Exhibit 99.3

                            SHARPER IMAGE CORPORATION

                             STOCK OPTION AGREEMENT

RECITALS

         A. The Board has  adopted  the Plan for the  purpose of  retaining  the
services of selected Employees,  non-employee members of the Board (or the board
of directors of any Parent or Subsidiary) and consultants and other  independent
advisors who provide services to the Corporation (or any Parent or Subsidiary).

         B. Optionee is to render  valuable  services to the  Corporation  (or a
Parent or  Subsidiary),  and this  Agreement  is  executed  pursuant  to, and is
intended  to  carry  out the  purposes  of,  the  Plan in  connection  with  the
Corporation's grant of an option to Optionee.

         C. All  capitalized  terms in this  Agreement  shall  have the  meaning
assigned to them in the attached Appendix.

                  NOW, THEREFORE, it is hereby agreed as follows:

                  1. Grant of Option. The Corporation hereby grants to Optionee,
as of the Grant Date,  an option to  purchase up to the number of Option  Shares
specified in the Grant Notice.  The Option Shares shall be purchasable from time
to time during the option term specified in Paragraph 2 at the Exercise Price.

                  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 or 6.

                  3. Limited Transferability.

                           (a) This  option  shall be neither  transferable  nor
assignable by Optionee other than by will or the laws of  inheritance  following
Optionee's  death and may be  exercised,  during  Optionee's  lifetime,  only by
Optionee. However, Optionee may designate one or more persons as the beneficiary
or beneficiaries of this option,  and this option shall, in accordance with such
designation,  automatically  be transferred to such beneficiary or beneficiaries
upon the  Optionee's  death while  holding  this  option.  Such  beneficiary  or
beneficiaries  shall take the  transferred  option  subject to all the terms and
conditions of this Agreement,  including  (without  limitation) the limited time
period  during  which this option may,  pursuant to  Paragraph  5, be  exercised
following Optionee's death.

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                           (b) If this  option  is  designated  a  Non-Statutory
Option in the Grant Notice, then this option may be assigned in whole or in part
during  Optionee's  lifetime to one or more members of Optionee's family or to a
trust  established for the exclusive  benefit of one or more such family members
or to Optionee's  former spouse,  to the extent such assignment is in connection
with the Optionee's  estate plan or pursuant to a domestic  relations order. The
assigned  portion shall be exercisable only by the person or persons who acquire
a  proprietary  interest in the option  pursuant to such  assignment.  The terms
applicable to the assigned portion shall be the same as those in effect for this
option immediately prior to such assignment.

                  4. Dates of Exercise. This option shall become exercisable for
the Option Shares in one or more  installments as specified in the Grant Notice.
As the option becomes  exercisable  for such  installments,  those  installments
shall  accumulate,  and the option shall remain  exercisable for the accumulated
installments  until the Expiration Date or sooner termination of the option term
under Paragraph 5 or 6.

                  5.  Cessation  of  Service.   The  option  term  specified  in
Paragraph  2 shall  terminate  (and this option  shall cease to be  outstanding)
prior to the  Expiration  Date  should any of the  following  provisions  become
applicable:

                           (a) Should  Optionee  cease to remain in Service  for
any reason (other than death,  Permanent Disability or Misconduct) while holding
this option,  then Optionee shall have a period of three (3) months  (commencing
with the date of such  cessation  of  Service)  during  which to  exercise  this
option,  but in no event shall this option be  exercisable at any time after the
Expiration Date.

                           (b) Should  Optionee  die while  holding this option,
then the personal  representative  of Optionee's estate or the person or persons
to whom the option is  transferred  pursuant to  Optionee's  will or the laws of
inheritance shall have the right to exercise this option.  However,  if Optionee
has  designated  one or more  beneficiaries  of this option,  then those persons
shall have the  exclusive  right to exercise  this option  following  Optionee's
death. Any such right to exercise this option shall lapse, and this option shall
cease to be  outstanding,  upon the earlier of (i) the  expiration of the twelve
(12)-month  period  measured  from  the  date of  Optionee's  death  or (ii) the
Expiration Date.

                           (c)  Should  Optionee  cease  Service  by  reason  of
Permanent  Disability  while  holding this option,  then  Optionee  shall have a
period of twelve  (12) months  (commencing  with the date of such  cessation  of
Service) during which to exercise this option.  In no event shall this option be
exercisable at any time after the Expiration Date.

                           (d)  During  the  limited   period  of   post-Service
exercisability,  this option may not be exercised in the aggregate for more than
the number of Option Shares for which the option is  exercisable  at the time of
Optionee's  cessation of Service.  Upon the expiration of such limited  exercise
period or (if earlier) upon the Expiration Date, this option shall terminate and

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cease to be outstanding for any  exercisable  Option Shares for which the option
has not been exercised.  However, this option shall, immediately upon Optionee's
cessation of Service for any reason,  terminate and cease to be outstanding with
respect to any Option Shares for which this option is not otherwise at that time
exercisable.

                           (e)  Should  Optionee's  Service  be  terminated  for
Misconduct or should  Optionee  otherwise  engage in any  Misconduct  while this
option is outstanding, then this option shall terminate immediately and cease to
remain outstanding.

                  6. Special Acceleration of Option.

                           (a) This  option,  to the extent  outstanding  at the
time of a Corporate  Transaction  but not  otherwise  fully  exercisable,  shall
automatically  accelerate  so that this option shall,  immediately  prior to the
effective date of such Corporate Transaction,  become exercisable for all of the
Option Shares at the time subject to this option and may be exercised for any or
all of those Option Shares as fully vested shares of Common Stock. However, this
option shall not become  exercisable on such an accelerated basis, if and to the
extent: (i) this option is, in connection with the Corporate Transaction,  to be
assumed by the successor  corporation (or parent thereof) or (ii) this option is
to be replaced with a cash incentive program of the successor  corporation which
preserves the spread  existing at the time of the Corporate  Transaction  on any
Option  Shares for which this option is not  otherwise at that time  exercisable
(the excess of the Fair Market Value of those Option  Shares over the  aggregate
Exercise  Price payable for such shares) and provides for  subsequent  payout in
accordance  with the same  option  exercise/vesting  schedule  for those  Option
Shares set forth in the Grant Notice.

                           (b) Immediately following the Corporate  Transaction,
this option shall  terminate and cease to be  outstanding,  except to the extent
assumed by the successor  corporation (or parent thereof) in connection with the
Corporate Transaction.

                           (c) If this  option is assumed in  connection  with a
Corporate  Transaction,  then  this  option  shall  be  appropriately  adjusted,
immediately after such Corporate  Transaction,  to apply to the number and class
of securities which would have been issuable to Optionee in consummation of such
Corporate  Transaction had the option been exercised  immediately  prior to such
Corporate  Transaction,  and appropriate  adjustments  shall also be made to the
Exercise Price,  provided the aggregate Exercise Price shall remain the same. To
the extent the actual  holders of the  Corporation's  outstanding  Common  Stock
receive  cash  consideration  for  their  Common  Stock in  consummation  of the
Corporate  Transaction,  the successor  corporation  may, in connection with the
assumption of this option, substitute one or more shares of its own common stock
with a fair market value equivalent to the cash  consideration paid per share of
Common Stock in such Corporate Transaction.

                           (d) This  Agreement  shall not in any way  affect the
right of the Corporation 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.

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                  7.  Adjustment in Option Shares.  Should any change be made to
the Common Stock by reason of any stock split, stock dividend, recapitalization,
combination  of  shares,  exchange  of  shares  or other  change  affecting  the
outstanding  Common  Stock  as a class  without  the  Corporation's  receipt  of
consideration,  appropriate  adjustments  shall be made to (i) the total  number
and/or class of securities subject to this option and (ii) the Exercise Price in
order to reflect such change and thereby  preclude a dilution or  enlargement of
benefits hereunder.

                  8.  Stockholder  Rights.  The holder of this option  shall not
have any stockholder  rights with respect to the Option Shares until such person
shall have exercised the option,  paid the Exercise Price and become a holder of
record of the purchased shares.

                  9. Manner of Exercising Option.

                           (a) In order to exercise  this option with respect to
all or any part of the  Option  Shares  for  which  this  option  is at the time
exercisable,  Optionee  (or any other person or persons  exercising  the option)
must take the following actions:

                               (i)  Execute  and  deliver to the  Corporation  a
         Notice of  Exercise  for the  Option  Shares  for  which the  option is
         exercised.

                               (ii) Pay the  aggregate  Exercise  Price  for the
         purchased shares in one or more of the following forms:

                                    (A)  cash  or  check  made  payable  to  the
                  Corporation;

                                    (B)  a   promissory   note  payable  to  the
                  Corporation,  but only to the  extent  authorized  by the Plan
                  Administrator in accordance with Paragraph 13;

                                    (C) shares of Common  Stock held by Optionee
                  (or any other person or persons exercising the option) for the
                  requisite   period   necessary   to  avoid  a  charge  to  the
                  Corporation's  earnings for financial  reporting  purposes and
                  valued at Fair Market Value on the Exercise Date; or

                                    (D)  through a special  sale and  remittance
                  procedure  pursuant to which  Optionee (or any other person or
                  persons  exercising  the option)  shall  concurrently  provide
                  irrevocable   instructions  (i)  to  a  Corporation-designated
                  brokerage  firm to effect the immediate  sale of the purchased
                  shares and remit to the Corporation,  out of the sale proceeds
                  available on the settlement  date,  sufficient  funds to cover
                  the aggregate  Exercise Price payable for the purchased shares
                  plus all

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<PAGE>


                  applicable  Federal,  state and local  income  and  employment
                  taxes required to be withheld by the  Corporation by reason of
                  such  exercise  and (ii) to the  Corporation  to  deliver  the
                  certificates   for  the  purchased  shares  directly  to  such
                  brokerage firm in order to complete the sale.

                           Except  to  the  extent   the  sale  and   remittance
                  procedure is utilized in connection with the option  exercise,
                  payment of the  Exercise  Price must  accompany  the Notice of
                  Exercise  delivered to the  Corporation in connection with the
                  option exercise.

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

                               (iv)  Make  appropriate   arrangements  with  the
         Corporation (or Parent or Subsidiary  employing or retaining  Optionee)
         for the  satisfaction  of all  Federal,  state  and  local  income  and
         employment  tax  withholding  requirements  applicable  to  the  option
         exercise.

                           (b) As soon as practical after the Exercise Date, the
Corporation  shall  issue to or on behalf of  Optionee  (or any other  person or
persons  exercising this option) a certificate for the purchased  Option Shares,
with the appropriate legends affixed thereto.

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

                  10. Compliance with Laws and Regulations.

                           (a) The  exercise of this option and the  issuance of
the Option  Shares  upon such  exercise  shall be subject to  compliance  by the
Corporation  and  Optionee  with all  applicable  requirements  of law  relating
thereto and with all applicable regulations of any stock exchange (or the Nasdaq
National  Market,  if  applicable)  on which the Common  Stock may be listed for
trading at the time of such exercise and issuance.

                           (b)  The  inability  of  the  Corporation  to  obtain
approval from any regulatory body having  authority deemed by the Corporation to
be  necessary to the lawful  issuance  and sale of any Common Stock  pursuant to
this option shall relieve the  Corporation  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  Corporation,  however,  shall use its best efforts to
obtain all such approvals.

                  11.  Successors  and Assigns.  Except to the extent  otherwise
provided in Paragraphs 3 and 6, the provisions of this Agreement  shall inure to
the benefit of, and be binding upon,  the  Corporation  and its  successors  and
assigns and Optionee,  Optionee's assigns, the legal representatives,  heirs and
legatees of Optionee's estate and any beneficiaries of this option designated by
Optionee.

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<PAGE>

                  12.  Notices.  Any notice required to be given or delivered to
the  Corporation  under  the terms of this  Agreement  shall be in  writing  and
addressed to the  Corporation  at its principal  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 the
Grant Notice.  All notices shall be deemed  effective upon personal  delivery or
upon deposit in the U.S.  mail,  postage  prepaid and properly  addressed to the
party to be notified.

                  13.  Financing.  The Plan  Administrator  may, in its absolute
discretion  and  without any  obligation  to do so,  permit  Optionee to pay the
Exercise  Price for the  purchased  Option  Shares (to the extent such  Exercise
Price  is in  excess  of  the  par  value  of  those  shares)  by  delivering  a
full-recourse promissory note payable to the Corporation.  The terms of any such
promissory  note (including the interest rate, the  requirements  for collateral
and the terms of repayment)  shall be established by the Plan  Administrator  in
its sole discretion.

                  14.  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 terms 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.

                  15.  Governing  Law.  The   interpretation,   performance  and
enforcement  of this  Agreement  shall be  governed  by the laws of the State of
California without resort to that State's conflict-of-laws rules.

                  16.  Excess  Shares.  If the  Option  Shares  covered  by this
Agreement  exceed,  as of the Grant Date,  the number of shares of Common  Stock
which may  without  stockholder  approval  be issued  under the Plan,  then this
option  shall be void with respect to those excess  shares,  unless  stockholder
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
the Plan.

                  17. Additional Terms Applicable to an Incentive Option. In the
event this option is  designated an Incentive  Option in the Grant  Notice,  the
following terms and conditions shall also apply to the grant:

                           (a) This option shall cease to qualify for  favorable
tax  treatment  as an  Incentive  Option if (and to the  extent)  this option is
exercised  for one or more Option  Shares:  (A) more than three (3) months after
the date  Optionee  ceases to be an Employee  for any reason other than death or
Permanent Disability or (B) more than twelve (12) months after the date Optionee
ceases to be an Employee by reason of Permanent Disability.

                           (b) No  installment  under this option shall  qualify
for favorable  tax  treatment as an Incentive  Option if (and to the extent) the
aggregate  Fair Market Value  (determined at the Grant Date) of the Common Stock
for which such installment first becomes exercisable hereunder would, when added
to the aggregate value  (determined as of the respective date or dates of grant)
of the  Common  Stock or other  securities  for which  this  option or any other

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<PAGE>

Incentive Options granted to Optionee prior to the Grant Date (whether under the
Plan or any other option plan of the  Corporation  or any Parent or  Subsidiary)
first  become  exercisable  during the same  calendar  year,  exceed One Hundred
Thousand Dollars  ($100,000) in the aggregate.  Should such One Hundred Thousand
Dollar ($100,000) limitation be exceeded in any calendar year, this option shall
nevertheless become exercisable for the excess shares in such calendar year as a
Non-Statutory Option.

                           (c)  Should  the  exercisability  of this  option  be
accelerated  upon a Corporate  Transaction,  then this option shall  qualify for
favorable tax treatment as an Incentive  Option only to the extent the aggregate
Fair Market Value  (determined  at the Grant Date) of the Common Stock for which
this  option  first  becomes  exercisable  in the  calendar  year in  which  the
Corporate  Transaction  occurs  does  not,  when  added to the  aggregate  value
(determined as of the respective  date or dates of grant) of the Common Stock or
other  securities for which this option or one or more other  Incentive  Options
granted to Optionee prior to the Grant Date (whether under the Plan or any other
option  plan of the  Corporation  or any  Parent  or  Subsidiary)  first  become
exercisable  during the same calendar year,  exceed One Hundred Thousand Dollars
($100,000) in the aggregate.  Should the applicable One Hundred  Thousand Dollar
($100,000)  limitation  be  exceeded  in the  calendar  year of  such  Corporate
Transaction,  the option may  nevertheless be exercised for the excess shares in
such calendar year as a Non-Statutory Option.

                           (d) Should Optionee hold, in addition to this option,
one or more other options to purchase Common Stock which become  exercisable for
the first time in the same  calendar  year as this  option,  then the  foregoing
limitations on the  exercisability of such options as Incentive Options shall be
applied on the basis of the order in which such options are granted.

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<PAGE>


                                    EXHIBIT I

                               NOTICE OF EXERCISE

                  I hereby notify Sharper Image Corporation (the  "Corporation")
that I elect to purchase ______________ shares of the Corporation's Common Stock
(the  "Purchased  Shares")  at the  option  exercise  price of $ per share  (the
"Exercise  Price") pursuant to that certain option (the "Option")  granted to me
under the Corporation's 2000 Stock Incentive Plan on ________________ , _______.

                  Concurrently  with the delivery of this Exercise Notice to the
Corporation,  I shall hereby pay to the  Corporation  the Exercise Price for the
Purchased  Shares in accordance  with the  provisions  of my agreement  with the
Corporation  (or other  documents)  evidencing  the  Option  and  shall  deliver
whatever  additional  documents may be required by such agreement as a condition
for exercise.  Alternatively,  I may utilize the special  broker-dealer sale and
remittance procedure specified in my agreement to effect payment of the Exercise
Price.

--------------------, -------
Date

                                                 -------------------------------
                                                 Optionee

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

                                                 -------------------------------
Print name in exact manner
it is to appear on the
stock certificate:
                                                 -------------------------------
Address to which
certificate is to be
sent, if different from
address above:
                                                 -------------------------------

                                                 -------------------------------
Social Security Number:
                                                 -------------------------------


<PAGE>

                                    APPENDIX

                  The  following  definitions  shall  be  in  effect  under  the
Agreement:

         A. Agreement shall mean this Stock Option Agreement.

         B. Board shall mean the Corporation's Board of Directors.

         C. Common Stock shall mean shares of the Corporation's common stock.

         D. Code shall mean the Internal Revenue Code of 1986, as amended.

         E.   Corporate   Transaction   shall  mean  either  of  the   following
stockholder-approved transactions to which the Corporation is a party:

                  (i) a merger or consolidation  in which securities  possessing
         more than fifty percent (50%) of the total combined voting power of the
         Corporation's  outstanding  securities  are  transferred to a person or
         persons different from the persons holding those securities immediately
         prior to such transaction, or

                  (ii)  the  sale,  transfer  or  other  disposition  of  all or
         substantially all of the Corporation's  assets in complete  liquidation
         or dissolution of the Corporation.

         F.  Corporation  shall  mean  Sharper  Image  Corporation,  a  Delaware
corporation,  and any successor  corporation to all or substantially  all of the
assets or voting stock of Sharper Image  Corporation  which shall by appropriate
action adopt the Plan.

         G.  Employee  shall  mean an  individual  who is in the  employ  of the
Corporation (or any Parent or Subsidiary),  subject to the control and direction
of the employer  entity as to both the work to be  performed  and the manner and
method of performance.

         H.  Exercise  Date shall  mean the date on which the option  shall have
been exercised in accordance with Paragraph 9 of the Agreement.

         I.  Exercise  Price shall mean the  exercise  price per Option Share as
specified in the Grant Notice.

         J.  Expiration  Date shall mean the date on which the option expires as
specified in the Grant Notice.

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<PAGE>

         K. Fair Market  Value per share of Common  Stock on any  relevant  date
shall be determined in accordance with the following provisions:

                  (i) If the  Common  Stock is at the time  traded on the Nasdaq
         National  Market,  then the Fair Market  Value shall be deemed equal to
         the  closing  selling  price per  share of Common  Stock on the date in
         question,  as the price is  reported  by the  National  Association  of
         Securities  Dealers on the Nasdaq  National Market and published in The
         Wall  Street  Journal.  If there is no  closing  selling  price for the
         Common Stock on the date in question,  then the Fair Market Value shall
         be the closing  selling price on the last preceding date for which such
         quotation exists, or

                  (ii) If the  Common  Stock is at the time  listed on any Stock
         Exchange,  then the Fair  Market  Value  shall be  deemed  equal to the
         closing selling price per 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 and published in
         The Wall Street  Journal.  If there is no closing selling price for the
         Common Stock on the date in question,  then the Fair Market Value shall
         be the closing  selling price on the last preceding date for which such
         quotation exists.

         L. Grant  Date shall mean the date of grant of the option as  specified
in the Grant Notice.

         M.  Grant  Notice  shall  mean the  Notice  of  Grant  of Stock  Option
accompanying the Agreement,  pursuant to which Optionee has been informed of the
basic terms of the option evidenced hereby.

         N.  Incentive   Option  shall  mean  an  option  which   satisfies  the
requirements of Code Section 422.

         O.  Misconduct   shall  mean  the  commission  of  any  act  of  fraud,
embezzlement or dishonesty by Optionee,  any  unauthorized  use or disclosure by
Optionee of confidential information or trade secrets of the Corporation (or any
Parent or Subsidiary), or any other intentional misconduct by Optionee adversely
affecting  the  business  or  affairs  of the  Corporation  (or  any  Parent  or
Subsidiary) in a material manner.  The foregoing  definition shall not be deemed
to be  inclusive  of all the acts or  omissions  which the  Corporation  (or any
Parent or Subsidiary)  may consider as grounds for the dismissal or discharge of
Optionee  or any other  individual  in the  Service of the  Corporation  (or any
Parent or Subsidiary).

         P.  Non-Statutory  Option  shall mean an option not intended to satisfy
the requirements of Code Section 422.

         Q.  Notice of  Exercise  shall mean the notice of  exercise in the form
attached hereto as Exhibit I.

                                      A-2


         R.  Option  Shares  shall  mean the  number of  shares of Common  Stock
subject to the option as specified in the Grant Notice.

         S.  Optionee  shall  mean the  person to whom the  option is granted as
specified in the Grant Notice.

         T. Parent shall mean any corporation (other than the Corporation) in an
unbroken  chain of  corporations  ending  with the  Corporation,  provided  each
corporation in the unbroken chain (other than the Corporation) 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.

         U. Permanent  Disability shall mean the inability of Optionee to engage
in any  substantial  gainful  activity by reason of any  medically  determinable
physical or mental impairment which is expected to result in death or has lasted
or can be  expected  to last for a  continuous  period of twelve  (12) months or
more.

         V. Plan shall mean the Corporation's 2000 Stock Incentive Plan.

         W. Plan Administrator shall mean either the Board or a committee of the
Board acting in its capacity as administrator of the Plan.

         X. Service shall mean the  Optionee's  performance  of services for the
Corporation  (or any Parent or  Subsidiary)  in the capacity of an  Employee,  a
non-employee  member of the board of directors or a  consultant  or  independent
advisor.

         Y. Stock  Exchange  shall mean the American  Stock  Exchange or the New
York Stock Exchange.

         Z. Subsidiary  shall mean any corporation  (other than the Corporation)
in an unbroken chain of corporations  beginning with the  Corporation,  provided
each 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.

                                      A-3