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                                                                    EXHIBIT 10.3

                          DOCUMENT SCIENCES CORPORATION

                            1995 STOCK INCENTIVE PLAN

                           (as amended March 9, 1998)

1.       Purposes of the Plan. The name of this plan is the Document Sciences
Corporation 1995 Stock Incentive Plan (the "Plan"). The purpose of the Plan is
to enable Document Sciences Corporation, a Delaware corporation (the "Company"),
and any Parent or any Subsidiary to obtain and retain the services of the types
of employees, consultants, officers and Directors who will contribute to the
Company's long range success and to provide incentives which are linked directly
to increases in share value which will inure to the benefit of all shareholders
of the Company.

2.       Definitions. For purposes of the Plan, the following terms shall be
defined as set forth below:

         "Administrator" shall have the meaning as set forth in Article 3.

         "Board" means the Board of Directors of the Company.

         "Code" means the Internal Revenue Code of 1986, as amended from time to
time, or any successor thereto.

         "Committee" means a committee of the Board designated by the Board to
administer the Plan and composed of not less than the minimum number of persons
from time to time required both by Rule 16b-3 and Section 162(m) of the Code,
each of whom is a Disinterested Person and an Outside Director.

         "Company" means Document Sciences Corporation, a corporation organized
under the laws of the State of Delaware (or any successor corporation).

         "Date of Grant" means the date on which the Administrator adopts a
resolution expressly granting a Right to a Participant, or if a different date
is set forth in such resolution as the Date of Grant, then such date as is set
forth in such resolution.

         "Director" means a member of the Board.

         "Disability" means permanent and total disability as defined by the
Administrator.

         "Disinterested Person" shall have the meaning set forth in Rule
16b-3(c)(2)(i) under the Exchange Act, or any successor definition adopted by
the SEC.

         "Election" shall have the meaning set forth in Section 10.3(d) of the
Plan.

         "Eligible Person" means an employee, officer, consultant or Director of
the Company, any Parent or any Subsidiary.
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         "Exchange Act" means the Securities Exchange Act of 1934, as amended.

         "Fair Market Value" per share at any date shall mean (i) if the Stock
is listed on an exchange or exchanges, or admitted for trading in a market
system which provides last sale data under Rule 11Aa3-1 of the General Rules and
Regulations of the Securities and Exchange Commission under the Securities and
Exchange Act of 1934, as amended (a "Market System"), the last reported sales
price per share on the last business day prior to such date on the principal
exchange on which it is traded, or in such a Market System, as applicable, the
last reported sales price per share on the most recent day prior to such date on
which a sale was reported on such exchange or such Market System, as applicable;
or (ii) if the Common Stock is not then traded on an exchange or in such a
Market System, the average of the closing bid and asked prices per share for the
Common Stock in the over-the-counter market as quoted on Nasdaq on the day prior
to such date; or (iii) if the Common Stock is not listed on an exchange or
quoted on Nasdaq, an amount determined in good faith by the Administrator,
taking into account the price at which securities of reasonably comparable
corporations are being traded, adjusted for any dissimilarities, and the
earnings history, book value and prospects of the Company in light of then
existing general market conditions.

         "Incentive Stock Option" means a Stock Option intended to qualify as an
"incentive stock option" as that term is defined in Section 422 of the Code.

         "Non-Statutory Option" means a Stock Option intended to not qualify as
an Incentive Stock Option.

         "Offeree" means a Participant who is granted a Purchase Right pursuant
to the Plan.

         "Optionee" means a Participant who is granted a Stock Option pursuant
to the Plan.

         "Outside Director" means a Director who is not (a) a current employee
of the Company (or any related entity), (b) a former employee of the Company (or
any related entity) who is receiving compensation for prior services (other than
benefits under a tax-qualified retirement plan), (c) a former officer of the
Company (or any related entity), or (d) a consultant or person otherwise
receiving compensation or other remuneration, either directly or indirectly, in
any capacity other than as a Director.

         "Parent" means any present or future corporation which would be a
"parent corporation" as that term is defined in Section 424 of the Code.

         "Participant" means any Eligible Person selected by the Administrator,
pursuant to the Administrator's authority in Article 3, to receive grants of
Rights.

         "Plan" means this Document Sciences Corporation 1995 Stock Incentive
Plan, as the same may be amended or supplemented from time to time.

         "Purchase Price" shall have the meaning set forth in Section 7.2(b) of
the Plan.

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         "Purchase Right" means the right to purchase Stock granted pursuant to
Article 7.

         "Rights" means Stock Options and Purchase Rights.

         "Retirement" means retirement from active employment with the Company
or any Parent or Subsidiary as defined by the Administrator.

         "SEC" means the Securities and Exchange Commission.

         "Section 16(b) Person" shall mean a person subject to Section 16(b) of
the Exchange Act.

         "Special Terminating Event" with respect to a Participant shall mean
the death, Disability or Retirement of that Participant.

         "Stock" means the Common Stock, par value $0.001 per share, of the
Company.

         "Stock Option" means an option to purchase shares of Stock granted
pursuant to Article 6.

         "Stock Option Agreement" shall have the meaning set forth in Section
6.2 of the Plan.

         "Stock Purchase Agreement" shall have the meaning set forth in Section
7.2 of the Plan.

         "Subsidiary" means any present or future corporation which would be a
"subsidiary corporation" as that term is defined in Section 424 of the Code.

         "Tax Date" shall have the meaning set forth in Section 10.3(d) of the
Plan.

         "Ten Percent Shareholder" means a person who on the Date of Grant owns,
either directly or indirectly or through attribution as provided in Section
424(d) of the Code, Stock possessing more than 10% of the total combined voting
power of all classes of stock of his or her employer corporation or of any
Parent or Subsidiary.

         "Withholding Right" shall have the meaning set forth in Section 10.3(c)
of the Plan.

3.       Administration.

         3.1  Administrator. The Plan shall be administered by either (i) the
Board, or (ii) the Committee (the group that administers the Plan is referred to
as the "Administrator").

         3.2  Powers in General. The Administrator shall have the power and
authority to grant to Eligible Persons, pursuant to the terms of the Plan: (i)
Stock Options; (ii) Purchase Rights; or (iii) any combination of the foregoing.

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         3.3  Specific Powers. In particular, the Administrator shall have the
authority: (i) to construe and interpret the Plan and apply its provisions; (ii)
to promulgate, amend and rescind rules and regulations relating to the
administration of the Plan; (iii) to authorize any person to execute, on behalf
of the Company, any instrument required to carry out the purposes of the Plan;
(iv) to determine when Rights are to be granted under the Plan; (v) from time to
time to select, subject to the limitations set forth in this Plan, those
Eligible Persons to whom Rights shall be granted; (vi) to determine the number
of shares of Stock to be made subject to each Right; (vii) to prescribe the
terms and conditions of each Stock Option, including, without limitation, the
exercise price, medium of payment, right of first refusal and repurchase
provisions and to determine whether the Stock Option is to be an Incentive Stock
Option or a Non-Statutory Option and to specify the provisions of the Stock
Option agreement relating to such Stock Option; (viii) to prescribe the terms
and conditions of each Stock Option and Purchase Right, including, without
limitation, the purchase price and medium of payment, vesting provisions and
repurchase provisions, and to specify the provisions of the Stock Option
Agreement or Stock Purchase Agreement relating to such sale; (ix) to amend any
outstanding Rights for the purpose of modifying the time or manner of vesting,
the purchase price or exercise price, as the case may be, thereunder or
otherwise, subject to applicable legal restrictions and to the consent of the
other party to such agreement; (x) to determine when a consultant's relationship
with the Company is sufficient to constitute the equivalent of employment with
the Company for purposes of the Plan; (xi) to determine the duration and purpose
of leaves of absences which may be granted to a Participant without constituting
termination of their employment for purposes of the Plan; and (xii) to make any
and all other determinations which it determines to be necessary or advisable
for administration of the Plan.

         3.4  Decisions Final. All decision made by the Administrator pursuant
to the provisions of the Plan shall be final and binding on the Company and the
Participants.

         3.5  The Committee. The Board may, in its sole and absolute discretion,
from time to time delegate any or all of its duties and authority with respect
to the Plan to the Committee whose members are to be appointed by and to serve
at the pleasure of the Board. Once appointed, the Committee shall continue to
serve until otherwise directed by the Board. From time to time, the Board may
increase or decrease (to not less than the minimum number of persons from time
to time required by both Rule 16b-3 and Section 162(m) of the Code) the size of
the Committee, add additional members to, remove members (with or without cause)
from, appoint new members in substitution therefor, and fill vacancies, however
caused, in the Committee. The Committee shall act pursuant to a vote of the
majority of its members or, in the case of a committee comprised of only two
members, the unanimous consent of its members, whether present or not, or by the
written consent of the majority of its members or, in the case of a committee
comprised of only two members, the unanimous written consent of its members, and
minutes shall be kept of all its meetings and copies thereof shall be provided
to the Board. Subject to the limitations prescribed by the Plan and the Board,
the Committee may establish and follow such rules and regulations for the
conduct of its business as it may determine to be advisable.

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4.       Stock Subject to Plan.

         4.1  Stock Subject to Plan. Subject to an adjustment as provided in
Article 8, the total number of shares of Stock reserved and available for
issuance under the Plan shall be 1,529,250 shares. Shares reserved hereunder may
consist, in whole or in part, of authorized and unissued shares or treasury
shares.

         4.2  Unexercised Rights; Reacquired Shares. To the extent that any
Rights expire or are otherwise terminated without being exercised, the shares
underlying such Rights (and shares related thereto) shall again be available for
issuance in connection with future Rights under the Plan. Shares acquired by the
Company upon exercise of Rights pursuant to Section 6.2(e) or Section 7.2(c) or
Section 10.3 shall not increase the shares available for issuance under the
Plan.

5.       Eligibility. Directors, officers, employees and consultants of the
Company, any Parent or any Subsidiary, who are responsible for or contribute to
the management, growth or profitability of the Company, any Parent or
Subsidiary, shall be eligible to be granted Rights hereunder subject to
limitations set forth in this Plan; provided, however, that only officers and
employees shall be eligible to be granted Incentive Stock Options hereunder.

6.       Stock Options.

         6.1  General. Stock Options may be granted alone or in addition to
other Rights granted under the Plan. Each Stock Option granted under the Plan
shall be in such form and under such terms and conditions as the Administrator
may from time to time approve: provided, that such terms and conditions are not
inconsistent with the Plan. The provisions of Stock Option Agreements entered
into under the Plan need not be identical. Stock Options granted under the Plan
may be either Incentive Stock Options or Non-Statutory Options.

         6.2  Terms and Conditions of Stock Options. Each Stock Option granted
pursuant to the Plan shall be evidenced by a written option agreement between
the Company and the Optionee (the "Stock Option Agreement"), which shall comply
with and be subject to the following terms and conditions:

              a) Number of Shares. Each Stock Option Agreement shall state the
number of shares of Stock to which the Stock Option relates.

              b) Type of Option. Each Stock Option Agreement shall identify the
portion (if any) of the Stock Option which constitutes an Incentive Stock
Option.

              c) Exercise Price. Each Stock Option Agreement shall state the
price at which shares subject to the Stock Option may be purchased (the
"Exercise Price"), which shall with respect to Incentive Stock Options be not
less than 100% of the Fair Value of the shares of Stock on the Date of Grant. In
the case of Non-Statutory Options, the Exercise Price shall be determined in the
sole discretion of the Administrator. In the case of either an Incentive Stock
Option or a Non-


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Statutory Option granted to a Ten Percent Shareholder, the Exercise Price shall
not be less than 110% of such Fair Market Value.

              d) Value of Shares. The Fair Market Value of the shares of Stock
(determined as of the Date of Grant) with respect to which Incentive Stock
Options are first exercisable by an Optionee under this Plan and all other
incentive option plans of the Company and any Parent or Subsidiary in any
calendar year shall not, for such year, in the aggregate, exceed $100,000; but
this Section 6.2(d) shall not affect the right of the Administrator to
accelerate or otherwise alter the time of vesting of any Options granted as
Incentive Stock Options, even, if as a result thereof, some of such Options
cease being Incentive Stock Options.

              e) Medium and Time of Payment. The Exercise Price shall be paid in
full, at the time of exercise, in cash or cash equivalents or, with the approval
of the Administrator, in shares of Stock which have been held by the Optionee
for a period of at least six calendar months preceding the date of surrender and
which have a Fair Market Value equal to the Exercise Price, or in a combination
of cash and such shares, and may be effected in whole or in part (i) with monies
received from the Company at the time of exercise as a compensatory cash
payment; or (ii) to the extent that the Exercise Price exceeds the par value of
the shares so purchased, with monies borrowed from the Company in accordance
with Section 10.5.

              f) Term and Exercise of Stock Options. Stock Options shall be
exercisable over the exercise period at the times the Administrator may
determine, as reflected in the related Stock Option Agreements. The Stock Option
Agreements shall provide that Option Holders shall have the right to exercise
the Stock Options at the rate of at least 20% per year over 5 years from the
Date of Grant of such Stock Options. The exercise period of any Stock Option
shall be determined by the Administrator, but shall not exceed ten years from
the Date of Grant of the Stock Option. In the case of an Incentive Stock Option
granted to a Ten Percent Shareholder, the exercise period shall be determined by
the Administrator, but shall not exceed five years from the Date of Grant of the
Stock Option. The exercise period shall be subject to earlier termination upon
the occurrence of either a Special Terminating Event, as provided in Section
10.6, or the Termination of Employment, as provided in Section 10.7. A Stock
Option may be exercised, as to any or all full shares of Stock as to which the
Stock Option has become exercisable, by giving written notice of such exercise
to the Company.

7.       Purchase Rights.

         7.1  General. Purchase Rights may be granted alone or in addition to
other Rights under the Plan. Each sale of Stock under this Article 7 shall be in
such form and under such terms and conditions as the Administrator shall from
time to time approve; provided, that such terms and conditions are not
inconsistent with the Plan. The provisions of Stock Purchase Agreements entered
into under the Plan need not be identical.

         7.2  Terms and Conditions of Purchase Rights. Each Purchase Right
granted pursuant to the Plan shall be evidenced by a written stock purchase
agreement between the Company and the


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Offeree (the "Stock Purchase Agreement"), which shall comply with and be subject
to the following terms and conditions.

              a) Number of Shares. Each Stock Purchase Agreement shall state the
number of shares of Stock which may be purchased pursuant to such agreement.

              b) Purchase Price. Each Stock Purchase Agreement shall state the
price at which the Stock subject to such Stock Purchase Agreement may be
purchased (the "Purchase Price"), which, with respect to Stock Purchase Rights,
shall be determined in the sole discretion of the Administrator.

              c) Medium and Time of Payment. The Purchase Price shall be paid in
full at the time of exercise, in cash or cash equivalent or, with the approval
of the Administrator, in shares of Stock which have been held by the Offeree for
a period of at least six calendar months preceding the date of surrender and
which have a Fair Market Value equal to the Purchase Price or in a combination
of cash or cash equivalent and such shares, and may be effected in whole or in
part (i) with monies received from the Company at the time of exercise as a
compensatory cash payment; or (ii) to the extent the purchase price exceeds the
par value of the shares so purchased, with monies borrowed from the Company in
accordance with Section 10.5 of the Plan.

8.       Adjustments.

         8.1  Effect of Certain Changes.

              a) Stock Dividends, Splits, Etc. If there is any change in the
number of outstanding shares of Stock through the declaration of Stock dividends
or through a recapitalization resulting in Stock splits, or combinations or
exchanges of the outstanding shares, (i) the number of shares of Stock available
for Rights, (ii) the number of shares covered by outstanding Rights and (iii)
the Exercise Price or Purchase Price of any Stock Option or Purchase Right, in
effect prior to such change, shall be proportionately adjusted by the
Administrator to reflect any increase or decrease in the number of issued shares
of Stock; provided, however, that any fractional shares resulting from the
adjustment shall be eliminated.

              b) Liquidating Event. In the event of the proposed dissolution or
liquidation of the Company, or in the event of any corporate separation or
division, including, but not limited to, a split-up, split-off or spin-off
(each, a "Liquidating Event"), the Administrator may provide that the holder of
any Right then exercisable shall have the right to exercise such Right (at the
price provided in the Rights) subsequent to the Liquidating Event, and for the
balance of its term, solely for the kind and amount of shares of Stock and other
securities, property, cash or any combination thereof receivable upon such
Liquidating Event by a holder of the number of shares of Stock for or with
respect to which such Right might have been exercised immediately prior to such
Liquidating Event; or the Administrator may provide, in the alternative, that
each Right granted under the Plan shall terminate as of a date to be fixed by
the Board; provided, however, that not less than 30 days written notice of the
date so fixed shall be given to each Rights holder and if such notice is given,
each Rights


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holder shall have the right, during the period of 30 days preceding such
termination, to exercise the Right as to all or any part of the shares of Stock
covered thereby, to the extent that such Right is then exercisable, on the
condition, however, that the Liquidating Event actually occurs; and if the
Liquidating Event actually occurs, such exercise shall be deemed effective (and,
if applicable, the Rights holder shall be deemed a shareholder with respect to
the Rights exercised) immediately preceding the occurrence of the Liquidating
Event, or the date of record for shareholders entitled to share in such
Liquidating Event, if a record date is set.

              c) Merger or Consolidation. In the case of any capital
reorganization, any reclassification of the Common Stock (other than a change in
par value or recapitalization described in Section 8.1(a) of the Plan), or the
consolidation of the Company with, or a sale of substantially all of the assets
of the Company to (which sale is followed by a liquidation or dissolution of the
Company), or merger of the Company with another person (a "Reorganization
Event"), the Administrator shall be obligated to determine whether the
Reorganization Event shall constitute a "Liquidity Event," and to deliver to
Rights holders at least 15 days prior to such Reorganization Event (or at least
15 days prior to the date of record for shareholders entitled to share in the
securities or property distributed in the Reorganization Event, if a record date
is set) a notice which shall (i) indicate whether the Reorganization Event is a
Liquidity Event, and (ii) advise the Rights holder of his or her rights pursuant
to the Agreement applicable to such Rights. If the Reorganization Event is
determined to be a Liquidity Event, in its sole and absolute discretion, the
surviving corporation may, but shall not be obligated to, (i) tender stock
options to the Rights holder with respect to the surviving corporation which
shall contain terms and provisions that substantially preserve the rights and
benefits of the applicable Right, and (ii) in the event that no stock options
have been tendered by the surviving corporation pursuant to the terms of item
(i) immediately above, the Rights holder shall have the right exercisable during
a ten-day period ending on the fifth day prior to the Reorganization Event (or
ending on the fifth day prior to the date of record for shareholders entitled to
share in the securities or property distributed in the Reorganization Event, if
a record date is set) to exercise his or her Rights, to the extent that such
Rights are then exercisable, in whole or in part, on the condition, however,
that the Reorganization Event is actually effected; and if the Reorganization
Event is actually effected, such exercise shall be deemed effective (and, if
applicable, the Rights holder shall be deemed a shareholder with respect to the
Rights exercised) immediately preceding the effective time of the Reorganization
Event (or on the date of record for shareholders entitled to share in the
securities or property distributed in the Reorganization Event, if a record date
is set). If the Reorganization Event is not determined to be a Liquidity Event,
the Rights holder shall thereafter be entitled upon exercise of the Right to
purchase the kind and number of shares of stock or other securities property of
the surviving corporation receivable upon such event by a holder of the number
of shares of the common Stock which the Right entitles the Rights holder to
purchase from the Company immediately prior to such event, and in any such case,
appropriate adjustment shall be made in the application of the provisions set
forth in this Plan with respect to the Rights holders' rights and interests
thereafter, to the end that the provisions set forth in the agreement applicable
to such Rights (including the specified changes and other adjustments to the
Exercise Price) shall thereafter be applicable in relation to any shares or
other property thereafter purchasable upon exercise of the Right.


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              d) Where Company Survives. Section 8. 1 (c) shall not apply to a
merger or consolidation in which the Company is the surviving corporation,
unless shares of Stock are converted into or exchanged for securities other than
publicly-traded common stock, cash (excluding cash in payment for actual shares)
or any other thing of value. Notwithstanding the preceding sentence, in case of
any consolidation or merger of another corporation into the company in which the
Company is the surviving corporation and in which there is a reclassification or
change (including a change to the right to receive an amount of money payable by
cash or cash equivalent or other property) of the shares of Stock (other than a
change in par value, or from par value to no par value, or as a result of a
subdivision or combination, but including any change in such shares into two or
more classes or series of shares), the Administrator may provide that the holder
of each Right then exercisable shall have the right to exercise such Right
solely for the kind and amount of shares of Stock and other securities
(including those of any new direct or indirect parent of the Company), property,
cash or any combination thereof receivable upon such reclassification change,
consolidation or merger by the holder of the number of shares of Stock for which
such Right might have been exercised.

              e) Surviving Corporation Defined. The determination as to which
party to a merger or consolidation is the "surviving corporation" shall be made
on the basis of the relative equity interests of the shareholders in the
corporation existing after the merger or consolidation, as follows: if
immediately following any merger or consolidation the holders of outstanding
voting securities of the Company immediately prior to the merger or
consolidation own equity securities possessing more than 50% of the voting power
of the corporation existing following the merger or consolidation, then for
purposes of this Plan, the Company shall be the surviving corporation. In all
other cases, the Company shall not be the surviving corporation. In making the
determination of ownership by the shareholders of a corporation immediately
after the merger or consolidation, of equity securities pursuant to this Section
8.1(e), equity securities which the shareholders owned immediately before the
merger or consolidation as shareholders of another party to the transaction
shall be disregarded. Further, for purposes of this Section 8.1(e) only,
outstanding voting securities of a corporation shall be calculated by assuming
the conversion of all equity securities convertible (immediately or at some
future time) into shares entitled to vote.

              f) Par Value Changes. In the event of a change in the Stock of the
Company as presently constituted which is to a change of all of its authorized
shares with par value, into the same number of shares without par value, or a
change in the par value, the shares resulting from any such change shall be
"Stock" within the meaning of the Plan.

         8.2  Decision of Administrator Final. To the extent that the foregoing
adjustments relate to stock or securities of the Company, such adjustments shall
be made by the Administrator, whose determination in respect shall be final,
binding and conclusive; provided, however, that each Incentive Stock Option
granted pursuant to the Plan shall not be adjusted without the prior consent of
the Holder thereof in a manner that causes such Stock Option to fail to continue
to qualify as an Incentive Stock Option.


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         8.3  No Other Rights. Except as herein before expressly provided in
this Article 8, no Rights holder shall have any rights by reason of any
subdivision or consolidation of shares of Stock or the payment of any dividend
or any other increase or decrease in the number of shares of Stock of any class
or by reason of any Liquidating Event, merger, or consolidation of assets or
stock of another corporation, or any other issue by the Company of shares of
stock of any class, or securities convertible into shares of stock of any class;
and except as provided in this Article 8, none of the foregoing events shall
affect, and no adjustment by reason thereof shall be made with respect to, the
number or price of shares of Stock subject to Rights. The grant of a Right
pursuant to the Plan shall not affect in any way the right or power of the
Company to make adjustments, reclassifications, Exercise Price) shall thereafter
be applicable in relation to any shares or other property thereafter purchasable
upon exercise of the Right.

         8.4  No Rights as Shareholder. Except as specifically provided in this
Article 8, a Rights holder or a transferee of a Right shall have no rights as a
shareholder with respect to any shares covered by the Rights until the date of
the issuance of a Stock certificate to him or her for such shares, and no
adjustment shall be made for dividends (ordinary or extraordinary, whether in
cash, securities or other property) or distributions of other rights for which
the record date is prior to the date such Stock certificate is issued, except as
provided in Section 8.1(b) or 8.1(c).

9.       Amendment and Termination. The Board may amend, alter or discontinue
the Plan, but no amendment, alteration or discontinuation shall be made which
would impair the rights of a Participant under any Right theretofore granted
without such Participant's consent. The Board shall obtain shareholder approval
of an Plan amendment to the extent necessary and desirable to comply with Rule
16b-3, Section 422 of the Code (or any successor rule or statute) or other
applicable law, rule or regulation, including the requirements of any Market
System on which the Stock is listed or quoted. The Administrator may amend the
terms of any award theretofore granted, prospectively or retroactively, but,
subject to Article 3, no such amendment shall impair the rights of any holder
without his or her consent.

10.      General Restrictions.

         10.1

              a) Limitation on Granting of Rights. Subject to adjustment as
provided in Article 8, no Participant shall be granted Rights with respect to
more than 100,000 shares of Stock during any one-year period.

              b) No View to Distribute. The Administrator may require each
person acquiring shares of Stock pursuant to the Plan to represent to and agree
with the Company in writing that such person is acquiring the shares without a
view towards distribution thereof. The certificates for such shares may include
any legend which the Administrator deems appropriate to reflect any restrictions
on transfer.

              c) Legends. All certificates for shares of Stock delivered under
the Plan shall be subject to such stop transfer orders and other restrictions as
the Administrator may deem advisable

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under the rules, regulations and other requirements of the Securities and
Exchange Commission, any stock exchange upon which the Stock is then listed and
any applicable federal or state securities laws.

              d) Market Stand-Off. All Stock Option Agreements and Stock
Purchase Agreements shall provide that in connection with any underwritten
public offering by the Company of its equity securities pursuant to an effective
registration statement filed under the 1933 Act, including the Company's initial
public offering, the Participant agrees (the "Hold-Back Agreement") not to sell,
make any short sale of, loan, hypothecate, pledge, grant any option for the
purchase of, or otherwise dispose or transfer or otherwise agree to engage in
any of the foregoing transactions with respect to any shares purchased by the
Optionee upon exercise of his or her Option ("Purchased Shares") without the
prior written consent of the Company or its underwriters, for such period of
time from and after the effective date of such registration statement as may be
requested by the Company or such underwriters; provided, however, that in no
event shall such period exceed one hundred-eighty (180) days. Stock Option
Agreements and Stock Purchase Agreements may provide that the Hold-Back
Agreement shall terminate following expiration of the two-year period
immediately following the effective date of the Company's initial public
offering.

         10.2  Other Compensation Arrangements. Nothing contained in this Plan
shall prevent the Board from adopting other or additional compensation
arrangements, subject to shareholder approval if such approval is required; and
such arrangements may be either generally applicable or applicable only in
specific cases.

         10.3

              a) Disqualifying Disposition. If an Optionee makes a "disposition"
(as defined in the Code) of all or any of the Purchased Shares within two years
from the date of Grant of the Incentive Stock Option covering such shares or
within one year after the issuance of such Purchased Shares, he or she shall
immediately advise the Company in writing as to the occurrence of the sale and
the price upon the sale of such Shares. The Optionee agrees that he or she shall
maintain all Purchased Shares in his or her name so long as he or she maintains
beneficial ownership of such Purchased Shares.

              b) Withholding Required. Each Participant shall, no later than the
date as of which the value derived from a Right first becomes includable in the
gross income of the Participant for income tax purposes, pay to the Company, or
make arrangements satisfactory to the Administrator regarding payment of, any
federal, state or local taxes of any kind required by law to be withheld with
respect to the Right or its exercise. The obligations of the Company under the
Plan shall be conditioned upon such payment or arrangements and the Participant
shall, to the extent permitted by law, have the right to request that the
Company deduct any such taxes from any payment of any kind otherwise due to the
Participant.

              c) Withholding Right. The Administrator may, in its discretion,
grant a Rights holder the right (a "Withholding Right") to elect to make such
payment by irrevocably requiring the Company to withhold from shares issuable
upon exercise of the Right that number of full shares of Common Stock having a
Fair Market Value on the Tax Date (as defined below) equal to the amount


                                      -11-
<PAGE>   12
(or portion of the amount) required to be withheld. The Withholding Right may be
granted with respect to all or any portion of the Right.

              d) Exercise of Withholding Right. To exercise a Withholding Right,
the Rights holder must follow the election procedures set forth below, together
with such additional procedures and conditions as may be set forth in the
related Rights agreement or otherwise adopted by the Administrator.

                 i) The Rights holder must deliver to the Company his or her
written notice of election (the "Election") to have the Withholding Right apply
to all (or a designated portion) of his or her Right.

                 ii) Unless disapproved by the Administrator as provided in
Subsection (iii) below, the Election once made will be irrevocable.

                 iii) No election is valid unless the Administrator consents to
the Election; the Administrator has the right and power, in its sole discretion,
with or without cause or reason therefor, to consent to the Election, to refuse
to consent to the Election, or to disapprove the Election; and if the
Administrator has not consented to the Election on or prior to the date that the
amount of tax to be withheld is, under applicable federal income tax laws, fixed
and determined by the Company (the "Tax Date"), the Election will be deemed
approved.

              e) Effect. If the Administrator consents to an Election of a
Withholding Right:

                 i) Upon the exercise of the Right (or any portion thereof) to
which the Withholding Right relates, the Company shall withhold from the shares
otherwise issuable that number of full shares of Stock having an actual Fair
Market Value equal to the amount (or portion of the amount, as applicable)
required to be withheld under applicable federal and/or state income tax laws as
a result of the exercise; and

                 ii) If the Rights holder is then a Section 16(b) Person who has
made an Election, the related Right may not be exercised, nor may any shares of
Stock issued pursuant thereto be sold, exchanged or otherwise transferred,
unless such exercise, or such transaction, complies with an exemption from
Section 16(b) provided under Rule 16b-3.

         10.4  Indemnification. In addition to such other rights of
indemnification as they may have as Directors or members of the Committee, and
to the extent allowed by applicable law, the Administrators shall be indemnified
by the Company against the reasonable expenses, including attorney's fees,
actually incurred in connection with any action, suit or proceeding or in
connection with any appeal therein, to which they or any one of them may be
party by reason of any action taken or failure to act under or in connection
with the Plan or any option granted under the Plan, and against all amounts paid
by them in settlement thereof (provided that the settlement has been approved by
the Company, which approval shall not be unreasonably withheld) or paid by them
in satisfaction of a judgment in any such action, suit or proceeding, except in
relation to matters as to


                                      -12-
<PAGE>   13
which it shall be adjudged in such action, suit or proceeding that such
Administrator did not act in good faith and in a manner in which such person
reasonably believed to be in the best interests of the Company, and in the case
of a criminal proceeding, had no reason to believe that the conduct complained
of was unlawful; provided, however, that within 60 days after institution of any
such action, suit or proceeding, such Administrator shall, in writing, offer the
Company the opportunity at its own expense to handle and defend such action,
suit or proceeding.

         10.5  Loans. The Company may make loans to Optionees and Offerees as
the Administrator, in its discretion, may determine in connection with the
exercise of outstanding Stock Options and Purchase Rights granted under the
Plan. Such loans shall (i) be evidenced by promissory notes entered into by the
holders in favor of the Company; (ii) be subject to the terms and conditions set
forth in this Section 10.5 and such other terms and conditions, not inconsistent
with the Plan, as the Administrator shall determine; and (iii) bear interest, if
any, at such rate as the Administrator shall determine. In no event may the
principal amount of any such loan exceed the Exercise Price or the Purchase
Price less the par value of the shares of Stock covered by the Stock Option or
Purchase Right, or portion thereof, exercised by the Optionee or Offeree. The
initial term of the loan, the schedule of payments of principal and interest
under the loan, the extent to which the loan is to be with or without recourse
against the holder with respect to principal and applicable interest and the
conditions upon which the loan will become payable in the event of the holder's
termination of employment shall be determined by the Administrator; provided,
however, that the term of the loan, including extensions, shall not exceed 10
years. Unless the Administrator deems otherwise, when a loan shall have been
made, shares of Stock having a Fair Market Value at least equal to the principal
amount of the loan shall be pledged by the holder to the Company as security for
payment of the unpaid balance of the loan and such pledge shall be evidenced by
a pledge agreement, the terms of which shall be determined by the Administrator,
in its discretion; provided, however, that each loan shall comply with all
applicable laws, regulations and rules of the Board of Governors of the Federal
Reserve System and any other governmental agency having jurisdiction.

         10.6  Special Terminating Events. If a Special Terminating Event
occurs, all Rights theretofore granted to such Rights holder may, unless earlier
terminated in accordance with their terms, be exercised by the Rights holder or
by his or her estate or by a person who acquired the right to exercise such
Right by bequest or by reason of the death or Disability of the Rights holder,
at any time within one year after the date of the Special Terminating Event.
Notwithstanding the foregoing, an Incentive Stock Option shall be exercisable at
any time within three months after the date of Retirement or termination of
employment of an Optionee.

         10.7  Termination of Employment. Except as provided in this Section
10.7, no Right may be exercised unless the Right holder is then a Director of
the Company, or in the employ of the Company or any Parent or Subsidiary, or
rendering services as a consultant to the Company or any Parent or Subsidiary,
and unless he or she has remained continuously so employed or engaged since the
Date of Grant. If the employment or services of a Right holder shall terminate
(other than by reason of a Special Terminating Event), all Rights previously
granted to the Right holder which are exercisable at the time of such
termination may be exercised for the period ending 90 days after


                                      -13-
<PAGE>   14
such termination, provided, however, that if the employment or services of a
Rights holder is terminated "for cause," such Rights may be exercised for the
period ending 30 days after such termination; provided, further, that no Right
may be exercised following the date of its expiration. Nothing in the Plan or in
any Right granted pursuant to the Plan shall confer upon an employee any right
to continue in the employ of the Company or any Parent or Subsidiary or
interfere in any way with the right of the Company or any Parent or Subsidiary
to terminate such employment at any time.

         10.8  Non-Transferability of Rights. Each Stock Option Agreement and
Stock Purchase Agreement shall provide that the Rights granted under the Plan
shall not be transferable otherwise than by will or by the laws of descent and
distribution, and the Rights may be exercised, during the lifetime of the Rights
holder, only by the Rights holder or by his or her guardian or legal
representative.

         10.9  Regulatory Matters. Each Stock Option Agreement and Stock
Purchase Agreement shall provide that no shares shall be purchased or sold
thereunder unless and until (i) any then applicable requirements of state or
federal laws and regulatory agencies shall have been fully complied with to the
satisfaction of the Company and its counsel; and (ii) if required to do so by
the Company, the Optionee or Offeree shall have executed and delivered to the
Company a letter of investment intent in such form and containing such
provisions as the Board or Committee may require.

         10.10 Recapitalizations. Each Stock Option Agreement and Stock Purchase
Agreement shall contain provisions to reflect the provisions of Article 8.

         10.11  Delivery. Upon exercise of a Right granted under this Plan, the
Company shall issue Stock or pay any amounts due within a reasonable period of
time thereafter. Subject to any statutory obligations the Company may have, for
purposes of this Plan, thirty days shall be considered a reasonable period of
time.

         10.12  Rule 16b-3. With respect to persons subject to Section 16 of the
Securities Exchange Act of 1934 (the "Exchange Act"), transactions under this
plan are intended to comply with all applicable conditions of Rule 16b-3 or its
successors under the Exchange Act. To the extent any provisions of the plan or
action by the Administrator fails to so comply, it shall be deemed null and
void, to the extent permitted by law and deemed advisable by the Administrator.

         10.13  Other Provisions. The Stock Option Agreements and Stock Purchase
Agreements authorized under the Plan may contain such other provisions not
inconsistent with this Plan, including, without limitation, restrictions upon
the exercise of the Rights, as the Administrator may deem advisable.

11.      Effective Date of Plan. The Plan shall become effective on the date on
which the Plan is adopted by the Board, subject to the approval by the Company's
shareholders, which approval must be obtained within one year from the date the
Plan is adopted by the Board.

                                      -14-
<PAGE>   15
12.      Term of Plan. No Right shall be granted pursuant to the Plan on or
after June 30, 2005, but Rights theretofore granted may extend beyond that date.

                                      -15-
<PAGE>   16
                             STOCK OPTION AGREEMENT
                          (NON-STATUTORY STOCK OPTION)

         This STOCK OPTION AGREEMENT (this "Option Agreement") is made and
entered into on the execution date of the Option Certificate to which it is
attached (the "Certificate"), by and between Document Sciences Corporation, a
Delaware corporation (the "Company"), and the Director, consultant or employee
named in the Certificate ("Optionee").

         Pursuant to the Document Sciences Corporation 1995 Stock Incentive Plan
(the "Plan"), the Board of Directors of the Company (the "Board") has authorized
the grant to Optionee of a non-statutory stock option to purchase shares of the
Company's Common Stock, par value $0.001 per share (the "Common Stock"), upon
the terms and subject to the conditions set forth in this Option Agreement and
in the Plan.

         The Company and Optionee agree as follows:

         1.       GRANT OF OPTION.

                  The Company hereby grants to Optionee the right and option
(the "Option"), upon the terms and subject to the conditions set forth in this
Option Agreement, to purchase all or any portion of that number of shares of the
Common Stock (the "Shares") set forth in the Certificate (the "Exercise Price").

         2.       TERM OF OPTION.

         The Option shall terminate and expire on the Option Expiration Date set
forth in the Certificate, unless sooner terminated as provided herein.

         3.       EXERCISE PERIOD.

                  (a) Subject to the provisions of Paragraphs 3(b), 5, 7(c) and
7(d) of this Option Agreement, the Option shall become exercisable (in whole or
in part) upon and after the dates set forth under the caption "Exercise
Schedule" in the Certificate. The installments shall be cumulative; i.e., the
Option may be exercised, as to any or all Shares covered by an installment, at
any time or times after the installment first becomes exercisable and until
expiration or termination of the Option.

                  (b) Notwithstanding anything to the contrary contained in this
Option Agreement, the Option may not be exercised, in whole or in part, unless
and until any then-applicable requirements of all federal, state and local laws
and regulatory agencies shall have been fully complied with to the satisfaction
of the Company and its counsel.

         4.       EXERCISE OF OPTION.

                  There is no obligation to exercise the Option, in whole or in
part. The Option may be exercised, in whole or in part, only by delivery to the
Company of:

                  (a) written notice of exercise in form and substance identical
to Exhibit "A" attached to this Option Agreement stating the number of shares of
Common Stock then being purchased (the "Purchased Shares"); and
<PAGE>   17
                  (b) payment of the Exercise Price of the Purchased Shares,
either in cash, by check, by cancellation of any indebtedness of the Company to
Optionee for accrued and unpaid salary or, with the consent of the Administrator
of the Plan, by transfer to the Company of issued and outstanding shares of
Common Stock, or by any combination of the above methods of payment. If payment
is made, in whole or in part, by transfer to the Company of issued and
outstanding shares of Common Stock, the value (the "Fair Market Value") of such
shares shall be determined as follows: (i) if the Stock is listed on an exchange
or exchanges, or admitted for trading in a market system which provides last
sale data under Rule 11Aa3-1 of the General Rules and Regulations of the
Securities and Exchange Commission under the Securities and Exchange Act of
1934, as amended (a "Market System"), the last reported sales price per share on
the last business day prior to such date on the principal exchange on which it
is traded, or in such a Market System, as applicable; or if no sale was made on
such day on such principal exchange or in such a Market System, as applicable,
the last reported sales price per share on the most recent day prior to such
date on which a sale was reported on such exchange or such Market System, as
applicable; or (ii) if the Common Stock is not then traded on an exchange or in
such a Market System, the average of the closing bid and asked prices per share
for the Common Stock in the over-the-counter market as quoted on Nasdaq on the
day prior to such date; or (iii) if the Common Stock is not listed on an
exchange or quoted on Nasdaq, an amount determined in good faith by the
Administrator.

         Following receipt of the notice and payment referred to above, the
Company shall issue and deliver to Optionee a stock certificate or stock
certificates evidencing the Purchased Shares; provided, however, that the
Company shall not be obligated to issue a fraction or fractions of a share of
its Common Stock, and may pay to Optionee, in cash or by check, the Fair Market
Value of any fraction or fractions of a share exercised by Optionee, which Fair
Market Value shall be determined as set forth in the preceding paragraph.

         5.       TERMINATION OF EMPLOYMENT.

                  (a) If Optionee shall cease to be a Director of the Company,
or to be in the employ of, or a consultant to the Company, any Subsidiary or any
Parent for any reason other than Optionee's death, permanent disability, or
retirement (a "Special Terminating Event"), Optionee shall have the right to
exercise the Option at any time within 90 days after the date Optionee ceased to
be a Director of the Company, or to be employed by, or to be a consultant to the
Company, and prior to the date of termination of the Option under Paragraph 2 of
this Option Agreement with respect to all shares with respect to which the
Option was exercisable at the date Optionee's employment terminated as to which
the Option had not previously been exercised; and to the extent unexercised at
the end of this period, the Option shall terminate. The Administrator, in its
sole and absolute discretion, shall determine whether or not authorized leaves
of absence shall constitute termination of employment for purposes of this
Option Agreement.

                  (b) If Optionee shall be terminated "for cause" by the
Company, any Subsidiary or any Parent, Optionee shall have the right to exercise
the Option at any time within 30 days after such termination of employment and
prior to the date of termination of the Option under Paragraph 2 of this Option
Agreement with respect to all Shares with respect to which the Option was
exercisable on the date his employment terminated as to which the Option had not
previously been exercised.

                  (c) If a Special Terminating Event occurs while Optionee is in
the employ of the Company, any Subsidiary or any Parent, then Optionee,
Optionee's executors or administrators or any person or persons acquiring the
Option directly from Optionee by bequest or inheritance, shall have the right to
exercise the entire Option at any time within one year after such death or
permanent disability, but not later than the Option Expiration Date; to the
extent the Option is unexercised at the end of that period, the Option will
terminated.


                                      -2-
<PAGE>   18
                  (d) For purposes of this Option Agreement, "cause" shall mean:

                      (i) with respect to Optionees of the Company:

                          (1) the failure or refusal by Optionee to perform his
duties to the Company; or

                          (2) Optionee's willful disobedience of any orders or
directives of the Board or any officers thereof acting under the authority
thereof or Optionee's deliberate interference with the compliance by other
employees of the Company with any such orders or directives; or

                          (3) the failure or refusal of Optionee to abide by or
comply with the written policies, standard procedures or regulations of the
Company; or

                          (4) any willful or continued act or course of conduct
by Optionee which the Board in good faith determines might reasonably be
expected to have a material detrimental effect on the Company or the business,
operations, affairs or financial position thereof; or

                          (5) the committing by the Optionee of any fraud,
theft, embezzlement or other dishonest act against the Company; or

                          (6) the determination by the Board of Directors of the
Company, in good faith and in the exercise of reasonable discretion, that
Optionee is not competent to perform his duties of employment; and

                      (ii) with respect to consultants, any material breach of
their consulting agreement with the Company.

                  (e) For purposes of this Option Agreement, "permanent
disability" shall mean permanent and total disability as defined by the
Administrator. Optionee shall not be considered permanently disabled unless he
furnishes proof of such disability in such form and manner, and at such times,
as the Administrator of the Plan may from time to time require.

         6.       RESTRICTIONS ON PURCHASED SHARES.

                  (a) Market Stand-Off.

                      (i) In connection with any underwritten public offering by
the Company of its equity securities pursuant to an effective registration
statement filed under the 1933 Act, including the Company's initial public
offering, Optionee shall not sell, make any short sale of, loan, hypothecate,
pledge, grant any option for the purchase of, or otherwise dispose or transfer
for value or otherwise agree to engage in any of the foregoing transactions with
respect to any Purchased Shares without the prior written consent of the Company
or its underwriters, for such period of time from and after the effective date
of such registration statement as may be requested by the Company or such
underwriters; provided, however, that in no event shall such period exceed one
hundred-eighty (180) days. This Section 6(a)(i) shall only remain in effect for
the two-year period immediately following the effective date of the Company's
initial public offering and shall thereafter terminate and cease to be in force
or effect. Optionee agrees to execute and deliver to the Company such further
documents or instruments as the Company reasonably determines to be necessary or
appropriate to effect the provisions of this Section 6(a).

                                      -3-
<PAGE>   19
                      (ii) In the event of any stock dividend, stock split,
recapitalization, or other change affecting the Company's outstanding Common
Stock effected without receipt of consideration, then any new, substituted, or
additional securities distributed with respect to the Purchased Shares shall be
immediately subject to the provisions of this Section 6(a), to the same extent
the Purchased Shares are at such time covered by such provisions.

                      (iii) In order to enforce the provisions of Section 6(a),
the corporation may impose stop-transfer instructions with respect to the
Purchased Shares until the end of the applicable stand-off period.

                  (b) Noncomplying Transfers Invalid.

                      (i) Any attempted Transfer which is not in full compliance
with this Paragraph (6) shall be null and void ab initio, and of no force or
effect.

         7.       ADJUSTMENTS UPON RECAPITALIZATION.

                  Subject to any required action by the shareholders of the
Company:

                  (a) If the outstanding shares of the Common Stock shall be
subdivided into a greater number of shares of the Common Stock, or a dividend in
shares of Common Stock or other securities of the Company convertible into or
exchangeable for shares of the Common Stock (in which latter event the number of
shares of Common Stock issuable upon the conversion or exchange of such
securities shall be deemed to have been distributed) shall be paid in respect of
the shares of Common Stock, the Exercise Price in effect immediately prior to
such subdivision or at the record date of such dividend shall, simultaneously
with the effectiveness of such subdivision or immediately after the record date
of such dividend, be proportionately reduced, and conversely, if the outstanding
shares of Common Stock shall be combined into a smaller number of shares of
Common Stock, the Exercise Price in effect immediately prior to such combination
shall, simultaneously with the effectiveness of such combination, be
proportionately increased.

                  (b) When any adjustment is required to be made in the Exercise
Price, the number of Shares purchasable upon the exercise of the Option shall be
adjusted to that number of Shares determined by (i) multiplying an amount equal
to the number of Shares purchasable on the exercise of the Option immediately
prior to such adjustment by the Exercise Price in effect immediately prior to
such adjustment, and then (ii) dividing that product by the Exercise Price in
effect immediately after such adjustment.

                  (c) In case of any capital reorganization, any
reclassification of the Common Stock (other than a change in par value or
recapitalization described in Paragraph 7(a) of this Option Agreement, or the
consolidation of the Company with, or sale of substantially all of the assets of
the Company to (which sale is followed by a liquidation or dissolution of the
Company), or merger of the Company with another person (a "Reorganization
Event"), the Administrator shall be obligated to determine whether the
Reorganization Event shall constitute a "Liquidity Event," and to deliver to
Optionee at least 15 days prior to such Reorganization Event a notice which
shall (i) indicate whether the Reorganization Event is a Liquidity Event and
(ii) advise Optionee of his or her rights pursuant to this Option Agreement. If
the Reorganization Event is determined to be a Liquidity Event, in its sole and
absolute discretion, the surviving corporation may, but shall not be obligated
to, (i) tender to Optionee Stock Options with respect to the surviving
corporation which shall contain terms and provisions that substantially preserve
the rights and benefits of this Option, and (ii) in the event that no Stock
Options have been tendered by the surviving corporation pursuant to the terms of
item (i) immediately above, Optionee shall have the right exercisable during a
ten-day period ending on the fifth day prior to the Reorganization Event to
exercise his or her Stock Options, to the


                                      -4-
<PAGE>   20
extent that such Stock Options are then exercisable, in whole or in part, on the
condition, however, that the Reorganization Event is actually effected; and if
the Reorganization Event is actually effected, such exercise shall be deemed
effective (and, if applicable, the Optionee shall be deemed a shareholder with
respect to the Stock Options exercised) immediately preceding the effective time
of the Reorganization Event (or on the date of record for shareholders entitled
to share in the securities or property distributed in the Reorganization Event,
if a record date is set). If the Reorganization Event is not determined to be a
Liquidity Event, Optionee shall thereafter be entitled upon exercise of the
Option to purchase the kind and number of shares of stock or other securities or
property of the surviving corporation receivable upon such event by a holder of
the number of shares of the Common Stock which the Option entitles Optionee to
purchase from the Company immediately prior to such event, and in any such case,
appropriate adjustment shall be made in the application of the provisions set
forth in this Option Agreement with respect to Optionee's rights and interests
thereafter, to the end that the provisions set forth in this Option Agreement
(including the specified changes and other adjustments to the Exercise Price)
shall thereafter be applicable in relation to any shares or other property
thereafter purchasable upon exercise of the Option.

                  (d) In the event of the proposed dissolution or liquidation of
the Company, or in the event of any corporate separation or division, including,
but not limited to, a split-up, split-off or spin-off (each, a "Liquidating
Event"), the holder of any Stock Option then exercisable shall have the right to
exercise such Stock Option (at the price provided in the Stock Option Agreement)
subsequent to the Liquidating Event, and for the balance of its term, solely for
the kind and amount of shares of Stock and other securities, property, cash or
any combination thereof receivable upon such Liquidating Event by a holder of
the number of shares of Stock for or with respect to which such Stock Option
might have been exercised immediately prior to such Liquidating Event; or, in
the alternative, that each Stock Option granted under the Plan shall terminate
as of a date to be fixed by the Board; provided, however, that not less than 30
days written notice of the date so fixed shall be given to each Option Holder
and if such notice is given, each Option Holder shall have the right, during the
period of 30 days preceding such termination, to exercise the Stock Option as to
all or any part of the shares of Stock covered thereby, to the extent that such
Stock Option is then exercisable, on the condition, however, that the
Liquidating Event actually occurs; and if the Liquidating Event actually occurs,
such exercise shall be deemed effective (and, if applicable, the Option Holder
shall be deemed a shareholder with respect to the Stock Options exercised)
immediately preceding the occurrence of the Liquidating Event, or the date of
record for shareholders entitled to share in such Liquidating Event, if a record
date is set.

                  (e) To the extent that the foregoing adjustments related to
stock or securities of the Company, such adjustments shall be made by the
Administrator of the Plan, and its determination shall be final, binding and
conclusive.

                  (f) The provisions of this Paragraph 7 are intended to be
exclusive, and Optionee shall have no other rights upon the occurrence of any of
the events described in this Paragraph 7.

                  (g) The grant of the Option shall not affect in any way the
right or power of the Company to make adjustments, reclassifications,
reorganizations or changes in its capital or business structure, or to merge,
consolidate, dissolve or liquidate, or to sell or transfer all or any part of
its business or assets.

         8.       WAIVER OF RIGHTS TO PURCHASE STOCK.

                  By signing this Option Agreement, Optionee acknowledges and
agrees that neither the Company nor any other person or entity is under any
obligation to sell or transfer to Optionee any option or equity security of the
Company, other than the shares of Common Stock subject to the Option and any
other right or option to purchase Common Stock which was previously granted to
Optionee by the Board (or a committee thereof). By signing this


                                      -5-
<PAGE>   21
Option Agreement, Optionee specifically waives all rights which he or she may
have had prior to the date of this Option Agreement to receive any option or
equity security of the Company.

         9.       INVESTMENT INTENT.

                  Optionee represents and agrees that if he or she exercises the
Option in whole or in part and if at the time of such exercise the Plan and /or
the Purchased Shares have not been registered under the Act, he or she will
acquire the Shares upon such exercise for the purpose of investment and not with
a view to the distribution of such Shares, and that upon each exercise of the
Option he or she will furnish to the Company a written statement to such effect.

         10.      LEGEND ON STOCK CERTIFICATES.

                  Optionee agrees that all certificates representing the
Purchased Shares will be subject to such stock transfer orders and other
restrictions (if any) as the Company may deem advisable under the rules,
regulations and other requirements of the Securities and Exchange Commission,
any stock exchange upon which the Common Stock is then listed and any applicable
federal or state securities laws, and the Company may cause a legend or legends
to be put on such certificates to make appropriate reference to such
restrictions.

         11.      NO RIGHTS AS SHAREHOLDER.

                  Except as provided in Section 8.1 of the Plan, Optionee shall
have no rights as a shareholder with respect to the Shares until the date of the
issuance to Optionee of a stock certificate or stock certificates evidencing
such Shares. Except as may be provided in Paragraph 7 of this Option Agreement,
no adjustment shall be made for dividends (ordinary or extraordinary, whether in
cash, securities or other property) or distributions or other rights for which
the record date is prior to the date such stock certificate is issued.

         12.      MODIFICATION.

                 Subject to the terms and conditions and within the limitations
of the Plan, the Board (or a committee thereof) may modify, extend or renew the
Option or accept the surrender of, and authorize the grant of a new option in
substitution for, the Option (to the extent not previously exercised). No
modification of the Option shall be made which, without the consent of Optionee,
would cause the Option to fail to continue to qualify as an "incentive stock
option" within Section 422 of the Code or would alter or impair any rights of
the Optionee under the Option.

         13.      WITHHOLDING.

                  (a) The Company shall be entitled to require as a condition of
delivery of any Purchased Shares upon exercise of any Option that the Optionee
agree to remit, at the time of such delivery or later date as the Company may
determine, an amount sufficient to satisfy all federal, state and local
withholding tax requirements relating thereto, and Optionee agrees to take such
other action required by the Company to satisfy such withholding requirements.

                  (b) With the consent of the Administrator, and in accordance
with any rules and procedures from time to time adopted by the Administrator,
Optionee may elect to satisfy his or her obligations under Paragraph 13(a) above
by (i) directing the Company to withhold a portion of the Shares otherwise
deliverable (or to tender back to the Company a portion of the Shares issued
where the Optionee (a "Section 16(b) Recipient") is required to report the
ownership of the Shares pursuant to Section 16(a) of the Securities Exchange Act
of 1934, as amended, and has


                                      -6-
<PAGE>   22
not made an election under Section 83(b) of the Code (a "Withholding Right"));
or (ii) tendering other shares of the Common Stock of the Company which are
already owned by Optionee which in all cases have a Fair Market Value (as
determined in accordance with the provisions of Paragraph 4(b) hereof) on the
date as of which the amount of tax to be withheld is determined (the "Tax Date")
equal to the amount of taxes to be paid by such method.

                  (c) To exercise a Withholding Right, the Optionee must follow
the election procedures set forth below, together with such additional
procedures and conditions set forth in this Option Agreement or otherwise
adopted by the Administrator.

                      (i) the Optionee must deliver to the Company his or her
written notice of election (the "Election") and specify whether all or a stated
percentage of the applicable taxes will be paid in accordance with Paragraph
13(b) above and whether the amount so paid shall be made in accordance with the
"flat" withholding rates for supplemental wages or as determined in accordance
with Optionee's form W-4 (or comparable state or local form);

                      (ii) unless disapproved by the Administrator as provided
in Subsection (iii) below, the Election once made will be irrevocable; and

                      (iii) no Election is valid unless the Administrator has
the right and power, in its sole discretion, with or without cause or reason
therefor, to consent to the Election, to refuse to consent to the Election, or
to disapprove the Election; and if the Administrator has not consented to the
Election on or prior to the Tax Date, the Election will be deemed approved.

         14.     CHARACTER OF OPTION.

                 The Option is not intended to qualify as an "incentive stock
option" as that term is defined in Section 422 of the Code.

         15.     GENERAL PROVISIONS.

                 (a) FURTHER ASSURANCES. Optionee shall promptly take all
actions and execute all documents requested by the Company which the Company
deems to be reasonably necessary to effectuate the terms and intent of this
Option Agreement.

                 (b) NOTICES. All notices, requests, demands and other
communications under this Option Agreement shall be in writing and shall be
given to the parties hereto as follows:

                     (i)       If the Company, to:

                               Document Sciences Corporation
                               6333 Greenwich Drive, Suite 120
                               San Diego, CA  92112

                     (ii)      If to Optionee, to the address set forth in the
records of the Company,

or at such other address or addresses as may have been furnished by such either
party in writing to the other party hereto. Any such notice, request, demand or
other communication shall be effective (i) if given by mail, 72 hours after such
communication is deposited in the mail by first-class certified mail, return
receipt requested, postage prepaid,


                                      -7-
<PAGE>   23
addressed as aforesaid, or (ii) if given by any other means, when delivered at
the address specified in this subparagraph (b).

                 (c) TRANSFER OF RIGHTS UNDER THE OPTION AGREEMENT. The Company
may at any time transfer and assign its rights and delegate its obligations
under this Option Agreement to any other person, corporation, firm or entity,
including its officers, directors and stockholders, with or without
consideration.

                 (d) OPTION NON-TRANSFERABLE. Optionee may not sell, transfer,
assign or otherwise dispose of the Option except by will or the laws of descent
and distribution, and Stock Options may be exercised during the lifetime of the
Option Holder only by the Option Holder or by his or her guardian or legal
representative.

                 (e) SUCCESSORS AND ASSIGNS. Except to the extent specifically
limited by the terms and provisions of this Option Agreement, this Option
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors, assigns, heirs and personal representatives.

                 (f) GOVERNING LAW. THIS OPTION AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA APPLICABLE
TO CONTRACTS MADE IN , AND TO BE PERFORMED WITHIN, THE STATE.

                 (g) THE PLAN. This Option Agreement is made pursuant to the
Plan, and it is intended, and shall be interpreted in a manner, to comply
therewith. Any provision of this Option Agreement inconsistent with the Plan
shall be superseded and governed by the Plan.

                 (h) MISCELLANEOUS. Titles and captions contained in this Option
Agreement are inserted for convenience of reference only and do not constitute a
part of this Option Agreement for any other purpose. Except as specifically
provided herein, neither this Option Agreement nor any right pursuant hereto or
interest herein shall be assignable by any of the parties hereto without the
prior written consent of the other party hereto.

         The Signature Page to this Option Agreement consists of the last page
of the Certificate.

                                      -8-
<PAGE>   24
                                   Exhibit "A"

                               NOTICE OF EXERCISE

                 (To be signed only upon exercise of the Option)

TO:      Document Sciences Corporation

         The undersigned, the holder of the enclosed Stock Option Agreement
(NonStatutory Stock Option), hereby irrevocably elects to exercise the purchase
rights represented by the Option and to purchase thereunder _______________*
shares of Common Stock of Document Sciences Corporation (the "Company"), and
herewith encloses payment of $_____________ and/or _________ shares of the
Company's Common Stock in full payment of the purchase price of such shares
being purchased.

Dated:____________________________


                                   ------------------------------------------
                                   (Signature must conform in all respects to
                                   name of holder as specified on the face of
                                   the Option)


                                   ------------------------------------------
                                   (Please print name)


                                   ------------------------------------------
                                   (Address)

        * Insert here the number of shares called for on the face of the Option
(or, in the case of a partial exercise, the number of shares being exercised),
in either case without making any adjustment for additional Common Stock of the
Company, other securities or property which, pursuant to the provisions of the
Option, may be deliverable upon exercise.
<PAGE>   25
                               OPTION CERTIFICATE

                          (NON-STATUTORY STOCK OPTION)


         THIS IS TO CERTIFY that Document Sciences Corporation, a Delaware
corporation (the "Company"), has granted to the person named below a
non-statutory stock option (the "Option") to purchase shares of the Company's
Common Stock, par value $0.001 per share, under its Stock Incentive Plan, as
follows:

Name of Optionee:          "Optionee"

Address of Optionee:       "Address1"
                           "Address2"
                           "Address3"

Number of Shares:          "Shares"

Option Exercise Price:     $"Price"

Date of Grant:             "GrantDate"

Option Expiration Date:    "ExpirationDate"

         EXERCISE SCHEDULE:  The Option shall become exercisable as follows:

         25% on "VestDate", and 2.0833% of the total shares each month
thereafter.

         SUMMARY OF OTHER TERMS: This option is defined in the Stock Option
Agreement (NonStatutory Stock Option) (the "Option Agreement") which is attached
to this Option Certificate (this "Certificate") as Annex I. This Certificate
summarizes certain of the provisions of the Option Agreement for your
information, but is not complete. Your rights are governed by the Option
Agreement, not by this summary. The Company strongly suggests that you carefully
review the full Option Agreement prior to signing this Certificate or exercising
the Option.

         Among the terms of the Option Agreement are the following:

         EMPLOYMENT: The Option Agreement does not obligate the Company to
retain you for any period of time. Unless otherwise agreed in writing, the
Company reserves the right to terminate any employee at any time, with or
without cause.

         TERMINATION OF EMPLOYMENT: While the Option terminates on the Option
Expiration Date, it will terminate earlier if you cease to be employed by the
Company (or to hold office if you are a director). If your employment ends "for
cause," the Option terminates 30 days after the date of termination of
employment, and is exercisable during such 30 day period as to the portion of
the Option which had vested prior to the date of termination of employment. If
your employment ends due to death, disability or retirement, the Option
terminates one year after the date of death, disability or retirement, and is
exercisable in full during such one year period. In all other cases, the Option
terminates 90 days after the date of termination of employment, and is
exercisable during such 90 day period as to the portion of the Option which had
vested prior to the date of termination of employment. See Section 5 of the
Option Agreement.

                                      -1-
<PAGE>   26
         TRANSFER: The Option is personal to you, and cannot be sold,
transferred, assigned or otherwise disposed of to any other person, except on
your death. See Section 15(d) of the Option Agreement.

         EXERCISE: You can exercise the Option (once it is exercisable), in
whole or in part, by delivering to the Company a Notice of Exercise identical to
Exhibit "A" attached to the Option Agreement, accompanied by payment of the
Option Exercise Price, set forth above, for the Shares to be purchased. The
Company will then issue a certificate to you for the Shares you have purchased.
You are under no obligation to exercise the Option. See Section 4 of the Option
Agreement.

         MARKET STAND-OFF: The Option provides that in connection with any
underwritten public offering by the Company, you may not sell or transfer any of
your Shares without the prior written consent of the Company or its underwriters
for a period of up to 180 days after the effective date of the offering. See
Section 6 of the Option Agreement.

         ANTI-DILUTION PROVISIONS: The Option contains provisions which adjust
your Option to reflect stock splits, stock dividends, mergers and other major
corporate reorganizations which would change the nature of the Shares underlying
your Option. See Section 7 of the Option Agreement.

         WAIVER: By signing this Certificate, you will be agreeing to all of the
terms of the Option Agreement, including those not summarized in this
Certificate. You will waive your rights to any other options or stock which may
have heretofore been promised to you. See Section 8 of the Option Agreement.

         WITHHOLDING: The Company may require you to make any arrangements
necessary to insure the proper withholding of any amount of tax, if any,
required to be withheld by the Company as a result of the exercise of the
Option. See Section 13 of the Option Agreement.


                                      -2-
<PAGE>   27
                                    AGREEMENT

         Document Sciences Corporation, a Delaware corporation (the "Company"),
and the above-named person ("Optionee") each hereby agrees to be bound by all of
the terms and conditions of the Stock Option Agreement (Non-Statutory Stock
Option) which is attached hereto as Annex I and incorporated herein by this
reference as if set forth in full in this document.


                                   ------------------------------------------
                                   Certificate Date


                                   DOCUMENT SCIENCES CORPORATION

                                   By: Tony N. Domit
                                       Its: President and CEO



                                   OPTIONEE


                                   ------------------------------------------
                                   Signature


                                   ------------------------------------------
                                   (Please print your name exactly as you wish
                                   it to appear on any stock certificates issued
                                   to you upon exercise of the Option.)

                                      -3-