Total Number of Pages:35                           As filed with the Securities
Index to Exhibits at Page:10          and Exchange Commission on April 03, 1996
                                           Registration No. 333-_______________


                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    FORM S-8

                             REGISTRATION STATEMENT
                                      Under
                           THE SECURITIES ACT OF 1933


                               DH TECHNOLOGY, INC.
               (Exact name of issuer as specified in its charter)


               California                                     94-2917470
               ----------                                     ----------
        (State of Incorporation)           (I.R.S. Employer Identification No.)


                             15070 Avenue of Science
                           San Diego, California 92128
                    (Address of principal executive offices)


                                 1992 STOCK PLAN
                            (Full title of the Plan)


                                 JANET W. SHANKS
                            Chief Accounting Officer
                             15070 Avenue of Science
                           San Diego, California 92128
                                 (619) 451-3485
            (Name, address and telephone number of agent for service)


                                   Copies to:

                           HENRY P. MASSEY, JR., ESQ.
                       Wilson, Sonsini, Goodrich & Rosati
                            Professional Corporation
                              Two Palo Alto Square
                           Palo Alto, California 94306
                                 (415) 493-9300





<PAGE>


<TABLE>
<CAPTION>




                                      

===========================================================================================================================
                         CALCULATION OF REGISTRATION FEE
===========================================================================================================================
                Title of                       Amount            Proposed             Proposed              Amount of
               Securities                       to be            Maximum              Maximum             Registration
                 to be                       Registered          Offering            Aggregate                 Fee
               Registered                                         Price               Offering
                                                                Per Share              Price
<S>                                               <C>               <C>                 <C>                     <C>  
- ----------------------------------------- ------------------ ----------------- ----------------------- --------------------
Common Stock,                                 375,000(1)(2)       $  24.63(2)             $ 9,236,250              $ 3,185
 no par value

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

(1)      The amount of shares to be registered and the proposed maximum offering
         price per share  reflect  the 1.5-  for-1  stock  split  that  occurred
         September 22, 1995.

(2)      Estimated in accordance  with Rule 457(h) under the  Securities  Act of
         1933  solely  for the  purpose of  calculating  the  registration  fee.
         Computation  based  upon the  average of the high and low prices of the
         Common  Stock as  reported on the Nasdaq  National  Market on April 8,
         1996 because the price at which the options to be granted in the future
         may be exercised is not currently determinable.

</TABLE>

<PAGE>



                                    PART II

               INFORMATION REQUIRED IN THE REGISTRATION STATEMENT


Item 3.  Information Incorporated by Reference.

         The  following  documents  and  information  heretofore  filed with the
Securities and Exchange Commission are hereby incorporated by reference:

         (1) The  Registrant's  Annual  Report on Form 10-K for the fiscal  year
ended December 31, 1994 filed pursuant to Section 13 of the Securities  Exchange
Act of 1934 (the "Exchange Act").

         (2) All other  reports  filed by the  Registrant  pursuant  to Sections
13(a) or 15(d) of the  Exchange  Act since the end of the fiscal year covered by
the Annual Report on Form 10-K referred to in (1) above.

         (3) The  description  of the  Common  Stock of the  Registrant  that is
contained in the Registration  Statement on Form 8-A effective June 25, 1985, as
amended, filed under Section 12 of the Exchange Act.

         All documents consequently filed by the Registrant pursuant to Sections
13(a),  13(c), 14 and 15(d) of the Exchange Act  subsequently  after the date of
this  Registration  Statement  and  prior  to  the  filing  of a  post-effective
amendment  which  indicates that all securities  offered have been sold or which
deregisters  all  securities  then  remaining  unsold,  shall  be  deemed  to be
incorporated by reference in this  Registration  Statement and to be part hereof
from the date of filing such documents.

Item 4.  Description of Securities.

         Not applicable.

Item 5.  Interests of Named Experts and Counsel.

         Not applicable.

Item 6.  Indemnification of Directors and Officers.

         Section 317 of the California General  Corporation law makes provisions
for the  indemnification of officers,  directors,  and other corporate agents in
terms sufficiently broad to indemnify such persons, under certain circumstances,
for liabilities (including reimbursement of expenses incurred) arising under the
Securities Act of 1933 (the  "Securities  Act"). The Registrant has entered into
indemnification agreements to such effect with its officers and directors.

         Article VI of the Bylaws of  Registrant  provides  that the  Registrant
shall indemnify certain agents of the Registrant to the maximum extent permitted
by the California  Corporations  Code.  Persons covered by this  indemnification
provision  include current and former directors,  officers,  employees and other
agents of the  Registrant  as well as  persons  who serve at the  request of the
Registrant as directors, officers, employees or agents of another enterprise.

         The  Registrant  shall have the power,  to the extent and in the manner
permitted by Section 317 of the California  Corporations Code, to indemnify each
of its  employees  and  agents  (other  than  directors  and  officers)  against
expenses,   judgments,  fines,  settlements,  and  other  amounts  actually  and
reasonably  incurred in connection with any proceeding  arising by reason of the
fact that such person is or was an agent of the Company.  For this  purpose,  an
"employee" or "agent" of the Registrant includes any person (i) who is or was an
employee  or agent of  Registrant,  (ii) who is or was serving at the request of
Registrant as an employee or agent of another  corporation,  partnership,  joint
venture,  trust or other enterprise,  or (iii) who was an employee or agent of a
corporation  which was a  predecessor  corporation  of  Registrant or of another
enterprise at the request of such predecessor corporation.


<PAGE>




         The  Registrant  has entered into separate  indemnification  agreements
with its directors and officers,  which may require the Registrant,  among other
things,  to indemnify them against certain  liabilities that may arise by reason
of their  status or service as  directors  or officers  (other than  liabilities
arising from willful  misconduct  of a culpable  nature),  and to advance  their
expenses  incurred as a result of any  proceeding  against them as to which they
could be indemnified.

Item 7.  Exemption from Registration Claimed.

         Not applicable.

Item 8.  Exhibits.

         Exhibit
         Number                                                Document
           4.1             1992 Stock Plan

           5.1             Opinion  of  Wilson,  Sonsini,   Goodrich  &  Rosati,
                           Professional  Corporation,  as  to  the  legality  of
                           securities being registered

           23.1            Consent of KPMG Peat Marwick LLP

           23.2            Consent of Counsel (contained in Exhibit 5.1 hereto)

           24.1            Power of Attorney (see page II-4)




Item 9.  Undertakings.

     (a)      The undersigned Registrant hereby undertakes:

              (1) To file,  during any period in which offers or sales are being
made, a post-effective  amendment to this Registration  Statement to include any
material  information  with respect to the plan of  distribution  not previously
disclosed  in  the  Registration  Statement  or  any  material  change  to  such
information in the Registration Statement.
<PAGE>

              (2) That, for the purpose of determining  any liability  under the
Securities Act, each such  post-effective  amendment shall be deemed to be a new
registration  statement  relating to the  securities  offered  therein,  and the
offering of such  securities at that time shall be deemed to be the initial bona
fide offering thereof.

              (3) To  remove  from  registration  by means  of a  post-effective
amendment  any of the  securities  being  registered  which remain unsold at the
termination of the offering.

     (b) The  undersigned  Registrant  hereby  undertakes  that, for purposes of
determining  any  liability  under  the  Securities  Act,  each  filing  of  the
Registrant's  annual  report  pursuant to Section  13(a) or Section 15(d) of the
Exchange Act (and, where  applicable,  each filing of an employee benefit plan's
annual  report   pursuant  to  Section  15(d)  of  the  Exchange  Act)  that  is
incorporated by reference in the Registration  Statement shall be deemed to be a
new registration  statement relating to the securities offered therein,  and the
offering of such  securities at that time shall be deemed to be the initial bona
fide offering thereof.

     (c) Insofar as indemnification for liabilities arising under the Securities
Act may be  permitted to  directors,  officers  and  controlling  persons of the
Registrant pursuant to the foregoing  provisions,  or otherwise,  the Registrant
has been advised that in the opinion of the Securities  and Exchange  Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore,  unenforceable. In the event that a claim for indemnification
against such  liabilities  (other than the payment by the Registrant of expenses
incurred or paid by a director,  officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director,  officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been  settled by  controlling  precedent,  submit to a court of  appropriate
jurisdiction the question whether such  indemnification  by it is against public
policy as  expressed  in the  Securities  Act and will be  governed by the final
adjudication of such issue.

     (d) The undersigned  Registrant hereby undertakes to deliver or cause to be
delivered with the prospectus,  to each person to whom the prospectus is sent or
given,  the latest annual  report to security  holders that is  incorporated  by
reference  in  the  prospectus  and  furnished   pursuant  to  and  meeting  the
requirements  of Rule 14a-3 or Rule 14c-3 under the  Exchange  Act;  and,  where
interim  financial  information  required  to  be  presented  to  Article  3  of
Regulation S-X are not set forth in the prospectus,  to deliver,  or cause to be
delivered  to each person to whom the  prospectus  is sent or given,  the latest
quarterly  report  that  is  specifically   incorporated  by  reference  in  the
prospectus to provide such interim financial information.


<PAGE>


                                   SIGNATURES


     Pursuant to the requirements of the Securities Act of 1933, the Registrant,
DH Technology, Inc., a California corporation,  certifies that it has reasonable
grounds to believe that it meets all of the  requirements for filing on Form S-8
and has duly caused this  Registration  Statement  to be signed on its behalf by
the undersigned,  thereunto duly authorized,  in the City of San Diego, State of
California, on this 3rd day of April , 1996.



                                 DH TECHNOLOGY, INC.

                                 By: /S/WILLIAM H. GIBBS
                                 -----------------------
                                        William H. Gibbs
                                        President






                              POWER OF ATTORNEY

     KNOW ALL  PERSONS  BY THESE  PRESENTS,  that each  person  whose  signature
appears  below  constitutes  and appoints  William H. Gibbs and Janet W. Shanks,
jointly  and  severally,   his   attorneys-in-fact,   each  with  the  power  of
substitution,  for him in any and all capacities, to sign any amendments to this
Registration  Statement on Form S-8, and to file the same, with exhibits thereto
and other  documents in connection  therewith,  with the Securities and Exchange
Commission,   hereby   ratifying   and   confirming   all  that   each  of  said
attorneys-in-fact,  or his substitute or substitutes, may do or cause to be done
by virtue hereof.


<PAGE>


     Pursuant  to  the   requirements  of  the  Securities  Act  of  1933,  this
Registration  Statement  has  been  signed  by  the  following  persons  in  the
capacities and on the date indicated.




SIGNATURE                         TITLE                               DATE
- ---------                         -----                               ----



/S/WILLIAM H. GIBBS     President, Chief Executive               April 3, 1996
(William H. Gibbs)      Officer (Principal Executive
                        Officer) and Chairman of the
                        Board of Directors

/S/JANET W. SHANKS      Chief Accounting Officer                 April 3, 1996
(Janet W. Shanks)       (Principal Financial Officer 
                        and Principal Accounting Officer)


/S/WILLIAM J. BOWERS    Director                                 April 3, 1996
(William J. Bowers)



/S/BRUCE G. KLAAS       Director                                 April 3, 1996
(Bruce G. Klaas)



/S/DON M. LYLE          Director                                 April 3, 1996
(Don M. Lyle)



/S/GEORGE M. RYAN       Director                                 April 3, 1996
(George M. Ryan)





<PAGE>



              Independent Auditors' Consent 




The Board of Directors
DH Technology, Inc.


     We consent to incorporation by reference in the registration  statements on
Form S-8 of DH  Technology,  Inc. of our report dated February 16, 1996 relating
to the consolidated balance sheets of DH Technology, Inc. and subsidiaries as of
December 31, 1995 and 1994, and the related  consolidated  statements of income,
shareholders'  equity, and cash flows and related schedule for each of the years
in the three year period period ended December 31, 1995, which report appears in
the December 31, 1995 annual report on Form 10K of DH Technology, Inc.



San Diego, California
Apri l0, 1996


/s/KPMG Peat Marwick LLP/
- -------------------------
(KPMG Peat Marwick LLP)



<PAGE>


                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549




                                    EXHIBITS



                       Registration Statement on Form S-8

                               DH Technology, Inc.



<PAGE>


<TABLE>
<CAPTION>

                                INDEX TO EXHIBITS


                                                                   Sequentially
Exhibit                                                              Numbered
Number         Description                                             Page
- ------         -----------                                             ----

<S>              <C>                                                   <C>   

   4.1         1992 Stock Option Plan

   5.1         Opinion of Wilson, Sonsini, Goodrich &
               Rosati, Professional Corporation

  23.1         Consent of KPMG Peat Marwick LLP

  23.2         Consent of Wilson, Sonsini, Goodrich &
               Rosati, Professional Corporation
               (Contained in Exhibit 5.1)

  24.1         Power of Attorney (See page II-4)

</TABLE>


<PAGE>


                                   EXHIBIT 4.1


                             1992 Stock Option Plan



<PAGE>


                               DH TECHNOLOGY, INC.

                                 1992 STOCK PLAN
                          As Amended September 22, 1995


         1. Purpose of the Plan.  The purpose of the DH  Technology,  Inc.  1992
Stock Plan is to enable DH Technology,  Inc. to provide an incentive to eligible
employees,  consultants  and officers whose present and potential  contributions
are  important  to  the  continued  success  of the  Company,  to  afford  these
individuals  the  opportunity to acquire a proprietary  interest in the Company,
and to enable  the  Company to enlist  and  retain in its  employment  qualified
personnel for the successful  conduct of its business.  It is intended that this
purpose will be effected  through the granting of (a) stock  options,  (b) stock
purchase rights,  (c) stock appreciation  rights, and (d) long-term  performance
awards.

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

                  (a) "Administrator"  means the Board or such of its Committees
as shall be administering the Plan, in accordance with Section 5 of the Plan.

                  (b) "Applicable Laws" means the legal requirements relating to
the  administration  of stock option  plans under  applicable  securities  laws,
California corporate law and the Code.

                  (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 5 of the Plan.

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

                  (g)  "Company"   means  DH  Technology,   Inc.,  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,  provided that 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.

                  (i)  "Continuous  Status as an Employee or  Consultant"  means
that the employment or consulting  relationship is not interrupted or terminated
by the Company,  any Parent or Subsidiary.  Continuous  Status as an Employee or
Consultant shall not be considered  interrupted in the case of: (i) any leave of
absence  approved by the Board,  including sick leave,  military  leave,  or any

<PAGE>

other personal leave;  provided,  however,  that for purposes of Incentive Stock
Options,  any such leave may not exceed  ninety (90) days,  unless  reemployment
upon the expiration of such leave is guaranteed by contract  (including  certain
Company policies) or statute; or (ii) transfers between locations of the Company
or between the Company, its Parent, its Subsidiaries or its successor.


                  (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
National Market System of the National  Association of Securities Dealers,  Inc.
Automated  Quotation  ("NASDAQ")  System,  the Fair  Market  Value of a Share of
Common  Stock  shall be the  closing  sales price for such stock (or the closing
bid, if no sales were  reported)  as quoted on such  system or exchange  (or the
exchange with the greatest volume of trading in 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;

                       (ii) If the Common  Stock is quoted on the NASDAQ  System
(but not on the National  Market  System  thereof) or 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.

                  (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.


<PAGE>



                  (p) "Long-Term Performance Award" means an award under Section
9 below. A Long-Term  Performance  Award shall permit the recipient to receive a
cash or stock bonus (as determined by the  Administrator)  upon  satisfaction of
such  performance  factors as are set out in the recipient's  individual  grant.
Long-term  Performance  Awards  will be based upon the  achievement  of Company,
Subsidiary and/or individual  performance factors or upon such other criteria as
the Administrator may deem appropriate.

                  (q) "Long-Term  Performance  Award  Agreement" means a written
agreement  between  the  Company  and  an  Optionee  evidencing  the  terms  and
conditions of an individual  Long-Term  Performance  Award grant.  The Long-Term
Performance Award Agreement is subject to the terms and conditions of the Plan.

                  (r)  "Nonstatutory  Stock Option" means any Option that is not
an Incentive Stock Option.

                  (s)  "Notice  of  Grant"  means a  written  notice  evidencing
certain terms and conditions of an individual Option,  Stock Purchase Right, SAR
or Long-Term  Performance Award grant. The Notice of Grant is part of the Option
Agreement, the SAR Agreement and the Long-Term Performance Award Agreement.

                  (t) "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.

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

                  (v) "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.

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

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

                  (y)  "Optionee"  means an Employee or Consultant  who holds an
outstanding Option or Right.

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

                  (aa) "Plan" means this 1992 Stock Plan.
<PAGE>

                  (bb)  "Restricted  Stock" means shares of Common Stock subject
to a Restricted Stock Purchase  Agreement  acquired pursuant to a grant of Stock
Purchase Rights under Section 8 below.

                  (cc)  "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.

                  (dd) "Right" means and includes  SARs,  Long-Term  Performance
Awards and Stock Purchase Rights granted pursuant to the Plan.

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

                  (ff) "SAR" means a stock  appreciation  right granted pursuant
to Section 7 of the Plan.

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

                  (hh) "Share" means a share of the Common Stock, as adjusted in
accordance with Section 11 of the Plan.

                  (ii) "Stock Purchase Right" means the right to purchase Common
Stock pursuant to Section 8 of the Plan, as evidenced by a Notice of Grant.

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

         3. Eligibility. Nonstatutory Stock Options and 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 Right may be granted additional Options or Rights.

         4. Stock Subject to the Plan.  Subject to the  provisions of Section 11
of the Plan, the total number of Shares reserved and available for  distribution
under the Plan is 1,473,469  Shares.  Subject to Section 11 of the Plan,  if any
Shares  that have been  optioned  under an Option  cease to be  subject  to such
Option  (other than through  exercise of the Option),  or if any Option or Right
granted  hereunder is forfeited or any such award otherwise  terminates prior to
the issuance of Common Stock to the participant, the shares that were subject to
such Option or Right shall again be available  for  distribution  in  connection
with future  Option or right  grants  under the Plan;  provided,  however,  that

<PAGE>

Shares that have actually  been issued under the Plan,  whether upon exercise of
an Option or Right, shall not in any event be returned to the Plan and shall not
become available for future distribution under the Plan.

         5.       Administration.

                  (a) Composition of Administrator.

                       (i) Multiple  Administrative Bodies. If permitted by Rule
16b-3  and  Applicable  Laws,  the Plan may (but need  not) be  administered  by
different administrative bodies with respect to (A) Directors who are employees,
(B) Officers who are not Directors  and (C) Employees who are neither  Directors
nor Officers.
                       (ii)   Administration   with  respect  to  Directors  and
Officers.  With respect to grants of Options and Rights to eligible participants
who are Officers or Directors of the Company,  the Plan shall be administered by
(A) the Board,  if the Board may  administer  the Plan in  compliance  with Rule
16b-3 as it applies to a plan intended to qualify  thereunder as a discretionary
grant or award plan,  or (B) a Committee  designated  by the Board to administer
the Plan, which Committee shall be constituted (1) in such a manner as to permit
the Plan to comply  with Rule 16b-3 as it applies to a plan  intended to qualify
thereunder as a discretionary grant or award plan and (2) in such a manner as to
satisfy the Applicable Laws.

                       (iii) Administration with respect to Other Persons.  With
respect to grants of Options to eligible  participants 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 in
such a manner as to satisfy the Applicable Laws.

                       (iv)  General.   Once  a  Committee  has  been  appointed
pursuant to subsection  (ii) or (iii) of this Section 5(a), such Committee shall
continue to serve in its  designated  capacity until  otherwise  directed by the
Board.  From time to time the Board may increase the size of any  Committee  and
appoint additional  members thereof,  remove members (with or without cause) and
appoint new members in substitution  therefor,  fill vacancies  (however caused)
and remove all members of a Committee and  thereafter  directly  administer  the
Plan, all to the extent  permitted by the Applicable  Laws and, in the case of a
Committee appointed under subsection (ii), to the extent permitted by Rule 16b-3
as it applies to a plan intended to qualify thereunder as a discretionary  grant
or award plan.

                  (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;


<PAGE>



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

                       (iii) to determine whether and to what extent Options and
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 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 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 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 construe and interpret the terms of the Plan;

                       (viii)  to   prescribe,   amend  and  rescind  rules  and
regulations relating to the Plan;

                       (ix) to determine whether and under what circumstances an
Option or Right may be settled in cash  instead of Common  Stock or Common Stock
instead of cash;

                       (x) to reduce the exercise price of any Option or Right;

                       (xi) to modify or amend each Option or Right  (subject to
Section 13 of the Plan);

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

                       (xiii) to institute an Option Exchange Program;

                       (xiv) to determine the terms and restrictions  applicable
to Options and Rights and any Restricted Stock; and


                       (xv) to make all other determinations deemed necessary or
advisable for administering the Plan.
<PAGE>

                  (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 Rights.

         6.  Duration  of the  Plan.  The Plan  shall  remain  in  effect  until
terminated  by the Board under the terms of the Plan,  provided that in no event
may  Incentive  Stock Options be granted under the Plan later than 10 years from
the date the Plan was adopted by the Board.

         7.       Options and SARs.

                  (a) Options. The Administrator,  in its discretion,  may grant
Options to eligible  participants and shall determine whether such Options shall
be Incentive Stock Options or Nonstatutory  Stock Options.  Each Option shall be
evidenced  by a Notice of Grant which shall  expressly  identify  the Options as
Incentive  Stock Options or as Nonstatutory  Stock Options,  and be in such form
and contain such  provisions as the  Administrator  shall from time to time deem
appropriate.  Without limiting the foregoing,  the Administrator may at any time
authorize the Company, with the consent of the respective  recipients,  to issue
new  Options  or  Rights in  exchange  for the  surrender  and  cancellation  of
outstanding  Options or Rights.  Option  agreements  shall contain the following
terms and conditions:
                       (i)  Exercise  Price;  Number  of  Shares.  The per Share
exercise price for the Shares issuable pursuant to an Option shall be such price
as is determined by the Administrator; provided, however, that in the case of an
Incentive Stock Option,  the price shall be no less than 100% of the Fair Market
Value of the  Common  Stock on the date the  Option is  granted,  subject to any
additional conditions set out in Section 7(a)(iv) below.

                           The  Notice  of Grant  shall  specify  the  number of
Shares to which it pertains.

                       (ii) Waiting  Period and Exercise  Dates.  At the time an
Option is granted,  the Administrator will determine the terms and conditions to
be satisfied before Shares may be purchased, including the dates on which Shares
subject to the Option may first be purchased. The Administrator may specify that
an Option  may not be  exercised  until the  completion  of the  service  period
specified  at the time of grant.  Any such  period is  referred to herein as the
"waiting period." At the time an Option is granted,  the Administrator shall fix
the period within which the Option may be exercised,  which shall not be earlier
than the end of the waiting  period,  if any,  nor, in the case of an  Incentive
Stock Option, later than ten (10) years, from the date of grant.

                       (iii) Form of Payment.  The  consideration to be paid for
the Shares to be issued  upon  exercise  of an Option,  including  the method of
payment,  shall  be  determined  by the  Administrator  (and,  in the case of an
Incentive  Stock  Option,  shall be  determined  at the time of  grant)  and may
consist entirely of:


<PAGE>


                            (1) cash;

                            (2) check;

                            (3) promissory note;

                            (4)  other  Shares  which  (1) 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 (2) have a Fair Market  Value on
the date of  surrender  not greater  than the  aggregate  exercise  price of the
Shares as to which said Option shall be exercised;

                            (5) delivery of a properly  executed exercise notice
together  with such  other  documentation  as the  Administrator  and any broker
approved by the Company,  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;

                            (6) any  combination  of the  foregoing  methods  of
payment; or
                            (7) such other  consideration  and method of payment
for the issuance of Shares to the extent permitted by Applicable Laws.

                       (iv)  Special  Incentive  Stock  Option  Provisions.   In
addition to the foregoing,  Options granted under the Plan which are intended to
be Incentive Stock Options under Section 422 of the Code shall be subject to the
following terms and conditions:

                            (1)  Dollar  Limitation.  To  the  extent  that  the
aggregate  Fair  Market  Value of (a) the Shares with  respect to which  Options
designated  as  Incentive  Stock  Options  plus (b) the  shares  of stock of the
Company,  Parent and any Subsidiary  with respect to which other incentive stock
options are  exercisable  for the first time by an Optionee  during any calendar
year  under all plans of the  Company  and any  Parent  and  Subsidiary  exceeds
$100,000,  such Options  shall be treated as  Nonstatutory  Stock  Options.  For
purposes of the preceding  sentence,  (a) Options shall be taken into account in
the  order in which  they were  granted,  and (b) the Fair  Market  Value of the
Shares shall be  determined as of the time the Option or other  incentive  stock
option is granted.

                            (2)  10%  Shareholder.  If any  Optionee  to whom an
Incentive  Stock Option is to be granted  pursuant to the provisions of the Plan
is, on the date of grant, the owner of Common Stock (as determined under Section
424(d) of the Code)  possessing more than 10% of the total combined voting power
of all  classes  of stock of the  Company  or any  Parent or  Subsidiary  of the
Company, then the following special provisions shall be applicable to the Option
granted to such individual:


<PAGE>



                                 (a)  The  per  Share  Option  price  of  Shares
subject to such  Incentive  Stock Option shall not be less than 110% of the Fair
Market Value of Common Stock on the date of grant; and

                                 (b) The Option  shall not have a term in excess
of five (5) years from the date of grant.

Except as modified by the preceding  provisions of this subsection  7(a)(iv) and
except as otherwise limited by Section 422 of the Code, all of the provisions of
the Plan shall be applicable to the Incentive Stock Options granted hereunder.

                       (v) Other Provisions.  Each Option granted under the Plan
may contain such other terms,  provisions,  and conditions not inconsistent with
the Plan as may be determined by the Administrator.

                       (vi) Buy-out  Provisions.  The  Administrator  may at any
time offer on behalf of the Company 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; provided,  however, that buy-out offers made to Insiders may
only be  payable in cash.  Any such cash  offer  made to an Officer or  Director
shall comply with the applicable provisions of Rule 16b-3, if any.

                  (b)      SARs.

                       (i) In Connection with Options. At the sole discretion of
the Administrator,  SARs may be granted in connection with all or any part of an
Option,  either  concurrently  with  the  grant  of the  Option  or at any  time
thereafter during the term of the Option. The following provisions apply to SARs
that are granted in connection with Options:

                            (1) The SAR shall  entitle the  Optionee to exercise
the SAR by  surrendering  to the  Company  unexercised  a portion of the related
Option.  The Optionee shall receive in Exchange from the Company an amount equal
to the excess of (1) the Fair Market Value on the date of exercise of the SAR of
the Common Stock covered by the  surrendered  portion of the related Option over
(2) the exercise price of the Common Stock covered by the surrendered portion of
the related Option.  Notwithstanding the foregoing,  the Administrator may place
limits  on the  amount  that  may be paid  upon  exercise  of an SAR;  provided,
however,  that such limit shall not restrict the  exercisability  of the related
Option.

                            (2) When an SAR is exercised, the related Option, to
the extent surrendered, shall cease to be exercisable.

                            (3) An SAR shall be exercisable only when and to the
extent that the related Option is exercisable and shall expire no later than the
date on which the related Option expires.


<PAGE>

                            (4) An SAR may only be  exercised at a time when the
Fair Market Value of the Common Stock covered by the related  Option exceeds the
exercise price of the Common Stock covered by the related Option.

                       (ii)  Independent of Options.  At the sole  discretion of
the  Administrator,  SARs may be granted without related Options.  The following
provisions apply to SARs that are not granted in connection with Options:

                            (1)  The  SAR  shall   entitle  the   Optionee,   by
exercising the SAR, to receive from the Company an amount equal to the excess of
(1) the Fair Market Value of the Common Stock covered by the  exercised  portion
of the SAR, as of the date of such  exercise,  over (2) the Fair Market Value of
the Common  Stock  covered by the  exercised  portion of the SAR, as of the last
market  trading date prior to the date on which the SAR was  granted;  provided,
however, that the Administrator may place limits on the aggregate amount that
may be paid upon exercise of an SAR.

                            (2) SARs shall be exercisable,  in whole or in part,
at  such  times  as  the  Administrator  shall  specify  in the  Optionee's  SAR
agreement.

                       (iii) Form of Payment.  The Company's  obligation arising
upon the  exercise of an SAR may be paid in Common  Stock or in cash,  or in any
combination  of  Common  Stock  and  cash,  as the  Administrator,  in its  sole
discretion,  may  determine.  Shares issued upon the exercise of an SAR shall be
valued at their Fair Market Value as of the date of exercise.

                  (c)      Method of Exercise.

                       (i) Procedure for Exercise; Rights as a Shareholder.  Any
Option or SAR granted  hereunder  shall be  exercisable  at such times and under
such conditions as determined by the  Administrator  and as shall be permissible
under the terms of the Plan.

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

                    An  Option  or SAR  shall be  deemed  to be  exercised  when
written notice of such exercise has been given to the Company in accordance with
the terms of the Option or SAR by the person  entitled to exercise the Option or
SAR and full  payment  for the  Shares  with  respect  to which  the  Option  is
exercised has been  received by the Company.  Full payment may, as authorized by
the Administrator (and, in the case of an Incentive Stock Option,  determined at
the  time of  grant)  and  permitted  by the  Option  Agreement  consist  of any
consideration and method of payment allowable under subsection  7(a)(iii) of the
Plan. 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

<PAGE>

other rights as a  shareholder  shall exist with respect to the Optioned  Stock,
notwithstanding  the 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 11 of the Plan.

                    Exercise  of an  Option  in any  manner  shall  result  in a
decrease in the number of Shares which thereafter  shall be 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. Exercise of an SAR in any manner shall, to the
extent the SAR is exercised,  result in a decrease in the number of Shares which
thereafter  shall be available for purposes of the Plan, and the SAR shall cease
to be exercisable to the extent it has been exercised.

                       (ii) Rule 16b-3.  Options and SARs 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.

                       (iii)    Termination    of   Employment   or   Consulting
Relationship.  In the event an  Optionee's  Continuous  Status as an Employee or
Consultant terminates (other than upon the Optionee's death or Disability),  the
Optionee  may  exercise his or her Option or SAR, but only within such period of
time as is determined by the  Administrator  at the time of grant, not to exceed
five (5) years (three (3) months in the case of an Incentive  Stock Option) from
the date of such  termination,  and only to the  extent  that the  Optionee  was
entitled to exercise it at the date of such  termination  (but in no event later
than the expiration of the term of such Option or SAR as set forth in the Option
or SAR  Agreement).  To the extent that Optionee was not entitled to exercise an
Option  or SAR at the  date of such  termination,  and to the  extent  that  the
Optionee  does not  exercise  such  Option or SAR (to the  extent  otherwise  so
entitled) within the time specified herein, the Option or SAR shall terminate.

                       (iv)  Disability of Optionee.  In the event an Optionee's
Continuous  Status as an Employee or  Consultant  terminates  as a result of the
Optionee's  Disability,  the Optionee may exercise his or her Option or SAR, but
only  within  such  period  of time  following  the date of  termination  due to
Disability  not exceeding  ten (10) years as is determined by the  Administrator
(with  such  determination  being made at the time of grant of the Option in the
case of an Incentive  Stock Option and not exceeding one (1) year),  and only to
the extent  that the  Optionee  was  entitled to exercise it at the date of such
termination  (but in no  event  later  than the  expiration  of the term of such
Option or SAR as set forth in the Option or SAR  Agreement).  To the extent that
Optionee  was not  entitled  to  exercise  an  Option or SAR at the date of such
termination,  and to the extent that the Optionee  does not exercise such Option
or SAR (to the extent otherwise so entitled)  within the time specified  herein,
the Option or SAR shall terminate.

                       (v)  Death of  Optionee.  In the  event of an  Optionee's
death, the Optionee's  estate or a person who acquired the right to exercise the
deceased  Optionee's  Option or SAR by bequest or  inheritance  may exercise the
Option or SAR, but only within ten (10) years  following the date of death,  and
only to the extent that the  Optionee was entitled to exercise it at the date of
death (but in no event later than the  expiration  of the term of such Option or

<PAGE>

SAR as set forth in the Option or SAR  Agreement).  To the extent that  Optionee
was not  entitled to exercise an Option or SAR at the date of death,  and to the
extent that the Optionee's estate or a person who acquired the right to exercise
such Option does not  exercise  such Option or SAR (to the extent  otherwise  so
entitled) within the time specified herein, the Option or SAR shall terminate.

                  (d) Option and SAR Limitation.  The following limitation shall
apply to grants of Options and SARs under the Plan:

                            (i) No Employee shall be granted, in any fiscal year
of the Company,  Options and SARs under the Plan to purchase more than 1,050,000
Shares.

                            (ii) The  foregoing  limitation  shall  be  adjusted
proportionately in connection with any change in the Company's capitalization as
described in Section 11(a).

                            (iii) If an Option or SAR is  cancelled  (other than
in connection with a transaction  described in Section 11), the cancelled Option
or SAR shall be counted  against  the limits set forth in Section  7(d)(i).  For
this  purpose,  if the  exercise  price  of an  Option  or SAR is  reduced,  the
transaction will be treated as a cancellation of the Option or SAR and the grant
of a new Option or SAR.

         8.       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 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 thirty (30) days 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
purchaser and may be paid by cancellation  of any  indebtedness of the purchaser
to  the  Company.  The  repurchase  option  shall  lapse  at  such  rate  as the
Administrator may determine.

                  (c) Other Provisions.  The Restricted Stock Purchase Agreement
shall contain such other terms,  provisions and conditions not inconsistent with

<PAGE>

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.

                  (d) 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.

                  (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 11
of the Plan.

         9.       Long-Term Performance Awards.

                  (a) Administration.  Long-Term  Performance Awards are cash or
stock  bonus  awards  that may be granted  either  alone or in addition to other
awards  granted  under  the  Plan.  Such  awards  shall be  granted  for no cash
consideration. The Administrator shall determine the nature, length and starting
date of any  performance  period (the  "Performance  Period") for each Long-Term
Performance Award, and shall determine the performance or employment factors, if
any, to be used in the  determination  of Long-Term  Performance  Awards and the
extent  to which  such  Long-Term  Performance  Awards  are  valued or have been
earned.  Long-Term  Performance  Awards may vary from participant to participant
and between groups of  participants  and shall be based upon the  achievement of
Company,  Subsidiary,  Parent and/or individual performance factors or upon such
other criteria as the Administrator may deem  appropriate.  Performance  Periods
may overlap and  participants  may  participate  simultaneously  with respect to
Long-Term  Performance Awards that are subject to different  Performance Periods
and different  performance  factors and criteria.  Long-Term  Performance Awards
shall be confirmed  by, and be subject to the terms of, a Long-Term  Performance
Award  agreement.  The terms of such awards need not be the same with respect to
each participant.

                  At the beginning of each Performance Period, the Administrator
may determine for each Long-Term  Performance  Award subject to such Performance
Period  the  range of dollar  values  or number of shares of Common  Stock to be
awarded to the  participant at the end of the  Performance  Period if and to the
extent that the relevant measures of performance for such Long-Term  Performance
Award are met.  Such  dollar  values or number of shares of Common  Stock may be
fixed or may vary in accordance  with such  performance or other criteria as may
be determined by the Administrator.


<PAGE>



                  (b)  Adjustment of Awards.  The  Administrator  may adjust the
performance factors applicable to the Long-Term  Performance Awards to take into
account changes in legal,  accounting and tax rules and to make such adjustments
as the Administrator  deems necessary or appropriate to reflect the inclusion or
exclusion  of  the  impact  of  extraordinary   or  unusual  items,   events  or
circumstances in order to avoid windfalls or hardships.

         10.  Non-Transferability  of Options and Rights. Options and Rights 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.

         11.  Adjustments Upon Changes in Capitalization,  Dissolution,  Merger,
Asset Sale or Change of Control.

                  (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 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 Rights have yet been granted or which have been  returned to the Plan
upon  cancellation or expiration of an Option or Right, as well as the price per
share of Common Stock covered by each such outstanding Option or 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  respect  to, the number or price of shares of Common  Stock  subject to an
Option or Right.

                  (b) Dissolution or  Liquidation.  In the event of the proposed
dissolution or liquidation of the Company, to the extent that an Option or Right
has not been previously  exercised,  it will terminate  immediately prior to the
consummation of such proposed action. The Board may, in the exercise of its sole
discretion in such  instances,  declare that any Option or Right shall terminate
as of a date fixed by the Board and give each Optionee the right to exercise his
or her Option or Right as to all or any part of the  Optioned  Stock,  including
Shares as to which the Option or Right would not otherwise be exercisable.
<PAGE>

                  (c)  Merger  or  Asset  Sale.  Subject  to the  provisions  of
paragraph  (d)  hereof,  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 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  does not agree to assume the Option or to  substitute an equivalent
option,  the  Administrator  shall, in lieu of such assumption or  substitution,
provide for the Optionee to have the right to exercise the Option or Right as to
all or a portion of the Optioned  Stock,  including  Shares as to which it would
not  otherwise be  exercisable.  If the  Administrator  makes an Option or Right
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
Right shall be  exercisable  for a period of fifteen  (15) days from the date of
such notice,  and the Option or Right will terminate upon the expiration of such
period.  For the  purposes  of this  paragraph,  the  Option  or Right  shall be
considered assumed if,  immediately  following the merger or sale of assets, the
Option or Right confers the right to purchase,  for each Share of Optioned Stock
subject  to the  Option  or 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 and the  participant,  provide for the
consideration  to be received upon the exercise of the Option or Right, for each
Share of  Optioned  Stock  subject to the Option or 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.

                  (d) Change in  Control.  In the event of a "Change in Control"
of  the  Company,  as  defined  in  paragraph  (e)  below,  then  the  following
acceleration and valuation provisions shall apply:

                           (i) Except as otherwise  determined by the Board,  in
its discretion,  prior to the occurrence of a Change in Control, any Options and
Rights  outstanding  on the date such  Change in Control is  determined  to have
occurred that are not yet exercisable and vested on such date shall become fully
exercisable and vested;

                           (ii) Except as otherwise  determined by the Board, in
its discretion,  prior to the occurrence of a Change in Control, all outstanding
Options and Rights,  to the extent they are  exercisable  and vested  (including
Options  and Rights  that  shall  become  exercisable  and  vested  pursuant  to
subparagraph  (i) above),  shall be  terminated  in exchange  for a cash payment
equal to the Change in Control Price,  (reduced by the exercise  price,  if any,
applicable to such Options or Rights).  These cash proceeds shall be paid to the
Optionee  or,  in the event of death of an  Optionee  prior to  payment,  to the
estate of the  Optionee or to a person who  acquired  the right to exercise  the
Option or Right by bequest or inheritance.

<PAGE>



                 (e)  Definition  of "Change in  Control".  For purposes of this
Section 11, a "Change in Control" means the happening of any of the following:
                           (i)  When  any  "person,"  as  such  term  is used in
Sections  13(d)  and  14(d) of the  Exchange  Act  (other  than the  Company,  a
Subsidiary or a Company  employee  benefit  plan,  including any trustee of such
plan acting as trustee) is or becomes the "beneficial owner" (as defined in Rule
13d-3 under the Exchange  Act),  directly or  indirectly,  of  securities of the
Company representing fifty percent (50%) or more of the combined voting power of
the Company's  then  outstanding  securities  entitled to vote  generally in the
election of directors; or

                           (ii) The shareholders of the Company approve a merger
or consolidation of the Company with any other corporation,  other than a merger
or  consolidation  which would  result in the voting  securities  of the Company
outstanding  immediately  prior  thereto  continuing  to  represent  (either  by
remaining  outstanding  or by being  converted  into  voting  securities  of the
surviving  entity)  at least  fifty  percent  (50%) of the  total  voting  power
represented  by the voting  securities of the Company or such  surviving  entity
outstanding immediately after such merger or consolidation,  or the shareholders
of the Company  approve an agreement for the sale or  disposition by the Company
of all or substantially all the Company's assets; or

                           (iii) A change  in the  composition  of the  Board of
Directors  of the  Company,  as a result of which  fewer than a majority  of the
directors are Incumbent  Directors.  "Incumbent  Directors" shall mean directors
who either (A) are  directors of the Company as of the date the Plan is approved
by the shareholders, or (B) are elected, or nominated for election, to the Board
of Directors of the Company with the affirmative votes of at least a majority of
the Incumbent  Directors at the time of such  election or nomination  (but shall
not include an individual  whose election or nomination is in connection with an
actual or threatened  proxy contest relating to the election of directors to the
Company).

                  (f) Change in Control Price.  For purposes of this Section 11,
"Change in Control Price" shall be, as determined by the Board,  (i) the highest
Fair Market Value of a Share within the 60-day period immediately  preceding the
date of  determination  of the Change in Control Price by the Board (the "60-Day
Period"),  or (ii) the highest price paid or offered per Share, as determined by
the Board, in any bona fide transaction or bona fide offer related to the Change
in Control of the Company,  at any time within the 60-Day Period,  or (iii) such
lower  price as the Board,  in its  discretion,  determines  to be a  reasonable
estimate of the fair market value of a Share.

         12.  Date of Grant.  The date of grant of an Option or Right  shall be,
for all purposes,  the date on which the  Administrator  makes the determination
granting such Option or Right,  or such other later date as is determined by the
Administrator.  Notice of the  determination  shall be provided to each Optionee
within a reasonable time after the date of such grant.


<PAGE>



         13.      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.

         14.      Stock Withholding to Satisfy Withholding Tax Obligations.

                  (a)  Ability  to Use  Stock  to  Satisfy  Withholding.  At the
discretion of the Administrator,  Optionees may satisfy withholding  obligations
as  provided  in this  Section 14.  When an  Optionee  incurs tax  liability  in
connection with the award,  vesting or exercise of an Option or Right, which tax
liability is subject to tax  withholding  under  applicable tax laws  (including
federal,  state and local laws),  the Optionee may satisfy the  withholding  tax
obligation  (up to an amount  calculated  by applying  such  Optionee's  maximum
marginal tax rate) by electing to have the Company  withhold  from the Shares to
be issued upon award,  vesting or exercise of the Option or Right that number of
Shares,  or by delivering to the Company that number of previously owned Shares,
having a Fair Market Value equal to the amount required to be withheld. The Fair
Market  Value of the Shares to be  withheld  or  delivered,  as the case may be,
shall  be  determined  on the date  that the  amount  of tax to be  withheld  is
determined (the "Tax Date").

                  (b)  Election  to Have Stock  Withheld.  All  elections  by an
Optionee to have Shares withheld or to deliver  previously owned Shares pursuant
to this  Section  14  shall  be  made in  writing  in a form  acceptable  to the
Administrator and shall be subject to the following restrictions:

                           (i) the  election  must be  made on or  prior  to the
applicable Tax Date;
                           (ii) all elections shall be subject to the consent or
disapproval of the Administrator; and


<PAGE>



                           (iii) if the  Optionee  is an Insider,  the  election
must comply with the applicable provisions of Rule 16b-3 and shall be subject to
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.

                  (c) Section 83(b) Elections. In the event that (i) an election
to have Shares withheld is made by an Optionee,  (ii) no election is filed under
Section  83(b) of the Code by such  Optionee  and (iii) the Tax Date is deferred
under  Section 83 of the Code,  the  Optionee  shall  receive the full number of
Shares with respect to which the Option or Right has been awarded, has vested or
has  been   exercised,   as  the  case  may  be,  but  such  Optionee  shall  be
unconditionally  obligated  to tender back to the  Company the proper  number of
Shares on the Tax Date.

         15.      Conditions Upon Issuance of Shares.

                  (a) Legal  Compliance.  Shares shall not be issued pursuant to
the  exercise of an Option or Right  unless the exercise of such Option or 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 Right, the Company may require the person exercising such Option
or 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.

         16.      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.

                  (b) Grants Exceeding  Allotted  Shares.  If the Optioned Stock
covered by an Option or 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 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 13(b) of the Plan.
<PAGE>

         17. 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.

         18. 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 federal and state law.

<PAGE>

- --------------------------------------------------------------------------------
                                   EXHIBIT 5.1
- --------------------------------------------------------------------------------

     Opinion of Wilson, Sonsini, Goodrich & Rosati, Professional Corporation


<PAGE>








                                  April 3, 1996


DH Technology, Inc.
15070 Avenue of Science
San Diego, CA 92128

Re:        Registration Statement on Form S-8

Ladies and Gentlemen:

We have examined the Registration  Statement on Form S-8 to be filed by you with
the  Securities  and  Exchange  Commission  on or about  December  18, 1995 (the
"Registration   Statement")  in  connection  with  the  registration  under  the
Securities  Act of 1933, as amended,  of 375,000  shares (the  "Shares") of your
Common Stock  reserved for issuance  under the 1992 Stock Plan (the "Plan").  As
legal counsel for DH Technology,  Inc., we have examined the  proceedings  taken
and are familiar with the proceedings  proposed to be taken by you in connection
with the issuance and sale of the Shares pursuant to the Plan.

It is our opinion that the Shares,  when issued and sold in the manner described
in the Plan and pursuant to the agreement that  accompanies each grant under the
Plan,   the  Shares  will  be  legally  and  validly   issued,   fully-paid  and
non-assessable.

We  consent  to the  use of  this  opinion  as an  exhibit  to the  Registration
Statement,  and further consent to the use of our name wherever appearing in the
Registration Statement and any amendments thereto.

                                            Very truly yours,

                                            WILSON, SONSINI, GOODRICH & ROSATI
                                            Professional Corporation





<PAGE>

- --------------------------------------------------------------------------------
                                  EXHIBIT 23.1
- --------------------------------------------------------------------------------

                        Consent of KPMG Peat Marwick LLP
                                 (See Page II-6)


<PAGE>

- --------------------------------------------------------------------------------
                                  EXHIBIT 23.2
- --------------------------------------------------------------------------------
                               
                               Consent of Counsel
                                (See Exhibit 5.1)


<PAGE>

- --------------------------------------------------------------------------------
                                  EXHIBIT 24.1
- --------------------------------------------------------------------------------

                                Power of Attorney
                                 (See Page II-4)


<PAGE>
[{"type": "S-8", "sequence": "1", "description": "S-8 - 1995 STOCK OPTION GRANT", "secsgml_size_bytes": 74317}]
{"company-data": {"conformed-name": "DH TECHNOLOGY INC", "cik": "0000728376", "assigned-sic": "3679", "irs-number": "942917470", "state-of-incorporation": "CA", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "S-8", "act": "33", "file-number": "333-02499", "film-number": "96546900"}, "business-address": {"street1": "15070 AVENUE OF SCIENCE", "city": "SAN DIEGO", "state": "CA", "zip": "92128", "phone": "6194513485"}, "mail-address": {"street1": "15070 AVENUE OF SCIENCE", "city": "SAN DIEGO", "state": "CA", "zip": "92128"}}
Total Number of Pages:35                           As filed with the Securities
Index to Exhibits at Page:10          and Exchange Commission on April 03, 1996
                                           Registration No. 333-_______________

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM S-8

                             REGISTRATION STATEMENT
                                      Under
                           THE SECURITIES ACT OF 1933

                               DH TECHNOLOGY, INC.
               (Exact name of issuer as specified in its charter)

               California                                     94-2917470
               ----------                                     ----------
        (State of Incorporation)           (I.R.S. Employer Identification No.)

                             15070 Avenue of Science
                           San Diego, California 92128
                    (Address of principal executive offices)

                                 1992 STOCK PLAN
                            (Full title of the Plan)

                                 JANET W. SHANKS
                            Chief Accounting Officer
                             15070 Avenue of Science
                           San Diego, California 92128
                                 (619) 451-3485
            (Name, address and telephone number of agent for service)

                                   Copies to:

                           HENRY P. MASSEY, JR., ESQ.
                       Wilson, Sonsini, Goodrich & Rosati
                            Professional Corporation
                              Two Palo Alto Square
                           Palo Alto, California 94306
                                 (415) 493-9300
===========================================================================================================================
                         CALCULATION OF REGISTRATION FEE
===========================================================================================================================
                Title of                       Amount            Proposed             Proposed              Amount of
               Securities                       to be            Maximum              Maximum             Registration
                 to be                       Registered          Offering            Aggregate                 Fee
               Registered                                         Price               Offering
                                                                Per Share              Price
- ----------------------------------------- ------------------ ----------------- ----------------------- --------------------
Common Stock,                                 375,000(1)(2)       $  24.63(2)             $ 9,236,250              $ 3,185
 no par value

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

(1)      The amount of shares to be registered and the proposed maximum offering
         price per share  reflect  the 1.5-  for-1  stock  split  that  occurred
         September 22, 1995.

(2)      Estimated in accordance  with Rule 457(h) under the  Securities  Act of
         1933  solely  for the  purpose of  calculating  the  registration  fee.
         Computation  based  upon the  average of the high and low prices of the
         Common  Stock as  reported on the Nasdaq  National  Market on April 8,
         1996 because the price at which the options to be granted in the future
         may be exercised is not currently determinable.
PART II

               INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

Item 3.  Information Incorporated by Reference.

         The  following  documents  and  information  heretofore  filed with the
Securities and Exchange Commission are hereby incorporated by reference:

         (1) The  Registrant's  Annual  Report on Form 10-K for the fiscal  year
ended December 31, 1994 filed pursuant to Section 13 of the Securities  Exchange
Act of 1934 (the "Exchange Act").

         (2) All other  reports  filed by the  Registrant  pursuant  to Sections
13(a) or 15(d) of the  Exchange  Act since the end of the fiscal year covered by
the Annual Report on Form 10-K referred to in (1) above.

         (3) The  description  of the  Common  Stock of the  Registrant  that is
contained in the Registration  Statement on Form 8-A effective June 25, 1985, as
amended, filed under Section 12 of the Exchange Act.

         All documents consequently filed by the Registrant pursuant to Sections
13(a),  13(c), 14 and 15(d) of the Exchange Act  subsequently  after the date of
this  Registration  Statement  and  prior  to  the  filing  of a  post-effective
amendment  which  indicates that all securities  offered have been sold or which
deregisters  all  securities  then  remaining  unsold,  shall  be  deemed  to be
incorporated by reference in this  Registration  Statement and to be part hereof
from the date of filing such documents.

Item 4.  Description of Securities.

         Not applicable.

Item 5.  Interests of Named Experts and Counsel.

         Not applicable.

Item 6.  Indemnification of Directors and Officers.

         Section 317 of the California General  Corporation law makes provisions
for the  indemnification of officers,  directors,  and other corporate agents in
terms sufficiently broad to indemnify such persons, under certain circumstances,
for liabilities (including reimbursement of expenses incurred) arising under the
Securities Act of 1933 (the  "Securities  Act"). The Registrant has entered into
indemnification agreements to such effect with its officers and directors.

         Article VI of the Bylaws of  Registrant  provides  that the  Registrant
shall indemnify certain agents of the Registrant to the maximum extent permitted
by the California  Corporations  Code.  Persons covered by this  indemnification
provision  include current and former directors,  officers,  employees and other
agents of the  Registrant  as well as  persons  who serve at the  request of the
Registrant as directors, officers, employees or agents of another enterprise.

         The  Registrant  shall have the power,  to the extent and in the manner
permitted by Section 317 of the California  Corporations Code, to indemnify each
of its  employees  and  agents  (other  than  directors  and  officers)  against
expenses,   judgments,  fines,  settlements,  and  other  amounts  actually  and
reasonably  incurred in connection with any proceeding  arising by reason of the
fact that such person is or was an agent of the Company.  For this  purpose,  an
"employee" or "agent" of the Registrant includes any person (i) who is or was an
employee  or agent of  Registrant,  (ii) who is or was serving at the request of
Registrant as an employee or agent of another  corporation,  partnership,  joint
venture,  trust or other enterprise,  or (iii) who was an employee or agent of a
corporation  which was a  predecessor  corporation  of  Registrant or of another
enterprise at the request of such predecessor corporation.
The  Registrant  has entered into separate  indemnification  agreements
with its directors and officers,  which may require the Registrant,  among other
things,  to indemnify them against certain  liabilities that may arise by reason
of their  status or service as  directors  or officers  (other than  liabilities
arising from willful  misconduct  of a culpable  nature),  and to advance  their
expenses  incurred as a result of any  proceeding  against them as to which they
could be indemnified.

Item 7.  Exemption from Registration Claimed.

         Not applicable.

Item 8.  Exhibits.

         Exhibit
         Number                                                Document
           4.1             1992 Stock Plan

           5.1             Opinion  of  Wilson,  Sonsini,   Goodrich  &  Rosati,
                           Professional  Corporation,  as  to  the  legality  of
                           securities being registered

           23.1            Consent of KPMG Peat Marwick LLP

           23.2            Consent of Counsel (contained in Exhibit 5.1 hereto)

           24.1            Power of Attorney (see page II-4)

Item 9.  Undertakings.

     (a)      The undersigned Registrant hereby undertakes:

              (1) To file,  during any period in which offers or sales are being
made, a post-effective  amendment to this Registration  Statement to include any
material  information  with respect to the plan of  distribution  not previously
disclosed  in  the  Registration  Statement  or  any  material  change  to  such
information in the Registration Statement.
(2) That, for the purpose of determining  any liability  under the
Securities Act, each such  post-effective  amendment shall be deemed to be a new
registration  statement  relating to the  securities  offered  therein,  and the
offering of such  securities at that time shall be deemed to be the initial bona
fide offering thereof.

              (3) To  remove  from  registration  by means  of a  post-effective
amendment  any of the  securities  being  registered  which remain unsold at the
termination of the offering.

     (b) The  undersigned  Registrant  hereby  undertakes  that, for purposes of
determining  any  liability  under  the  Securities  Act,  each  filing  of  the
Registrant's  annual  report  pursuant to Section  13(a) or Section 15(d) of the
Exchange Act (and, where  applicable,  each filing of an employee benefit plan's
annual  report   pursuant  to  Section  15(d)  of  the  Exchange  Act)  that  is
incorporated by reference in the Registration  Statement shall be deemed to be a
new registration  statement relating to the securities offered therein,  and the
offering of such  securities at that time shall be deemed to be the initial bona
fide offering thereof.

     (c) Insofar as indemnification for liabilities arising under the Securities
Act may be  permitted to  directors,  officers  and  controlling  persons of the
Registrant pursuant to the foregoing  provisions,  or otherwise,  the Registrant
has been advised that in the opinion of the Securities  and Exchange  Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore,  unenforceable. In the event that a claim for indemnification
against such  liabilities  (other than the payment by the Registrant of expenses
incurred or paid by a director,  officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director,  officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been  settled by  controlling  precedent,  submit to a court of  appropriate
jurisdiction the question whether such  indemnification  by it is against public
policy as  expressed  in the  Securities  Act and will be  governed by the final
adjudication of such issue.

     (d) The undersigned  Registrant hereby undertakes to deliver or cause to be
delivered with the prospectus,  to each person to whom the prospectus is sent or
given,  the latest annual  report to security  holders that is  incorporated  by
reference  in  the  prospectus  and  furnished   pursuant  to  and  meeting  the
requirements  of Rule 14a-3 or Rule 14c-3 under the  Exchange  Act;  and,  where
interim  financial  information  required  to  be  presented  to  Article  3  of
Regulation S-X are not set forth in the prospectus,  to deliver,  or cause to be
delivered  to each person to whom the  prospectus  is sent or given,  the latest
quarterly  report  that  is  specifically   incorporated  by  reference  in  the
prospectus to provide such interim financial information.
SIGNATURES

     Pursuant to the requirements of the Securities Act of 1933, the Registrant,
DH Technology, Inc., a California corporation,  certifies that it has reasonable
grounds to believe that it meets all of the  requirements for filing on Form S-8
and has duly caused this  Registration  Statement  to be signed on its behalf by
the undersigned,  thereunto duly authorized,  in the City of San Diego, State of
California, on this 3rd day of April , 1996.

                                 DH TECHNOLOGY, INC.

                                 By: /S/WILLIAM H. GIBBS
                                 -----------------------
                                        William H. Gibbs
                                        President

                              POWER OF ATTORNEY

     KNOW ALL  PERSONS  BY THESE  PRESENTS,  that each  person  whose  signature
appears  below  constitutes  and appoints  William H. Gibbs and Janet W. Shanks,
jointly  and  severally,   his   attorneys-in-fact,   each  with  the  power  of
substitution,  for him in any and all capacities, to sign any amendments to this
Registration  Statement on Form S-8, and to file the same, with exhibits thereto
and other  documents in connection  therewith,  with the Securities and Exchange
Commission,   hereby   ratifying   and   confirming   all  that   each  of  said
attorneys-in-fact,  or his substitute or substitutes, may do or cause to be done
by virtue hereof.
Pursuant  to  the   requirements  of  the  Securities  Act  of  1933,  this
Registration  Statement  has  been  signed  by  the  following  persons  in  the
capacities and on the date indicated.

SIGNATURE                         TITLE                               DATE
- ---------                         -----                               ----

/S/WILLIAM H. GIBBS     President, Chief Executive               April 3, 1996
(William H. Gibbs)      Officer (Principal Executive
                        Officer) and Chairman of the
                        Board of Directors

/S/JANET W. SHANKS      Chief Accounting Officer                 April 3, 1996
(Janet W. Shanks)       (Principal Financial Officer 
                        and Principal Accounting Officer)

/S/WILLIAM J. BOWERS    Director                                 April 3, 1996
(William J. Bowers)

/S/BRUCE G. KLAAS       Director                                 April 3, 1996
(Bruce G. Klaas)

/S/DON M. LYLE          Director                                 April 3, 1996
(Don M. Lyle)

/S/GEORGE M. RYAN       Director                                 April 3, 1996
(George M. Ryan)
Independent Auditors' Consent 

The Board of Directors
DH Technology, Inc.

     We consent to incorporation by reference in the registration  statements on
Form S-8 of DH  Technology,  Inc. of our report dated February 16, 1996 relating
to the consolidated balance sheets of DH Technology, Inc. and subsidiaries as of
December 31, 1995 and 1994, and the related  consolidated  statements of income,
shareholders'  equity, and cash flows and related schedule for each of the years
in the three year period period ended December 31, 1995, which report appears in
the December 31, 1995 annual report on Form 10K of DH Technology, Inc.

San Diego, California
Apri l0, 1996

/s/KPMG Peat Marwick LLP/
- -------------------------
(KPMG Peat Marwick LLP)
SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    EXHIBITS

                       Registration Statement on Form S-8

                               DH Technology, Inc.
INDEX TO EXHIBITS

                                                                   Sequentially
Exhibit                                                              Numbered
Number         Description                                             Page
- ------         -----------                                             ----
4.1         1992 Stock Option Plan

   5.1         Opinion of Wilson, Sonsini, Goodrich &
               Rosati, Professional Corporation

  23.1         Consent of KPMG Peat Marwick LLP

  23.2         Consent of Wilson, Sonsini, Goodrich &
               Rosati, Professional Corporation
               (Contained in Exhibit 5.1)

  24.1         Power of Attorney (See page II-4)
EXHIBIT 4.1

                             1992 Stock Option Plan
DH TECHNOLOGY, INC.

                                 1992 STOCK PLAN
                          As Amended September 22, 1995

         1. Purpose of the Plan.  The purpose of the DH  Technology,  Inc.  1992
Stock Plan is to enable DH Technology,  Inc. to provide an incentive to eligible
employees,  consultants  and officers whose present and potential  contributions
are  important  to  the  continued  success  of the  Company,  to  afford  these
individuals  the  opportunity to acquire a proprietary  interest in the Company,
and to enable  the  Company to enlist  and  retain in its  employment  qualified
personnel for the successful  conduct of its business.  It is intended that this
purpose will be effected  through the granting of (a) stock  options,  (b) stock
purchase rights,  (c) stock appreciation  rights, and (d) long-term  performance
awards.

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

                  (a) "Administrator"  means the Board or such of its Committees
as shall be administering the Plan, in accordance with Section 5 of the Plan.

                  (b) "Applicable Laws" means the legal requirements relating to
the  administration  of stock option  plans under  applicable  securities  laws,
California corporate law and the Code.

                  (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 5 of the Plan.

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

                  (g)  "Company"   means  DH  Technology,   Inc.,  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,  provided that 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.

                  (i)  "Continuous  Status as an Employee or  Consultant"  means
that the employment or consulting  relationship is not interrupted or terminated
by the Company,  any Parent or Subsidiary.  Continuous  Status as an Employee or
Consultant shall not be considered  interrupted in the case of: (i) any leave of
absence  approved by the Board,  including sick leave,  military  leave,  or any
other personal leave;  provided,  however,  that for purposes of Incentive Stock
Options,  any such leave may not exceed  ninety (90) days,  unless  reemployment
upon the expiration of such leave is guaranteed by contract  (including  certain
Company policies) or statute; or (ii) transfers between locations of the Company
or between the Company, its Parent, its Subsidiaries or its successor.

                  (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
National Market System of the National  Association of Securities Dealers,  Inc.
Automated  Quotation  ("NASDAQ")  System,  the Fair  Market  Value of a Share of
Common  Stock  shall be the  closing  sales price for such stock (or the closing
bid, if no sales were  reported)  as quoted on such  system or exchange  (or the
exchange with the greatest volume of trading in 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;

                       (ii) If the Common  Stock is quoted on the NASDAQ  System
(but not on the National  Market  System  thereof) or 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.

                  (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) "Long-Term Performance Award" means an award under Section
9 below. A Long-Term  Performance  Award shall permit the recipient to receive a
cash or stock bonus (as determined by the  Administrator)  upon  satisfaction of
such  performance  factors as are set out in the recipient's  individual  grant.
Long-term  Performance  Awards  will be based upon the  achievement  of Company,
Subsidiary and/or individual  performance factors or upon such other criteria as
the Administrator may deem appropriate.

                  (q) "Long-Term  Performance  Award  Agreement" means a written
agreement  between  the  Company  and  an  Optionee  evidencing  the  terms  and
conditions of an individual  Long-Term  Performance  Award grant.  The Long-Term
Performance Award Agreement is subject to the terms and conditions of the Plan.

                  (r)  "Nonstatutory  Stock Option" means any Option that is not
an Incentive Stock Option.

                  (s)  "Notice  of  Grant"  means a  written  notice  evidencing
certain terms and conditions of an individual Option,  Stock Purchase Right, SAR
or Long-Term  Performance Award grant. The Notice of Grant is part of the Option
Agreement, the SAR Agreement and the Long-Term Performance Award Agreement.

                  (t) "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.

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

                  (v) "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.

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

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

                  (y)  "Optionee"  means an Employee or Consultant  who holds an
outstanding Option or Right.

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

                  (aa) "Plan" means this 1992 Stock Plan.
(bb)  "Restricted  Stock" means shares of Common Stock subject
to a Restricted Stock Purchase  Agreement  acquired pursuant to a grant of Stock
Purchase Rights under Section 8 below.

                  (cc)  "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.

                  (dd) "Right" means and includes  SARs,  Long-Term  Performance
Awards and Stock Purchase Rights granted pursuant to the Plan.

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

                  (ff) "SAR" means a stock  appreciation  right granted pursuant
to Section 7 of the Plan.

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

                  (hh) "Share" means a share of the Common Stock, as adjusted in
accordance with Section 11 of the Plan.

                  (ii) "Stock Purchase Right" means the right to purchase Common
Stock pursuant to Section 8 of the Plan, as evidenced by a Notice of Grant.

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

         3. Eligibility. Nonstatutory Stock Options and 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 Right may be granted additional Options or Rights.

         4. Stock Subject to the Plan.  Subject to the  provisions of Section 11
of the Plan, the total number of Shares reserved and available for  distribution
under the Plan is 1,473,469  Shares.  Subject to Section 11 of the Plan,  if any
Shares  that have been  optioned  under an Option  cease to be  subject  to such
Option  (other than through  exercise of the Option),  or if any Option or Right
granted  hereunder is forfeited or any such award otherwise  terminates prior to
the issuance of Common Stock to the participant, the shares that were subject to
such Option or Right shall again be available  for  distribution  in  connection
with future  Option or right  grants  under the Plan;  provided,  however,  that
Shares that have actually  been issued under the Plan,  whether upon exercise of
an Option or Right, shall not in any event be returned to the Plan and shall not
become available for future distribution under the Plan.

         5.       Administration.

                  (a) Composition of Administrator.

                       (i) Multiple  Administrative Bodies. If permitted by Rule
16b-3  and  Applicable  Laws,  the Plan may (but need  not) be  administered  by
different administrative bodies with respect to (A) Directors who are employees,
(B) Officers who are not Directors  and (C) Employees who are neither  Directors
nor Officers.
                       (ii)   Administration   with  respect  to  Directors  and
Officers.  With respect to grants of Options and Rights to eligible participants
who are Officers or Directors of the Company,  the Plan shall be administered by
(A) the Board,  if the Board may  administer  the Plan in  compliance  with Rule
16b-3 as it applies to a plan intended to qualify  thereunder as a discretionary
grant or award plan,  or (B) a Committee  designated  by the Board to administer
the Plan, which Committee shall be constituted (1) in such a manner as to permit
the Plan to comply  with Rule 16b-3 as it applies to a plan  intended to qualify
thereunder as a discretionary grant or award plan and (2) in such a manner as to
satisfy the Applicable Laws.

                       (iii) Administration with respect to Other Persons.  With
respect to grants of Options to eligible  participants 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 in
such a manner as to satisfy the Applicable Laws.

                       (iv)  General.   Once  a  Committee  has  been  appointed
pursuant to subsection  (ii) or (iii) of this Section 5(a), such Committee shall
continue to serve in its  designated  capacity until  otherwise  directed by the
Board.  From time to time the Board may increase the size of any  Committee  and
appoint additional  members thereof,  remove members (with or without cause) and
appoint new members in substitution  therefor,  fill vacancies  (however caused)
and remove all members of a Committee and  thereafter  directly  administer  the
Plan, all to the extent  permitted by the Applicable  Laws and, in the case of a
Committee appointed under subsection (ii), to the extent permitted by Rule 16b-3
as it applies to a plan intended to qualify thereunder as a discretionary  grant
or award plan.

                  (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 Rights may be granted hereunder;

                       (iii) to determine whether and to what extent Options and
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 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 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 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 construe and interpret the terms of the Plan;

                       (viii)  to   prescribe,   amend  and  rescind  rules  and
regulations relating to the Plan;

                       (ix) to determine whether and under what circumstances an
Option or Right may be settled in cash  instead of Common  Stock or Common Stock
instead of cash;

                       (x) to reduce the exercise price of any Option or Right;

                       (xi) to modify or amend each Option or Right  (subject to
Section 13 of the Plan);

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

                       (xiii) to institute an Option Exchange Program;

                       (xiv) to determine the terms and restrictions  applicable
to Options and Rights and any Restricted Stock; and

                       (xv) 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 Rights.

         6.  Duration  of the  Plan.  The Plan  shall  remain  in  effect  until
terminated  by the Board under the terms of the Plan,  provided that in no event
may  Incentive  Stock Options be granted under the Plan later than 10 years from
the date the Plan was adopted by the Board.

         7.       Options and SARs.

                  (a) Options. The Administrator,  in its discretion,  may grant
Options to eligible  participants and shall determine whether such Options shall
be Incentive Stock Options or Nonstatutory  Stock Options.  Each Option shall be
evidenced  by a Notice of Grant which shall  expressly  identify  the Options as
Incentive  Stock Options or as Nonstatutory  Stock Options,  and be in such form
and contain such  provisions as the  Administrator  shall from time to time deem
appropriate.  Without limiting the foregoing,  the Administrator may at any time
authorize the Company, with the consent of the respective  recipients,  to issue
new  Options  or  Rights in  exchange  for the  surrender  and  cancellation  of
outstanding  Options or Rights.  Option  agreements  shall contain the following
terms and conditions:
                       (i)  Exercise  Price;  Number  of  Shares.  The per Share
exercise price for the Shares issuable pursuant to an Option shall be such price
as is determined by the Administrator; provided, however, that in the case of an
Incentive Stock Option,  the price shall be no less than 100% of the Fair Market
Value of the  Common  Stock on the date the  Option is  granted,  subject to any
additional conditions set out in Section 7(a)(iv) below.

                           The  Notice  of Grant  shall  specify  the  number of
Shares to which it pertains.

                       (ii) Waiting  Period and Exercise  Dates.  At the time an
Option is granted,  the Administrator will determine the terms and conditions to
be satisfied before Shares may be purchased, including the dates on which Shares
subject to the Option may first be purchased. The Administrator may specify that
an Option  may not be  exercised  until the  completion  of the  service  period
specified  at the time of grant.  Any such  period is  referred to herein as the
"waiting period." At the time an Option is granted,  the Administrator shall fix
the period within which the Option may be exercised,  which shall not be earlier
than the end of the waiting  period,  if any,  nor, in the case of an  Incentive
Stock Option, later than ten (10) years, from the date of grant.

                       (iii) Form of Payment.  The  consideration to be paid for
the Shares to be issued  upon  exercise  of an Option,  including  the method of
payment,  shall  be  determined  by the  Administrator  (and,  in the case of an
Incentive  Stock  Option,  shall be  determined  at the time of  grant)  and may
consist entirely of:
(1) cash;

                            (2) check;

                            (3) promissory note;

                            (4)  other  Shares  which  (1) 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 (2) have a Fair Market  Value on
the date of  surrender  not greater  than the  aggregate  exercise  price of the
Shares as to which said Option shall be exercised;

                            (5) delivery of a properly  executed exercise notice
together  with such  other  documentation  as the  Administrator  and any broker
approved by the Company,  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;

                            (6) any  combination  of the  foregoing  methods  of
payment; or
                            (7) such other  consideration  and method of payment
for the issuance of Shares to the extent permitted by Applicable Laws.

                       (iv)  Special  Incentive  Stock  Option  Provisions.   In
addition to the foregoing,  Options granted under the Plan which are intended to
be Incentive Stock Options under Section 422 of the Code shall be subject to the
following terms and conditions:

                            (1)  Dollar  Limitation.  To  the  extent  that  the
aggregate  Fair  Market  Value of (a) the Shares with  respect to which  Options
designated  as  Incentive  Stock  Options  plus (b) the  shares  of stock of the
Company,  Parent and any Subsidiary  with respect to which other incentive stock
options are  exercisable  for the first time by an Optionee  during any calendar
year  under all plans of the  Company  and any  Parent  and  Subsidiary  exceeds
$100,000,  such Options  shall be treated as  Nonstatutory  Stock  Options.  For
purposes of the preceding  sentence,  (a) Options shall be taken into account in
the  order in which  they were  granted,  and (b) the Fair  Market  Value of the
Shares shall be  determined as of the time the Option or other  incentive  stock
option is granted.

                            (2)  10%  Shareholder.  If any  Optionee  to whom an
Incentive  Stock Option is to be granted  pursuant to the provisions of the Plan
is, on the date of grant, the owner of Common Stock (as determined under Section
424(d) of the Code)  possessing more than 10% of the total combined voting power
of all  classes  of stock of the  Company  or any  Parent or  Subsidiary  of the
Company, then the following special provisions shall be applicable to the Option
granted to such individual:
(a)  The  per  Share  Option  price  of  Shares
subject to such  Incentive  Stock Option shall not be less than 110% of the Fair
Market Value of Common Stock on the date of grant; and

                                 (b) The Option  shall not have a term in excess
of five (5) years from the date of grant.

Except as modified by the preceding  provisions of this subsection  7(a)(iv) and
except as otherwise limited by Section 422 of the Code, all of the provisions of
the Plan shall be applicable to the Incentive Stock Options granted hereunder.

                       (v) Other Provisions.  Each Option granted under the Plan
may contain such other terms,  provisions,  and conditions not inconsistent with
the Plan as may be determined by the Administrator.

                       (vi) Buy-out  Provisions.  The  Administrator  may at any
time offer on behalf of the Company 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; provided,  however, that buy-out offers made to Insiders may
only be  payable in cash.  Any such cash  offer  made to an Officer or  Director
shall comply with the applicable provisions of Rule 16b-3, if any.

                  (b)      SARs.

                       (i) In Connection with Options. At the sole discretion of
the Administrator,  SARs may be granted in connection with all or any part of an
Option,  either  concurrently  with  the  grant  of the  Option  or at any  time
thereafter during the term of the Option. The following provisions apply to SARs
that are granted in connection with Options:

                            (1) The SAR shall  entitle the  Optionee to exercise
the SAR by  surrendering  to the  Company  unexercised  a portion of the related
Option.  The Optionee shall receive in Exchange from the Company an amount equal
to the excess of (1) the Fair Market Value on the date of exercise of the SAR of
the Common Stock covered by the  surrendered  portion of the related Option over
(2) the exercise price of the Common Stock covered by the surrendered portion of
the related Option.  Notwithstanding the foregoing,  the Administrator may place
limits  on the  amount  that  may be paid  upon  exercise  of an SAR;  provided,
however,  that such limit shall not restrict the  exercisability  of the related
Option.

                            (2) When an SAR is exercised, the related Option, to
the extent surrendered, shall cease to be exercisable.

                            (3) An SAR shall be exercisable only when and to the
extent that the related Option is exercisable and shall expire no later than the
date on which the related Option expires.
(4) An SAR may only be  exercised at a time when the
Fair Market Value of the Common Stock covered by the related  Option exceeds the
exercise price of the Common Stock covered by the related Option.

                       (ii)  Independent of Options.  At the sole  discretion of
the  Administrator,  SARs may be granted without related Options.  The following
provisions apply to SARs that are not granted in connection with Options:

                            (1)  The  SAR  shall   entitle  the   Optionee,   by
exercising the SAR, to receive from the Company an amount equal to the excess of
(1) the Fair Market Value of the Common Stock covered by the  exercised  portion
of the SAR, as of the date of such  exercise,  over (2) the Fair Market Value of
the Common  Stock  covered by the  exercised  portion of the SAR, as of the last
market  trading date prior to the date on which the SAR was  granted;  provided,
however, that the Administrator may place limits on the aggregate amount that
may be paid upon exercise of an SAR.

                            (2) SARs shall be exercisable,  in whole or in part,
at  such  times  as  the  Administrator  shall  specify  in the  Optionee's  SAR
agreement.

                       (iii) Form of Payment.  The Company's  obligation arising
upon the  exercise of an SAR may be paid in Common  Stock or in cash,  or in any
combination  of  Common  Stock  and  cash,  as the  Administrator,  in its  sole
discretion,  may  determine.  Shares issued upon the exercise of an SAR shall be
valued at their Fair Market Value as of the date of exercise.

                  (c)      Method of Exercise.

                       (i) Procedure for Exercise; Rights as a Shareholder.  Any
Option or SAR granted  hereunder  shall be  exercisable  at such times and under
such conditions as determined by the  Administrator  and as shall be permissible
under the terms of the Plan.

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

                    An  Option  or SAR  shall be  deemed  to be  exercised  when
written notice of such exercise has been given to the Company in accordance with
the terms of the Option or SAR by the person  entitled to exercise the Option or
SAR and full  payment  for the  Shares  with  respect  to which  the  Option  is
exercised has been  received by the Company.  Full payment may, as authorized by
the Administrator (and, in the case of an Incentive Stock Option,  determined at
the  time of  grant)  and  permitted  by the  Option  Agreement  consist  of any
consideration and method of payment allowable under subsection  7(a)(iii) of the
Plan. 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.  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 11 of the Plan.

                    Exercise  of an  Option  in any  manner  shall  result  in a
decrease in the number of Shares which thereafter  shall be 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. Exercise of an SAR in any manner shall, to the
extent the SAR is exercised,  result in a decrease in the number of Shares which
thereafter  shall be available for purposes of the Plan, and the SAR shall cease
to be exercisable to the extent it has been exercised.

                       (ii) Rule 16b-3.  Options and SARs 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.

                       (iii)    Termination    of   Employment   or   Consulting
Relationship.  In the event an  Optionee's  Continuous  Status as an Employee or
Consultant terminates (other than upon the Optionee's death or Disability),  the
Optionee  may  exercise his or her Option or SAR, but only within such period of
time as is determined by the  Administrator  at the time of grant, not to exceed
five (5) years (three (3) months in the case of an Incentive  Stock Option) from
the date of such  termination,  and only to the  extent  that the  Optionee  was
entitled to exercise it at the date of such  termination  (but in no event later
than the expiration of the term of such Option or SAR as set forth in the Option
or SAR  Agreement).  To the extent that Optionee was not entitled to exercise an
Option  or SAR at the  date of such  termination,  and to the  extent  that  the
Optionee  does not  exercise  such  Option or SAR (to the  extent  otherwise  so
entitled) within the time specified herein, the Option or SAR shall terminate.

                       (iv)  Disability of Optionee.  In the event an Optionee's
Continuous  Status as an Employee or  Consultant  terminates  as a result of the
Optionee's  Disability,  the Optionee may exercise his or her Option or SAR, but
only  within  such  period  of time  following  the date of  termination  due to
Disability  not exceeding  ten (10) years as is determined by the  Administrator
(with  such  determination  being made at the time of grant of the Option in the
case of an Incentive  Stock Option and not exceeding one (1) year),  and only to
the extent  that the  Optionee  was  entitled to exercise it at the date of such
termination  (but in no  event  later  than the  expiration  of the term of such
Option or SAR as set forth in the Option or SAR  Agreement).  To the extent that
Optionee  was not  entitled  to  exercise  an  Option or SAR at the date of such
termination,  and to the extent that the Optionee  does not exercise such Option
or SAR (to the extent otherwise so entitled)  within the time specified  herein,
the Option or SAR shall terminate.

                       (v)  Death of  Optionee.  In the  event of an  Optionee's
death, the Optionee's  estate or a person who acquired the right to exercise the
deceased  Optionee's  Option or SAR by bequest or  inheritance  may exercise the
Option or SAR, but only within ten (10) years  following the date of death,  and
only to the extent that the  Optionee was entitled to exercise it at the date of
death (but in no event later than the  expiration  of the term of such Option or
SAR as set forth in the Option or SAR  Agreement).  To the extent that  Optionee
was not  entitled to exercise an Option or SAR at the date of death,  and to the
extent that the Optionee's estate or a person who acquired the right to exercise
such Option does not  exercise  such Option or SAR (to the extent  otherwise  so
entitled) within the time specified herein, the Option or SAR shall terminate.

                  (d) Option and SAR Limitation.  The following limitation shall
apply to grants of Options and SARs under the Plan:

                            (i) No Employee shall be granted, in any fiscal year
of the Company,  Options and SARs under the Plan to purchase more than 1,050,000
Shares.

                            (ii) The  foregoing  limitation  shall  be  adjusted
proportionately in connection with any change in the Company's capitalization as
described in Section 11(a).

                            (iii) If an Option or SAR is  cancelled  (other than
in connection with a transaction  described in Section 11), the cancelled Option
or SAR shall be counted  against  the limits set forth in Section  7(d)(i).  For
this  purpose,  if the  exercise  price  of an  Option  or SAR is  reduced,  the
transaction will be treated as a cancellation of the Option or SAR and the grant
of a new Option or SAR.

         8.       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 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 thirty (30) days 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
purchaser and may be paid by cancellation  of any  indebtedness of the purchaser
to  the  Company.  The  repurchase  option  shall  lapse  at  such  rate  as the
Administrator may determine.

                  (c) 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.

                  (d) 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.

                  (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 11
of the Plan.

         9.       Long-Term Performance Awards.

                  (a) Administration.  Long-Term  Performance Awards are cash or
stock  bonus  awards  that may be granted  either  alone or in addition to other
awards  granted  under  the  Plan.  Such  awards  shall be  granted  for no cash
consideration. The Administrator shall determine the nature, length and starting
date of any  performance  period (the  "Performance  Period") for each Long-Term
Performance Award, and shall determine the performance or employment factors, if
any, to be used in the  determination  of Long-Term  Performance  Awards and the
extent  to which  such  Long-Term  Performance  Awards  are  valued or have been
earned.  Long-Term  Performance  Awards may vary from participant to participant
and between groups of  participants  and shall be based upon the  achievement of
Company,  Subsidiary,  Parent and/or individual performance factors or upon such
other criteria as the Administrator may deem  appropriate.  Performance  Periods
may overlap and  participants  may  participate  simultaneously  with respect to
Long-Term  Performance Awards that are subject to different  Performance Periods
and different  performance  factors and criteria.  Long-Term  Performance Awards
shall be confirmed  by, and be subject to the terms of, a Long-Term  Performance
Award  agreement.  The terms of such awards need not be the same with respect to
each participant.

                  At the beginning of each Performance Period, the Administrator
may determine for each Long-Term  Performance  Award subject to such Performance
Period  the  range of dollar  values  or number of shares of Common  Stock to be
awarded to the  participant at the end of the  Performance  Period if and to the
extent that the relevant measures of performance for such Long-Term  Performance
Award are met.  Such  dollar  values or number of shares of Common  Stock may be
fixed or may vary in accordance  with such  performance or other criteria as may
be determined by the Administrator.
(b)  Adjustment of Awards.  The  Administrator  may adjust the
performance factors applicable to the Long-Term  Performance Awards to take into
account changes in legal,  accounting and tax rules and to make such adjustments
as the Administrator  deems necessary or appropriate to reflect the inclusion or
exclusion  of  the  impact  of  extraordinary   or  unusual  items,   events  or
circumstances in order to avoid windfalls or hardships.

         10.  Non-Transferability  of Options and Rights. Options and Rights 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.

         11.  Adjustments Upon Changes in Capitalization,  Dissolution,  Merger,
Asset Sale or Change of Control.

                  (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 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 Rights have yet been granted or which have been  returned to the Plan
upon  cancellation or expiration of an Option or Right, as well as the price per
share of Common Stock covered by each such outstanding Option or 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  respect  to, the number or price of shares of Common  Stock  subject to an
Option or Right.

                  (b) Dissolution or  Liquidation.  In the event of the proposed
dissolution or liquidation of the Company, to the extent that an Option or Right
has not been previously  exercised,  it will terminate  immediately prior to the
consummation of such proposed action. The Board may, in the exercise of its sole
discretion in such  instances,  declare that any Option or Right shall terminate
as of a date fixed by the Board and give each Optionee the right to exercise his
or her Option or Right as to all or any part of the  Optioned  Stock,  including
Shares as to which the Option or Right would not otherwise be exercisable.
(c)  Merger  or  Asset  Sale.  Subject  to the  provisions  of
paragraph  (d)  hereof,  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 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  does not agree to assume the Option or to  substitute an equivalent
option,  the  Administrator  shall, in lieu of such assumption or  substitution,
provide for the Optionee to have the right to exercise the Option or Right as to
all or a portion of the Optioned  Stock,  including  Shares as to which it would
not  otherwise be  exercisable.  If the  Administrator  makes an Option or Right
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
Right shall be  exercisable  for a period of fifteen  (15) days from the date of
such notice,  and the Option or Right will terminate upon the expiration of such
period.  For the  purposes  of this  paragraph,  the  Option  or Right  shall be
considered assumed if,  immediately  following the merger or sale of assets, the
Option or Right confers the right to purchase,  for each Share of Optioned Stock
subject  to the  Option  or 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 and the  participant,  provide for the
consideration  to be received upon the exercise of the Option or Right, for each
Share of  Optioned  Stock  subject to the Option or 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.

                  (d) Change in  Control.  In the event of a "Change in Control"
of  the  Company,  as  defined  in  paragraph  (e)  below,  then  the  following
acceleration and valuation provisions shall apply:

                           (i) Except as otherwise  determined by the Board,  in
its discretion,  prior to the occurrence of a Change in Control, any Options and
Rights  outstanding  on the date such  Change in Control is  determined  to have
occurred that are not yet exercisable and vested on such date shall become fully
exercisable and vested;

                           (ii) Except as otherwise  determined by the Board, in
its discretion,  prior to the occurrence of a Change in Control, all outstanding
Options and Rights,  to the extent they are  exercisable  and vested  (including
Options  and Rights  that  shall  become  exercisable  and  vested  pursuant  to
subparagraph  (i) above),  shall be  terminated  in exchange  for a cash payment
equal to the Change in Control Price,  (reduced by the exercise  price,  if any,
applicable to such Options or Rights).  These cash proceeds shall be paid to the
Optionee  or,  in the event of death of an  Optionee  prior to  payment,  to the
estate of the  Optionee or to a person who  acquired  the right to exercise  the
Option or Right by bequest or inheritance.
(e)  Definition  of "Change in  Control".  For purposes of this
Section 11, a "Change in Control" means the happening of any of the following:
                           (i)  When  any  "person,"  as  such  term  is used in
Sections  13(d)  and  14(d) of the  Exchange  Act  (other  than the  Company,  a
Subsidiary or a Company  employee  benefit  plan,  including any trustee of such
plan acting as trustee) is or becomes the "beneficial owner" (as defined in Rule
13d-3 under the Exchange  Act),  directly or  indirectly,  of  securities of the
Company representing fifty percent (50%) or more of the combined voting power of
the Company's  then  outstanding  securities  entitled to vote  generally in the
election of directors; or

                           (ii) The shareholders of the Company approve a merger
or consolidation of the Company with any other corporation,  other than a merger
or  consolidation  which would  result in the voting  securities  of the Company
outstanding  immediately  prior  thereto  continuing  to  represent  (either  by
remaining  outstanding  or by being  converted  into  voting  securities  of the
surviving  entity)  at least  fifty  percent  (50%) of the  total  voting  power
represented  by the voting  securities of the Company or such  surviving  entity
outstanding immediately after such merger or consolidation,  or the shareholders
of the Company  approve an agreement for the sale or  disposition by the Company
of all or substantially all the Company's assets; or

                           (iii) A change  in the  composition  of the  Board of
Directors  of the  Company,  as a result of which  fewer than a majority  of the
directors are Incumbent  Directors.  "Incumbent  Directors" shall mean directors
who either (A) are  directors of the Company as of the date the Plan is approved
by the shareholders, or (B) are elected, or nominated for election, to the Board
of Directors of the Company with the affirmative votes of at least a majority of
the Incumbent  Directors at the time of such  election or nomination  (but shall
not include an individual  whose election or nomination is in connection with an
actual or threatened  proxy contest relating to the election of directors to the
Company).

                  (f) Change in Control Price.  For purposes of this Section 11,
"Change in Control Price" shall be, as determined by the Board,  (i) the highest
Fair Market Value of a Share within the 60-day period immediately  preceding the
date of  determination  of the Change in Control Price by the Board (the "60-Day
Period"),  or (ii) the highest price paid or offered per Share, as determined by
the Board, in any bona fide transaction or bona fide offer related to the Change
in Control of the Company,  at any time within the 60-Day Period,  or (iii) such
lower  price as the Board,  in its  discretion,  determines  to be a  reasonable
estimate of the fair market value of a Share.

         12.  Date of Grant.  The date of grant of an Option or Right  shall be,
for all purposes,  the date on which the  Administrator  makes the determination
granting such Option or Right,  or such other later date as is determined by the
Administrator.  Notice of the  determination  shall be provided to each Optionee
within a reasonable time after the date of such grant.
13.      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.

         14.      Stock Withholding to Satisfy Withholding Tax Obligations.

                  (a)  Ability  to Use  Stock  to  Satisfy  Withholding.  At the
discretion of the Administrator,  Optionees may satisfy withholding  obligations
as  provided  in this  Section 14.  When an  Optionee  incurs tax  liability  in
connection with the award,  vesting or exercise of an Option or Right, which tax
liability is subject to tax  withholding  under  applicable tax laws  (including
federal,  state and local laws),  the Optionee may satisfy the  withholding  tax
obligation  (up to an amount  calculated  by applying  such  Optionee's  maximum
marginal tax rate) by electing to have the Company  withhold  from the Shares to
be issued upon award,  vesting or exercise of the Option or Right that number of
Shares,  or by delivering to the Company that number of previously owned Shares,
having a Fair Market Value equal to the amount required to be withheld. The Fair
Market  Value of the Shares to be  withheld  or  delivered,  as the case may be,
shall  be  determined  on the date  that the  amount  of tax to be  withheld  is
determined (the "Tax Date").

                  (b)  Election  to Have Stock  Withheld.  All  elections  by an
Optionee to have Shares withheld or to deliver  previously owned Shares pursuant
to this  Section  14  shall  be  made in  writing  in a form  acceptable  to the
Administrator and shall be subject to the following restrictions:

                           (i) the  election  must be  made on or  prior  to the
applicable Tax Date;
                           (ii) all elections shall be subject to the consent or
disapproval of the Administrator; and
(iii) if the  Optionee  is an Insider,  the  election
must comply with the applicable provisions of Rule 16b-3 and shall be subject to
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.

                  (c) Section 83(b) Elections. In the event that (i) an election
to have Shares withheld is made by an Optionee,  (ii) no election is filed under
Section  83(b) of the Code by such  Optionee  and (iii) the Tax Date is deferred
under  Section 83 of the Code,  the  Optionee  shall  receive the full number of
Shares with respect to which the Option or Right has been awarded, has vested or
has  been   exercised,   as  the  case  may  be,  but  such  Optionee  shall  be
unconditionally  obligated  to tender back to the  Company the proper  number of
Shares on the Tax Date.

         15.      Conditions Upon Issuance of Shares.

                  (a) Legal  Compliance.  Shares shall not be issued pursuant to
the  exercise of an Option or Right  unless the exercise of such Option or 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 Right, the Company may require the person exercising such Option
or 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.

         16.      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.

                  (b) Grants Exceeding  Allotted  Shares.  If the Optioned Stock
covered by an Option or 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 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 13(b) of the Plan.
17. 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.

         18. 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 federal and state law.
- --------------------------------------------------------------------------------
                                   EXHIBIT 5.1
- --------------------------------------------------------------------------------

     Opinion of Wilson, Sonsini, Goodrich & Rosati, Professional Corporation
April 3, 1996

DH Technology, Inc.
15070 Avenue of Science
San Diego, CA 92128

Re:        Registration Statement on Form S-8

Ladies and Gentlemen:

We have examined the Registration  Statement on Form S-8 to be filed by you with
the  Securities  and  Exchange  Commission  on or about  December  18, 1995 (the
"Registration   Statement")  in  connection  with  the  registration  under  the
Securities  Act of 1933, as amended,  of 375,000  shares (the  "Shares") of your
Common Stock  reserved for issuance  under the 1992 Stock Plan (the "Plan").  As
legal counsel for DH Technology,  Inc., we have examined the  proceedings  taken
and are familiar with the proceedings  proposed to be taken by you in connection
with the issuance and sale of the Shares pursuant to the Plan.

It is our opinion that the Shares,  when issued and sold in the manner described
in the Plan and pursuant to the agreement that  accompanies each grant under the
Plan,   the  Shares  will  be  legally  and  validly   issued,   fully-paid  and
non-assessable.

We  consent  to the  use of  this  opinion  as an  exhibit  to the  Registration
Statement,  and further consent to the use of our name wherever appearing in the
Registration Statement and any amendments thereto.

                                            Very truly yours,

                                            WILSON, SONSINI, GOODRICH & ROSATI
                                            Professional Corporation
- --------------------------------------------------------------------------------
                                  EXHIBIT 23.1
- --------------------------------------------------------------------------------

                        Consent of KPMG Peat Marwick LLP
                                 (See Page II-6)
- --------------------------------------------------------------------------------
                                  EXHIBIT 23.2
- --------------------------------------------------------------------------------
                               
                               Consent of Counsel
                                (See Exhibit 5.1)
- --------------------------------------------------------------------------------
                                  EXHIBIT 24.1
- --------------------------------------------------------------------------------

                                Power of Attorney
                                 (See Page II-4)