Document:

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                                                                     Exhibit 4.2

                              TALARIAN CORPORATION

                           1998 EQUITY INCENTIVE PLAN

                        As Adopted on September 29, 1998
       and Amended on July 16, 1999, November 12, 1999 and March 17, 2000

         1. PURPOSE. The purpose of this Plan is to provide incentives to
            -------
attract, retain and motivate eligible persons whose present and potential
contributions are important to the success of the Company, its Parent and
Subsidiaries, by offering them an opportunity to participate in the Company's
future performance through awards of Options and Restricted Stock. Capitalized
terms not defined in the text are defined in Section 22 hereof. This Plan is
intended to be a written compensatory benefit plan within the meaning of Rule
701 promulgated under the Securities Act.

         2. SHARES SUBJECT TO THE PLAN.
            --------------------------

            2.1 Number of Shares Available. Subject to Sections 2.2 and 17
                --------------------------
hereof, the total number of Shares reserved and available for grant and issuance
pursuant to this Plan will be 3,800,000 Shares (or such lesser number of Shares
as permitted under Section 260.140.45 of Title 10 of the California Code of
Regulations) plus the Shares described in the following two sentences. Subject
to Sections 2.2 and 17 hereof, Shares will again be available for grant and
issuance in connection with future Awards under this Plan that: (i) are subject
to issuance upon exercise of an Option but cease to be subject to such Option
for any reason other than exercise of such Option; (ii) are issued pursuant to
an Award granted pursuant to this Plan but are repurchased by the Company at the
original issue price; or (iii) are subject to an Award that otherwise terminates
without Shares being issued. In addition, any authorized shares not issued or
subject to outstanding grants under the Talarian Corporation 1991 Stock Option
Plan (the "Prior Plan") on the Effective Date (as defined in Section 18) and any
shares that: (i) are subject to issuance upon exercise of options granted
pursuant to the Prior Plan that expire or become unexercisable for any reason
without having been exercised in full; or (ii) are issued upon exercise of an
option granted pursuant to the Prior Plan but are repurchased by the Company at
the original issue price will no longer be available for grant and issuance
under the Prior Plan, but will be available for grant and issuance under this
Plan; provided, however, that the total number of shares available for grant and
      --------  -------
issuance under this Plan shall not exceed 10,000,000 Shares. At all times the
Company will reserve and keep available a sufficient number of Shares as will be
required to satisfy the requirements of all Awards granted and outstanding under
this Plan.

            2.2 Adjustment of Shares. In the event that the number of
                --------------------
outstanding shares of the Company's Common Stock is changed by a stock dividend,
recapitalization, stock split, reverse stock split, subdivision, combination,
reclassification or similar change in the capital structure of the Company
without consideration, then (i) the number of Shares reserved for

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issuance under this Plan, (ii) the Exercise Prices of and number of Shares
subject to outstanding Options and (iii) the Purchase Prices of and number of
Shares subject to other outstanding Awards will be proportionately adjusted,
subject to any required action by the Board or the shareholders of the Company
and compliance with applicable securities laws; provided, however, that
fractions of a Share will not be issued but will either be paid in cash at the
Fair Market Value of such fraction of a Share or will be rounded down to the
nearest whole Share, as determined by the Committee.

         3. ELIGIBILITY. ISOs (as defined in Section 5 hereof) may be granted
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only to employees (including officers and directors who are also employees) of
the Company or of a Parent or Subsidiary of the Company. NQSOs (as defined in
Section 5 hereof) and Restricted Stock Awards may be granted to employees,
officers, directors and consultants of the Company or any Parent or Subsidiary
of the Company; provided such consultants render bona fide services not in
connection with the offer and sale of securities in a capital-raising
transaction. A person may be granted more than one Award under this Plan.

         4. ADMINISTRATION.
            --------------

            4.1 Committee Authority. This Plan will be administered by the
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Committee or the Board if no Committee is created by the Board. Subject to the
general purposes, terms and conditions of this Plan, and to the direction of the
Board, the Committee will have full power to implement and carry out this Plan.
Without limitation, the Committee will have the authority to:

            (a) construe and interpret this Plan, any Award Agreement and any
                other agreement or document executed pursuant to this Plan;

            (b) prescribe, amend and rescind rules and regulations relating to
                this Plan;

            (c) approve persons to receive Awards;

            (d) determine the form and terms of Awards;

            (e) determine the number of Shares or other consideration subject to
                Awards;

            (f) determine whether Awards will be granted singly, in combination
                with, in tandem with, in replacement of, or as alternatives to,
                other Awards under this Plan or awards under any other incentive
                or compensation plan of the Company or any Parent or Subsidiary
                of the Company;

            (g) grant waivers of any conditions of this Plan or any Award;

            (h) determine the terms of vesting, exercisability and payment of
                Awards;

            (i) correct any defect, supply any omission, or reconcile any
                inconsistency in this Plan, any Award, any Award Agreement, any
                Exercise Agreement or any Restricted Stock Purchase Agreement;

            (j) determine whether an Award has been earned; and

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            (k) make all other determinations necessary or advisable for the
                administration of this Plan.

            4.2 Committee Discretion. Unless in contravention of any express
                --------------------
terms of this Plan or Award, any determination made by the Committee with
respect to any Award will be made in its sole discretion either (i) at the time
of grant of the Award, or (ii) subject to Section 5.9 hereof, at any later time.
Any such determination will be final and binding on the Company and on all
persons having an interest in any Award under this Plan. The Committee may
delegate to one or more officers of the Company the authority to grant an Award
under this Plan, provided such officer or officers are members of the Board.

         5. OPTIONS. The Committee may grant Options to eligible persons
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described in Section 3 hereof and will determine whether such Options will be
Incentive Stock Options within the meaning of the Code ("ISOs") or Nonqualified
Stock Options ("NQSOs"), the number of Shares subject to the Option, the
Exercise Price of the Option, the period during which the Option may be
exercised, and all other terms and conditions of the Option, subject to the
following:

            5.1 Form of Option Grant. Each Option granted under this Plan will
                --------------------
be evidenced by an Award Agreement which will expressly identify the Option as
an ISO or an NQSO ("Stock Option Agreement"), and will be in such form and
contain such provisions (which need not be the same for each Participant) as the
Committee may from time to time approve, and which will comply with and be
subject to the terms and conditions of this Plan.

            5.2 Date of Grant. The date of grant of an Option will be the date
                -------------
on which the Committee makes the determination to grant such Option, unless a
later date is otherwise specified by the Committee. The Stock Option Agreement
and a copy of this Plan will be delivered to the Participant within a reasonable
time after the granting of the Option.

            5.3 Exercise Period. Options may be exercisable immediately but
                ---------------
subject to repurchase pursuant to Section 11 hereof or may be exercisable within
the times or upon the events determined by the Committee as set forth in the
Stock Option Agreement governing such Option; provided, however, that no Option
will be exercisable after the expiration of ten (10) years from the date the
Option is granted; and provided further that no ISO granted to a person who
directly or by attribution owns more than ten percent (10%) of the total
combined voting power of all classes of stock of the Company or of any Parent or
Subsidiary of the Company ("Ten Percent Shareholder") will be exercisable after
the expiration of five (5) years from the date the ISO is granted. The Committee
also may provide for Options to become exercisable at one time or from time to
time, periodically or otherwise, in such number of Shares or percentage of
Shares as the Committee determines. Subject to earlier termination of the Option
as provided herein, each Participant who is not an officer, director or
consultant of the Company or of a Parent or Subsidiary of the Company shall have
the right to exercise an Option granted hereunder at the rate of no less than
twenty percent (20%) per year over five (5) years from the date such Option is
granted.

            5.4 Exercise Price. The Exercise Price of an Option will be
                --------------
determined by the Committee when the Option is granted and may not be less than
eighty-five percent (85%) of the

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Fair Market Value of the Shares on the date of grant; provided that (i) the
Exercise Price of an ISO will not be less than one hundred percent (100%) of the
Fair Market Value of the Shares on the date of grant and (ii) the Exercise Price
of any Option granted to a Ten Percent Shareholder will not be less than one
hundred ten percent (110%) of the Fair Market Value of the Shares on the date of
grant. Payment for the Shares purchased must be made in accordance with Section
7 hereof.

            5.5 Method of Exercise. Options may be exercised only by delivery to
                ------------------
the Company of a written stock option exercise agreement (the "Exercise
Agreement") in a form approved by the Committee (which need not be the same for
each Participant). The Exercise Agreement will state (i) the number of Shares
being purchased, (ii) the restrictions imposed on the Shares purchased under
such Exercise Agreement, if any, and (iii) such representations and agreements
regarding Participant's investment intent and access to information and other
matters, if any, as may be required or desirable by the Company to comply with
applicable securities laws. Participant shall execute and deliver to the Company
the Exercise Agreement together with payment in full of the Exercise Price, and
any applicable taxes, for the number of Shares being purchased.

            5.6 Termination. Subject to earlier termination pursuant to Sections
                -----------
17 and 18 hereof and notwithstanding the exercise periods set forth in the Stock
Option Agreement, exercise of an Option will always be subject to the following:

            (a) If the Participant is Terminated for any reason other than
                death, Disability or for Cause, then the Participant may
                exercise such Participant's Options only to the extent that such
                Options are exercisable upon the Termination Date. Such Options
                must be exercised by the Participant, if at all, as to all or
                some of the Vested Shares calculated as of the Termination Date,
                within three (3) months after the Termination Date (or within
                such shorter time period, not less than thirty (30) days, or
                within such longer time period, not exceeding five (5) years,
                after the Termination Date as may be determined by the
                Committee, with any exercise beyond three (3) months after the
                Termination Date deemed to be an NQSO) but in any event, no
                later than the expiration date of the Options.

            (b) If the Participant is Terminated because of Participant's death
                or Disability (or the Participant dies within three (3) months
                after a Termination other than for Cause), then Participant's
                Options may be exercised only to the extent that such Options
                are exercisable by Participant on the Termination Date. Such
                options must be exercised by Participant (or Participant's legal
                representative or authorized assignee), if at all, as to all or
                some of the Vested Shares calculated as of the Termination Date,
                within twelve (12) months after the Termination Date (or within
                such shorter time period, not less than six (6) months, or
                within such longer time period, not exceeding five (5) years,
                after the Termination Date as may be determined by the
                Committee, with any exercise beyond (i) three (3) months after
                the Termination Date when the Termination is for any reason
                other than the

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                 Participant's death or disability, within the meaning of
                 Section 22(e)(3) of the Code, or (ii) twelve (12) months after
                 the Termination Date when the Termination is for Participant's
                 disability, within the meaning of Section 22(e)(3) of the Code,
                 deemed to be an NQSO) but in any event no later than the
                 expiration date of the Options.

            (c)  If the Participant is terminated for Cause, then Participant's
                 Options shall expire on such Participant's Termination Date, or
                 at such later time and on such conditions as are determined by
                 the Committee.

            5.7  Limitations on Exercise. The Committee may specify a reasonable
                 -----------------------
minimum number of Shares that may be purchased on any exercise of an Option,
provided that such minimum number will not prevent Participant from exercising
the Option for the full number of Shares for which it is then exercisable.

            5.8  Limitations on ISOs. The aggregate Fair Market Value
                 -------------------
(determined as of the date of grant) of Shares with respect to which ISOs are
exercisable for the first time by a Participant during any calendar year (under
this Plan or under any other incentive stock option plan of the Company or any
Parent or Subsidiary of the Company) will not exceed One Hundred Thousand
Dollars ($100,000). If the Fair Market Value of Shares on the date of grant with
respect to which ISOs are exercisable for the first time by a Participant during
any calendar year exceeds One Hundred Thousand Dollars ($100,000), then the
Options for the first One Hundred Thousand Dollars ($100,000) worth of Shares to
become exercisable in such calendar year will be ISOs and the Options for the
amount in excess of One Hundred Thousand Dollars ($100,000) that become
exercisable in that calendar year will be NQSOs. In the event that the Code or
the regulations promulgated thereunder are amended after the Effective Date (as
defined in Section 18 hereof) to provide for a different limit on the Fair
Market Value of Shares permitted to be subject to ISOs, then such different
limit will be automatically incorporated herein and will apply to any Options
granted after the effective date of such amendment.

            5.9  Modification, Extension or Renewal. The Committee may modify,
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extend or renew outstanding Options and authorize the grant of new Options in
substitution therefor, provided that any such action may not, without the
written consent of a Participant, impair any of such Participant's rights under
any Option previously granted. Any outstanding ISO that is modified, extended,
renewed or otherwise altered will be treated in accordance with Section 424(h)
of the Code. Subject to Section 5.10 hereof, the Committee may reduce the
Exercise Price of outstanding Options without the consent of Participants by a
written notice to them; provided, however, that the Exercise Price may not be
reduced below the minimum Exercise Price that would be permitted under Section
5.4 hereof for Options granted on the date the action is taken to reduce the
Exercise Price.

            5.10 No Disqualification. Notwithstanding any other provision in
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this Plan, no term of this Plan relating to ISOs will be interpreted, amended or
altered, nor will any discretion or authority granted under this Plan be
exercised, so as to disqualify this Plan under Section 422 of the Code or,
without the consent of the Participant, to disqualify any Participant's ISO
under Section 422 of the Code.

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       6.   RESTRICTED STOCK. A Restricted Stock Award is an offer by the
            ----------------
Company to sell to an eligible person Shares that are subject to certain
specified restrictions. The Committee will determine to whom an offer will be
made, the number of Shares the person may purchase, the Purchase Price, the
restrictions to which the Shares will be subject, and all other terms and
conditions of the Restricted Stock Award, subject to the following:

            6.1  Form of Restricted Stock Award. All purchases under a
                 ------------------------------
Restricted Stock Award made pursuant to this Plan will be evidenced by an Award
Agreement ("Restricted Stock Purchase Agreement") that will be in such form
(which need not be the same for each Participant) as the Committee will from
time to time approve, and will comply with and be subject to the terms and
conditions of this Plan. The Restricted Stock Award will be accepted by the
Participant's execution and delivery of the Restricted Stock Purchase Agreement
and full payment for the Shares to the Company within thirty (30) days from the
date the Restricted Stock Purchase Agreement is delivered to the person. If such
person does not execute and deliver the Restricted Stock Purchase Agreement
along with full payment for the Shares to the Company within such thirty (30)
days, then the offer will terminate, unless otherwise determined by the
Committee.

            6.2  Purchase Price. The Purchase Price of Shares sold pursuant to a
                 --------------
Restricted Stock Award will be determined by the Committee and will be at
least eighty-five percent (85%) of the Fair Market Value of the Shares on the
date the Restricted Stock Award is granted or at the time the purchase is
consummated, except in the case of a sale to a Ten Percent Shareholder, in which
case the Purchase Price will be one hundred percent (100%) of the Fair Market
Value on the date the Restricted Stock Award is granted or at the time the
purchase is consummated. Payment of the Purchase Price must be made in
accordance with Section 7 hereof.

            6.3  Restrictions. Restricted Stock Awards may be subject to
                 ------------
the restrictions set forth in Section 11 hereof or such other restrictions not
inconsistent with Section 25102(o) of the California Corporations Code.

       7.   PAYMENT FOR SHARE PURCHASES.
            ---------------------------

            7.1  Payment. Payment for Shares purchased pursuant to this Plan may
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be made in cash (by check) or, where expressly approved for the Participant by
by the Committee and where permitted by law:

            (a)  by cancellation of indebtedness of the Company owed to the
                 Participant;

            (b)  by surrender of shares that: (i) either (A) have been owned by
                 Participant for more than six (6) months and have been paid for
                 within the meaning of SEC Rule 144 (and, if such shares were
                 purchased from the Company by use of a promissory note, such
                 note has been fully paid with respect to such shares) or (B)
                 were obtained by Participant in the public market and (ii) are
                 clear of all liens, claims, encumbrances or security interests;

            (c)  by tender of a full recourse promissory note having such terms
                 as may be approved by the Committee and bearing interest at a
                 rate sufficient to avoid imputation of income under Sections
                 483 and 1274 of the Code;

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                    provided, however, that Participants who are not employees
                    or directors of the Company will not be entitled to purchase
                    Shares with a promissory note unless the note is adequately
                    secured by collateral other than the Shares;

            (d)     by waiver of compensation due or accrued to the Participant
                    from the Company for services rendered;

            (e)     with respect only to purchases upon exercise of an Option,
                    and provided that a public market for the Company's stock
                    exists:

                    (i)    through a "same day sale" commitment from the
                           Participant and a broker-dealer that is a member of
                           the National Association of Securities Dealers (an
                           "NASD Dealer") whereby the Participant irrevocably
                           elects to exercise the Option and to sell a portion
                           of the Shares so purchased sufficient to pay the
                           total Exercise Price, and whereby the NASD Dealer
                           irrevocably commits upon receipt of such Shares to
                           forward the total Exercise Price directly to the
                           Company; or

                    (ii)   through a "margin" commitment from the Participant
                           and an NASD Dealer whereby the Participant
                           irrevocably elects to exercise the Option and to
                           pledge the Shares so purchased to the NASD Dealer in
                           a margin account as security for a loan from the NASD
                           Dealer in the amount of the total Exercise Price, and
                           whereby the NASD Dealer irrevocably commits upon
                           receipt of such Shares to forward the total Exercise
                           Price directly to the Company; or

            (f)     by any combination of the foregoing.

            7.2     Loan Guarantees. The Committee may, in its sole discretion,
                    ---------------
elect to assist the Participant in paying for Shares purchased under this Plan
by authorizing a guarantee by the Company of a third-party loan to the
Participant.

       8.   WITHHOLDING TAXES.
            -----------------

            8.1     Withholding Generally. Whenever Shares are to be issued in
                    ---------------------
satisfaction of Awards granted under this Plan, the Company may require the
Participant to remit to the Company an amount sufficient to satisfy federal,
state and local withholding tax requirements prior to the delivery of any
certificate or certificates for such Shares. Whenever, under this Plan, payments
in satisfaction of Awards are to be made in cash by the Company, such payment
will be net of an amount sufficient to satisfy federal, state, and local
withholding tax requirements.

            8.2     Stock Withholding. When, under applicable tax laws, a
                    -----------------
Participant incurs tax liability in connection with the exercise or vesting of
any Award that is subject to tax withholding and the Participant is obligated to
pay the Company the amount required to be withheld, the Committee may in its
sole discretion allow the Participant to satisfy the minimum

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withholding tax obligation by electing to have the Company withhold from the
Shares to be issued that number of Shares having a Fair Market Value equal to
the minimum amount required to be withheld, determined on the date that the
amount of tax to be withheld is to be determined. All elections by a Participant
to have Shares withheld for this purpose will be made in accordance with the
requirements established by the Committee for such elections and be in writing
in a form acceptable to the Committee.

         9.       PRIVILEGES OF STOCK OWNERSHIP.
                  -----------------------------

                  9.1  Voting and Dividends. No Participant will have any of the
                       --------------------
rights of a shareholder with respect to any Shares until the Shares are issued
to the Participant. After Shares are issued to the Participant, the Participant
will be a shareholder and have all the rights of a shareholder with respect to
such Shares, including the right to vote and receive all dividends or other
distributions made or paid with respect to such Shares; provided, that if such
Shares are Restricted Stock, then any new, additional or different securities
the Participant may become entitled to receive with respect to such Shares by
virtue of a stock dividend, stock split or any other change in the corporate or
capital structure of the Company will be subject to the same restrictions as the
Restricted Stock. The Participant will have no right to retain such stock
dividends or stock distributions with respect to Unvested Shares that are
repurchased pursuant to Section 11 hereof. The Company will comply with Section
260.140.1 of Title 10 of the California Code of Regulations with respect to the
voting rights of Common Stock.

                  9.2  Financial Statements. The Company will provide financial
                       --------------------
statements to each Participant annually during the period such Participant has
Awards outstanding, or as otherwise required under Section 260.140.46 of Title
10 of the California Code of Regulations. Notwithstanding the foregoing, the
Company will not be required to provide such financial statements to
Participants when issuance is limited to key employees whose services in
connection with the Company assure them access to equivalent information.

         10.      TRANSFERABILITY. Awards granted under this Plan, and any
                  ---------------
interest therein, will not be transferable or assignable by Participant, other
than by will or by the laws of descent and distribution, and may not be made
subject to execution, attachment or similar process. During the lifetime of the
Participant an Award will be exercisable only by the Participant or
Participant's legal representative and any elections with respect to an Award
may be made only by the Participant or Participant's legal representative.

         11.      RESTRICTIONS ON SHARES.
                  ----------------------

                  11.1 Right of First Refusal. At the discretion of the
                       ----------------------
Committee, the Company may reserve to itself and/or its assignee(s) in the Award
Agreement a right of first refusal to purchase all Shares that a Participant (or
a subsequent transferee) may propose to transfer to a third party, unless
otherwise not permitted by Section 25102(o) of the California Corporations Code,
provided that such right of first refusal terminates upon the Company's initial
public offering of Common Stock pursuant to an effective registration statement
filed under the Securities Act.

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             11.2 Right of Repurchase. At the discretion of the Committee, the
                  -------------------
Company may reserve to itself and/or its assignee(s) in the Award Agreement a
right to repurchase Unvested Shares held by a Participant for cash and/or
cancellation of purchase money indebtedness owed to the Company by the
Participant following such Participant's Termination at any time within the
later of ninety (90) days after the Participant's Termination Date and the date
the Participant purchases Shares under the Plan at the Participant's Exercise
Price or Purchase Price, as the case may be, provided that, unless the
Participant is an officer, director or consultant of the Company or of a Parent
or Subsidiary of the Company, such right of repurchase lapses at the rate of no
less than twenty percent (20%) per year over five (5) years from: (a) the date
of grant of the Option or (b) in the case of Restricted Stock, the date the
Participant purchases the Shares.

         12. CERTIFICATES. All certificates for Shares or other securities
             ------------
delivered under this Plan will be subject to such stock transfer orders, legends
and other restrictions as the Committee may deem necessary or advisable,
including restrictions under any applicable federal, state or foreign securities
law, or any rules, regulations and other requirements of the SEC or any stock
exchange or automated quotation system upon which the Shares may be listed or
quoted.

         13. ESCROW; PLEDGE OF SHARES. To enforce any restrictions on a
             ------------------------
Participant's Shares set forth in Section 11 hereof, the Committee may require
the Participant to deposit all certificates representing Shares, together with
stock powers or other instruments of transfer approved by the Committee,
appropriately endorsed in blank, with the Company or an agent designated by the
Company to hold in escrow until such restrictions have lapsed or terminated. The
Committee may cause a legend or legends referencing such restrictions to be
placed on the certificates. Any Participant who is permitted to execute a
promissory note as partial or full consideration for the purchase of Shares
under this Plan will be required to pledge and deposit with the Company all or
part of the Shares so purchased as collateral to secure the payment of
Participant's obligation to the Company under the promissory note; provided,
however, that the Committee may require or accept other or additional forms of
collateral to secure the payment of such obligation and, in any event, the
Company will have full recourse against the Participant under the promissory
note notwithstanding any pledge of the Participant's Shares or other collateral.
In connection with any pledge of the Shares, Participant will be required to
execute and deliver a written pledge agreement in such form as the Committee
will from time to time approve.

         14. EXCHANGE AND BUYOUT OF AWARDS. The Committee may, at any time or
             -----------------------------
from time to time, authorize the Company, with the consent of the respective
Participants, to issue new Awards in exchange for the surrender and cancellation
of any or all outstanding Awards. The Committee may at any time buy from a
Participant an Award previously granted with payment in cash, shares of Common
Stock of the Company (including Restricted Stock) or other consideration, based
on such terms and conditions as the Committee and the Participant may agree.

         15. SECURITIES LAW AND OTHER REGULATORY COMPLIANCE. This Plan is
             ----------------------------------------------
intended to comply with Section 25102(o) of the California Corporations Code.
Any provision of this Plan which is inconsistent with Section 25102(o) shall,
without further act or

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amendment by the Company or the Board, be reformed to comply with the
requirements of Section 25102(o). An Award will not be effective unless such
Award is in compliance with all applicable federal and state securities laws,
rules and regulations of any governmental body, and the requirements of any
stock exchange or automated quotation system upon which the Shares may then be
listed or quoted, as they are in effect on the date of grant of the Award and
also on the date of exercise or other issuance. Notwithstanding any other
provision in this Plan, the Company will have no obligation to issue or deliver
certificates for Shares under this Plan prior to (i) obtaining any approvals
from governmental agencies that the Company determines are necessary or
advisable, and/or (ii) compliance with any exemption, completion of any
registration or other qualification of such Shares under any state or federal
law or ruling of any governmental body that the Company determines to be
necessary or advisable. The Company will be under no obligation to register the
Shares with the SEC or to effect compliance with the exemption, registration,
qualification or listing requirements of any state securities laws, stock
exchange or automated quotation system, and the Company will have no liability
for any inability or failure to do so.

         16. NO OBLIGATION TO EMPLOY. Nothing in this Plan or any Award granted
             -----------------------
under this Plan will confer or be deemed to confer on any Participant any right
to continue in the employ of, or to continue any other relationship with, the
Company or any Parent or Subsidiary of the Company or limit in any way the right
of the Company or any Parent or Subsidiary of the Company to terminate
Participant's employment or other relationship at any time, with or without
Cause.

         17. CORPORATE TRANSACTIONS.
             ----------------------

             17.1 Assumption or Replacement of Awards by Successor or
                  ---------------------------------------------------
Acquiring Corporation. In the event of (i) a merger or consolidation in which
---------------------
the Company is not the surviving corporation (other than a merger or
consolidation with a wholly owned subsidiary, a reincorporation, or other
transaction in which there is no substantial change in the shareholders of the
corporation and the Options granted under this Plan are assumed by the successor
corporation), (ii) a dissolution or liquidation of the Company, (iii) the sale
of substantially all of the assets of the Company, or (iv) any other transaction
which qualifies as a "corporate transaction" under Section 424(a) of the Revenue
Code wherein the shareholders of the Company give up all of their equity
interest in the Company (except for the acquisition of all or substantially all
of the outstanding shares of the Company), any or all outstanding Options may be
assumed by the successor corporation, which assumption shall be binding on all
Optionees. In the alternative, the successor corporation may substitute an
equivalent option or provide substantially similar consideration to Optionees as
was provided to shareholders (after taking into account the existing provisions
of Optionee's options, such as the exercise price and the vesting schedule). The
successor corporation may also issue, in place of outstanding shares of the
Company held by Optionee as a result of the exercise of an Option that is
subject to repurchase, substantially similar shares or other property subject to
similar repurchase restrictions no less favorable to Optionee. In the event such
successor corporation, if any, refuses to assume or substitute the Options, as
provided above, or if there is no successor corporation, such Options shall
expire in connection with such transaction at such time and on such conditions
as the Board shall determine.

                                      -10-

<PAGE>

             17.2 Other Treatment of Awards. Subject to any greater rights
                  -------------------------
granted to Participants under the foregoing provisions of this Section 17, in
the event of the occurrence of any transaction described in Section 17.1 hereof,
any outstanding Awards will be treated as provided in the applicable agreement
or plan of merger, consolidation, dissolution, liquidation or sale of assets.

             17.3 Assumption of Awards by the Company. The Company, from time to
                  -----------------------------------
time, also may substitute or assume outstanding awards granted by another
company, whether in connection with an acquisition of such other company or
otherwise, by either (i) granting an Award under this Plan in substitution of
such other company's award or (ii) assuming such award as if it had been granted
under this Plan if the terms of such assumed award could be applied to an Award
granted under this Plan. Such substitution or assumption will be permissible if
the holder of the substituted or assumed award would have been eligible to be
granted an Award under this Plan if the other company had applied the rules of
this Plan to such grant. In the event the Company assumes an award granted by
another company, the terms and conditions of such award will remain unchanged
(except that the exercise price and the number and nature of shares issuable
upon exercise of any such option will be adjusted appropriately pursuant to
Section 424(a) of the Code). In the event the Company elects to grant a new
Option rather than assuming an existing option, such new Option may be granted
with a similarly adjusted Exercise Price.

         18. ADOPTION AND SHAREHOLDER APPROVAL. This Plan will become effective
             ---------------------------------
on the date that it is adopted by the Board (the "Effective Date"). This Plan
will be approved by the shareholders of the Company (excluding Shares issued
pursuant to this Plan), consistent with applicable laws, within twelve (12)
months before or after the Effective Date. Upon the Effective Date, the Board
may grant Awards pursuant to this Plan; provided, however, that: (i) no Option
may be exercised prior to initial shareholder approval of this Plan; (ii) no
Option granted pursuant to an increase in the number of Shares approved by the
Board shall be exercised prior to the time such increase has been approved by
the shareholders of the Company; (iii) in the event that initial shareholder
approval is not obtained within the time period provided herein, all Awards
granted hereunder shall be canceled, any Shares issued pursuant to any Award
shall be canceled and any purchase of Shares issued hereunder shall be
rescinded; and (iv) Awards granted pursuant to an increase in the number of
Shares approved by the Board which increase is not timely approved by
shareholders shall be canceled, any Shares issued pursuant to any such Awards
shall be canceled, and any purchase of Shares subject to any such Award shall be
rescinded.

         19. TERM OF PLAN/GOVERNING LAW. Unless earlier terminated as provided
             --------------------------
herein, this Plan will terminate ten (10) years from the Effective Date or, if
earlier, the date of shareholder approval. This Plan and all agreements
hereunder shall be governed by and construed in accordance with the laws of the
State of California.

         20. AMENDMENT OR TERMINATION OF PLAN. Subject to Section 5.9 hereof,
             --------------------------------
the Board may at any time terminate or amend this Plan in any respect, including
without limitation amendment of any form of Award Agreement or instrument to be
executed pursuant to this Plan; provided, however, that the Board will not,
without the approval of the shareholders of the Company, amend this Plan in any
manner that requires such shareholder approval pursuant to

                                      -11-

<PAGE>

Section 25102(o) of the California Corporations Code or the Code or the
regulations promulgated thereunder as such provisions apply to ISO plans.

         21. NONEXCLUSIVITY OF THE PLAN. Neither the adoption of this Plan by
             --------------------------
the Board, the submission of this Plan to the shareholders of the Company for
approval, nor any provision of this Plan will be construed as creating any
limitations on the power of the Board to adopt such additional compensation
arrangements as it may deem desirable, including, without limitation, the
granting of stock options and other equity awards otherwise than under this
Plan, and such arrangements may be either generally applicable or applicable
only in specific cases.

         22. DEFINITIONS. As used in this Plan, the following terms will have
             -----------
the following meanings:

             "Award" means any award under this Plan, including any Option or
Restricted Stock Award.

             "Award Agreement" means, with respect to each Award, the signed
written agreement between the Company and the Participant setting forth the
terms and conditions of the Award, including the Stock Option Agreement and
Restricted Stock Agreement.

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

             "Cause" means Termination because of (i) any willful, material
violation by the Participant of any law or regulation applicable to the business
of the Company or a Parent or Subsidiary of the Company, the Participant's
conviction for, or guilty plea to, a felony or a crime involving moral
turpitude, or any willful perpetration by the Participant of a common law fraud,
(ii) the Participant's commission of an act of personal dishonesty which
involves personal profit in connection with the Company or any other entity
having a business relationship with the Company, (iii) any material breach by
the Participant of any provision of any agreement or understanding between the
Company or any Parent or Subsidiary of the Company and the Participant regarding
the terms of the Participant's service as an employee, officer, director or
consultant to the Company or a Parent or Subsidiary of the Company, including
without limitation, the willful and continued failure or refusal of the
Participant to perform the material duties required of such Participant as an
employee, officer, director or consultant of the Company or a Parent or
Subsidiary of the Company, other than as a result of having a Disability, or a
breach of any applicable invention assignment and confidentiality agreement or
similar agreement between the Company or a Parent or Subsidiary of the Company
and the Participant, (iv) Participant's disregard of the policies of the Company
or any Parent or Subsidiary of the Company so as to cause loss, damage or injury
to the property, reputation or employees of the Company or a Parent or
Subsidiary of the Company, or (v) any other misconduct by the Participant which
is materially injurious to the financial condition or business reputation of, or
is otherwise materially injurious to, the Company or a Parent or Subsidiary of
the Company.

             "Code" means the Internal Revenue Code of 1986, as amended.

             "Committee" means the committee created and appointed by the Board
to administer this Plan, or if no committee is created and appointed, the Board.

                                      -12-

<PAGE>

                  "Company" means Talarian Corporation, or any successor
corporation.

                  "Disability" means a disability, whether temporary or
permanent, partial or total, as determined by the Committee.

                  "Exercise Price" means the price at which a holder of an
Option may purchase the Shares issuable upon exercise of the Option.

                  "Fair Market Value" means, as of any date, the value of a
share of the Company's Common Stock determined as follows:

                  (a)      if such Common Stock is then quoted on the Nasdaq
                           National Market, its closing price on the Nasdaq
                           National Market on the date of determination as
                           reported in The Wall Street Journal;
                                       -----------------------

                  (b)      if such Common Stock is publicly traded and is then
                           listed on a national securities exchange, its closing
                           price on the date of determination on the principal
                           national securities exchange on which the Common
                           Stock is listed or admitted to trading as reported in
                           The Wall Street Journal;
                           -----------------------

                  (c)      if such Common Stock is publicly traded but is not
                           quoted on the Nasdaq National Market nor listed or
                           admitted to trading on a national securities
                           exchange, the average of the closing bid and asked
                           prices on the date of determination as reported by
                           The Wall Street Journal (or, if not so reported, as
                           -----------------------
                           otherwise reported by any newspaper or other source
                           as the Board may determine); or

                  (d)      if none of the foregoing is applicable, by the
                           Committee in good faith.

                  "Option" means an award of an option to purchase Shares
pursuant to Section 5 hereof.

                  "Parent" means any corporation (other than the Company) in an
unbroken chain of corporations ending with the Company if each of such
corporations other than the Company owns stock representing fifty percent (50%)
or more of the total combined voting power of all classes of stock in one of the
other corporations in such chain.

                  "Participant" means a person who receives an Award under this
Plan.

                  "Plan" means this Talarian Corporation 1998 Equity Incentive
Plan, as amended from time to time.

                  "Purchase Price" means the price at which a Participant may
purchase Restricted Stock.

     "Restricted Stock" means Shares purchased pursuant to a Restricted Stock
Award.

                  "Restricted Stock Award" means an award of Shares pursuant to
Section 6 hereof.

                  "SEC" means the Securities and Exchange Commission.

                                      -13-

<PAGE>

                  "Securities Act" means the Securities Act of 1933, as amended.

                  "Shares" means shares of the Company's Common Stock reserved
for issuance under this Plan, as adjusted pursuant to Sections 2 and 17 hereof,
and any successor security.

                  "Subsidiary" means any corporation (other than the Company) in
an unbroken chain of corporations beginning with the Company if each of the
corporations other than the last corporation in the unbroken chain owns stock
representing fifty percent (50%) or more of the total combined voting power of
all classes of stock in one of the other corporations in such chain.

                  "Termination" or "Terminated" means, for purposes of this Plan
with respect to a Participant, that the Participant has for any reason ceased to
provide services as an employee, officer, director or consultant to the Company
or a Parent or Subsidiary of the Company. A Participant will not be deemed to
have ceased to provide services in the case of (i) sick leave, (ii) military
leave, or (iii) any other leave of absence approved by the Committee, provided
that such leave is for a period of not more than ninety (90) days (a) unless
reinstatement (or, in the case of an employee with an ISO, reemployment) upon
the expiration of such leave is guaranteed by contract or statute, or (b) unless
provided otherwise pursuant to formal policy adopted from time to time by the
Company's Board and issued and promulgated in writing. In the case of any
Participant on (i) sick leave, (ii) military leave or (iii) an approved leave of
absence, the Committee may make such provisions respecting suspension of vesting
of the Award while on leave from the Company or a Parent or Subsidiary of the
Company as it may deem appropriate, except that in no event may an Option be
exercised after the expiration of the term set forth in the Stock Option
Agreement. The Committee will have sole discretion to determine whether a
Participant has ceased to provide services and the effective date on which the
Participant ceased to provide services (the "Termination Date").

                  "Unvested Shares" means "Unvested Shares" as defined in the
Award Agreement.

                  "Vested Shares" means "Vested Shares" as defined in the Award
Agreement.

                                      -14-

<PAGE>

                                   [Six month cliff; monthly vesting thereafter]

                                                              No. --------------

                              TALARIAN CORPORATION
                           1998 EQUITY INCENTIVE PLAN

                             STOCK OPTION AGREEMENT

                  This Stock Option Agreement (the "Agreement") is made and
entered into as of the date of grant set forth below (the "Date of Grant") by
and between Talarian Corporation, a California corporation (the "Company"), and
the participant named below (the "Participant"). Capitalized terms not defined
herein shall have the meaning ascribed to them in the Company's 1998 Equity
Incentive Plan (the "Plan").

Participant:
                              __________________________________
Social Security Number:
                              __________________________________
Address:
                              __________________________________

                              __________________________________
Total Option Shares:
                              __________________________________
Exercise Price Per Share:
                              __________________________________
Date of Grant:
                              __________________________________
First Vesting Date:
                              __________________________________
Expiration Date:
                              __________________________________
                              (unless earlier terminated under Section 5.6 of
                              the Plan)
Type of Stock Option

(Check one):                  [_] Incentive Stock Option
                              [_] Nonqualified Stock Option

                  1. Grant of Option. The Company hereby grants to Participant
                     ---------------
an option (this "Option") to purchase the total number of shares of Common Stock
of the Company set forth above as Total Option Shares (the "Shares") at the
Exercise Price Per Share set forth above (the "Exercise Price"), subject to all
of the terms and conditions of this Agreement and the Plan. If designated as an
Incentive Stock Option above, the Option is intended to qualify as an "incentive
stock option" (the "ISO") within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code").

                  2. Exercise Period.
                     ---------------

                     2.1 Exercise Period of Option. Provided Participant
                         -------------------------
continues to provide services to the Company or any Subsidiary or Parent of the
Company, the Option will

                                      -15-

<PAGE>

become vested and exercisable as to portions of the Shares as follows: (i) this
Option shall not vest nor be exercisable with respect to any of the Shares until
________, 199__ (the "First Vesting Date"); (ii) on the First Vesting Date the
Option will become vested and exercisable as to twelve and one half percent
(12.5%) of the Shares; and (iii) thereafter at the end of each full succeeding
month the Option will become vested and exercisable as to 2.0833% percent of the
Shares until the Shares are vested with respect to one hundred percent (100%) of
the Shares. If application of the vesting percentage causes a fractional share,
such share shall be rounded down to the nearest whole share for each month
except for the last month in such vesting period, at the end of which last month
this Option shall become exercisable for the full remainder of the Shares.

                    2.2 Vesting of Options. Shares that are vested pursuant to
                        ------------------
the schedule set forth in Section 2.1 are "Vested Shares." Shares that are not
vested pursuant to the schedule set forth in Section 2.1 are "Unvested Shares."

                    2.3 Expiration. The Option shall expire on the Expiration
                        ----------
Date set forth above or earlier as provided in Section 3 below or pursuant to
Section 5.6 of the Plan.

               3.   Termination.
                    -----------

                    3.1 Termination for Any Reason Except Death, Disability or
                        ------------------------------------------------------
Cause. If Participant is Terminated for any reason, except death, Disability or
-----
for Cause, the Option, to the extent (and only to the extent) that it would have
been exercisable by Participant on the Termination Date, may be exercised by
Participant no later than three (3) months after the Termination Date, but in
any event no later than the Expiration Date.

                    3.2 Termination Because of Death or Disability. If
                        ------------------------------------------
Participant is Terminated because of death or Disability of Participant (or
Participant dies within three (3) months of Termination when Termination is for
any reason other than Participant's Disability or for Cause), the Option, to the
extent that it is exercisable by Participant on the Termination Date, may be
exercised by Participant (or Participant's legal representative) no later than
twelve (12) months after the Termination Date, but in any event no later than
the Expiration Date. Any exercise beyond (i) three (3) months after the
Termination Date when the Termination is for any reason other than the
Participant's death or disability, within the meaning of Section 22(e)(3) of the
Code; or (ii) twelve (12) months after the Termination Date when the termination
is for Participant's disability, within the meaning of Section 22(e)(3) of the
Code, is deemed to be an NQSO.

                    3.3 Termination for Cause. If Participant is Terminated for
                        ---------------------
Cause, then the Option will expire on Participant's Termination Date, or at such
later time and on such conditions as are determined by the Committee.

                    3.4 No Obligation to Employ. Nothing in the Plan or this
                        -----------------------
Agreement shall confer on Participant any right to continue in the employ of, or
other relationship with, the Company or any Parent or Subsidiary of the Company,
or limit in any way the right of the

                                      -16-

<PAGE>

Company or any Parent or Subsidiary of the Company to terminate Participant's
employment or other relationship at any time, with or without Cause.

               4.   Manner of Exercise.
                    ------------------

                    4.1 Stock Option Exercise Agreement. To exercise this
                        -------------------------------
Option, Participant (or in the case of exercise after Participant's death or
incapacity, Participant's executor, administrator, heir or legatee, as the case
may be) must deliver to the Company an executed stock option exercise agreement
in the form attached hereto as Exhibit A, or in such other form as may be
                               ---------
approved by the Committee from time to time (the "Exercise Agreement"), which
shall set forth, inter alia, (i) Participant's election to exercise the Option,
                 ----- ----
(ii) the number of Shares being purchased, (iii) any restrictions imposed on the
Shares and (iv) any representations, warranties and agreements regarding
Participant's investment intent and access to information as may be required by
the Company to comply with applicable securities laws. If someone other than
Participant exercises the Option, then such person must submit documentation
reasonably acceptable to the Company verifying that such person has the legal
right to exercise the Option.

                    4.2 Limitations on Exercise. The Option may not be exercised
                        -----------------------
unless such exercise is in compliance with all applicable federal and state
securities laws, as they are in effect on the date of exercise. The Option may
not be exercised as to fewer than one hundred (100) Shares unless it is
exercised as to all Shares as to which the Option is then exercisable.

                    4.3 Payment. The Exercise Agreement shall be accompanied by
                        -------
full payment of the Exercise Price for the shares being purchased in cash (by
check), or where permitted by law:

               (a)  by cancellation of indebtedness of the Company to the
                    Participant;

               (b)  by surrender of shares of the Company's Common Stock that
                    (i) either (A) have been owned by Participant for more than
                    six (6) months and have been paid for within the meaning of
                    SEC Rule 144 (and, if such shares were purchased from the
                    Company by use of a promissory note, such note has been
                    fully paid with respect to such shares); or (B) were
                    obtained by Participant in the open public market; and (ii)
                    are clear of all liens, claims, encumbrances or security
                    interests;

               (c)  by waiver of compensation due or accrued to Participant for
                    services rendered;

               (d)  provided that a public market for the Company's stock
                    exists: (i) through a "same day sale" commitment from
                    Participant and a broker-dealer that is a member of the
                    National Association of Securities Dealers (an "NASD
                    Dealer") whereby Participant irrevocably elects to exercise
                    the Option and to sell a portion of the Shares so purchased
                    sufficient to pay for the total Exercise Price and whereby
                    the NASD Dealer irrevocably

                                      -17-

<PAGE>

                    commits upon receipt of such Shares to forward the total
                    Exercise Price directly to the Company, or (ii) through a
                    "margin" commitment from Participant and an NASD Dealer
                    whereby Participant irrevocably elects to exercise the
                    Option and to pledge the Shares so purchased to the NASD
                    Dealer in a margin account as security for a loan from the
                    NASD Dealer in the amount of the total Exercise Price, and
                    whereby the NASD Dealer irrevocably commits upon receipt of
                    such Shares to forward the total Exercise Price directly to
                    the Company; or

               (e)  by any combination of the foregoing.

                    4.4 Tax Withholding. Prior to the issuance of the Shares
                        ---------------
upon exercise of the Option, Participant must pay or provide for any applicable
federal, state and local withholding obligations of the Company. If the
Committee permits, Participant may provide for payment of withholding taxes upon
exercise of the Option by requesting that the Company retain Shares with a Fair
Market Value equal to the minimum amount of taxes required to be withheld. In
such case, the Company shall issue the net number of Shares to the Participant
by deducting the Shares retained from the Shares issuable upon exercise.

                    4.5 Issuance of Shares. Provided that the Exercise Agreement
                        ------------------
and payment are in form and substance satisfactory to counsel for the Company,
the Company shall issue the Shares registered in the name of Participant,
Participant's authorized assignee, or Participant's legal representative, and
shall deliver certificates representing the Shares with the appropriate legends
affixed thereto.

               5.   Notice of Disqualifying Disposition of ISO Shares. If the
                    -------------------------------------------------
Option is an ISO, and if Participant sells or otherwise disposes of any of the
Shares acquired pursuant to the ISO on or before the later of (i) the date two
(2) years after the Date of Grant, and (ii) the date one (1) year after transfer
of such Shares to Participant upon exercise of the Option, Participant shall
immediately notify the Company in writing of such disposition. Participant
agrees that Participant may be subject to income tax withholding by the Company
on the compensation income recognized by Participant from the early disposition
by payment in cash or out of the current wages or other compensation payable to
Participant.

               6.   Compliance with Laws and Regulations. The Plan and this
                    ------------------------------------
Agreement are intended to comply with Section 25102(o) of the California
Corporations Code and any regulations relating thereto. Any provision of this
Agreement which is inconsistent with Section 25102(o) or any regulations
relating thereto shall, without further act or amendment by the Company or the
Board, be reformed to comply with the requirements of Section 25102(o) and any
regulations relating thereto. The exercise of the Option and the issuance and
transfer of Shares shall be subject to compliance by the Company and Participant
with all applicable requirements of federal and state securities laws and with
all applicable requirements of any stock exchange on which the Company's Common
Stock may be listed at the time of such issuance or transfer. Participant
understands that the Company is under no obligation to register

                                      -18-

<PAGE>

or qualify the Shares with the SEC, any state securities commission or any stock
exchange to effect such compliance.

           7.  Nontransferability of Option. The Option may not be transferred
               ----------------------------
in any manner other than by will or by the laws of descent and distribution and
may be exercised during the lifetime of Participant only by Participant or in
the event of Participant's incapacity, by Participant's legal representative.
The terms of the Option shall be binding upon the executors, administrators,
successors and assigns of Participant.

           9.  Company's Right of First Refusal. Before any Vested Shares held
               --------------------------------
by Participant or any transferee of such Vested Shares may be sold or otherwise
transferred (including without limitation a transfer by gift or operation of
law), the Company and/or its assignee(s) shall have an assignable right of first
refusal to purchase the Vested Shares to be sold or transferred on the terms and
conditions set forth in the Exercise Agreement (the "Right of First Refusal").
The Company's Right of First Refusal will terminate when the Company's
securities become publicly traded.

           10. Tax Consequences. Set forth below is a brief summary as of the
               ----------------
Effective Date of the Plan of some of the federal and California tax
consequences of exercise of the Option and disposition of the Shares. THIS
SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT
TO CHANGE. PARTICIPANT SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THE OPTION
OR DISPOSING OF THE SHARES.

               10.1 Exercise of ISO. If the Option qualifies as an ISO, there
                    ---------------
will be no regular federal or California income tax liability upon the exercise
of the Option, although 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 a tax
preference item for federal alternative minimum tax purposes and may subject the
Participant to the alternative minimum tax in the year of exercise.

               10.2 Exercise of Nonqualified Stock Option. If the Option does
                    -------------------------------------
not qualify as an ISO, there may be a regular federal and California income tax
liability upon the exercise of the Option. Participant will be treated as having
received compensation 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. If Participant is a current or former employee of the
Company, the Company may be required to withhold from Participant's compensation
or collect from Participant and pay to the applicable taxing authorities an
amount equal to a percentage of this compensation income at the time of
exercise.

               10.3 Disposition of Shares. The following tax consequences may
                    ---------------------
apply upon disposition of the Shares.

                    (a) Incentive Stock Options. If the Shares are held for more
                        -----------------------
than twelve (12) months after the date of the transfer of the Shares pursuant to
the exercise of an ISO and are disposed of more than two (2) years after the
Date of Grant, any gain realized on

                                       -19-

<PAGE>

disposition of the Shares will be treated as long term capital gain for federal
and California income tax purposes. If Shares purchased under an ISO are
disposed of within the applicable one (1) year or two (2) year period, any gain
realized on such disposition will be treated as compensation income (taxable at
ordinary income rates) to the extent of the excess, if any, of the Fair Market
Value of the Shares on the date of exercise over the Exercise Price.

                    (b) Nonqualified Stock Options. If the Shares are held for
                        --------------------------
more than twelve (12) months after the date of the transfer of the Shares
pursuant to the exercise of an NQSO, any gain realized on disposition of the
Shares will be treated as long term capital gain.

                    (c) Withholding. The Company may be required to withhold
                        -----------
from the Participant's compensation or collect from the Participant and pay to
the applicable taxing authorities an amount equal to a percentage of this
compensation income.

            11. Privileges of Stock Ownership. Participant shall not have any of
                -----------------------------
the rights of a shareholder with respect to any Shares until the Shares are
issued to Participant.

            12. Interpretation. Any dispute regarding the interpretation of this
                --------------
Agreement shall be submitted by Participant or the Company to the Committee for
review. The resolution of such a dispute by the Committee shall be final and
binding on the Company and Participant.

            13. Entire Agreement. The Plan is incorporated herein by reference.
                ----------------
This Agreement and the Plan constitute the entire agreement of the parties and
supersede all prior undertakings and agreements with respect to the subject
matter hereof.

            14. Notices. Any notice required to be given or delivered to the
                -------
Company under the terms of this Agreement shall be in writing and addressed to
the Corporate Secretary of the Company at its principal corporate offices. Any
notice required to be given or delivered to Participant shall be in writing and
addressed to Participant at the address indicated above or to such other address
as such party may designate in writing from time to time to the Company. All
notices shall be deemed to have been given or delivered upon: (i) personal
delivery; (ii) three (3) days after deposit in the United States mail by
certified or registered mail (return receipt requested); (iii) one (1) business
day after deposit with any return receipt express courier (prepaid); or (iv) one
(1) business day after transmission by facsimile, rapifax or telecopier.

            15. Successors and Assigns. The Company may assign any of its rights
                ----------------------
under this Agreement including its rights to purchase Shares under the Right of
First Refusal. This Agreement shall be binding upon and inure to the benefit of
the successors and assigns of the Company. Subject to the restrictions on
transfer set forth herein, this Agreement shall be binding upon Participant and
Participant's heirs, executors, administrators, legal representatives,
successors and assigns.

                                      -20-

<PAGE>

          16. Governing Law. This Agreement shall be governed by and construed
              -------------
in accordance with the laws of the State of California as such laws are applied
to agreements between California residents entered into and to be performed
entirely within California. If any provision of this Agreement is determined by
a court of law to be illegal or unenforceable, then such provision will be
enforced to the maximum extent possible and the other provisions will remain
fully effective and enforceable.

          17. Acceptance. Participant hereby acknowledges receipt of a copy of
              ----------
the Plan and this Agreement. Participant has read and understands the terms and
provisions thereof, and accepts the Option subject to all the terms and
conditions of the Plan and this Agreement. Participant acknowledges that there
may be adverse tax consequences upon exercise of the Option or disposition of
the Shares and that Participant should consult a tax adviser prior to such
exercise or disposition.

          IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed in triplicate by its duly authorized representative and Participant has
executed this Agreement in triplicate, effective as of the Date of Grant.

TALARIAN CORPORATION                           PARTICIPANT

By: ___________________________________        _________________________________
                                               (Signature)

_______________________________________        _________________________________
(Please print name)                            (Please print name)

_______________________________________
(Please print title)

                                      -21-

<PAGE>

                                    EXHIBIT A
                                    ---------

                                                                          No. __

                              TALARIAN CORPORATION

                           1998 EQUITY INCENTIVE PLAN

                         STOCK OPTION EXERCISE AGREEMENT

     This Stock Option Exercise Agreement (the "Exercise Agreement") is made and
entered into as of _________________________, 2000 (the "Effective Date") by and
between Talarian Corporation, a California corporation (the "Company"), and the
purchaser named below (the "Purchaser"). Capitalized terms not defined herein
shall have the meaning ascribed to them in the Company's 1998 Equity Incentive
Plan (the "Plan").

Purchaser:                    __________________________________________________

Social Security Number:       __________________________________________________

Address:                      __________________________________________________

                              __________________________________________________

Total Option Shares:          __________________________________________________

Exercise Price Per Share:     __________________________________________________

Date of Grant:                __________________________________________________

First Vesting Date:           __________________________________________________

Expiration Date:              __________________________________________________
                              (unless earlier terminated under Section 5.6 of
                              the Plan)
Type of Stock Option
(Check one):                  [_] Incentive Stock Option
                              [_] Nonqualified Stock Option

     1.  Exercise of Option.
         ------------------

         1.1 Exercise. Pursuant to exercise of that certain option (the
             --------
"Option") granted to Purchaser under the Plan and subject to the terms and
conditions of this Exercise Agreement, Purchaser hereby purchases from the
Company, and the Company hereby sells to Purchaser, the Total Number of Shares
set forth above (the "Shares") of the Company's Common Stock at the Exercise
Price Per Share set forth above (the "Exercise Price"). As used in this Exercise
Agreement, the term "Shares" refers to the Shares purchased under this Exercise
Agreement and includes all securities received (i) in replacement of the Shares,
(ii) as a result of

<PAGE>

stock dividends or stock splits with respect to the Shares, and (iii) all
securities received in replacement of the Shares in a merger, recapitalization,
reorganization or similar corporate transaction.

          1.2 Title to Shares. The exact spelling of the name(s) under which
              ---------------
Purchaser will take title to the Shares is:

              __________________________________________________________________

              __________________________________________________________________

Purchaser desires to take title to the Shares as follows:

              [_] Individual, as separate property

              [_] Husband and wife, as community property

              [_] Joint Tenants

              [_] Alone or with spouse as trustee(s) of the following trust
                  (including date):

                  ______________________________________________________________

                  ______________________________________________________________

              [_] Other; please specify:________________________________________

          1.3 Payment. Purchaser hereby delivers payment of the Exercise Price
              -------
in the manner permitted in the Stock Option Agreement as follows (check and
complete as appropriate):

              [_] in cash (by check) in the amount of $____________, receipt of
                  which is acknowledged by the Company;

              [_] by cancellation of indebtedness of the Company owed to
                  Purchaser in the amount of $_______________;

              [_] by delivery of _________ fully-paid, nonassessable and vested
                  shares of the Common Stock of the Company owned by Purchaser
                  for at least six (6) months prior to the date hereof which
                  have been paid for within the meaning of SEC Rule 144, (if
                  purchased by use of a promissory note, such note has been
                  fully paid with respect to such vested shares), or obtained by
                  Purchaser in the open public market, and owned free and clear
                  of all liens, claims, encumbrances or security interests,
                  valued at the current Fair Market Value of $___________ per
                  share;

              [_] by the waiver hereby of compensation due or accrued for
                  services rendered in the amount of $_________.

                                       -2-

<PAGE>

     2. Delivery.
        --------

        2.1 Deliveries by Purchaser. Purchaser hereby delivers to the Company
            -----------------------
(i) this Exercise Agreement, (ii) two (2) copies of a blank Stock Power and
Assignment Separate from Stock Certificate in the form of Exhibit 1 attached
                                                          ---------
hereto (the "Stock Powers"), both executed by Purchaser (and Purchaser's spouse,
if any), (iii) if Purchaser is married, a Consent of Spouse in the form of
Exhibit 2 attached hereto (the "Spouse Consent") executed by Purchaser's spouse,
---------
and (iv) the Exercise Price and payment or other provision for any applicable
tax obligations in the form of _______________, [ADD DESCRIPTION OF METHOD OF
PAYMENT (USUALLY A "CHECK")] a copy of which is attached hereto as Exhibit 3.
                                                                   ---------

        2.2 Deliveries by the Company. Upon its receipt of the Exercise Price,
            -------------------------
payment or other provision for any applicable tax obligations and all the
documents to be executed and delivered by Purchaser to the Company under Section
2.1, the Company will issue a duly executed stock certificate evidencing the
Shares in the name of Purchaser to be placed in escrow as provided in Section 11
until expiration or termination of the Company's Repurchase Option and Right of
First Refusal described in Sections 8 and 9.

     3. Representations and Warranties of Purchaser. Purchaser represents and
        -------------------------------------------
warrants to the Company that:

        3.1 Agrees to Terms of the Plan. Purchaser has received a copy of the
            ---------------------------
Plan and the Stock Option Agreement, has read and understands the terms of the
Plan, the Stock Option Agreement and this Exercise Agreement, and agrees to be
bound by their terms and conditions. Purchaser acknowledges that there may be
adverse tax consequences upon exercise of the Option or disposition of the
Shares, and that Purchaser should consult a tax adviser prior to such exercise
or disposition.

        3.2 Purchase for Own Account for Investment. Purchaser is purchasing the
            ---------------------------------------
Shares for Purchaser's own account for investment purposes only and not with a
view to, or for sale in connection with, a distribution of the Shares within the
meaning of the Securities Act. Purchaser has no present intention of selling or
otherwise disposing of all or any portion of the Shares and no one other than
Purchaser has any beneficial ownership of any of the Shares.

        3.3 Access to Information. Purchaser has had access to all information
            ---------------------
regarding the Company and its present and prospective business, assets,
liabilities and financial condition that Purchaser reasonably considers
important in making the decision to purchase the Shares, and Purchaser has had
ample opportunity to ask questions of the Company's representatives concerning
such matters and this investment.

        3.4 Understanding of Risks. Purchaser is fully aware of: (i) the highly
            ----------------------
speculative nature of the investment in the Shares; (ii) the financial hazards
involved; (iii) the lack of liquidity of the Shares and the restrictions on
transferability of the Shares (e.g., that Purchaser may not be able to sell or
dispose of the Shares or use them as collateral for loans); (iv) the
qualifications and backgrounds of the management of the Company; and (v) the tax
consequences of investment in the Shares. Purchaser is capable of evaluating the
merits and

                                       -3-

<PAGE>

risks of this investment, has the ability to protect Purchaser's own interests
in this transaction and is financially capable of bearing a total loss of this
investment.

        3.5 No General Solicitation. At no time was Purchaser presented with or
            -----------------------
solicited by any publicly issued or circulated newspaper, mail, radio,
television or other form of general advertising or solicitation in connection
with the offer, sale and purchase of the Shares.

     4. Compliance with Securities Laws.
        -------------------------------

        4.1 Compliance with U.S. Federal Securities Laws. Purchaser understands
            --------------------------------------------
and acknowledges that the Shares have not been registered with the SEC under the
Securities Act and that, notwithstanding any other provision of the Stock Option
Agreement to the contrary, the exercise of any rights to purchase any Shares is
expressly conditioned upon compliance with the Securities Act and all applicable
state securities laws. Purchaser agrees to cooperate with the Company to ensure
compliance with such laws. The Shares are being issued under the Securities Act
pursuant to the exemption provided by SEC Rule 701.

        4.2 Compliance with California Securities Laws. THE PLAN, THE STOCK
            ------------------------------------------
OPTION AGREEMENT, AND THIS EXERCISE AGREEMENT ARE INTENDED TO COMPLY WITH
SECTION 25102(o) OF THE CALIFORNIA CORPORATIONS CODE AND ANY RULES (INCLUDING
COMMISSIONER RULES, IF APPLICABLE) OR REGULATIONS PROMULGATED THEREUNDER BY THE
CALIFORNIA DEPARTMENT OF CORPORATIONS (THE "REGULATIONS"). ANY PROVISION OF THIS
EXERCISE AGREEMENT WHICH IS INCONSISTENT WITH SECTION 25102(o) SHALL, WITHOUT
FURTHER ACT OR AMENDMENT BY THE COMPANY OR THE BOARD, BE REFORMED TO COMPLY WITH
THE REQUIREMENTS OF SECTION 25102(o). THE SALE OF THE SECURITIES THAT ARE THE
SUBJECT OF THIS EXERCISE AGREEMENT, IF NOT YET QUALIFIED WITH THE CALIFORNIA
COMMISSIONER OF CORPORATIONS AND NOT EXEMPT FROM SUCH QUALIFICATION, IS SUBJECT
TO SUCH QUALIFICATION, AND THE ISSUANCE OF SUCH SECURITIES, AND THE RECEIPT OF
ANY PART OF THE CONSIDERATION THEREFOR PRIOR TO SUCH QUALIFICATION IS UNLAWFUL
UNLESS THE SALE IS EXEMPT. THE RIGHTS OF THE PARTIES TO THIS EXERCISE AGREEMENT
ARE EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED OR AN EXEMPTION
BEING AVAILABLE.

     5. Restricted Securities.
        ---------------------

        5.1 No Transfer Unless Registered or Exempt. Purchaser understands that
            ---------------------------------------
Purchaser may not transfer any Shares unless such Shares are registered under
the Securities Act or qualified under applicable state securities laws or
unless, in the opinion of counsel to the Company, exemptions from such
registration and qualification requirements are available. Purchaser understands
that only the Company may file a registration statement with the SEC and that
the Company is under no obligation to do so with respect to the Shares.
Purchaser has also been advised that exemptions from registration and
qualification may not be available or may not

                                       -4-

<PAGE>

permit Purchaser to transfer all or any of the Shares in the amounts or at the
times proposed by Purchaser.

           5.2 SEC Rule 144. In addition, Purchaser has been advised that SEC
               ------------
Rule 144 promulgated under the Securities Act, which permits certain limited
sales of unregistered securities, is not presently available with respect to the
Shares and, in any event, requires that the Shares be held for a minimum of one
(1) year, and in certain cases two (2) years, after they have been purchased and
                                                                             ---
paid for (within the meaning of Rule 144). Purchaser understands that Rule 144
--------
may indefinitely restrict transfer of the Shares so long as Purchaser remains an
"affiliate" of the Company or if "current public information" about the Company
(as defined in Rule 144) is not publicly available.

           5.3 SEC Rule 701. The Shares are issued pursuant to SEC Rule 701
               ------------
promulgated under the Securities Act and may become freely tradeable by
non-affiliates (under limited conditions regarding the method of sale) ninety
(90) days after the first sale of Common Stock of the Company to the general
public pursuant to a registration statement filed with and declared effective by
the SEC, subject to the lengthier market standoff agreement contained in Section
7 of this Exercise Agreement or any other agreement entered into by Purchaser.
Affiliates must comply with the provisions (in addition to the holding period
requirements) of Rule 144.

       6.  Restrictions on Transfers.
           -------------------------

           6.1 Disposition of Shares. Purchaser hereby agrees that Purchaser
               ---------------------
shall make no disposition of the Shares (other than as permitted by this
Exercise Agreement) unless and until:

               (a) Purchaser shall have notified the Company of the proposed
disposition and provided a written summary of the terms and conditions of the
proposed disposition;

               (b) Purchaser shall have complied with all requirements of this
Exercise Agreement applicable to the disposition of the Shares;

               (c) Purchaser shall have provided the Company with written
assurances, in form and substance satisfactory to counsel for the Company, that
(i) the proposed disposition does not require registration of the Shares under
the Securities Act or (ii) all appropriate actions necessary for compliance with
the registration requirements of the Securities Act or of any exemption from
registration available under the Securities Act (including Rule 144) have been
taken; and

               (d) Purchaser shall have provided the Company with written
assurances, in form and substance satisfactory to the Company, that the proposed
disposition will not result in the contravention of any transfer restrictions
applicable to the Shares pursuant to the provisions of the Regulations referred
to in Section 4.2. hereof.

                                       -5-

<PAGE>

           6.2 Restriction on Transfer. Purchaser shall not transfer, assign,
               -----------------------
grant a lien or security interest in, pledge, hypothecate, encumber or otherwise
dispose of any of the Shares which are subject to the Company's Repurchase
Option or Right of First Refusal described below, except as permitted by this
Exercise Agreement.

           6.3 Transferee Obligations. Each person (other than the Company) to
               ----------------------
whom the Shares are transferred by means of one of the permitted transfers
specified in this Exercise Agreement must, as a condition precedent to the
validity of such transfer, acknowledge in writing to the Company that such
person is bound by the provisions of this Exercise Agreement and that the
transferred Shares are subject to (i) both the Company's Repurchase Option and
Right of First Refusal granted hereunder and (ii) the market stand-off
provisions of Section 7 hereof, to the same extent such Shares would be so
subject if retained by the Purchaser.

       7.  Market Standoff Agreement. Purchaser agrees in connection with any
           -------------------------
registration of the Company's securities that, upon the request of the Company
or the underwriters managing any public offering of the Company's securities,
Purchaser will not sell or otherwise dispose of any Shares without the prior
written consent of the Company or such underwriters, as the case may be, for
such period of time (not to exceed one hundred eighty (180) days) after the
effective date of such registration requested by such managing underwriters and
subject to all restrictions as the Company or the underwriters may specify.
Purchaser also further agrees to enter into any agreement reasonably required by
the underwriters to implement the foregoing.

       8.  Company's Repurchase Option for Unvested Shares. The Company, or its
           -----------------------------------------------
assignee, shall have the option to repurchase all or a portion of the
Purchaser's Unvested Shares (as defined in Section 2.2 of the Stock Option
Agreement) on the terms and conditions set forth in this Section (the
"Repurchase Option") if Purchaser is Terminated (as defined in the Plan) for any
reason, or no reason, including without limitation, Purchaser's death,
Disability (as defined in the Plan), voluntary resignation or termination by the
Company with or without Cause. Notwithstanding the foregoing, the Company shall
retain the Repurchase Option for Unvested Shares only as to that number of
Unvested Shares (whether or not exercised) that exceeds the number of shares
which remain unexercised.

           8.1 Termination and Termination Date. In case of any dispute as to
               --------------------------------
whether Purchaser is Terminated, the Committee shall have discretion to
determine whether Purchaser has been Terminated and the effective date of such
Termination (the "Termination Date").

           8.2 Exercise of Repurchase Option. At any time within ninety (90)
               -----------------------------
days after the Purchaser's Termination Date (or, in the case of securities
issued upon exercise of an Option after the Purchaser's Termination Date, within
ninety (90) days after the date of such exercise), the Company, or its assignee,
may elect to repurchase any or all the Purchaser's Unvested Shares by giving
Purchaser written notice of exercise of the Repurchase Option.

           8.3 Calculation of Repurchase Price for Unvested Shares. The Company
               ---------------------------------------------------
or its assignee shall have the option to repurchase from Purchaser (or from
Purchaser's personal representative as the case may be) the Unvested Shares at
the Purchaser's Exercise Price,

                                       -6-

<PAGE>

proportionately adjusted for any stock split or similar change in the capital
structure of the Company as set forth in Section 2.2 of the Plan (the
"Repurchase Price").

           8.4 Payment of Repurchase Price. The Repurchase Price shall be
               ---------------------------
payable, at the option of the Company or its assignee, by check or by
cancellation of all or a portion of any outstanding indebtedness owed by
Purchaser to the Company or such assignee, or by any combination thereof. The
Repurchase Price shall be paid without interest within sixty (60) days after
exercise of the Repurchase Option.

           8.5 Right of Termination Unaffected. Nothing in this Exercise
               -------------------------------
Agreement shall be construed to limit or otherwise affect in any manner
whatsoever the right or power of the Company (or any Parent or Subsidiary of the
Company) to terminate Purchaser's employment or other relationship with Company
(or the Parent or Subsidiary of the Company) at any time, for any reason or no
reason, with or without Cause.

       9.  Company's Right of First Refusal. Before any Vested Shares held by
           --------------------------------
Purchaser or any transferee of such Vested Shares (either being sometimes
referred to herein as the "Holder") may be sold or otherwise transferred
(including without limitation a transfer by gift or operation of law), the
Company and/or its assignee(s) shall have an assignable right of first refusal
to purchase the Vested Shares to be sold or transferred (the "Offered Shares")
on the terms and conditions set forth in this Section (the "Right of First
Refusal").

           9.1 Notice of Proposed Transfer. The Holder of the Offered Shares
               ---------------------------
shall deliver to the Company a written notice (the "Notice") stating: (i) the
Holder's bona fide intention to sell or otherwise transfer the Offered Shares;
(ii) the name of each proposed bona fide purchaser or other transferee (the
"Proposed Transferee"); (iii) the number of Offered Shares to be transferred to
each Proposed Transferee; (iv) the bona fide cash price or other consideration
for which the Holder proposes to transfer the Offered Shares (the "Offered
Price"); and (v) that the Holder acknowledges this Notice is an offer to sell
the Offered Shares to the Company and/or its assignee(s) pursuant to the
Company's Right of First Refusal at the Offered Price as provided for in this
Exercise Agreement.

           9.2 Exercise of Right of First Refusal. At any time within thirty
               ----------------------------------
(30) days after the date of the Notice, the Company and/or its assignee(s) may,
by giving written notice to the Holder, elect to purchase all (or, with the
consent of the Holder, less than all) the Offered Shares proposed to be
transferred to any one or more of the Proposed Transferees named in the Notice,
at the purchase price, determined as specified below.

           9.3 Purchase Price. The purchase price for the Offered Shares
               --------------
purchased under this Section will be the Offered Price. If the Offered Price
includes consideration other than cash, then the cash equivalent value of the
non-cash consideration shall conclusively be deemed to be the value of such
non-cash consideration as determined in good faith by the Board. If the transfer
is a gift, the Offered Price is the Fair Market Value on the proposed transfer
date, as conclusively determined in good faith by the Board.

                                       -7-

<PAGE>

           9.4 Payment. Payment of the Offered Price will be payable, at the
               -------
option of the Company and/or its assignee(s) (as applicable), by check or by
cancellation of all or a portion of any outstanding indebtedness owed by the
Holder to the Company (or to such assignee, in the case of a purchase of Offered
Shares by such assignee) or by any combination thereof. The Offered Price will
be paid without interest within sixty (60) days after the Company's receipt of
the Notice, or, at the option of the Company and/or its assignee(s), in the
manner and at the time(s) set forth in the Notice.

           9.5 Holder's Right to Transfer. If all of the Offered Shares proposed
               --------------------------
in the Notice to be transferred to a given Proposed Transferee are not purchased
by the Company and/or its assignee(s) as provided in this Section, then the
Holder may sell or otherwise transfer such Offered Shares to that Proposed
Transferee at the Offered Price or at a higher price, provided (i) that such
sale or other transfer is consummated within one hundred twenty (120) days after
the date of the Notice, (ii) any such sale or other transfer is effected in
compliance with all applicable securities laws, and (iii) the Proposed
Transferee agrees in writing that the provisions of this Section will continue
to apply to the Offered Shares in the hands of such Proposed Transferee. If the
Offered Shares described in the Notice are not transferred to the Proposed
Transferee within such one hundred twenty (120) day period, then a new Notice
must be given to the Company pursuant to which the Company will again be offered
the Right of First Refusal before any Shares held by the Holder may be sold or
otherwise transferred.

           9.6 Exempt Transfers. Notwithstanding anything to the contrary in
               ----------------
this Section, the following transfers of Vested Shares will be exempt from the
Right of First Refusal: (i) the transfer of any or all of the Vested Shares
during Purchaser's lifetime by gift or on Purchaser's death by will or intestacy
to Purchaser's "Immediate Family" (as defined below) or to a trust for the
benefit of Purchaser or Purchaser's Immediate Family, provided that each
transferee or other recipient agrees in a writing satisfactory to the Company
that the provisions of this Section will continue to apply to the transferred
Vested Shares in the hands of such transferee or other recipient; (ii) any
transfer of Vested Shares made pursuant to a statutory merger or statutory
consolidation of the Company with or into another corporation or corporations
(except that the Right of First Refusal will continue to apply thereafter to
such Vested Shares, in which case the surviving corporation of such merger or
consolidation shall succeed to the rights of the Company under this Section
unless the agreement of merger or consolidation expressly otherwise provides);
or (iii) any transfer of Vested Shares pursuant to the winding up and
dissolution of the Company. As used herein, the term "Immediate Family" will
mean Purchaser's spouse, the lineal descendant or antecedent, father, mother,
brother or sister, child, adopted child, grandchild or adopted grandchild of the
Purchaser or the Purchaser's spouse, or the spouse of any child, adopted child,
grandchild or adopted grandchild of Purchaser or the Purchaser's spouse.

           9.7 Termination of Right of First Refusal. The Company's Right of
               -------------------------------------
First Refusal will terminate when the Company's securities become publicly
traded.

       10. Rights as a Shareholder. Subject to the terms and conditions of this
           -----------------------
Exercise Agreement, Purchaser will have all of the rights of a shareholder of
the Company with respect to the Shares from and after the date that Shares are
issued to Purchaser until such time as Purchaser

                                       -8-

<PAGE>

disposes of the Shares or the Company and/or its assignee(s) exercise(s) the
Repurchase Option or Right of First Refusal. Upon an exercise of the Repurchase
Option or Right of First Refusal, Purchaser will have no further rights as a
holder of the Shares so purchased upon such exercise, other than the right to
receive payment for the Shares so purchased in accordance with the provisions of
this Exercise Agreement, and Purchaser will promptly surrender the stock
certificate(s) evidencing the Shares so purchased to the Company for transfer or
cancellation.

       11. Escrow. As security for Purchaser's faithful performance of this
           ------
Exercise Agreement, Purchaser agrees, immediately upon receipt of the stock
certificate(s) evidencing the Shares, to deliver such certificate(s), together
with the Stock Powers executed by Purchaser and by Purchaser's spouse, if any
(with the date and number of Shares left blank), to the Secretary of the Company
or other designee of the Company (the "Escrow Holder"), who is hereby appointed
to hold such certificate(s) and Stock Powers in escrow and to take all such
actions and to effectuate all such transfers and/or releases of such Shares as
are in accordance with the terms of this Exercise Agreement. Purchaser and the
Company agree that Escrow Holder will not be liable to any party to this
Exercise Agreement (or to any other party) for any actions or omissions unless
Escrow Holder is grossly negligent or intentionally fraudulent in carrying out
the duties of Escrow Holder under this Exercise Agreement. Escrow Holder may
rely upon any letter, notice or other document executed with any signature
purported to be genuine and may rely on the advice of counsel and obey any order
of any court with respect to the transactions contemplated by this Exercise
Agreement. The Shares will be released from escrow upon termination of both the
Repurchase Option and the Right of First Refusal.

       12. Restrictive Legends and Stop-Transfer Orders.
           --------------------------------------------

           12.1 Legends. Purchaser understands and agrees that the Company will
                -------
place the legends set forth below or similar legends on any stock certificate(s)
evidencing the Shares, together with any other legends that may be required by
state or U.S. Federal securities laws, the Company's Articles of Incorporation
or Bylaws, any other agreement between Purchaser and the Company or any
agreement between Purchaser and any third party:

                THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER
                THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
                OR UNDER THE SECURITIES LAWS OF CERTAIN STATES. THESE SECURITIES
                ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND
                MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE
                SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS, PURSUANT TO
                REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE
                THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS
                INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. THE ISSUER OF THESE
                SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND
                SUBSTANCE SATISFACTORY TO THE ISSUER

                                       -9-

<PAGE>

                           TO THE EFFECT THAT ANY PROPOSED TRANSFER OR
                           RESALE IS IN COMPLIANCE WITH THE SECURITIES ACT AND
                           ANY APPLICABLE STATE SECURITIES LAWS.

                           THE SHARES REPRESENTED BY THIS CERTIFICATE ARE
                           SUBJECT TO CERTAIN RESTRICTIONS ON PUBLIC RESALE AND
                           TRANSFER, INCLUDING THE RIGHT OF FIRST REFUSAL OPTION
                           HELD BY THE ISSUER AND/OR ITS ASSIGNEE(S) AS SET
                           FORTH IN A STOCK OPTION EXERCISE AGREEMENT BETWEEN
                           THE ISSUER AND THE ORIGINAL HOLDER OF THESE SHARES, A
                           COPY OF WHICH MAY BE OBTAINED AT THE PRINCIPAL OFFICE
                           OF THE ISSUER. SUCH PUBLIC SALE AND TRANSFER
                           RESTRICTIONS INCLUDING THE RIGHT OF FIRST REFUSAL ARE
                           BINDING ON TRANSFEREES OF THESE SHARES.

                  12.2     Stop-Transfer Instructions. Purchaser agrees that, to
                           --------------------------
ensure compliance with the restrictions imposed by this Exercise Agreement, the
Company may issue appropriate "stop-transfer" instructions to its transfer
agent, if any, and if the Company transfers its own securities, it may make
appropriate notations to the same effect in its own records.

                  12.3     Refusal to Transfer. The Company will not be required
                           -------------------
(i) to transfer on its books any Shares that have been sold or otherwise
transferred in violation of any of the provisions of this Exercise Agreement or
(ii) to treat as owner of such Shares, or to accord the right to vote or pay
dividends to any purchaser or other transferee to whom such Shares have been so
transferred.

       13.        Tax Consequences. PURCHASER UNDERSTANDS THAT PURCHASER MAY
                  ----------------
SUFFER ADVERSE TAX CONSEQUENCES AS A RESULT OF PURCHASER'S PURCHASE OR
DISPOSITION OF THE SHARES. PURCHASER REPRESENTS: (i) THAT PURCHASER HAS
CONSULTED WITH ANY TAX ADVISER THAT PURCHASER DEEMS ADVISABLE IN CONNECTION WITH
THE PURCHASE OR DISPOSITION OF THE SHARES AND (ii) THAT PURCHASER IS NOT RELYING
ON THE COMPANY FOR ANY TAX ADVICE. IN PARTICULAR, IF UNVESTED SHARES ARE SUBJECT
TO REPURCHASE BY THE COMPANY, PURCHASER REPRESENTS THAT PURCHASER HAS CONSULTED
WITH PURCHASER'S OWN TAX ADVISER CONCERNING THE ADVISABILITY OF FILING AN 83(B)
ELECTION WITH THE INTERNAL REVENUE SERVICE WHICH MUST BE FILED WITHIN THIRTY
(30) DAYS OF THE PURCHASE OF SHARES TO BE EFFECTIVE. Set forth below is a brief
summary as of the date the Plan was adopted by the Board of some of the U.S.
Federal and California tax consequences of exercise of the Option and
disposition of the Shares. THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX
LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. PURCHASER SHOULD CONSULT HIS OR HER
OWN TAX ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE SHARES.

                                      -10-

<PAGE>

          13.1 Exercise of Incentive Stock Option. If the Option qualifies as an
               ----------------------------------
ISO, there will be no regular U.S. Federal income tax liability or California
income tax liability upon the exercise of the Option, although 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 a tax preference item for U.S. Federal
alternative minimum tax purposes and may subject Purchaser to the alternative
minimum tax in the year of exercise.

          13.2 Exercise of Nonqualified Stock Option. If the Option does not
               -------------------------------------
qualify as an ISO, there may be a regular U.S. Federal income tax liability and
a California income tax liability upon the exercise of the Option. Purchaser
will be treated as having received compensation 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. If Purchaser is or was
an employee of the Company, the Company may be required to withhold from
Purchaser's compensation or collect from Purchaser and pay to the applicable
taxing authorities an amount equal to a percentage of this compensation income
at the time of exercise.

          13.3 Disposition of Shares. The following tax consequences may apply
               ---------------------
upon disposition of the Shares.

               (a) Incentive Stock Options. If the Shares are held for more than
                   -----------------------
twelve (12) months after the date of the transfer of the Shares pursuant to the
exercise of an ISO and are disposed of more than two (2) years after the Date of
Grant, any gain realized on disposition of the Shares will be treated as long
term capital gain for federal and California income tax purposes. If Shares
purchased under an ISO are disposed of within the applicable one (1) year or two
(2) year period, any gain realized on such disposition will be treated as
compensation income (taxable at ordinary income rates) to the extent of the
excess, if any, of the Fair Market Value of the Shares on the date of exercise
over the Exercise Price.

               (b) Nonqualified Stock Options. If the Shares are held for more
                   --------------------------
than twelve (12) months after the date of the transfer of the Shares pursuant to
the exercise of an NQSO, any gain realized on disposition of the Shares will be
treated as long term capital gain.

               (c) Withholding. The Company may be required to withhold from the
                   -----------
Purchaser's compensation or collect from the Purchaser and pay to the applicable
taxing authorities an amount equal to a percentage of this compensation income.

          13.4 Section 83(b) Election for Unvested Shares. With respect
               ------------------------------------------
to Unvested Shares, which are subject to the Repurchase Option, unless an
election is filed by the Purchaser with the Internal Revenue Service (and, if
necessary, the proper state taxing authorities), within 30 days of the purchase
                                                 ------------------------------
of the Unvested Shares, electing pursuant to Section 83(b) of the Code (and
similar state tax provisions, if applicable) to be taxed currently on any
difference between the Exercise Price of the Unvested Shares and their Fair
Market Value on the date of purchase, there may be a recognition of taxable
income (and/or, where applicable, alternative minimum taxable income) to the
Purchaser, measured by the excess, if any, of the Fair Market Value of the
Unvested Shares at the time they cease to be Unvested Shares, over the Exercise
Price of the

                                      -11-

<PAGE>

Unvested Shares. A form of Election under Section 83(b) is attached hereto as
Exhibit 4 for reference.
---------

       14. Compliance with Laws and Regulations. The issuance and transfer of
           ------------------------------------
the Shares will be subject to and conditioned upon compliance by the Company and
Purchaser with all applicable state and U.S. Federal laws and regulations and
with all applicable requirements of any stock exchange or automated quotation
system on which the Company's Common Stock may be listed or quoted at the time
of such issuance or transfer.

       15. Successors and Assigns. The Company may assign any of its rights
           ----------------------
under this Exercise Agreement, including its rights to purchase Shares under the
Repurchase Option or Right of First Refusal. This Exercise Agreement shall be
binding upon and inure to the benefit of the successors and assigns of the
Company. Subject to the restrictions on transfer herein set forth, this Exercise
Agreement will be binding upon Purchaser and Purchaser's heirs, executors,
administrators, legal representatives, successors and assigns.

       16. Governing Law; Severability. This Exercise Agreement shall be
           ---------------------------
governed by and construed in accordance with the internal laws of the State of
California as such laws are applied to agreements between California residents
entered into and to be performed entirely within California. If any provision of
this Exercise Agreement is determined by a court of law to be illegal or
unenforceable, then such provision will be enforced to the maximum extent
possible and the other provisions will remain fully effective and enforceable.

       17. Notices. Any notice required to be given or delivered to the Company
           -------
shall be in writing and addressed to the Corporate Secretary of the Company at
its principal corporate offices. Any notice required to be given or delivered to
Purchaser shall be in writing and addressed to Purchaser at the address
indicated above or to such other address as Purchaser may designate in writing
from time to time to the Company. All notices shall be deemed effectively given
upon personal delivery, (i) three (3) days after deposit in the United States
mail by certified or registered mail (return receipt requested), (ii) one (1)
business day after its deposit with any return receipt express courier
(prepaid), or (iii) one (1) business day after transmission by rapifax or
telecopier.

       18. Further Instruments. The parties agree to execute such further
           -------------------
instruments and to take such further action as may be reasonably necessary to
carry out the purposes and intent of this Exercise Agreement.

       19. Headings. The captions and headings of this Exercise Agreement are
           --------
included for ease of reference only and will be disregarded in interpreting or
construing this Exercise Agreement. All references herein to Sections will refer
to Sections of this Exercise Agreement.

       20. Entire Agreement. The Plan, the Stock Option Agreement and this
           ----------------
Exercise Agreement, together with all Exhibits thereto, constitute the entire
agreement and understanding of the parties with respect to the subject matter of
this Exercise Agreement, and supersede all prior understandings and agreements,
whether oral or written, between the parties hereto with respect to the specific
subject matter hereof.

                                      -12-

<PAGE>

       IN WITNESS WHEREOF, the Company has caused this Exercise Agreement to be
executed in triplicate by its duly authorized representative and Purchaser has
executed this Exercise Agreement in triplicate as of the Effective Date,
indicated above.

TALARIAN CORPORATION                            PURCHASER

By:
    ___________________________________         ________________________________
                                                (Signature)

_______________________________________         ________________________________
(Please print name)                             (Please print name)

_______________________________________
(Please print title)

    [Signature page to Talarian Corporation Stock Option Exercise Agreement]

                                      -13-

<PAGE>

                                LIST OF EXHIBITS
                                ----------------

Exhibit 1:        Stock Power and Assignment Separate from Stock Certificate

Exhibit 2:        Spouse Consent

Exhibit 3:        Copy of Purchaser's Check

Exhibit 4:        83(b) Election

                                      -14-

<PAGE>

                                    EXHIBIT 1
                                    ---------

                           Stock Power and Assignment
                           --------------------------
                         Separate from Stock Certificate
                         -------------------------------

         FOR VALUE RECEIVED and pursuant to that certain Stock Option Exercise
Agreement No. ________ dated as of _______________, ____, (the "Agreement"), the
undersigned hereby sells, assigns and transfers unto __________________________,
__________ shares of the Common Stock of Talarian Corporation, a California
corporation (the "Company"), standing in the undersigned's name on the books of
the Company represented by Certificate No(s). ______ delivered herewith, and
does hereby irrevocably constitute and appoint the Secretary of the Company as
the undersigned's attorney-in-fact, with full power of substitution, to transfer
said stock on the books of the Company. THIS ASSIGNMENT MAY ONLY BE USED AS
AUTHORIZED BY THE AGREEMENT AND ANY EXHIBITS THERETO.

Dated:  _______________, 200_

                                        PURCHASER

                                        ________________________________________
                                        (Signature)

                                        ________________________________________
                                        (Please Print Name)

                                        ________________________________________
                                        (Spouse's Signature, if any)

                                        ________________________________________
                                        (Please Print Spouse's Name)

Instructions to Purchaser: Please do not fill in any blanks other than the
-------------------------
signature line. The purpose of this Stock Power and Assignment is to enable the
Company to acquire the shares pursuant to its "Right of First Refusal" or
"Repurchase Option" set forth in the Exercise Agreement without requiring
additional signatures on the part of the Purchaser or Purchaser's Spouse.

<PAGE>

                                    EXHIBIT 2
                                    ---------

                                 Spouse Consent
                                 --------------

         The undersigned spouse of ______________________________ (the
"Purchaser") has read, understands, and hereby approves the Stock Option
Exercise Agreement between Purchaser and the Company (the "Agreement"). In
consideration of the Company's granting my spouse the right to purchase the
Shares as set forth in the Agreement, the undersigned hereby agrees to be
irrevocably bound by the Agreement and further agrees that any community
property interest I may have in the Shares shall similarly be bound by the
Agreement. The undersigned hereby appoints Purchaser as my attorney-in-fact with
respect to any amendment or exercise of any rights under the Agreement.

Date: _____________________

                                          ______________________________________
                                          Print Name of Purchaser's Spouse

                                          ______________________________________
                                          Signature of Purchaser's Spouse

                                Address:  ______________________________________

                                          ______________________________________

                                          ______________________________________

<PAGE>

                                    EXHIBIT 3
                                    ---------

                            COPY OF PURCHASER'S CHECK
                            -------------------------

<PAGE>

                                    EXHIBIT 4
                                    ---------

                       ELECTION UNDER SECTION 83(b) OF THE
                              INTERNAL REVENUE CODE

The undersigned Taxpayer hereby elects, pursuant to Section 83(b) of the
Internal Revenue Code of 1986 as amended, to include the excess, if any, of the
fair market value of the property described below at the time of transfer over
the amount paid for such property, as compensation for services in the
calculation of: (1) regular gross income; (2) alternative minimum taxable income
or (3) disqualifying disposition gross income, as the case may be.

1.   TAXPAYER'S NAME:     __________________________________________________

     TAXPAYER'S ADDRESS:  __________________________________________________

     SOCIAL SECURITY NUMBER:  ______________________________________________

2.   The property with respect to which the election is made is described as
     follows: _______ shares of Common Stock of Talarian Corporation, a
     California corporation (the "Company"), which were transferred upon
                                  -------
     exercise of an option by Company, which is Taxpayer's employer or the
     corporation for whom the Taxpayer performs services.

3.   The date on which the shares were transferred was _____________, and this
     election is made for calendar year 200_.

4.   The shares received upon exercise of the option are subject to the
     following restrictions: The company may repurchase all or a portion of the
     shares at the Taxpayer's original purchase price under certain conditions
     at the time of Taxpayer's termination of employment or services.

5.   The fair market value of the shares (without regard to restrictions other
     than restrictions which by their terms will never lapse) was $______ per
     share at the time of transfer.

6.   The amount paid for such shares was $______ per share.

7.   The Taxpayer has submitted a copy of this statement to the Company.

THIS ELECTION MUST BE FILED WITH THE INTERNAL REVENUE SERVICE ("IRS"), AT THE
                                                                ---
OFFICE WHERE THE TAXPAYER FILES ANNUAL INCOME TAX RETURNS WITHIN 30 DAYS AFTER
                                                          --------------
THE DATE OF TRANSFER OF THE PROPERTY, AND MUST ALSO BE FILED WITH THE TAXPAYER'S
INCOME TAX RETURNS FOR THE CALENDAR YEAR. THE ELECTION CANNOT BE REVOKED WITHOUT
THE CONSENT OF THE IRS.

Dated: ___________________, 200_               _____________________________
                                                    Taxpayer's Signature

                                        1<PAGE>

                                                                     Exhibit 4.3

                              TALARIAN CORPORATION

                             1991 STOCK OPTION PLAN
                             ----------------------

                           As adopted April 26, 1991,
     as Amended September 23, 1993, November 10, 1995 and February 14, 1997

     1.   PURPOSE. This 1991 Stock Option Plan ("Plan") is established as a
          -------                                ----
compensatory plan to attract, retain and provide equity incentives to selected
persons to promote the financial success of Talarian Corporation, a California
corporation, (the "Company"). Capitalized terms not previously defined herein
                   -------
are defined in Section 17 of this Plan.

     2.   TYPES OF OPTIONS AND SHARES. Options granted under this Plan (the
          ---------------------------
"Options") may be either (a) incentive stock options ("ISOs") within the meaning
 -------                                               ----
of Section 422A of the Internal Revenue Code of 1986, as amended (the "Revenue
                                                                       -------
Code"), or (b) nonqualified stock options ("NQSOs"), as designated at the time
----
of grant. The shares of stock that may be purchased upon exercise of Options
granted under this Plan (the "Shares") are shares of the common stock of the
                              ------
Company.

     3.   NUMBER OF SHARES. The aggregate number of Shares that may be issued
          ----------------
pursuant to Options granted under this Plan is 2,050,000 Shares, subject to
adjustment as provided in this Plan. If any Option expires or is terminated
without being exercised in whole or in part, the unexercised or released Shares
from such Options shall be available for future grant and purchase under this
Plan. At all times during the term of this Plan, the Company shall reserve and
keep available such number of Shares as shall be required to satisfy the
requirements of outstanding Options under this Plan.

     4.   ELIGIBILITY. Options may be granted to employees, officers, directors,
          -----------
consultants, independent contractors and advisers (provided such consultants,
contractors and advisers render bona fide services not in connection with the
offer and sale of securities in a capital-raising transaction) of the Company or
any Parent, Subsidiary or Affiliate of the Company. ISOs may be granted only to
employees (including officers and directors who are also employees) of the
Company or a Parent or Subsidiary of the Company. The Committee (as defined in
Section 14) in its sole discretion shall select the recipients of Options
("Optionees"). An Optionee may be granted more than one Option under this Plan.
  ---------
The Company may also, from time to time, assume outstanding options granted by
another company, whether in connection with an acquisition of such other company
or otherwise, by either (i) granting an Option under this Plan in replacement of
the option assumed by the Company, or (ii) treating the assumed option as if it
had been granted under this Plan if the terms of such assumed option could be
applied to an Option granted under this Plan. Such assumption shall be
permissible if the holder of the assumed option would have been eligible to be
granted an Option hereunder if the other company had applied the rules of this
Plan to such grant.

<PAGE>

     5.   TERMS AND CONDITIONS OF OPTIONS. The Committee shall determine whether
          -------------------------------
each Option is to be an ISO or an NQSO, the number of Shares subject to the
Option, the exercise price of the Option, the period during which the Option may
be exercised, and all other terms and conditions of the Option, subject to the
following:

          (a) Form of Option Grant. Each Option granted under this Plan shall be
              --------------------
evidenced by a written Stock Option Grant (the "Grant") in such form (which need
                                                -----
not be the same for each Optionee) as the Committee shall from time to time
approve, which Grant shall comply with and be subject to the terms and
conditions of this Plan.

          (b) Date of Grant. The date of grant of an Option shall be the date on
              -------------
which the Committee makes the determination to grant such Option unless
otherwise specified by the Committee. The Grant representing the Option will be
delivered to Optionee with a copy of this Plan within a reasonable time after
granting of the Option.

          (c) Exercise Price. The exercise price of an NQSO shall be not less
              --------------
than 85% of the Fair Market Value of the Shares on the date the Option is
granted. The exercise price of an ISO shall be not less than 100% of the Fair
Market Value of the Shares on the date the Option is granted. The exercise price
of any ISO or NQSO granted to a person owning more than 10% of the total
combined voting power of all classes of stock of the Company or any Parent or
Subsidiary of the Company ("Ten Percent Shareholder") shall not be less than
                            -----------------------
110% of the Fair Market Value of the Shares on the date the Option is granted.

          (d) Exercise Period. Options shall be exercisable within the times or
              ---------------
upon the events determined by the Committee as set forth in the Grant; provided,
however, that no Option shall be exercisable after the expiration of ten (10)
years from the date the Option is granted, and provided further that no ISO
granted to a Ten Percent Shareholder shall be exercisable after the expiration
of five (5) years from the date the Option is granted.

          (e) Limitations on ISOs. The aggregate Fair Market Value (determined
              -------------------
as of the time an Option is granted) of stock with respect to which ISOs are
exercisable for the first time by an Optionee during any calendar year (under
this Plan or under any other incentive stock option plan of the Company or any
Parent or Subsidiary of the Company) shall not exceed $100,000. If the Fair
Market Value of Shares with respect to which ISOs are exercisable for the first
time by an Optionee during any calendar year exceeds $100,000, the Options for
the first $100,000 worth of Shares to become exercisable in such year shall be
ISOs and the Options for the amount in excess of $100,000 that becomes
exercisable in that year shall be NQSOs. In the event that the Revenue Code or
the regulations promulgated thereunder are amended after the effective date of
this Plan to provide for a different limit on the Fair Market Value of Shares
permitted to be subject to ISOs, such different limit shall be incorporated
herein and shall apply to any Options granted after the effective date of such
amendment.

          (f) Options Non-Transferable. Options granted under this Plan, and any
              ------------------------
interest therein, shall not be transferable or assignable by Optionee, and may
not be made subject to execution, attachment or similar process, otherwise than
by will or by the laws of descent and distribution, and shall be exercisable
during the lifetime of Optionee only by Optionee; provided,

                                       -2-

<PAGE>

however, that NQSOs held by an Optionee who is not an officer or director of the
Company or other person (in each case, an "Insider") whose transactions in the
                                           -------
Company's common stock are subject to Section 16(b) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), may be transferred to such family
                              ------------
members, trusts and charitable institutions as the Committee, in its sole
discretion, shall approve at the time of the grant of such Option.

          (g) Assumed Options. In the event the Company assumes an option
              ---------------
granted by another company, the terms and conditions of such option shall remain
unchanged (except the exercise price and the number and nature of shares
issuable upon exercise, which will be adjusted appropriately pursuant to Section
424(a) of the Revenue Code). In the event the Company elects to grant a new
option rather than assuming an existing option (as specified in Section 4), such
new option need not be granted at Fair Market Value on the date of grant and may
instead be granted with a similarly adjusted exercise price.

     6.   EXERCISE OF OPTIONS.
          -------------------

          (a) Notice. Options may be exercised only by delivery to the Company
              ------
of a written stock option exercise agreement (the "Exercise Agreement") in a
                                                   ------------------
form approved by the Committee (which need not be the same for each Optionee),
stating the number of Shares being purchased, the restrictions imposed on the
Shares, if any, and such representations and agreements regarding Optionee's
investment intent and access to information, if any, as may be required by the
Company to comply with applicable securities laws, together with payment in full
of the exercise price for the number of Shares being purchased.

          (b) Payment. Payment for the Shares may be made in cash (by check) or,
              -------
where approved by the Committee in its sole discretion at the time of grant and
where permitted by law: (i) by cancellation of indebtedness of the Company to
the Optionee; (ii) by surrender of shares of common stock of the Company having
a Fair Market Value equal to the applicable exercise price of the Options, that
have been owned by Optionee for more than six (6) months (and which have been
paid for within the meaning of the Securities and Exchange Commission ("SEC")
                                                                        ---
Rule 144 and, if such Shares were purchased from the Company by use of a
promissory note, such note has been fully paid with respect to such shares), or
were obtained by Optionee in the open public market; (iii) by tender of a full
recourse promissory note having such terms as may be approved by the Committee
and bearing interest at a rate sufficient to avoid imputation of income under
Sections 483 and 1274 of the Revenue Code; (iv) by waiver of compensation due or
accrued to Optionee for services rendered; (v) provided that a public market for
the Company's stock exits, through a "same day sale" commitment from Optionee
and a broker-dealer that is a member of the National Association of Securities
Dealers (an "NASD Dealer") whereby Optionee irrevocably elects to exercise the
             -----------
Option and to sell a portion of the Shares so purchased to pay for the exercise
price and whereby the NASD Dealer irrevocably commits upon receipt of such
Shares to forward the exercise price directly to the Company; (vi) provided that
a public market for the Company's stock exists, through a "margin" commitment
from Optionee and an NASD Dealer whereby Optionee irrevocably elects to exercise
the Option and to pledge the Shares so purchased to the NASD Dealer in a margin
account as security for a loan from the NASD Dealer in the amount of the
exercise price, and whereby the NASD Dealer irrevocably commits upon receipt of
such Shares to forward the exercise price directly to the Company; or

                                       -3-

<PAGE>

(vii) by any combination of the foregoing. Optionees who are not employees
or directors of the Company shall not be entitled to purchase Shares with a
promissory note unless the note is adequately secured by collateral other than
the Shares.

          (c) Withholding Taxes. Prior to issuance of the Shares upon exercise
              -----------------
of an Option, Optionee shall pay or make adequate provision for any federal or
state withholding obligations of the Company, if applicable. Where approved by
the Committee in its sole discretion, Optionee may provide for payment of
withholding taxes upon exercise of the Option by requesting that the Company
retain Shares with a Fair Market Value equal to the minimum amount of taxes
required to be withheld. In such case, the Company shall issue the net number of
Shares to Optionee by deducting the Shares retained from the Shares exercised.
The Fair Market Value of the Shares to be withheld shall be determined on the
date that the amount of tax to be withheld is to be determined in accordance
with Section 83 of the Revenue Code (the "Tax Date"). All elections by Optionees
                                          --------
to have Shares withheld for this purpose shall be made in writing in a form
acceptable to the Committee and shall be subject to the following restrictions:

              (i)   the election must be made on or prior to the applicable Tax
Date;

              (ii)  once made, the election shall be irrevocable as to the
particular Shares as to which the election is made; and

              (iii) all elections shall be subject to the consent or
disapproval of the Committee.

     In addition, if Optionee is an Insider, and if the Company is subject to
Section 16(b) of the Exchange Act, the following shall apply:

              (iv)  the election may not be made within six (6) months of the
date of grant of the Option; provided, however, that this limitation shall not
apply in the event that death or disability of Optionee occurs prior to the
expiration of the six (6) month period;

              (v)   the election must be made either six (6) months prior to the
Tax Date or in the 10-day period beginning on the third day following the public
release of the Company's quarterly or annual summary statement of operations;
and

              (vi)  if the Tax Date is deferred until six months after exercise
of the Option because no election is filed under Section 83(b) of the Revenue
Code, Optionee shall receive the full number of Shares with respect to which the
Option is exercised, but Optionee shall be unconditionally obligated to tender
back to the Company the proper number of Shares on the Tax Date.

          (d) Limitations on Exercise. Notwithstanding the exercise periods set
              -----------------------
forth in the Grant, exercise of an Option shall always be subject to the
following:

              (i)   If Optionee ceases to be employed by the Company or any
Parent, Subsidiary or Affiliate of the Company for any reason except death or
disability, Optionee may exercise such Optionee's ISOs to the extent (and only
to the extent) that they would have been

                                       -4-

<PAGE>

exercisable upon the date of termination, within three (3) months after the date
of termination (or such shorter time period as may be specified in the Grant);

                    (ii)   If Optionee is an Insider and the Company is subject
to Section 16(b) of the Exchange Act, Optionee's Option will be exercisable for
a period of time sufficient to allow Optionee from having a matching purchase
and sale under Section 16(b), with any extension beyond three (3) months from
termination of employment deemed to be as an NQSO, and provided further that in
no event may an Option be exercisable later than the expiration date of the
Option;

                    (iii) If Optionee's employment with the Company or any
Parent, Subsidiary or Affiliate of the Company is terminated because of the
death of Optionee or disability of Optionee within the meaning of Section
22(e)(3) of the Revenue Code, Optionee's ISOs may be exercised to the extent
(and only to the extent) that they would have been exercisable by Optionee on
the date of termination, by Optionee (or Optionee's legal representative) within
twelve (12) months after the date of termination (or such shorter time period as
may be specified in the Grant), but in any event no later than the expiration
date of the ISOs.

                    (iv)   The Committee shall have discretion to determine
whether Optionee has ceased to be employed by the Company or any Parent,
Subsidiary or Affiliate of the Company and the effective date on which such
employment terminated.

                    (v)    In the case of an Optionee who is a director,
independent consultant, contractor or adviser, the Committee will have the
discretion to determine whether Optionee is "employed by the Company or any
Parent, Subsidiary or Affiliate of the Company" pursuant to the foregoing
Sections.

                    (vi)   The Committee may specify a reasonable minimum number
of Shares that may be purchased on any exercise of an Option, provided that such
minimum number will not prevent Optionee from exercising the full number of
Shares as to which the Option is then exercisable.

                    (vii)  An Option shall not be exercisable unless such
exercise is in compliance with the Securities Act of 1933, as amended (the
"Securities Act"), all applicable state securities laws and the requirements of
 --------------
any stock exchange or national market system upon which the Shares may then be
listed, as they are in effect on the date of exercise. The Company shall be
under no obligation to register the Shares with the SEC or to effect compliance
with the registration, qualification or listing requirements of any state
securities laws, stock exchange or national market system, and the Company shall
have no liability for any inability or failure to do so.

     7.   RESTRICTIONS ON SHARES. At the discretion of the Committee, the
          ----------------------
Company may reserve to itself and/or its assignee(s) in the Grant (a) a right of
first refusal to purchase all Shares that an Optionee (or a subsequent
transferee) may propose to transfer to a third party and/or (b) a right to
repurchase a portion of or all Shares held by an Optionee upon

                                       -5-

<PAGE>

Optionee's termination of employment or service with the Company or a Parent,
Subsidiary or Affiliate of the Company, for any reason within a specified time
as determined by the Committee at the time of grant at (i) Optionee's original
purchase price, (ii) the Fair Market Value of such Shares or (iii) a price
determined by a formula or other provision set forth in the Grant, if any, but
in no event shall the repurchase price be less than Optionee's original purchase
price.

     8.   MODIFICATION, EXTENSION AND RENEWAL OF OPTIONS. The Committee shall
          ----------------------------------------------
have the power to modify, extend or renew outstanding Options and to authorize
the grant of new Options in substitution therefor, provided that any such action
may not, without the written consent of Optionee, impair any rights under any
Option previously granted. Any outstanding ISO that is modified, extended,
renewed or otherwise altered shall be treated in accordance with Section 424(h)
of the Revenue Code. The Committee shall have the power to reduce the exercise
price of outstanding Options without the consent of Optionees by a written
notice to the Optionees affected; provided, however, that the exercise price per
Share may not be reduced below the minimum exercise price that would be
permitted under Section 5(c) of this Plan for Options granted on the date the
action is taken to reduce the exercise price.

     9.   PRIVILEGES OF STOCK OWNERSHIP. No Optionee shall have any of the
          -----------------------------
rights of a shareholder with respect to any Shares subject to an Option until
such Option is properly exercised. No adjustment shall be made for dividends or
distributions or other rights for which the record date is prior to such date,
except as provided in this Plan. The Company shall provide to each Optionee a
copy of the annual financial statements of the Company at such time after the
close of each fiscal year of the Company as such statements are released by the
Company to its common shareholders generally.

     10.  NO OBLIGATION TO EMPLOY. Nothing in this Plan or any Option granted
          -----------------------
under this Plan shall confer on any Optionee any right to continue in the employ
of, or other relationship with, the Company or any Parent, Subsidiary or
Affiliate of the Company or limit in any way the right of the Company or any
Parent, Subsidiary or Affiliate of the Company to terminate Optionee's
employment or other relationship at any time, with or without cause.

     11.  ADJUSTMENT OF OPTION SHARES. In the event that the number of
          ---------------------------
outstanding shares of common stock of the Company is changed by a stock
dividend, stock split, reverse stock split, combination, reclassification or
similar change in the capital structure of the Company without consideration, or
if a substantial portion of the assets of the Company are distributed, without
consideration in a spin-off or similar transaction, to the shareholders of the
Company, the number of Shares available under this Plan and the number of Shares
subject to outstanding Options and the exercise price per Share of such Options
shall be proportionately adjusted, subject to any required action by the Board
of Directors (the "Board") or shareholders of the Company and compliance with
                   -----
applicable securities laws; provided, however, that a fractional share shall not
be issued upon exercise of any Option and any fractions of a Share that would
have resulted shall either be cashed out at Fair Market Value or the number of
Shares issuable under the Option shall be rounded up to the nearest whole
number, as determined by the Committee; and provided further that the exercise
price may not be decreased to below the par value, if any, for the Shares.

                                       -6-

<PAGE>

     12.  ASSUMPTION OF OPTIONS BY SUCCESSORS.
          -----------------------------------

          (a) In the event of (i) a merger or consolidation in which the Company
is not the surviving corporation (other than a merger or consolidation with a
wholly owned subsidiary, a reincorporation, or other transaction in which there
is no substantial change in the shareholders of the corporation and the Options
granted under this Plan are assumed by the successor corporation), (ii) a
dissolution or liquidation of the Company, (iii) the sale of substantially all
of the assets of the Company, or (iv) any other transaction which qualifies as a
"corporate transaction" under Section 424(a) of the Revenue Code wherein the
shareholders of the Company give up all of their equity interest in the Company
(except for the acquisition of all or substantially all of the outstanding
shares of the Company), any or all outstanding Options may be assumed by the
successor corporation, which assumption shall be binding on all Optionees. In
the alternative, the successor corporation may substitute an equivalent option
or provide substantially similar consideration to Optionees as was provided to
shareholders (after taking into account the existing provisions of Optionee's
options, such as the exercise price and the vesting schedule). The successor
corporation may also issue, in place of outstanding shares of the Company held
by Optionee as a result of the exercise of an Option that is subject to
repurchase, substantially similar shares or other property subject to similar
repurchase restrictions no less favorable to Optionee. In the event such
successor corporation, if any, refuses to assume or substitute the Options, as
provided above, or if there is no successor corporation, such Options shall
expire in connection with such transaction at such time and on such conditions
as the Board shall determine.

          (b) Subject to the foregoing provisions of this Section 12, in the
event of the occurrence of any transaction described in Section 12(a), any
outstanding Option shall be treated as provided in the applicable agreement or
plan of merger, consolidation, dissolution, liquidation, sale of assets or other
"corporate transaction".

          (c) Notwithstanding the above, for Options granted prior to September
30, 1995, in the event such successor corporation refuses to assume or
substitute, as provided above, pursuant to a transaction described in Subsection
12(a)(i) above, such Options shall accelerate and become exercisable in full at
least 20 days prior to, and shall expire on (and, if the Company has reserved to
itself a right to repurchase Shares issued on exercise of Options at the
original purchase price of such Shares, such right shall terminate on), the
consummation of such transaction at such time and on such conditions as the
Board shall determine. If the Fair Market Value of stock with respect to which
all ISOs are first exercisable in such calendar year exceeds $100,000, the
Options for the first $100,000 worth of Shares to become exercisable in that
year shall be ISOs and the Options for the amount in excess of $100,000 shall be
NQSOs.

     13.  ADOPTION AND SHAREHOLDER APPROVAL. This Plan shall become effective on
          ---------------------------------
the date that it is adopted by the Board of the Company. This Plan shall be
approved by the shareholders of the Company, in any manner permitted by
applicable corporate law, within twelve months before or after the date this
Plan is adopted by the Board. Upon the effective date of the Plan, the Board may
grant Options pursuant to this Plan; provided that, in the event that
shareholder approval is not obtained within the time period provided herein, all
Options granted hereunder shall terminate. No Option that is issued as a result
of any increase in the number of

                                       -7-

<PAGE>

shares authorized to be issued under this Plan shall be exercised prior to the
time such increase has been approved by the shareholders of the Company and all
such Options granted pursuant to such increase shall similarly terminate if such
Shareholder approval is not obtained. After the Company becomes subject to
Section 16(b) of the Exchange Act, the Company will comply with the requirements
of Rule 16b-3 with respect to shareholder approval.

     14.  ADMINISTRATION. This Plan may be administered by the Board or a
          --------------
committee appointed by the Board (the "Committee"). If, at the time the Company
                                       ---------
registers under the Exchange Act, a majority of the Board is not comprised of
Disinterested Persons, the Company will take appropriate steps to comply with
the disinterested director requirements of Section 16(b) of the Exchange Act,
which may consist of the appointment by the Board of a Committee consisting of
not less than three persons (who need not be members of the Board), each of whom
is a Disinterested Person. As used in this Plan, references to the "Committee"
shall mean either the committee appointed to the Board to administer this Plan
or the Board if no committee has been established. After registration of the
Company under the Exchange Act, Board members who are not Disinterested Persons
may not vote on any matters affecting the administration of this Plan or on the
grant of any Options pursuant to this Plan to Insiders, but any such member may
be counted for determining the existence of a quorum at any meeting of the Board
during which action is taken with respect to Options or administration of this
Plan and may vote on the grant of any Options pursuant to this Plan otherwise
than to Insiders. The Interpretation by the Committee of any of the provisions
of this Plan or any Option granted under this Plan shall be final and binding
upon the Company and all persons having an interest in any Option or any Shares
purchased pursuant to an Option. The Committee may delegate to officers of the
Company the authority to grant Options under this Plan to Optionees who are not
Insiders of the Company.

     15.  TERM OF PLAN. Options may be granted pursuant to this Plan from time
          ------------
to time within a period of ten (10) years from the date on which this Plan is
adopted by the Board.

     16.  AMENDMENT OR TERMINATION OF PLAN. The Committee may at any time
          --------------------------------
terminate or amend this Plan in any respect including (but not limited to)
amendment of any form of grant, exercise agreement or instrument to be executed
pursuant to this Plan; provided, however, that the Committee shall not, without
the approval of the shareholders of the Company, amend this Plan in any manner
that requires such shareholder approval pursuant to the Revenue Code or the
regulations promulgated thereunder as such provisions apply to ISO plans or
pursuant to the Exchange Act or Rule 16b-3 (or its successor) promulgated
thereunder.

     17.  CERTAIN DEFINITIONS. As used in this Plan, the following terms shall
          -------------------
have the following meanings:

          (a) "Parent" means any corporation (other than the Company) in an
               ------
unbroken chain of corporations ending with the Company if, at the time of the
granting of the Option, each of such corporations other than the Company owns
stock possessing 50% or more of the total combined voting power of all classes
of stock in one of the other corporations in such chain.

                                       -8-

<PAGE>

          (b) "Subsidiary" means any corporation (other than the Company) in an
               ----------
unbroken chain of corporations beginning with the Company if, at the time of
granting of the Option, each of the corporations other than the last corporation
in the unbroken chain owns stock possessing 50% or more of the total combined
voting power of all classes of stock in one of the other corporations in such
chain.

          (c) "Affiliate" means any corporation that directly, or indirectly
               ---------
through one or more intermediaries, controls or is controlled by, or is under
common control with, another corporation, where "control" (including the terms
"controlled by" and "under common control with") means the possession, direct or
indirect, of the power to cause the direction of the management and policies of
the corporation, whether through the ownership of voting securities, by contract
or otherwise.

          (d) "Disinterested Person" shall have the meaning set forth in Rule
               --------------------
16b-3(d) (3) as promulgated by the SEC under Section 16(b) of the Exchange Act,
as such rule is amended from time to time and as interpreted by the SEC.

          (e) "Fair Market Value" shall mean the fair market value of the Shares
               -----------------
as determined by the Committee from time to time in good faith. If a public
market exists for the Shares, the Fair Market Value shall be the average of the
last reported bid and asked prices for common stock of the Company on the last
trading day prior to the date of determination (or the average closing price
over the number of consecutive working days preceeding the date of determination
as the Committee shall deem appropriate) or, the event the common stock of the
Company is listed on a stock exchange or on the NASDAQ National Market System,
the Fair Market Value shall be the closing price on such exchange or quotation
system on the last trading day prior to the date of determination (or the
average closing price over the number of consecutive working days preceding the
date of determination as the Committee shall deem appropriate).

                                       -9-

<PAGE>

                              TALARIAN CORPORATION
                               STOCK OPTION GRANT
                               ------------------

Optionee:                                 ______________________________________

Address:                                  ______________________________________

                                          ______________________________________

Total Shares Subject to Option:           ______________________________________

Exercise Price per Share:

Date of Grant:                            ______________________________________

Expiration Date:                          ______________________________________

Type of Option:                           [_] Incentive Stock Option

                                          [_] Nonqualified Stock Option

1.    Grant of Option. Talarian Corporation, a California corporation (the
      ---------------
"Company"), hereby grants to the optionee named above ("Optionee") an option
 -------                                                --------
(this "Option") to purchase the total number of shares of common stock of the
       ------
Company set forth above (the "Shares") at the exercise price per share set forth
                              ------
above (the "Exercise Price"), subject to all of the terms and conditions of this
            --------------
Stock Option Grant (this "Grant") and the Company's 1991 Stock Option Plan, as
                          -----
amended to the date hereof (the "Plan"). If designated as an Incentive Stock
                                 ----
Option above, this Option is intended to qualify as an "incentive stock option"
("ISO") within the meaning of Section 422A of the Internal Revenue Code of 1986,
  ---
as amended (the "Revenue Code"). Unless otherwise defined herein, capitalized
                 ------------
terms used herein shall have the meanings ascribed to them in the Plan.

2.    Exercise Period of Option.
      -------------------------

      (a) Exercise Schedule. Subject to the terms and conditions of the Plan and
          -----------------
this Grant, this Option shall become exercisable as to portions of the Shares as
follows: (a) This Option shall not be exercisable with respect to any of the
Shares until _______________ (the "First Vesting Date"); (b) if Optionee has
                                   ------------------
been continuously employed by the Company at all times during the time period
beginning on the Date of Grant set forth above and ending on the First Vesting
Date, then on the First Vesting Date this Option shall become exercisable as to
________________ (______%) of the Shares; and (c) thereafter this Option shall
become exercisable as to an additional ______________ (_______%) of the Shares
for each additional full calendar month after the First Vesting Date that
Optionee remains continuously employed by the Company thereafter; provided that
                                                                  --------
Optionee shall in no event be entitled under this Option to purchase a number of
shares of the Company's common stock greater than the "Total Shares Subject to
Option" indicated above.

     (b)  Right to Exercise Option in Full. Notwithstanding Section 2(a) hereof,
          --------------------------------
from the period from January 25, 2000 to January 31, 2000, this Option shall be
immediately exercisable with respect to all Shares, provided however, that the
                                                    -------- -------
Company shall have the right to

                                      -10-

<PAGE>

repurchase (in addition to any other rights of repurchase the Company may hold)
any or all of the Shares that are not yet exercisable pursuant to Section 2(a)
hereof at a price equal to the Exercise Price Per Share, as adjusted for stock
splits, reverse stock splits and the like, at the time which Optionee ceases to
be employed by the Company (as determined by the Board of Directors or Committee
thereof). Provided Optionee continues to be employed by the Company, the
Company's right to repurchase the Shares at a price equal to the Exercise Price
Per Share shall lapse at the same rate that this Option for such Shares would
have become exercisable pursuant to Section 2(a) hereof, if such Option had not
been exercised in full pursuant to this Section 2(b). Shares subject to
repurchase by the Company pursuant to this Section 2(b) may not be sold or
otherwise transferred without the Company's written consent.

          (c)  Expiration. Notwithstanding anything herein to the contrary, this
               ----------
Option shall expire on the Expiration Date set forth above and must be
exercised, if at all, on or before the Expiration Date; and provided further
that this Option must become exercisable as to at least 20% of the Shares for
each full year since the Date of Grant.

     3.   Restriction on Exercise. This Option may not be exercised unless such
          -----------------------
exercise is in compliance with the Securities Act and all applicable state
securities laws as they are in effect on the date of exercise, and the
requirements of any stock exchange or national market system on which the
Company's common stock may be listed at the time of exercise. Optionee
understands that the Company is under no obligation to register, qualify or list
the Shares with the SEC, any state securities commission or any stock exchange
to effect such compliance.

     4.   Termination of Option. Except as provided below in this Section, this
          ---------------------
Option shall terminate and may not be exercised if Optionee ceases to be
employed by the Company or any Parent or Subsidiary of the Company (or, in the
case of a nonqualified stock option, an Affiliate of the Company). Optionee
shall be considered to be employed by the Company for all purposes under this
Section 4 if Optionee is an officer, director or full-time employee of the
Company or any Parent, Subsidiary or Affiliate of the Company or if the
Committee determines that Optionee is rendering substantial services as a
part-time employee, consultant, contractor or adviser to the Company or any
Parent, Subsidiary or Affiliate of the Company. The Committee shall have
discretion to determine whether Optionee has ceased to be employed by the
Company or any Parent, Subsidiary or Affiliate of the Company and the effective
date on which such employment terminated (the "Termination Date").
                                               ----------------

          (a)  Termination Generally. If Optionee ceases to be employed by the
               ---------------------
Company or any Parent, Subsidiary or Affiliate of the Company for any reason
except death or disability, this Option, to the extent (and only to the extent)
that it would have been exercisable by Optionee on the Termination Date, may be
exercised by Optionee within three (3) months after the Termination Date, but in
no event later than the Expiration Date.

          (b)  Death or Disability. If Optionee's employment with the Company or
               -------------------
any Parent, Subsidiary or Affiliate of the Company is terminated because of the
death of Optionee or the disability of Optionee within the meaning of Section
22(e)(3) of the Revenue Code, this Option, to the extent (and only to the
extent) that it would have been exercisable by Optionee on

                                      -11-

<PAGE>

the Termination Date, may be exercised by Optionee (or Optionee's legal
representative) within twelve (12) months after the Termination Date, but in no
event later than the Expiration Date.

        (c)    No Right to Employment. Nothing in the Plan or this Grant shall
               ----------------------
confer on Optionee any right to continue in the employ of, or other relationship
with, the Company or any Parent, Subsidiary or Affiliate of the Company or limit
in any way the right of the Company or any Parent, Subsidiary or Affiliate of
the Company to terminate Optionee's employment or other relationship at any
time, with or without cause.

     5.  Manner of Exercise.
         ------------------

        (a)    Exercise Agreement. This Option shall be exercisable by delivery
               ------------------
to the Company of an executed written Stock Option Exercise Agreement in the
form attached hereto as Exhibit A, or in such other form as may be approved by
                        ---------
the Company, which shall set forth Optionee's election to exercise some or all
of this Option, the number of Shares being purchased, any restrictions imposed
on the Shares and such other representations and agreements as may be required
by the Company to comply with applicable securities laws.

        (b)    Exercise Price. Such notice shall be accompanied by full payment
               --------------
of the Exercise Price for the Shares being purchased. Payment for the Shares may
be made in cash (by check) or, where permitted by law: (i) by cancellation of
indebtedness of the Company to Optionee; (ii) by surrender of shares of common
stock of the Company having a Fair Market Value equal to the exercise price of
the Option that have been owned by Optionee for more than six (6) months (and
which have been paid for within the meaning of SEC Rule 144 and, if such Shares
were purchased from the Company by use of a promissory note, such note has been
fully paid with respect to such shares), or were obtained by Optionee in the
open public market; (iii) by waiver of compensation due or accrued to Optionee
for services rendered; (iv) provided that a public market for the Company's
stock exists, through a "same day sale" commitment from Optionee and a
broker-dealer that is a member of the National Association of Securities Dealers
(an "NASD Dealer") whereby Optionee irrevocably elects to exercise the Option
     -----------
and to sell a portion of the Shares so purchased to pay for the Exercise Price
and whereby the NASD Dealer irrevocably commits upon receipt of such Shares to
forward the Exercise Price directly to the Company; (v) provided that a public
market for the Company's stock exists, through a "margin" commitment from
Optionee and an NASD Dealer whereby Optionee irrevocably elects to exercise the
Option and to pledge the Shares so purchased to the NASD Dealer in a margin
account as security for a loan from the NASD Dealer in the amount of the
Exercise Price, and whereby the NASD Dealer irrevocably commits upon receipt of
such Shares to forward the Exercise Price directly to the Company; or (vi) by
any combination of the foregoing. Optionees who are not employees or directors
of the Company shall not be entitled to purchase Shares with a promissory note
unless the note is adequately secured by collateral other than the Shares.

        (c)   Withholding Taxes. Prior to the issuance of the Shares upon
               -----------------
exercise of this Option, Optionee must pay or make adequate provision for any
applicable federal or state withholding obligations of the Company. If Optionee
is an Insider subject at the time of exercise of this Option to Section 16(b) of
the Exchange Act, Optionee may provide for payment of Optionee's minimum
statutory withholding taxes upon exercise of the Option by requesting that

                                      -12-

<PAGE>

the Company retain Shares with a Fair Market Value equal to the minimum amount
of taxes required to be withheld, all as set forth in Section 6(c) of the Plan.
In such case, the Company shall issue the net number of Shares to Optionee by
deducting the Shares retained from the Shares exercised.

          (d)  Issuance of Shares. Provided that such notice and payment are in
               ------------------
form and substance satisfactory to counsel for the Company, the Company shall
cause the Shares to be issued in the name of Optionee, Optionee's legal
representative or Optionee's assignee.

     6.   Notice of Disqualifying Disposition of ISO Shares. If the Option
          -------------------------------------------------
granted to Optionee herein is an ISO, and if Optionee sells or otherwise
disposes of any of the Shares acquired pursuant to the ISO within (1) the date
two years after the Date of Grant, or (2) the date one year after exercise of
the ISO with respect to the Shares to be sold or disposed, Optionee shall
immediately notify the Company in writing of such disposition. Optionee
acknowledges and agrees that Optionee may be subject to income tax withholding
by the Company on the compensation income recognized by Optionee from any such
early disposition by payment in cash (or in Shares, to the extent permissible
under Section 5(c)) or out of the current wages or other earnings payable to
Optionee.

     7.   Nontransferability of Option. If this Option is an ISO, or if Optionee
          ----------------------------
is an Insider subject to Section 16(b) of the Exchange Act, then this Option may
not be transferred in any manner other than by will or by the law of descent and
distribution and may be exercised during the lifetime of Optionee only by
Optionee. Otherwise, this Option may only be transferred to Optionee's immediate
family, to a trust for the benefit of Optionee or Optionee's immediate family,
or to a charitable entity qualified under IRC Section 501(c), where "immediate
family" shall mean spouse, lineal descendant or antecedent, brother or sister.
The terms of this Option shall be binding upon the executors, administrators,
successors and assigns of Optionee.

     8.   Tax Consequences. Set forth below is a brief summary as of the date
          ----------------
this form of Grant was adopted of some of the federal and California tax
consequences of exercise of this Option and disposition of the Shares. THIS
SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT
TO CHANGE. OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THIS OPTION
OR DISPOSING OF THE SHARES.

          (a)  Exercise of ISO. If this Option qualifies as an ISO, there will
               ---------------
be no regular federal income tax liability or California income tax liability
upon the exercise of the Option, although 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 alternative minimum taxable income for federal and
California income tax purposes and may subject Optionee to an alternative
minimum tax liability in the year of exercise.

          (b)  Exercise of Nonqualified Stock Option. If this Option does not
               -------------------------------------
qualify as an ISO, there may be a regular federal income tax liability and a
California income tax liability upon the exercise of the Option. Optionee will
be treated as having received compensation income (taxable at ordinary income
tax rates) equal to the excess, if any, of the Fair Market

                                      -13-

<PAGE>

Value of the Shares on the date of exercise over the Exercise Price. The Company
will be required to withhold from Optionee's compensation or collect from
Optionee and pay to the applicable taxing authorities an amount equal to a
percentage of this compensation income at the time of exercise.

          (c)  Disposition of Shares. In the case of an NQSO, if Shares are held
               ---------------------
for more than one year before disposition, any gain on disposition of the Shares
will be treated as long-term capital gain for federal and California income tax
purposes. In the case of an ISO, if Shares are held for more than one year after
the date of exercise and more than two years after the Date of Grant, any gain
on disposition on the Shares will be treated as long-term capital gain for
federal and California income tax purposes. If Shares acquired pursuant to an
ISO are disposed of within such one year or two year periods (a "disqualifying
                                                                 -------------
disposition"), gain on such disqualifying disposition will be treated as
-----------
compensation income (taxable at ordinary income rates) to the extent of the
excess, if any, of the Fair Market Value of the Shares on the date of exercise
over the Exercise Price (the "Spread"), or, if less, the difference between the
                              ------
amount realized on the sale of such Shares and the Exercise Price. Any gain in
excess of the Spread shall be treated as capital gain.

          (d)  Section 83(b) Election for Shares Subject to Repurchase Pursuant
               ----------------------------------------------------------------
to Section 2(b). With respect to Shares subject to repurchase pursuant to
---------------
Section 2(b), unless an election is filed by the Optionee with the Internal
Revenue Service (and, if necessary, the proper state taxing authorities), within
                                                                          ------
30 days of the purchase of such Shares, electing pursuant to Section 83(b) of
-------
the Code (and similar state tax provisions, if applicable) to be taxed currently
on any difference between the Exercise Price of such Shares and their Fair
Market Value on the date of purchase, there may be a recognition of taxable
income and/or alternative minimum taxable income to the Optionee, measured by
the excess, if any, of the Fair Market Value of such Shares at the time they
cease to be subject to the repurchase right, over the Exercise Price of such
Shares.

     9.   Interpretation. Any dispute regarding the interpretation of this Grant
          --------------
shall be submitted by Optionee or the Company to the Company's Board of
Directors or the committee thereof that administers the Plan, which shall review
such dispute at its next regular meeting. The resolution of such a dispute by
the Board or Committee shall be final and binding on the Company and on
Optionee.

     10.  Entire Agreement. The Plan and the Stock Option Exercise Agreement
          ----------------
attached as Exhibit A are incorporated herein by this reference. This Grant, the
            ---------
Plan and the Stock Option Exercise Agreement constitute the entire agreement of
the parties hereto and supersede all prior undertakings and agreements with
respect to the subject matter hereof.

                                        TALARIAN CORPORATION

                                        By:___________________________________

                                        Name:_________________________________

                                        Title:________________________________

                                       -14-

<PAGE>

                                   ACCEPTANCE
                                   ----------

Optionee hereby acknowledges receipt of a copy of the Plan, represents that
Optionee has read and understands the terms and provisions thereof, and accepts
this Option subject to all the terms and conditions of the Plan and this Stock
Option Grant. Optionee acknowledges that there may be adverse tax consequences
upon exercise of this Option or disposition of the Shares and that Optionee
should consult a tax adviser prior to such exercise or disposition.

                                            ____________________________________
                                                         Optionee

                                      -15-

<PAGE>

                                    Exhibit A
                                    ---------

                              TALARIAN CORPORATION

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

This Exercise Agreement is made this _____ day of ____________, 2__ (the
"Effective Date") between Talarian Corporation, a California corporation (the
 --------------
"Company"), and the optionee named below ("Optionee") pursuant to the Company's
 -------                                   --------
1991 Stock Option Plan (the "Plan").
                             ----

Optionee:                                _______________________________________

Social Security Number:                  _______________________________________

Address:                                 _______________________________________

                                         _______________________________________

Number of Unvested Shares as of the
Effective Date:                          _______________________________________

Number of Vested Shares as of the
Effective Date:                          _______________________________________

Total Number of Shares Purchased:        _______________________________________

Price per Share:                         _______________________________________

Aggregate Purchase Price:                _______________________________________

Date of Option Grant:                    _______________________________________

Type of Option:                          [_] Incentive Stock Option
                                         [_] Nonqualified Stock Option

Optionee hereby delivers to the Company the Aggregate Purchase Price, to the
extent permitted in the Grant and pursuant to exercise of that certain option
("Option") granted to Optionee under the Plan, as follows (check as applicable
  ------
and complete):

[_]    in cash in the amount of $__________, receipt of which is acknowledged by
the Company;

[_]    by delivery of _______ fully-paid, nonassessable and vested shares of the
common stock of the Company owned by Optionee for at least six (6) months prior
to the date hereof (and which have been paid for within the meaning of SEC Rule
144), or obtained by Optionee in the open public market, and owned free and
clear of all liens, claims, encumbrances or security interests, valued at the
current Fair Market Value of $________ per share;

[_]    by cancellation of indebtedness of the Company to Optionee in the amount
of $______;

<PAGE>

[_]     by the waiver hereby of compensation due or accrued for services
rendered in the amount of $______;

[_]     through a "same-day-sale" commitment, delivered herewith, from Optionee
and the NASD Dealer named therein, in the amount of $______; or

[_]     through a "margin" commitment, delivered herewith from Optionee and the
NASD Dealer named therein, in the amount of $____.

Optionee also hereby delivers to the Company (i) this Exercise Agreement, (ii)
two (2) copies of a blank Stock Power and Assignment Separate from Stock
Certificate in the form of Attachment 1 attached hereto (the "Stock Powers"),
                           ------------                       ------------
both executed by Optionee (and Optionee's spouse, if any), and (iii) if Optionee
is married, a Consent of Spouse in the form of Attachment 2 attached hereto (the
                                               ------------
"Spouse Consent") executed by Optionee's spouse. Upon its receipt of the
 --------------
Aggregate Purchase Price and all the documents to be executed and delivered by
Optionee to the Company, the Company will issue a duly executed stock
certificate evidencing the Shares in the name of Optionee, to be placed in
escrow as provided in Section 11 until expiration or termination of the
Company's Right of First Refusal and Repurchase Option described in Sections 7
and 9, respectively.

The Company and Optionee hereby agree as follows:

1.   Purchase of Shares. On this date and subject to the terms and conditions of
     ------------------
this Exercise Agreement, Optionee hereby exercises the Grant between the Company
and Optionee dated as of the Date of Grant set forth above, with respect to the
Number of Shares Purchased set forth above of the Company's common stock (the
"Shares") at an aggregate purchase price equal to the Aggregate Purchase Price
 ------
set forth above (the "Aggregate Purchase Price") and the Price per Share set
                      ------------------------
forth above (the "Purchase Price Per Share"). The term "Shares" refers to the
                  ------------------------
Shares purchased under this Exercise Agreement and includes all securities
received (a) in replacement of the Shares, and (b) as a result of stock
dividends or stock splits with respect to the Shares.

2.   Representations of Optionee. Optionee represents and warrants to the
     ---------------------------
Company that:

(a)      Optionee has received, read and understood the Plan and the Grant and
agrees to abide by and be bound by their terms and conditions.

(b)      Optionee is purchasing the Shares for Optionee's own account for
investment purposes only and not with a view to, or for sale in connection with,
a distribution of the Shares within the meaning of the Securities Act.

(c)      Optionee has no present intention of selling or otherwise disposing of
all or any portion of the Shares.

(d)      Optionee is fully aware of (i) the highly speculative nature of the
investment in the Shares; (ii) the financial hazards involved; and (iii) the
lack of liquidity of the

                                       -2-

<PAGE>

Shares and the restrictions on transferability of the Shares (e.g., that
                                                              ----
Optionee may not be able to sell or dispose of the Shares or use them as
collateral for loans).

(e)          Optionee is capable of evaluating the merits and risks of this
investment, has the ability to protect Optionee's own interests in this
transaction and is financially capable of bearing a total loss of this
investment.

3.     Compliance with Securities Laws. Optionee understands and acknowledges
       -------------------------------
that the Shares have not been registered under the Securities Act and that,
notwithstanding any other provision of the Grant to the contrary, the exercise
of any rights to purchase any Shares is expressly conditioned upon compliance
with the Securities Act and all applicable state securities laws. Optionee
agrees to cooperate with the Company to ensure compliance with such laws. The
Shares are being issued under the Securities Act pursuant to (the Company will
check the applicable box):

       [_]   the exemption provided by Rule 701;
[_]          the exemption provided by Rule 504;
[_]          Section 4(2) of the Securities Act;
[_]          other:____________________________.

4.     Federal Restrictions on Transfer. Optionee understands that the Shares
       --------------------------------
must be held indefinitely unless they are registered under the Securities Act or
unless an exemption from such registration is available and that the
certificate(s) representing the Shares will bear a legend to that effect.
Optionee understands that the Company is under no obligation to register the
Shares and that an exemption may not be available or may not permit Optionee to
transfer Shares in the amounts or at the times proposed by Optionee.

(a)         Rule 144. Optionee has been advised that Rule 144 promulgated under
            --------
the Securities Act, which permits certain resales of unregistered securities, is
not presently available with respect to the Shares and, in any event, requires
that the Shares be paid for and then held for a minimum of one year before they
may be resold under Rule 144. Prior to an initial public offering of the
Company's stock, "nonaffiliates" (i.e. persons other than officers, directors
and major shareholders of the Company) may resell only under Rule 144(k), which
requires that the Shares be paid for and held for a minimum of two years. Rule
144(k) is not available to affiliates.

(b)         Rule 701. If the exemption relied upon for exercise of the Shares is
            --------
Rule 701, the Shares will become freely transferable, subject to limited
conditions regarding the method of sale, by nonaffiliates 90 days after the
first sale of common stock of the Company to the general public pursuant to a
registration statement filed with and declared effective by the SEC, subject to
any lengthier market standoff agreement contained in this Exercise Agreement or
entered into by Optionee. Affiliates must comply with the provisions (other than
the holding period requirements) of Rule 144.

5.     State Law Restrictions on Transfer. Optionee understands that transfer of
       ----------------------------------
the Shares may be restricted by Section 260.141.11 of the Rules of the
California Commissioner of

                                       -3-

<PAGE>

Corporations, a copy of which is attached hereto as Attachment 3, and that the
                                                    ------------
certificate(s) representing the Shares may bear a legend to that effect.

6.     Market Standoff Agreement. Optionee agrees in connection with any
       -------------------------
registration of the Company's securities that, upon the request of the Company
or the underwriters managing any public offering of the Company's securities,
Optionee will not sell or otherwise dispose of any Shares without the prior
written consent of the Company or such underwriters, as the case may be, for
such period of time from the effective date of such registration as the Company
or the underwriters may specify for employee shareholders generally.

7.     Company's Right of First Refusal. Before any Shares held by Optionee or
       --------------------------------
any transferee (either being sometimes referred to herein as the "Holder") may
                                                                  ------
be sold or otherwise transferred (including transfer by gift or operation of
law), the Company shall have an assignable right of first refusal to purchase
the Shares on the terms and conditions set forth in this Section (the "Right of
                                                                       --------
First Refusal").
-------------

(a)         Notice of Proposed Transfer. The Holder of the Shares shall deliver
            ---------------------------
to the Company a written notice (the "Notice") stating: (i) the Holder's bona
                                      ------
fide intention to sell or otherwise transfer such Shares; (ii) the name of each
proposed purchaser or other transferee ("Proposed Transferee"); (iii) the number
                                         -------------------
of Shares to be transferred to each Proposed Transferee; and (iv) the bona fide
cash price or other consideration for which the Holder proposes to transfer the
Shares (the "Offered Price"); and the Holder shall offer to sell the Shares at
             -------------
the Offered Price to the Company.

(b)         Exercise of Right of First Refusal. At any time within thirty (30)
            ----------------------------------
days after receipt of the Notice, the Company or its assignee may, by giving
written notice to the Holder, elect to purchase all (but not less than all) of
the Shares proposed to be transferred to any one or more of the Proposed
Transferees, at the purchase price determined in accordance with subsection (c)
below.

(c)         Purchase Price. The purchase price for the Shares purchased under
            --------------
this Section shall be the Offered Price. If the Offered Price includes
consideration other than cash, the cash equivalent value of the non-cash
consideration shall be determined by the Board of Directors of the Company in
good faith.

(d)         Payment. Payment of the purchase price shall be made, at the option
            -------
of the Company or its assignee, either (i) in cash (by check), by cancellation
of all or a portion of any outstanding indebtedness of the Holder to the Company
or such assignee, or by any combination thereof within thirty (30) days after
receipt of the Notice or (ii) in the manner and at the time(s) set forth in the
Notice.

(e)         Holder's Right to Transfer. If all of the Shares proposed in the
            --------------------------
Notice to be transferred to a given Proposed Transferee are not purchased by the
Company and/or its assignee as provided in this Section, then the Holder may
sell or otherwise transfer such Shares to that Proposed Transferee at the
Offered Price or at a higher price, provided that such sale or other transfer is
consummated within one hundred twenty (120) days after the date of the Notice

                                       -4-

<PAGE>

and provided further that any such sale or other transfer is effected in
accordance with any applicable securities laws and the Proposed Transferee
agrees in writing that the provisions of this Section shall continue to apply to
the Shares in the hands of such Proposed Transferee. If the Shares described in
the Notice are not transferred to the Proposed Transferee within such period, a
new Notice shall be given to the Company, and the Company shall again be offered
the Right of First Refusal, before any Shares held by the Holder may be sold or
otherwise transferred.

(f)         Exception for Certain Family Transfers. Anything to the contrary
            --------------------------------------
contained in this Section notwithstanding, the transfer of any or all of the
Shares during Optionee's lifetime or on Optionee's death by will or intestacy to
Optionee's immediate family or a trust for the benefit of Optionee or Optionee's
immediate family shall be exempt from the provisions of this Section; provided
that, as a condition to receiving the Shares, the transferee or other recipient
shall agree in writing to receive and hold the Shares so transferred subject to
the provisions of this Exercise Agreement, and to transfer such Shares no
further except in accordance with the terms of this Exercise Agreement. As used
herein, "immediate family" shall mean spouse, lineal descendant or antecedent,
         ----------------
brother or sister.

(g)         Termination of Right of First Refusal. The Right of First Refusal
            -------------------------------------
shall terminate as to any Shares upon the first sale of common stock of the
Company to the general public pursuant to a registration statement filed with
and declared effective by the SEC (other than a registration statement solely
covering an employee benefit plan or corporate reorganization).

8.     Compliance with State Securities Laws. THE SALE OF THE SECURITIES THAT
       -------------------------------------
ARE THE SUBJECT OF THIS EXERCISE AGREEMENT, IF NOT YET QUALIFIED WITH THE
CALIFORNIA COMMISSIONER OF CORPORATIONS AND NOT EXEMPT FROM SUCH QUALIFICATION,
IS SUBJECT TO SUCH QUALIFICATION, AND THE ISSUANCE OF SUCH SECURITIES, AND THE
RECEIPT OF ANY PART OF THE CONSIDERATION THEREFOR PRIOR TO SUCH QUALIFICATION IS
UNLAWFUL UNLESS THE SALE IS EXEMPT. THE RIGHTS OF THE PARTIES TO THIS EXERCISE
AGREEMENT ARE EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED OR AN
EXEMPTION BEING AVAILABLE.

9.     Company's Repurchase Option. The Company, or its assignee, shall have the
       ---------------------------
option to repurchase all or a portion of the Shares on the terms and conditions
set forth in this Section (the "Repurchase Option") if Optionee should cease to
                                -----------------
be employed by the Company for any reason, or no reason, including without
limitation Optionee's death, disability, voluntary resignation or termination by
the Company with or without cause.

(a)         Right of Termination Unaffected. Nothing in this Exercise Agreement
            -------------------------------
shall be construed to limit or otherwise affect in any manner whatsoever the
right or power of the Company to terminate Optionee's employment at any time,
for any reason or no reason, with or without cause. For purposes of this
Exercise Agreement, Optionee shall be considered to be "employed by the Company"
if Optionee is an officer, director or full-time employee of the Company or any
Parent, Subsidiary or Affiliate of the Company or if the Committee determines
that Optionee is rendering substantial services as a part-time employee,
consultant, contractor or

                                       -5-

<PAGE>

adviser to the Company or any Parent, Subsidiary or Affiliate of the Company.
The Committee shall have discretion to determine whether Optionee has ceased to
be employed by the Company or any Parent, Subsidiary or Affiliate of the Company
and the effective date on which such employment terminated (the "Termination
                                                                 -----------
Date").
----

(b)           Vested and Unvested Shares. "Vested Shares" shall mean at any
              --------------------------   -------------
point in time those Shares that would have been eligible for exercise under
Section 2(a) of the Grant at such point in time if the Option had not been
exercised under Section 2(b) of the Grant, and the remaining Shares are
"Unvested Shares." Unvested Shares may not be sold or otherwise transferred by
 ---------------
Optionee without the Company's prior written consent. The number of Shares that
are Vested Shares or Unvested Shares will be proportionally adjusted to reflect
any stock dividend, stock split, reverse stock split or recapitalization of the
Common Stock of the Company occurring after the Effective Date.

(c)           Exercise of Repurchase Option. At any time within one hundred
              -----------------------------
twenty (120) days after the later of the Termination Date and the date the
Optionee purchased the Shares, the Company, or its assignee, may elect to
repurchase a portion, all or none of the Unvested Shares and/or a portion (with
Optionee's consent), all or none of the Vested Shares by giving Optionee written
notice of exercise of the Repurchase Option.

(d)           Calculation of Repurchase Price. The Company or its assignee(s)
              -------------------------------
shall have the option to repurchase from Optionee (or from Optionee's personal
representative as the case may be) any or all of the Unvested Shares at the
Optionee's original Purchase Price Per Share (as adjusted to reflect any stock
dividend, stock split, reverse stock split or recapitalization of the Common
Stock of the Company occurring after the Effective Date) and any (with
Optionee's Consent) or all of the Vested Shares at the higher of Fair Market
Value of such Vested Shares on the Optionee's Termination Date or the Optionee's
original Purchase Price Per Share.

(e)           Payment of Repurchase Price. The repurchase price shall be
              ---------------------------
payable, at the option of the Company or its assignee, by check or by
cancellation of all or a portion of any outstanding indebtedness of Optionee to
the Company or such assignee, or by any combination thereof. The repurchase
price shall be paid without interest within thirty (30) days after exercise of
the Repurchase Option.

(f)           Termination of Repurchase Option. The Repurchase Option shall
              --------------------------------
terminate as to any Vested Shares upon the first sale of common stock of the
Company to the general public pursuant to a registration statement filed with
and declared effective by the SEC (other than a registration statement solely
covering an employee benefit plan or corporate reorganization).

     10.  Rights as Shareholder. Subject to the terms and conditions of this
          ---------------------
Exercise Agreement, Optionee will have all of the rights of a shareholder of the
Company with respect to the Shares from and after the date that Optionee
delivers payment of the Aggregate Purchase Price until such time as Optionee
disposes of the Shares or the Company and/or its assignee(s) exercise(s) the
Right of Repurchase or Right of First Refusal. Upon an exercise of the Right of
Repurchase or Right of First Refusal, Optionee will have no further rights as a
holder of the

                                       -6-

<PAGE>

Shares so purchased upon such exercise, except the right to receive payment for
the Shares so purchased in accordance with the provisions of this Exercise
Agreement, and Optionee will promptly surrender the stock certificate(s)
evidencing the Shares so purchased to the Company for transfer or cancellation.

     11.  Escrow. As security for Optionee's faithful performance of this
          ------
Agreement, Optionee agrees, immediately upon receipt of the stock certificate(s)
evidencing the Shares, to deliver such certificate(s), together with the Stock
Powers executed by Optionee and by Optionee's spouse, if any (with the date and
number of Shares left blank), to the Secretary of the Company or other designee
of the Company ("Escrow Holder"), who is hereby appointed to hold such
                 -------------
certificate(s) and Stock Powers in escrow and to take all such actions and to
effectuate all such transfers and/or releases of such Shares as are in
accordance with the terms of this Agreement. Optionee and the Company agree that
Escrow Holder will not be liable to any party to this Exercise Agreement (or to
any other party) for any actions or omissions unless Escrow Holder is grossly
negligent or intentionally fraudulent in carrying out the duties of Escrow
Holder under this Exercise Agreement. Escrow Holder may rely upon any letter,
notice or other document executed by any signature purported to be genuine and
may rely on the advice of counsel and obey any order of any court with respect
to the transactions contemplated by this Agreement. The Shares will be released
from escrow upon termination of the Right of Repurchase and Right of First
Refusal.

     12.  Legends. Optionee understands and agrees that the Shares are subject
          -------
to a Right of First Refusal and a Repurchase Option held by the Company (or its
assignee) as set forth herein and that the certificate(s) representing the
Shares will bear legends in substantially the following forms:

          "THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
          RESTRICTIONS ON PUBLIC RESALE AND TRANSFER AND RIGHT OF FIRST REFUSAL
          AND REPURCHASE OPTIONS HELD BY THE ISSUER AND/OR ITS ASSIGNEE(S) AND
          MAY NOT BE TRANSFERRED EXCEPT AS SET FORTH IN AN AGREEMENT BETWEEN THE
          ISSUER AND THE ORIGINAL HOLDER OF THESE SHARES, A COPY OF WHICH MAY BE
          OBTAINED AT THE PRINCIPAL OFFICE OF THE ISSUER. SUCH TRANSFER
          RESTRICTIONS AND RIGHT OF FIRST REFUSAL AND REPURCHASE ARE BINDING ON
          TRANSFEREES OF THESE SHARES."

          "THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
          SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER THE
          SECURITIES LAWS OF CERTAIN STATES. THESE SECURITIES ARE SUBJECT TO
          RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED
          OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT AND THE APPLICABLE STATE
          SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM.
          INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE

                                      -7-

<PAGE>

          FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.
          THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN
          FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY
          PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND ANY
          APPLICABLE STATE SECURITIES LAWS."

The California Commissioner of Corporations may require that the following
legend also be placed upon the share certificate(s) evidencing ownership of the
Shares:

          "IT IS UNLAWFUL TO CONSUMMATE A SALE OR TRANSFER OF THIS SECURITY, OR
          ANY INTEREST THEREIN, OR TO RECEIVE ANY CONSIDERATION THEREFOR,
          WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMMISSIONER OF CORPORATIONS
          OF THE STATE OF CALIFORNIA, EXCEPT AS PERMITTED IN THE COMMISSIONER'S
          RULES."

If the foregoing legend is required, Optionee acknowledges receipt of a copy of
Section 260.141.11 of the Rules of the California Corporations Commissioner,
attached as Attachment 3.
            ------------

13.       Stop-Transfer Notices. Optionee understands and agrees that, in order
          ---------------------
to ensure compliance with the restrictions referred to herein, the Company may
issue appropriate "stop-transfer" instructions to its transfer agent, if any,
and that, if the Company transfers its own securities, it may make appropriate
notations to the same effect in its own records.

14.       Tax Consequences. OPTIONEE UNDERSTANDS THAT OPTIONEE MAY SUFFER
          ----------------
ADVERSE TAX CONSEQUENCES AS A RESULT OF OPTIONEE'S PURCHASE OR DISPOSITION OF
THE SHARES. OPTIONEE REPRESENTS THAT OPTIONEE HAS CONSULTED WITH ANY TAX
CONSULTANT(S) OPTIONEE DEEMS ADVISABLE IN CONNECTION WITH THE PURCHASE OR
DISPOSITION OF THE SHARES AND THAT OPTIONEE IS NOT RELYING ON THE COMPANY FOR
ANY TAX ADVICE. IN PARTICULAR, IF THE SHARES ARE SUBJECT TO REPURCHASE BY THE
COMPANY OR IF OPTIONEE IS AN INSIDER SUBJECT TO SECTION 16(b) OF THE EXCHANGE
ACT, OPTIONEE REPRESENTS THAT OPTIONEE HAS CONSULTED WITH OPTIONEE'S TAX
ADVISERS CONCERNING THE ADVISABILITY OF FILING AN 83(b) ELECTION WITH THE
INTERNAL REVENUE SERVICE.

          OPTIONEE FURTHER ACKNOWLEDGES THAT OPTIONEE HAS BEEN INFORMED THAT,
UNLESS AN ELECTION IS FILED BY THE OPTIONEE WITH THE INTERNAL REVENUE SERVICE
(AND, IF NECESSARY, THE PROPER STATE TAXING AUTHORITIES), WITHIN 30 DAYS OF THE
PURCHASE OF THE OPTION SHARES, ELECTING PURSUANT TO SECTION 83(b) OF THE
INTERNAL REVENUE CODE (AND SIMILAR STATE TAX PROVISIONS, IF APPLICABLE) TO BE
TAXED CURRENTLY ON ANY DIFFERENCE BETWEEN THE PURCHASE PRICE OF THE OPTION
SHARES AND THEIR FAIR MARKET VALUE ON THE DATE OF PURCHASE, THERE MAY BE A
RECOGNITION OF TAXABLE INCOME TO THE OPTIONEE, MEASURED BY THE

                                       -8-

<PAGE>

EXCESS, IF ANY, OF THE FAIR MARKET VALUE OF THE OPTION SHARES, AT THE TIME THEY
CEASE TO BE UNVESTED SHARES, OVER THE PURCHASE PRICE FOR THE OPTION SHARES.
SIMILAR ISSUES MAY ARISE IN CONNECTION WITH ALTERNATIVE MINIMUM TAXES. OPTIONEE
REPRESENTS THAT OPTIONEE HAS CONSULTED ANY TAX ADVISORS OPTIONEE DEEMS ADVISABLE
IN CONNECTION WITH OPTIONEE'S PURCHASE OF THE OPTION SHARES AND THE FILING OF
THE ELECTION UNDER SECTION 83(b) AND SIMILAR TAX PROVISIONS. FORMS OF ELECTION
UNDER SECTION 83(b) ARE ATTACHED HERETO AS ATTACHMENTS 5A AND 5B FOR REFERENCE
                                           ---------------------
PURPOSES ONLY. OPTIONEE HEREBY ASSUMES ALL RESPONSIBILITY FOR FILING SUCH
ELECTION AND PAYING ANY TAXES RESULTING FROM SUCH ELECTION OR FROM FAILURE TO
FILE THE ELECTION AND PAYING TAXES FROM THE LAPSE OF THE REPURCHASE RESTRICTIONS
ON THE UNVESTED SHARES.

15.       Entire Agreement. The Plan and Grant are incorporated herein by
          ----------------
reference. This Exercise Agreement, the Plan and the Grant constitute the entire
agreement of the parties and supersede in their entirety all prior undertakings
and agreements of the Company and Optionee with respect to the subject matter
hereof, and is governed by California law except for that body of law pertaining
to conflict of laws.

Submitted by:                                   Accepted by:

OPTIONEE:______________________________         TALARIAN CORPORATION
                (print name)

                                                By:_____________________________
_______________________________________
                (Signature)

                                                Its:____________________________

Dated:_________________________________         Dated:__________________________

                                       -9-

<PAGE>

                                                            Talarian Corporation
                                                 Stock Option Exercise Agreement

                               LIST OF ATTACHMENTS
                               -------------------

Attachment 1:   Stock Power and Assignment Separate from Stock Certificate

Attachment 2:   Spouse Consent

Attachment 3:   California Commissioner Rule 260.141.11

Attachment 4:   Copy of Optionee's Check

Attachment 5:   83(b) Election

                                      -10-

<PAGE>

                                                            Talarian Corporation
                                                 Stock Option Exercise Agreement

                                  ATTACHMENT 1
                                  ------------

                           Stock Power and Assignment
                           --------------------------
                         Separate from Stock Certificate
                         -------------------------------

         FOR VALUE RECEIVED and pursuant to that certain Stock Option Exercise
Agreement No. __ dated as of __________, 19__, (the "Agreement"), the
                                                     ---------
undersigned hereby sells, assigns and transfers unto _____________,
____________, shares of the Common Stock of Talarian Corporation, a California
corporation (the "Company"), standing in the undersigned's name on the books of
                  -------
the Company represented by Certificate No(s). _______ delivered herewith, and
does hereby irrevocably constitute and appoint the Secretary of the Company as
the undersigned's attorney-in-fact, with full power of substitution, to transfer
said stock on the books of the Company. THIS ASSIGNMENT MAY ONLY BE USED AS
AUTHORIZED BY THE AGREEMENT AND ANY EXHIBITS THERETO.

Dated:  ____________, 19__

                                                 OPTIONEE

                                                 ____________________________
                                                 (Signature)

                                                 ____________________________
                                                 (Please Print Name)

                                                 ____________________________
                                                 (Spouse's Signature, if any)

                                                 ____________________________
                                                 (Please Print Spouse's Name)

Instructions: Please do not fill in any blanks other than the signature line.
------------
The purpose of this Stock Power and Assignment is to enable the Company to
acquire the shares upon exercise of its "Right of First Refusal" and/or "Right
of Repurchase" set forth in the Agreement without requiring additional
signatures on the part of the Optionee or, Optionee's Spouse, if any.

<PAGE>

                                                            Talarian Corporation
                                                 Stock Option Exercise Agreement

                                  ATTACHMENT 2
                                  ------------

                                 Spouse Consent
                                 --------------

         The undersigned spouse of Optionee has read, understands, and hereby
approves the Stock Option Exercise Agreement between Optionee and Talarian
Corporation (the "Agreement"). In consideration of Talarian Corporation having
                  ---------
granted my spouse the right to purchase the Shares as set forth in the
Agreement, the undersigned hereby agrees to be irrevocably bound by the
Agreement and further agrees that any community property interest shall
similarly be bound by the Agreement. The undersigned hereby appoints Optionee as
my attorney-in-fact with respect to any amendment or exercise of any rights
under the Agreement.

Date:__________________                        _____________________________

                                               Optionee's Spouse

                                               Address:_____________________

                                               _____________________________

<PAGE>

                                                            Talarian Corporation
                                                 Stock Option Exercise Agreement

                                  ATTACHMENT 3
                                  ------------
                     California Commissioner Rule 260.141.11
                     ---------------------------------------

(a)  The issuer of any security upon which a restriction on transfer has been
imposed pursuant to Sections 260.102.6, 260.141.10 or 260.534 shall cause a copy
of this section to be delivered to each issuee or transferee of such security at
the time the certificate evidencing the security is delivered to the issuee or
transferee.

(b)  It is unlawful for the holder of any such security to consummate a sale or
transfer of such security, or any interest therein, without the prior written
consent of the Commissioner (until this condition is removed pursuant to Section
260.141.12 of these rules), except:

(1)  to the issuer;
(2)  pursuant to the order or process of any court;
(3)  to any person described in Subdivision (i) of Section 25102 of the Code or
     Section 260.105.14 of these rules:
(4)  to the transferor's ancestors, descendants or spouse, or any custodian or
     trustee for the account of the transferor or the transferor's ancestors,
     descendants, or spouse; or to a transferee by a trustee or custodian for
     the account of the transferee or the transferee's ancestors, descendants or
     spouse;
(5)  to holders of securities of the same class of the same issuer;
(6)  by way of gift or donation intervivos or on death;
(7)  by or through a broker-dealer licensed under the Code (either acting as
     such or as a finder) to a resident of a foreign state, territory or
     country who is neither domiciled in this state to the knowledge of the
     broker-dealer, nor actually present in this state if the sale of such
     securities is not in violation of any securities law of the foreign state,
     territory or country concerned;
(8)  to a broker-dealer licensed under the Code in a principal transaction, or
     as an underwriter or member of an underwriting syndicate or selling group;
(9)  if the interest sold or transferred is a pledge or other lien given by the
     purchaser to the seller upon a sale of the security for which the
     Commissioner's written consent is obtained or under this rule not
     required;
(10) by way of a sale qualified under Section 25111, 25112, 25113, or 25121 of
     the Code, of the securities to be transferred, provided that no order
     under Section 25140 or subdivision (a) of Section 25143 is in effect with
     respect to such qualification;
(11) by a corporation to a wholly owned subsidiary of such corporation, or by a
     wholly owned subsidiary of a corporation to such corporation;
(12) by way of an exchange qualified under Section 25111, 25112 or 25113 of the
     Code, provided that no order under Section 25140 or subdivision (a) of
     Section 25143 is in effect with respect to such qualification;
(13) between residents of foreign states, territories or countries who are
     neither domiciled nor actually present in this state;
(14) to the State Controller pursuant to the Unclaimed Property Law or the
     administrator of the unclaimed property law of another state; or
(15) by the State Controller pursuant to the Unclaimed Property Law or by the
     administrator of the unclaimed property law of another state if, in either
     such case, such person (i) discloses to potential purchasers at the sale
     that transfer of the securities is restricted under this rule, (ii)
     delivers to each purchaser a copy of this rule, and (iii) advises the
     Commissioner of the name of each purchaser;
(16) by a trustee to a successor trustee when such transfer does not involve a
     change in the beneficial ownership of the securities;
(17) by way of an offer and sale of outstanding securities in an issuer
     transaction that is subject to the qualification requirements of Section
     25110 of the Code but exempt from that qualification requirement by
     subdivision (f) of Section 25102;

provided that any such transfer is on the condition that any certificate
evidencing the security issued to such transferee shall contain the legend
required by this section.

(c)  The certificates representing all such securities subject to such a
restriction on transfer, whether upon initial issuance or upon any transfer
thereof, shall bear on their face a legend, prominently stamped or printed
thereon in capital letters of not less than 10-point size, reading as follows:

     IT IS UNLAWFUL TO CONSUMMATE A SALE OR TRANSFER OF THIS SECURITY, OR ANY
     INTEREST THEREIN, OR TO RECEIVE ANY CONSIDERATION THEREFORE, WITHOUT THE
     PRIOR WRITTEN CONSENT OF THE COMMISSIONER OF CORPORATIONS OF THE STATE OF
     CALIFORNIA, EXCEPT AS PERMITTED IN THE COMMISSIONER'S RULES.

<PAGE>

                                                            Talarian Corporation
                                                 Stock Option Exercise Agreement

                                  ATTACHMENT 4
                                  ------------

                            COPY OF OPTIONEE'S CHECK
                            ------------------------

<PAGE>

                                  ATTACHMENT 5
                                  ------------

                       ELECTION UNDER SECTION 83(b) OF THE
                              INTERNAL REVENUE CODE

The undersigned Taxpayer hereby elects, pursuant to Section 83(b) of the
Internal Revenue Code of 1986 as amended, to include the excess, if any, of the
fair market value of the property described below at the time of transfer over
the amount paid for such property, as compensation for services in the
calculation of: (1) regular gross income; (2) alternative minimum taxable income
or (3) disqualifying disposition gross income, as the case may be.

1.       TAXPAYER'S NAME:
                                    ____________________________________________

         TAXPAYER'S ADDRESS:
                                    ____________________________________________

         SOCIAL SECURITY NUMBER:
                                    ____________________________________________

2.       The property with respect to which the election is made is described as
         follows: _______ shares of Common Stock of Talarian Corporation, a
         California corporation (the "Company"), which were transferred upon
                                      -------
         exercise of an option by Company, which is Taxpayer's employer or the
         corporation for whom the Taxpayer performs services.

3.       The date on which the shares were transferred was _____________, and
         this election is made for calendar year 200_. The shares were
         transferred following the exercise of an incentive stock option.

4.       The shares received upon exercise of the option are subject to the
         following restrictions: The Company may repurchase all or a portion of
         the shares at the Taxpayer's original purchase price under certain
         conditions at the time of Taxpayer's termination of employment or
         services.

5.       The fair market value of the shares (without regard to restrictions
         other than restrictions which by their terms will never lapse) was
         $______ per share at the time of exercise of the option.

6.       The amount paid for such shares upon exercise of the option was $______
         per share.

7.       The Taxpayer has submitted a copy of this statement to the Company.

THIS ELECTION MUST BE FILED WITH THE INTERNAL REVENUE SERVICE ("IRS"), AT THE
                                                                ---
OFFICE WHERE THE TAXPAYER FILES ANNUAL INCOME TAX RETURNS WITHIN 30 DAYS AFTER
                                                          --------------
THE DATE OF TRANSFER OF THE PROPERTY, AND MUST ALSO BE FILED WITH THE TAXPAYER'S
INCOME TAX RETURNS FOR THE CALENDAR YEAR. THE ELECTION CANNOT BE REVOKED WITHOUT
THE CONSENT OF THE IRS.

Dated: ___________________, 200_                   _____________________________
                                                            Taxpayer's Signature

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