<PAGE>
 
                                                                   EXHIBIT 10.21

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.

                            GMS DENTAL GROUP, INC.
                      1996 PERFORMANCE STOCK OPTION PLAN

                       INCENTIVE STOCK OPTION AGREEMENT

     GMS Dental Group, Inc., a Delaware corporation (the "Company"), hereby 
grants an option to purchase Shares of its common stock to the optionee named 
below. The terms and conditions of the option are set forth in this cover sheet,
in the attachment and in the Company's 1996 Performance Stock Option Plan (the 
"Plan").

Date of Option Grant: 12-4-96
                      -------

Name of Optionee: Norman Huffaker
                  ---------------

Optionee's Social Security Number: ###-##-####
                                   -----------

Number of Shares of Common Stock Covered by Option: 50,000
                                                    ------

Exercise Price per Share: $.20
                          ----

Vesting Start Date: 12-4-96
                    -------


     By signing this cover sheet, you agree to all of the terms and conditions
     described in the attached Agreement and in the Plan, a copy of which is
     also enclosed.


Optionee: Norman R. Huffaker     /s/ NORMAN R. HUFFAKER
          ---------------------------------------------
                          (Signature)


Company:  Grant M. Sadler        /s/ GRANT M. SADLER
          ---------------------------------------------
                          (Signature)

          Title: President
                 --------------------------------------


Attachment
----------
<PAGE>
 
                                                                   EXHIBIT 10.18

                             GMS DENTAL GROUP, INC.
                             1996 STOCK OPTION PLAN

                        INCENTIVE STOCK OPTION AGREEMENT


INCENTIVE STOCK       This Option is intended to be an incentive stock option
OPTION                under Section 422 of the Internal Revenue Code and will
                      be interpreted accordingly.

VESTING               The Option Shares shall be unvested and subject to
                      repurchase by the Company at the Exercise Price paid per
                      share ($.20 per share). Optionee shall acquire a vested
                      interest in, and the Company's repurchase right shall
                      accordingly lapse with respect to, (i) twenty-five percent
                      (25%) of the Option Shares upon Optionee's completion of
                      one (1) year of Service measured from the Vesting
                      Commencement Date and (ii) the balance of the Option
                      Shares in a series of thirty-six (36) successive equal
                      monthly installments upon Optionee's completion of each
                      additional month of Service over the thirty-six (36)-month
                      period measured from the first anniversary of the Vesting
                      Commencement Date. In no event shall any additional Option
                      Shares vest after Optionee's cessation of Service.

TERM                  Your Option will expire in any event at the close of
                      business at Company headquarters on the day before the
                      10th anniversary of the Date of Grant, as shown on the
                      cover sheet. (It will expire earlier if your Company
                      service terminates, as described below.)

REGULAR               If your Service terminates for any reason except death or
TERMINATION           Disability, then your Option will expire at the close of
                      business at Company headquarters no less than 30 days
                      after your termination date.

DEATH                 If you die as an Employee, then your Option will expire at
                      the close of business at Company headquarters on a day not
                      less than 6 months after the date of death. During the 6-
                      month period, your estate or heirs may exercise the vested
                      portion of your Option.

DISABILITY            If your Service terminates because of your Disability,
                      then your Option will expire at the close of business at
                      the Company headquarters on the day not less than 6 months
                      after your termination date.

                                      A-1
<PAGE>
 
LEAVES OF ABSENCE     For purposes of this Option, your status as an Employee
                      does not terminate when you go on a military leave, a sick
                      leave or another bona fide leave of absence that was
                      approved by the Company in writing if the terms of the
                      leave provide for continued service crediting, or when
                      continued service crediting is required by applicable law.
                      Your status as an Employee terminates in any event when
                      the approved leave ends, unless you immediately return to
                      active work.
                      
                      The Company determines which leaves count for this
                      purpose, whether your Option continues to vest during a
                      leave and when your service terminates for all purposes
                      under the Plan.

NOTICE OF EXERCISE    When you wish to exercise this Option, you must notify the
                      Company by filing the proper "Notice of Exercise" form at
                      the address given on the form. The Company may prescribe a
                      minimum number of shares of Common Stock which may be
                      purchased. Your notice must specify how many shares of
                      Common Stock you with to purchase. Your notice must also
                      specify how your Common Stock should be registered (in
                      your name only or in your and your spouse's names as
                      community property or as joint tenants with right of
                      survivorship). The notice will be effective when it is
                      received by the Company.
                      
                      If someone else wants to exercise this Option after your
                      death, that person must prove to the Company's
                      satisfaction that he or she is entitled to do so.

RESTRICTIONS ON       The Company will not permit you to exercise this Option if
EXERCISE              the issuance of shares of the Company's Common Stock at
                      that time would violate any law or regulation.

                                      A-2
<PAGE>
 
PERIODS OF            Any other provision of this Agreement notwithstanding, the
NONEXERCISABILITY     Company shall have the right to designate one or more
                      periods of time, each of which shall not exceed 180 days
                      in length, during which this Option shall not be
                      exercisable if the Company determines (in its sole
                      discretion) that such limitation on exercise could in any
                      way facilitate a lessening of any restriction on transfer
                      pursuant to the Securities Act of 1933 (the "Securities
                      Act") or any state securities laws with respect to any
                      issuance of securities by the Company, facilitate the
                      registration or qualification of any securities by the
                      Company under the Securities Act or any state securities
                      laws, or facilitate the perfection of any exemption from
                      the registration or qualification requirements of the
                      Securities Act or any applicable state securities laws for
                      the issuance or transfer of any securities. Such
                      limitation on exercise shall not alter the vesting
                      schedule set forth in this Agreement other than to limit
                      the periods during which this Option shall be exercisable.

*Form of Payment      When you submit your notice of exercise, you must include
                      payment of the Option exercise price for the Option Shares
                      you are purchasing.  Payment may be made in one (or a
                      combination) of the following forms:
 
                      .  Promissory Note in favor of the Company, your
                         personal check, a cashier's check or a money order.
 
                      .  Shares of the Company's Common Stock which have
                         already been owned by you for any time period
                         specified by the Committee and which are surrendered to
                         the Company. The value of such shares, determined as of
                         the effective date of the Option exercise, will be
                         applied to the Exercise Price.
                         
                      .  To the extent that a public market for the Option
                         Shares exists as determined by the Company, by delivery
                         (on a form prescribed by the Committee) of an
                         irrevocable direction to a securities broker to sell
                         Option Shares and to deliver all or part of the sale
                         proceeds to the Company in payment of the aggregate
                         Exercise Price.

WITHHOLDING TAXES     You will not be allowed to exercise this Option unless you
                      make acceptable arrangements to pay any withholding or
                      other taxes that may be due as a result of the Option
                      exercise or the sale of Option Shares acquired upon
                      exercise of this Option.

                                      A-3
<PAGE>
 
RESTRICTIONS ON       You agree that the Option Shares may not be sold,
RESALE                transferred, pledged or otherwise disposed of until the
                      repurchase rights with respect to those Option Shares
                      expire. By signing this Agreement, you agree not to sell
                      any Option Shares at a time when applicable laws,
                      regulations or Company or underwriter trading policies
                      prohibit a sale.
 
                      You represent and agree that the Option Shares to be
                      acquired upon exercising this Option will be acquired for
                      investment, and not with a view to the sale or
                      distribution thereof.
 
                      In the event that the sale of Option Shares under the Plan
                      is not registered under the Securities Act of 1933, as
                      amended, but an exemption is available which requires an
                      investment representation or other representation, you
                      shall represent and agree at the time of exercise that the
                      Option Shares being acquired upon exercising this Option
                      are being acquired for investment, and not with a view to
                      the sale or distribution thereof, and shall make such
                      other representations as are deemed necessary or
                      appropriate by the Company and its counsel.

THE COMPANY'S         In the event that you propose to sell, pledge or otherwise
RIGHT OF FIRST        transfer to a third party any Option Shares acquired 
REFUSAL               under this Agreement, or any interest in such Option
                      Shares, the Company shall have the "Right of First
                      Refusal" with respect to all (and not less than all) of
                      such Option Shares. If you desire to transfer Option
                      Shares acquired under this Agreement, you must give a
                      written "Transfer Notice" to the Company describing fully
                      the proposed transfer, including the number of Option
                      Shares proposed to be transferred, the proposed transfer
                      price and the name and address of the proposed transferee.
                      The Transfer Notice shall be signed both by you and by the
                      proposed new transferee and must constitute a binding
                      commitment of both parties to the transfer of the Option
                      Shares. The Company shall have the right to purchase all,
                      and not less than all, of the Option Shares on the terms
                      of the proposal described in the Transfer Notice (subject,
                      however, to any change in such terms permitted in the next
                      paragraph) by delivery of a notice of exercise of the
                      Right of First Refusal within 30 days after the date when
                      the Transfer Notice was received by the Company. The
                      Company's rights under this Subsection shall be freely
                      assignable, in whole or in part.

                                      A-4
<PAGE>
 
                      If the Company fails to exercise is Right of First Refusal
                      within 30 days after the date when it received the
                      Transfer Notice, you may, not later than 90 days following
                      receipt of the Transfer Notice by the Company, conclude a
                      transfer of the Option Shares subject to the Transfer
                      Notice on the terms and conditions described in the
                      Transfer Notice. Any proposed transfer on terms and
                      conditions different form those described in the Transfer
                      Notice, as well as any subsequent proposed transfer by
                      you, shall again be subject to the Right of First Refusal
                      and shall require compliance with the procedure described
                      in the paragraph above. If the Company exercises its Right
                      of First Refusal, the parties shall consummate the sale of
                      the Option Shares on the terms set forth in the Transfer
                      Notice within 60 days after the date when the Company
                      received the Transfer Notice (or within such longer period
                      as may have been specified in the Transfer Notice);
                      provided, however, that in the event the Transfer Notice
                      provided that payment for the Option Shares was to be made
                      in a form other than lawful money paid at the time of
                      transfer, the Company shall have the Option of paying for
                      the Option Shares with lawful money equal to the present
                      value of the consideration described in the Transfer
                      Notice.* 

                      The Company's Right of First Refusal shall inure to the
                      benefit of its successors and assigns and shall be binding
                      upon any transferee of the Option Shares.
                      
                      The Company's Right of First Refusal shall terminate in
                      the event that the Company's Common Stock is listed on an
                      established stock exchange or is quoted regularly on the
                      Nasdaq National Market.

                                      A-5
<PAGE>
 
RIGHT OF              Following termination of your Service for any reason, the
REPURCHASE            Company shall have the right to repurchase all of those
                      unvested Option Shares that you have or will acquire under
                      this Option. If the Company fails to provide you with
                      written notice of its intention to purchase such Option
                      Shares before or within 30 days of the date the Company
                      receives written notice from you of your termination of
                      Service, the Company's right to purchase such Option
                      Shares shall terminate. If the Company exercises its right
                      to purchase such Option Shares, the Company will
                      consummate the purchase of such Option Shares within 60
                      days of the date of its written notice to you. The
                      purchase price for any Option Shares repurchased shall be
                      equal to the Exercise Price for those Option Shares ($.20
                      per share) and shall be paid in cash, or by cancellation
                      of all or a portion of any indebtedness owed by you to the
                      Company. To secure its repurchase right, the Company shall
                      retain the certificates representing Option Shares until
                      such time as the repurchase rights expire as provided
                      herein. Upon any exercise of repurchase rights, the
                      Company shall be authorized to transfer or cancel the
                      Option Shares so repurchased without any further actions
                      of you.

TRANSFER OF OPTION    Prior to your death, only you may exercise this Option.
                      You cannot transfer or assign this Option. For instance,
                      you may not sell this Option or use it as security for a
                      loan. If you attempt to do any of these things, this
                      Option will immediately become invalid. You may, however,
                      dispose of this Option in your will or designate a
                      beneficiary.
 
                      Regardless of any marital property settlement agreement,
                      the Company is not obligated to honor a notice of exercise
                      from your spouse or former spouse, nor is the Company
                      obligated to recognize such individual's interest in your
                      Option in any other way.

RETENTION RIGHTS      Neither your Option nor this Agreement give you the right
                      to be retained by the Company (or any subsidiaries) in any
                      capacity. The Company (and any subsidiaries) reserve the
                      right to terminate your Service at any time for any
                      reason.

SHAREHOLDER RIGHTS    You, or your estate or heirs, have no rights as a
                      shareholder of the Company until a certificate for the
                      shares of the Company's Common Stock acquired upon
                      exercise of this Option has been issued.  No adjustments
                      are made for dividends or other rights if the applicable
                      record date occurs before your stock certificate is
                      issued, except as described in the Plan.

                                      A-6
<PAGE>
 
ADJUSTMENTS           On the event of a stock split, a stock dividend or a
                      similar change in the outstanding Common Stock of the
                      Company, the number of shares of the Company's Common
                      Stock covered by this Option and the exercise price per
                      share may be adjusted pursuant to the Plan. Your Option
                      shall be subject to the terms of the agreement of merger,
                      liquidation or reorganization in the event the Company is
                      subject to such corporate activity.

AMENDMENTS AND        This Agreement may be amended in writing signed by both
ADMINISTRATION        parties.  The Committee shall have the sole discretion to
                      interpret and administer this Agreement and to adopt rules
                      and policies to administer and enforce this Agreement.

LEGENDS               All certificates representing the Option Shares issued
                      upon exercise of this Option shall, where applicable, have
                      endorsed thereon the following legends:
                      
                      "THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
                      CERTAIN RESTRICTIONS ON TRANSFER AND OPTIONS TO PURCHASE
                      SUCH SHARES SET FORTH IN AN AGREEMENT BETWEEN THE COMPANY
                      AND THE REGISTERED HOLDER, OR HIS OR HER PREDECESSOR IN
                      INTEREST. A COPY OF SUCH AGREEMENT IS ON FILE AT THE
                      PRINCIPAL OFFICE OF THE COMPANY AND WILL BE FURNISHED UPON
                      WRITTEN REQUEST TO THE SECRETARY OF THE COMPANY BY THE
                      HOLDER OF RECORD OF THE SHARES REPRESENTED BY THIS
                      CERTIFICATE."
                      
                      "THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN
                      REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
                      AND MAY NOT BE SOLD, PLEDGED, OR OTHERWISE TRANSFERRED
                      WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT
                      OR AN OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY AND
                      ITS COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED."

APPLICABLE LAW        This Agreement will be interpreted and enforced under the
                      laws of the State of California.

THE PLAN AND          The text of the Plan is incorporated in this Agreement by
OTHER AGREEMENTS      reference.  Certain capitalized terms used in this
                      Agreement or in the Notice of Grant which are not defined
                      herein or in the Notice of Grant shall have the meanings
                      defined in the Plan.

                                      A-7
<PAGE>
 
ENTIRE AGREEMENT      This Agreement, that certain employment letter, dated
                      February 26, 1997, by and between you and the Company,
                      as amended or superseded from time to time, and the Plan
                      constitute the entire understanding between you and the
                      Company regarding this Option and Option Shares.  Any
                      prior agreements, commitments or negotiations concerning
                      this Option or Option Shares are superseded.

     By signing the cover sheet of this Agreement, you agree to all of the terms
     and conditions described above and in the Plan.

                                      A-8