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                             COLORADO MEDTECH, INC.               EXHIBIT 10.31
                               STOCK OPTION PLAN

                        (As amended September 26, 1997)

I.      PURPOSE

        The COLORADO MEDTECH, INC. Stock Option Plan (the "Plan") provides 
for the grant of Stock Options, Stock Appreciation Rights and Supplemental 
Bonuses to Employees and non-employee directors of Colorado MEDtech, Inc. 
(the "Company"), and such of its subsidiaries (as defined in Section 424(f) 
of the Internal Revenue Code of 1986, as amended (the "Code")) as the Board 
of Directors of the Company (the "Board") shall from time to time designate 
("Participating Subsidiaries"), in order to advance the interests of the 
Company and its Participating Subsidiaries through the motivation, attraction 
and retention of their respective Employees and non-employee directors. 

II.     INCENTIVE STOCK OPTIONS AND NON-INCENTIVE STOCK OPTIONS

        The Stock Options granted under the Plan may be either:

        (a)    Incentive Stock Options ("ISOs") which are intended to be 
"Incentive Stock Options" as that term is defined in Section 422 of the Code; 
or 

        (b)    Nonstatutory Stock Options ("NSOs") which are intended to be 
options that do not qualify as "Incentive Stock Options" under Section 422 of 
the Code. 

        All Stock Options shall be ISOs unless the Option Agreement clearly 
designates the Stock Options granted thereunder, or a specified portion 
thereof, as NSOs.  Subject to the other provisions of the Plan, a Participant 
may receive ISOs and NSOs at the same time, provided that the ISOs and NSOs 
are clearly designated as such, and the exercise of one does not affect the 
exercise of the other.

        Except as otherwise expressly provided herein, all of the provisions 
and requirements of the Plan relating to Stock Options shall apply to ISOs 
and NSOs. 

III.    ADMINISTRATION

        3.1    COMMITTEE.   The Plan shall be administered by the Board or by 
a committee composed solely of two or more directors ("Committee") each of 
whom is a Non-Employee Director.  The Committee or the Board, as the case may 
be, shall have full authority to administer the Plan, including authority to 
interpret and construe any provision of this Plan and any Stock Option, Stock 
Appreciation Right or Supplemental Bonus granted hereunder, and to adopt such 
rules and regulations for administering the Plan as it may deem necessary in 
order to comply with the requirements of the Code, or in order that Stock 
Options that are intended to be ISOs will be classified as incentive stock 
options under the Code, or in order to conform to any regulation or to any 
change in any law or regulation applicable thereto.  The Committee or the 
Board may delegate any of its responsibilities under this Plan, other than 
its responsibility to grant Stock Options, to determine whether the Stock 
Appreciation Rights or Supplemental Bonuses, if any, payable to a Participant 
shall be paid in cash, in shares of Common Stock or a combination thereof, or 
to interpret and construe this Plan.  The Board of Directors may reserve to 
itself any of the authority granted to the Committee as set forth herein, and 
it may perform and discharge all of the functions and responsibilities of the 
Committee at any time that a duly constituted 

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Committee is not appointed and serving.  All references in this Plan to the 
"Committee" shall be deemed to refer to the Board of Directors whenever the 
Board is discharging the powers and responsibilities of the Committee, and to 
any special committee appointed by the Board to administer particular aspects 
of this Plan. 

        3.2    ACTIONS OF THE COMMITTEE.   All actions taken and all 
interpretations and determinations made by the Committee in good faith 
(including determinations of Fair Market Value) shall be final and binding 
upon all Participants, the Company and all other interested persons.  No 
member of the Committee shall be personally liable for any action, 
determination or interpretation made in good faith with respect to this Plan, 
and all members of the Committee shall, in addition to their rights as 
directors, be fully protected by the Company with respect to any such action, 
determination or interpretation.  Rule 16b-3 under the Securities Exchange 
Act of 1934 (the "Exchange Act") provides that the grant of a stock option to 
a director or officer of a company will be exempt from the provisions of 
Section 16(b) of the Exchange Act if the conditions set forth in said Rule 
are satisfied.  Unless otherwise specified by the Committee, grants of Stock 
Options hereunder to and exercises of Stock Options by individuals who are 
officers or directors of the Company shall be made in a manner that satisfies 
the conditions of said Rule.

IV.     DEFINITIONS

        4.1    "STOCK OPTION".   A Stock Option is the right granted under 
the Plan to purchase, at such time or times and at such price or prices 
("Option Price") as are determined by the Committee, the number of shares of 
Common Stock determined by the Committee. 

        4.2    "STOCK APPRECIATION RIGHT".  A Stock Appreciation Right is the 
right to receive payment, in shares of Common Stock, cash or a combination of 
shares of Common Stock and cash, of the Redemption Value of a specified 
number of shares of Common Stock then purchasable under a Stock Option. 

        4.3    "REDEMPTION VALUE".   The Redemption Value of shares of Common 
Stock purchasable under a Stock Option shall be the amount, if any, by which 
the Fair Market Value of one share of Common Stock on the date on which the 
Stock Option is exercised exceeds the Option Price for such share. 

        4.4    "COMMON STOCK".   A share of Common Stock means a share of 
authorized but unissued or reacquired Common Stock (no par value per share) 
of the Company. 

        4.5    "FAIR MARKET VALUE".  If the Common Stock is not traded 
publicly, the Fair Market Value of a share of Common Stock on any date shall 
be determined, in good faith, by the Committee after such consultation with 
outside legal, accounting and other experts as the Committee may deem 
advisable, and the Committee shall maintain a written record of its method of 
determining such value.  If the Common Stock is traded publicly, the Fair 
Market Value of a share of Common Stock on any date shall be the average of 
the representative closing bid and asked prices, as quoted by the National 
Association of Securities Dealers through NASDAQ (its automated system for 
reporting quotes), for the date in question or, if the Common Stock is listed 
on the NASDAQ National Market System or is listed on a national stock 
exchange, the officially quoted closing price on NASDAQ or such exchange, as 
the case may be, on the date in question.

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        4.6    "EMPLOYEE".  An Employee is an employee of the Company or any 
Participating Subsidiary. 

        4.7    "PARTICIPANT".  A Participant is a person to whom a Stock 
Option, Stock Appreciation Right or Supplemental Bonus is granted. 

        4.8 "NON-EMPLOYEE DIRECTOR".  A Non-Employee Director is a person who 
satisfies the definition of a "non-employee director" set forth in Rule 16b-3 
under the Exchange Act or any successor rule or regulation, as it may be 
amended from time to time.

        4.9    "SUPPLEMENTAL BONUS".  A Supplemental Bonus is the right to 
receive payment, in shares of Common Stock, cash or a combination of shares 
of Common Stock and cash, of an amount determined under Section 7.7. 

V.      ELIGIBILITY AND PARTICIPATION

        Grants of Stock Options, Stock Appreciation Rights and Supplemental 
Bonuses may be made to Employees or non-employee directors of the Company or 
any Participating Subsidiary; PROVIDED, HOWEVER, that only Employees, 
including directors of the Company who are also Employees, shall be eligible 
to receive ISOs.  The Committee shall from time to time determine the 
Participants to whom Stock Options shall be granted, the number of shares of 
Common Stock subject to each Stock Option to be granted, the Option Price of 
such Stock Options and other terms and provisions of such Stock Options, all 
as provided in this Plan. The Option Price of any ISO shall be not less than 
the Fair Market Value of a share of Common Stock on the date on which the 
Stock Option is granted, but the Option Price of an NSO may be less than the 
Fair Market Value on the date the NSO is granted if the Committee so 
determines.  If an ISO is granted to an Employee who then owns stock 
possessing more than 10% of the total combined voting power of all classes of 
stock of the Company or any parent or subsidiary corporation of the Company, 
the Option Price of such ISO shall be at least 110% of the Fair Market Value 
of the Common Stock subject to the ISO at the time such ISO is granted, and 
such ISO shall not be exercisable after five years after the date on which it 
was granted.  Each Stock Option shall be evidenced by a written agreement 
("Option Agreement") containing such terms and provisions as the Committee 
may determine, subject to the provisions of this Plan.

VI.     SHARES OF COMMON STOCK SUBJECT TO THE PLAN

        6.1    MAXIMUM NUMBER.  The maximum aggregate number of shares of 
Common Stock that may be made subject to Stock Options shall be 3,500,000 
authorized but unissued shares.  The aggregate Fair Market Value (determined 
as of the time the ISO is granted) of the Common Stock as to which all ISOs 
granted to an Employee may first become exercisable in a particular calendar 
year may not exceed $100,000.  If any shares of Common Stock subject to Stock 
Options are not purchased or otherwise paid for before such Stock Options 
expire, such shares may again be made subject to Stock Options. 

        6.2    CAPITAL CHANGES.  In the event any changes are made to the 
shares of Common Stock (whether by reason of merger, consolidation, 
reorganization, recapitalization, stock dividend in excess of ten percent 
(10%) at any single time, stock split, combination of shares, exchange of 
shares, change in corporate structure or otherwise), appropriate adjustments 
shall be made in: (i) the number of shares of Common Stock theretofore made 
subject to Stock Options, and in the purchase price of said shares; and 

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(ii) the aggregate number of shares which may be made subject to Stock 
Options.  If any of the foregoing adjustments shall result in a fractional 
share, the fraction shall be disregarded, and the Company shall have no 
obligation to make any cash or other payment with respect to such a 
fractional share. 

VII.    EXERCISE OF STOCK OPTIONS

        7.1    TIME OF EXERCISE.  Subject to the provisions of the Plan, 
including without limitation Section 7.5, the Committee, in its discretion, 
shall determine the time when a Stock Option, or a portion of a Stock Option, 
shall become exercisable, and the time when a Stock Option, or a portion of a 
Stock Option, shall expire.  Such time or times shall be set forth in the 
Option Agreement evidencing such Stock Option.  A Stock Option shall expire, 
to the extent not exercised, no later than the tenth anniversary of the date 
on which it was granted.  The Committee may accelerate the vesting of any 
Participant's Stock Option by giving written notice to the Participant.  Upon 
receipt of such notice, the Participant and the Company shall amend the 
Option Agreement to reflect the new vesting schedule.  The acceleration of 
the exercise period of a Stock Option shall not affect the expiration date of 
that Stock Option. 

        7.2    EXCHANGE OF OUTSTANDING STOCK.  The Committee, in its sole 
discretion, may permit a Participant to surrender to the Company shares of 
Common Stock previously acquired by the Participant as part or full payment 
for the exercise of a Stock Option.  Such surrendered shares shall be valued 
at their Fair Market Value on the date of exercise. 

        7.3    USE OF PROMISSORY NOTE; EXERCISE LOANS.  The Committee may, in 
its sole discretion, impose terms and conditions, including conditions 
relating to the manner and timing of payments, on the exercise of Stock 
Options.  Such terms and conditions may include, but are not limited to, 
permitting a Participant to deliver to the Company his promissory note as 
full or partial payment for the exercise of a Stock Option.  The Committee, 
in its sole discretion, may authorize the Company to make a loan to a 
Participant in connection with the exercise of Stock Options, or authorize 
the Company to arrange or guarantee loans to a Participant by a third party. 

        7.4    STOCK RESTRICTION AGREEMENT.  The Committee may provide that 
shares of Common Stock issuable upon the exercise of a Stock Option shall, 
under certain conditions, be subject to restrictions whereby the Company has 
a right of first refusal with respect to such shares or a right or obligation 
to repurchase all or a portion of such shares, which restrictions may survive 
a Participant's term of employment with the Company.  The acceleration of 
time or times at which a Stock Option becomes exercisable may be conditioned 
upon the Participant's agreement to such restrictions. 

        7.5    TERMINATION OF EMPLOYMENT BEFORE EXERCISE.  If a Participant's 
employment with the Company or a Participating Subsidiary shall terminate for 
any reason other than the Participant's disability, any Stock Option granted 
to the Participant, to the extent then exercisable under the applicable 
Option Agreement(s), shall remain exercisable after the termination of his 
employment for a period of 30 days (but, in the case of an ISO, in no event 
beyond ten years from the date of grant of the ISO).  If the Participant's 
employment is terminated because the Participant is disabled within the 
meaning of Section 22(e)(3) of the Code, any Stock Option granted to the 
Participant, to the extent then exercisable under the applicable Option 
Agreement(s), shall remain exercisable after the termination of his 
employment for a period of three months (but, in the case of an ISO, in no 
event beyond ten years from the date of grant of the ISO).  If the Stock 
Option is not exercised during the applicable period, it shall be deemed to 
have 

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been forfeited and of no further force or effect. 

        7.6    DISPOSITION OF FORFEITED STOCK OPTIONS.  Any shares of Common 
Stock subject to Stock Options forfeited by a Participant shall not 
thereafter be eligible for purchase by the Participant but may be made 
subject to Stock Options granted to other Participants. 

        7.7    GRANT OF SUPPLEMENTAL BONUSES.  The Committee, either at the 
time of grant or at any time prior to exercise of any Stock Option or Stock 
Appreciation Right, may provide for a Supplemental Bonus from the Company or 
Participating Subsidiary in connection with a specified number of shares of 
Common Stock then purchasable, or which may become purchasable, under a Stock 
Option, or a specified number of Stock Appreciation Rights which may be or 
become exercisable.  Such Supplemental Bonus shall be payable upon the 
exercise of the Stock Option or Stock Appreciation Right with regard to which 
such Supplemental Bonus was granted.  A Supplemental Bonus shall not exceed 
the amount necessary to reimburse the Participant for the income tax 
liability incurred by him upon the exercise of the Stock Option or upon the 
exercise of such Stock Appreciation Right, calculated using the maximum 
combined federal and applicable state income tax rates then in effect and 
taking into account the tax liability arising from the Participant's receipt 
of the Supplemental Bonus.  The Committee may, in its discretion, elect to 
pay any part or all of the Supplemental Bonus in: (i) cash; (ii) shares of 
Common Stock; or (iii) any combination of cash and shares of Common Stock.  
The provisions of Section 8.3 shall apply to the giving of notice, the 
determination of the number of shares to be delivered, and the time for 
delivering shares.  In applying Section 8.3, the Supplemental Bonus shall be 
treated as if it were a Stock Appreciation Right that the Participant 
exercised on the day the Supplemental Bonus became payable. Shares of Common 
Stock issued pursuant to this Section 7.7 shall not be deemed to have been 
issued upon the exercise of a Stock Option for purposes of the limitations 
imposed by Section 6.1 of the Plan. 

VIII.   STOCK APPRECIATION RIGHTS

        8.1    GRANT OF STOCK APPRECIATION RIGHTS.  The Committee may, from 
time to time, grant Stock Appreciation Rights to a Participant with respect 
to not more than the number of shares of Common Stock which are, or may 
become, purchasable under any Stock Option held by the Participant.  The 
Committee may, in its sole discretion, specify the terms and conditions of 
such rights, including without limitation the time period or time periods 
during which such rights may be exercised and the date or dates upon which 
such rights shall expire and become void and unexercisable; provided, 
however, that in no event shall such rights expire and become void and 
unexercisable later than the time when the related Stock Option is exercised, 
expires or terminates.  Each Participant to whom Stock Appreciation Rights 
are granted shall be given written notice advising him of the grant of such 
rights and specifying the terms and conditions of the rights, which shall be 
subject to all the provisions of this Plan.

        8.2    EXERCISE OF STOCK APPRECIATION RIGHTS.  Subject to Section 
8.3, and in lieu of purchasing shares of Common Stock upon the exercise of a 
Stock Option held by him, a Participant may elect to exercise the Stock 
Appreciation Rights, if any, he has been granted and receive payment of the 
Redemption Value of all, or any portion, of the number of shares of Common 
Stock subject to such Stock Option with respect to which he has been granted 
Stock Appreciation Rights; provided, however, that the Stock Appreciation 
Rights may be exercised only when the Fair Market Value of the Common Stock 
subject to such Stock Option exceeds the exercise price of the Stock Option.  
A Participant shall exercise his Stock Appreciation Rights by delivering a 
written notice to the Committee specifying the number of shares with respect 
to which he exercises Stock Appreciation Rights and agreeing to surrender 

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the rights to purchase an equivalent number of shares of Common Stock subject 
to his Stock Option.  If a Participant exercises Stock Appreciation Rights, 
payment of his Stock Appreciation Rights shall be made in accordance with 
Section 8.3 on or before the 90th day after the date of exercise of the Stock 
Appreciation Rights. 

        8.3    FORM OF PAYMENT.  If a Participant elects to exercise Stock 
Appreciation Rights as provided in Section 8.2, the Committee may, in its 
absolute discretion, elect to pay any part or all of the Redemption Value of 
the shares with respect to which the Participant has exercised Stock 
Appreciation Rights in: (i) cash; (ii) shares of Common Stock; or (iii) any 
combination of cash and shares of Common Stock.  The Committee's election 
pursuant to this Section 8.3 shall be made by giving written notice to the 
Participant within said 90-day period, which notice shall specify the portion 
which the Committee elects to pay in cash, shares of Common Stock or a 
combination thereof.  In the event any portion is to be paid in shares of 
Common Stock, the number of shares to be delivered shall be determined by 
dividing the amount which the Committee elects to pay in shares of Common 
Stock by the Fair Market Value of one share of Common Stock on the date of 
exercise of the Stock Appreciation Rights.  Any fractional share resulting 
from any such calculation shall be disregarded.  Said shares, together with 
any cash payable to the Participant, shall be delivered within said 90-day 
period. 

IX.     NO CONTRACT OF EMPLOYMENT

        Nothing in this Plan shall confer upon the Participant the right to 
continue in the employ of the Company, or any Participating Subsidiary, nor 
shall it interfere in any way with the right of the Company, or any such 
Participating Subsidiary, to discharge the Participant at any time for any 
reason whatsoever, with or without cause.  Nothing in this Article IX shall 
affect any rights or obligations of the Company or any Participant under any 
written contract of employment. 

X.      NO RIGHTS AS A STOCKHOLDER

        A Participant shall have no rights as a stockholder with respect to 
any shares of Common Stock subject to a Stock Option.  Except as provided in 
Section 6.2, no adjustment shall be made in the number of shares of Common 
Stock issued to a Participant, or in any other rights of the Participant upon 
exercise of a Stock Option by reason of any dividend, distribution or other 
right granted to shareholders for which the record date is prior to the date 
of exercise of the Participant's Stock Option. 

XI.     ASSIGNABILITY

        No Stock Option, Stock Appreciation Right or Supplemental Bonus right 
granted under this Plan, nor any other rights acquired by a Participant under 
this Plan, shall be assignable or transferable by a Participant, other than 
by will or the laws of descent and distribution or, in the case of an NSO, 
pursuant to a qualified domestic relations order as defined by the Code, 
Title I of the Employee Retirement Income Security Act, or the rules 
thereunder. Notwithstanding the preceding sentence, the Committee may, in its 
sole discretion, permit the assignment or transfer of an NSO, Stock 
Appreciation Right or Supplemental Bonus right granted under this Plan by a 
Participant, and the exercise thereof by a person other than such 
Participant, on such terms and conditions as the Committee in its sole 
discretion may determine.  Any such terms shall be set forth in the Option 
Agreement.  In the event of a Participant's death, the Stock Option or any 
Stock Appreciation Right or Supplemental Bonus right may be exercised by the 
Personal Representative of the Participant's estate or, if no Personal 
Representative has been 

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appointed, by the successor or successors in interest determined under the 
Participant's will or under the applicable laws of descent and distribution.  
The terms of any rights under this Plan in the hands of a transferee or 
assignee shall be determined as if held by the Participant and shall be of no 
greater extent or term than if the transfer or assignment had not taken place.

XII.    MERGER OR LIQUIDATION OF THE COMPANY

        If the Company or its shareholders enter into an agreement to dispose 
of all, or substantially all, of the assets or outstanding capital stock of 
the Company by means of a sale or liquidation, or a merger or reorganization 
in which the Company is not the surviving corporation, all Stock Options 
outstanding under the Plan as of the day before the consummation of such 
sale, liquidation, merger or reorganization, to the extent not exercised, 
shall for all purposes under this Plan become exercisable in full as of such 
date even though the dates of exercise established pursuant to Section 7.1 
have not yet occurred, unless the Board shall have prescribed other terms and 
conditions to the exercise of the Stock Option, or otherwise modified the 
Stock Options. 

XIII.   AMENDMENT

        The Board may from time to time alter, amend, suspend or discontinue 
the Plan, including, where applicable, any modifications or amendments as it 
shall deem advisable in order that ISOs will be classified as incentive stock 
options under the Code, or in order to conform to any regulation or to any 
change in any law or regulation applicable thereto; provided, however, that 
no such action shall adversely affect the rights and obligations with respect 
to Stock Options at any time outstanding under the Plan; and provided further 
that no such action shall, without the approval of the shareholders of the 
Company, (i) increase the maximum number of shares of Common Stock that may 
be made subject to Stock Options (unless necessary to effect the adjustments 
required by Section 6.2), or (ii) materially modify the requirements as to 
eligibility for participation in the Plan. 

XIV.    REGISTRATION OF OPTIONED SHARES

        The Stock Options shall not be exercisable unless the purchase of 
such optioned shares is pursuant to an applicable effective registration 
statement under the Securities Act of 1933, as amended (the "1933 Act"), or 
unless, in the opinion of counsel to the Company, the proposed purchase of 
such optioned shares would be exempt from the registration requirements of 
the 1933 Act and from the registration or qualification requirements of 
applicable state securities laws.

XV.     WITHHOLDING TAXES

        The Company or Participating Subsidiary may take such steps as it may 
deem necessary or appropriate for the withholding of any taxes (including the 
withholding of shares of Common Stock otherwise issuable which appropriate 
Fair Market Value) which the Company or the Participating Subsidiary is 
required by any law or regulation or any governmental authority, whether 
federal, state or local, domestic or foreign, to withhold in connection with 
any Stock Option, Stock Appreciation Right or Supplemental Bonus, including, 
but not limited to, the withholding of all or any portion of any payment or 
the withholding of issuance of shares of Common Stock to be issued upon the 
exercise of any Stock Option or Stock Appreciation Right or upon payment of 
any Supplemental Bonus, until the Participant reimburses the Company or 
Participating Subsidiary for the amount the Company or Participating 

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Subsidiary is required to withhold with respect to such taxes, or canceling 
any portion of such payment or issuance in an amount sufficient to reimburse 
itself for the amount it is required to so withhold. 

XVI.    BROKERAGE ARRANGEMENTS

        The Committee, in its discretion, may enter into arrangements with 
one or more banks, brokers or other financial institutions to facilitate the 
disposition of shares acquired upon exercise of Stock Options, Stock 
Appreciation Rights or Supplemental Bonuses, including, without limitation, 
arrangements for the simultaneous exercise of Stock Option, Stock 
Appreciation Rights or Supplemental Bonuses, and sale of the shares acquired 
upon such exercise. 

XVII.   NONEXCLUSIVITY OF THE PLAN

        Neither the adoption of the Plan by the Board nor the submission of 
this Plan to shareholders of the Company for approval shall be construed as 
creating any limitations on the power or authority of the Board to adopt such 
other or additional incentive or other compensation arrangements of whatever 
nature as the Board may deem necessary or desirable or preclude or limit the 
continuation of any other plan, practice or arrangement for the payment of 
compensation or fringe benefits to employees generally, or to any class or 
group of employees, which the Company or any Participating Subsidiary now has 
lawfully put into effect, including, without limitation, any retirement, 
pension, savings and stock purchase plan, insurance, death and disability 
benefits and executive short-term incentive plans. 

XVIII.  EFFECTIVE DATE

        This Plan was adopted by the Board of Directors and became effective 
on June 25, 1992 and was approved by the Company's shareholders on May 14, 
1993. No Stock Options shall be granted subsequent to ten years after the 
effective date of the Plan.  Stock Options outstanding subsequent to ten 
years after the effective date of the Plan shall continue to be governed by 
the provisions of the Plan.






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