ZOOM TELEPHONICS, INC.

                                                 STOCK OPTION PLAN

                                         As Amended Through August 4, 1998

                                                      PART I
                                                   INTRODUCTION


1.       Purpose.

         The purpose of this Stock  Option Plan (the  "Plan") is to  establish a
plan to advance the  interests of Zoom  Telephonics,  Inc.  (the  "Company")  by
encouraging  equity  participation  in the Company by  directors,  officers  and
certain full-time and part- time employees of the Company or an affiliate of the
Company  through  acquisition of common shares without par value in the Company.
Notwithstanding the foregoing,  a non-employee director of the Company shall not
be entitled to participate under the Plan.

2.       Definitions.

         In the Plan,

         (i)           "Board" means the board of directors of the Company;

         (ii)          "Employee"  means any  individual or  individuals  in the
                       full-time  or part-time  employment  of the Company or an
                       affiliate and includes Board members, consultants and any
                       other  individuals  the Board deems to be an employee for
                       the purpose of the Plan,  except that a Board  member who
                       is not otherwise  employed by or serving as an officer of
                       the Company shall not be considered an Employee;

         (iii)         "Option  Price" means the price per Share at which shares
                       may be purchased upon the exercise of an Option;

         (iv)              "Optionee"  means a person who is eligible to receive
                        Options and who does so;
         (v)           "Option"  means the option rights  granted by the Company
                        in accordance  with the provisions of the Plan;

         (vi)          "Shares"  means shares to be optioned  under the Plan and
                       are common shares without par value in the capital of the
                       Company as  constituted on the date the  shareholders  of
                       the Company approve the Plan;

         (vii)         "Stock Option Committee" means a committee  designated by
                       the Board,  consisting  of at least two Board members who
                       are not eligible for grants of Options under the Plan;

         (viii)        "Tax  Date"  means the date on which the amount of tax to
                       be withheld  with respect to the exercise of an Option is
                       determined; and

         (ix)          "Termination" means termination of the employment of 
                        an Employee.


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3.       Administration of the Plan

         The Plan shall be administered by the Stock Option Committee.

         The Stock Option Committee is authorized,  subject to the provisions of
the Plan, to adopt such rules and regulations which it deems consistent with the
Plan's provisions and, in its sole discretion,  to designate Options to purchase
Shares pursuant to the Plan. The  determinations  of the Stock Option  Committee
and interpretations  shall be final and conclusive  regarding the administration
of the Plan.

         The Stock Option  Committee may authorize one or more  Employees of the
Company to execute,  deliver and receive documents on behalf of the Stock Option
Committee with regard to the Plan.


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                                     PART II
                                  STOCK OPTIONS

4.       Eligibility

         All Employees are eligible to receive Options.

         Nothing in the Plan shall  confer any right on any Employee to continue
in the employ of or association with the Company or any affiliate of the Company
or shall  interfere in any way with the right of the Company or any affiliate of
the Company to terminate  at any time the  employment  of an Optionee  under the
Plan.

5.       Shares Subject to Option

         The  Shares to be  optioned  under  the Plan  shall be  authorized  but
unissued.

         The  aggregate  number of Shares for which Options may be granted shall
not exceed 2,800,000  common shares,  but in no event shall the aggregate number
of Shares under the Plan that may be subject,  from time to time, to outstanding
options  granted to any one Employee exceed 5% of the Shares of the Company then
outstanding.

6.       Granting of Options

         The Stock  Option  Committee  may from time to time at its  discretion,
subject to the provisions of the Plan,  determine  those  eligible  Employees to
whom Options shall be granted, the number of Shares subject to such Options, the
dates on which such  Options are to be  granted,  and the price and term of such
Options as set forth below.

         Each Option  shall be  evidenced by a written  agreement  between,  and
executed  by, the  Company  and the  Optionee  containing  terms and  conditions
established by the Stock Option  Committee with respect to such Option and shall
be  consistent  with the  provisions  of the Plan.  The Option shall include the
following,  or a  similar  statement:  "This  Option  is not  intended  to be an
incentive  stock  option as that term is  described  in 422 of the Code, as
amended."

7.       Option Price

         The Option  Price shall be not less than the fair  market  value of the
common shares without par value in the capital of the Company on the date of the
grant of Option,  as  determined by reference to the closing price per share for
such common shares as reported on the Nasdaq  National Market on the date of the
grant or, if such common  shares are not listed on the Nasdaq  National  Market,
then on such other stock exchange or market  quotation  system where such shares
may from time to time be listed or traded on the date of the  grant,  subject to
any applicable regulatory rules.

8.       Terms of Options

         The Stock Option Committee may, in its entire  discretion,  at the time
of the granting of an Option under the Plan, specify a particular time period or
periods  following  the date of the grant of an Option  during which an Optionee
may  exercise  his Option and may  designate  the number of Shares in respect of
which such  Optionee  may  exercise  his Option  during  each such time  period.
Notwithstanding  the  foregoing,  in no event shall an Option  granted under the
Plan be exercisable within six months of the date of grant of such Option.

         Each Option,  unless  sooner  terminated,  shall expire on a date to be
determined by the Stock Option  Committee  which will not be later than 10 years
from the date the Option was granted.

9.       Exercise of Options

         An  Optionee  shall  exercise  an  Option  (or any part or  installment
thereof)  by  giving  written  notice to the  Company  at its  principal  office
address, identifying the Option being exercised, specifying the number of Shares
as to which such Option is being  exercised and  accompanied  by full payment of
the Option  Price  therefor  either (1) in US dollars,  in cash or by  certified
cheque or bank draft,  or (2) in common shares  without par value in the capital
of the  Company  owned by the  Optionee  (and held at least one year if acquired
pursuant  to the  exercise  of any stock  option  granted by the  Company to the
Optionee  whether  under the Plan or  otherwise)  having a fair market value (as
determined by the Stock Option Committee as of the day immediately preceding the
date on which the Option is exercised and in accordance with all applicable laws
and  all  applicable  rules  and  policies  of  relevant  securities  regulatory
authorities)  equal to, or a fraction of a share less than,  such purchase price
(and if such  common  shares are equal to a  fraction  of a share less than such
purchase price,  then the Optionee shall pay any balance  remaining in cash), or
(3) in a  combination  of such  common  shares  (as  described  above) and cash,
certified  cheque or bank  draft.  However,  if the  Optionee  desires to tender
common shares in payment of any part of the Option Price as  contemplated in (2)
or (3) above, the Optionee, before giving notice of exercise as aforesaid, shall
first give written  notice  (addressed  to the  principal  office of the Company
specifying  the number of shares which the  Optionee  wishes to tender) that the
Optionee  proposes to tender common shares in order to exercise his Option.  The
Stock Option  Committee shall notify the Optionee whether the proposed tender is
acceptable to the Stock Option Committee within ten days of receipt of notice of
the  proposed  tender.  The  acceptance  of any  tender of  common  shares by an
Optionee  pursuant to (2) or (3) in payment of the Option Price shall be subject
to the absolute  discretion of the Stock Option  Committee,  who may only accept
the  tender of such  common  shares  in  accordance  with,  and  subject  to the
requirements  of, all applicable  laws and all applicable  rules and policies of
relevant  securities   regulatory   authorities.   If  the  proposed  tender  is
acceptable,  the Optionee  must then give written  notice of the exercise of his
Option as  aforesaid  within five days or receipt of notice of the Stock  Option
Committee that the proposed tender is acceptable.  If the proposed tender is not
acceptable and the Optionee, at that time, still desires to exercise his Option,
he may do so by giving written notice of exercise of his Option as aforesaid and
paying  the  Option  Price in cash or by  certified  cheque or bank  draft.  The
acceptance  by the  Company of common  shares  tendered in payment of the Option
Price shall be treated as a purchase of those shares by the Company.

         Unless the Stock Option Committee otherwise  determines,  the holder of
an Option  shall  have no rights as a  shareholder  with  respect  to the Shares
issued upon exercise of the Option until the date of issuance of the certificate
for those shares to him. Unless the Stock Option Committee otherwise determines,
no adjustment  will be made for dividends or similar rights for which the record
date  occurs  after  the  exercise  of the  Option  but  before  the  date  such
certificate  for  Shares  is  issued.  In no case may a  fraction  of a Share be
purchased or issued under the Plan.


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                                    PART III
                                WITHHOLDING TAXES

10.      Withholding Taxes

         Each  Optionee's  rights under the Plan are subject to such  Optionee's
payment  to the  Company  of the  amount  of  taxes  (if  any)  required  by any
government  to be  withheld  by  reason  of any  exercise  of an  Option  by the
Optionee.  Such  amount may be paid at the  election of the  Optionee  (1) in US
dollars,  in cash or by certified  cheque or bank draft,  (2) subject as set out
below, in common shares without par value in the capital of the Company owned by
the Optionee  having a fair market value  (determined as set out below) equal to
the amount of such  withholding  (and held at least one year if such shares were
acquired by exercise of any stock option granted to the Optionee under this Plan
or otherwise  granted),  (3) subject as set out below, by directing the Company,
for its own account,  to withhold,  from the Shares  issued to the Optionee upon
the exercise of the Option,  a number of such Shares  having a fair market value
(determined  as set out below) equal to the amount of such  withholding,  or (4)
subject as set out below, in any combination of the foregoing.

         The number of shares to be  surrendered  or withheld  shall be based on
the fair market value of such shares on the Tax Date, and shall be determined by
the Stock  Option  Committee  in  accordance  with all  applicable  laws and all
applicable rules and policies of relevant securities regulatory authorities. Any
fractional  share  amount  remaining  after   satisfaction  of  the  withholding
requirement shall be paid to the Optionee in cash.

         Any  election  hereunder  must be made before the Tax Date and shall be
irrevocable.  The Stock  Option  Committee  may  disapprove  any such  election.
Approval  of an  election  involving  payment of the  withholding  tax in common
shares  without  par value in the  capital  of the  Company  is in the  absolute
discretion  of the Stock Option  Committee,  and may only be made in  accordance
with, and subject to, the requirements of all applicable laws and all applicable
rules and  policies  of  relevant  securities  regulatory  authorities.  Such an
election shall be treated as a proposed purchase of those shares by the Company.

         If the Optionee is subject to Section 16(b) of the Securities  Exchange
Act of 1934, as amended,  at the time of an election,  such Optionee's  election
shall be subject to the following additional restrictions:

        (a)            No  election  shall be  effective  for a Tax  Date  which
                       occurs  within  six  months of the  grant of the  Option,
                       except  that  this  limitation  shall  not  apply  if the
                       Optionee dies or is disabled before the six-month  period
                       expires.

        (b)            The  election  must be made either six months  before the
                       Tax  Date or  during  a  period  beginning  on the  third
                       business   day   following   the  date  of  release   for
                       publication  of the Company's  quarterly or annual income
                       statements  and  ending  on  the  twelfth   business  day
                       following such date.


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                                     PART IV
                            DEALING WITH THE OPTIONS

11.      Transferability of Options

         An Option may not be  transferred.  During the lifetime of an Optionee,
the Option may be exercised only by the Optionee.

12.      Termination of Employment

         Upon  termination for any reason except death or permanent  disability,
an Optionee may, at any time within one month after the date of Termination  but
not later than the date of expiration of the Option,  exercise the Option to the
extent the Optionee was entitled to do so on the date of Termination. Any Option
or portions of Options of terminated Employees not so exercised shall terminate.
A change of  employment  shall not be  considered a  Termination  so long as the
Optionee continues to be employed by the Company or an affiliate of the Company.


13.      Death or Permanent Disability

         Notwithstanding any other provisions of the Plan, if any Optionee shall
die or become  permanently  disabled  while holding an Option which has not been
fully exercised or surrendered, his personal representatives,  heirs or legatees
may,  at any time  within 60 days of grant of  probate of the will or letters of
administration  of the estate of the  decedent or within one year after the date
of  such  death  or  permanent   disability,   whichever  is  the  lesser  time,
(notwithstanding  the normal  expiry date of the Option under the  provisions of
Section 8) exercise  the Option with respect to the  unexercised  balance of the
Shares subject to the Option.  The occurrence of permanent  disability  shall be
determined  by the Stock  Option  Committee  on the basis of  available  medical
evidence.

14.      Changes in Shares

         In the  event  the  authorized  capital  of the  Company  as  presently
constituted is consolidated  into a lesser number of Shares or subdivided into a
greater  number  of  Shares,  the  number of Shares  for which the  Options  are
outstanding shall be decreased or increased  proportionately as the case may be,
and  the  Option  Price  shall  be  adjusted  accordingly.  Should  the  Company
amalgamate  or merge  with any other  company or  companies  (the right to do so
being hereby expressly  reserved) whether by way of arrangement,  sale of assets
and  undertakings or otherwise,  then and in each such case the number of shares
of the  resulting  company to which an Option  relates shall be determined as if
the  Option  had  been  fully  exercised  prior  to the  effective  date  of the
amalgamation or merger and the Option Price shall be  correspondingly  increased
or decreased as applicable.

15.      Cancellation and Regrant of Options

         The Stock Option  Committee  may cancel an existing  Option and regrant
the Option at an Option  Price  determined  in the same  manner as  provided  in
Section 7 above.

16.      Availability of Cancelled Shares

         In the event any Option granted under the Plan shall expire,  terminate
or be cancelled for any reason  without  having been exercised in full, or shall
cease for any  reason to be  exercisable  in whole or in part,  the  unpurchased
shares subject thereto, to the extent the Option ceases to be exercisable, shall
again be available under the Plan.

17.      Term of the Plan

         The Plan shall expire on March 31, 2008 unless  terminated  earlier by 
resolution of the  Shareholders  of the Company.


<PAGE>



                                     PART V
                                   REPURCHASE

18.      Repurchase of Shares from Employees

         Subject  to the  Articles  of  the  Company,  any  special  rights  and
restrictions  attached  to any class of shares of the  Company,  any  applicable
laws,  and any  applicable  rules and  policies of any stock  exchange or market
quotation  system on which any shares of the  Company may be listed from time to
time, the Company may, by a resolution of the Stock Option  Committee,  purchase
shares of the Company from  Employees,  whether such shares were  acquired by an
Employee  upon  exercise  of an Option or  otherwise,  at the price and upon the
terms specified in such resolution.

                                     PART VI
                                     GENERAL

19.      Amendment or Discontinuance

         The Stock Option Committee may amend, alter, suspend or discontinue the
Plan, but may not, without the approval of the shareholders of the Company, make
any alteration that would materially increase the benefits to participants under
the Plan,  within the meaning of Rule 16b-3  promulgated under the United States
Securities  Exchange Act of 1934 (or any successor or supplementary law, rule or
regulation), including without limitation, and alteration that would:

        (a)     increase the  aggregate  number of Shares  subject to Option 
                under the Plan,  except as provided in Section 14;

        (b)     decrease Option Prices, except as provided in Section 14;

        (c)     alter the eligibility provisions of the Plan; or

        (d)     change the expiry date of the Plan.

         The Stock Option  Committee may, at any time, in its  discretion  amend
the Plan in order to bring it into compliance with the rules and policies of the
Nasdaq  National  Market  or  of  any  other  applicable  securities  regulatory
authorities.

20.      Interpretation

         The Plan is  established  under  the laws of the  Province  of  British
Columbia and the rights of all parties and the  construction  and effect of each
and every  provision  of the Plan shall be according to the laws of the Province
of British Columbia.

         Throughout  this Plan,  wherever the singular or masculine are used the
same shall be  construed  as being the plural or  feminine  or neuter  where the
context so requires.


21.      Liability

         No member of the Stock Option  Committee or any employee of the Company
shall be  personally  liable  for any act  taken  or  omitted  in good  faith in
connection with the Plan.

22.      Administration Costs

         All costs and expenses of  administering  the Plan shall be paid for by
the Company.