<PAGE>
 
                                                                    Exhibit 10.2
 
                     OBJECTIVE SYSTEMS INTEGRATORS, INC.  

                            1994 STOCK OPTION PLAN
                      (AS AMENDED THROUGH JULY  18, 1997)


     1.        Purposes of the Plan.  The purposes of this Stock Option Plan are
               --------------------                       
  to attract and retain the best available personnel for positions of
  substantial responsibility, to provide additional incentive to Employees and
  Consultants of the Company and its Subsidiaries and to promote the success of
  the Company's business. Options granted under the Plan may be incentive stock
  options (as defined under Section 422 of the Code) or nonstatutory stock
  options, as determined by the Administrator at the time of grant of an option
  and subject to the applicable provisions of Section 422 of the Code, as
  amended, and the regulations promulgated thereunder.

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

               (a) "Administrator" means the Board or any of its Committees
                    -------------
  appointed pursuant to Section 4 of the Plan.

               (b) "Board" means the Board of Directors of the Company.
                    -----                                 

               (c) "Code" means the Internal Revenue Code  of 1986, as amended.
                    ----                                 

               (d) "Committee" means a Committee appointed by the Board of
                    ---------                              
  Directors in accordance with Section 4 of the Plan.

               (e) "Common Stock" means the Common Stock of the Company.
                    ------------                           

               (f) "Company" means Objective Systems Integrators, Inc., a
                    -------                         
  California corporation.

          (g)  "Consultant" means any person who is engaged by the Company
                ----------
  or any Parent or Subsidiary to render consulting or advisory services and is
  compensated for such services, and any director of the Company whether
  compensated for such services or not. If and in the event the Company
  registers any class of any equity security pursuant to the Exchange Act, the
  term Consultant shall thereafter not include directors who are not compensated
  for their services or are paid only a director's fee by the Company.

          (h)  "Continuous Status as an Employee or Consultant" means that the
                ----------------------------------------------                
employment or consulting relationship with the Company, any Parent, or
Subsidiary, is not interrupted or terminated.  Continuous Status as an Employee
or Consultant shall not be considered interrupted in the case of (i) any leave
of absence approved by the Company or (ii) transfers between locations of the
Company or between the Company, its Parent, any Subsidiary, or any successor.  A
leave of absence approved by the Company shall include sick leave, military
leave, or any other personal leave approved by an authorized representative of
the Company.  For purposes of Incentive Stock Options, no such leave may exceed
90 days, unless reemployment upon expiration of such leave is guaranteed by
statute or contract, including Company policies.  If reemployment upon
expiration of a leave of absence approved by the Company is not so guaranteed,
on the 91st day of such leave any Incentive Stock Option held by the Optionee
shall cease to be treated as an Incentive Stock Option and shall be treated for
tax purposes as a Nonstatutory Stock Option.

          (i)  "Employee" means any person, including Officers and directors,
                --------                                                     
employed by the Company or any Parent or Subsidiary of the Company.  The payment
of a director's fee by the Company shall not be sufficient to constitute
"employment" by the Company.

          (j)  "Exchange Act" means the Securities Exchange Act of 1934, as 
                ------------
amended.

          (k)  "Fair Market Value" means, as of any date, the value of Common
                -----------------
Stock determined as follows:

               (i)  If the Common Stock is listed on any established stock
exchange or a national market system, including without limitation the Nasdaq
National Market of the National Association of Securities Dealers, Inc.
Automated Quotation ("NASDAQ") System, its Fair Market Value shall be the
closing sales price for such stock (or the closing bid, if no sales were
reported) as quoted on such exchange or system for the last market trading day
<PAGE>
 
prior to the time of determination, as reported in The Wall Street Journal or
such other source as the Administrator deems reliable;

               (ii)  If the Common Stock is quoted on the NASDAQ System (but not
on the Nasdaq National Market thereof) or regularly quoted by a recognized
securities dealer but selling prices are not reported, its Fair Market Value
shall be the mean between the high bid and low asked prices for the Common Stock
on the last market trading day prior to the day of determination, or;

               (iii) In the absence of an established market for the Common
Stock, the Fair Market Value thereof shall be determined in good faith by the
Administrator.

          (l)  "Incentive Stock Option" means an Option intended to qualify as
                ----------------------
an incentive stock option within the meaning of Section 422 of the Code.

          (m)  "Nonstatutory Stock Option" means an Option not intended to
                -------------------------
qualify as an Incentive Stock Option.

          (n)  "Officer" means a person who is an officer of the Company within
                -------                                                        
the meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.

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

          (p)  "Optioned Stock" means the Common Stock subject to an Option.
                --------------                                              

          (q)  "Optionee" means an Employee or Consultant who receives an
                --------
Option.

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

          (s)  "Plan" means this 1994 Stock Option Plan.
                ----                                    

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

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

     3.   Stock Subject to the Plan.  Subject to the provisions of Section 11 of
          -------------------------                                             
the Plan, the maximum aggregate number of Shares which may be optioned and sold
under the Plan is 7,434,830 Shares.  The Shares may be authorized, but unissued,
or reacquired Common Stock.

          If an Option expires or becomes unexercisable without having been
exercised in full, or is surrendered pursuant to an Option Exchange Program, the
unpurchased Shares which were subject thereto shall become available for future
grant or sale under the Plan (unless the Plan has terminated); provided,
                                                               -------- 
however, that Shares that have actually been issued under the Plan shall not be
returned to the Plan and shall not become available for future distribution
under the Plan, except that if unvested Shares are repurchased by the Company at
their original purchase price, and the original purchaser of such Shares did not
receive any benefits of ownership of such Shares, such Shares shall become
available for future grant under the Plan.  For purposes of the preceding
sentence, voting rights shall not be considered a benefit of Share ownership.

     4.   Administration of the Plan.
          -------------------------- 

          (a)  Initial Plan Procedure.  Prior to the date, if any, upon which
               ----------------------
the Company becomes subject to the Exchange Act, the Plan shall be administered
by the Board or a committee appointed by the Board.

                                      -2-
<PAGE>
 
          (b)  Plan Procedure after the Date, if any, upon Which the Company
               -------------------------------------------------------------
becomes Subject to the Exchange Act.
-----------------------------------

               (i)    Administration with Respect to Directors and Officers.  
                      -----------------------------------------------------
With respect to grants of Options to Employees who are also Officers or
directors of the Company, the Plan shall be administered by (A) the Board if the
Board may administer the Plan in compliance with Rule 16b-3 promulgated under
the Exchange Act or any successor thereto ("Rule 16b-3") with respect to a plan
intended to qualify thereunder as a discretionary plan, or (B) a Committee
designated by the Board to administer the Plan, which Committee shall be
constituted in such a manner as to permit the Plan to comply with Rule 16b-3
with respect to a plan intended to qualify thereunder as a discretionary plan.
Once appointed, such Committee shall continue to serve in its designated
capacity until otherwise directed by the Board. From time to time the Board may
increase the size of the Committee and appoint additional members thereof,
remove members (with or without cause) and appoint new members in substitution
therefor, fill vacancies, however caused, and remove all members of the
Committee and thereafter directly administer the Plan, all to the extent
permitted by Rule 16b-3 with respect to a plan intended to qualify thereunder as
a discretionary plan.

               (ii)   Multiple Administrative Bodies. If permitted by Rule 16b-
                      ------------------------------
3, the Plan may be administered by different bodies with respect to directors,
non-director Officers and Employees who are neither directors nor Officers.

               (iii)  Administration With Respect to Consultants and Other
                      ----------------------------------------------------
Employees.  With respect to grants of Options to Employees or Consultants who
---------
are neither directors nor Officers of the Company, the Plan shall be
administered by (A) the Board or (B) a committee designated by the Board, which
committee shall be constituted in such a manner as to satisfy the legal
requirements relating to the administration of incentive stock option plans, if
any, of California corporate and securities laws, of the Code, and of any
applicable stock exchange (the "Applicable Laws").  Once appointed, such
Committee shall continue to serve in its designated capacity until otherwise
directed by the Board.  From time to time the Board may increase the size of the
Committee and appoint additional members thereof, remove members (with or
without cause) and appoint new members in substitution therefor, fill vacancies,
however caused, and remove all members of the Committee and thereafter directly
administer the Plan, all to the extent permitted by the Applicable Laws.

          (c)  Powers of the Administrator.  Subject to the provisions of the
               ---------------------------
Plan and, in the case of a Committee, the specific duties delegated by the Board
to such Committee, and subject to the approval of any relevant authorities,
including the approval, if required, of any stock exchange upon which the Common
Stock is listed, the Administrator shall have the authority, in its discretion:

               (i)    to determine the Fair Market Value of the Common Stock, in
accordance with Section 2(k) of the Plan;

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

               (iii)  to determine whether and to what extent Options are
granted hereunder;

               (iv)   to determine the number of shares of Common Stock to be
covered by each such award granted hereunder;

               (v)    to approve forms of agreement for use under the Plan;

               (vi)   to determine the terms and conditions of any award granted
hereunder;

               (vii)  to determine whether and under what circumstances an
Option may be settled in cash under subsection 9(f) instead of Common Stock;

               (viii) to reduce the exercise price of any Option to the then
current Fair Market Value if the Fair Market Value of the Common Stock covered
by such Option has declined since the date the Option was granted; and

               (ix)   to construe and interpret the terms of the Plan and awards
granted pursuant to the Plan.

                                      -3-
<PAGE>
 
          (d)  Effect of Administrator's Decision.  All decisions,
               ----------------------------------
determinations and interpretations of the Administrator shall be final and
binding on all Optionees and any other holders of any Options.

     5.   Eligibility.
          ----------- 

          (a)  Nonstatutory Stock Options may be granted to Employees and
Consultants.  Incentive Stock Options may be granted only to Employees.  An
Employee or Consultant who has been granted an Option may, if otherwise
eligible, be granted additional Options.

          (b)  Each Option shall be designated in the written option agreement
as either an Incentive Stock Option or a Nonstatutory Stock Option. However,
notwithstanding such designations, to the extent that the aggregate Fair Market
Value:

               (i)    of Shares subject to an Optionee's Incentive Stock Options
granted by the Company, any Parent or Subsidiary, which

               (ii)   become exercisable for the first time during any calendar
year (under all plans of the Company or any Parent or Subsidiary) exceeds
$100,000, such excess Options shall be treated as Nonstatutory Stock Options.
For purposes of this Section 5(b), Incentive Stock Options shall be taken into
account in the order in which they were granted, and the Fair Market Value of
the Shares shall be determined as of the time the Option with respect to such
Shares is granted.

          (c)  The Plan shall not confer upon any Optionee any right with
respect to continuation of employment or consulting relationship with the
Company, nor shall it interfere in any way with his or her right or the
Company's right to terminate his or her employment or consulting relationship at
any time, with or without cause.

          (d)  Upon the Company or a successor corporation issuing any class of
common equity securities required to be registered under Section 12 of the
Exchange Act or upon the Plan being assumed by a corporation having a class of
common equity securities required to be registered under Section 12 of the
Exchange Act, the following limitations shall apply to grants of Options to
Employees:

               (i)    No Employee shall be granted, in any fiscal year of the
Company, Options to purchase more than 1,375,000 Shares.

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

               (iii)  If an Option is canceled in the same fiscal year of the
Company in which it was granted (other than in connection with a transaction
described in Section 11), the cancelled Option will be counted against the limit
set forth in Section 5.  For this purpose, if the exercise price of an Option is
reduced, the transaction will be treated as a cancellation of the Option and the
grant of a new Option.

     6.   Term of Plan.  The Plan shall become effective upon the earlier to
          ------------
occur of its adoption by the Board of Directors or its approval by the
shareholders of the Company, as described in Section 17 of the Plan. It shall
continue in effect for a term of ten (10) years unless sooner terminated under
Section 13 of the Plan.

     7.   Term of Option.  The term of each Option shall be the term stated in
          --------------
the Option Agreement; provided, however, that the term shall be no more than ten
(10) years from the date of grant thereof. However, in the case of an Incentive
Stock Option granted to an Optionee who, at the time the Option is granted, owns
stock representing more than ten percent (10%) of the voting power of all
classes of stock of the Company or any Parent or Subsidiary, the term of the
Option shall be five (5) years from the date of grant thereof or such shorter
term as may be provided in the Option Agreement.

                                      -4-
<PAGE>
 
     8.   Option Exercise Price and Consideration.
          --------------------------------------- 

          (a)  The per share exercise price for the Shares to be issued pursuant
to exercise of an Option shall be such price as is determined by the Board, but
shall be subject to the following:

               (i)    In the case of an Incentive Stock Option

                      (A)  granted to an Employee who, at the time of the grant
of such Incentive Stock Option, owns stock representing more than ten percent
(10%) of the voting power of all classes of stock of the Company or any Parent
or Subsidiary, the per Share exercise price shall be no less than 110% of the
Fair Market Value per Share on the date of grant.

                      (B)  granted to any Employee other than an Employee
described in the preceding paragraph, the per Share exercise price shall be no
less than 100% of the Fair Market Value per Share on the date of grant.

               (ii)   In the case of a Nonstatutory Stock Option

                      (A)  granted to a person who, at the time of the grant of
such Option, owns stock representing more than ten percent (10%) of the voting
power of all classes of stock of the Company or any Parent or Subsidiary, the
per Share exercise price shall be no less than 110% of the Fair Market Value per
Share on the date of the grant.

                      (B)  granted to any person, the per Share exercise price
shall be no less than 85% of the Fair Market Value per Share on the date of
grant.

          (b)  The consideration to be paid for the Shares to be issued upon
exercise of an Option, including the method of payment, shall be determined by
the Administrator (and, in the case of an Incentive Stock Option, shall be
determined at the time of grant) and may consist entirely of (1) cash, (2)
check, (3) promissory note, (4) other Shares which (x) in the case of Shares
acquired upon exercise of an Option have been owned by the Optionee for more
than six months on the date of surrender and (y) have a Fair Market Value on the
date of surrender equal to the aggregate exercise price of the Shares as to
which said Option shall be exercised, (5) delivery of a properly executed
exercise notice together with such other documentation as the Administrator and
the broker, if applicable, shall require to effect an exercise of the Option and
delivery to the Company of the sale or loan proceeds required to pay the
exercise price, or (6) any combination of the foregoing methods of payment.  In
making its determination as to the type of consideration to accept, the Board
shall consider if acceptance of such consideration may be reasonably expected to
benefit the Company.

     9.   Exercise of Option.
          ------------------ 

          (a)  Procedure for Exercise; Rights as a Shareholder. Any Option
               -----------------------------------------------
granted hereunder shall be exercisable at such times and under such conditions
as determined by the Board, including performance criteria with respect to the
Company and/or the Optionee, and as shall be permissible under the terms of the
Plan, but in no case at a rate of less than 20% per year over five (5) years
from the date the Option is granted.

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

               An Option shall be deemed to be exercised when written notice of
such exercise has been given to the Company in accordance with the terms of the
Option by the person entitled to exercise the Option and full payment for the
Shares with respect to which the Option is exercised has been received by the
Company. Full payment may, as authorized by the Board, consist of any
consideration and method of payment allowable under Section 8(b) of the Plan.
Until the issuance (as evidenced by the appropriate entry on the books of the
Company or of a duly authorized transfer agent of the Company) of the stock
certificate evidencing such Shares, no right to vote or receive dividends or any
other rights as a shareholder shall exist with respect to the Optioned Stock,
notwithstanding the exercise of the Option. The Company shall issue (or cause to
be issued) such stock certificate promptly upon exercise of the Option. No
adjustment will be made for a dividend or other right for which the record date
is prior to the date the stock certificate is issued, except as provided in
Section 11 of the Plan.

                                      -5-
<PAGE>
 
               Exercise of an Option in any manner shall result in a decrease in
the number of Shares which thereafter may be available, both for purposes of the
Plan and for sale under the Option, by the number of Shares as to which the
Option is exercised.

          (b)  Termination of Employment or Consulting Relationship.  In the
               ----------------------------------------------------
event of termination of an Optionee's Continuous Status as an Employee or
Consultant with the Company (but not in the event of an Optionee's change of
status from Employee to Consultant (in which case an Employee's Incentive Stock
Option shall automatically convert to a Nonstatutory Stock Option on the ninety-
first (91st) day following such change of status) or from Consultant to
Employee), such Optionee may, but only within such period of time as is
determined by the Administrator, of at least thirty (30) days, with such
determination in the case of an Incentive Stock Option not exceeding three (3)
months after the date of such termination (but in no event later than the
expiration date of the term of such Option as set forth in the Option
Agreement), exercise his or her Option to the extent that Optionee was entitled
to exercise it at the date of such termination. To the extent that Optionee was
not entitled to exercise the Option at the date of such termination, or if
Optionee does not exercise such Option to the extent so entitled within the time
specified herein, the Option shall terminate.

          (c)  Disability of Optionee.  In the event of termination of an
               ----------------------
Optionee's consulting relationship or Continuous Status as an Employee as a
result of his or her disability, Optionee may, but only within twelve (12)
months from the date of such termination (and in no event later than the
expiration date of the term of such Option as set forth in the Option
Agreement), exercise the Option to the extent otherwise entitled to exercise it
at the date of such termination; provided, however, that if such disability is
not a "disability" as such term is defined in Section 22(e)(3) of the Code, in
the case of an Incentive Stock Option such Incentive Stock Option shall
automatically convert to a Nonstatutory Stock Option on the day three months and
one day following such termination. To the extent that Optionee is not entitled
to exercise the Option at the date of termination, or if Optionee does not
exercise such Option to the extent so entitled within the time specified herein,
the Option shall terminate, and the Shares covered by such Option shall revert
to the Plan.

          (d)  Death of Optionee.  In the event of the death of an Optionee, the
               -----------------                                                
Option may be exercised at any time within twelve (12) months following the date
of death (but in no event later than the expiration of the term of such Option
as set forth in the Notice of Grant), by the Optionee's estate or by a person
who acquired the right to exercise the Option by bequest or inheritance, but
only to the extent that the Optionee was entitled to exercise the Option at the
date of death.  If, at the time of death, the Optionee was not entitled to
exercise his or her entire Option, the Shares covered by the unexercisable
portion of the Option shall immediately revert to the Plan.  If, after death,
the Optionee's estate or a person who acquired the right to exercise the Option
by bequest or inheritance does not exercise the Option within the time specified
herein, the Option shall terminate, and the Shares covered by such Option shall
revert to the Plan.

          (e)  Rule 16b-3.  Options granted to persons subject to Section 16(b)
               ----------
of the Exchange Act must comply with Rule 16b-3 and shall contain such
additional conditions or restrictions as may be required thereunder to qualify
for the maximum exemption from Section 16 of the Exchange Act with respect to
Plan transactions.

          (f)  Buyout Provisions.  The Administrator may at any time offer to
               -----------------
buy out for a payment in cash or Shares, an Option previously granted, based on
such terms and conditions as the Administrator shall establish and communicate
to the Optionee at the time that such offer is made.

     10.  Non-Transferability of Options.  Options may not be sold, pledged,
          ------------------------------                                    
assigned, hypothecated, transferred, or disposed of in any manner other than by
will or by the laws of descent or distribution and may be exercised, during the
lifetime of the Optionee, only by the Optionee.

     11.  Adjustments Upon Changes in Capitalization or Merger.
          ---------------------------------------------------- 

          (a)  Changes in Capitalization.  Subject to any required action by the
               -------------------------                                        
shareholders of the Company, the number of shares of Common Stock covered by
each outstanding Option, and the number of shares of Common Stock which have
been authorized for issuance under the Plan but as to which no Options have yet
been granted or which have been returned to the Plan upon cancellation or
expiration of an Option, as well as the price per share of Common Stock covered
by each such outstanding Option, shall be proportionately adjusted for any
increase or decrease in the number of issued shares of Common Stock resulting
from a stock split, reverse stock split, stock dividend, combination or
reclassification of the Common Stock, or any other increase or decrease in the
number of issued shares of Common Stock effected without receipt of
consideration by the Company; provided, 

                                      -6-
<PAGE>
 
however, that conversion of any convertible securities of the Company shall not
be deemed to have been "effected without receipt of consideration." Such
adjustment shall be made by the Board, whose determination in that respect shall
be final, binding and conclusive. Except as expressly provided herein, no
issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall affect, and no adjustment
by reason thereof shall be made with respect to, the number or price of shares
of Common Stock subject to an Option.

          (b)  Dissolution or Liquidation.  In the event of the proposed
               --------------------------
dissolution or liquidation of the Company, the Board shall notify the Optionee
at least fifteen (15) days prior to such proposed action. To the extent it has
not been previously exercised, the Option will terminate immediately prior to
the consummation of such proposed action.

          (c)  Merger.  In the event of a merger of the Company with or into
               ------
another corporation, the Option may be assumed or an equivalent option may be
substituted by such successor corporation or a parent or subsidiary of such
successor corporation. If, in such event, the Option is not assumed or
substituted, the Option shall terminate as of the date of the closing of the
merger. For the purposes of this paragraph, the Option shall be considered
assumed if, following the merger, the option confers the right to purchase, for
each Share of Optioned Stock subject to the Option immediately prior to the
merger, the consideration (whether stock, cash, or other securities or property)
received in the merger by holders of Common Stock for each Share held on the
effective date of the transaction (and if holders were offered a choice of
consideration, the type of consideration chosen by the holders of a majority of
the outstanding Shares); provided, however, that if such consideration received
in the merger was not solely common stock of the successor corporation or its
Parent, the Administrator may, with the consent of the successor corporation,
provide for the consideration to be received upon the exercise of the Option for
each Share of Optioned Stock subject to the Option to be solely common stock of
the successor corporation or its Parent equal in fair market value to the per
share consideration received by holders of Common Stock in the merger.

     12.  Time of Granting Options.  The date of grant of an Option shall, for
          ------------------------
all purposes, be the date on which the Administrator makes the determination
granting such Option, or such other date as is determined by the Board. Notice
of the determination shall be given to each Employee or Consultant to whom an
Option is so granted within a reasonable time after the date of such grant.

     13.  Amendment and Termination of the Plan.
          ------------------------------------- 

          (a)  Amendment and Termination.  The Board may at any time amend,
               -------------------------
alter, suspend or discontinue the Plan, but no amendment, alteration, suspension
or discontinuation shall be made which would impair the rights of any Optionee
under any grant theretofore made, without his or her consent. In addition, to
the extent necessary and desirable to comply with Rule 16b-3 under the Exchange
Act or with Section 422 of the Code (or any other applicable law or regulation,
including the requirements of the NASD or an established stock exchange), the
Company shall obtain shareholder approval of any Plan amendment in such a manner
and to such a degree as required.

          (b)  Effect of Amendment or Termination.  Any such amendment or
               ----------------------------------                        
termination of the Plan shall not affect Options already granted, and such
Options shall remain in full force and effect as if this Plan had not been
amended or terminated, unless mutually agreed otherwise between the Optionee and
the Board, which agreement must be in writing and signed by the Optionee and the
Company.

     14.  Conditions Upon Issuance of Shares.  Shares shall not be issued
          ----------------------------------
pursuant to the exercise of an Option unless the exercise of such Option and the
issuance and delivery of such Shares pursuant thereto shall comply with all
relevant provisions of law, including, without limitation, the Securities Act of
1933, as amended, the Exchange Act, the rules and regulations promulgated
thereunder, and the requirements of any stock exchange upon which the Shares may
then be listed, and shall be further subject to the approval of counsel for the
Company with respect to such compliance.

          As a condition to the exercise of an Option, the Company may require
the person exercising such Option to represent and warrant at the time of any
such exercise that the Shares are being purchased only for investment and
without any present intention to sell or distribute such Shares if, in the
opinion of counsel for the Company, such a representation is required by any of
the aforementioned relevant provisions of law.

     15.  Reservation of Shares.  The Company, during the term of this Plan,
          ---------------------
will at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.

                                      -7-
<PAGE>
 
          The inability of the Company to obtain authority from any regulatory
body having jurisdiction, which authority is deemed by the Company's counsel to
be necessary to the lawful issuance and sale of any Shares hereunder, shall
relieve the Company of any liability in respect of the failure to issue or sell
such Shares as to which such requisite authority shall not have been obtained.

     16.  Agreements.  Options shall be evidenced by written agreements in such
          ----------                                                           
form as the Board shall approve from time to time.

     17.  Shareholder Approval.  Continuance of the Plan shall be subject to
          --------------------                                              
approval by the shareholders of the Company within twelve (12) months before or
after the date the Plan is adopted.  Such shareholder approval shall be obtained
in the degree and manner required under applicable state and federal law and the
rules of any stock exchange upon which the Common Stock is listed.

     18.  Information to Optionees and Purchasers.  The Company shall provide to
          ---------------------------------------                               
each Optionee, not less frequently than annually, copies of annual financial
statements.  The Company shall also provide such statements to each individual
who acquires Shares pursuant to the Plan while such individual owns such Shares.
The Company shall not be required to provide such statements to key employees
whose duties in connection with the Company assure their access to equivalent
information.

                                      -8-
<PAGE>
 
                            STOCK OPTION AGREEMENT
                            ----------------------


1.   DEFINITIONS. Unless expressly stated otherwise in this Stock Option
     -----------                                                         
     Agreement ("Agreement"), the terms in this Agreement will have the same
     meanings as in the Objective Systems Integrators 1994 Stock Option Plan
     ("Plan").

2.   GRANT OF OPTION. OSI grants to the Optionee ("you" or "Optionee") named in
     ---------------                                                            
     the Notice of Stock Option Grant attached as the first page of the
     Agreement ("Notice"), an option ("Option") to purchase the total number of
     shares of Common Stock ("Shares") set forth in the Notice, at the exercise
     price per share set forth in the Notice ("Exercise Price") subject to the
     terms, definitions and provisions of the Plan, which is incorporated into
     this Agreement by reference.

     If described in the Notice as an Incentive Stock Option ("ISO"), the Option
     is intended to qualify an Incentive Stock Option as defined in Section 422
     of the Code. However, Incentive Stock Options, to the extent they exceed
     the $100,000 rule of Code Section 422(d), will be treated as Nonstatutory
     Stock Options ("NSOs").

3.   VESTING SCHEDULE. The Option may be exercised, in whole or in part, as
     ----------------                                                       
     follows:

     (A)  25% of the Shares subject to the Option will vest on the Vest Date in
          the Notice; and

     (B)  1/48 of the Shares subject to the Option will vest each month
          thereafter.

4.   EXERCISE.  The Option can be exercised with respect to vested Shares, as
     --------                                                                
     follows:

     (A)  RIGHT TO EXERCISE.
          ----------------- 

          (1)  The Option may not be exercised for a fraction of a Share.

          (2)  The Option may be exercised only before it expires and only in
               accordance with the Plan and this Agreement. The limitations in
               Section 7 of the Plan regarding Options designated as ISOs and
               Options granted to more than 10% shareholders will apply.

          (3)  Subject to the limitation in subsection 4(a)(1), if you die,
               become disabled or your employment or consulting relationship
               with OSI ends, your ability to exercise the Option is governed by
               Sections 8, 9 and 10.

          (4)  Vesting of Options is earned by continued employment or by a
               continued consulting relationship with OSI. The grant of an
               Option is not an express or implied promise of continued
               employment or a continued consulting relationship for the vesting
               period or for any other period.

     (B)  METHOD OF EXERCISE. This Option can only be exercised by written
          ------------------                                         
          notice to OSI. The notice must (1) state that the Option is being
          exercised, (2) recite the number of Shares being acquired, (3) contain
          such other representations and agreements concerning the Shares as OSI
          may require, (4) be signed by you, (5) be delivered in person or by
          certified mail to the Secretary of OSI, and (6) be accompanied by
          payment of the Exercise Price. Options will only be deemed to have
          been exercised when OSI receives this notice accompanied by the
          Exercise Price.

5.   METHOD OF PAYMENT.  Payment of the exercise price will be by cash, check,
     -----------------                                                         
     surrender of previously owned Common Stock which, on the date of surrender,
     has been owned by you for more than six months (or was not acquired
     directly from OSI) and has a fair market value equal to the aggregate
     exercise price of the Shares being exercised, by delivery of a properly
     executed exercise notice together with an irrevocable instruction to a
     broker to promptly deliver the exercise price to OSI, or by a combination
     of any of the above.
<PAGE>
 
6.   RESTRICTIONS ON EXERCISE.  The Option may not be exercised if the exercise
     ------------------------                                                  
     itself, the issuance of the Shares or the type of consideration being paid
     for the Shares, violates any applicable law, rule or regulation, including
     any rule under Part 207 of Title 12 of the Code of Federal Regulations
     ("Regulation G") or any requirement of a stock exchange on which the Shares
     are listed. Assuming no such violation exists, the Shares will be
     considered issued on the date the Option is exercised.

7.   CHANGE IN STATUS.  If your status changes from being an Employee to being a
     ----------------                                                           
     Consultant or vice versa (expressed in the Plan as maintaining Continuous
     Status as an Employee or Consultant), this Agreement will remain in effect.

8.   TERMINATION OF RELATIONSHIP. If you cease being an Employee or Consultant
     ---------------------------                                      
     of OSI (expressed in the Plan as a termination of Continuous Status as an
     Employee or Consultant), you may exercise the Option at any time within 30
     days after termination to the same extent that you could exercise it on the
     date of your termination. To the extent that you were not entitled to
     exercise the Option on your termination date, or if you do not exercise the
     Option within the thirty-day period, the Option will expire.

9.   DISABILITY.  Notwithstanding Section 8, if you cease being an employee or
     ----------                                                               
     consultant of OSI as a result of your disability, you may exercise the
     Option at any time within 12 months after termination to the same extent
     you were entitled to exercise it on the date of termination,. To the extent
     you were not entitled to exercise the Option on your termination date, or
     if you do not exercise the Option within the twelve-month period, the
     Option will expire. Moreover, if your disability is not a "disability" as
     defined in Section 22(e)(3) of the Code, ISOs will be treated for tax
     purposes as a NSOs effective three months and one day after termination.

10.  DEATH.  Notwithstanding Section 8, if you die while an employee or
     -----                                                             
     consultant of OSI, your estate (or the person who acquired the right to
     exercise the Option by bequest or inheritance) may exercise the Option at
     any time within 12 months after your death to the same extent that you were
     entitled to exercise it on the date of your death,. To the extent you were
     not entitled to exercise the Option on the date of your death, or the
     Option is not exercised within the twelve-month period, the Option will
     expire.

11.  NON-TRANSFERABILITY. Options may not be transferred in any manner otherwise
     -------------------                                                
     than by will or by the laws of descent and distribution. During your
     lifetime, the Option may be exercised only by you. The terms of an Option
     will be binding upon your executors, administrators, heirs, successors and
     assigns.

12.  TAX CONSEQUENCES.  Below is a brief summary of some of the current U.S.
     ----------------                                                       
     Federal tax consequences of exercising an Option and disposing of the
     resulting Shares. THIS SUMMARY IS NECESSARILY INCOMPLETE AND THE TAX LAWS
     AND REGULATIONS CAN CHANGE. YOU SHOULD CONSULT A TAX ADVISER BEFORE
     EXERCISING THE OPTION OR DISPOSING OF THE SHARES.

     (A)  EXERCISE OF ISO.  If this Option qualifies as an ISO, there will be no
          ---------------                                                       
          regular U.S. Federal income tax liability on exercise. The excess, if
          any, of the Fair Market Value of the Shares on the date of exercise
          over the Exercise Price will be treated as an adjustment to the
          alternative minimum tax and may subject you to alternative minimum tax
          in the year of exercise. However, you may be required at some point to
          satisfy tax withholding obligations for a disqualifying disposition of
          an ISO. This tax withholding obligation must be satisfied either by
          paying the required amounts or having them withheld by OSI from your
          compensation.

     (B)  EXERCISE OF ISO FOLLOWING DISABILITY.  If your Continuous Status as an
          ------------------------------------                                  
          Employee or Consultant ends as a result of a disability that is not
          total and permanent as defined in Section 22(e)(3) of the Code then,
          to the extent permitted on the date of termination, you must exercise
          the ISO within 90 days of termination for it to be qualified as an
          ISO.

     (C)  EXERCISE OF NSO. There may be a regular U.S. Federal income tax
          ---------------                                              
          liability on the exercise of an NSO. You will be treated as having
          received income (taxable at ordinary income tax rates) equal to the
          excess, if any, of the Fair Market Value of the Shares on the date of
          exercise over the Exercise Price ("Gain").
<PAGE>
 
          However, the timing for recognizing this Gain may be deferred for up
          to six months if you are subject to Section 16 of the Securities
          Exchange Act of 1934, as amended ("Exchange Act"). If you are an
          Employee or a former Employee, OSI must collect from you or withhold
          from your compensation, and pay to the applicable tax authorities, a
          percentage of the Gain at the time of exercise. OSI may refuse to
          honor the exercise or refuse to deliver Shares if these withholding
          amounts are not delivered at the time of exercise.

     (D)  DISPOSITION OF SHARES. In the case of an NSO, if Shares are held for
          ---------------------                                     
          at least one year any gain realized on their disposition will be
          treated as long-term capital gain for U.S. Federal income tax
          purposes. In the case of an ISO, if the Shares are held for at least
          one year after exercise and are disposed of at least two years after
          the Date of Grant, any gain realized on their disposition will be
          treated as long-term capital gain. If Shares purchased under an ISO
          are disposed of within the one-year period or within two years after
          the Date of Grant, gain realized on the disposition will be treated as
          compensation income (taxable at ordinary income rates) to the extent
          of the difference between the Exercise Price and the lesser of (1) the
          Fair Market Value of the Shares on the date of exercise, or (2) the
          sale price of the Shares.

     (E)  NOTICE OF DISQUALIFYING DISPOSITION. If the Option is an ISO, and if
          -----------------------------------                         
          you sell or otherwise dispose of any of the Shares acquired under the
          ISO on or before the later of (1) two years after the Date of Grant,
          or (2) one year after the date of exercise, you agree to immediately
          give OSI written notice of the disposition. You may be subject to
          income tax withholding by OSI on the compensation income that you
          recognize.

13.  ENTIRE AGREEMENT; GOVERNING LAW. The Plan and this Agreement constitute the
     -------------------------------                                        
     entire agreement of the parties with respect to their subject matter and
     supersede all prior undertakings and agreements of Optionee and OSI with
     respect to that subject matter. This Agreement may not be modified
     adversely to your interest except by means of a writing signed by you and
     OSI. This Agreement is governed by California law except for that body of
     law pertaining to conflict of laws.


VESTING OF SHARES IS EARNED ONLY BY CONTINUED EMPLOYMENT AT THE WILL OF OSI (NOT
THROUGH THE ACT OF BEING HIRED, BEING GRANTED THIS OPTION OR ACQUIRING SHARES
UNDER IT). NEITHER THE OPTION NOR THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED EMPLOYMENT FOR
THE VESTING PERIOD OR FOR ANY OTHER PERIOD.

Optionee acknowledges receipt of a copy of the Plan, the Prospectus relating to
the Plan and the OSI Insider Trading Policy ("Policy"). You represent that you
are familiar with the terms of the Plan and accept the Option subject to those
terms. You further represent that you are familiar with the Policy and agree to
abide by the Policy in dealing with OSI securities.

Optionee has reviewed the Plan, the Option and the Policy, has had an
opportunity to obtain legal advice before executing this Agreement, fully
understands the provisions of the Option and specifically acknowledges that the
vesting of shares is earned only by continuing employment or consulting at the
will of OSI (and not through the act of being hired, being granted the Option or
acquiring shares under the Option). You accept as binding, conclusive and final
all decisions or interpretations of the Board of Directors upon any questions
arising under the Plan.


OBJECTIVE SYSTEMS INTEGRATORS, INC.


By: ______________________________    __________________________________
                                      OPTIONEE

Date: ____________________________        Date: ________________________