<PAGE>
 
                                                                    EXHIBIT 99.2


                    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.


                             INCENTIVE STOCK OPTION


1, OPTIONEE:

     FlowPoint Corp. (the "Company"), pursuant to its FlowPoint Corp. 1994 Stock
Option Plan (the "Plan") has this day granted to you, the optionee named above,
an option to purchase shares of the common stock of the Company ("Common
Stock").  This option is intended to qualify as an "incentive stock option"
within the meaning of Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code").

     The grant hereunder is in connection with and in furtherance of the
Company's compensatory benefit plan for participation of the Company's employees
(including officers), directors or consultants and is intended to comply with
the provisions of Rule 701 promulgated by the Securities and Exchange Commission
under the Securities Act of 1933, as amended (the "Act").

     The details of your option are as follows:

     1.   The total number of shares of Common Stock subject to this option is
2. The date that vesting begins on this option is 3.  Subject to the limitations
herein, 6/48ths of the shares will vest (become exercisable) on 4 and 1/48 of
the shares will then vest each month thereafter until either (i) you cease to
provide services for the Company for any reason, or (ii) this option becomes
fully vested.  This option may be exercised only with respect to those shares
which are vested.

     2.   (a)  The exercise price of this option is 5 per share, being not less
than the fair market value of the Common Stock on the date of grant of this
option.

          (b) Payment of the exercise price per share is due in full upon
exercise of all or any part of each installment which has accrued to you.  You
may elect, to the extent permitted by applicable statutes and regulations, to
make payment of the exercise price under one of the following alternatives:

             (i) Payment of the exercise price per share in cash (including 
check) at the time of exercise;
<PAGE>
 
             (ii) Payment pursuant to a program developed under Regulation T as
promulgated by the Federal Reserve Board which results in the receipt of cash
(or check) by the Company prior to the issuance of Common Stock;

             (iii) Provided that at the time of exercise the Company's
Common Stock is publicly traded and quoted regularly in the Wall Street Journal,
payment by delivery of already-owned shares of Common Stock, held for the period
required to avoid a charge to the Company's reported earnings, and owned free
and clear of any liens, claims, encumbrances or security interests, which Common
Stock shall be valued at its fair market value on the date of exercise; or

             (iv) Payment by a combination of the methods of payment
permitted by subparagraph 2(b)(i) through 2(b)(iii) above.

     3.   This option may not be exercised for any number of shares which would
require the issuance of anything other than whole shares.

     4.   Notwithstanding anything to the contrary contained herein, this option
may not be exercised unless the shares issuable upon exercise of this option are
then registered under the Act or, if such shares are not then so registered, the
Company has determined that such exercise and issuance would be exempt from the
registration requirements of the Act.

     5.   The term of this option commences on the date hereof and, unless
sooner terminated as set forth below or in the Plan, terminates on 6 (which date
shall be no more than ten (10) years from the date this option is granted).  In
no event may this option be exercised on or after the date on which it
terminates.  This option shall terminate prior to the expiration of its term as
follows: three (3) months after the termination of your employment with the
Company or an affiliate of the Company (as defined in the Plan) for any reason
or for no reason unless:

          (a) such termination of employment is due to your disability, in which
event the option shall terminate on the earlier of the termination date set
forth above or twelve (12) months following such termination of employment; or

          (b) such termination of employment is due to your death, in which
event the option shall terminate on the earlier of the termination date set
forth above or twelve (12) months after your death; or

          (c) during any part of such three (3) month period the option is not
exercisable solely because of the condition set forth in paragraph 4 above, in
which event the option shall not terminate until the earlier of the termination
date set forth above or until it shall have been exercisable for an aggregate
period of three (3) months after the termination of employment; or

          (d) exercise of the option within three (3) months after termination
of your employment with the Company or with an affiliate would result in
liability under section 16(b) of the Securities Exchange Act of 1934, in which
case the option will terminate on the earlier of (i) the termination date set
forth above, (ii) the tenth (10th) day after the last date upon which exercise
would result in such liability or (iii) six (6) months and ten (10) days after
the termination of your employment with the Company or an affiliate.

                                      -2-
<PAGE>
 
     However, this option may be exercised following termination of employment
only as to that number of shares as to which it was exercisable on the date of
termination of employment under the provisions of paragraph 1 of this option.

     6.   (a)  This option may be exercised, to the extent specified above, by
delivering a notice of exercise (in a form designated by the Company) together
with the exercise price to the Secretary of the Company, or to such other person
as the Company may designate, during regular business hours, together with such
additional documents as the Company may then require pursuant to subparagraph
6(f) of the Plan.

          (b) By exercising this option you agree that:

              (i) the Company may require you to enter an arrangement providing
for the payment by you to the Company of any tax withholding obligation of the
Company arising by reason of (1) the exercise of this option; (2) the lapse of
any substantial risk of forfeiture to which the shares are subject at the time
of exercise; or (3) the disposition of shares acquired upon such exercise;

              (ii) you will notify the Company in writing within fifteen (15)
days after the date of any disposition of any of the shares of the Common Stock
issued upon exercise of this option that occurs within two (2) years after the
date of this option grant or within one (1) year after such shares of Common
Stock are transferred upon exercise of this option; and

              (iii) the Company (or a representative of the underwriters)
may, in connection with the first underwritten registration of the offering of
any securities of the Company under the Act, require that you not sell or
otherwise transfer or dispose of any shares of Common Stock or other securities
of the Company during such period (not to exceed one hundred eighty (180) days)
following the effective date (the "Effective Date") of the registration
statement of the Company filed under the Act as may be requested by the Company
or the representative of the underwriters.  For purposes of this restriction you
will be deemed to own securities which (i) are owned directly or indirectly by
you, including securities held for your benefit by nominees, custodians, brokers
or pledgees; (ii) may be acquired by you within sixty (60) days of the Effective
Date; (iii) are owned directly or indirectly, by or for your brothers or sisters
(whether by whole or half blood), spouse, ancestors and lineal descendants; or
(iv) are owned, directly or indirectly, by or for a corporation, partnership,
estate or trust of which you are a shareholder, partner or beneficiary, but only
to the extent of your proportionate interest therein as a shareholder, partner
or beneficiary thereof.  You further agree that the Company may impose stop-
transfer instructions with respect to securities subject to the foregoing
restrictions until the end of such period.

     7.   This option is not transferable, except by will or by the laws of
descent and distribution, and is exercisable during your life only by you.
Notwithstanding the foregoing, by delivering written notice to the Company, in a
form satisfactory to the Company, you may designate a third party who, in the
event of your death, shall thereafter be entitled to exercise this option.

                                      -3-
<PAGE>
 
     8.   This option is not an employment contract and nothing in this option
shall be deemed to create in any way whatsoever any obligation on your part to
continue in the employ of the Company, or of the Company to continue your
employment with the Company.

     9.   Any notices provided for in this option or the Plan shall be given in
writing and shall be deemed effectively given upon receipt or, in the case of
notices delivered by the Company to you, five (5) days after deposit in the
United States mail, postage prepaid, addressed to you at the address specified
below or at such other address as you hereafter designate by written notice to
the Company.

     10.  This option is subject to all the provisions of the Plan, a copy of
which is attached hereto and its provisions are hereby made a part of this
option, including without limitation the provisions of paragraph 6 of the Plan
relating to option provisions, and is further subject to all interpretations,
amendments, rules and regulations which may from time to time be promulgated and
adopted pursuant to the Plan.  In the event of any conflict between the
provisions of this option and those of the Plan, the provisions of the Plan
shall control.

     Dated the          day of                , 19  .
              ----------      ----------------    --


                              Very truly yours,

                              FLOWPOINT CORP.



                              By:
                                 ---------------------------------
                                  Duly authorized on behalf of
                                  the Board of Directors


ATTACHMENTS:

     FlowPoint Corp. 1994 Stock Option Plan
     Regulation 260.141.11
     Notice of Exercise

                                      -4-
<PAGE>
 
The undersigned:

     (a) Acknowledges receipt of the foregoing option and the attachments
referenced therein and understands that all rights and liabilities with respect
to this option are set forth in the option and the Plan; and

     (b) Acknowledges that as of the date of grant of this option, it sets forth
the entire understanding between the undersigned optionee and the Company and
its affiliates regarding the acquisition of stock in the Company and supersedes
all prior oral and written agreements on that subject with the exception of (i)
the options previously granted and delivered to the undersigned under stock
option plans of the Company, and (ii) the following agreements only:

     NONE
         ----------------------
          (Initial)

     OTHER
           ---------------------------------

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

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

     (c) Acknowledges receipt of a copy of Section 260.141.11 of Title 10 of the
California Code of Regulations.


 
                              
                              ---------------------------------
                              FIELD(1), OPTIONEE

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

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

                                      -5-
<PAGE>
 
                               NOTICE OF EXERCISE



FLOWPOINT CORP.
180 Knowles Drive, Suite 100
Los Gatos, CA  95030  Date of Exercise:  ____________________


Ladies and Gentlemen:

     This constitutes notice under my stock option that I elect to purchase the
number of shares for the price set forth below.

     Type of option (check one):         Incentive [ ]        Nonstatutory [ ]

     Stock option dated:
                                      ----------------------

     Number of shares as
     to which option is
     exercised:
                                      ----------------------

     Certificates to be
     issued in name of:
                                      ----------------------

     Total exercise price:            $
                                      ----------------------

     Cash payment delivered
     herewith:                        $
                                      ----------------------


     By this exercise, I agree (i) to provide such additional documents as you
may require pursuant to the terms of the FlowPoint Corp. 1994 Stock Option Plan,
(ii) to provide for the payment by me to you (in the manner designated by you)
of your withholding obligation, if any, relating to the exercise of this option,
and (iii) if this exercise relates to an incentive stock option, to notify you
in writing within fifteen (15) days after the date of any disposition of any
shares of Common Stock issued upon exercise of this option that occurs within
two (2) years after the date of grant of this option or within one (1) year
after such shares of Common Stock are issued upon exercise of this option.

     I hereby make the following certifications and representations with respect
to the number of shares of Common Stock of the Company listed above (the
"Shares"), which are being acquired by me for my own account upon exercise of
the Option as set forth above:

     I acknowledge that the Shares have not been registered under the Securities
Act of 1933, as amended (the "Act"), and are deemed to constitute "restricted
securities" under Rule 701 and 

                                      -6-
<PAGE>
 
"control securities" under Rule 144 promulgated under the Act. I warrant and
represent to the Company that I have no present intention of distributing or
selling said Shares, except as permitted under the Act and any applicable state
securities laws.

     I further acknowledge that I will not be able to resell the Shares for at
least ninety days after the stock of the Company becomes publicly traded (i.e.,
subject to the reporting requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934) under Rule 701 and that more restrictive conditions apply
to affiliates of the Company under Rule 144.

     I further acknowledge that all certificates representing any of the Shares
subject to the provisions of the Option shall have endorsed thereon appropriate
legends reflecting the foregoing limitations, as well as any legends reflecting
restrictions pursuant to the Company's Articles of Incorporation, Bylaws and/or
applicable securities laws.

     I further agree that, if required by the Company (or a representative of
the underwriters) in connection with the first underwritten registration of the
offering of any securities of the Company under the Act, I will not sell or
otherwise transfer or dispose of any shares of Common Stock or other securities
of the Company during such period (not to exceed one hundred eighty (180) days)
following the effective date of the registration statement of the Company filed
under the Act (the "Effective Date") as may be requested by the Company or the
representative of the underwriters. For purposes of this restriction I will be
deemed to own securities that (i) are owned directly or indirectly by me,
including securities held for my benefit by nominees, custodians, brokers or
pledgees; (ii) may be acquired by me within sixty (60) days of the Effective
Date; (iii) are owned directly or indirectly, by or for my brothers or sisters
(whether by whole or half blood), spouse, ancestors and lineal descendants; or
(iv) are owned, directly or indirectly, by or for a corporation, partnership,
estate or trust of which I am a shareholder, partner or beneficiary, but only to
the extent of my proportionate interest therein as a shareholder, partner or
beneficiary thereof.  I further agree that the Company may impose stop-transfer
instructions with respect to securities subject to the foregoing restrictions
until the end of such period.

                              Very truly yours,


 
                              ---------------------------------
                              FIELD(1)



 

                                      -7-