Document:

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                                                                    Exhibit 10.2

                     LYNX REAL-TIME SYSTEMS, INCORPORATED

                            1988 STOCK OPTION PLAN
                            ----------------------

                                 (as amended)

  I.      PURPOSES OF THE PLAN
          --------------------

  (a)     This Stock Option Plan (the "Plan") is intended to promote the
interests of LYNX REAL-TIME SYSTEMS, INCORPORATED (the "Company") by providing a
method whereby (i) key employees (including officers and directors) of the
Company (or its parent or subsidiary corporations) responsible for the
management, growth and financial success of the Company (or its parent or
subsidiary corporations), (ii) the non-employee members of the company's Board
of Directors (or any parent corporations) and {iii) consultants and independent
contractors who provide valuable services to the company (or its parent or
subsidiary corporations) may be offered incentives and rewards which will
encourage them to acquire a proprietary interest, or otherwise increase their
proprietary interest, in the Company and continue to render services to the
Company {or its parent or subsidiary corporations).

  (b)     For purposes of the Plan, the following provisions shall be applicable
in determining the parent and subsidiary corporations of the Company:

        (i)  Any corporation (other than the company) in an unbroken chain of
corporations ending with the company shall be considered to be a parent
corporation of the company, provided each such corporation in the unbroken chain
(other than the company) owns, at the time or the determination, stock
possessing fifty percent (50%) or more of the total combined voting power of all
classes of stock in one or the other corporations in such chain.

        (ii) Each corporation (other than the company) in an unbroken chain of
corporations beginning with the Company shall be considered to be a subsidiary
of the Company, provided each such corporation (other than the last corporation)
in the unbroken chain owns, at the time of the determination, stock possessing
fifty percent (5O') or more of the total combined voting power of all classes or
stock in one or the other corporations in such chain.

  II.     ADMINISTRATION OF THE PLAN
          --------------------------

  (a)     The Plan shall be administered by the Board of Directors (the "Board")
of the Company. The Board, however, may at any time appoint a committee
("Committee") of three (3) or more members of the Board and delegate to such
Committee one or more of the administrative powers allocated to the Board under
the provisions of the Plan, including (without limitation) the power to grant
options under the Plan and administer the option surrender and option
acceleration provisions of the Plan. Members of the committee shall serve for
such period of determine and shall be subject to removal by the Board at any
time. The Board may also at any time terminate the functions of the Committee
and reassume all powers and authority previously delegated to the Committee.
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  (b)     The Plan Administrator (either the Board or the Committee, to the
extent the Committee is at the time responsible for the administration of the
Plan) shall have full power and authority (subject to the provisions of the
Plan} to establish such rules and regulations as it may deem appropriate for the
proper administration of the Plan and to make such determinations under, and
issue such interpretations of, the Plan and any outstanding option as it may
deem necessary or advisable. Decisions of the Plan Administrator shall be final
and binding on all parties who have an interest in the Plan or any outstanding
option.

  III.    ELIGIBILITY FOR OPTION GRANTS
          -----------------------------
  (a)     The persons .eligible to receive option grants under the Plan are as
follows:
        (i)   key employees (including officers and directors) of the Company
(or its parent or subsidiary corporations) who render services which contribute
to the success and growth of the Company (or its parent or subsidiary
corporations) or which may reasonably be anticipated to contribute to the future
success and growth of the Company (or its parent or subsidiary corporations);

        (ii)  the non-employee members of the Board or the non-employee members
of the Board of Directors of any parent corporation; and

        (iii) those consultants or independent contractors who provide valuable
services to the Company (or its parent or subsidiary corporations).

  (b)     The Plan Administrator shall have full authority to determine which
eligible individuals are to receive option grants under the Plan, the number of
shares to be covered by each such grant, whether the granted option is to be an
incentive stock option ("Incentive Option") which satisfies the requirements of
Section 422A of the Internal Revenue Code or a non-statutory option not intended
to meet such requirements , the time or times at which each such option is to
become exercisable, and the maximum term for which the option is to be
outstanding.

  IV.     STOCK SUBJECT TO THE PLAN
          -------------------------
  (a)     The stock issuable under the Plan shall be shares of the Company's
authorized but unissued or reacquired Common Stock.  The aggregate number of
shares which may be issued under the Plan shall not exceed 6 million shares. The
total number of shares issuable under the Plan shall be subject to adjustment
from time to time in accordance with Section IV(c) of the Plan.

  (b)     Should an option be terminated for any reason without being exercised
or surrendered in whole or in part ( including options cancelled in accordance
with the cancellation-regrant provisions of Section VIII of the Plan), the
shares subject to the portion of the option not so exercised or surrendered
shall be available for subsequent option grants under the Plan. Shares subject
to any option or portion thereof surrendered in accordance with Section IX of
the Plan and shares repurchased by the Company pursuant to its repurchase rights
under the Plan shall not be available for subsequent option grants under the
                     ---
Plan.

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  (c)     In the event any change is made to the Common Stock issuable. under
the Plan by reason of any stock split, stock dividend, combination of shares,
exchange of shares or other change affecting the outstanding Common stock as a
class without receipt of consideration, then appropriate adjustments will be
made to (i) the aggregate number of shares issuable under the Plan and (ii) the
number of shares. and price per share of the Common stock subject to each
outstanding option in order to prevent the dilution or enlargement or benefits
thereunder.

  V.      TERMS AND CONDITIONS OF OPTIONS
          -------------------------------

  Options granted pursuant to the Plan shall be authorized by action of the Plan
Administrator and may, at the Plan Administrator's discretion, be either
Incentive Options or non-statutory options. Individuals who are not employees of
the Company or its parent or subsidiary corporation. may only be granted non-
statutory option. Each granted option shall be evidenced by one or more
instruments in the form approved by the Plan Administrator; provided, however,
that each such instrument shall comply with and incorporate the terms and
conditions specified below. Each instrument evidencing an Incentive Option
shall, in addition, be subject to the applicable provisions of Section VI.

  1.      Option Price.
          ------------

          A.   This option price per share shall be fixed by the Plan
Administrator, but, subject to the provisions of Section V.1.B. below, in no
event shall the option price per share be less than eighty-five percent (85%) of
the fair market value of a share of Common Stock on the date of the option
grant.

          B.   If any individual to whom an option is to be granted pursuant to
the provisions of the Plan is on the date of grant the owner of stock (as
determined under Section 425(d) of the Internal Revenue Code) possessing 10% or
more of the total combined voting power of all classes of stock of the Company
or any one of its parent or subsidiary corporations (such person to be herein
referred to as a 10% Shareholder), than the option price per share shall not be
less than one hundred and ten percent (110%) of the fair market value of one
share of Common Stock on the date of grant.

          C.   The option price shall become immediately due upon exercise of
the option and shall, subject to the provisions of Section X and the instrument
evidencing the grant, be payable in one of the alternative forms specified
below:

              (i)   full payment in cash;

              (ii)  full payment in shares of Common Stock held for at least six
(6) months and having a fair market value on the Exercise Date (as such term is
defined below) in an amount equal to the option price; or

              (iii) a combination of shares of Common Stock held for at least
six (6) months and valued at fair market value on the Exercise Date and cash
equal in the aggregate to the option price.

                                      -3-
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     For purposes or this subparagraph C, the Exercise Date shall be the first
date on which the Company shall have received both written notice of the
exercise of the option and payment of the option price for the purchased shares.

     D.   The fair market value of a share of Common Stock on any relevant date
under subparagraph A, B, or C above ( and for all other valuation purposes under
the Plan) shall be determined in accordance with the following provisions:

          (i)   If the Common Stock is not at the time listed or admitted to
trading on any stock exchange but is traded in the over-the-counter market, the
fair market value shall be the mean between the highest bid and lowest asked
prices (or, if such information is available, the closing selling price) of one
share of Common Stock on the date in question in the over-the-counter market, as
such prices are reported by the National Association of Securities Dealers
through its NASDAQ system or any successor system.  If there are no reported bid
and asked prices or closing selling price) for the Common Stock on the date in
question then the mean between the highest bid price and lowest asked price (or
the closing selling price) on the last preceding date for which such quotations
exist shall be determinative of fair market value.

          (ii)  If the Common Stock is at the time listed or admitted to trading
on any stock exchange, then the fair market value shall be the closing selling
price of one share of Common Stock on the date in question on the stock exchange
determined by the Plan Administrator to be the primary market for the Common
stock, as such price is officially quoted in the composite tape of transactions
on such exchange. If there is no reported sale of Common Stock on such exchange
on the date in question, then the fair market value shall be the closing selling
price on the exchange on the last preceding date for which such quotation
exists.

          (iii) If the Common stock at the time is neither listed nor admitted
to trading on any stock exchange nor traded in the over-the-counter market, then
the fair market value shall be determined by the Plan Administrator after taking
into account such factors as the Plan Administrator shall deem appropriate,
which may, but need not include, one or more independent professional
appraisals.

     2.   Term and Exercise of Options.  Each option granted under the Plan
          ----------------------------
shall be exercisable at such time or times, during such period, and for such
number of shares as shall be determined by the Plan Administrator and set forth
in the instrument evidencing such option; provided, however, that no such option
                                          --------
shall have a term in excess of ten (10) years from the grant date and provided
                                                                      --------
further, have a term in excess of five (5) years from the grant date.  During
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the lifetime of the options, the option shall be exercisable only the optionee
and shall not be assignable or transferable by the optionee otherwise than by
will or by the laws of descent and distribution.

     3.   Effect of Termination of Employment.
          -----------------------------------

          A.   Should an optionee cease to be an Employee or the company for any
reason (including death or permanent disability as defined in Section 105(d) (4)
of the Internal Revenue Code) while the holder of one or more outstanding
options granted to such optionee under the Plan, then such option or options
shall not (except to the extent otherwise provided pursuant to Section XI

                                      -4-
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below) remain exercisable for more than a twelve (12) month period (or such
shorter period determined by the plan Administrator and  specified in the
instrument evidencing the grant) following the date of such cessation of
Employee status provided, however, that under no circumstances shall such
options be exercisable after the. specified expiration date of the option term.
Each such option shall, during such twelve (12) month or shorter period, be
exercisable only to the extent of the number of shares (if any) for which the
option is exercisable on the date of such cessation of Employee status.  Upon
the expiration of such twelve (12) month or shorter period or (if earlier) upon
the expiration of the option term, the option shall terminate and cease to be
exercisable.

          B.   Any option granted to an optionee under the Plan and exercisable
in whole in part on the date of the optionee's death may be subsequently
exercised, but only to the extent of the number of shares (if any) for which the
option is exercisable on the date of the optionee's death, by the personal
representative of the optionee's estate or by the person or persons to whom the
option is transferred pursuant to the optionee's will or in accordance with the
laws of descent and distribution, provided and only if such exercise occurs
                                  -----------------
prior to the earlier of (i) the first anniversary of the date of the optionee's
             -------
death or (ii) the specified expiration date of the option term.  Upon the
occurrence of the earlier event, the option shall terminate and cease to be
exercisable.

          C.   If (i) the optionee's status as an Employee is terminated for
misconduct (including, but not limited to, any act of dishonesty, willful
misconduct, fraud or embezzlement or any unauthorized disclosure or use of
confidential information or trade secrets) or (ii) the optionee makes or
attempts to make any unauthorized use or disclosure or confidential information
or trade secrets of the Company or its parent or subsidiary corporations, then
in any such .vent all outstanding options granted the optionee under the Plan
shall terminate and cease to be exercisable immediately upon such termination of
Employee status or such unauthorized use or disclosure of confidential or secret
information or attempt thereat.

          D.   Notwithstanding subparagraphs A and B above, the Plan
Administrator shall have complete discretion, exercisable either at the time the
option is granted or at the time the optionee ceases Employee status, to
establish as a provision applicable to the exercise of one or more options
granted under the Plan that during the limited period of exercisability
following the cessation of Employee status as provided in Section V.3.A above,
the option may be exercised not only with respect to the number of shares for
which it is exercisable at the time of the optionee's cessation of Employee
status but also with respect to one or more subsequent installments of
purchasable shares for which the option would otherwise have become exercisable
had such cessation of Employee status not occurred.

          E.   For purposes of the foregoing provisions of this Section V.3 (and
all other provisions of the Plan), the optionee shall be deemed to be an
Employee of the Company for so long as the optionee remains in the employ of the
Company or one or more of its parent or subsidiary corporations.

          F.   If the option is to be granted to an individual who is not an
Employee of the Company, then the option agreement evidencing the granted option
shall include provisions comparable to subparagraphs V.3.A., B and C above, and
may include provisions comparable to

                                      -5-
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subparagraphs V.3.D. above, with respect to the optionee's termination of
service with the Company or its parent or subsidiary corporations.

     4.   Stockholder Rights.  An optionee shall have none of the rights of a
          ------------------
stockholder with respect to any shares covered by the option until such
individual shall have exercised the option and paid the option price.

     5.   Repurchase Rights.  The shares of Common Stock acquired upon the
          -----------------
exercise of options granted under the Plan may be subject to one or more
repurchase rights of the Company in accordance with the following provisions:

     (a)  The Plan Administrator may in its discretion determine that it shall
be a term and condition of one or more options exercised under the Plan that the
company (or its assignees) shall have the right, exercisable upon the optionee's
cessation of Employee status, to repurchase at the option price all or (at the
discretion of the Company and with the consent of the optionee) any portion of
the shares of " Common Stock previously acquired by the optionee upon the
exercise of such option. Any such ,repurchase right shall be exercisable by the
Company (or its assignees) upon such terms and conditions (including the
establishment of the appropriate vesting schedule and other provision for the
expiration of such right in one or more installments over the optionee's period
of Employee status) as the Plan Administrator may specify in the instrument
evidencing such right.

     (b)  The Plan Administrator may assign the Company's repurchase rights
under subparagraph (a) above to any person or entity selected by the Plan
Administrator, including one or more stockholders of the Company other than a
10% Shareholder as defined in Section V.1.B above; provided, however, that such
                                                   --------
limitation shall not apply if such 10% Shareholder is the parent corporation of
the Company.  If the selected assignee is other than a parent corporation of the
Company, then the assignee must make a cash payment to the Company, upon the
assignment of the repurchase rights, in an amount equal to the excess (if any)
of the fair market value of the unvested shares at the time subject to the
repurchase rights and the aggregate repurchase price payable for such unvested
shares thereunder.

       (c)  The Plan Administrator shall also have full power and authority to
provide for the automatic termination of the Company's outstanding repurchase
rights in whole or in part, and thereby accelerate the vesting of any or all
purchased shares, upon the occurrence of any Corporate Transaction under Section
VII.

       (d)  The Plan Administrator may also in its discretion establish as a
term and condition of one or more options granted under the Plan that the
Company shall have a right of first refusal with respect to any proposed sale or
other disposition by the optionee (or any successor in interest by reason of
purchase, gift or other mode of transfer) of any shares of Common Stock issued
upon the exercise of such options. Any such right of first refusal shall be
exercisable by the Company (or its assignees) in accordance with the terms and
conditions set forth in the instrument evidencing such right.

                                      -6-
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     VI.  INCENTIVE OPTIONS.
          -----------------

     The terms and condition. specified below shall be applicable to all
Incentive options granted under the Plan. Incentive options may only be granted
to individuals who are Employees of the Company. Options which are specifically
designated as "non-statutory" options when issued under the Plan shall not be
subject to such terms and conditions.

     (a)  Option Price.  The option price per share of the Common stock subject
          ------------
to an Incentive Option shall in no event be less than one hundred percent (100%)
of the fair market value or a share of Common Stock on the date or grant.

     (b)  Limitation on Exercisability.  If the fair market value of the shares
          ----------------------------
of Common Stock for which one or more post-1986 Incentive Options held by an
individual first become exercisable in a single calendar year exceed. $100,000
(based on the value of the share. on the respective date or dates of the
grants), then such options will qualify for favorable tax treatment as Incentive
Option. only with respect to the first $100,000 of the shares for which they
first become exercisable during such calendar year.  In calculating such
$100,000 limitation, the options will be deemed to become first exercisable in
the same order in which they are granted.

     Except as modified by the preceding provisions of this Section VI, all the
provisions of the Plan shall be applicable to the Inventive Options granted
hereunder.

     VII. CORPORATE TRANSACTION
          ---------------------

     (a)  In the event of any of the following transactions (a "Corporate
Transaction");

        (i)   a merger or acquisition in which the Company is not the surviving
entity, except for a transaction of the principal purpose of which is
incorporation;

        (ii)  the sale, transfer or other disposition of all or substantially
all of the company; or

        (iii) any reverse merger in which the company is the surviving entity;

then such option shall, in connection with the corporate Transaction, either to
be assumed by the successor corporation or parent thereof to be replaced with a
comparable option to purchase shares or the capital stock or the successor
corporation or parent thereof.  If the options are not assumed or substituted by
the successor corporation then upon the consummation of the Corporate
Transaction, all outstanding options under the Plan shall, to the extent not
previously exercised or assumed by the successor corporation or its parent
company, terminate and cease to be outstanding.

     (b)  If the Company is the surviving entity in any merger or other business
combination, then each option which remains outstanding under the Plan
immediately after such merger or other business combination shall be
appropriately adjusted to apply and pertain to the number of class of securities
which would be issuable, in consummation of such merger or business combination,
to an actual holder of the same number of shares or Common Stock as are subject
to such option immediately prior to such merger or business combination, and
appropriate adjustments shall also be made to the option price payable per
share, provided the aggregate option price payable for such

                                      -7-
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option shall remain the same. Appropriate adjustments shall also be made to the
class and number of securities available for issuance under Plan following the
consummation of such merger or business combination.

  (c)     The grant options under this Plan shall in no way affect the right of
the Company to adjust, reclassify, reorganize or otherwise change its capital or
business structure or to merge, consolidate, dissolve, liquidate or sell or
transfer all or any part of its business or assets.

  VIII.   CANCELLATION AND NEW GRANT OF OPTIONS
          -------------------------------------

  The Plan Administrator shall have the authority to effect, at any time and
from time to time, with the consent of the affected optionees, the cancellation
of any or all outstanding options under the Plan and to grant in substitution
therefor new options under the Plan covering the same or different numbers of
shares of Common Stock but having an option price per share not less than
eighty-five percent (85%) of fair market value (one hundred percent (100%) of
fair market value in the case of an Incentive Option or, in the case of a 10%
Shareholder, not less than one hundred and ten percent (110%) of fair market
value) of the new grant data.

  IX.     SLENDER OF OPTIONS FOR CASH OR STOCK
          ------------------------------------

  (a)     Provided and only if the Plan Administrator determines in its
discretion to implement stock appreciation right provisions of this Section IX,
one or more optionees may be granted the right, exercisable upon such terms and
conditions as the Plan Administrator may establish at the time of the option
grant or at any time thereafter, to surrender all or part of an unexercised
option under the Plan in exchange for a distribution from the Company equal in
amount to the difference between (i) the fair market value (at date of
surrender) of the number of shares in which the optionee is at the time vested
under the surrendered option or portion thereof and (ii) the aggregate option
price payable for such vested shares.

  (b)     No surrender of an option shall be effective hereunder unless it is
approved by the Plan Administrator.  If the surrender is so approved, then the
distribution to which the optionee shall accordingly become entitled under this
Section IX may be made in shares of Common stock valued at fair market value at
date of surrender, in cash, or partly in shares and partly in cash, as the Plan
Administrator shall in its sole discretion deem appropriate.

  (c)     If the surrender of an option is rejected by the Plan Administrator,
then the optionee shall retain whatever rights the optionee had under the
surrendered option (or surrendered portion thereof) on the date of surrender and
may exercise such rights at any time prior to the later (i) the receipt or the
                                                  -----
rejection notice or (ii) the last day on which the option is otherwise
exercisable in accordance with the terms or the instrument evidencing such
option, but in no event may such rights be exercised at any time after ten (10)
years (or five (5) years in the case of a 10% Shareholder) after the date of the
option grant.

  (d)     The following special provisions shall be applicable to any Incentive
Option which is surrendered pursuant to the provisions of this Section IX:

                                      -8-
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     (i)   The right to surrender the Incentive Option may only be transferred
to assigned in connection with the transfer or assignment of the Incentive
Option in compliance with the limitations of Section V.2.

     (ii)  The Incentive Option may only be surrendered when there is a positive
spread between the fair market value of the shares subject to the surrendered
option and the aggregate option price payable for such shares.

     (iii) The Incentive Option may not be surrendered at any time after the
expiration or sooner termination of the option term.

     X.   LOANS OR GUARANTEE OF LOANS
          ---------------------------

     The Plan Administrator may assist any optionee (including any officer or
director) in the exercise of one or more options granted to such optionee under
the Plan by (a) authorizing the extension of a loan to such optionee from the
Company, (b) permitting the optionee to pay the option price for the purchased
Common Stock in installments over a period of years or (c) authorizing a
guarantee by the Company of a third party loan to the optionee.  The terms of
any loan, installment method of payment or guarantee (including the interest
rate and terms of repayment) will be established by the Plan Administrator in
its sole discretion.  Loans, installment payments and guarantees may be granted
without security or collateral (other than to optionees who are consultants or
independent contractors, in which event the loan must be adequately secured by
collateral other than the purchased shares), but the maximum credit available to
the optionee shall not exceed the sum of (i) the aggregate option price payable
                                  ---
for the purchased shares plus (ii) any federal and state income and employment
tax liability incurred by the optionee in connection with the exercise of the
option.

     XI.  EXTENSION OF EXERCISE PERIOD
          ----------------------------

     The Board shall have full power and authority, exercisable in its sole
discretion to extend, either at any time while the option is granted or at the
time while the option remains outstanding, the period of time for which the
option is to remain exercisable following the optionee's termination of Employee
status from the twelve (12) month or shorter period set forth in the option
agreement to such greater period of time as the Plan Administrator shall deem
appropriate; provided, however, that in no event shall such option be
exercisable after the specified expiration date of the option term.

     XII. AMENDMENT OF THE PLAN
          ---------------------

     The Board shall have complete and exclusive power and authority to amend or
modify the Plan in any or all respects whatsoever; provided, however, that no
                                                   --------
such amendment or modification shall, without the consent of the holders,
adversely affect rights and obligations with respect to options at the time
outstanding under the Plan; and provided, further, that the Board shall not,
without the approval of the stockholders of the Company (i) increase the maximum
number or shares issuable under the Plan, except for permissible adjustments
under Section IV(c}, (ii) modify the eligibility requirement. for the grant of
options under the Plan or (iii) otherwise materially increase the benefits
accruing to participant. under the Plan.

                                      -9-
<PAGE>

     XIII. EFFECTIVE DATE AND TERM OF PLAN
           -------------------------------

     (a)   The Plan shall become effective when adopted by the Board, but no
option granted under the Plan shall become exercisable unless and until the Plan
shall have been approved by the stockholder. of the Company. If such stockholder
approval is not obtained within twelve (12) months after the date of the Board's
adoption of the Plan, then all options previously granted under the Plan shall
terminate and no further options shall be granted. Subject to such limitation,
the Plan Administrator may grant options under the Plan at any time after the
effective date and before the date fixed herein for termination of the Plan.

     (b)   Unless sooner terminated in accordance with Section VII, the Plan
shall terminate upon the earlier of (i) the expiration of the ten (10) year
period measured from the date of the Board's adoption of the Plan or (ii) the
date on which all share. available for issuance under the Plan shall have been
issued or cancelled pursuant to options granted hereunder. If the date of
termination is determined under clause (i) above, then options outstanding on
such date shall thereafter continue to have force and effect in accordance with
the provisions of the instruments evidencing such options.

     (c)   Options may be granted under this Plan to purchase shares of Common
stock in excess of the number of shares then available for issuance under the
Plan, provided (i) an amendment to increase the maximum number of shares
issuable under the Plan is adopted by the Board prior to the initial grant of
any such option and within one year thereafter such amendment is approved by the
stockholder of the Company and (ii) each option granted is not to become
exercisable, in whole or in part, at any time prior to the obtaining of such
stockholder approval.

     XIV.  USE OF PROCEEDS
           ---------------

     Any cash proceeds received by the Company from the sales of shares pursuant
to options granted under the Plan shall be used for general corporate purposes.

     XV.   REGULATORY APPROVALS
           --------------------

     The implementation of the Plan, the granting of any option hereunder, and
the issuance of stock upon the exercise or surrender of any such option shall be
subject to the procurement by the Company of all approvals and permits required
by regulatory authorities having jurisdiction over the Plan, the options granted
under it and the stock issued pursuant to it.

     XVI.  FINANCIAL REPORTS
           -----------------

     The Company shall deliver financial and other information regarding the
company, on an Annual or other periodic basis, to each individual holding an
outstanding option under the Plan, to the extent the Company is required to
provide such information pursuant to Section 260.140.41.2 of the Rules of the
California Corporations Commissioner.

                                      -10-
<PAGE>

                                                      Non-Qualified Stock Option

                     LYNX REAL-TIME SYSTEMS, INCORPORATED

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

     AGREEMENT made as of the _____ day of _______, 19 by and between LYNX
REAL-TIME SYSTEMS, INCORPORATED, a California corporation (hereinafter called
"Company"), and ______________, (hereinafter called "Optionee").

                                  WITNESSETH:
                                  -----------

RECITALS
--------

     A.   The Board of Directors of the Company has adopted the Company's 1988
Stock Option Plan (the "Plan") for the purpose of attracting and retaining the
services of selected key employees (including officers and directors), non-
employee members of the Board of Directors and consultants and independent
contractors who contribute to the financial success of the Company or its parent
or subsidiary corporations.

     B.   Optionee is to render valuable services to the Company or its parent
or subsidiary corporations, and this Agreement is executed pursuant to, and is
intended to carry out the purposes of, the Plan in connection with the Company's
grant of a stock option to Optionee.

     C.   The granted option is intended to be a non-statutory stock option
which does not satisfy the requirements of Section 422A of the Internal Revenue
           ---
Code.

     NOW THEREFORE, it is hereby agreed as follows:

     1.   GRANT OF OPTION.
          ---------------

          Subject to and upon the terms and conditions set forth in this
Agreement, there is hereby granted to Optionee, as of the date of this Agreement
(the "Grant Date"), a stock option to purchase up to ________ shares of the
Company's Common Stock (the "Optioned Shares") in accordance with the following
schedule, during the option term at the option price of $_______ per share (the
"Option Price"):

On or after __________ ______shares; price per share______
On or after __________ ______shares; price per share______
On or after __________ ______shares; price per share______
<PAGE>

On or after __________ ______shares; price per share______

     2.   OPTION TERM.
          ------------

          This option shall have a maximum term of ten (10) years measured from
the Grant Date and shall accordingly expire at the close of business on _______,
______, (the "Expiration Date"), unless sooner terminated in accordance with
Paragraph 5, 7(a) or 20.

     3.   OPTION NON-TRANSFERABLE
          -----------------------

          This option shall be neither transferable nor assignable by Optionee.

     4.   DATES OF EXERCISE.
          ------------------

          (a)  This option may not be exercised in whole or in part at any time
prior to the time the Plan is approved by the Company's shareholders in
accordance with Paragraph 20. Provided such shareholder approval is obtained,
this option shall, prior to the expiration or sooner termination of the option
term under Paragraph 5 or Paragraph 7(a) of this Agreement, become immediately
exercisable at the earlier to occur of the following:

               (i)  On or after the date or dates enumerated in Paragraph 1 as
to those shares designated; or

               (ii) Thirty (30) days prior to any event in Paragraph 7 hereunder
defined as a Corporate Transaction wherein the Company is not the survivor
corporation.

          (b)  Exercisable installments may be exercised in whole or in part and
to the extent not exercised shall accumulate and be exercisable at any time on
or before the expiration or sooner termination of the option term. In no event,
however, shall this option be exercisable for any fractional shares.

     5.   ACCELERATED TERMINATION OF OPTION TERM.
          ---------------------------------------

          The option term specified in Paragraph 2 shall terminate (and this
option shall cease to be exercisable) prior to the Expiration Date should one of
the following provisions become applicable:

          (a)  Except as otherwise provided in subparagraphs (b), (c) or (d)
below, should Optionee cease to be an employee to the Company at any time during
the option term, then the period for exercising this option shall be reduced to
a three (3) month period commencing with the date of such

                                       2
<PAGE>

cessation of employment, but in no event shall this option be exercisable at any
time after the Expiration Date. Upon the expiration of such three (3) month
period or (if earlier) upon the Expiration Date, this option shall terminate and
cease to be outstanding; or

          (b)  Should Optionee die while this option is outstanding and Optionee
cease by reason thereof to be an employee of the Company at any time during the
option term, then the executors or administrators of Optionee's estate or
Optionee's heirs or legatees (as the case may be) shall have the right to
exercise this option for the number of shares (if any) for which the option is
exercisable on the date of his death. Such right shall lapse and this option
shall cease to be exercisable upon the earlier of (i) the first anniversary of
the date of his death or (ii) the Expiration Date; or

          (c)  Should Optionee become permanently disabled and Optionee cease by
reason thereof to be an employee to the Company at any time during the option
term, then the Optionee shall have a period of twelve (12) months (commencing
with the date of such cessation of employment status) during which to exercise
this option; provided, however, that in no event shall this option be
             --------
exercisable at any time after the Expiration Date. Optionee shall be deemed to
be permanently disabled if Optionee is, by reason of any medically
determinable physical or mental impairment of Optionee expected to result in
death or to be of continuous duration of not less than twelve (12) months,
unable to provide the usual duties to the Company or the parent or subsidiary
corporation retaining its services. Upon the expiration of the limited period of
exercisability or (if earlier) upon the Expiration Date, this option shall
terminate and cease to be outstanding; or

          (d)  Should Optionee's status as employee be terminated for misconduct
(including, but not limited to, any act of dishonesty, willful misconduct, fraud
or embezzlement or any unauthorized disclosure or use of confidential
information or trade secrets) or should Optionee make or attempt to make any
unauthorized use or disclosure of the confidential information or trade secrets
of the Company or any parent or subsidiary corporations (as such terms are
expressly defined in the Plan), then in any such event this option shall
terminate and cease to be exercisable immediately upon such termination of
employment status or such unauthorized disclosure or use of confidential or
secret information or attempt thereat; or

          (e)  For purposes of this Paragraph 5 and for all other purposes under
this Agreement, Optionee shall be deemed

                                       3
<PAGE>

to be an employee to the Company for so long as Optionee renders periodic
services to the Company or one or more of its parent or subsidiary corporations,
whether as an employee, non-employee member of the Board of Directors or an
independent non-employee consultant. In applying the provisions of this
Agreement, a corporation shall be considered to be a subsidiary corporation of
the Company if it is a member of an unbroken chain of corporations beginning
with the Company, provided each such corporation in the chain (other than the
last corporation) owns, at the time of determination, 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. A corporation shall be considered to be a
parent corporation of the Company if it is a member of an unbroken chain ending
with the Company, provided each such corporation in the chain (other than the
Company) owns, at the time of determination, 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.

     6.   ADJUSTMENT IN OPTION SHARES.
          ----------------------------

          (a)  In the event any change is made to the Common Stock issuable
under the Plan by reason of any stock split, stock dividend, combination of
shares, or other change affecting the outstanding Common Stock as a class
without receipt of consideration, then appropriate adjustments will be made to
(i) the total number of Optioned Shares subject to this option and (ii) the
option price payable per share in order to reflect such change and thereby
preclude a dilution or enlargement of benefits hereunder;

          (b)  If the Company is the surviving entity in any merger or other
business combination, then this Option, if outstanding under the Plan
immediately after such merger or other business combination, shall be
appropriately adjusted to apply and pertain to the number and class of
securities which would be issuable to the Optionee in the consummation of such
merger or business combination if the option were exercised immediately prior to
such merger or business combination, and appropriate adjustments shall also be
made to the Option Price payable per share, provided the aggregate Option Price
payable hereunder shall remain the same.

     7.   SPECIAL TERMINATION OF OPTION.
          ------------------------------

          (a)  In the event of one or more of the following transactions (a
"Corporate Transaction"):

               (i)  a merger or acquisition in which the Company is not the
               surviving entity, except for a transaction the principal purpose
               of

                                       4
<PAGE>

               which is to change the State of the Company's incorporation; or

               (ii)  the sale, transfer or other disposition of all or
                     substantially all of the assets of the Company; or

               (iii) any reverse merger in which the Company is the surviving
                     entity;

then this option shall terminate upon the consummation of such Corporate
Transaction and cease to be exercisable, unless it is expressly assumed by the
successor corporation or parent thereof. The Company shall use its best efforts
to (A) provide the Optionee with at least ten (10) days prior written notice of
the specified effective date for the Corporate Transaction and (B) have the
option assumed by the successor corporation or its parent company, to the extent
not exercised in connection with such Corporate Transaction:

          (b)  This Agreement shall not in any way affect the right of the
Company to adjust, reclassify, reorganize or otherwise make changes in its
capital or business structure or to merge, consolidate, dissolve, liquidate,
sell or transfer all or any part of its business or assets.

     8.   PRIVILEGE OF STOCK OWNERSHIP.
          -----------------------------

          The holder of this option shall not have any of the rights of a
shareholder with respect to the Optioned Shares until such individual shall have
exercised the option and paid the option price.

     9.   MANNER OF EXERCISING OPTION.
          ----------------------------

          (a)  In order to exercise this option with respect to all or any part
of the Optioned Shares for which this option is at the time exercisable,
Optionee (or in the case of exercise after Optionee's death, the Optionee's
executor, administrator, heir or legatee, as the case may be) must take the
following actions:

               (i)  Execute and deliver to the Secretary of the Company a stock
purchase agreement in substantially the form of Exhibit A to this Agreement (the
"Purchase Agreement"); and

               (ii) Pay the aggregate option price for the purchased shares in
one or more of the following alternative forms:

                                       5
<PAGE>

                (A)  full payment, in cash or cash equivalents;

                (B)  full payment in shares of Common Stock of the Company held
for at least six (6) months and having a Fair Market Value on the Exercise Date
(as such terms are defined below) equal to the option price;

                (C)  full payment in a combination of shares of Common Stock of
the Company held for at least six months and valued at Fair Market Value on the
Exercise Date and cash or cash equivalents, equal in the aggregate to the option
price; or

                (D)  any other form which the Plan Administrator may, in its
discretion, approve at the time of exercise in accordance with the provisions of
paragraph 16 of this Agreement; and

          (iii) Furnish to the Company appropriate documentation that the person
or persons exercising the option, if other than Optionee, have the right to
exercise this option.

     (b)  For purposes of Paragraph 9(a) above, the Fair Market Value of a share
of Common Stock shall be determined in accordance with subparagraphs (i) through
(iii) below, and the Exercise Date shall be the first date on which there shall
have been delivered to the Company both (I) the executed Purchase Agreement and
(II) the payment of the option price for the purchases shares.

          (i)  If the Common Stock is not on the Exercise Date listed or
admitted to trading on any stock exchange, but is traded in the over-the-counter
market, the Fair Market Value shall be the mean between the highest bid and the
lowest asked prices (or if such information is available, the closing selling
price) of one share of Common Stock on the Exercise Date in the over-the-counter
market, as such prices are reported by the National Association of Securities
Dealers through its NASDAQ system or any successor system. If there are no
reported bid and asked prices (or closing selling price) for the Common Stock on
the Exercise Date, then the mean between the highest bid and lowest asked prices
(or closing selling price) on the last preceding date for which such quotations
exist shall be determinative of Fair Market Value.

          (ii)  If the Common Stock is on the Exercise Date listed or admitted
to trading on any stock exchange, then the Fair Market Value shall be the
closing selling price

                                       6
<PAGE>

of one share of Common Stock on the Exercise Date on the stock exchange
determined by the Plan Administrator to be the primary market for the Common
Stock, as such price is officially quoted in the composite tape of transactions
on such exchange. If there is no reported sale of Common Stock on such exchange
on the Exercise Date, then the Fair Market Value shall be the closing selling
price on the exchange on the last preceding date for which such quotation
exists.

               (iii) If the Common Stock is on the Exercise Date neither listed
or admitted to trading on any stock exchange nor traded in the over-the-counter
market, then the Fair Market Value shall be determined by the Plan Administrator
after taking into account such factors as the Plan Administrator shall deem
appropriate, including one or more independent professional appraisals.

          (c)  This option shall be deemed to have been exercised with respect
to the number of Optioned Shares specified in the Purchase Agreement at such
time as the executed Purchase Agreement for such shares shall have been
delivered to the Company. Payment of the option price shall immediately become
due and shall accompany the Purchase Agreement. As soon thereafter as
practical, the Company shall mail or deliver to Optionee or to the other person
or persons exercising this option a certificate or certificates representing the
shares so purchased and paid for, with the appropriate legends affixed thereto.

          (d)  In no event may this option be exercised for any fractional
shares.

     10.  RIGHTS OF FIRST REFUSAL.
          ------------------------

          THE OPTIONEE HEREBY AGREES THAT ALL OPTIONED SHARES ACQUIRED UPON THE
EXERCISE OF THIS OPTION SHALL BE SUBJECT TO CERTAIN RIGHTS OF THE COMPANY AND
ITS ASSIGNS TO REPURCHASE SUCH SHARES IN ACCORDANCE WITH THE TERMS AND
CONDITIONS SPECIFIED IN THE PURCHASE AGREEMENT.

     11.  COMPLIANCE WITH LAWS AND REGULATIONS.
          -------------------------------------

          (a)  The exercise of this option and the issuance of Optioned Shares
upon such exercise shall be subject to compliance by the Company and the
Optionee with all applicable requirements of law relating thereto and with all
applicable regulations of any stock exchange on which shares of the Company's
Common Stock may be listed at the time of such exercise and issuance;

          (b)  In connection with the exercise of this option, Optionee shall
execute and deliver to the Company

                                       7
<PAGE>

such representations in writing as may be requested by the Company in order for
it to comply with the applicable requirements of federal and state securities
law.

     12.  SUCCESSORS AND ASSIGNS.
          -----------------------

          Except to the extent otherwise provided in Paragraph 3 or 7(a), the
provisions of this Agreement shall inure to the benefit of, and be binding upon,
the successors, administrators and assigns of Optionee and the heirs, legal
representatives and assigns of Shareholder and the successors and assigns of the
Company.

     13.  LIABILITY OF COMPANY.
          ---------------------

          (a)  If the Optioned Shares covered by this Agreement exceed, as of
the Grant Date, the number of shares of Common Stock which may without
shareholder approval be issued under the Plan, then this option shall be void
with respect to such excess shares unless shareholder approval of an amendment
sufficiently increasing the number of shares of Common Stock issuable under the
Plan is obtained in accordance with the provisions of Section XII of the Plan.

          (b)  The inability of the Company to obtain approval from any
regulatory body having authority deemed by the Company to be necessary to the
lawful issuance and sale of any Common Stock pursuant to this option shall
relieve the Company of any liability with respect to the non-issuance or sale of
the Common Stock as to which such approval shall not have been obtained. The
Company, however, shall use its best efforts to obtain all such approvals.

     14.  NO EMPLOYMENT OR SERVICE CONTRACT.
          ----------------------------------

          Except to the extent the terms of any employment or service contract
between the Company and Optionee may expressly provide otherwise, the Company
(or any parent or subsidiary corporation of the Company retaining Optionee)
shall be under no obligation to continue the employment status of Optionee for
any period of specific duration and may terminate such employment status at any
time, with or without cause.

                                       8
<PAGE>

     15.  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 Company in care
of its Secretary at its corporate offices. Any notice required to be given or
delivered to Optionee shall be in writing and addressed to Optionee at the
address indicated below Optionee's signature line on this Agreement. All notices
shall be deemed to have been given or delivered upon personal delivery or upon
deposit in the U.S. Mail, postage prepaid and properly addressed to the party to
be notified.

     16.  LOANS OR GUARANTEES.
          --------------------

          The Plan Administrator may, in its absolute discretion and without any
obligation to do so, assist the Optionee in the exercise of this option by (i)
authorizing the extension of a loan to the Optionee from the Company, (ii)
permitting the Optionee to pay the option price for the purchased Common Stock
in installments over a period of years, or (iii) authorizing a guarantee by the
Company of a third part; loan to the Optionee. The terms of any loan,
installment method of payment or guarantee (including the interest rate,
collateral requirements and terms of repayment) shall be established by the Plan
Administrator in its sole discretion.

     17.  WITHHOLDING.
          ------------

          Optionee hereby agrees to make appropriate arrangements with the
Company or parent or subsidiary corporation employing Optionee (if any) for the
satisfaction of any federal, state or local income tax withholding requirements
and federal social security employee tax requirements applicable to the exercise
of this option.

     18.  CONSTRUCTION.
          -------------

          This Agreement and the option evidenced hereby are made and granted
pursuant to the Plan and are in all respects limited by and subject to the
express terms and provisions of the Plan. All decisions of the Plan
Administrator with respect to any question or issue arising under the Plan or
this Agreement shall be conclusive and binding on all persons having an interest
in this option.

     19.  GOVERNING LAW.
          --------------

          The interpretation, performance, and enforcement of this Agreement
shall be governed by the laws of the State of California.

                                       9
<PAGE>

     20.  SHAREHOLDER APPROVAL.
          ---------------------

          The grant of this option is subject to approval of the Plan by the
Company's shareholders within twelve (12) months after the adoption of the Plan
by the Board of Directors, and this option may not be exercised in whole or in
part until such shareholder approval is obtained. In the event that such
shareholder approval is not obtained, then this option shall thereupon terminate
and the Optionee shall have no further rights to acquire any Optioned Shares
hereunder.

     21.  COUNTERPARTS.
          -------------

          This Agreement may be executed in counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instruments.

     IN WITNESS WHEREOF, the Company has caused this Agreement to be executed in
duplicate on its behalf by its duly authorized officer and Optionee has also
executed this Agreement in duplicate, all as of the day and year indicated
above.

                                             LYNX REAL-TIME SYSTEMS,
                                             INCORPORATED

                                             By:________________________________

                                             its:_______________________________

                                                 OPTIONEE:

                                   Address:  ___________________________________

                                             ___________________________________

                                      10
<PAGE>

Exercise Notice                                           Right Of First Refusal
1988 STock Plan                                           ----------------------

                                   EXHIBIT A

                     LYNX REAL-TIME SYSTEMS, INCORPORATED

                           STOCK PURCHASE AGREEMENT
                           ------------------------

     This Agreement is made as of this ____ day of              19__ by and
between LYNX REAl-TIME SYSTEMS INC. a California corporation ("Company"),
______________, the holder of a stock option under the Company's 1988 Stock
Option Plan ("Optionee").

I.   EXERCISE OF OPTION
     ------------------

     1.1  Exercise. Optionee hereby purchases _______ shares of Common Stock of
          --------
the Company ("Purchased Shares") pursuant to that certain option ("Option")
granted Optionee on ___________  19_ ("Grant Date") under the Company's 1988
Stock Option Plan ("Plan") to purchase up to __________ shares of the Company's
Common Stock ("Total Purchasable Shares") at an option price of $_____ per share
("Option Price").

     1.2  Payment. Concurrently with the delivery of this Agreement to the
          -------
Secretary of the Company, Optionee shall pay the Option Price for the Purchased
Shares in accordance with the provisions of the agreement between the Company
and Optionee evidencing the Option ("Option Agreement") and shall deliver
whatever additional documents may be required by the Option Agreement as a
condition for exercise.

II.  INVESTMENT REPRESENTATIONS
     --------------------------

     2.1  Investment Intent. Optionee hereby warrants and represents that
          -----------------
Optionee is acquiring the Purchased Shares for Optionee's own account and not
with a view to their resale or distribution and that Optionee is prepared to
hold the Purchased Shares for an indefinite period and has no present intention
to sell, distribute or grant any participating interests in the Purchased
Shares. Optionee hereby acknowledges the fact that the Purchased Shares have not
been registered under the Securities Act of 1933, as amended (the "1933 Act"),
and that the Company is issuing the Purchased Shares to Optionee in reliance on
the representations made by Optionee herein.

     2.2  Restricted Securities. Optionee hereby confirms that Optionee has been
          ---------------------
informed that the Purchased Shares may not be resold or transferred unless the
Purchased Shares are first registered under the Federal securities laws or
unless

                                       1
<PAGE>

an exemption from such registration is available. Accordingly, Optionee hereby
acknowledges that Optionee is prepared to hold the Purchased Shares for an
indefinite period and that Optionee is aware that Rule 144 of the Securities and
Exchange Commission issued under the 1933 Act is not presently available to
exempt the sale of the Purchased Shares from the registration requirements of
the 1933 Act. Should Rule 144 subsequently become available, Optionee is aware
that any sale of the Purchased Shares effective pursuant to the Rule may,
depending upon the status of Optionee as an "affiliate" or "non-affiliate"
under the Rule, be made only in limited amounts in accordance with the
provisions of the Rule, and that in no event may any Purchased Shares be sold
pursuant to the Rule until Optionee has held the Purchased Shares for the
requisite holding period.

     2.3  Disposition of Shares. Optionee hereby agrees that Optionee shall make
          ---------------------
no disposition of the Purchased Shares (other than a permitted transfer under
paragraph 3.1) unless and until:

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

     (b)  Optionee shall have complied with all requirements of this Agreement
applicable to the disposition of the Purchased Shares; and

     (c)  Optionee shall have provided the Company with written assurances, in
form and substance satisfactory to the Company, that (i) the proposed
disposition does not require registration of the Purchased Shares under the 1933
Act or (ii) all appropriate action necessary for compliance with the
registration requirements of the 1933 Act or of any exemption from registration
available under the 1933 Act has been taken.

     The Company shall not be required (i) to transfer on its books any
                       ---
Purchased Shares which have been sold or transferred in violation of the
provisions of this Article II or (ii) to treat as the owner of the Purchased
Shares, or otherwise to accord voting or dividend rights to, any transferree to
whom the Purchased Shares have been transferred in contravention of this
Agreement.

     2.4  Restrictive Legends. In order to reflect the restrictions on
          -------------------
disposition of the Purchased Shares, the stock certificates for the Purchased
Shares will be endorsed with restrictive legends, including one or both of the
following legends:

                                       2
<PAGE>

          (i)  "THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933. THE SHARES HAVE BEEN ACQUIRED FOR
INVESTMENT AND MAY NOT BE SOLD OR OFFERED FOR SALE IN THE ABSENCE OF (a) AN
EFFECTIVE REGISTRATION STATEMENT FOR THE SHARES UNDER SUCH ACT, (b) A 'NO
ACTION' LETTER OF THE SECURITIES AND EXCHANGE COMMISSION WITH RESPECT TO SUCH
SALE OR OFFER, OR (C) SATISFACTORY ASSURANCES TO THE COMPANY THAT REGISTRATION
UNDER SUCH ACT IS NOT REQUIRED WITH RESPECT TO SUCH SALE OR OFFER."

          (ii) "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."

     2.5  Receipt of commissioner Rules. Optionee hereby acknowledges receipt of
          -----------------------------
a copy of Section 260.141.11 of the Rules of the California Corporations
Commissioner, a copy of which is attached as Exhibit A to this Agreement.

     2.6  Stockholder Rights. Until such time as the Company actually exercises
          ------------------
its repurchase rights under this Agreement, Optionee (or any successor in
interest) shall have all the rights of a stockholder (including voting and
dividend rights) with respect to the Purchased Shares, subject, however, to the
transfer restrictions of Article III.

III. TRANSFER RESTRICTIONS
     ---------------------

     3.1  Restriction on Transfer. Optionee shall not transfer, assign, encumber
          -----------------------
or otherwise dispose of any of the Purchased Shares in contravention of the
Company's Right of First Refusal under Article IV. Such restrictions on
transfer, however, shall not be applicable to ( i) a gratuitous transfer of the
Purchased Shares made to the Shareholder's spouse or issue, including adopted
children, or to a trust for the exclusive benefit of the Shareholder or the
Shareholder's spouse or issue, (ii) a transfer of title to the Purchased Shares
effected pursuant to the Shareholder's will or the laws of intestate succession
or (iii) a transfer to the Company in pledge as security for any purchase-money
indebtedness incurred by the Optionee in connection with the acquisition of the
Purchased Shares.

     3.2  Transferee Obligations. Each person (other than the Company) to whom
          ----------------------
the Purchased Shares are transferred by means of one of the permitted transfers
specified in paragraph 3.1 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 Agreement and

                                       3
<PAGE>

that the transferred shares are subject to the Company's Right of First Refusal
granted hereunder, to the same extent such shares would be so subject if
retained by the Optionee.

     3.3  Definition of Owner. For purposes of Article IV of this Agreement, the
          -------------------
term "Owner" shall include the Optionee and all subsequent holders of the
Purchased Shares who derive their chain of ownership through a permitted
transfer from the Optionee in accordance with paragraph 3.1.

IV.  RIGHT OF FIRST REFUSAL
     ----------------------

     4.1  Grant. The Company is hereby granted the right of first refusal
          -----
("Right of First Refusal"), exercisable in connection with any proposed sale or
other transfer of the Purchased Shares. For purposes of this Article IV, the
term "transfer" shall include any assignment, pledge, encumbrance or other
disposition for value of the Purchased Shares intended to be made by the
Optionee but shall not include any of the permitted transfers under paragraph
3.1 for purposes of this Article IV, Optionee shall also be known as "Owner".

     4.2  Notice of Intended Disposition. In the event the Owner desires to
          ------------------------------
accept a bona fide third-party offer for any or all of the Purchased Shares (the
shares subject to such offer to be hereinafter called, solely for the purposes
of this Article IV, the "Target Shares"), Owner shall promptly (i) deliver to
the Secretary of the Company written notice (the "Disposition Notice") of the
offer and the basic terms and conditions thereof, including the proposed
purchase price, and (ii) provide satisfactory proof that the disposition of the
Target Shares to the third-party offeror would not be in contravention of the
representations made by Optionee in Article II of this Agreement.

     4.3  Exercise of Right. The Company (or its assignees) shall, for a period
          -----------------
of twenty-five (25) days following receipt of the Disposition Notice, have the
right to repurchase any or all of the Target Shares specified in the Disposition
Notice upon substantially the same terms and conditions specified therein. Such
right shall be exercisable by written notice (the "Exercise Notice") delivered
to Owner prior to the expiration of the twenty-five (25) day exercise period. If
such right is exercised with respect to all the Target Shares specified in the
Disposition Notice, the Company (or its assignees) shall effect the repurchase
of the Target Shares, including payment of the purchase price, not more than
five (5) business days thereafter; and at such time Owner shall deliver to the
Company the certificates representing the Target Shares to be repurchased, each
certificate to be properly endorsed for transfer. The Target Shares so purchased
shall thereupon be

                                       4
<PAGE>

cancelled and cease to be issued and outstanding shares of the Company's Common
Stock. However,should the purchase price specified in the notice of intended
disposition be payable in property other than cash or evidences of indebtedness,
the Company (or its assignees) shall have the right to pay the purchase price in
the form of cash equal in amount to the value of such property. If the Owner and
the Company (or its assignees) cannot agree on such cash value within ten (10)
days after the Company's receipt of the Disposition Notice, the valuation shall
be made by an appraiser of recognized standing selected by the Owner and the
Company (or its assignees) or, if they cannot agrees on an appraiser within
twenty (20) days after the Company's receipt of the Disposition Notice, each
shall select an appraiser of recognized standing and the two appraisers shall
designate a third appraiser of recognized standing, whose appraisal shall be
determinative of such value. The closing shall then be held on the later of (i)
                                                                   -----
the fifth business day following the Company's (or its assignees') exercise of
its repurchase rights hereunder or (ii) the 15th day after such cash valuation
shall have been made.

     4.4  Non-Exercise of Right. In the event the Exercise Notice is not given
          ---------------------
to Owner within twenty-five (25) days following the date of the Company's
receipt of the Disposition Notice, Owner shall have a period of thirty (30) days
thereafter in which to sell or otherwise dispose of the Target Shares upon terms
and conditions (including the purchase price) no more favorable to the third
party purchaser than those specified in the Disposition Notice; provided,
                                                                --------
however, that any such sale or disposition must not be effected in contravention
of the representations made by the Optionee in Article II of this Agreement. The
third-party purchaser shall acquire the Target Shares free and clear of all the
terms and provisions of this Agreement (including the Company's Right of First
Refusal hereunder). In the event Owner does not sell or otherwise dispose of the
Target Shares within the specified thirty (30) day period, the Company's Right
of First Refusal shall continue to be applicable to any subsequent disposition
of the Target Shares by Owner until such right lapses in accordance with
paragraph 4.7.

     4.5  Partial Exercise of Right. In the event the Company (or its assignees)
          -------------------------
makes a timely exercise of the Right of First Refusal with respect to a portion,
but not all, of the Target Shares specified in the Disposition Notice, Owner
shall have the option, exercisable by written notice to the Company delivered
within ten (10) days after the date of the Exercise Notice, to effect the sale
of the Target Shares pursuant to one of the following alternatives:

                                       5
<PAGE>

          (i)  sale or other disposition of all the Target Shares to a third-
party purchaser in compliance with the requirements of paragraph 4.4, as if the
Company did not exercise the Right of First Refusal hereunder; or

          (ii) sale to the Company (or its assignees) of the portion of the
Target Shares which the Company (or its assignees) has elected to purchase, such
sale to be effected in substantial conformity with the provisions of paragraph
4.3.

     Failure of Owner to deliver timely notification to the Company under this
paragraph 4.5 shall be deemed to be an election by Owner to sell the Target
Shares pursuant to alternative (ii) above.

     4.6  Recapitalization.
          ----------------

     (a)  In the event of any stock dividend,stock split, recapitalization or
other transaction affecting the Company's outstanding Common Stock as a class
effected without receipt of consideration, then any new, substituted or
additional securities or other property which is by reason of such transaction
distributed with respect to the Purchased Shares shall be immediately subject to
the Company's Right of First Refusal hereunder, but only to the extent the
Purchased Shares are at the time covered by such right.

     (b)  In the event of any of the following transactions (a "Corporate
Transaction"):

          (i)   a merger or acquisition in which the Company is not the
surviving entity, except for a transaction the principal purpose of which is to
change the State in which the Company is incorporated,

          (ii)  the sale, transfer or other disposition of all or substantially
all of the assets of the Company, or

          (iii) any reverse merger in which the Company is the surviving entity,

then the Company's Right of First Refusal shall, to the extent the lapse
provisions of Section 4.7 are not otherwise applicable, remain in full force and
effect and shall apply to the new capital stock or other property received in
exchange for the Purchased Shares in consummation of the Corporate Transaction,
but only to the extent the Purchased Shares are at the time covered by such
right.

     4.7  Lapse. The Right of First Refusal under this Article IV shall lapse
          -----
and cease to have effect upon the

                                       6
<PAGE>

earliest of (i) the first date on which shares of the Company's Common Stock are
--------
held of record by more than five hundred (500) persons, (ii) the sale, transfer
or other disposition of all or substantially all of the Company's assets or
fifty percent (50%) or more of the Company's outstanding voting stock for cash
consideration or freely tradeable securities, or (iii) a determination is made
by the Company's Board of Directors that a public market exists for the
outstanding shares of the Company's Common Stock.

v.   GENERAL PROVISIONS.
     ------------------

     5.1  Assignment. The Company may assign its Right of First Refusal under
          ----------
Article IV to any person or entity selected by the Company's Board of Directors,
including (without limitation) one or more shareholders of the Company.

     5.2  Definitions. For purposes of this Agreement, the following provisions
          -----------
shall be applicable in determining the parent and subsidiary corporations of the
Company:

     (i)  Any corporation (other than the Company) in an unbroken chain of
corporations ending with the Company shall be considered to be a parent
corporation of the Company, provided each such corporation in the unbroken chain
(other than the Company) owns, at the time of the determination, stock
possessing 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.

     (ii) Each corporation (other than the Company) in an unbroken chain of
corporations beginning with the Company shall be considered to be a subsidiary
of the Company, provided each such corporation (other than the last corporation)
in the unbroken chain owns, at the time of the determination, stock possessing
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.

     5.3  No Employment or Service Contract. Except to the extent the terms of
          ---------------------------------
any written employment or service contract with the Optionee may expressly
provide otherwise, the Company (or any parent or subsidiary corporation
employing or retaining Optionee) is under no obligation to continue the
employment status of Optionee for any period of specific duration and may
terminate such employment status at any time, with or without cause.

     5.4  Notices.  Any notice required in connection with (i) the Right of
          -------
First Refusal or (ii) the disposition of any Purchased Shares covered thereby
shall be given in writing and shall be deemed effective upon personal delivery
or upon

                                       7
<PAGE>

deposit in the United States mail, registered or certified, postage prepaid and
addressed to the party entitled to such notice at the address indicated below
such party's signature line on this Agreement or at such other address as such
party may designate by 10 days advance written notice under this paragraph 5.4
to all other parties to this Agreement.

     5.5  No Waiver. The failure of the Company (or its assignees) in any
          ---------
instance to exercise the Right of First Refusal granted under Article IV, shall
not constitute a waiver of any other rights of first refusal that may
subsequently arise under the provisions of this Agreement or any other agreement
between the Company and the Optionee. No waiver of any breach or condition of
this Agreement shall be deemed to be a waiver of any other or subsequent breach
or condition, whether of like or different nature.

     5.6  Cancellation of Shares. If the Company (or its assignees) shall make
          ----------------------
available, at the time and place and in the amount and form provided in this
Agreement, the consideration for the Purchased Shares to be repurchased in
accordance with the provisions of this Agreement, then from and after such time,
the person from whom such shares are to be repurchased shall no longer have any
rights as a holder of such shares (other than the right to receive payment of
such consideration in accordance with this Agreement), and such shares shall be
deemed purchased in accordance with the applicable provisions hereof and the
Company (or its assignees) shall be deemed the owner and holder of such shares,
whether or not the certificates therefor have been delivered as required by this
Agreement.

     5.7  Legend. All certificates representing the Purchased Shares shall be
          ------
endorsed with the following legend:

          "THIS CERTIFICATE AND THE SHARES REPRESENTED HEREBY MAY NOT BE SOLD,
          ASSIGNED, TRANSFERRED, ENCUMBERED, OR IN ANY MANNER DISPOSED OF EXCEPT
          IN CONFORMITY WITH THE TERMS OF A WRITTEN AGREEMENT, DATED _________,
          19 __, BETWEEN THE COMPANY AND THE REGISTERED HOLDER OF THE SHARES (OR
          THE PREDECESSOR IN INTEREST TO THE SHARES). SUCH AGREEMENT GRANTS
          CERTAIN RIGHTS OF FIRST REFUSAL TO THE COMPANY (OR ITS ASSIGNEES) UPON
          THE SALE, ASSIGNMENT, TRANSFER, ENCUMBRANCE OR OTHER DISPOSITION OF
          THE COMPANY'S SHARES. THE COMPANY WILL UPON WRITTEN REQUEST FURNISH A
          COPY OF SUCH AGREEMENT TO THE HOLDER HEREOF WITHOUT CHARGE."

VI.  MISCELLANEOUS PROVISIONS.
     ------------------------

     6.1  Optionee Undertaking. Optionee hereby agrees to
          --------------------

                                       8
<PAGE>

take whatever additional action and execute whatever additional documents the
Company may in its judgment deem necessary or advisable in order to carry out or
effect one or more of the obligations or restrictions imposed on either the
Optionee or the Purchased Shares pursuant to the express provisions of this
Agreement.

     6.2  Agreement is Entire Contract. This Agreement constitutes the entire
          ----------------------------
contract between the parties hereto with regard to the subject matter hereof.
This Agreement is made pursuant to the provisions of the Plan and shall in all
respects be construed in conformity with the express terms and provisions of the
Plan.

     6.3  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 contracts entered into and performed in such State.

     6.4  Counterparts. This Agreement may be executed in counterparts, each of
          ------------
which shall be deemed to be an original, but all of which together shall
constitute one and the same instrument.

     6.5  Successors and Assigns. The provisions of this Agreement shall inure
          ----------------------
to the benefit of, and be binding upon, the Company and its successors and
assigns and the Optionee and the Optionee's legal representatives, heirs,
legatees, distributees, assigns and transferees by operation of law, whether or
not any such person shall have become a party to this Agreement and have agreed
in writing to join herein and be bound by the terms and conditions hereof.

     6.6  Power of Attorney. Optionee's spouse hereby appoints Optionee as his
          -----------------
or her true and lawful attorney in fact, for him or her and in his or her name,
place and stead, and for his or her use and benefit, to agree to any amendment
or modification of this Agreement and to execute such further instruments and
take such further actions as may be reasonably necessary to carry out the intent
of this Agreement. Optionee's spouse further gives and grants unto Shareholder
as his or her attorney in fact full power and authority to do and perform every
act necessary and proper to be done in the exercise of any of the foregoing
powers as fully as he or she might or could do if personally present, with full
power of substitution and revocation, hereby ratifying and confirming all that
Optionee shall lawfully do and cause to be done by virtue of this power of
attorney.

                                       9
<PAGE>

     IN WITNESS WHEREOF, the parties have executed this Agreement on the day and
year first indicated above.

LYNX REAL-TIME SYSTEMS, INCORPORATED

By ________________________________

its _______________________________

Address   2239 Samaritan Drive
          -----------------------------------
S         San Jose, GA 95124
          -----------------------------------

                                                  OPTIONEE:

                                        Address

                                        Address

                                      10
<PAGE>

                      INFORMATION STATEMENT FOR EMPLOYEE
                     EXERCISING AN INCENTIVE STOCK OPTION

               (Statement Pursuant to IRC Section 6039 (a) (1))

(1)  Name, address and employer identification number of the corporation
     transferring the stock:

     (a)  Name:    _______________________________________________________

     (b)  Address: _______________________________________________________

                   _______________________________________________________

     (c)  Employer identification number:
          ______________________________

(2)  Name, address and identifying number of the person to whom the stock was
     transferred:

     (a)  Name:    _______________________________________________________

     (b)  Address: _______________________________________________________

                   _______________________________________________________

     (c)  Identifying number:
          ______________________________

(3)  Name and address of the corporation the stock of which is the subject of
     the option (if other than the corporation transferring the stock):

     (a)  Name:    ________________________________________

     (b)  Address: ________________________________________

(4)  Date the option was granted:
     _________________________________________

(5)  Date the shares were transferred to the person exercising the option:
     ___________________________________________________

(6)  Fair market value of the stock at the time the option was exercised:
     ___________________________________________________

(7)  Number of shares of stock transferred pursuant to the option:
     ___________________________________________________

<PAGE>

     (8)  Type of option under which the transferred shares were acquired:
          Incentive Stock Option (Section 422A).

     (9)  Total cost (option price) of all the shares transferred:
          ___________________________________________________________________

     The amount indicated in item (6) above represents the determination of the
board of directors of the Company of the fair market value of the stock at the
time the option was exercised. The Company believes this valuation represents a
fair attempt at reaching an accurate appraisal of the worth of the Company's
Common Stock. It is possible, however, that with the benefit of hind-sight, the
Internal Revenue Service could successfully assert a different value for the
Common Stock.

<PAGE>

                                 ATTACHMENT 1
             STATE OF CALIFORNIA - CALIFORNIA ADMINISTRATIVE CODE
             ----------------------------------------------------
        Title 10. Investment - Chapter 3, Commissioner of Corporations

     260,141,11: Restriction on Transfer. (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 transferror's ancestors, descendants or spouse, or any
     custodian or trustee for the account of the transferrer or the
     transferror'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 inter vivos 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 pledged 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 Sections 25111, 25112, 25113 or
     25121 of the Code, of the securities to be transferred, provided that no
     order under Section 25410 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
     to 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 requirement 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 THEREFOR,
          WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMMISSIONER OF CORPORATIONS
          OF THE STATE OF CALIFORNIA, EXCEPT AS PERMITTED IN THE COMMISSIONER'S
          RULES."<PAGE>

                                                                    Exhibit 10.3

                     LYNX REAL-TIME SYSTEMS, INCORPORATED

                                1992 STOCK PLAN

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

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

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

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

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

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

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

          (f) "Company" means Lynx Real-Time Systems, Incorporated, a California
               -------
corporation.

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

          (h) "Continuous Status as an Employee" means the absence of any
               --------------------------------
interruption or termination of the employment relationship by the Company or any
Subsidiary.  Continuous Status as an Employee shall not be considered
interrupted in the case of:  (i) sick leave; (ii) military leave; (iii) any
other leave of absence approved by the Board, provided that such leave is for a
period of not more than ninety (90) days, unless reemployment upon the
expiration of such leave is guaranteed by contract or statute, or unless
provided otherwise pursuant to Company policy adopted from time to time; or (iv)
in the case of transfers between locations of the Company or between the
Company, its Subsidiaries or its successor.

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

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

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

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

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

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

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

                                      -2-
<PAGE>

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

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

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

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

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

          (r) "Plan" means this 1992 Stock Plan.
               ----

          (s) "Restricted Stock" means shares of Common Stock acquired pursuant
               ----------------
to a grant of Stock Purchase Rights under Section 11 below.

          (t) "Share" means a share of the Common Stock, as adjusted in
               -----
accordance with Section 13 of the Plan.

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

     3.   Stock Subject to the Plan.  Subject to the provisions of Section 13 of
          -------------------------
the Plan, the maximum aggregate number of shares which may be optioned and sold
under the Plan is 3,981,274 shares of Common Stock.  The shares may be
authorized, but unissued, or reacquired Common Stock.

          If an Option should expire or become unexercisable for any reason
without having been exercised in full, the unpurchased Shares which were subject
thereto shall, unless the Plan shall have been terminated, become available for
future grant under the Plan.

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

          (a)  Procedure.
               ---------

               (i)  Administration With Respect to Directors and Officers.  With
                    -----------------------------------------------------
respect to grants of Options or Stock Purchase Rights to Employees who are also
officers or directors of the Company, the Plan shall be administered by (A) the
Board if the Board may administer the Plan in compliance with Rule 16b-3
promulgated under the Exchange Act or any successor thereto

                                      -3-
<PAGE>

("Rule 16b-3") with respect to a plan intended to qualify thereunder as a
discretionary plan, or (B) a Committee designated by the Board to administer the
Plan, which Committee shall be constituted in such a manner as to permit the
Plan to comply with Rule 16b-3 with respect to a plan intended to qualify
thereunder as a discretionary plan. Once appointed, such Committee shall
continue to serve in its designated capacity until otherwise directed by the
Board. From time to time the Board may increase the size of the Committee and
appoint additional members thereof, remove members (with or without cause) and
appoint new members in substitution therefor, fill vacancies, however caused,
and remove all members of the Committee and thereafter directly administer the
Plan, all to the extent permitted by Rule 16b-3 with respect to a plan intended
to qualify thereunder as a discretionary plan.

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

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

      (b) Powers of the Administrator.  Subject to the provisions of the Plan
          ---------------------------
and in the case of a Committee, the specific duties delegated by the Board to
such Committee, the Administrator shall have the authority, in its discretion:

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

          (ii)  to select the officers, Consultants and Employees to whom
Options and Stock Purchase Rights may from time to time be granted hereunder;

                                      -4-
<PAGE>

          (iii)  to determine whether and to what extent Options and Stock
Purchase Rights or any combination thereof, are granted hereunder;

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

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

          (vi)   to determine the terms and conditions, not inconsistent with
the terms of the Plan, of any award granted hereunder (including, but not
limited to, the share price and any restriction or limitation, or waiver of
forfeiture restrictions regarding any Option or other award and/or the shares of
Common Stock relating thereto, based in each case on such factors as the
Administrator shall determine, in its sole discretion);

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

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

          (ix)   to determine the terms and restrictions applicable to Stock
Purchase Rights and the Restricted Stock purchased by exercising such Stock
Purchase Rights.

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

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

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

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

                                      -5-
<PAGE>

Shares with respect to which Options designated as Incentive Stock Options are
exercisable for the first time by any Optionee during any calendar year (under
all plans of the Company or any Parent or Subsidiary) exceeds $100,000, such
excess Options shall be treated as Nonstatutory Stock Options.

          (c) For purposes of Section 5(b), Incentive Stock Options shall be
taken into account in the order in which they were granted, and the Fair Market
Value of the Shares shall be determined as of the time the Option with respect
to such Shares is granted.

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

     6.   Term of Plan.  The Plan shall become effective upon the earlier to
          ------------
occur of its adoption by the Board of Directors or its approval by the
shareholders of the Company as described in Section 19 of the Plan.  It shall
continue in effect for a term of ten (10) years unless sooner terminated under
Section 15 of the Plan.

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

     8.   Option Exercise Price and Consideration.
          ---------------------------------------

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

              (i)  In the case of an Incentive Stock Option

                         (A) granted to an Employee who, at the time of the
grant of such Incentive Stock Option, owns stock representing more than ten
percent (10%) of the voting power of all classes of stock of the Company or any
Parent or Subsidiary, the

                                      -6-
<PAGE>

per Share exercise price shall be no less than 110% of the Fair Market Value per
Share on the date of grant.

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

              (ii)  In the case of a Nonstatutory Stock Option

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

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

          (b)  The consideration to be paid for the Shares to be issued upon
exercise of an Option, including the method of payment, shall be determined by
the Administrator (and, in the case of an Incentive Stock Option, shall be
determined at the time of grant) and may consist entirely of (1) cash, (2)
check, (3) promissory note, (4) other Shares which (x) in the case of Shares
acquired upon exercise of an Option either have been owned by the Optionee for
more than six months on the date of surrender or were not acquired, directly or
indirectly, from the Company, and (y) have a Fair Market Value on the date of
surrender equal to the aggregate exercise price of the Shares as to which said
Option shall be exercised, (5) authorization from the Company to retain from the
total number of Shares as to which the Option is exercised that number of Shares
having a Fair Market Value on the date of exercise equal to the exercise price
for the total number of Shares as to which the Option is exercised, (6) delivery
of a properly executed exercise notice together with irrevocable instructions to
a broker to promptly deliver to the Company the amount of sale or loan proceeds
required to pay the exercise price, (7) by delivering an irrevocable
subscription agreement for the Shares which irrevocably obligates the option
holder to take and pay for the Shares not more than twelve months after the date
of delivery of the subscription agreement, (8) any combination of the foregoing
methods of payment, (9) or such other consideration and method of payment for
the issuance of Shares to the extent permitted under Applicable Laws.  In making
its determination as to the type of consideration to accept, the Board shall
consider if acceptance of such consideration may be reasonably expected to
benefit the Company (Section 315(b) of the California Corporation law).

                                      -7-
<PAGE>

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

          (a) Procedure for Exercise; Rights as a Shareholder. Any Option
              -----------------------------------------------
granted hereunder shall be exercisable at such times and under such conditions
as determined by the Board, including performance criteria with respect to the
Company and/or the Optionee, and as shall be permissible under the terms of the
Plan.

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

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

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

          (b) Termination of Employment. In the event of termination of an
              -------------------------
Optionee's consulting relationship or Continuous Status as an Employee with the
Company (as the case may be), such Optionee may, but only within ninety (90)
days (or such other period of time as is determined by the Board, with such
determination in the case of an Incentive Stock Option being made at the time of
grant of the Option and not exceeding ninety (90) days) after the date of such
termination (but in no event later than the expiration date of the term of such
Option as set forth in the Option Agreement), exercise his Option to the extent
that Optionee was entitled to exercise it at the date of such termination.  To
the extent that Optionee was not entitled to exercise the Option at the date of
such termination, or if Optionee does not exercise such Option to the extent so
entitled within the time specified herein, the Option shall terminate.

                                      -8-
<PAGE>

          (c) Disability of Optionee.  Notwithstanding the provisions of Section
              ----------------------
9(b) above, in the event of termination of an Optionee's Consulting relationship
or Continuous Status as an Employee as a result of his total and permanent
disability (as defined in Section 22(e)(3) of the Code), Optionee may, but only
within twelve (12) months from the date of such termination (but in no event
later than the expiration date of the term of such Option as set forth in the
Option Agreement), exercise the Option to the extent otherwise entitled to
exercise it at the date of such termination.  To the extent that Optionee was
not entitled to exercise the Option at the date of termination, or if Optionee
does not exercise such Option to the extent so entitled within the time
specified herein, the Option shall terminate.

          (d) Death of Optionee.  In the event of the death of an Optionee, the
              -----------------
Option may be exercised, at any time within twelve (12) months following the
date of death (but in no event later than the expiration date of the term of
such Option as set forth in the Option Agreement), by the Optionee's estate or
by a person who acquired the right to exercise the Option by bequest or
inheritance, but only to the extent the Optionee was entitled to exercise the
Option at the date of death.  To the extent that Optionee was not entitled to
exercise the Option at the date of termination, or if Optionee does not exercise
such Option to the extent so entitled within the time specified herein, the
Option shall terminate.

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

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

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

     11.  Stock Purchase Rights.
          ---------------------

          (a) Rights to Purchase.  Stock Purchase Rights may be issued either
              ------------------
alone, in addition to, or in tandem with other awards granted under the Plan
and/or cash awards made outside of the Plan.

                                      -9-
<PAGE>

After the Administrator determines that it will offer Stock Purchase Rights
under the Plan, it shall advise the offeree in writing of the terms, conditions
and restrictions related to the offer, including the number of Shares that such
person shall be entitled to purchase, the price to be paid (which price shall
not be less than 85% of the Fair Market Value of the Shares as of the date of
the offer, or 100% of Fair Market Value of the Shares as of the date of offer in
the case of any offeree who owns, either at the time of the grant of a right or
at the consummation of its purchase, stock possessing more than ten percent
(10%) of the total combined voting power of all classes of stock of Company or
its subsidiaries), and the time within which such person must accept such offer,
which shall in no event exceed thirty (30) days from the date upon which the
Administrator made the determination to grant the Stock Purchase Right. The
offer shall be accepted by execution of a Restricted Stock purchase agreement in
the form determined by the Administrator. Shares purchased pursuant to the grant
of a Stock Purchase Right shall be referred to herein as "Restricted Stock."

          (b) Repurchase Option.  Unless the Administrator determines otherwise,
              -----------------
the Restricted Stock purchase agreement shall grant the Company a repurchase
option exercisable upon the voluntary or involuntary termination of the
purchaser's employment with the Company for any reason (including death or
Disability).  The purchase price for Shares repurchased pursuant to the
Restricted Stock purchase agreement shall be the original price paid by the
purchaser and may be paid by cancellation of any indebtedness of the purchaser
to the Company.  The repurchase option shall lapse at such rate as the Committee
may determine.

          (c) Other Provisions.  The Restricted Stock purchase agreement shall
              ----------------
contain such other terms, provisions and conditions not inconsistent with the
Plan as may be determined by the Administrator in its sole discretion.  In
addition, the provisions of Restricted Stock purchase agreements need not be the
same with respect to each purchaser.

          (d) Rights as a Shareholder.  Once the Stock Purchase Right is
              -----------------------
exercised, the purchaser shall have the rights equivalent to those of a
shareholder, and shall be a shareholder when his or her purchase is entered upon
the records of the duly authorized transfer agent of the Company.  No adjustment
will be made for a dividend or other right for which the record date is prior to
the date the Stock Purchase Right is exercised, except as provided in Section 13
of the Plan.

     12.  Stock Withholding to Satisfy Withholding Tax Obligations.  At the
          --------------------------------------------------------
discretion of the Administrator, Optionees may satisfy

                                      -10-
<PAGE>

withholding obligations as provided in this paragraph. When an Optionee incurs
tax liability in connection with an Option or Stock Purchase Right, which tax
liability is subject to tax withholding under applicable tax laws, and the
Optionee is obligated to pay the Company an amount required to be withheld under
applicable tax laws, the Optionee may satisfy the withholding tax obligation by
electing to have the Company withhold from the Shares to be issued upon exercise
of the Option, or the Shares to be issued in connection with the Stock Purchase
Right, if any, that number of Shares having a Fair Market Value equal to the
amount required to be withheld. 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 (the "Tax Date").

     All elections by an Optionee to have Shares withheld for this purpose shall
be made in writing in a form acceptable to the Administrator and shall be
subject to the following restrictions:

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

          (b) once made, the election shall be irrevocable as to the particular
Shares of the Option or Right as to which the election is made;

          (c) all elections shall be subject to the consent or disapproval of
the Administrator;

          (d) if the Optionee is subject to Rule 16b-3, the election must comply
with the applicable provisions of Rule 16b-3 and shall be subject to such
additional conditions or restrictions as may be required thereunder to qualify
for the maximum exemption from Section 16 of the Exchange Act with respect to
Plan transactions.

     In the event the election to have Shares withheld is made by an Optionee
and the Tax Date is deferred under Section 83 of the Code because no election is
filed under Section 83(b) of the Code, the Optionee shall receive the full
number of Shares with respect to which the Option or Stock Purchase Right is
exercised but such Optionee shall be unconditionally obligated to tender back to
the Company the proper number of Shares on the Tax Date.

     13.  Adjustments Upon Changes in Capitalization or Merger. Subject to any
          ----------------------------------------------------
required action by the shareholders of the Company, the number of shares of
Common Stock covered by each outstanding Option, and the number of shares of
Common Stock which have been authorized for issuance under the Plan but as to
which no Options have yet been granted or which have been returned to the Plan
upon

                                      -11-
<PAGE>

cancellation or expiration of an Option, as well as the price per share of
Common Stock covered by each such outstanding Option, shall be proportionately
adjusted for any increase or decrease in the number of issued shares of Common
Stock resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock, or any other increase or
decrease in the number of issued shares of Common Stock effected without receipt
of consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration." Such adjustment shall be made by the Board,
whose determination in that respect shall be final, binding and conclusive.
Except as expressly provided herein, no issuance by the Company of shares of
stock of any class, or securities convertible into shares of stock of any class,
shall affect, and no adjustment by reason thereof shall be made with respect to,
the number or price of shares of Common Stock subject to an Option.

          In the event of the proposed dissolution or liquidation of the
Company, the Board shall notify the Optionee at least fifteen (15) days prior to
such proposed action.  To the extent it has not been previously exercised, the
Option will terminate immediately prior to the consummation of such proposed
action.  In the event of a merger of the Company with or into another
corporation, the Option shall be assumed or an equivalent option shall be
substituted by such successor corporation or a parent or subsidiary of such
successor corporation.

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

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

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

                                      -12-
<PAGE>

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

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

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

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

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

     18.  Agreements.  Options and Stock Purchase Rights shall be evidenced by
          ----------
written agreements in such form as the Board shall approve from time to time.

     19.  Shareholder Approval.  Continuance of the Plan shall be subject to
          --------------------
approval by the shareholders of the Company within twelve (12) months before or
after the date the Plan is adopted.  Such shareholder approval shall be obtained
in the degree and manner required under applicable state and federal law.

                                      -13-
<PAGE>

     20.  Information to Optionees.  The Company shall at least annually provide
          ------------------------
to each Optionee, during the period for which such Optionee has one or more
Options outstanding, a balance sheet and income statement.  The Company shall
not be required to provide such information to key employees whose duties in
connection with the Company assure their access to equivalent information.

                                      -14-
<PAGE>

                     LYNX REAL-TIME SYSTEMS, INCORPORATED

                         NOTICE OF STOCK OPTION GRANT

     You have been granted an option to purchase Common Stock of Lynx Real-Time
Systems, Incorporated (the "Company") as follows:

     Grant Number                            _____________________________

     Date of Grant                           _____________________________

     Vesting Commencement Date               _____________________________

     Option Price Per Share                  $
                                             -----------------------------

     Total Number of Shares Granted          _____________________________

     Total Price of Shares Granted           $
                                             -----------------------------

     Type of Option:                    ___ Incentive Stock Option
                                        ___ Nonstatutory Stock Option

     Term/Expiration Date:              _________________

     Exercise Schedule:
     -----------------

     This Option may be exercised, in whole or in part, in accordance with the
Vesting Schedule set out below.

  *  Vesting Schedule:
     ----------------

     On the first anniversary of the Vesting Commencement Date (as set forth
above) the option shall become exercisable as to twenty-five percent (25%) of
the total number of shares granted (as set forth above); thereafter, the option
shall become exercisable to the extent of one forty-eighth (1/48th) of the total
number of shares granted for each month that has expired from the Vesting
Commencement Date.

     Termination Period:
     ------------------

____________________

*    Note that for California permit plans, vesting must occur at a rate of no
     less than 20% per year.
<PAGE>

     Option may be exercised for 90 days after termination of employment or
consulting relationship except as set out in Sections 7 and 8 of the Stock
Option Agreement (but in no event late than the Expiration Date).

     By your signature and the signature of the Company's representative below,
you and the Company agree that this option is granted under and governed by the
terms and conditions of the 1992 Stock Plan and the Stock Option Agreement, all
of which are attached and made a part of this document.

Optionee:                                    Lynx Real-Time Systems,
                                             Incorporated

_______________________________              By: _______________________________
Signature

_______________________________              Title: ____________________________
Print Name

                                      -2-
<PAGE>

                     LYNX REAL-TIME SYSTEMS, INCORPORATED

                       INCENTIVE STOCK OPTION AGREEMENT

     1.   Grant of Option.  Lynx Real-Time Systems, Incorporated, a California
          ---------------
corporation (the "Company"), hereby grants to the Optionee named in the Notice
of Grant (the "Optionee"), an option (the "Option") to purchase a total number
of shares of Common Stock (the" Shares") set forth in the Notice of Grant, at
the exercise price per share set forth in the Notice of Grant (the "Exercise
Price") subject to the terms, definitions and provisions of the 1992 Stock Plan
(the "Plan") adopted by the Company, which is incorporated herein by reference.
Unless otherwise defined herein, the terms defined in the Plan shall have the
same defined meanings in this Option.

          This Option is designated an Incentive Stock Option and is intended to
qualify as an Incentive Stock Option as defined in Section 422 of the Code.

     2.   Exercise of Option. This Option shall be exercisable during its term
          ------------------
in accordance with the Exercise Schedule set out in the Notice of Grant and with
the provisions of Section 9 of the Plan as follows:

          (i)  Right to Exercise.
               -----------------

               (a)  This Option may not be exercised for a fraction of a share.

               (b)  In the event of Optionee's death, disability or other
termination of employment, the exercisability of the Option is governed by
Sections 6, 7 and 8 below, subject to the limitation contained in subsection
2(i) (c).

               (c)  In no event may this Option be exercised after the date of
expiration of the term of this Option as set forth in the Notice of Grant.

          (ii) Method of Exercise. This Option shall be exercisable by written
               ------------------
notice (in the form attached as Exhibit A) which shall state the election to
exercise the Option, the number of Shares in respect of which the Option is
being exercised, and such other representations and agreements as to the
holder's investment intent with respect to such shares of Common Stock as may be
required by the Company pursuant to the provisions of the Plan. Such written
notice shall be signed by the Optionee and shall be delivered in person or by
certified mail to the Secretary of the Company. The written notice shall be
accompanied by payment of the Exercise Price. This Option shall be deemed to be
exercised

<PAGE>

upon receipt by the Company of such written notice accompanied by the Exercise
Price.

          No Shares will be issued pursuant to the exercise of an Option unless
such issuance and such exercise shall comply with all relevant provisions of law
and the requirements of any stock exchange upon which the Shares may then be
listed. Assuming such compliance, for income tax purposes the Shares shall be
considered transferred to the Optionee on the date on which the Option is
exercised with respect to such Shares.

     3.  Optionee's Representations. In the event the Shares purchasable
         --------------------------
pursuant to the exercise of this Option have not been registered under the
Securities Act of 1933, as amended, at the time this Option is exercised,
Optionee shall, if required by the Company, concurrently with the exercise of
all or any portion of this Option, deliver to the Company his Investment
Representation Statement in the form attached hereto as Exhibit B, and shall
read the applicable rules of the Commissioner of Corporations attached to such
Investment Representation Statement.

     4.   Method of Payment. Payment of the Exercise Price shall be by any of
          -----------------
the following, or a combination thereof, at the election of the Optionee:

          i.   cash; or

          ii.  check; or

          iii. surrender of other shares of Common Stock of the Company which
(A) either have been owned by the Optionee for more than six (6) months on the
date of surrender or were not acquired, directly or indirectly, from the
Company and (B) have a fair market value on the date of surrender equal to the
Exercise Price of the Shares as to which the Option is being exercised; or

          iv.  delivery of a promissory note (the "Note") of Optionee in the
amount of the Exercise Price together with the execution and delivery by the
Optionee of the Security Agreement attached hereto as Exhibit C. The Note shall
be in the form attached hereto as Exhibit D, shall contain the terms and be
payable as set forth herein, shall bear interest at a rate no less than the
"applicable federal rate" prescribed under the Code and its regulations at time
of purchase, and shall be secured by a pledge of the Shares purchased by the
Note pursuant to the Security Agreement.

                                      -2-
<PAGE>

     5.   Restrictions on Exercise.  This Option may not be exercised until such
          ------------------------
time as the Plan has been approved by the shareholders of the Company, or if the
issuance of such Shares upon such exercise or the method of payment of
consideration for such shares would constitute a violation of any applicable
federal or state securities or other law or regulation, including any rule under
Part 207 of Title 12 of the Code of Federal Regulations ("Regulations G") as
promulgated by the Federal Reserve Board. As a condition to the exercise of this
Option, the Company may require Optionee to make any representation and warranty
to the Company as may be required by any applicable law or regulation.

     6.   Termination of Relationship. In the event of termination of Optionee's
          ---------------------------
consulting relationship or Continuous Status as an Employee, Optionee may, to
the extent otherwise so entitled at the date of such termination (the
"Termination Date"), exercise this Option during the Termination Period set out
in the Notice of Grant. To the extent that Optionee was not entitled to exercise
this Option at the date of such termination, or if Optionee does not exercise
this Option within the time specified herein, the Option shall terminate.

     7.   Disability of Optionee. Notwithstanding the provisions of Section 6
          ----------------------
above, in the event of termination of Optionee's Continuous Status as an
Employee as a result of total and permanent disability (as defined in Section 22
(e) (3) of the Code), Optionee may, but only within twelve (12) months from the
date of termination of employment (but in no event later than the date of
expiration of the term of this Option as set forth in Section 10 below),
exercise the Option to the extent otherwise so entitled at the date of such
termination. To the extent that Optionee was not entitled to exercise the Option
at the date of termination, or if Optionee does not exercise such Option (to the
extent otherwise so entitled) within the time specified herein, the Option shall
terminate.

     8.   Death of Optionee. In the event of the death of Optionee, the Option
          -----------------
may be exercised at any time within twelve (12) months following the date of
death (but in no event later than the date of expiration of the term of this
Option as set forth in Section 10 below), by Optionee's estate or by a person
who acquired the right to exercise the Option by bequest or inheritance, but
only to the extent the Optionee could exercise the Option at the date of death.

     9.   Non-Transferability of Option. This Option may not be transferred in
          -----------------------------
any manner otherwise than by will or by the laws of descent or distribution and
may be exercised during the lifetime of

                                      -3-

<PAGE>

Optionee only by him. The terms of this Option shall be binding upon the
executors, administrators, heirs, successors and assigns of the Optionee.

     10.  Term of Option. This Option may be exercised only within the terms set
          --------------
out in the Notice of Grant, and may be exercised during such term only in
accordance with the Plan and the terms of this Option. The limitations set out
in Section 7 of the Plan regarding Options designated as Incentive Stock Options
and Options granted to more than ten percent (10%) shareholders shall apply to
this Option.

     11.  Tax Consequences. Set forth below is a brief summary as of the date of
          ----------------
this Option 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.

          (i)   Exercise of ISO. This Option is intended to qualify as an ISO.
                ---------------
There is be no regular federal income tax liability or California income tax
liability upon the exercise of an ISO, 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 the alternative minimum tax for federal tax
purposes and may subject the Optionee to the alternative minimum tax in the year
of exercise.

          (ii)  Disposition of Shares. If Shares transferred pursuant to an ISO
                ---------------------
are held for at least one year after exercise and are disposed of at least two
years after the Date of Grant, any gain realized on 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 such one-year
period or within two years after the Date of Grant, 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.

          (iii) Notice of Disqualifying Disposition of ISO Shares. If Optionee
                -------------------------------------------------
sells or otherwise disposes of any of the Shares acquired pursuant to this
Option on or before the later of (1) the date two years after the Date of Grant,
or (2) the date one year after transfer of such Shares to the Optionee upon
exercise of the Option, the Optionee shall immediately notify the Company in

                                      -4-

<PAGE>

writing of such disposition. Optionee agrees that Optionee may be subject to
income tax withholding by the Company on the

                                      -5-

<PAGE>

compensation income recognized by the Optionee from the early disposition by
payment in cash or out of the current earnings paid to the Optionee.

                                           Lynx Real-Time Systems, Incorporated,
                                           a California corporation

                                           By:__________________________________

                                           Title:_______________________________

     OPTIONEE ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO THE
OPTION HEREOF IS EARNED ONLY BY CONTINUING CONSULTANCY OR EMPLOYMENT AT THE WILL
OF THE COMPANY (NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED THIS OPTION OR
ACQUIRING SHARES HEREUNDER). OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT
NOTHING IN THIS AGREEMENT, NOR IN THE COMPANY'S STOCK OPTION PLAN WHICH IS
INCORPORATED HEREIN BY REFERENCE, SHALL CONFER UPON OPTIONEE ANY RIGHT WITH
RESPECT TO CONTINUATION OF EMPLOYMENT OR CONSULTANCY BY THE COMPANY, NOR SHALL
IT INTERFERE IN ANY WAY WITH HIS RIGHT OR THE COMPANY'S RIGHT TO TERMINATE HIS
EMPLOYMENT OR CONSULTANCY AT ANY TIME, WITH OR WITHOUT CAUSE.

     Optionee acknowledges receipt of a copy of the Plan and certain information
related thereto and represents that he is familiar with the terms and provisions
thereof, and herby accepts this Option subject to all of the terms and
provisions thereof. Optionee has reviewed the Plan and this Option in their
entirety, has had an opportunity to obtain the advice of counsel prior to
executing this Option and fully understands all provisions of the Option.
Optionee hereby agrees to accept as binding, conclusive and final all decisions
or interpretations of the Board upon any questions arising under the Plan.

Date:_____________________         ____________________________________________
                                   Optionee

                                      -6-
<PAGE>

 Exercise Notice
1992 Stock Plan

                                   EXHIBIT A
                                   ---------

                  EXERCISE NOTICE FOR INCENTIVE STOCK OPTIONS
                  -------------------------------------------

Lynx Real-Time Systems, Incorporated
2239 Samaritan Drive
San Jose, CA 95124

Attention: Secretary

     1.   Exercise of Option. Effective as of today, ___________, 19__, the
          ------------------
undersigned ("Optionee") hereby elects to exercise Optionee's option to purchase
              --------
_____________ shares of the Common Stock (the "Shares") of Lynx Real-Time
                                               ------
Systems, Incorporated (the "Company") under and pursuant to the Company's 1992
                            -------
Stock Plan (the "Plan") and the Incentive Stock Option Agreement dated _________
                 ----
(the "Option Agreement").
      ----------------

     2.   Representations of Optionee. Optionee acknowledges that Optionee has
          ---------------------------
received, read and understood the Plan and the Option Agreement and agrees to
abide by and be bound by their terms and conditions. Optionee represents that
Optionee is purchasing the Shares for Optionee's own account for investment and
not with a view to, or for sale in connection with, a distribution of any of
such Shares.

     3.   Compliance with Securities Laws. Optionee understands and acknowledges
          -------------------------------
that the Shares have not been registered under the Securities Act of 1933, as
amended (the "1933 Act"), and, notwithstanding any other provision of the Option
              --------
Agreement to the contrary, the exercise of any rights to purchase any Shares is
expressly conditioned upon compliance with the 1933 Act, all applicable state
securities laws and all applicable requirements of any stock exchange or over
the counter market on which the Company's Common Stock may be listed or traded
at the time of exercise and transfer. Optionee agrees to cooperate with the
Company to ensure compliance with such laws.

     4.   Federal Restrictions on Transfer. Optionee understands that the Shares
          --------------------------------
have not been registered under the 1933 Act and therefore cannot be resold and
must be held indefinitely unless they are registered under the 1933 Act or
unless an exemption from such registration is available and that the
certificate(s) representing the Shares may 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.
Specifically, Optionee has been advised that Rule 144 promulgated under the 1933
Act, which permits certain resales of

<PAGE>

unregistered securities, is not presently available with respect to the Shares
and, in any event requires that the Shares be paid for and then be held for at
least two years (and in some cases three years) before they may be resold under
Rule 144.

     5.   Rights as Shareholder. Subject to the terms and conditions of this
          ---------------------
Agreement, Optionee shall have all of the rights of a shareholder of the Company
with respect to the Shares from and after the date that Optionee delivers full
payment of the Exercise Price until such time as Optionee disposes of the Shares
or the Company and/or its assignee(s) exercises the Right of First Refusal
hereunder and pays the Purchase Price as set forth in Section 6(d) hereof. Upon
such exercise, Optionee shall have no further rights as a holder of the Shares
so purchased, and Optionee shall forthwith cause the certificate(s) evidencing
the Shares so purchased to be surrendered to the Company for transfer or
cancellation.

     6.   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 or its assignee(s) shall have a 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 the Shares at the
             -------------
Offered Price to the Company or its assignee(s).

     (b)  Exercise of Right of First Refusal. At any time within thirty (30)
          ----------------------------------
days after receipt of the Notice, the Company and/or its assignee(s) 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. Notwithstanding the foregoing, if there is more than one Proposed
Transferee, and if the Notice states that no Shares will be sold to a particular
Proposed Transferee unless a specified number of other Shares are simultaneously
sold to one or more other specifically identified Proposed Transferees (all of

                                      -2-

<PAGE>
such Shares that will not be sold other than simultaneously collectively
referred to as the "Related Shares"), the Company and/or its assignee(s) may not
elect to purchase fewer than all of the Related Shares.

     (c)  Purchase Price. The purchase price ("Purchase Price") for the Shares
          --------------                       --------------
purchased by the Company or its assignee(s) 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.

     If the Holder or Holder's executor disputes the price as set by the Board
of Directors by giving notice to the Company within ten (10) days after being
informed of the price, the price of the Shares shall be determined by an
independent financial analyst selected by the Board of Directors of the Company
and acceptable to the Holder, with the cost of such determination to be divided
equally between the Company and the Holder. The Board of Directors shall select
such analyst within thirty (30) days after receipt of notice that the Holder is
disputing the price set by the Board of Directors. If the Board is not notify of
any such dispute within such ten (10) day period, the decision of the Board of
Directors as to the purchase price shall be final. Any time required to
determine a purchase price or to resolve a dispute shall be added to the thirty
(30) days period in which the Company may exercise its right to purchase.

     (d)  Payment. Payment of the Purchase Price shall be made, at the option of
          -------
the Company or its assignee(s), in cash (by check), by cancellation of all or a
portion of any outstanding indebtedness of the Holder to the Company (or, in the
case of repurchase by an assignee, to the assignee), or by any combination
thereof within 30 days after receipt to the Notice or in the manner and at the
times set forth in the Notice.

     (e)  Holder's Right to Transfer. If all of the Shares proposed in the
          --------------------------
Notice to be transferred to all of the Proposed Transferees 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 Shares to such Proposed Transferees at the
Offered Price or at a higher price, provided that such sale or other transfer is
consummated within 120 days after the date of the Notice and provided further
that any such sale or other transfer is effected in accordance with any
applicable securities laws and the Proposed Transferees agree in writing that
the provisions of this Section shall continue to apply to the Shares in the
hands of such Proposed Transferees. If the Shares described in the Notice are
not trans-

                                      -3-

<PAGE>

ferred to the Proposed Transferees within such period, a new Notice shall be
given to the Company, and the Company and/or its assignees 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 the Optionee's lifetime or on the Optionee's death by will or
intestacy to the Optionee's immediate family or a trust for the benefit of the
Optionee's immediate family shall be exempt from the provisions of this Section.
"Immediate Family" as used herein shall mean spouse, lineal descendant or
 ----------------
antecedent, farther, mother, brother or sister. In such case, the transferee or
other recipient shall receive and hold the Shares so transferred subject to the
provisions of this Section, and there shall be no further transfer of such
Shares except in accordance with the terms of this Section.

     (g)  Termination of Right of First Refusal. The Right of First Refusal
          -------------------------------------
shall terminate as to any Shares 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 Securities and Exchange Commission under the
19 Act.

     7.   Tax Consultation. Optionee understand 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 consultants
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 advise.

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

          (a)  Legends. Optionee understands and agrees that the Company shall
               -------
cause the legends set forth below or legends substantially equivalent thereto,
to be placed upon any certificate(s) evidencing ownership of the Shares together
with any other legends that may be required by state or federal securities laws:

          THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN
          REGISTERED UNDER THE SECURITIES ACT OF 1933
          (THE "ACT) AND MAY NOT BE OFFERED, SOLD OR
          OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED
          UNLESS AND UNTIL REGISTERED UNDER THE ACT OR,
          IN THE OPINION OF COUNSEL IN FORM AND SUBSTANCE,
          SATISFACTORY TO THE ISSUER OF THESE SECURITIES,

                                      -4-

<PAGE>

          SUCH OFFER, SALE OR TRANSFER, PLEDGE OR
          HYPOTHECATION IS IN COMPLIANCE THEREWITH.

          THE SHARES REPRESENTED BY THIS CERTIFICATE ARE
          SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER AND
          RIGHT OF FIRST REFUSAL OPTIONS HELD BY THE
          ISSUER OR ITS ASSIGNEE(S) AS SET FORTH IN THE
          EXERCISE NOTICE 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 ARE BINDING ON
          TRANSFEREES OF THESE SHARES.

          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.

          Optionee understands that transfer of the Shares may be restricted by
Section 260.141.11 of the Rules of the California Corporations Commissioner, a
copy of which is attached to Exhibit B, the Investment Representation Statement.

          (b)  Stop-Transfer Notices. Optionee agrees that, in order to ensure
               ---------------------
compliance with the restrictions referred to herein, the Company may issue
appropriate "stop transfer" instructions to its transfers 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.

          (c)  Refusal to Transfer. The Company shall 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 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 shall have been so transferred.

          9.   Market Standoff Agreement. Optionee hereby agrees that if so
               -------------------------
requested by the Company or any representative of the underwriters in connection
with any registration of the offering of any securities of the Company under the
1993 Act, Optionee shall not sell or otherwise transfer any Shares or other
securities of the Company during the 180-day period following the effective date
of the registration statement of the Company filed under the 1933 Act;

                                      -5-

<PAGE>

provided, however, that such restriction shall only apply to the first two
registration statements of the Company to become effective under the 1993 Act
which include securities to be sold on behalf of the Company to the public in an
underwritten public offering under the 1993 Act. The Company may impose stop-
transfer instructions with respect to securities subject to the foregoing
restrictions until the end of such 180-day period.

     10.  Successors and Assigns. The Company may assign any of its rights under
          ----------------------
this Agreement to single or multiple assignees, and this Agreement shall inure
to the benefit of the successors and assigns of the Company. Subject to the
restrictions on transfer herein set forth, this Agreement shall be binding upon
Optionee and his or her heirs, executors, administrators, successors and
assigns.

     11.  Interpretation. Any dispute regarding the interpretation of this
          --------------
Agreement shall be submitted by Optionee or by the Company forthwith 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.

     12.  Governing Law; Severability. This Agreement shall be governed by and
          ---------------------------
construed in accordance with the laws of the State of California excluding that
body of law pertaining to conflicts of law. Should any provision of this
Agreement be determined by a court of law to be illegal or unenforceable, the
other provisions shall nevertheless remain effective and shall remain
enforceable.

     13.  Notices. Any notice required or permitted hereunder shall be given in
          -------
writing and shall be deemed effectively given upon personal delivery or upon
deposit in the United States mail by certified mail, with postage and fees
prepaid, addressed to the other party at its address as shown below beneath its
signature, or to such other address as such party may designate in writing from
time to time to the other party.

     14.  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 Agreement.

     15.  Delivery of Payment. Optioneee herewith delivers to the Company the
          -------------------
full Exercise Price for the Shares.

                                      -6-

<PAGE>

     16. Entire Agreement. The Plan and Notice of Grant/Option Agreement are
         ----------------
incorporated herein by reference. This Agreement, the Plan and the Notice of
Grant/Stock Option Agreement 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:

                                                  Lynx Real-Time Systems,
                                                  Incorporated

                                             By:______________________________

                                             Its:_____________________________
___________________________
        (Signature)

Address:                                     Address:
-------                                      -------

____________________________                 2239 Samaritan Drive
                                             San Jose, CA 95124
____________________________

                                      -7-
<PAGE>

                EXERCISE NOTICE FOR NONSTATUTORY STOCK OPTIONS
                ----------------------------------------------

Lynx Real-Time Systems, Incorporated
2239 Samaritan Dr.
San Jose, CA 95124

Attention:     Secretary

     1.   Exercise of Option. Effective as of today, ____________, 19__, the
          ------------------
undersigned ("Optionee") hereby elects to exercise Optionee's option to purchase
              --------
__________ shares of the Common Stock (the "Shares") of Lynx Real-Time Systems,
                                             ------
Incorporated (the "Company") under and pursuant to the Company's 1992 Stock Plan
                   -------
(the "Plan") and the Nonstatutory Stock Option Agreement dated ____________ (the
      ----
"Option Agreement").
 ----------------

     2.   Representations of Optionee. Optionee acknowledges that Optionee has
          ---------------------------
received, read and understood the Plan and the Option Agreement and agrees to
abide by and be bound by their terms and conditions. Optionee represents that
Optionee is purchasing the Shares for Optionee's own account for investment and
not with a view to, or for sale in connection with, a distribution of any of
such Shares.

     3.   Compliance with Securities Laws. Optionee understands and acknowledges
          -------------------------------
that the Shares have not been registered under the Securities Act of 1933, as
amended (the "1933 Act"), and, notwithstanding any other provision of the Option
              --------
Agreement to the contrary, the exercise of any rights to purchase any Shares is
expressly conditioned upon compliance with the 1933 Act, all applicable state
securities laws and all applicable requirements of any stock exchange or over
the counter market on which the Company's Common Stock may be listed or traded
at the time of exercise and transfer. Optionee agrees to cooperate with the
Company to ensure compliance with such laws.

     4.   Federal Restrictions on Transfer. Optionee understands that the Shares
          --------------------------------
have not been registered under the 1933 Act and therefore cannot be resold and
must be held indefinitely unless they are registered under the 1933 Act or
unless an exemption from such registration is available and that the
certificate(s) representing the Shares may 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.
Specifically, Optionee has been advised that Rule 144 promulgated under the 1933
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
<PAGE>

and then be held for at least two years (and in some cases three years) before
they may be resold under Rule 144.

     5.   Rights as Shareholder. Subject to the terms and conditions of this
          ---------------------
Agreement, Optionee shall have all of the rights of a shareholder of the Company
with respect to the Shares from and after the date that Optionee delivers full
payment of the Exercise Price until such time as Optionee disposes of the Shares
or the Company and/or its assignee(s) exercises the Right of First Refusal
hereunder and pays the Purchase Price as set forth in Section 6(d) hereof. Upon
such exercise, Optionee shall have no further rights as a holder of the Shares
so purchased, and Optionee shall forthwith cause the certificate(s) evidencing
the Shares so purchased to be surrendered to the Company for transfer or
cancellation.

     6.   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 or its assignee(s) shall have a 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 the Shares
                          -------------
at the Offered Price to the Company or its assignee(s).

          (b)  Exercise of Right of First Refusal. At any time within thirty
               ----------------------------------
(30) days after receipt of the Notice, the Company and/or its assignee(s) 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. Notwithstanding the foregoing, if there is more than one Proposed
Transferee, and if the Notice states that no Shares will be sold to a particular
Proposed Transferee unless a specified number of other Shares are simultaneously
sold to one or more other specifically identified Proposed Transferees (all of
such Shares that will not be sold other than simultaneously collectively
referred to as the "Related Shares"), the Company and/or its assignee(s) may not
elect to purchase newer than all of the Related Shares.

                                      -2-
<PAGE>

          (c)  Purchase Price. The purchase price ("Purchase Price") for the
               --------------                       --------------
Shares purchased by the Company or its assignee(s) 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.

     If the Holder or Holder's executor disputes the price as set by the Board
of Directors by giving notice to the Company within ten (10) days after being
informed of the price, the price of the Shares shall be determined by an
independent financial analyst selected by the Board of Directors of the Company
and acceptable to the Holder, with the cost of such determination to be divided
equally between the Company and the Holder. The Board of Directors shall select
such analyst within thirty (30) days after receipt of notice that the Holder is
disputing the price set by the Board of Directors. If the Board is not notified
of any such dispute within such ten (10) day period, the decision of the Board
of Directors as to the purchase price shall be final. Any time required to
determine a purchase price or to resolve a dispute shall be added to the thirty
(30) day period in which the Company may exercise its right to purchase.

          (d)  Payment. Payment of the Purchase Price shall be made, at the
               -------
option of the Company or its assignee(s), in cash (by check), by cancellation of
all or a portion of any outstanding indebtedness of the Holder to the Company
(or, in the case of repurchase by an assignee, to the assignee), or by any
combination thereof within 30 days after receipt of the Notice or in the manner
and at the times set forth in the Notice.

          (e)  Holder's Right to Transfer. If all of the Shares proposed in the
               --------------------------
Notice to be transferred to all of the Proposed Transferees 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 shares to such Proposed Transferees at the
Offered Price or at a higher price, provided that such sale or other transfer is
consummated within 120 days after the date of the Notice and provided further
that any such sale or other transfer is effected in accordance with any
applicable securities laws and the Proposed Transferees agree in writing that
the provisions of this Section shall continue to apply to the Shares in the
hands of such Proposed Transferees. If the Shares described in the Notice are
not transferred to the Proposed Transferees within such period, a new Notice
shall be given to the Company, and the Company and/or its assignees 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 the Optionee's lifetime or

                                     -3-

<PAGE>

on the Optionee's death by will or intestacy to the Optionee's immediate family
or a trust for the benefit of the Optionee's immediate family shall be exempt
from the provisions of this Section. "Immediate Family" as used herein shall
                                      ----------------
mean spouse, lineal descendant or antecedent, father, mother, brother or sister.
In such case, the transferee or other recipient shall receive and hold the
Shares so transferred subject to the provisions of this Section, and there shall
be no further transfer of such Shares except in accordance with the terms of
this Section.

          (g)  Termination of Right of First Refusal. The Right of First Refusal
               -------------------------------------
shall terminate as to any Shares 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 Securities and Exchange Commission under the
1933 Act.

     7.   Tax Consultation. 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
consultants 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.

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

          (a)  Legends. Optionee understands and agrees that the Company shall
               -------
cause the legends set forth below or legends substantially equivalent thereto,
to be placed upon any certificate(s) evidencing ownership of the Shares
together with any other legends that may be required by state or federal
securities laws:

          THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
          UNDER THE SECURITIES ACT OF 1933 (THE "ACT") AND MAY NOT BE
          OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR
          HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE ACT OR,
          IN THE OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY
          TO THE ISSUER OF THESE SECURITIES, SUCH OFFER, SALE OR
          TRANSFER, PLEDGE OR HYPOTHECATION IS IN COMPLIANCE
          THEREWITH.

          THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
          CERTAIN RESTRICTIONS ON TRANSFER AND RIGHT OF FIRST REFUSAL
          OPTIONS HELD BY THE ISSUER OR ITS ASSIGNEE(S) AS SET FORTH
          IN THE EXERCISE NOTICE BETWEEN THE ISSUER AND THE ORIGINAL
          HOLDER OR THESE SHARES, A COPY OF WHICH MAY BE OBTAINED AT
          THE PRINCIPAL OFFICE OF THE ISSUER. SUCH TRANSFER
          RESTRICTIONS AND

                                          -4-

<PAGE>

          RIGHT OF FIRST REFUSAL ARE BINDING ON
          TRANSFEREES OF THESE 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.

          Optionee understands that transfer of the Shares may be restricted by
Section 260.141.11 of the Rules of the California Corporations Commissioner, a
copy of which is attached to Exhibit B, the Investment Representation Statement.

          (b)  Stop-Transfer Notices. Optionee 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 appropriate notations
to the same effect in its own records.

          (c)  Refusal to Transfer. The Company shall not be required (i) to
               -------------------
transfer on its books any Shares that may have been sold or otherwise
transferred in violation of any of the provisions of this 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 shall have been so
transferred.

     9.   Market Standoff Agreement. Optionee hereby agrees that if so requested
          -------------------------
by the Company or any representative of the underwriters in connection with any
registration of the offering of any securities of the company under the 1933
Act, Optionee shall not sell or otherwise transfer any Shares or other
securities of the Company during the 180-day period following the effective date
of a registration statement of the Company filed under the 1933 Act; provided,
however, that such restriction shall only apply to the first two registration
statements of the Company to become effective under the 1933 Act which include
securities to be sold on behalf of the Company to the public in an underwritten
public offering under the 1933 Act. The Company may impose stop-transfer
instructions with respect to securities subject to the foregoing restrictions
until the end of such 180-day period.

     10.  Successors and Assigns. The Company may assign any of its rights under
          ----------------------
this Agreement to single or multiple assignees, and this Agreement shall inure
to the benefit of the successors and assigns of the Company. Subject to the
restrictions on transfer herein set forth, this Agreement shall be binding upon
Optionee and

                                     -5-
<PAGE>

his or her heirs, executors, administrators, successors and assigns.

     11.  Interpretation. Any dispute regarding the interpretation of this
          --------------
Agreement shall be submitted by Optionee or by the Company forthwith 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.

     12.  Governing Law; Severability. This Agreement shall be governed by and
          ---------------------------
construed in accordance with the laws of the State of California excluding that
body of law pertaining to conflicts of law. Should any provision of this
Agreement be determined by a court of law to be illegal or unenforceable, the
other provisions shall nevertheless remain effective and shall remain
enforceable.

     13.  Notices. Any notice required or permitted hereunder shall be given in
          -------
writing and shall be deemed effectively given upon personal delivery or upon
deposit in the United States mail by certified mail, with postage and fees
prepaid, addressed to the other party at its address as shown below beneath its
signature, or to such other address as such party may designate in writing from
time to time to the other party.

     14.  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 Agreement.

     15.  Delivery of Payment. Optionee herewith delivers to the Company the
          -------------------
full Exercise Price for the Shares.

                                      -6-

<PAGE>

     16. Entire Agreement. The Plan and Notice of Grant/Option Agreement are
         ----------------
incorporated herein by reference. This Agreement, the Plan and the Notice of
Grant/Stock Option Agreement 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:                                  Lynx Real-Time Systems,
                                           Incorporated

                                           By:_____________________________

                                           Its:____________________________

___________________________
       (Signature)

Address:                                   Address:
-------                                    -------

____________________________               2239 Samaritan Dr.
                                           San Jose, CA 95124
____________________________

                                      -7-

<PAGE>

                                   EXHIBIT B
                                   ----------

                     INVESTMENT REPRESENTATION STATEMENT
OPTIONEE:

COMPANY:    LYNX REAL-TIME SYSTEMS, INCORPORATED

SECURITY:   COMMON STOCK

AMOUNT:

DATE:

In connection with the purchase of the above-listed Securities, the undersigned
Optionee represents to the Company the following:

          (a) Optionee is aware of the Company's business affairs and financial
condition and has acquired sufficient information about the Company to reach an
informed and knowledgeable decision to acquire Securities. Optionee is acquiring
these securities for investment for Optionee's own account only and not with a
view to, or for resale in connection with, any "distribution" thereof within the
meaning of the Securities Act of 1933, as amended (the "Securities Act").

          (b) Optionee acknowledges and understands that the securities
constitute "restricted securities" under the Securities Act and have not been
registered under the Securities Act in reliance upon a specific exemption
therefrom, which exemption depends upon, among other things, the bona fide
nature of Optionee's investment intent as expressed herein. In this connection,
Optionee understands that, in the view of the Securities and Exchange
Commission, the statutory basis for such exemption may be unavailable if
Optionee's representation was predicted solely upon a present intention to hold
these Securities for the minimum capital gains period specified under tax
statutes, for a deferred sale, for or until an increase or decrease in the
market price of the Securities, or for a period of one year or any other fixed
period in the future. Optionee further understands that the Securities must be
held indefinitely unless they are subsequently registered under the Securities
Act or an exemption from such registration is available. Optionee further
acknowledges and understands that the Company is under no obligation to
register the securities. Optionee understands that the certificate evidencing
the securities will be imprinted with a legend which prohibits the transfer of
the Securities unless they are registered or such registration is not required
in the opinion of counsel satisfactory to the Company, a legend prohibiting
their transfer without the consent of the Commissioner of Corporations of the
State of California and any other legend required under applicable state
securities laws.

<PAGE>

          (c)  Optionee is familiar with the provisions of Rule 701 and Rule
144, each promulgated under the Securities Act, which, in substance, permit
limited public resale of "restricted securities" acquired, directly or
indirectly from the issuer thereof, in a non-public offering subject to the
satisfaction of certain conditions. Rule 701 provides that if the issuer
qualifies under Rule 701 at the time of exercise of the Option by the Optionee,
such exercise will be exempt from registration under the Securities Act. In the
event the Company later becomes subject to the reporting requirements of Section
13 or 15(d) of the Securities Exchange Act of 1934, one hundred eighty (180)
days thereafter the securities exempt under Rule 701 may be resold, subject to
the satisfaction of certain of the conditions specified by Rule 144, including
among other things: (1) the sale being made through a broker in an unsolicited
"broker's transaction" or in transactions directly with a market maker (as said
term is defined under the Securities Exchange Act of 1934); and, in the case of
an affiliate, (2) the availability of certain public information about Company,
and the amount of securities being sold during any three month period not
exceeding the limitations specified in Rule 144(e), if applicable.

     In the event that the Company does not qualify under Rule 701 at the time
of exercise of the Option, then the securities may be resold in certain limited
circumstances subject to the provisions of Rule 144, which requires among other
things: (1) the resale occurring not less than two years after the party has
purchased, and made full payment for, within the meaning of Rule 144, the
securities to be sold; and, in the case of an affiliate, or of a non-affiliate
who has held the securities less than three years, (2) the availability of
certain public information about the Company, (3) the sale being made through a
broker in an unsolicited "broker's transaction" or in transactions directly with
a market maker (as said term is defined under the Securities Exchange Act of
1934), and (4) the amount of securities being sold during any three month period
not exceeding the specified limitations stated therein, if applicable.

          (d)  Optionee agrees, in connection with the Company's initial
underwritten public offering of the Company's securities, (1) not to sell, make
short sale of, loan, grant any options for the purchase of, or otherwise dispose
of any shares of Common Stock of the Company held by Optionee (other than those
shares included in the registration) without the prior written consent of the
Company or the underwriters managing such initial underwritten public offering
of the Company's securities for one hundred eighty (180) days from the effective
date of such registration, and (2) further agrees to execute any agreement
reflecting (1) above as may be requested by the underwriters at the time of the
public offering; provided however that the officers and directors of the
                 -------- -------

                                      -2-

<PAGE>

Company who own the stock of the Company also agree to such restrictions.

          (e)  Optionee further understands that in the event all of the
applicable requirements of Rule 701 or 144 are not satisfied, registration under
the Securities Act, compliance with Regulation A, or some other registration
exemption will be required; and that, notwithstanding the fact that Rules 144
and 701 are not exclusive, the Staff of the Securities and Exchange Commission
has expressed its opinion that persons proposing to sell private placement
securities other than in a registered offering and otherwise than pursuant to
Rules 144 or 701 will have a substantial burden of proof in establishing that an
exemption from registration is available for such offers or sales, and that such
persons and their respective brokers who participate in such transactions do so
at their own risk. Optionee understands that no assurances can be given that any
such other registration exemption will be available in such event.

          (f)  Optionee understands that the certificate evidencing the
Securities will be imprinted with a legend which prohibits the transfer of the
Securities without the consent of the Commissioner of Corporations of
California. Optionee has read the applicable Commissioner's Rules with respect
to such restriction, a copy of which is attached.

                                    Signature of Optionee:

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

                                    Date:_________________, 19__

                                      -3-

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