<PAGE>

                                                           EXHIBIT 10.28
                                                           -------------



                            STOCK OPTION AGREEMENT
                            ----------------------


     STOCK OPTION AGREEMENT, dated as of August 7, 1999 (the "Agreement"),
                                                              ---------
between General Electric Company, a New York corporation ("Parent"), and OEC
                                                           ------
Medical Systems, Inc., a Delaware corporation (the "Company").
                                                    -------

                             W I T N E S S E T H:

     WHEREAS, simultaneously with the execution and delivery of this Agreement,
Parent, Ruby Merger Corp., a newly formed Delaware corporation and a direct
wholly owned subsidiary of Parent ("Sub"), and the Company are entering into an
                                    ---
Agreement and Plan of Merger, dated as of the date hereof (the "Merger
                                                                ------
Agreement"), which provides for the merger of Sub with and into the Company (the
"Merger");

     WHEREAS, as a condition to Parent's willingness to enter into the Merger
Agreement, Parent has requested that the Company grant to Parent an option to
purchase up to 2,243,346 shares of Company Common Stock, upon the terms and
subject to the conditions hereof; and

     WHEREAS, in order to induce Parent to enter into the Merger Agreement, the
Company has agreed to grant Parent the requested option.

     NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements set forth herein, the parties hereto agree as follows:

     1.  The Option; Exercise; Adjustments.  The Company hereby grants to Parent
         ---------------------------------
an irrevocable option (the "Option") to purchase from time to time up to
                            ------
2,243,346  Common Shares, par value $.01 per share, of the Company (the "Company
                                                                         -------
Common Stock"), upon the terms and subject to the conditions set forth herein
------------
(the "Optioned Shares").  Subject to the conditions set forth in Section 2, the
      ---------------
Option may be exercised by Parent in whole or from time to time in part, at any
time after the date hereof and prior to the termination of the Option in
accordance with Section 19.  In the event Parent wishes to exercise the Option,
Parent shall send a written notice to the Company (the "Stock Exercise Notice")
                                                        ---------------------
specifying the total number of Optioned Shares it wishes to purchase and a date
(not later than 20 business days and not earlier than two business days from the
date such notice is given) for the closing of such purchase (the "Closing
                                                                  -------
Date").  Parent may revoke an exercise of the Option at any time prior to the
Closing Date by written notice to the Company.  In the event of any change in
the number of issued and outstanding shares of Company Common Stock by reason of
any stock dividend, stock split, split-up, recapitalization, merger or other
change in the corporate or capital structure of the Company, the number of
Optioned Shares subject to the Option and the Exercise Price (as
<PAGE>

hereinafter defined) per Optioned Share shall be appropriately adjusted. In the
event that any additional shares of Company Common Stock are issued after the
date of this Agreement (other than pursuant to an event described in the
preceding sentence or pursuant to this Agreement), the number of Optioned Shares
subject to the Option shall be adjusted so that, after such issuance, it equals
(but does not exceed) 15% of the number of shares of Company Common Stock then
issued and outstanding and 15% of the voting power of shares of capital stock of
the Company then issued and outstanding.

          2.  Conditions to Exercise of Option and Delivery of Optioned Shares.
              ----------------------------------------------------------------
 (a) Parent's right to exercise the Option is subject to the following
 conditions:

     (i)   Neither Parent nor Sub shall have breached any of its material
obligations under the Merger Agreement;

     (ii)  No preliminary or permanent injunction or other order issued by any
federal or state court of competent jurisdiction in the United States
invalidating the grant or prohibiting the exercise of the Option shall be in
effect; and

     (iii) One or more of the following events shall have occurred on or after
the date hereof: (A) any person, corporation, partnership, limited liability
company or other entity or group (such person, corporation, partnership, limited
liability company or other entity or group being referred to hereinafter,
singularly or collectively, as a "Person") (other than Forstmann-Leff
                                  ------
Associates, Inc., FLA Advisers, L.L.C., FLA Asset Management, Inc. and Stamford
Advisers Corp., so long as the aggregate beneficial ownership of these four
entities does not exceed 25%), acquires or becomes the beneficial owner of 20%
or more of the outstanding shares of Company Common Stock; (B) any group is
formed which beneficially owns 20% or more of the outstanding shares of Company
Common Stock; (C) any Person shall have commenced a tender or exchange offer for
20% or more of the then outstanding shares of Company Common Stock or publicly
proposed any bona fide merger, consolidation or acquisition of all or
substantially all the assets of the Company, or other similar business
combination involving the Company; (D) the Company enters into, or announces
that it proposes to enter into, an agreement, including, without limitation, an
agreement in principle, providing for a merger or other business combination
involving the Company or a "significant subsidiary" (as defined in Rule 1.02(w)
of Regulation S-X as promulgated by the Securities and Exchange Commission (the
"SEC")) of the Company or the acquisition of a substantial interest in, or a
 ---
substantial portion of the assets, business or operations of, the Company or a
significant subsidiary (other than the transactions contemplated by the Merger
Agreement); (E) any Person is granted any option or right, conditional or
otherwise, to acquire or otherwise become the beneficial owner of shares of
Company Common Stock which, together with all shares of Company Common Stock
beneficially owned by such Person, results or would result in such Person being
the beneficial owner of 20% or more of the outstanding shares of Company Common
Stock; or (F) there is a public announcement with respect to a plan or intention
by the Company, other than Parent or its affiliates, to effect any of the
foregoing transactions.  For purposes of this subparagraph (iii), the terms
"group" and "beneficial owner" shall be defined by reference to Section 13(d) of
the Securities Exchange Act

                                       2
<PAGE>

of 1934, as amended (the "Exchange Act"), and the rules and regulations
                          ------------
promulgated thereunder.

          (b)  Parent's obligation to purchase the Optioned Shares following the
exercise of the Option, and the Company's obligation to deliver the Optioned
Shares, are subject to the conditions that:

     (i)   No preliminary or permanent injunction or other order issued by any
federal or state court of competent jurisdiction in the United States
prohibiting the delivery of the Optioned Shares shall be in effect;

     (ii)  The purchase of the Optioned Shares will not violate Rule 10b-13
promulgated under the Exchange Act; and

     (iii) All applicable waiting periods under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the "HSR Act"), shall have expired or been
                                           -------
terminated.

          3.  Exercise Price for Optioned Shares.  At any Closing Date, the
              ----------------------------------
Company will deliver to Parent a certificate or certificates representing the
Optioned Shares in the denominations designated by Parent in its Stock Exercise
Notice and Parent will purchase the Optioned Shares from the Company at a price
per Optioned Share equal to $36.00 of Merger Agreement (the "Exercise Price"),
                                                             --------------
payable in cash.  Payment made by Parent to the Company pursuant to this
Agreement shall be made by wire transfer of federal funds to a bank designated
by the Company or a check payable in immediately available funds.  After payment
of the Exercise Price for the Optioned Shares covered by the Stock Exercise
Notice, the Option shall be deemed exercised to the extent of the Optioned
Shares specified in the Stock Exercise Notice as of the date such Stock Exercise
Notice is given to the Company.

          4.  Representations and Warranties of the Company.  The Company
              ---------------------------------------------
represents and warrants to Parent that (a) the execution and delivery of this
Agreement by the Company and the consummation by it of the transactions
contemplated hereby have been duly authorized by all necessary corporate action
on the part of the Company and this Agreement has been duly executed and
delivered by the Company and constitutes a valid and binding obligation of the
Company enforceable against the Company in accordance with its terms; (b) the
Company has taken all necessary corporate action to authorize and reserve the
Optioned Shares for issuance upon exercise of the Option, and the Optioned
Shares, when issued and delivered by the Company to Parent upon exercise of the
Option, will be duly authorized, validly issued, fully paid and nonassessable
and free of preemptive rights; (c) except as otherwise required by the HSR Act,
except for routine filings and subject to Section 7, the execution and delivery
of this Agreement by the Company and the consummation by it of the transactions
contemplated hereby do not require the consent, approval or authorization of, or
filing with, any person or public authority and will not violate or conflict
with the Company's Certificate of Incorporation, or Bylaws, or result in the
acceleration or termination of, or constitute a default under, any indenture,
license, approval, agreement, understanding or other instrument, or any statute,
rule, regulation, judgment, order or other restriction binding upon or
applicable to the Company or any

                                       3
<PAGE>

of its subsidiaries or any of their respective properties or assets; (d) the
Company is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware and has all requisite corporate power
and authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby; and (e) the Company has taken all appropriate
actions so that the restrictions on business combinations contained in Section
203 of the DGCL will not apply with respect to or as a result of the
transactions contemplated hereby.

     5.  Representations and Warranties of Parent.  Parent represents and
         ----------------------------------------
warrants to the Company that (a) the execution and delivery of this Agreement by
Parent and the consummation by it of the transactions contemplated hereby have
been duly authorized by all necessary corporate action on the part of Parent and
this Agreement has been duly executed and delivered by Parent and constitutes a
valid and binding agreement of Parent; and (b) Parent is acquiring the Option
and, if and when it exercises the Option, will be acquiring the Optioned Shares
issuable upon the exercise thereof, for its own account and not with a view to
distribution or resale in any manner which would be in violation of the
Securities Act of 1933, as amended (the "Securities Act"), and will not sell or
                                         --------------
otherwise dispose of the Optioned Shares except pursuant to an effective
registration statement under the Securities Act or a valid exemption from
registration under the Securities Act.

     6.  The Closing.  Any closing hereunder shall take place on the Closing
         -----------
Date specified by Parent in its Stock Exercise Notice pursuant to Section 1 at
10:00 A.M., local time, or the first business day thereafter on which all of the
conditions in Section 2 are met, at the principal executive office of the
Company, or at such other time and place as the parties hereto may agree.

     7.  Filings Related to Optioned Shares.  The Company will make such filings
         ----------------------------------
with the SEC as are required by the Exchange Act, and will use its best efforts
to effect all necessary filings by the Company under the HSR Act and to have the
Optioned Shares approved for quotation on New York Stock Exchange (the "NYSE").

     8.  Registration Rights.  (a)  If the Company effects any registration or
         -------------------
registrations of shares of Company Common Stock under the Securities Act for its
own account or for any other stockholder of the Company at any time after the
exercise of the Option (other than a registration on Form S-4, Form S-8 or any
successor forms), it will allow Parent to participate in such registration or
registrations with respect to any or all of the Optioned Shares acquired upon
the exercise of the Option; provided, however, that any request of Parent
                            --------  -------
pursuant to this Section 8(a) shall be with respect to at least 250,000 Optioned
Shares and provided, further, that if the managing underwriters in such offering
           --------  -------
advise the Company that, in their written opinion, the number of Optioned Shares
requested by Parent to be included in such registration exceeds the number of
shares of Company Common Stock which can be sold in such offering, the Company
may exclude from such registration all or a portion, as may be appropriate, of
the Optioned Shares requested for inclusion by Parent.

     (b)  At any time after the exercise of the Option, upon the request of
Parent, the Company will promptly file and use its best efforts to cause to be
declared effective a registration

                                       4
<PAGE>

statement under the Securities Act (and applicable Blue Sky statutes) with
respect to any or all of the Optioned Shares acquired upon the exercise of the
Option; provided, however, that any request of Parent pursuant to this Section
        --------  -------
8(b) shall be with respect to at least 1,000,000 Optioned Shares and provided,
                                                                     --------
further, that the Company shall not be required to have declared effective more
-------
than two registration statements hereunder and shall be entitled to delay the
effectiveness of each such registration statement, for a period not to exceed 90
days in the aggregate, if the commencement of such offering would, in the
reasonable good faith judgment of the Board of Directors of the Company, require
premature disclosure of any material corporate development or otherwise
materially interfere with or materially adversely affect any pending or proposed
offering of securities of the Company. In connection with any such registration
requested by Parent, the costs of such registration shall be borne by the
Company, and the Company and Parent each shall provide the other and any
underwriters with customary indemnification and contribution agreements.

     9.  Optional Put; Optional Repurchase; Excess Compensation.  (a) Prior to
         ------------------------------------------------------
the termination of the Option in accordance with Section 19, if a Put Event has
occurred, Parent shall have the right, upon three business days' prior written
notice to the Company, to require the Company to purchase the Option from Parent
(the "Put Right") at a cash purchase price (the "Put Price") equal to the lesser
      ---------                                  ---------
of (x) the product determined by multiplying (A) the number of Optioned Shares
as to which the Option has not yet been exercised by (B) the Spread (as defined
below); and (y) the difference found by subtracting any Termination Fee paid by
the Company under Section 5.6 of the Merger Agreement from $25,000,000.  As used
herein, "Put Event" means the occurrence on or after the date hereof of any of
         ---------
the following:  (i) any Person (other than Parent or its affiliates) acquires or
becomes the beneficial owner of 50% or more of the outstanding shares of Company
Common Stock or (ii) the Company consummates a merger or other business
combination involving the Company or a "significant subsidiary" (as defined in
Rule 1.02(w) of Regulation S-X as promulgated by the SEC) of the Company or the
acquisition of a substantial  interest in, or a substantial portion of the
assets, business or operations of, the Company or a significant subsidiary
(other than the transactions contemplated by the Merger Agreement).  As used
herein, the term "Spread" shall mean the excess, if any, of (i) the greater of
                  ------
(x) the highest price (in cash or fair market value of securities or other
property) per share of Company Common Stock paid or to be paid within 12 months
preceding the date of exercise of the Put Right for any shares of Company Common
Stock beneficially owned by any Person who shall have acquired or become the
beneficial owner of 20% or more of the outstanding shares of Company Common
Stock after the date hereof or (y) the average of the daily volume-weighted
sales prices quoted on NYSE of the Company Common Stock during the five trading
days immediately preceding the written notice of exercise of the Put Right over
(ii) the Exercise Price.

     (b)  At any time after the termination of the Option granted hereunder
pursuant to Section 19 and for a period of 90 days thereafter, the Company shall
have the right, upon three business days' prior written notice, to repurchase
from Parent (the "Repurchase Right"), all (but not less than all) of the
Optioned Shares acquired by the Company hereby and with respect to which the
Company then has beneficial ownership (as defined in Rule 13d-3 under the
Exchange Act) at a price per share equal to the greater of (i) the average of
the daily volume-weighted sales price quoted on NYSE of the Company Common Stock
during the five trading days immediately

                                       5
<PAGE>

preceding the written notice of exercise of the Repurchase Right and (ii) the
Exercise Price, plus interest at a rate per annum equal to the costs of funds to
Parent at the time of exercise of the Repurchase Right; provided, however, that
the aggregate price payable pursuant to this Section 9(b) shall not exceed
$25,000,000 less any Termination Fee paid by the Company under Section 5.6 of
the Agreement.

     (c)  Parent shall deliver to the Company all "Excess Compensation" realized
upon the sale of any Optioned Shares.  "Excess Compensation" shall mean the
amount, if any, by which the sum of (i) the aggregate gross proceeds received
upon the sale of any Optioned Shares, and (ii) any Termination Fee paid by the
Company under Section 5.6 of the Merger Agreement, exceeds the sum of (x)
$25,000,000, (y) the aggregate Exercise Price paid, and (z)  any underwriters
discount or selling commission incurred by Parent in connection with the
acquisition and disposition of the Optioned Shares.

     10.  Expenses.  Each party hereto shall pay its own expenses incurred in
          --------
connection with this Agreement, except as otherwise provided in Section 8 or as
specified in the Merger Agreement.

     11.  Specific Performance.  The parties hereto agree that irreparable
          --------------------
damage would occur in the event that any of the provisions of this Agreement
were not performed in accordance with their specific terms or were otherwise
breached.  It is accordingly agreed that the parties shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions hereof in any court of the United States
or any state thereof having jurisdiction, this being in addition to any other
remedy to which they are entitled at law or in equity.  Each party hereby
irrevocably submits to the exclusive jurisdiction of the United States District
Court for either the District of Connecticut or the  District of Delaware in any
action, suit or proceeding arising in connection with this Agreement, and agrees
that any such action, suit or proceeding shall be brought only in such courts
(and waives any objection based on forum non conveniens or any other objection
to venue therein).  Each party hereto waives any right to a trial by jury in
connection with any such action, suit or proceeding.

     12.  Notice.  All notices, requests, demands and other communications
          ------
hereunder shall be deemed to have been duly given and made if in writing and if
served by personal delivery upon the party for whom it is intended or if sent by
telex or telecopier (and also confirmed in writing) to the person at the address
set forth below, or such other address as may be designated in writing
hereafter, in the same manner, by such person:

     (a)    if to Parent or Sub, to:

            General Electric Company
            c/o GE Medical Systems
            P.O. Box 414, W-410
            Milwaukee, WI 53201
            Attention: General Counsel
            Facsimile No.:  414-544-3575

                                       6
<PAGE>

               for overnight courier deliveries, to:

               General Electric Company
               c/o GE Medical Systems
               3000 North Grandview Boulevard
               Waukesha, WI 53188
               Attention: General Counsel

                   with copies to:

               General Electric Company
               3135 Easton Turnpike
               Fairfield, Connecticut 06431-00001
               Attention: Vice President and Senior Counsel - Transactions
               Facsimile No.: 203-373-3008


                   and

               Gibson, Dunn & Crutcher, LLP
               1801 California Street, Suite 4100
               Denver, CO 80202
               Attention:  Richard M. Russo, Esq.
               Facsimile No.:  303-296-5310

     (b)       if to the Company, to:

               OEC Medical Systems, Inc.
               384 Wright Brothers Drive
               Salt Lake City, UT 84116
               Attention: President
               Facsimile No.:

              with a copy to:

               Holland & Hart LLP
               215 South State Street, Suite 500
               Salt Lake City, UT 84111-2317
               Attention: David R. Rudd
               Facsimile No.:  801-364-9124

       13.  Parties in Interest.  This Agreement shall inure to the benefit
            -------------------
of and be binding upon the parties named herein and their respective successors
and assigns.  Nothing in

                                       7
<PAGE>

this Agreement, expressed or implied, is intended to confer upon any Person
other than Parent or the Company, or their permitted successors or assigns, any
rights or remedies under or by reason of this Agreement.

          14.  Entire Agreement; Amendments.  This Agreement, together with the
               ----------------------------
Merger Agreement and the other documents referred to therein, contains the
entire agreement between the parties hereto with respect to the subject matter
hereof and supersedes all prior and contemporaneous agreements and
understandings, oral or written, with respect to such transactions.  This
Agreement may not be changed, amended or modified orally, but only by an
agreement in writing signed by the party against whom any waiver, change,
amendment, modification or discharge may be sought.

          15.  Assignment.  No party to this Agreement may assign any of its
               ----------
rights or delegate any of its obligations under this Agreement (whether by
operation of law or otherwise) without the prior written consent of the other
party hereto, except that Parent may, without a written consent, assign its
rights and delegate its obligations hereunder in whole or in part to one or more
of its direct or indirect wholly owned subsidiaries.

          16.  Headings.  The section headings herein are for convenience only
               --------
and shall not affect the construction of this Agreement.

          17.  Counterparts.  This Agreement may be executed in one or more
               ------------
counterparts, each of which, when executed, shall be deemed to be an original
and all of which together shall constitute one and the same document.

          18.  Governing Law.  Except to the extent that the laws of the State
               -------------
of Delaware are mandatorily applicable to the Merger, this Agreement shall be
governed by, and construed in accordance with, the laws of the State of New
York, regardless of the laws that might otherwise govern under applicable
principles of conflicts of laws thereof.

          19.  Termination.  This Agreement and the Option shall terminate upon
               -----------
the earlier of (i) the Effective Time and (ii) the termination of the Merger
Agreement in accordance with its terms; provided, however, the Option shall not
                                        --------  -------
terminate until 12 months after a termination pursuant to clause (ii)
immediately above if (A) the Merger Agreement is terminated by Parent pursuant
to Section 7.1(b), (c), (f) or (h) thereof, (B) the Merger Agreement is
terminated by Parent or the Company pursuant to Section 7.1(e) or (g) thereof or
(C) the Merger Agreement is terminated by the Company pursuant to Section
7.1(d)(i) thereof after receipt of a Superior Proposal; provided, further, that
                                                        --------  -------
this Agreement shall not terminate with respect to the Repurchase Right set
forth in Section 9(b) until 90 days after the termination of the Option pursuant
to the foregoing proviso.  Notwithstanding the foregoing, the provisions of
Section 8 shall survive the termination of this Agreement until such time as
Parent or any of its affiliates ceases to beneficially own at least 250,000 of
the Optioned Shares.

                                       8
<PAGE>

          20.  Capitalized Terms.  Capitalized terms not otherwise defined in
               -----------------
this Agreement shall have the meanings set forth in the Merger Agreement.

          22.  Severability.  If any term or other provision of this Agreement
               ------------
is invalid, illegal or incapable of being enforced by any rule of law, or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic and legal substance of
the transactions contemplated hereby are not affected in any manner materially
adverse to any party.  Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties shall negotiate
in good faith to modify this Agreement so as to effect the original intent of
the parties as closely as possible in a mutually acceptable manner in order that
the transactions contemplated by this Agreement may be consummated as originally
contemplated to the fullest extent possible.

                                       9
<PAGE>

          IN WITNESS WHEREOF, Parent and the Company have caused this Agreement
to be duly executed and delivered on the day and year first above written.


                              General Electric Company,
                                    a New York corporation



                              By:_______________________________________________
                                  Name:  Jeffrey R. Immelt
                                         Title:    Senior Vice President



                              OEC Medical Systems, Inc.
                                    a Delaware corporation



                              By:_______________________________________________
                                  Name:  Joseph W. Pepper
                                  Title: President & Chief Executive Officer

                                       10