARNED ONLY BY CONTINUING

                                      -4-

<PAGE>

SERVICE AS AN EMPLOYEE OR CONSULTANT AT THE WILL OF THE COMPANY (AND NOT THROUGH
THE ACT OF BEING  HIRED  OR  PURCHASING  SHARES  HEREUNDER).  PURCHASER  FURTHER
ACKNOWLEDGES  AND AGREES  THAT THIS  AGREEMENT,  THE  TRANSACTIONS  CONTEMPLATED
HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS
OR IMPLIED PROMISE OF CONTINUED  ENGAGEMENT AS AN EMPLOYEE OR CONSULTANT FOR THE
VESTING  PERIOD,  FOR ANY  PERIOD,  OR AT ALL,  AND  SHALL  NOT  INTERFERE  WITH
PURCHASER'S RIGHT OR THE COMPANY'S RIGHT TO TERMINATE PURCHASER'S  EMPLOYMENT OR
CONSULTING RELATIONSHIP AT ANY TIME, WITH OR WITHOUT CAUSE.

     By Purchaser's  signature  below,  Purchaser  represents  that he or she is
familiar  with the terms and  provisions  of the Plan,  and hereby  accepts this
Agreement  subject to all of the terms and  provisions  thereof.  Purchaser  has
reviewed the Plan and this Agreement in their  entirety,  has had an opportunity
to obtain the advice of counsel  prior to  executing  this  Agreement  and fully
understands  all  provisions of this  Agreement.  Purchaser  agrees to accept as
binding,   conclusive  and  final  all  decisions  or   interpretations  of  the
Administrator  upon any  questions  arising  under  the Plan or this  Agreement.
Purchaser  further agrees to notify the Company upon any change in the residence
indicated in the Notice of Grant.



DATED:  _____________________



PURCHASER:                                  SIERRA MONITOR CORPORATION



______________________________              By:____________________________

Signature



______________________________              Title:_________________________

                                       Print Name


                                      -5-

<PAGE>

                                   EXHIBIT A-2


                      ASSIGNMENT SEPARATE FROM CERTIFICATE



     FOR VALUE RECEIVED I,  __________________________,  hereby sell, assign and
transfer unto ____________________________________________________  (__________)
shares of the Common Stock of Sierra Monitor Corporation  standing in my name of
the books of said corporation  represented by Certificate No. _____ herewith and
do hereby irrevocably constitute and appoint  ______________________to  transfer
the said stock on the books of the within named  corporation  with full power of
substitution in the premises.

     This Stock  Assignment  may be used only in accordance  with the Restricted
Stock Purchase Agreement (the "Agreement")  between________________________  and
the undersigned dated ______________, 19__.



Dated: _______________, 19__





                                   Signature:______________________________






INSTRUCTIONS:  Please do not fill in any blanks other than the  signature  line.
The  purpose  of this  assignment  is to enable  the  Company  to  exercise  the
Repurchase Option, as set forth in the Agreement,  without requiring  additional
signatures on the part of the Purchaser.


                                      -6-

<PAGE>



                                   EXHIBIT A-3


                            JOINT ESCROW INSTRUCTIONS




                                                                __________, 19__


Corporate Secretary
Sierra Monitor Corporation
1991 Tarob Court
Milpitas, CA 95035


Dear ________________:

     As  Escrow  Agent  for  both  Sierra  Monitor  Corporation,   a  California
corporation  (the  "Company"),  and the  undersigned  purchaser  of stock of the
Company (the  "Purchaser"),  you are hereby  authorized and directed to hold the
documents  delivered  to you  pursuant to the terms of that  certain  Restricted
Stock Purchase Agreement  ("Agreement") between the Company and the undersigned,
in accordance with the following instructions:

     58. In the event the Company  and/or any assignee of the Company  (referred
to collectively as the "Company")  exercises the Company's Repurchase Option set
forth in the  Agreement,  the Company  shall give to Purchaser and you a written
notice  specifying  the number of shares of stock to be purchased,  the purchase
price,  and the time for a  closing  hereunder  at the  principal  office of the
Company.  Purchaser and the Company hereby irrevocably  authorize and direct you
to close the  transaction  contemplated  by such notice in  accordance  with the
terms of said notice.

     59. At the  closing,  you are  directed  (a) to date the stock  assignments
necessary  for the  transfer  in  question,  (b) to fill in the number of shares
being  transferred,  and (c) to  deliver  same,  together  with the  certificate
evidencing  the  shares  of  stock  to be  transferred,  to the  Company  or its
assignee,  against the  simultaneous  delivery to you of the purchase  price (by
cash, a check,  or some  combination  thereof) for the number of shares of stock
being purchased pursuant to the exercise of the Company's Repurchase Option.

     60.  Purchaser  irrevocably  authorizes the Company to deposit with you any
certificates  evidencing  shares  of stock to be held by you  hereunder  and any
additions  and  substitutions  to  said  shares  as  defined  in the  Agreement.
Purchaser  does hereby  irrevocably  constitute  and appoint you as  Purchaser's
attorney-in-fact  and agent for the term of this escrow to execute  with respect
to  such  securities  all  documents  necessary  or  appropriate  to  make  such
securities  negotiable  and to complete  any  transaction  herein  contemplated,
including  but not  limited to the  filing  with any  applicable  state blue sky
authority of any required applications for consent to, or notice of transfer of,
the  securities.  Subject to the provisions of this paragraph 3, Purchaser shall
exercise all rights and  privileges  of a  shareholder  of the Company while the
stock is held by you.

<PAGE>

     61.  Upon  written  request  of the  Purchaser,  but no more  than once per
calendar year, unless the Company's  Repurchase  Option has been exercised,  you
shall deliver to Purchaser a certificate or  certificates  representing  so many
shares of stock as are not then  subject  to the  Company's  Repurchase  Option.
Within 90 days  after  cessation  of  Purchaser's  continuous  employment  by or
services to the Company,  or any parent or subsidiary of the Company,  you shall
deliver to Purchaser a certificate or  certificates  representing  the aggregate
number of shares held or issued  pursuant to the  Agreement and not purchased by
the Company or its assignees  pursuant to exercise of the  Company's  Repurchase
Option.

     62. If at the time of  termination  of this  escrow you should have in your
possession any documents,  securities, or other property belonging to Purchaser,
you shall  deliver all of the same to Purchaser  and shall be  discharged of all
further obligations hereunder.

     63. Your duties hereunder may be altered, amended, modified or revoked only
by a writing signed by all of the parties hereto.

     64. You shall be obligated  only for the  performance of such duties as are
specifically  set forth herein and may rely and shall be protected in relying or
refraining  from  acting  on any  instrument  reasonably  believed  by you to be
genuine and to have been signed or presented by the proper party or parties. You
shall not be personally liable for any act you may do or omit to do hereunder as
Escrow Agent or as  attorney-in-fact  for Purchaser  while acting in good faith,
and any act done or omitted by you pursuant to the advice of your own  attorneys
shall be conclusive evidence of such good faith.

     65. You are hereby  expressly  authorized to disregard any and all warnings
given by any of the  parties  hereto  or by any  other  person  or  corporation,
excepting  only  orders or  process of courts of law,  and are hereby  expressly
authorized to comply with and obey orders, judgments or decrees of any court. In
case you obey or comply with any such order,  judgment or decree,  you shall not
be  liable  to  any of the  parties  hereto  or to any  other  person,  firm  or
corporation  by  reason  of such  compliance,  notwithstanding  any such  order,
judgment or decree being subsequently reversed,  modified,  annulled, set aside,
vacated or found to have been entered without jurisdiction.

     66. You shall not be liable in any  respect  on  account  of the  identity,
authorities  or rights of the parties  executing or  delivering or purporting to
execute or deliver the Agreement or any documents or papers  deposited or called
for hereunder.

     67.  You shall not be liable  for the  outlawing  of any  rights  under the
statute of limitations  with respect to these Joint Escrow  Instructions  or any
documents deposited with you.

     68. You shall be entitled to employ such legal counsel and other experts as
you  may  deem  necessary  properly  to  advise  you  in  connection  with  your
obligations  hereunder,  may rely upon the advice of such  counsel,  and may pay
such counsel reasonable compensation therefor.

                                      -2-
<PAGE>

     69. Your  responsibilities as Escrow Agent hereunder shall terminate if you
shall cease to be an officer or agent of the  Company or if you shall  resign by
written notice to each party. In the event of any such termination,  the Company
shall appoint a successor Escrow Agent.

     70. If you  reasonably  require other or further  instruments in connection
with these Joint Escrow  Instructions  or  obligations  in respect  hereto,  the
necessary parties hereto shall join in furnishing such instruments.

     71. It is understood  and agreed that should any dispute arise with respect
to the delivery  and/or  ownership or right of possession of the securities held
by you hereunder,  you are authorized and directed to retain in your  possession
without  liability  to  anyone  all or any part of said  securities  until  such
disputes  shall have been  settled  either by mutual  written  agreement  of the
parties  concerned  or by a final  order,  decree  or  judgment  of a  court  of
competent  jurisdiction  after the time for appeal has expired and no appeal has
been perfected, but you shall be under no duty whatsoever to institute or defend
any such proceedings.

     72. Any notice  required or permitted  hereunder  shall be given in writing
and shall be deemed  effectively given upon personal delivery or upon deposit in
the United States Post Office,  by registered or certified mail with postage and
fees prepaid,  addressed to each of the other parties thereunto  entitled at the
following  addresses or at such other  addresses as a party may designate by ten
days' advance written notice to each of the other parties hereto.



                COMPANY:                     Sierra Monitor Corporation
                                             1991 Tarob Court
                                             Milpitas, CA 95035



                PURCHASER:                   ___________________________________

                                             ___________________________________

                                             ___________________________________


                ESCROW AGENT:                Corporate Secretary

                                             [Company Name and Address]


     73. By signing these Joint Escrow  Instructions,  you become a party hereto
only for the  purpose of said  Joint  Escrow  Instructions;  you do not become a
party to the Agreement.

     74. This  instrument  shall be binding upon and inure to the benefit of the
parties hereto, and their respective successors and permitted assigns.


                                      -3-

<PAGE>

     75. These Joint Escrow Instructions shall be governed by, and construed and
enforced in accordance with, the laws of the State of California.

                                           Very truly yours,

                                           SIERRA MONITOR CORPORATION


                                  By:      _____________________________________


                                  Title:   _____________________________________

                                           PURCHASER:


                                           _____________________________________

                                           (Signature)


                                           _____________________________________

                                           (Typed or Printed Name)

ESCROW AGENT:

_________________________________


                               Corporate Secretary


                                      -4-

<PAGE>



                                   EXHIBIT A-4


                                CONSENT OF SPOUSE




     I,  ____________________,  spouse  of  ___________________,  have  read and
approve the foregoing Restricted Stock Purchase Agreement (the "Agreement").  In
consideration  of the  Company's  grant to my spouse  of the  right to  purchase
shares of Sierra Monitor  Corporation,  as set forth in the Agreement,  I hereby
appoint  my spouse as my  attorney-in-fact  in respect  to the  exercise  of any
rights  under  the  Agreement  and  agree to be bound by the  provisions  of the
Agreement  insofar  as I may have any  rights in said  Agreement  or any  shares
issued  pursuant  thereto  under the  community  property  laws or similar  laws
relating to marital  property in effect in the state of our  residence as of the
date of the signing of the foregoing Agreement.



Dated: _______________, 19




                                       _________________________________________

                                        Signature of Spouse



                                      -5-

<PAGE>



                                   EXHIBIT A-5

                          ELECTION UNDER SECTION 83(b)

                      OF THE INTERNAL REVENUE CODE OF 1986

The  undersigned  taxpayer  hereby  elects,  pursuant  to  Section  83(b) of the
Internal Revenue Code of 1986, as amended, to include in taxpayer's gross income
for the current taxable year the amount of any compensation  taxable to taxpayer
in connection with his or her receipt of the property described below:

1.   The name, address,  taxpayer  identification number and taxable year of the
     undersigned are as follows:

      NAME:                         TAXPAYER:                     SPOUSE:

      ADDRESS:

      IDENTIFICATION NO.:           TAXPAYER:                     SPOUSE:

      TAXABLE YEAR:

2.   The  property  with  respect to which the  election is made is described as
     follows:  shares  (the  "Shares")  of the  Common  Stock of Sierra  Monitor
     Corporation (the "Company").

3.   The date on which the property was transferred is:_____________, 19__.

4.   The property is subject to the following restrictions:

     The Shares may be repurchased by the Company, or its assignee, upon certain
     events.  This right  lapses with regard to a portion of the Shares based on
     the continued performance of services by the taxpayer over time.

5.   The fair market value at the time of transfer, determined without regard to
     any  restriction  other  than a  restriction  which by its terms will never
     lapse, of such property is:

     $___________________.

6.   The amount (if any) paid for such property is:

     $___________________.

The  undersigned  has submitted a copy of this  statement to the person for whom
the services were performed in connection with the undersigned's  receipt of the
above-described  property.  The  transferee  of  such  property  is  the  person
performing the services in connection with the transfer of said property.

The  undersigned  understands  that the  foregoing  election  may not be revoked
except with the consent of the Commissioner.

Dated:   ___________________, 19________________________________________________

                                    Taxpayer

The undersigned spouse of taxpayer joins in this election.

Dated:   ___________________, 19________________________________________________

                                    Spouse of Taxpayer