Document:

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CONFIDENTIAL INFORMATION HAS BEEN OMITTED PURSUANT TO RULE 406 UNDER THE
SECURITIES ACT AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. THE LOCATIONS OF THE OMITTED INFORMATION HAVE BEEN INDICATED WITH
ASTERISKS.

                                                                   EXHIBIT 10.33

                                                            Contract No. _______
                                                            Page 1 of 15

                          DIRECT MARKETING AGREEMENT

                                  WITNESSETH:

That in consideration of the agreements expressed herein, Cellular Telephone
Company d/b/a AT&T Wireless Services, Northeast Region, ("AWS") having an office
at 15 East Midland Avenue, Paramus, New Jersey 07652 and Bronner Slosberg
Humphrey Inc., a corporation of the Commonwealth of Massachusetts ("Agency"),
having an office at 800 Boylston Street, The Prudential Tower, Boston,
Massachusetts 02199, do hereby agree as follows:

ARTICLE 1 - AGENCY SERVICES

The Agency shall act as AWS's direct marketing agency in the planning,
preparing, and placing of such direct communication programs (i.e. business to
business retention, consumer acquisition, marketing consulting, database
consulting and special projects) and marketing, as may be requested by AWS. The
Agency shall perform other services as AWS may request, as outlined in Article
30, subject to mutual written agreement of the parties.

Agency shall devote its best efforts, on behalf of AWS to further AWS's
interests and shall reasonably endeavor in every proper way to make AWS's direct
marketing and associated efforts, for which the Agency is herein responsible,
successful. To accomplish the foregoing, Agency specifically agrees that its
services shall include but not be limited to the following:

     A. Assigning and maintaining, with AWS's consent executive strategic input
        and review, an account management group, creative, systems and
        fulfillment, research and analysis, teleservices marketing, partnership
        marketing, production, media and traffic teams necessary to service the
        AWS account;

     B. Provide direct marketing services, including the creation, production
        and placement, insertion or distribution of direct mail and other direct
        communication programs;

     C. Attending meetings, as requested by AWS, with AWS's staff and periodic
        meetings with AWS's top management;

     D. Familiarizing itself with the business of AWS, its products and
        services, and the industry in which AWS operates; and analyzing the
        present and potential direct marketing opportunities for such products
        and services so as to provide AWS with direct marketing counsel,
        including specific direct marketing objectives, strategies and plans for
        reaching AWS's business objectives;

     E. Preparing layouts, copy, artwork, scripts and storyboards and furnishing
        other elements and materials to be used in finished advertisements for
        all media and promotions to be used by AWS;

     F. If requested, advising AWS of the availability of all broadcast,
        publication and out-of-home media which can appropriately be used to
        advertise AWS products and services; and developing media plans suitable
        for AWS;

     G. Supervising the production of all finished direct marketing material;
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     H.  Negotiating, arranging and contracting for any special talent required,
         with AWS's approval, and for all photography, models, special effects,
         layout, artwork and for all printing for use in the direct marketing
         promotions program; and making appropriate arrangements for tax
         withholdings from talent;

     I. Analyzing direct marketing, marketing and consumer research to aid AWS
        in developing advertising strategy and developing and evaluating AWS's
        direct marketing and media;

     J. Conducting and analyzing competitive direct marketing tracking.

The above services shall be performed to the satisfaction of AWS, shall be
performed in accordance with the highest professional standards and shall be in
accordance with such requirements or restrictions as may be lawfully imposed by
governmental authority. Services not completed to the reasonable satisfaction of
AWS shall be reperformed at no cost to AWS.

ARTICLE 2 - APPROVALS BEFORE COMMITMENT

No commitment of any kind shall be made by the Agency on behalf of AWS unless
specifically authorized in writing by AWS, except as provided in Article 3
(Estimates).

The Agency shall submit concepts, scripts, print copy and other materials as
early as possible to AWS for internal review and required legal and technical
approval.

ARTICLE 3 - ESTIMATES

The Agency shall furnish to AWS, in writing and in advance, labor fee and a cost
estimate of all expenditures in connection with all services and projects
recommended by Agency or requested by AWS. Prior to undertaking such projects or
committing AWS's funds, Agency shall obtain written authorization from AWS.
Agency shall furnish revisions of these estimates when changes in costs are
anticipated in excess of ten percent (10%), plus or minus. Each estimate as
approved by AWS shall be executed by both parties. Approved estimates shall
constitute the only authorization for the Agency to take any action, make any
commitments or expend any money. In those situations where time or circumstances
will not permit specific prior written authorization, commitments to exceed
$10,000.00 may be made with oral approval, provided such approval shall be
confirmed by an approved written estimate no later than ten (10) working days
thereafter.

ARTICLE 4 - DISCOUNTS

Agency shall obtain all prompt payment or other similar discounts available to
it from media and other suppliers from which it makes purchases in the
performance of the services hereunder. When Agency receives a cash discount,
rebate, frequency discount, volume discount, promotional consideration, or other
similar credit from such media or other suppliers, AWS shall receive full
allowance for each such amount, provided Agency, after timely notification,
receives payment from AWS within the applicable discount period.

ARTICLE 5 - ANNUAL REVIEW

An annual review shall take place during the first quarter (January - March) of
each calendar year for the review of the previous year's performance, to be
attended by appropriate AWS management representatives and by Agency management
and senior members of the AWS agency group. The purpose of this review will be
to determine the appropriate Agency bonus based on previous year's business
results. There will also be a mid-year review that addresses the quality of
Agency
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   services and account management. AWS and the Agency will mutually agree on
   any corrective actions needed.

   ARTICLE 6. DEFINITIONS

 A.   "Gross Revenue" as used herein shall mean the total amount of
      compensation, exclusive of pass-through costs, the Agency receives from
      AWS for direct marketing services performed after reconciliation and any
      rebates or supplementary fees are paid.

 B.   "Annual Salary" as used herein shall mean annual base salary, excluding
      bonuses. It does not include employer paid FICA, insurance and medical
      benefits or payments into retirement plans.

 C.   "Direct Salaries" as used herein shall mean the [***] of [***] (including
      [***]) in [***], [***] (including [***] and [***]), [***], [***]
      (including [***]) and [***], [***] and [***], [***], [***] and [***] on
      the [***] which are [***] to the [***].

      1. [***] for an individual who works on the AWS account is to be computed
         as follows:

             [***] multiplied by the [***] of [***] on the [***] divided by the
             [***] of [***] on any [***].

         [***] on Agency business means [***] on any [***] and on [***] and
         other [***]. It does not include [***], [***] or [***].

      2. At AWS's option, such option to be obtained by the Agency in writing
         from AWS, AWS may elect to "buy-out" designated individuals. For those
         individuals bought out by AWS, AWS shall be responsible for that
         person's total annual base salary, excluding bonuses.

  D.  "Profit Before Taxes" as used herein shall mean [***] minus [***], where
      [***] equals [***] X [***].

   ARTICLE 7 - AGENCY COMPENSATION

   A. Agency compensation for the calendar year shall be computed as follows:

      1.  During the last quarter of the previous calendar year, AWS and the
          Agency shall meet to determine:

          a. The account staffing (including all functions as defined in Article
             6, Paragraph C) for the AWS account for the next calendar year.

          b. The aggregate Direct Salaries, as defined herein, of the agreed
             upon account staff.

      2. The fee for the calendar year is then [***] X [***] X [***].

CONFIDENTIAL INFORMATION HAS BEEN OMITTED PURSUANT TO RULE 406 UNDER THE
SECURITIES ACT AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. THE LOCATIONS OF THE OMITTED INFORMATION HAVE BEEN INDICATED WITH
ASTERISKS.

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      3. For 1997 the yearly fee is estimated at [***]. Any increase or
         decrease in the estimated fee will require AWS approval. For each
         subsequent year, the yearly fee shall be mutually agreed upon by the
         parties in writing and attached as an amendment hereto.

     4.  For 1997 the Agency's average rates range between [***] and [***]
         per hour for marketing communications and planning. There will be
         additional projects that will fall outside of this range that involve
         operational enablement work beyond marketing communications (i.e.
         database support, customer care assessments, etc.).

 B.   [***] (expressed as a [***] of [***]) as herein defined shall be based on
      [***] of [***] for the [***] based on [***] in [***] to [***] its [***].
      The specific criteria for evaluation shall be mutually agreed upon by the
      parties.

      Based on the Agency's performance in assisting AWS to meet its stated
      goals, the Agency shall be allowed a bonus based on an agreed upon formula
      attached hereto as Schedule I.

 C.   AWS shall pay the Agency on dates to be mutually agreed upon by the
      parties.

 D.   If for any reason Agency anticipates exceptional increases in Direct
      Salaries during any quarter of the year, a meeting between Agency and AWS
      shall be called by the Agency to discuss what action should be taken while
      still providing AWS with needed services.

 E.   If for any reason AWS expects the direct marketing budget to decline or
      increase significantly above or below the anticipated budget for the year,
      AWS will notify Agency of this change as soon as possible.

 F.   AWS agrees to reimburse the Agency directly for reasonable direct client
      service expenses (i.e. out of pocket expenses of Agency related to the AWS
      account), including travel and living expenses authorized by AWS and
      incurred in connection with this Agreement. Reimbursement for travel and
      living expenses shall be in accordance with the following guidelines:

      1. Transportation

         a.  Airline Tickets - Agency will be reimbursed for air fare that has
             been purchased at coach fare for domestic travel (business class is
             allowed for international flights over six (6) hours in duration).
             Agency employees may not request specific flights/carriers or
             arrange/alter travel plans to obtain airline promotional benefits.
             Agency employees traveling under first class status will be
             responsible for the expense difference incurred. The ticket stub
             must be presented and relate directly to the AWS assignment. Agency
             employees must account for all business related tickets whether
             used, partially used, or unused. Unused tickets should be promptly
             returned to the licensing travel agency for credit. Reimbursement
             will not be made for the purchase of travel insurance.

          b. Reasonable taxi, bus, rail or car rental expenses will be
             reimbursed along with associated receipts from tolls, tips, and
             parking fees will be reimbursed by AWS. For groups traveling to the
             same destination, special group fares should be utilized when
             available. Reimbursement for car rental expenses will be made upon
             presentation of a car rental agreement/receipt. Car rentals must be
             contracted at the lowest available rate and in the
             compact/subcompact category

CONFIDENTIAL INFORMATION HAS BEEN OMITTED PURSUANT TO RULE 406 UNDER THE
SECURITIES ACT AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. THE LOCATIONS OF THE OMITTED INFORMATION HAVE BEEN INDICATED WITH
ASTERISKS.

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       where possible, unless special requirements dictate otherwise, in which
       cases AWS prior approval is required. For more than two people, a mid-
       size rental is acceptable, however, names of the people must be indicated
       on the car rental receipt. Taxis, shuttles and other available forms of
       transportation should be used where it is more practical or less
       expensive.

       AWS will not reimburse car rental refueling charges.

       Cab fares for "late nights" (after 8 PM) are billable.

   c.  A mileage allowance, as approved yearly by the IRS, will be reimbursed to
       Agency employees who use their own personal automobiles for services
       provided on behalf of AWS. Allowable mileage is determined by deducting
       the normal commuting mileage.

   When traveling, use public transportation as a first choice, personal car as
   a second choice, and car rental as the last choice.

2. Lodging - Business class hotels should be utilized by Agency employees unless
   another kind of hotel better meets the Agency employees needs at a lower
   rate. Agency shall only invoice hotel expenses that are directly related to
   the work performed under this Agreement. Expenses incurred at hotels for AWS
   business related services (fax, typing, photocopying) are reimbursable. If
   accommodations are not needed, it is the responsibility of the Agency
   employee to ensure that the hotel is notified. "No show" bills will not be
   reimbursed.

3. Meals and Entertainment - Reasonable expenses for business meals and/or
   entertainment are reimbursable it the activities are directly related to AWS
   related services. Business entertainment must be directly related and
   conducive to the transaction of AWS related business and may precede or
   follow the conducting of AWS business related activities or discussion. The
   senior AWS representative must approve all such business entertainment in
   writing and in advance.

   Receipts for meal expenditures should be submitted for meal reimbursement.
   However, per diem meal allowances may be charged for meals, with no
   requirement for submitting receipts. The per diem meal allowances (including
   gratuities) are as follows:

          Breakfast        $ 5.00
          Lunch            $ 7.00
          Dinner           $25.00

          Daily Total      $37.00

   Normal reasonable and necessary gratuities up to 20% are reimbursable to the
   Agency employee. This would include, but is not limited to, tips for Airport
   Sky Caps, Hotel Bellboys, etc. Tips for meals should be listed individually
   for reimbursement.

   Overtime meals are not billable.
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 4. Business Calls - Business calls and faxes made on AWS's behalf while
    staying overnight are billable. Agency employees are encouraged to use a
    calling card whenever possible. Calls must list reason and person called
    and be on the AT&T Network. Personal calls are not billable.

 5. Personal Expenses - AWS will not reimburse personal expenses of Agency
    employees. If expenses of a personal nature (i.e., hotel/ship purchases,
    alcoholic beverages, telephone and long-distance charges, in-room movies,
    sundry items, etc.) are charged against the room, the amount will be
    deducted from the invoice presented to AWS. Personal expenses for
    laundry/valets, tips, etc. will be reimbursed where reasonable; up to a
    maximum of $10.00 per day.

 6. Magazines/Newspapers/Books are not billable unless specifically requested,
    in writing, by AWS.

 7. Services provided by Agency employees - For services requested by AWS, the
    Agency shall provide, as a maximum, the following number of people:

                                        Maximum Number of People

     a.      Location Shoots                      3
     b.      Press Runs                           1
     c.      Strategy Meetings                    *
     d.      Review Meetings                      *
     e.      Research Meetings (Focus Groups)     *

     * Agency shall obtain prior approval from AWS regarding the number of
       people to attend.

 The Agency shall submit copies of all hotel bills and other reimbursable
 expenses along with the associated charge receipt(s). Expenses shall be billed
 at cost and invoices for all reimbursable expenses shall list the date(s),
 company, person(s) visited and business purpose for the expense.

ARTICLE 8 - DURATION

The term of this Agreement shall begin on January 1, 1997 and shall continue
until terminated by either party for their convenience by giving ninety (90)
days written notice or as otherwise provided herein.

After expiration of the period of notice, no rights or liabilities shall arise
out of this relationship, regardless of any plans which may have been made for
future direct marketing promotions, except that: (1) if AWS terminates, any non-
cancelable contracts made on AWS's authorization (or any uncompleted work
previously approved by AWS either specifically or as part of a plan, and still
existing at the expiration of the period of notice), which contracts were not or
could not be assigned by the Agency to AWS or AWS's assignee, shall be carried
to completion by the Agency and paid for by AWS; and (2) if Agency terminates,
it shall be similarly responsible for any non-cancelable contracts unless AWS
chooses to assume such contracts. Upon termination of this Agreement, the Agency
shall transfer, assign, and make available to AWS, all property and materials in
the Agency's possession or control belonging to and paid for by AWS, and all
information regarding AWS's direct marketing. The Agency also agrees to give all
reasonable cooperation towards transferring, with the approval of third parties
in interest, all assignable reservations, contracts and agreements with direct
marketing media, or others, for advertising
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   space, broadcast time or materials yet to be used and all rights and claims
   thereto and therein, upon being duly released from the obligation thereof.
   Upon termination, unused direct marketing/promotional plans and ideas
   prepared by the Agency for AWS prior to the date of termination shall remain
   AWS's property.

   Except as otherwise specifically set forth, all the rights and liabilities of
   the parties arising out of this Agreement shall cease on the date of
   termination.

   ARTICLE 9. BILLING AND PAYMENT

   A.  Agency's bills for space in publications, outdoor and carcard
       advertising, and radio and TV time and talent shall be rendered to AWS in
       sufficient time to afford AWS a reasonable opportunity to remit funds to
       enable Agency to pay charges incurred for AWS's account on their due
       dates, and AWS agrees to pay such bills within the time herein specified
       for payment. Agency's bills for other items will be rendered to AWS from
       time to time; unless otherwise specified, AWS shall pay Agency 100% of
       all estimated Agency fee prior to the commencement of each project. AWS
       shall pay 70% of all reimbursable expenses in advance of project work and
       the remaining 30% of reimbursable expenses shall be invoiced upon
       completion of the particular project. Such bills will be due and payable
       within thirty (30) days from date thereof. Agency shall submit all media
       and other invoices in time for AWS to obtain customary cash discounts.
       All bills submitted to AWS by Agency shall be net of all commissions
       and/or markups.

       On a quarterly basis and again within ninety (90) days after the close of
       each project, Agency will prepare for review by AWS a fee and pass-
       through reconciliation for each project with appropriate credit/payment
       adjustments made. Agency will provide AWS with credits in the amount of
       any overpayment made by AWS for fee and reimbursable expenses.

       (i)   Fee reconciliations for direct marketing will reflect actual hours
             worked at each billing rate, by position, by department;

       (ii)  Fee reconciliations for advertising materials and deliverables will
             be supported by advertising and production summaries, including
             number of advertisements placed and number of units actually
             produced and shipped; and

       (iii) Pass-through reconciliations will be supported by vendor invoices
             (except summary compilations in the case of courier charges) and
             travel expense summary reports.

       All non-media billing charges shall be in accordance with Schedule II,
       attached hereto and made a part hereof. In no event shall AWS be liable
       for media or non-media bills unless the Agency submits such bills to AWS
       within three (3) months from the date in which costs were incurred.

   B.  Receipt or acceptance by AWS of any statement or invoice furnished
       pursuant hereto or any sums paid by AWS hereunder shall not preclude AWS
       from questioning the correctness thereof within two (2) years of the year
       in question, and if any inconsistencies or mistakes are discovered in
       such statements or payments, they shall be immediately rectified and
       prompt adjustments and corresponding payments shall be made to compensate
       thereof.

   C.  AWS agrees to pay any "short rates" with which AWS is justly charged by
       the media placed on AWS's behalf by Agency for any premature termination
       of a contract that is caused by AWS. Agency shall pay any "short rates"
       with which AWS is charged by media for any premature termination of a
       contract that is caused by Agency.
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   The Agency shall submit invoices for all work performed under this Agreement.
   Invoices against this Agreement shall indicate the work performed for which
   billing is rendered, shall be in accordance with approved estimates and shall
   be submitted in duplicate.

   ARTICLE 10 - NOTICES

   Any notice or demand which under the terms of this Agreement or under any
   statute must or may be given or made by Agency or AWS shall be in writing and
   shall be given or made by telegram, telex, confirmed facsimile or by
   certified or registered mail to the addresses noted in the first paragraph of
   this Agreement.

   Such notice or demand shall be deemed to have been given or made when sent by
   telegram, telex, or facsimile or when deposited, postage prepaid in the U.S.
   mail.

   ARTICLE 11 - TITLE

   A.  Except as set forth in Paragraph C below, all creative work and work
       products, including, but not limited to, direct marketing and/or
       marketing plans, media plans, ideas, and direct marketing materials
       developed by the Agency, or on Agency's behalf, for AWS in connection
       with this Agreement, and any and all copyrights therein are hereby
       assigned and agreed to be assigned by Agency to AWS and shall be and will
       remain the exclusive property of AWS, which may use any of such as it
       deems appropriate. All such work and work products shall be considered
       "works made for hire" to the extent allowed by law. Agency shall acquire
       for AWS from Agency subcontractors or others all such assignments, rights
       and covenants, and will furnish AWS with all such documentation, as, any
       of them, are needed in AWS's reasonable opinion to assure vesting in it
       of title to, and unrestricted ownership rights in, such work, work
       products and copyrights, and to perfect the enforceability of such
       copyrights.

       Should the Agency desire to use material developed for AWS for another
       client or for other business reasons it may request AWS's permission to
       do so. Granting of any such permission shall be at AWS's sole discretion.

   B.  If Agency furnishes AWS with materials previously copyrighted by Agency
       and not originally prepared hereunder, Agency hereby grants and agrees to
       grant to AWS unrestricted, non-exclusive, royalty-free licenses for all
       purposes under any and all copyrights in such materials, with the
       unrestricted right to grant such sublicenses under those licenses as AWS
       may see fit, to the extent that such materials are used in conjunction
       with any of the work and work products referred to in Paragraph A of this
       Article.

   C.  If AWS has consented to the inclusion of materials owned or copyrighted
       by others, or in which other rights may be claimed by others (and there
       shall be no such inclusion without AWS's prior consent), then the Agency
       shall notify AWS of the scope of the rights and permissions the Agency
       intends to obtain with respect to such materials and shall modify the
       scope of same as requested by AWS. Copies of all rights and permissions
       clearly identifying the included works to which they apply shall be
       supplied to AWS prior to program completion.

   D.  Agency warrants the originality of the work prepared for AWS hereunder
       (except if such work is in the public domain) and its disclosure to AWS
       exclusively and that, except as provided in Paragraphs B and C above, no
       portion of the material prepared for AWS under this Agreement is derived
       from copyrighted material.
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   E.  Agency undertakes that no part of the creative work or work products
       developed for AWS in connection with this Agreement, whether or not
       copyrightable, shall be disclosed to any persons or used by the Agency to
       produce creative materials for any persons other than AWS without the
       express written permission of AWS.

   F.  Agency shall retain all materials for two years or for such longer period
       as is necessary for purposes of carrying out Agency's obligations
       hereunder after which time they will be returned to AWS, placed in
       public storage at AWS's expense, or destroyed as requested by AWS.
       Agency shall safeguard and be responsible for all materials entrusted to
       it by or on behalf of AWS and shall return such materials to AWS upon
       request of AWS, and, in any event, as soon as practicable upon
       termination of this Agreement. Agency shall provide copies of materials
       requested by AWS to the extent necessary for AWS to litigate or negate
       claims or to handle proceedings before regulatory agencies.

   ARTICLE 12 - USE OF INFORMATION

   Except under the conditions stated in the next sentence, any materials and/or
   information furnished or disclosed by AWS or developed by the Agency
   hereunder is the property of and shall be deemed proprietary and confidential
   to AWS and shall be surrendered to AWS at the conclusion of this Agreement,
   or shall be destroyed if AWS shall so direct in writing. Unless such
   information or materials were previously known to the Agency free of any
   obligation to keep it confidential as agreed to by both parties, or is
   subsequently made public by AWS or by a third party having a legal right to
   make such disclosure, it shall be held in confidence by the Agency for a
   period of twenty (20) years, shall be used only for the purposes hereunder,
   and may be used for other purposes only upon such terms and conditions as
   may be mutually agreed upon in writing.

   ARTICLE 13 - EXCLUSIVITY AND RESERVATION OF RIGHTS        -

   A.  For the duration of this Agreement, including the period of notice prior
       to its effectiveness of termination, Agency and any of its constituent
       companies anywhere in the world shall not undertake any work for any of
       the following companies or their wireless subsidiaries or partnerships:
       Ameritech, Bell Atlantic, Bell South, British Telecom, IBM, MCI, NYNEX,
       Pacific Telesis, Southwestern Bell, Sprint or US West.

   B.  Further, Agency and any of its constituent companies shall not work for
       other companies that compete with any AWS unit unless at AWS sole
       discretion the Agency receives written approval from AWS and the
       following three (3) conditions are met:

       1. The non-AWS business is not competitive with the AWS account handled
          by the Agency.

       2. A "virtual wall" is erected so that none of the people working on
          AWS's business share any information with people working on the
          competitive account.

       3. The Agency understand that if the competitive company shifts its
          focus and strategy to become a strategic competitor, the Agency must
          then choose to work only for AWS or the competitor.

   ARTICLE 14 - AGENCY'S INFORMATION

   No specifications, drawings, sketches, models, samples, tools, computer or
   other apparatus programs, technical or business information or data, written,
   oral or otherwise, furnished by Agency to AWS under this Agreement, or in
   contemplation of this Agreement, shall be considered
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      by Agency to be confidential or proprietary unless subject matter so
      furnished is owned by AWS as defined and provided under the Article 11
      (Title) or Article 12 (Use of Information), contained herein.

      ARTICLE 15 - INDEMNIFICATION/INFRINGEMENT

      The Agency agrees to indemnify and save harmless AWS, its subsidiaries,
      affiliates and its customers and their officers, directors, employees
      successors and assigns (collectively referred to as "AWS") from and
      against the following claims, losses, suits, demands, or liens:

      A. Any tortious act, omission, or statement of the Agency or any person
         employed by or under contract with the Agency that results in injury
         (including death), loss or damage to any person or property, including
         libel, slander, and defamation;

      B. Injuries or death to persons or damage to property, including theft, in
         any way arising out of or occasioned by, caused or alleged to have been
         caused by or on account of the performance of the work or services
         performed by Agency or persons furnished by Agency, except to the
         extent such injury or damages are caused by AWS's sole negligence or
         willful misconduct;

      C. Any failure on the part of the Agency to satisfy all claims for labor,
         equipment, materials and other obligations relating to the performance
         of the work hereunder;

      D. Piracy, unfair competition, plagiarism, idea misappropriation under
         implied contract;

      E. Assertions under Worker's Compensation or similar acts made by persons
         furnished by Agency or by any subcontractor, or by reason of any
         injuries to such persons for which AWS would be responsible under
         Worker's Compensation or similar acts if the persons were employed by
         AWS;

      F. Any failure by the Agency to perform Agency's obligations under this
         clause or, Article 16 (Insurance); and

      G. Any act of infringement of any patent, trademark, or copyright; any
         title, slogan, or other trademark; or any unauthorized use of trade
         secret or other proprietary interest, except where such infringement or
         unauthorized use arises solely from Agency's adherence to AWS's written
         instructions which are so specific as to directly cause said
         infringement or unauthorized use, in which case AWS shall so indemnify
         Agency; provided however, if such instructions specify (1) commercial
         material which is available on the open market or is the same as such
         material or (2) material of Agency's origin, design or selection, and
         the adherence to such instructions results in the infringement or
         unauthorized use, then Agency shall indemnify AWS for any such
         infringement or unauthorized use.

      However, the indemnification in (A) shall not apply to claims for loss or
      damage to property arising solely from Agency's reasonable reliance upon
      the accuracy, completeness and propriety of information furnished by AWS
      concerning its and its competitors organization, products, industry and
      services in developing or producing work or work products under this
      Agreement.

      Each party shall defend or settle, at its own expense, any action or suit
      against the other for which it is responsible hereunder and shall
      reimburse the other for reasonable attorneys' fees, interest, costs of
      suit and all other expenses incurred by the other in connection therewith.
      Each party shall notify the other promptly of any claim for which the
      other is responsible hereunder and shall cooperate with the other in every
      reasonable way to facilitate the defense of any such claim.
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   ARTICLE 16. INSURANCE

   Agency shall maintain during the term of this Agreement (1) Worker's
   Compensation insurance as prescribed by the law of the state or nation in
   which the work is performed; (2) employer's liability insurance with limits
   of at least $300,000 for each occurrence; (3) comprehensive automobile
   liability insurance if the use of motor vehicles is required, with limits of
   at least $1,000,000 combined single limit for bodily injury and property
   damage for each occurrence; (4) Comprehensive General Liability ("CGL")
   insurance, including Advertiser's Liability and Blanket Contractual Liability
   and Broad Form Property damage, with limits of at least $5,000,000 combined
   single limit for personal injury and property damage for each occurrence. All
   CGL insurance shall designate AWS as an additional insured for work Agency
   performs for AWS. Agency shall cause its subcontractors to maintain insurance
   similar in form and amount as AWS shall approve, which approval shall not be
   reasonably withheld. All such insurance must be primary and required to
   respond and pay prior to any other available coverage.

   Agency agrees that Agency, Agency's insurer(s) and anyone claiming by,
   through, under or in Agency's behalf shall have no claim, right of action or
   right of subrogation against AWS and its customers based on any loss or
   liability insured against under the foregoing insurance. Agency shall furnish
   prior to the start of work certificates or adequate proof of the foregoing
   insurance. AWS shall be notified in writing at least thirty (30) days prior
   to cancellation of or any change in the policy.

   ARTICLE 17 - RELATIONSHIP

   The Agency shall exercise full control and direction over the employees of
   the Agency performing the work covered by this Agreement. Any changes in
   personnel performing services for AWS that may be reasonably requested by AWS
   through its authorized representative shall be made promptly.

   Neither the Agency nor its employees or agents shall be deemed to be AWS's
   employees or agents, it being fully understood that Agency employees are
   entitled to no benefits or compensation from AWS. It is understood that the
   Agency is an independent contractor for all purposes and at all times. The
   Agency is wholly responsible for withholding and payment of all applicable
   federal, state and local income and other payroll taxes with respect to its
   employees, including contributions from them as required by law. Agency
   agrees to indemnify, defend and hold AWS harmless from any claims made by
   Agency employees or former Agency employees, their heirs or assigns, against
   AWS for direct compensation, including salaries and bonuses, or for any
   benefits such as medical, dental, life insurance or pension benefits.

   ARTICLE 18 - SUBCONTRACTS

   The Agency shall be responsible for informing subcontractors of their
   responsibility to protect any confidential and proprietary information
   included in any work subcontracted hereunder, and Agency shall undertake all
   necessary precautions to insure that each subcontractor is in compliance with
   this Article. This Agreement is not intended to create any legal rights or
   interests as to persons not directly a party hereto. In accordance with this
   understanding, Agency shall remain fully, directly and solely responsible for
   all expenses it incurs of any nature whatsoever and shall indemnify, defend
   and hold AWS harmless from any and all claims made against AWS by persons not
   a party to this Agreement for non-payment of such expenses (except those
   incurred as an authorized and disclosed direct marketing agent for AWS in
   connection with approved work or services performed or purchases made
   hereunder).
<PAGE>

                                                            Contract No.________
                                                            Page l2 of 15

If Agency elects to subcontract out any work, then the Agency shall request
competitive quotations from a minimum of three vendors when the subcontracted
work is estimated to exceed $20,000. The quotation process shall be administered
by the Agency and contracts awarded by the Agency, but only with the prior
concurrence of AWS. Copies of the quotations shall be submitted to AWS for
review and approval prior to the award of a contract. In the event a selected
vendor cannot perform, the Agency shall select another vendor upon notification
to and approval by AWS. The Agency shall not fragment any subcontracted work to
avoid the obligation to obtain quotations.

ARTICLE 19 - USE OF AWS'S NAME, LOGO, AND MARKS

All use of AWS's name, logo and marks shall be in strict conformance with any
written AWS, Corporate or other guidelines provided by AWS and shall be
approved in advance by AWS. AWS retains all rights to restrict or terminate any
use of its trademark and marks at anytime.

ARTICLE 20 - AUDIT

Agency shall maintain accurate and complete records including a physical
inventory, if applicable, of all costs incurred under this Agreement in
performing the services covered by this Agreement, including the costs of labor
(other than individual salaries and bonuses of agency employees), equipment,
materials, and other disbursements for purposes of certifying that the bills to
AWS and actual Direct Salaries and Profit computations are accurate and in
accordance with the definitions set forth in this Agreement. Discrepancies in
the bills shall be remedied by Agency within a reasonable period of time after
they are discovered, by either crediting or debiting AWS or by issuing a check
to AWS. These records shall be maintained in accordance with recognized
commercial accounting practices so they may be readily audited and shall be held
until costs have been finally determined under this Agreement and payment or
final adjustment of payment, as the case may be, has been made. Agency shall
permit AWS or AWS's representative to examine and audit these records on
reasonable notice. Audits shall be made not later than two (2) calendar years
after the end of the year in question.

ARTICLE 21 - ASSIGNMENT

The Agency shall not assign any right under this Agreement (excepting monies due
or to become due), subcontract any work or delegate any other obligations to be
performed or owed under this Agreement without the prior written consent of
AWS. Any attempted assignment or delegation in contravention of the above
provisions shall be void and ineffective. Any assignment of monies shall be void
and ineffective to the extent that (1) Agency shall not have given AWS at least
thirty (30) days prior written notice of such assignment or (2) such assignment
attempts to impose upon AWS obligations to the assignee additional to the
payment of such monies, or to preclude AWS from dealing solely and directly with
Agency in all matters pertaining to this Agreement including the negotiation of
amendments or settlements of charges due. All work performed by Agency's
subcontractor(s) at any time shall be deemed work performed by the Agency.

ARTICLE 22 - TAXES

AWS shall reimburse Agency only for the following tax payments with respect to
transactions under this Agreement unless an exemption applies: state and local
sales and use taxes, as applicable. Taxes payable by AWS shall be billed as
separate items on Agency's invoices and shall not be included in Agency's
prices. AWS shall have the right to have Agency contest any such taxes that AWS
reasonably deems improperly levied, at AWS's expense and subject to its
direction and control.
<PAGE>

                                                            Contract No.________
                                                            Page 13 of 15

ARTICLE 23 - COMPLIANCE WITH LAWS

Agency and all persons furnished by Agency shall comply at their own expense
with all applicable federal, state and local laws, ordinances, regulations and
codes, including identification and procurement of required permits,
certificates, licenses, insurance approvals and inspections, in performance
under this Agreement. Agency agrees to indemnify AWS and its customers for any
loss or damage that may be sustained by reason of any failure to do so.

ARTICLE 24 - PUBLICITY, ADVERTISING

The Agency agrees not to advertise, promote, make use of any identification of
AWS or publicity matters relating to the services performed under this Agreement
or to mention or imply any relationship or connection with AWS in such direct
marketing, promotion or publicity without the prior written consent of AWS. The
term "identification" includes any trade name, trademark, service mark,
insignia, symbol, or any simulation thereof, and any code, drawing,
specification, or evidence of AWS's inspection. This article does not modify
Article 12 (Use of Information).

ARTICLE 25 - WAIVER

The failure of either party at any time to enforce any right or remedy available
to it under this Agreement with respect to any breach or failure by the other
party shall not be construed to be a waiver of such right or remedy with respect
to any other breach or failure by the other party.

ARTICLE 26 - SEVERABILITY

In the event that any one or more of the provisions contained herein shall for
any reason be held to be unenforceable in any respect under the laws of any
state, or of the United States of America, such unenforceability shall not
affect any other provision of this Agreement, but this Agreement shall then be
construed as if such unenforceable provision or provisions had never been
contained herein.

ARTICLE 27 - SURVIVAL OF OBLIGATION

The obligations of the parties under this Agreement that by their nature would
continue beyond the termination, cancellation or expiration of this Agreement,
including by way of illustration only and not limitation, those in the clauses
in Article 23 (Compliance With Laws), Article 16 (Insurance), Article 15
(Indemnification/Infringement), Article 12 (Use of Information), shall survive
termination, cancellation or expiration of this Agreement.

ARTICLE 28 - CHOICE OF LAW AND VENUE

The construction, interpretation and performance of this Agreement shall be
governed by the laws of the State of New Jersey, excluding its choice of law
rules, and any action on this Agreement will be in the state or federal courts
of the state of New Jersey.

ARTICLE 29 - RELEASES VOID

Neither party shall require (1) waivers or releases of any personal rights or
(2) execution of documents, which conflict with the terms of this Agreement from
employees, representatives or customers of the other in connection with visits
to its premises and both parties agree that no such releases, waivers or
documents shall be pleaded by them or third persons in any action or proceeding.
<PAGE>

                                                            Contract No.________
                                                            Page l4 of 15

 ARTICLE 30 - SPECIAL SERVICES

 At the request of AWS, Agency may be asked to perform the following special
 marketing communications services:

 A.  Create and produce sales promotion and collateral material.

 B.  Develop new product or service concepts and test marketing of new products
     and services.

 C.  Conduct market research.

 D.  Design services including packaging, trademarks and corporate identity
     programs.

 E.  Stage and conduct sales, marketing positioning, sporting or other events
     and meetings.

 F.  Design and prepare exhibits for trade shows or other venues.

 G.  Prepare visual presentation materials.

 H.  Other services outside of the scope of direct marketing.

 For any special services requested by AWS and performed by Agency, compensation
 shall be mutually agreed upon in writing prior to the start of work.

 ARTICLE 31 - NON-EXCLUSIVE RIGHTS

 It is expressly understood and agreed that this Agreement does not grant to
 the Agency an exclusive right or privilege to provide any and all of the
 services described in this Agreement which AWS may require. It is, therefore,
 understood that AWS may contract with other agencies for the procurement of the
 same or comparable services.

 ARTICLE 32 - CHANGES IN, TERMINATION, OR SUSPENSION OF PARTICULAR WORK

 AWS may, at any time, by written notice, advise the Agency of AWS's intent to
 make changes in, additions to, or deductions from, the work on any specific
 program under an approved estimate. If such intended changes cause an increase
 or decrease in the amount or character of the services to be rendered under
 this Agreement, or in the time required for its performance, the Agency shall
 promptly so advise AWS, specifying the impact of such change on the approved
 estimates. Thereafter, if AWS elects to make such change, an equitable
 adjustment to all appropriate terms and conditions, including the amount to be
 paid to the Agency and the time for performance shall be made and this
 Agreement shall be modified accordingly in writing. Notwithstanding anything
 contained in this Article 32 to the contrary no change shall have the effect of
 reducing the required ninety (90) days notice of termination.

 ARTICLE 33 - ENTIRE AGREEMENT

 This Agreement constitutes the entire agreement between the Agency and AWS
 relating to the subject matter hereof and shall not be modified or rescinded in
 any manner except by a writing
<PAGE>

                                                            Contract No.________
                                                            Page 15 of 15

executed by both parties. Other than as expressly provided herein, both the
Agency and AWS agree that no prior or contemporaneous oral representations form
a part of their agreement. Additional or different terms inserted in this
Agreement by Agency, or deletions thereto, whether by alterations, addenda, or
otherwise, shall be of no force and effect, unless expressly consented to by AWS
in writing. The provisions of this Agreement supersede all contemporaneous oral
agreements and all prior oral and written quotations, communications, agreements
and understandings of the parties with respect to the subject matter of this
Agreement.

WITNESS WHEREOF, the Agency and AWS have executed this Agreement in duplicate on
the day and year below written.

                                 CELLULAR TELEPHONE COMPANY
BRONNER SLOSBERG HUMPHREY, INC.  d/b/a AT&T Wireless Services
-------------------------------  ----------------------------

By: Robert E. Stoloff            By: Kathryn A. Russell
   ____________________________      ________________________
            (Signature)                     (Signature)

   Robert E. Stoloff                 Kathryn Russell
   SVP & Chief Financial Officer     Vice President
   _______________________________   __________________________________
   (Name & Title Typed or Printed)   (Name & Title Typed or Printed)

             7/24/97                          7/16/97
   _______________________________   __________________________________
             (Date)                            (Date)
<PAGE>

                                  SCHEDULE I

                       1997 BSH Agency Bonus Structure -
                                   AWS NY/NJ
                                      7/97

OBJECTIVE: Reward BSH with bonus when company-wide annual business goals are met
or exceeded across three program areas: [***], [***], and [***]. Bonus based on
% of total year fees by program (all bonus fees to be paid in 1998). Note:
research and data fees are not included in 1997.

[***]
[***]
                                 Business Goal

                           Low   to    Medium    to  High
                           ---         ------        ----
Response Rate Range*      [***]  to     [***]    to  [***]
Bonus %                   [***]  to     [***]    to  [***]

*  Response rate / associated bonus to be determined after each [***] for
   [***] (Data not included).

[***]

                           Low   to    Medium    to  High
                           ---         ------        ----
Response Rate *           [***]  to     [***]    to  [***]
Bonus %                   [***]  to     [***]    to  [***]

*  Response rate / associated bonus to be
   determined after each [***].

[***]

<TABLE>
<CAPTION>
                        Above Churn Target     to         Target               to                   Below Target
                        ------------------                ------                                    ------------
<S>                       <C>                  <C>    <C>                      <C>               <C>
End of Year Total             [***]            to         [***]                to                       [***]
Voluntary Churn            [***] of target*    to     [***] of target *        to                   [***] of target
Bonus %                       [***]
                            [***] = x                     [***] = x                                     [***]
</TABLE>
* For every % point below target of voluntary churn BSH will receive [***] of
  the bonus pool with a maximum of [***] bonus (below target bonus based (x) =
  target [***] dollars).

Note: To receive any payout, churn must reach a minimum of [***] of the target.
After [***] payout is incremental based on delivery (e g. if [***] of target
churn is achieved,

CONFIDENTIAL INFORMATION HAS BEEN OMITTED PURSUANT TO RULE 406 UNDER THE
SECURITIES ACT AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. THE LOCATIONS OF THE OMITTED INFORMATION HAVE BEEN INDICATED WITH
ASTERISKS.

<PAGE>

                         Bronner Bonus Fees Opportunity
                                      7/97

  [***]

                                 Business Goal
                              Response Rate [***]
<TABLE>
<CAPTION>
            Low                     Medium                     High
            ---                     ------                     ----
<S>         <C>          <C>         <C>          <C>          <C>
            [***]        to          [***]        to           [***]
Bonus %     [***]                    [***]                     [***]
</TABLE>

CALCULATION

Bonus %                         [***]           [***]     [***]
                                  X               X         X
Est. Fee Total                  [***]           [***]     [***]
                                  =               =         =
Bonus $ Opportunity             [***]     to    [***]     [***]
Range

[***] Fees *

[***]                                          $[***]
[***]                                           [***]
[***]                                           [***]
[***]                                           [***]
[***]                                           [***]
[***]                                           [***]
[***]                                           [***]
[***]                                           [***]
[***]                                           [***]
[***]                                           [***]
                                                ------
                                                [***]

* Note: Actual fees will be calculated after program completion.

                                      (2)

CONFIDENTIAL INFORMATION HAS BEEN OMITTED PURSUANT TO RULE 406 UNDER THE
SECURITIES ACT AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. THE LOCATIONS OF THE OMITTED INFORMATION HAVE BEEN INDICATED WITH
ASTERISKS.

<PAGE>

                                     [***]
                                      7/97

                                 Business Goal
                              Response Rate [***]

                     Low                 Medium            High
                     ---                 ------            ----
Response Rate       [***]       to        [***]     to     [***]
Bonus %             [***]                 [***]            [***]

CALCULATION
Bonus %                 [***]   to       [***]      to     [***]
                          X                X                 X
Est. Fee  Total         [***]            [***]             [***]
                          =                =                 =
Bonus $ Opportunity     [***]            [***]             [***]
Range

Estimated Fees (Fees to be actualized at year-end)

[***]                                                      [***]
[***]                                                      [***]
[***]                                                      [***]
[***] 2B Control                                           [***]
[***] 2B                                                   [***]
[***] III                                                  [***]
                                                           -----
                                                           [***]
Brainstorming                                              [***]
[***]                                                      [***]
                                                           -----
                                                           [***]

                                      (3)

CONFIDENTIAL INFORMATION HAS BEEN OMITTED PURSUANT TO RULE 406 UNDER THE
SECURITIES ACT AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. THE LOCATIONS OF THE OMITTED INFORMATION HAVE BEEN INDICATED WITH
ASTERISKS.

<PAGE>

                                     [***]
                                      7/97
<TABLE>
<CAPTION>
                     Above Churn Target         Target                 Below Target
<S>                      <C>            <C>      <C>          <C>   <C>
End of Year Total       [***]                   [***]                    [***]
Voluntary Churn
Bonus % of Total      [***] of target   to   [***] of target  to       [***] of target
Retention Fees          [***]                   [***]                = x plus up to [***]
                                                                       increase of x
</TABLE>

<TABLE>
<CAPTION>
CALCULATION
<S>                              <C>                        <C>                     <C>
Est. Bonus %                     [***] of [***]             [***] of [***]          [***] of [***]
                                     X                           X                       X
Est. Fee Total                      [***]                      [***]                   [***]
                                     =                           =                       =
Bonus $ Opportunity Range           [***]       to             [***]         to        [***]
</TABLE>

Estimated Retention Fees *

<TABLE>
<CAPTION>
    [***]                           $            [***]                                  $
    -----                           -             ---                                   -
<S>                                  <C>      <C>                                      <C>
Jan. Rate [***]                     [***]     Auto [***]                               [***]
Feb. Rate [***]                     [***]     Ed. Mailing                              [***]
[***]                               [***]     Life Cycle                               [***]
Bond [***]                          [***]     Predictive Churn                         [***]
Bond 15/24                          [***]     [***]                                    [***]
March Rate [***]                    [***]     Lifecycle                                [***]
April Rate [***]                    [***]     [***]                                    [***]
May Rate [***]                      [***]     Creative Platform                        [***]
June Rate [***]                     [***]     [***]                                    [***]
July Rate [***]                     [***]     [***]                                    [***]
Bond [***]                          [***]                                              -----
June Remail                         [***]                                              [***]
August Rate [***]                   [***]
Rate [***]  Sept.-Dec               [***]
[***] 1Q                            [***]
[***]                               [***]
Rate [***]                          [***]
Consumer 1997 DPCS [***]            [***]
Deact Research March                [***]
Rate Elimination                    [***]
[***]                               [***]
DPCS [***]                          [***]
[***] 2Q                            [***]
KAR Meeting 4/16                    [***]
2Q [***]                            [***]     * Actual as of 5/23.
                                    -----
                                    [***]
</TABLE>

                                      (4)

CONFIDENTIAL INFORMATION HAS BEEN OMITTED PURSUANT TO RULE 406 UNDER THE
SECURITIES ACT AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. THE LOCATIONS OF THE OMITTED INFORMATION HAVE BEEN INDICATED WITH
ASTERISKS.

<PAGE>

                             1997 Total BSH Bonus
                               Opportunity Range
                                     7/97

                                   Low                High
                                   ---                ----
                                    $                  $
                                    -                  -
       [***]                     [***]               [***]

       [***]                     [***]               [***]

       [***]                     [***]               [***]
                                ------              ------
                  Total          [***]               [***]

NOTE:  The fees listed for each of the projects herein are rough figures. The
bonus calculation will be done based on actual fees for each program.

In addition, as a point of clarification, the "Below Target" portion of the
bonus calculation for [***] should be interpreted to be [***]. This calculation
should not be interpreted to mean that BSH gets [***]

                                      (5)

CONFIDENTIAL INFORMATION HAS BEEN OMITTED PURSUANT TO RULE 406 UNDER THE
SECURITIES ACT AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. THE LOCATIONS OF THE OMITTED INFORMATION HAVE BEEN INDICATED WITH
ASTERISKS.

<PAGE>

                                                             Contract No._______
                                                             Schedule II
                                                             Page l of 2

                                  SCHEDULE II

                           NON-MEDIA BILLING SCHEDULE

Net out-of-pocket ("Net O-O-P") as used in this Schedule II shall mean the
amount of money the Agency pays to outside suppliers on behalf of AWS based on
an authorized estimate.

A.  Charges for Publication Advertising and Outdoor Advertising

    1.    Preparation of rough layouts and copy          No Charge

    2.    Production of comprehensive layouts:

          - purchased from outside suppliers             Net O-O-P

          - produced by Agency personnel                 Quoted in advance

    3.    Type composition, printing, engraving;
          electrotypes, finished art, photographs,
          photostats and other reproduction mats,
          stereotypes, quantity proofs:

          - purchased from outside suppliers             Net O-O-P

          - produced by Agency personnel                 Quoted in advance

    4.    Endorsement fees, testimonials, etc.           Net O-O-P

    5.    Fashion Coordination performed by:

          - studio and/or stylist                        Net O-O-P

          - Agency personnel (Competitive Fee Schedule)  Net O-O-P

    6.    Travel expenses of Agency personnel to
          supervise production, obtain testimonials
          and otherwise directly attributable to
          specific publication and outdoor advertising   Net O-O-P

    7.    Supervision and checking                       No Charge
<PAGE>

                                                            Contract No.________
                                                            Schedule II
                                                            Page 2 of 2

    8.    Talent for use in test and/or finished         Net O-O-P
          advertising

    9.    Production of test advertisements              Net O-O-P

   10.    Research and licensing costs for stock         Net O-O-P
          photography

   11.    Location scouting                              Net O-O-P

   12.    All other elements required to produce         Net O-O-P
          publications and outdoor advertising
          not referred to above

B. Postage, Express and Freight, and Sales Taxes

    1.    Incidental to normal business routine          No Charge
          between Agency and client home office

    2.    Shipment of advertising materials to           Net O-O-P
          suppliers, media, etc.

    3.    Sales Taxes                                    Net O-O-P

D. Telephone, Teletype, Telegraph and Facsimile

    1.    Incidental to normal business routine          No Charge
          between Agency and client home office

    2.    Attributable to unusual service or to the      Net O-O-P
          production of specific advertising
          projects

E. Research

    1.    All research conducted by Agency unless        No Charge
          authorized by client

    2.    All media research normally provided by        No Charge
          agencies

    3.    Test materials                                 Net O-O-P

    4.    Travel for Agency personnel to supervise,      Net O-O-P
          participate in and observe the research

F. Free-Lance Creative/Technical Talent                  Net O-O-P<PAGE>

                                                                   EXHIBIT 10.03

                              SNOWBALL.COM, INC.

                          2000 EQUITY INCENTIVE PLAN

                         As Adopted February 22, 2000

     1.   PURPOSE.  The purpose of this Plan is to provide incentives to
          -------
attract, retain and motivate eligible persons whose present and potential
contributions are important to the success of the Company, its Parent and
Subsidiaries, by offering them an opportunity to participate in the Company's
future performance through awards of Options, Restricted Stock and Stock
Bonuses.  Capitalized terms not defined in the text are defined in Section 23.

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

          2.1  Number of Shares Available.  Subject to Sections 2.2 and 18, the
               --------------------------
total number of Shares reserved and available for grant and issuance pursuant to
this Plan will be 5,000,000 Shares plus Shares that are subject to: (a) issuance
upon exercise of an Option but cease to be subject to such Option for any reason
other than exercise of such Option; (b) an Award granted hereunder but are
forfeited or are repurchased by the Company at the original issue price; and (c)
an Award that otherwise terminates without Shares being issued. In addition, any
authorized shares not issued or subject to outstanding grants under the
Company's 1999 Equity Incentive Plan (the "Prior Plan") on the Effective Date
(as defined below) and any shares issued under the Prior Plan that are forfeited
or repurchased by the Company or that are issuable upon exercise of options
granted pursuant to the Prior Plan that expire or become unexercisable for any
reason without having been exercised in full, will no longer be available for
grant and issuance under the Prior Plan, but will be available for grant and
issuance under this Plan. In addition, on each January 1, the aggregate number
of Shares reserved and available for grant and issuance pursuant to this Plan
will be increased automatically by a number of Shares equal to 5% of the total
outstanding shares of the Company as of the immediately preceding December 31,
provided that no more than 30,000,000 shares shall be issued as ISOs (as defined
in Section 5 below). At all times the Company shall reserve and keep available a
sufficient number of Shares as shall be required to satisfy the requirements of
all outstanding Options granted under this Plan and all other outstanding but
unvested Awards granted under this Plan.

          2.2  Adjustment of Shares.  In the event that the number of
               --------------------
outstanding shares is changed by a stock dividend, recapitalization, stock
split, reverse stock split, subdivision, combination, reclassification or
similar change in the capital structure of the Company without consideration,
then (a) the number of Shares reserved for issuance under this Plan, (b) the
number of shares that may be granted pursuant to Sections 3 and 9 below, (c) the
Exercise Prices of and number of Shares subject to outstanding Options, and (d)
the number of Shares subject to other outstanding Awards will be proportionately
adjusted, subject to any required action by the Board or the stockholders of the
Company and compliance with applicable securities laws; provided, however, that
                                                        --------  -------
fractions of a Share will not be issued but will either be replaced by a cash
payment equal to the Fair Market Value of such fraction of a Share or will be
rounded up to the nearest whole Share, as determined by the Committee.

     3.   ELIGIBILITY.  ISOs (as defined in Section 5 below) may be granted only
          -----------
to employees (including officers and directors who are also employees) of the
Company or of a Parent or Subsidiary of the Company.  All other Awards may be
granted to employees, officers, directors, consultants, independent contractors
and advisors of the Company or any Parent or Subsidiary of the Company; provided
                                                                        --------
such consultants, contractors and advisors render bona fide services not in
connection with the offer and sale of securities in a capital-raising
transaction.  No person will be eligible to receive more than 1,500,000 Shares
in any calendar year under this Plan pursuant to the grant of Awards hereunder,
other than new employees of the Company or of a Parent or Subsidiary of the
Company (including new employees who are also officers and directors of the
Company or any Parent or Subsidiary of the Company), who are eligible to receive
up to a maximum of 3,000,000 Shares in the calendar year in which they commence
their employment.  A person may be granted more than one Award under this Plan.
<PAGE>

                                                              Snowball.com, Inc.
                                                      2000 Equity Incentive Plan

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

          4.1  Committee Authority.  This Plan will be administered by the
               -------------------
Committee or by the Board acting as the Committee.  Except for automatic grants
to Outside Directors pursuant to Section 9 hereof, and subject to the general
purposes, terms and conditions of this Plan, and to the direction of the Board,
the Committee will have full power to implement and carry out this Plan.  Except
for automatic grants to Outside Directors pursuant to Section 9 hereof, the
Committee will have the authority to:

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

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

          (c)  select persons to receive Awards;

          (d)  determine the form and terms of Awards;

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

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

          (g)  grant waivers of Plan or Award conditions;

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

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

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

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

          4.2  Committee Discretion.  Except for automatic grants to Outside
               --------------------
Directors pursuant to Section 9 hereof, any determination made by the Committee
with respect to any Award will be made in its sole discretion at the time of
grant of the Award or, unless in contravention of any express term of this Plan
or Award, at any later time, and such determination will be final and binding on
the Company and on all persons having an interest in any Award under this Plan.
The Committee may delegate to one or more officers of the Company the authority
to grant an Award under this Plan to Participants who are not Insiders of the
Company.

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

          5.1  Form of Option Grant.  Each Option granted under this Plan will
               --------------------
be evidenced by an Award Agreement which will expressly identify the Option as
an ISO or an NQSO ("Stock Option Agreement"), and, except as otherwise required
by the terms of Section 9 hereof, will be in such form and contain such
provisions (which need not be the same for each Participant) as the Committee
may from time to time approve, and which will comply with and be subject to the
terms and conditions of this Plan.

                                       2
<PAGE>

                                                              Snowball.com, Inc.
                                                      2000 Equity Incentive Plan

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

          5.3  Exercise Period.  Options may be exercisable within the times or
               ---------------
upon the events determined by the Committee as set forth in the Stock Option
Agreement governing such Option; provided, however, that no Option will be
                                 --------  -------
exercisable after the expiration of ten (10) years from the date the Option is
granted; and provided further that no ISO granted to a person who directly or by
             ----------------
attribution owns more than ten percent (10%) of the total combined voting power
of all classes of stock of the Company or of any Parent or Subsidiary of the
Company ("Ten Percent Stockholder") will be exercisable after the expiration of
five (5) years from the date the ISO is granted.  The Committee also may provide
for Options to become exercisable at one time or from time to time, periodically
or otherwise, in such number of Shares or percentage of Shares as the Committee
determines.

          5.4  Exercise Price.  The Exercise Price of an Option will be
               --------------
determined by the Committee when the Option is granted and may be not less than
85% of the Fair Market Value of the Shares on the date of grant; provided that:
(i) the Exercise Price of an ISO will be not less than 100% of the Fair Market
Value of the Shares on the date of grant; and (ii) the Exercise Price of any ISO
granted to a Ten Percent Stockholder will not be less than 110% of the Fair
Market Value of the Shares on the date of grant.  Payment for the Shares
purchased may be made in accordance with Section 8 of this Plan.

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

          5.6  Termination.  Notwithstanding the exercise periods set forth in
               -----------
the Stock Option Agreement, exercise of an Option will always be subject to the
following:

          (a)  Except for automatic grants to Outside Directors pursuant to
               Section 9 hereof, if the Participant is Terminated for any reason
               except death or Disability, then the Participant may exercise
               such Participant's Options only to the extent that such Options
               would have been exercisable upon the Termination Date no later
               than three (3) months after the Termination Date (or such shorter
               or longer time period not exceeding five (5) years as may be
               determined by the Committee, with any exercise beyond three (3)
               months after the Termination Date deemed to be an NQSO), but in
               any event, no later than the expiration date of the Options.

          (b)  If the Participant is Terminated because of Participant's death
               or Disability (or the Participant dies within three (3) months
               after a Termination other than for Cause or because of
               Participant's Disability), then Participant's Options may be
               exercised only to the extent that such Options would have been
               exercisable by Participant on the Termination Date and must be
               exercised by Participant (or Participant's legal representative
               or authorized assignee) no later than twelve (12) months after
               the Termination Date (or such shorter or longer time period not
               exceeding five (5) years as may be determined by the Committee,
               with any such exercise beyond (a) three (3) months after the
               Termination Date when the Termination is for any reason other
               than the Participant's death or Disability, or (b) twelve (12)
               months after the Termination Date when the Termination is for
               Participant's

                                       3
<PAGE>

                                                              Snowball.com, Inc.
                                                      2000 Equity Incentive Plan

               death or Disability, deemed to be an NQSO), but in any event no
               later than the expiration date of the Options.

          (c)  If a Participant is terminated for Cause, then the Participant
               may exercise such Participant's Options only to the extent that
               such Options would have been exercisable upon the Termination
               Date no later than one (1) month after the Termination Date (or
               such shorter or longer time period as may be determined by the
               Committee, with any exercise beyond three (3) months after the
               Termination Date deemed to be an NQSO), but in any event, no
               later than the expiration date of the Options.

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

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

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

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

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

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

                                       4
<PAGE>

                                                              Snowball.com, Inc.
                                                      2000 Equity Incentive Plan

with full payment for the Shares to the Company within thirty (30) days, then
the offer will terminate, unless otherwise determined by the Committee.

          6.2  Purchase Price.  The Purchase Price of Shares sold pursuant to a
               --------------
Restricted Stock Award will be determined by the Committee on the date the
Restricted Stock Award is granted, except in the case of a sale to a Ten Percent
Stockholder, in which case the Purchase Price will be 100% of the Fair Market
Value.  Payment of the Purchase Price may be made in accordance with Section 8
of this Plan.

          6.3  Terms of Restricted Stock Awards.  Restricted Stock Awards shall
               --------------------------------
be subject to such restrictions as the Committee may impose.  These restrictions
may be based upon completion of a specified number of years of service with the
Company or upon completion of the performance goals as set out in advance in the
Participant's individual Restricted Stock Purchase Agreement.  Restricted Stock
Awards may vary from Participant to Participant and between groups of
Participants.  Prior to the grant of a Restricted Stock Award, the Committee
shall:  (a) determine the nature, length and starting date of any Performance
Period for the Restricted Stock Award; (b) select from among the Performance
Factors to be used to measure performance goals, if any; and (c) determine the
number of Shares that may be awarded to the Participant.  Prior to the payment
of any Restricted Stock Award, the Committee shall determine the extent to which
such Restricted Stock Award has been earned.  Performance Periods may overlap
and Participants may participate simultaneously with respect to Restricted Stock
Awards that are subject to different Performance Periods and having different
performance goals and other criteria.

          6.4  Termination During Performance Period.  If a Participant is
               -------------------------------------
Terminated during a Performance Period for any reason, then such Participant
will be entitled to payment (whether in Shares, cash or otherwise) with respect
to the Restricted Stock Award only to the extent earned as of the date of
Termination in accordance with the Restricted Stock Purchase Agreement, unless
the Committee will determine otherwise.

     7.   STOCK BONUSES.
          -------------

          7.1  Awards of Stock Bonuses.  A Stock Bonus is an award of Shares
               -----------------------
(which may consist of Restricted Stock) for services rendered to the Company or
any Parent or Subsidiary of the Company.  A Stock Bonus may be awarded for past
services already rendered to the Company, or any Parent or Subsidiary of the
Company pursuant to an Award Agreement (the "Stock Bonus Agreement") that will
be in such form (which need not be the same for each Participant) as the
Committee will from time to time approve, and will comply with and be subject to
the terms and conditions of this Plan.  A Stock Bonus may be awarded upon
satisfaction of such performance goals as are set out in advance in the
Participant's individual Award Agreement (the "Performance Stock Bonus
Agreement") that will be in such form (which need not be the same for each
Participant) as the Committee will from time to time approve, and will comply
with and be subject to the terms and conditions of this Plan.  Stock Bonuses may
vary from Participant to Participant and between groups of Participants, and may
be based upon the achievement of the Company, Parent or Subsidiary and/or
individual performance factors or upon such other criteria as the Committee may
determine.

          7.2  Terms of Stock Bonuses.  The Committee will determine the number
               ----------------------
of Shares to be awarded to the Participant.  If the Stock Bonus is being earned
upon the satisfaction of performance goals pursuant to a Performance Stock Bonus
Agreement, then the Committee will: (a)  determine the nature, length and
starting date of any Performance Period for each Stock Bonus; (b) select from
among the Performance Factors to be used to measure the performance, if any; and
(c) determine the number of Shares that may be awarded to the Participant.
Prior to the payment of any Stock Bonus, the Committee shall determine the
extent to which such Stock Bonuses have been earned.  Performance Periods may
overlap and Participants may participate simultaneously with respect to Stock
Bonuses that are subject to different Performance Periods and different
performance goals and other criteria.  The number of Shares may be fixed or may
vary in accordance with such performance goals and criteria as may be determined
by the Committee.  The Committee may adjust the performance goals applicable to
the Stock Bonuses to take into account changes in law and accounting or tax
rules and to make such adjustments as the Committee deems necessary or
appropriate to reflect the impact of extraordinary or unusual items, events or
circumstances to avoid windfalls or hardships.

                                       5
<PAGE>

                                                              Snowball.com, Inc.
                                                      2000 Equity Incentive Plan

          7.3  Form of Payment.  The earned portion of a Stock Bonus may be paid
               ---------------
currently or on a deferred basis with such interest or dividend equivalent, if
any, as the Committee may determine.  Payment may be made in the form of cash or
whole Shares or a combination thereof, either in a lump sum payment or in
installments, all as the Committee will determine.

     8.   PAYMENT FOR SHARE PURCHASES.
          ---------------------------

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

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

          (b)  by surrender of shares that either:  (1) have been owned by
               Participant for more than six (6) months and have been paid for
               within the meaning of SEC Rule 144 (and, if such shares were
               purchased from the Company by use of a promissory note, such note
               has been fully paid with respect to such shares); or (2) were
               obtained by Participant in the public market;

          (c)  by tender of a full recourse promissory note having such terms as
               may be approved by the Committee and bearing interest at a rate
               sufficient to avoid imputation of income under Sections 483 and
               1274 of the Code; provided, however, that Participants who are
                                 --------  -------
               not employees or directors of the Company will not be entitled to
               purchase Shares with a promissory note unless the note is
               adequately secured by collateral other than the Shares;

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

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

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

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

          (f)  by any combination of the foregoing.

          8.2  Loan Guarantees.  The Committee may help the Participant pay for
               ---------------
Shares purchased under this Plan by authorizing a guarantee by the Company of a
third-party loan to the Participant.

     9.   AUTOMATIC GRANTS TO OUTSIDE DIRECTORS.
          --------------------------------------

          9.1  Types of Options and Shares.  Options granted under this Plan and
               ----------------------------
subject to this Section 9 shall be NQSOs.

                                       6
<PAGE>

                                                              Snowball.com, Inc.
                                                      2000 Equity Incentive Plan

          9.2  Eligibility.  Options subject to this Section 9 shall be granted
               -----------
only to Outside Directors.

          9.3  Initial Grant.  Each Outside Director who first becomes a member
               -------------
of the Board on or after the Effective Date will automatically be granted an
Option for 20,000 Shares (an "Initial Grant") on the date such Outside Director
first becomes a member of the Board, unless such Outside Director received a
grant of Options before the Effective Date.  Each Outside Director who became a
member of the Board prior to the Effective Date and who did not receive a prior
Option grant will receive an Initial Grant immediately following the Effective
Date.

          9.4  Succeeding Grants.  Immediately following each Annual Meeting of
               -----------------
stockholders, each Outside Director will automatically be granted an Option for
5,000 Shares (a "Succeeding Grant"), provided the Outside Director is a member
of the Board on such date and has served continuously as a member of the Board
for a period of at least one year since the date of such Outside Director's
Initial Grant.

          9.5  Vesting.  The date an Outside Director receives an Initial Grant
               -------
or a Succeeding Grant is referred to in this Plan as the "Start Date" for such
Option.

          (a)  Initial Grant.  Each Initial Grant will vest as to 25% of the
               -------------
               Shares on the first anniversary of the Start Date for such
               Initial Grant, and as to 2.08333% of the Shares on each
               subsequent monthly anniversary of the Start Date, so long as the
               Outside Director continuously remains a director or a consultant
               of the Company.

          (b)  Succeeding Grant.  Each Succeeding Grant will vest as to 25% of
               ----------------
               the Shares on the first anniversary of the Start Date for such
               Succeeding Grant, and as to 2.08333% of the Shares on each
               subsequent monthly anniversary of the Start Date, so long as the
               Outside Director continuously remains a director or a consultant
               of the Company.

Notwithstanding any provision to the contrary, in the event of a corporate
transaction described in Section 18.1, the vesting of all options granted to
Outside Directors pursuant to this Section 9 will accelerate and such options
will become exercisable in full prior to the consummation of such event at such
times and on such conditions as the Committee determines, and must be exercised,
if at all, within three months of the consummation of said event.  Any options
not exercised within such three-month period shall expire.

          9.6  Exercise Price.  The exercise price of an Option pursuant to an
               --------------
Initial Grant or Succeeding Grant shall be the Fair Market Value of the Shares,
at the time that the Option is granted.

          9.7  Termination.  If the Outside Director ceases to be a member of
               -----------
the Board or a consultant of the Company for any reason except death of the
Outside Director or disability of the Outside Director (whether temporary or
permanent, partial or total, as determined by the Committee), then each Option
then held by such Outside Director, to the extent (and only to the extent) that
it would have been exercisable by the Outside Director on the Termination Date,
may be exercised by the Outside Director on the later of seven (7) months after
the Termination Date, but in no event later than the Expiration Date.

     10.  WITHHOLDING TAXES.
          -----------------

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

          10.2 Stock Withholding.  When, under applicable tax laws, a
               -----------------
Participant incurs tax liability in connection with the exercise or vesting of
any Award that is subject to tax withholding and the Participant is

                                       7
<PAGE>

                                                              Snowball.com, Inc.
                                                      2000 Equity Incentive Plan

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

     11.  TRANSFERABILITY.
          ---------------

          11.1 Except as otherwise provided in this Section 11, Awards granted
under this Plan, and any interest therein, will not be transferable or
assignable by Participant, and may not be made subject to execution, attachment
or similar process, otherwise than by will or by the laws of descent and
distribution or as determined by the Committee and set forth in the Award
Agreement with respect to Awards that are not ISOs.

          11.2 All Awards other than NQSO's.  All Awards other than NQSO's shall
               -----------------------------
be exercisable: (i) during the Participant's lifetime, only by (A) the
Participant, or (B) the Participant's guardian or legal representative; and (ii)
after Participant's death, by the legal representative of the Participant's
heirs or legatees.

          11.3 NQSOs.  Unless otherwise restricted by the Committee, an NQSO
               -----
shall be exercisable: (i) during the Participant's lifetime only by (A) the
Participant, (B) the Participant's guardian or legal representative, (C) a
Family Member of the Participant who has acquired the NQSO by "permitted
transfer;" and (ii) after Participant's death, by the legal representative of
the Participant's heirs or legatees.  "Permitted transfer" means, as authorized
by this Plan and the Committee in an NQSO, any transfer effected by the
Participant during the Participant's lifetime of an interest in such NQSO but
only such transfers which are by gift or domestic relations order.  A permitted
transfer does not include any transfer for value and neither of the following
are transfers for value:  (a) a transfer of under a domestic relations order in
settlement of marital property rights or (b) a transfer to an entity in which
more than fifty percent of the voting interests are owned by Family Members or
the Participant in exchange for an interest in that entity.

     12.  PRIVILEGES OF STOCK OWNERSHIP; RESTRICTIONS ON SHARES..
          ------------------------------------------------------

          12.1 Voting and Dividends.  No Participant will have any of the rights
               --------------------
of a stockholder with respect to any Shares until the Shares are issued to the
Participant.  After Shares are issued to the Participant, the Participant will
be a stockholder and have all the rights of a stockholder with respect to such
Shares, including the right to vote and receive all dividends or other
distributions made or paid with respect to such Shares; provided, that if such
                                                        --------
Shares are Restricted Stock, then any new, additional or different securities
the Participant may become entitled to receive with respect to such Shares by
virtue of a stock dividend, stock split or any other change in the corporate or
capital structure of the Company will be subject to the same restrictions as the
Restricted Stock; provided, further, that the Participant will have no right to
                  --------  -------
retain such stock dividends or stock distributions with respect to Shares that
are repurchased at the Participant's Purchase Price or Exercise Price pursuant
to Section 12.

          12.2 Financial Statements.  The Company will provide financial
               --------------------
statements to each Participant prior to such Participant's purchase of Shares
under this Plan, and to each Participant annually during the period such
Participant has Awards outstanding; provided, however, the Company will not be
                                    --------  -------
required to provide such financial statements to Participants whose services in
connection with the Company assure them access to equivalent information.

          12.3 Restrictions on Shares.  At the discretion of the Committee, the
               -----------------------
Company may reserve to itself and/or its assignee(s) in the Award Agreement a
right to repurchase a portion of or all Unvested Shares held by a Participant
following such Participant's Termination at any time within ninety (90) days
after the later of Participant's Termination Date and the date Participant
purchases Shares under this Plan, for cash and/or cancellation of purchase money
indebtedness, at the Participant's Exercise Price or Purchase Price, as the case
may be.

                                       8
<PAGE>

                                                              Snowball.com, Inc.
                                                      2000 Equity Incentive Plan

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

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

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

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

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

     18.  CORPORATE TRANSACTIONS.
          ----------------------

          18.1 Assumption or Replacement of Awards by Successor.  Except for
               ------------------------------------------------
automatic grants to Outside Directors pursuant to Section 9 hereof, in the event
of (a) a dissolution or liquidation of the Company, (b) a merger or
consolidation in which the Company is not the surviving corporation (other than
a merger or consolidation with a wholly-owned subsidiary, a reincorporation of
the Company in a different jurisdiction, or other transaction in which there is
no substantial change in the stockholders of the Company or their relative stock

                                       9
<PAGE>

                                                              Snowball.com, Inc.
                                                      2000 Equity Incentive Plan

holdings and the Awards granted under this Plan are assumed, converted or
replaced by the successor corporation, which assumption will be binding on all
Participants), (c) a merger in which the Company is the surviving corporation
but after which the stockholders of the Company immediately prior to such merger
(other than any stockholder that merges, or which owns or controls another
corporation that merges, with the Company in such merger) cease to own their
shares or other equity interest in the Company, (d) the sale of substantially
all of the assets of the Company, or (e) the acquisition, sale, or transfer of
more than 50% of the outstanding shares of the Company by tender offer or
similar transaction, any or all outstanding Awards may be assumed, converted or
replaced by the successor corporation (if any), which assumption, conversion or
replacement will be binding on all Participants.  In the alternative, the
successor corporation may substitute equivalent Awards or provide substantially
similar consideration to Participants as was provided to stockholders (after
taking into account the existing provisions of the Awards).  The successor
corporation may also issue, in place of outstanding Shares of the Company held
by the Participants, substantially similar shares or other property subject to
repurchase restrictions no less favorable to the Participant.  In the event such
successor corporation (if any) refuses to assume or substitute Awards, as
provided above, pursuant to a transaction described in this Subsection 18.1,
such Awards will expire on such transaction at such time and on such conditions
as the Committee will determine.  Notwithstanding anything in this Plan to the
contrary, the Committee may, in its sole discretion, provide that the vesting of
any or all Awards granted pursuant to this Plan will accelerate upon a
transaction described in this Section 18.  If the Committee exercises such
discretion with respect to Options, such Options will become exercisable in full
prior to the consummation of such event at such time and on such conditions as
the Committee determines, and if such Options are not exercised prior to the
consummation of the corporate transaction, they shall terminate at such time as
determined by the Committee.

          18.2 Other Treatment of Awards.  Subject to any greater rights granted
               -------------------------
to Participants under the foregoing provisions of this Section 18, in the event
of the occurrence of any transaction described in Section 18.1, any outstanding
Awards will be treated as provided in the applicable agreement or plan of
merger, consolidation, dissolution, liquidation, or sale of assets.

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

     19.  ADOPTION AND STOCKHOLDER APPROVAL.  This Plan will become effective on
          ---------------------------------
the date on which the registration statement filed by the Company with the SEC
under the Securities Act registering the initial public offering of the
Company's Common Stock is declared effective by the SEC (the "Effective Date").
This Plan shall be approved by the stockholders of the Company (excluding Shares
issued pursuant to this Plan), consistent with applicable laws, within twelve
(12) months before or after the date this Plan is adopted by the Board.  Upon
the Effective Date, the Committee may grant Awards pursuant to this Plan;
provided, however, that: (a) no Option may be exercised prior to initial
--------  -------
stockholder approval of this Plan; (b) no Option granted pursuant to an increase
in the number of Shares subject to this Plan approved by the Board will be
exercised prior to the time such increase has been approved by the stockholders
of the Company; (c) in the event that initial stockholder approval is not
obtained within the time period provided herein, all Awards granted hereunder
shall be cancelled, any Shares issued pursuant to any Awards shall be cancelled
and any purchase of Shares issued hereunder shall be rescinded; and (d) in the
event that stockholder approval of such increase is not obtained within the time
period provided herein, all Awards granted pursuant to such increase will be
cancelled, any Shares issued pursuant to any Award granted pursuant to such
increase will be cancelled, and any purchase of Shares pursuant to such increase
will be rescinded.

                                       10
<PAGE>

                                                              Snowball.com, Inc.
                                                      2000 Equity Incentive Plan

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

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

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

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

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

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

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

          "Cause" means the commission of an act of theft, embezzlement, fraud,
dishonesty or a breach of fiduciary duty to the Company or a Parent or
Subsidiary of the Company.

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

          "Committee" means the Compensation Committee of the Board.

          "Company" means Snowball.com, Inc. or any successor corporation.

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

          "Exchange Act" means the Securities Exchange Act of 1934, as amended.

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

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

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

          (b)  if such Common Stock is publicly traded and is then listed on a
               national securities exchange, its closing price on the date of
               determination on the principal national

                                       11
<PAGE>

                                                              Snowball.com, Inc.
                                                      2000 Equity Incentive Plan

               securities exchange on which the Common Stock is listed or
               admitted to trading as reported in The Wall Street Journal;
                                                  -----------------------

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

          (d)  in the case of an Award made on the Effective Date, the price per
               share at which shares of the Company's Common Stock are initially
               offered for sale to the public by the Company's underwriters in
               the initial public offering of the Company's Common Stock
               pursuant to a registration statement filed with the SEC under the
               Securities Act;  or

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

          "Family Member" includes any of the following:

          (a)  child, stepchild, grandchild, parent, stepparent, grandparent,
               spouse, former spouse, sibling, niece, nephew, mother-in-law,
               father-in-law, son-in-law, daughter-in-law, brother-in-law, or
               sister-in-law of the Participant, including any such person with
               such relationship to the Participant by adoption;

          (b)  any person (other than a tenant or employee) sharing the
               Participant's household;

          (c)  a trust in which the persons in (a) and (b) have more than fifty
               percent of the beneficial interest;

          (d)  a foundation in which the persons in (a) and (b) or the
               Participant control the management of assets; or

          (e)  any other entity in which the persons in (a) and (b) or the
               Participant own more than fifty percent of the voting interest.

          "Insider" means an officer or director of the Company or any other
person whose transactions in the Company's Common Stock are subject to Section
16 of the Exchange Act.

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

          "Outside Director" means a member of the Board who is not an employee
of the Company or any Parent, Subsidiary or Affiliate of the Company.

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

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

          "Performance Factors" means the factors selected by the Committee from
among the following measures to determine whether the performance goals
established by the Committee and applicable to Awards have been satisfied:

          (a)  Net revenue and/or net revenue growth;

                                       12
<PAGE>

                                                              Snowball.com, Inc.
                                                      2000 Equity Incentive Plan

          (b) Earnings before income taxes and amortization and/or earnings
              before income taxes and amortization growth;

          (c) Operating income and/or operating income growth;

          (d) Net income and/or net income growth;

          (e) Earnings per share and/or earnings per share growth;

          (f) Total stockholder return and/or total stockholder return growth;

          (g) Return on equity;

          (h) Operating cash flow return on income;

          (i) Adjusted operating cash flow return on income;

          (j) Economic value added; and

          (k) Individual confidential business objectives.

          "Performance Period" means the period of service determined by the
Committee, not to exceed five years, during which years of service or
performance is to be measured for Restricted Stock Awards or Stock Bonuses.

          "Plan" means this Snowball.com, Inc. 2000 Equity Incentive Plan, as
amended from time to time.

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

          "SEC" means the Securities and Exchange Commission.

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

          "Shares" means shares of the Company's Common Stock reserved for
issuance under this Plan, as adjusted pursuant to Sections 2 and 18, and any
successor security.

          "Stock Bonus" means an award of Shares, or cash in lieu of Shares,
pursuant to Section 7.

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

          "Termination" or "Terminated" means, for purposes of this Plan with
respect to a Participant, that the Participant has for any reason ceased to
provide services as an employee, officer, director, consultant, independent
contractor, or advisor to the Company or a Parent or Subsidiary of the Company.
An employee will not be deemed to have ceased to provide services in the case of
(i) sick leave, (ii) military leave, or (iii) any other leave of absence
approved by the Committee, provided, that such leave is for a period of not more
than 90 days, unless reemployment upon the expiration of such leave is
guaranteed by contract or statute or unless provided otherwise pursuant to
formal policy adopted from time to time by the Company and issued and
promulgated to employees in writing.  In the case of any employee on an approved
leave of absence, the Committee may make such provisions respecting suspension
of vesting of the Award while on leave from the employ of the Company or a
Subsidiary as it may deem appropriate, except that in no event may an Option be
exercised after the expiration of

                                       13
<PAGE>

                                                              Snowball.com, Inc.
                                                      2000 Equity Incentive Plan

the term set forth in the Option agreement. The Committee will have sole
discretion to determine whether a Participant has ceased to provide services and
the effective date on which the Participant ceased to provide services (the
"Termination Date").

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

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

                                       14
<PAGE>

                                                                         No. ___

                              SNOWBALL.COM, INC.

                          2000 EQUITY INCENTIVE PLAN

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

          This Stock Option Agreement (this "Agreement") is made and entered
into as of the Date of Grant set forth below (the "Date of Grant") by and
between Snowball.com, Inc., a Delaware corporation (the "Company"), and the
Optionee named below ("Optionee").  Capitalized terms not defined herein shall
have the meanings ascribed to them in the Company's 2000 Equity Incentive Plan
(the "Plan").

Optionee:                     __________________________________________

Social Security Number:       __________________________________________

Optionee's Address:           __________________________________________

                              __________________________________________

Total Option Shares:          __________________________________________

Exercise Price Per Share:     __________________________________________

Date of Grant:                __________________________________________

Expiration Date:              __________________________________________
                              (unless earlier terminated under Section 3 hereof)

Type of Stock Option

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

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

          2.   Vesting; Exercise Period.
               ------------------------

               2.1  Vesting of Shares.  This Option shall be exercisable as it
                    -----------------
vests.  Subject to the terms and conditions of the Plan and this Agreement, this
Option shall vest and become exercisable as to portions of the Shares as
follows:  (a) this Option shall not be exercisable with respect to any of the
Shares until _________________, 19___ (the "First Vesting Date"); (b) if
Optionee has continuously provided services to the Company, or any Parent or
Subsidiary of the Company, then on the First Vesting Date, this Option shall
become exercisable as to _______________% of the Shares; and (c) thereafter this
Option shall become
<PAGE>

                                                              Snowball.com, Inc.
                                                          Stock Option Agreement
                                                      2000 Equity Incentive Plan

exercisable as to an additional _____________% of the Shares on each monthly
anniversary of the First Vesting Date, provided that Optionee has continuously
provided services to the Company, or any Parent or Subsidiary of the Company, at
all times during the relevant month. This Option shall cease to vest upon
Optionee's Termination and Optionee shall in no event be entitled under this
Option to purchase a number of shares of the Company's Common Stock greater than
the "Total Option Shares."

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

               2.3  Expiration. This Option shall expire on the Expiration Date
                    ----------
set forth above and must be exercised, if at all, on or before the earlier of
the Expiration Date or the date on which this Option is earlier terminated in
accordance with the provisions of Section 3 hereof.

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

               3.1  Termination for Any Reason Except Death, Disability or
                    ------------------------------------------------------
Cause. If Optionee is Terminated for any reason except Optionee's death,
-----
Disability or Cause, then this Option, to the extent (and only to the extent)
that it is vested in accordance with the schedule set forth in Section 2.1
hereof on the Termination Date, may be exercised by Optionee no later than three
(3) months after the Termination Date, but in any event no later than the
Expiration Date.

               3.2  Termination Because of Death or Disability.  If Optionee is
                    ------------------------------------------
Terminated because of death or Disability of Optionee (or the Optionee dies
within three (3) months after Termination other than for Cause or because of
Disability), then this Option, to the extent that it is vested in accordance
with the schedule set forth in Section 2.1 hereof on the Termination Date, may
be exercised by Optionee (or Optionee's legal representative or authorized
assignee) no later than twelve (12) months after the Termination Date, but in
any event no later than the Expiration Date.  Any exercise after three months
after the Termination Date when the Termination is for any reason other than
Optionee's death or disability, within the meaning of Code Section 22(e)(3),
shall be deemed to be the exercise of a nonqualified stock option.

               3.3  Termination for Cause.  If Optionee is Terminated for Cause,
                    ---------------------
then this Option, to the extenct that it is vested in accordance with the
schedule set forth in Section 2.1 hereof on the Termination Date, may be
exercised by Optionee no later than one (1) month after the Termination Date,
but in any event no later than the Expiration Date.

               3.4  No Obligation to Employ.  Nothing in the Plan or this
                    -----------------------
Agreement shall confer on Optionee any right to continue in the employ of, or
other relationship with, the Company or any Parent or Subsidiary of the Company,
or limit in any way the right of the Company or any Parent or Subsidiary of the
Company to terminate Optionee's employment or other relationship at any time,
with or without Cause.

                                       2
<PAGE>

                                                              Snowball.com, Inc.
                                                          Stock Option Agreement
                                                      2000 Equity Incentive Plan

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

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

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

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

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

     (b)  by surrender of shares of the Company's Common Stock that either: (1)
          have been owned by Optionee for more than six (6) months and have been
          paid for within the meaning of SEC Rule 144 (and, if such shares were
          purchased from the Company by use of a promissory note, such note has
          been fully paid with respect to such shares); or (2) were obtained by
          Optionee in the open public market; and (3) are clear of all liens,
                                              ---
          claims, encumbrances or security interests;

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

     (d)  provided that a public market for the Company's stock exists: (1)
          through a "same day sale" commitment from Optionee and a broker-dealer
          that is a member of the National Association of Securities Dealers (an
          "NASD Dealer") whereby Optionee irrevocably elects to exercise this
          Option and to sell a portion of the Shares so purchased to pay for the
          Exercise Price and whereby the NASD Dealer irrevocably commits upon
          receipt of such Shares to forward the exercise price directly to the
          Company; or (2) through a "margin" commitment from Optionee and an
                   --
          NASD Dealer whereby Optionee irrevocably elects to exercise this
          Option and to pledge the Shares so purchased to the NASD Dealer in a
          margin account as security for a loan from the NASD Dealer in the
          amount of the Exercise Price, and whereby the NASD Dealer irrevocably
          commits upon receipt of such Shares to forward the Exercise Price
          directly to the Company; or

                                       3
<PAGE>

                                                              Snowball.com, Inc.
                                                          Stock Option Agreement
                                                      2000 Equity Incentive Plan

     (e)  by any combination of the foregoing.

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

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

          5.   Notice of Disqualifying Disposition of ISO Shares.  To the extent
               -------------------------------------------------
this Option is an ISO, if Optionee sells or otherwise disposes of any of the
Shares acquired pursuant to the ISO on or before the later of (a) the date two
(2) years after the Date of Grant, and (b) the date one (1) year after transfer
of such Shares to Optionee upon exercise of this Option, then Optionee shall
immediately notify the Company in writing of such disposition.

          6.   Compliance with Laws and Regulations. The exercise of this Option
               ------------------------------------
and the issuance and transfer of Shares shall be subject to compliance by the
Company and Optionee with all applicable requirements of federal and state
securities laws and with all applicable requirements of any stock exchange on
which the Company's Common Stock may be listed at the time of such issuance or
transfer.  Optionee understands that the Company is under no obligation to
register or qualify the Shares with the SEC, any state securities commission or
any stock exchange to effect such compliance.

          7.   Nontransferability of Option.  This Option may not be transferred
               ----------------------------
in any manner other than under the terms and conditions of the Plan or by will
or by the laws of descent and distribution and may be exercised during the
lifetime of Optionee only by Optionee.  The terms of this Option shall be
binding upon the executors, administrators, successors and assigns of Optionee.

          8.   Tax Consequences.  Set forth below is a brief summary as of the
               ----------------
date the Board adopted the Plan of some of the federal 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 ADVISOR BEFORE EXERCISING THIS OPTION OR DISPOSING
OF THE SHARES.

               8.1  Exercise of Incentive Stock Option.  To the extent this
                    ----------------------------------
Option qualifies as an ISO, there will be no regular federal income tax
liability upon the exercise of this

                                       4
<PAGE>

                                                              Snowball.com, Inc.
                                                          Stock Option Agreement
                                                      2000 Equity Incentive Plan

Option, although the excess, if any, of the fair market value of the Shares on
the date of exercise over the Exercise Price will be treated as a tax preference
item for federal income tax purposes and may subject the Optionee to the
alternative minimum tax in the year of exercise.

               8.2  Exercise of Nonqualified Stock Option.  To the extent this
                    -------------------------------------
Option does not qualify as an ISO, there may be a regular federal income tax
liability upon the exercise of this Option.  Optionee will be treated as having
received compensation income (taxable at ordinary income tax rates) equal to the
excess, if any, of the fair market value of the Shares on the date of exercise
over the Exercise Price.  The Company may be required to withhold from
Optionee's compensation or collect from Optionee and pay to the applicable
taxing authorities an amount equal to a percentage of this compensation income
at the time of exercise.

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

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

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

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

          9.   Privileges of Stock Ownership. Optionee shall not have any of the
               -----------------------------
rights of a stockholder with respect to any Shares until the Shares are issued
to Optionee.

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

          11.  Entire Agreement.  The Plan is incorporated herein by reference.
               ----------------
This Agreement and the Plan and the Exercise Agreement constitute the entire
agreement and understanding of the parties hereto with respect to the subject
matter hereof and supersede all prior understandings and agreements with respect
to such subject matter.

          12.  Notices.  Any notice required to be given or delivered to the
               -------
Company under the terms of this Agreement shall be in writing and addressed to
the Corporate Secretary of the

                                       5
<PAGE>

                                                              Snowball.com, Inc.
                                                          Stock Option Agreement
                                                      2000 Equity Incentive Plan

the Company 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 above or to such other address as such party may designate in
writing from time to time to the Company. All notices shall be deemed to have
been given or delivered upon: personal delivery; three (3) days after deposit in
the United States mail by certified or registered mail (return receipt
requested); one (1) business day after deposit with any return receipt express
courier (prepaid); or one (1) business day after transmission by facsimile.

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

         14.  Governing Law.  This Agreement shall be governed by and construed
              -------------
in accordance with the internal laws of the State of California, without regard
to that body of law pertaining to choice of law or conflict of law.

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

                                       6
<PAGE>

                                                              Snowball.com, Inc.
                                                          Stock Option Agreement
                                                      2000 Equity Incentive Plan

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

SNOWBALL.COM, INC.                      OPTIONEE

By:  _________________________________  ____________________________________
                                        (Signature)

______________________________________  ____________________________________
(Please print name)                     (Please print name)

______________________________________
(Please print title)

                                       7
<PAGE>

                                   EXHIBIT A
                                   ---------

                        STOCK OPTION EXERCISE AGREEMENT
<PAGE>

                                   Exhibit A
                                   ---------

                              SNOWBALL.COM, INC.
                    2000 EQUITY INCENTIVE PLAN (the "Plan")
                        STOCK OPTION EXERCISE AGREEMENT
                        -------------------------------

      I hereby elect to purchase the number of shares of Common Stock of
Snowball.com, Inc. (the "Company") as set forth below:

<TABLE>
<S>                                                             <C>
Optionee____________________________________________________    Number of Shares Purchased:_________________________________________
Social Security Number:_____________________________________    Purchase Price per Share:___________________________________________
Address:____________________________________________________    Aggregate Purchase Price:___________________________________________
               _____________________________________________    Date of Option Agreement:____________________
               _____________________________________________
Type of Option:   [  ]   Incentive Stock Option                 Exact Name of Title to Shares:______________________________________
                  [  ]   Nonqualified Stock                     ____________________________________________________________________
</TABLE>

1.  Delivery of Purchase Price.  Optionee hereby delivers to the Company the
Aggregate Purchase Price, to the extent permitted in the Option Agreement (the
"Option Agreement") as follows (check as applicable and complete):

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

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

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

[ ]  by the waiver hereby of compensation due or accrued to Optionee for
     services rendered in the amount of $____________________________________;

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

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

2.   Market Standoff Agreement.  Optionee, if requested by the Company and an
underwriter of Common Stock (or other securities) of the Company, agrees not to
sell or otherwise transfer or dispose of any Common Stock (or other securities)
of the Company held by Optionee during the period requested by the managing
underwriter following the effective date of a registration statement of the
Company filed under the Securities Act, provided that all officers and directors
of the Company are required to enter into similar agreements.  Such agreement
shall be in writing in a form satisfactory to the Company and such underwriter.
The Company may impose stop-transfer instructions with respect to the shares (or
other securities) subject to the foregoing restriction until the end of such
period.

3.    Tax Consequences.  OPTIONEE UNDERSTANDS THAT OPTIONEE MAY SUFFER ADVERSE
TAX CONSEQUENCES AS A RESULT OF OPTIONEE'S PURCHASE OR DISPOSITION OF THE
SHARES.  OPTIONEE REPRESENTS THAT OPTIONEE HAS CONSULTED WITH ANY TAX
CONSULTANT(S) OPTIONEE DEEMS ADVISABLE IN CONNECTION WITH THE PURCHASE OR
DISPOSITION OF THE SHARES AND THAT OPTIONEE IS NOT RELYING ON THE COMPANY FOR
ANY TAX ADVICE.

4.    Entire Agreement. The Plan and Option Agreement are incorporated herein by
reference.  This Exercise Agreement, the Plan and the Option Agreement
constitute the entire agreement and understanding of the parties and supersede
in their entirety all prior understandings and agreements of the Company and
Optionee with respect to the subject matter hereof, and are governed by
California law except for that body of law pertaining to choice of law or
conflict of law.

Date:_____________________________           ___________________________________
                                             Signature of Optionee
<PAGE>

                                Spousal Consent

     I acknowledge that I have read the foregoing Stock Option Exercise
Agreement (the "Agreement") and that I know its contents.  I hereby consent to
and approve all of the provisions of the Agreement, and agree that the shares of
the Common Stock of Snowball.com, Inc. purchased thereunder (the "Shares") and
any interest I may have in such Shares are subject to all the provisions of the
Agreement.  I will take no action at any time to hinder operation of the
Agreement on these Shares or any interest I may have in or to them.

         __________________________________       Date:__________________
         Signature of Optionee's Spouse

         __________________________________
         Spouse's Name - Typed or Printed

         __________________________________
         Optionee's Name - Typed or Printed
<PAGE>

                                                            No. ______

                              SNOWBALL.COM, INC.

                          2000 EQUITY INCENTIVE PLAN

                            STOCK OPTION AGREEMENT
                            ----------------------
                  (Initial Grants For Non-Employee Directors)

          This Stock Option Agreement (this "Agreement") is made and entered
into as of the Date of Grant set forth below (the "Date of Grant") by and
between Snowball.com, Inc., a Delaware corporation (the "Company"), and the
Optionee named below ("Optionee"). Capitalized terms not defined herein shall
have the meanings ascribed to them in the Company's 2000 Equity Incentive Plan
(the "Plan").

Optionee:                      ____________________________

Social Security Number:        ____________________________

Optionee's Address:            ____________________________

                               ____________________________

Total Option Shares:           20,000
                               ----------------------------

Exercise Price Per Share:      ____________________________

Date of Grant:                 ____________________________

Expiration Date:               ____________________________
                               (unless earlier terminated
                                under Section 3 hereof)

Type of Stock Option:          Nonqualified Stock Option
                               ----------------------------

          1.   Grant of Option. The Company hereby grants to Optionee an option
               ---------------
(this "Option") to purchase up to the total number of shares of Common Stock of
the Company set forth above as Total Option Shares (collectively, the "Shares")
at the Exercise Price Per Share set forth above (the "Exercise Price"), subject
to all of the terms and conditions of this Agreement and the Plan.

          2.   Vesting; Exercise Period.
               ------------------------

               2.1  Vesting of Shares. Subject to the terms and conditions of
                    -----------------
the Plan and this Agreement, this Option shall be exercisable as it vests.
Subject to the terms and conditions of the Plan and this Agreement, this Option
shall vest as to 25% of the Shares on the first anniversary of the Date of
Grant, and as to 2.08333% of the Shares monthly thereafter until all of the
Shares are fully vested, so long as the Optionee continuously remains a director
of the Company.

               2.2  Expiration. This Option shall expire on the Expiration Date
                    ----------
set forth above and must be exercised, if at all, on or before the earlier of
the Expiration Date or the date on which this Option is earlier terminated in
accordance with the provisions of Section 3 hereof.
<PAGE>

                                                              Snowball.com, Inc.
                                                            Stock Open Agreement
                                                      For Non-Employee Directors
                                                      2000 Equity Incentive Plan
                                                                   Initial Grant

          3.   Termination. Except as provided below in this Section, this
               -----------
Option shall terminate and may not be exercised if Optionee ceases to be a
member of the Board of Directors of the Company ("Board Member"). The date on
which Optionee ceases to be a Board Member shall be referred to as the
"Termination Date."

               3.1 Termination for Any Reason Except Death, Disability or Cause.
                   ------------------------------------------------------------
If Optionee ceases to be a Board Member for any reason except death, Disability
or Cause, then this Option may be exercised by Optionee no later than seven (7)
months after the Termination Date, but in any event no later than the Expiration
Date.

               3.2 Termination Because of Death or Disability. If Optionee
                   ------------------------------------------
ceases to be a Board Member due to Optionee's death or Disability (or dies
within 3 months after Termination other than for Cause or because of
Disability), then this Option may be exercised by Optionee (or Optionee's legal
representative or authorized assignee) no later than twelve (12) months after
the Termination Date, but in any event no later than the Expiration Date.

               3.3 Termination for Cause. If Optionee is Terminated for Cause,
                   ---------------------
then this Option, to the extenct that it is vested in accordance with the
schedule set forth in Section 2.1 hereof on the Termination Date, may be
exercised by Optionee no later than one (1) month after the Termination Date,
but in any event no later than the Expiration Date.

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

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

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

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

                                       2
<PAGE>

                                                              Snowball.com, Inc.
                                                            Stock Open Agreement
                                                      For Non-Employee Directors
                                                      2000 Equity Incentive Plan
                                                                   Initial Grant

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

     (b)  by surrender of shares of the Company's Common Stock that either: (1)
          have been owned by Optionee for more than six (6) months and have been
          paid for within the meaning of SEC Rule 144 (and, if such shares were
          purchased from the Company by use of a promissory note, such note has
          been fully paid with respect to such shares); or (2) were obtained by
          Optionee in the open public market; and (3) are clear of all liens,
                                              ---
          claims, encumbrances or security interests;

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

     (d)  provided that a public market for the Company's stock exists: (1)
          through a "same day sale" commitment from Optionee and a broker-dealer
          that is a member of the National Association of Securities Dealers (an
          "NASD Dealer") whereby Optionee irrevocably elects to exercise this
          Option and to sell a portion of the Shares so purchased to pay for the
          Exercise Price and whereby the NASD Dealer irrevocably commits upon
          receipt of such Shares to forward the exercise price directly to the
          Company; or (2) through a "margin" commitment from Optionee and an
                   --
          NASD Dealer whereby Optionee irrevocably elects to exercise this
          Option and to pledge the Shares so purchased to the NASD Dealer in a
          margin account as security for a loan from the NASD Dealer in the
          amount of the Exercise Price, and whereby the NASD Dealer irrevocably
          commits upon receipt of such Shares to forward the Exercise Price
          directly to the Company; or

     (e)  by any combination of the foregoing.

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

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

          5.   Compliance with Laws and Regulations. The exercise of this Option
               ------------------------------------
and the issuance and transfer of Shares shall be subject to compliance by the
Company and Optionee with all applicable requirements of federal and state
securities laws and with all applicable requirements of any stock exchange on
which the Company's Common Stock may be listed at the

                                       3
<PAGE>

                                                              Snowball.com, Inc.
                                                            Stock Open Agreement
                                                      For Non-Employee Directors
                                                      2000 Equity Incentive Plan
                                                                   Initial Grant

time of such issuance or transfer. Optionee understands that the Company is
under no obligation to register or qualify the Shares with the SEC, any state
securities commission or any stock exchange to effect such compliance.

          6.   Nontransferability of Option. This Option may not be transferred
               ----------------------------
in any manner other than under the terms and conditions of the Plan or by will
or by the laws of descent and distribution and may be exercised during the
lifetime of Optionee only by Optionee. The terms of this Option shall be binding
upon the executors, administrators, successors and assigns of Optionee.

          7.   Tax Consequences. Set forth below is a brief summary as of the
               ----------------
date the Board adopted the Plan of some of the federal 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 ADVISOR BEFORE EXERCISING THIS OPTION OR DISPOSING
OF THE SHARES.

               7.1  Exercise of Nonqualified Stock Option. There may be a
                    -------------------------------------
regular federal income tax liability upon the exercise of this Option. Optionee
will be treated as having received compensation income (taxable at ordinary
income tax rates) equal to the excess, if any, of the fair market value of the
Shares on the date of exercise over the Exercise Price. The Company may be
required to withhold from Optionee's compensation or collect from Optionee and
pay to the applicable taxing authorities an amount equal to a percentage of this
compensation income at the time of exercise.

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

          8.   Privileges of Stock Ownership. Optionee shall not have any of the
               -----------------------------
rights of a stockholder with respect to any Shares until the Shares are issued
to Optionee.

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

          10.  Entire Agreement. The Plan is incorporated herein by reference.
               ----------------
This Agreement and the Plan and the Exercise Agreement constitute the entire
agreement and understanding of the parties hereto with respect to the subject
matter hereof and supersede all prior understandings and agreements with respect
to such subject matter.

          11.  Notices. Any notice required to be given or delivered to the
               -------
Company under the terms of this Agreement shall be in writing and addressed to
the Corporate Secretary of the Company at its principal corporate offices. Any
notice required to be given or delivered to

                                       4
<PAGE>

                                                              Snowball.com, Inc.
                                                            Stock Open Agreement
                                                      For Non-Employee Directors
                                                      2000 Equity Incentive Plan
                                                                   Initial Grant

Optionee shall be in writing and addressed to Optionee at the address indicated
above or to such other address as such party may designate in writing from time
to time to the Company. All notices shall be deemed to have been given or
delivered upon: personal delivery; three (3) days after deposit in the United
States mail by certified or registered mail (return receipt requested); one (1)
business day after deposit with any return receipt express courier (prepaid); or
one (1) business day after transmission by facsimile.

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

          13.  Governing Law. This Agreement shall be governed by and construed
               -------------
in accordance with the internal laws of the State of California, without regard
to that body of law pertaining to choice of law or conflict of law.

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

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

SNOWBALL.COM, INC.                          OPTIONEE

By:________________________________         _______________________________
                                            (Signature)

___________________________________         _______________________________
(Please print name)                         (Please print name)

___________________________________
(Please print title)

                                       5
<PAGE>

                                   EXHIBIT A
                                   ---------

                        STOCK OPTION EXERCISE AGREEMENT
<PAGE>

                                   Exhibit A
                                   ---------

                               SNOWBALL.COM, INC.
                    2000 EQUITY INCENTIVE PLAN (the "Plan")
                        STOCK OPTION EXERCISE AGREEMENT
                        -------------------------------
                          (For Non-Employee Directors)

     I hereby elect to purchase the number of shares of Common Stock of
Snowball.com, Inc. (the "Company") as set forth below:

<TABLE>
<CAPTION>
<S>                                                                  <C>
Optionee______________________________________                       Number of Shares Purchased:________________________________
Social Security Number:_______________________                       Purchase Price per Share:__________________________________
Address:______________________________________                       Aggregate Purchase Price:__________________________________
                                                                     Date of Option Agreement: _________________________________
          ____________________________________
          ____________________________________
Type of Option:   Nonqualified Stock Option                          Exact Name of Title to Shares:_____________________________

                                                                     ___________________________________________________________
</TABLE>

1.   Delivery of Purchase Price.  Optionee hereby delivers to the Company the
Aggregate Purchase Price, to the extent permitted in the Option Agreement (the
"Option Agreement") as follows (check as applicable and complete):

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

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

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

[ ]  by the waiver hereby of compensation due or accrued to Optionee for
     services rendered in the amount of $____________________________________;

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

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

2.   Market Standoff Agreement. Optionee, if requested by the Company and an
underwriter of Common Stock (or other securities) of the Company, agrees not to
sell or otherwise transfer or dispose of any Common Stock (or other securities)
of the Company held by Optionee during the period requested by the managing
underwriter following the effective date of a registration statement of the
Company filed under the Securities Act, provided that all officers and directors
of the Company are required to enter into similar agreements. Such agreement
shall be in writing in a form satisfactory to the Company and such underwriter.
The Company may impose stop-transfer instructions with respect to the shares (or
other securities) subject to the foregoing restriction until the end of such
period.

3.   Tax Consequences. OPTIONEE UNDERSTANDS THAT OPTIONEE MAY SUFFER ADVERSE TAX
CONSEQUENCES AS A RESULT OF OPTIONEE'S PURCHASE OR DISPOSITION OF THE SHARES.
OPTIONEE REPRESENTS THAT OPTIONEE HAS CONSULTED WITH ANY TAX CONSULTANT(S)
OPTIONEE DEEMS ADVISABLE IN CONNECTION WITH THE PURCHASE OR DISPOSITION OF THE
SHARES AND THAT OPTIONEE IS NOT RELYING ON THE COMPANY FOR ANY TAX ADVICE.

4.   Entire Agreement. The Plan and Option Agreement are incorporated herein by
reference. This Exercise Agreement, the Plan and the Option Agreement constitute
the entire agreement and understanding of the parties and supersede in their
entirety all prior understandings and agreements of the Company and Optionee
with respect to the subject matter hereof, and are governed by California law
except for that body of law pertaining to choice of law or conflict of law.

Date: ________________                          ___________________________
                                                Signature of Optionee
<PAGE>

                                Spousal Consent

     I acknowledge that I have read the foregoing Stock Option Exercise
Agreement (the "Agreement") and that I know its contents. I hereby consent to
and approve all of the provisions of the Agreement, and agree that the shares of
the Common Stock of Snowball.com, Inc. purchased thereunder (the "Shares") and
any interest I may have in such Shares are subject to all the provisions of the
Agreement. I will take no action at any time to hinder operation of the
Agreement on these Shares or any interest I may have in or to them.

     __________________________________           Date:__________________
     Signature of Optionee's Spouse

     __________________________________
     Spouse's Name - Typed or Printed

     __________________________________
     Optionee's Name - Typed or Printed
<PAGE>

                                                                         No. ___

                              SNOWBALL.COM, INC.

                          2000 EQUITY INCENTIVE PLAN

                            STOCK OPTION AGREEMENT
                            ----------------------
                 (Succeeding Grant For Non-Employee Directors)

          This Stock Option Agreement (this "Agreement") is made and entered
into as of the Date of Grant set forth below (the "Date of Grant") by and
between Snowball.com, Inc., a Delaware corporation (the "Company"), and the
Optionee named below ("Optionee").  Capitalized terms not defined herein shall
have the meanings ascribed to them in the Company's 2000 Equity Incentive Plan
(the "Plan").

Optionee:                     _______________________________________________

Social Security Number:       _______________________________________________

Optionee's Address:           _______________________________________________

Total Option Shares:          5,000
                              -----------------------------------------------

Exercise Price Per Share:     _______________________________________________

Date of Grant:                _______________________________________________

Expiration Date:              _______________________________________________
                              (unless earlier terminated under Section 3 hereof)

Type of Stock Option:         Nonqualified Stock Option
                              -----------------------------------------------

          1.   Grant of Option.  The Company hereby grants to Optionee an option
               ---------------
(this "Option") to purchase up to the total number of shares of Common Stock of
the Company set forth above as Total Option Shares (collectively, the "Shares")
at the Exercise Price Per Share set forth above (the "Exercise Price"), subject
to all of the terms and conditions of this Agreement and the Plan.

          2.   Vesting; Exercise Period.
               ------------------------

               2.1  Vesting of Shares.  Subject to the terms and conditions of
                    -----------------
the Plan and this Agreement, this Option shall be exercisable as it vests.
Subject to the terms and conditions of the Plan and this Agreement, this Option
shall vest as to 25% of the Shares on the first anniversary of the Date of
Grant, and as to 2.08333% of the Shares monthly thereafter until all of the
Shares are fully vested, so long as the Optionee continuously remains a director
of the Company.

               2.2  Expiration.  This Option shall expire on the Expiration Date
                    ----------
set forth above and must be exercised, if at all, on or before the earlier of
the Expiration Date or the date on which this Option is earlier terminated in
accordance with the provisions of Section 3 hereof.
<PAGE>

                                                              Snowball.com, Inc.
                                                               Stock Option Plan
                                                      For Non-Employee Directors
                                                      2000 Equity Incentive Plan
                                                                Succeeding Grant

          3.   Termination.  Except as provided below in this Section, this
               -----------
Option shall terminate and may not be exercised if Optionee ceases to be a
member of the Board of Directors of the Company ("Board Member").  The date on
which Optionee ceases to be a Board Member shall be referred to as the
"Termination Date."

               3.1  Termination for Any Reason Except Death, Disability or
                    ------------------------------------------------------
Cause. If Optionee ceases to be a Board Member for any reason except death,
-----
Disability or Cause, then this Option may be exercised by Optionee no later than
seven (7) months after the Termination Date, but in any event no later than the
Expiration Date.

               3.2  Termination Because of Death or Disability.  If Optionee
                    ------------------------------------------
ceases to be a Board Member due to Optionee's death or Disability (or dies
within 3 months after Termination other than for Cause or because of
Disability), then this Option may be exercised by Optionee (or Optionee's legal
representative or authorized assignee) no later than twelve (12) months after
the Termination Date, but in any event no later than the Expiration Date.

               3.3  Termination for Cause.  If Optionee is Terminated for Cause,
                    ---------------------
then this Option, to the extenct that it is vested in accordance with the
schedule set forth in Section 2.1 hereof on the Termination Date, may be
exercised by Optionee no later than one (1) month after the Termination Date,
but in any event no later than the Expiration Date.

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

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

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

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

                                       2
<PAGE>

                                                              Snowball.com, Inc.
                                                               Stock Option Plan
                                                      For Non-Employee Directors
                                                      2000 Equity Incentive Plan
                                                                Succeeding Grant

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

     (b)  by surrender of shares of the Company's Common Stock that either: (1)
          have been owned by Optionee for more than six (6) months and have been
          paid for within the meaning of SEC Rule 144 (and, if such shares were
          purchased from the Company by use of a promissory note, such note has
          been fully paid with respect to such shares); or (2) were obtained by
          Optionee in the open public market; and (3) are clear of all liens,
                                              ---
          claims, encumbrances or security interests;

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

     (d)  provided that a public market for the Company's stock exists:  (1)
          through a "same day sale" commitment from Optionee and a broker-dealer
          that is a member of the National Association of Securities Dealers (an
          "NASD Dealer") whereby Optionee irrevocably elects to exercise this
          Option and to sell a portion of the Shares so purchased to pay for the
          Exercise Price and whereby the NASD Dealer irrevocably commits upon
          receipt of such Shares to forward the exercise price directly to the
          Company; or (2) through a "margin" commitment from Optionee and an
                   --
          NASD Dealer whereby Optionee irrevocably elects to exercise this
          Option and to pledge the Shares so purchased to the NASD Dealer in a
          margin account as security for a loan from the NASD Dealer in the
          amount of the Exercise Price, and whereby the NASD Dealer irrevocably
          commits upon receipt of such Shares to forward the Exercise Price
          directly to the Company; or

     (e)  by any combination of the foregoing.

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

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

          5.   Compliance with Laws and Regulations. The exercise of this Option
               ------------------------------------
and the issuance and transfer of Shares shall be subject to compliance by the
Company and Optionee with all applicable requirements of federal and state
securities laws and with all applicable requirements of any stock exchange on
which the Company's Common Stock may be listed at the

                                       3
<PAGE>

                                                              Snowball.com, Inc.
                                                               Stock Option Plan
                                                      For Non-Employee Directors
                                                      2000 Equity Incentive Plan
                                                                Succeeding Grant

time of such issuance or transfer. Optionee understands that the Company is
under no obligation to register or qualify the Shares with the SEC, any state
securities commission or any stock exchange to effect such compliance.

          6.   Nontransferability of Option.  This Option may not be transferred
               ----------------------------
in any manner other than under the terms and conditions of the Plan or by will
or by the laws of descent and distribution and may be exercised during the
lifetime of Optionee only by Optionee.  The terms of this Option shall be
binding upon the executors, administrators, successors and assigns of Optionee.

          7.   Tax Consequences.  Set forth below is a brief summary as of the
               ----------------
date the Board adopted the Plan of some of the federal 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 ADVISOR BEFORE EXERCISING THIS OPTION OR DISPOSING
OF THE SHARES.

               7.1  Exercise of Nonqualified Stock Option.  There may be a
                    -------------------------------------
regular federal income tax liability upon the exercise of this Option.  Optionee
will be treated as having received compensation income (taxable at ordinary
income tax rates) equal to the excess, if any, of the fair market value of the
Shares on the date of exercise over the Exercise Price.  The Company may be
required to withhold from Optionee's compensation or collect from Optionee and
pay to the applicable taxing authorities an amount equal to a percentage of this
compensation income at the time of exercise.

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

          8.   Privileges of Stock Ownership. Optionee shall not have any of the
               -----------------------------
rights of a stockholder with respect to any Shares until the Shares are issued
to Optionee.

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

          10.  Entire Agreement.  The Plan is incorporated herein by reference.
               ----------------
This Agreement and the Plan and the Exercise Agreement constitute the entire
agreement and understanding of the parties hereto with respect to the subject
matter hereof and supersede all prior understandings and agreements with respect
to such subject matter.

          11.  Notices.  Any notice required to be given or delivered to the
               -------
Company under the terms of this Agreement shall be in writing and addressed to
the Corporate Secretary of the Company at its principal corporate offices.  Any
notice required to be given or delivered to

                                       4
<PAGE>

                                                              Snowball.com, Inc.
                                                          Stock Option Agreement
                                                      For Non-Employee Directors
                                                      2000 Equity Incentive Plan
                                                                Succeeding Grant

Optionee shall be in writing and addressed to Optionee at the address indicated
above or to such other address as such party may designate in writing from time
to time to the Company. All notices shall be deemed to have been given or
delivered upon: personal delivery; three (3) days after deposit in the United
States mail by certified or registered mail (return receipt requested); one (1)
business day after deposit with any return receipt express courier (prepaid); or
one (1) business day after transmission by facsimile.

         12.  Successors And Assigns.  The Company may assign any of its rights
              ----------------------
under this Agreement.  This Agreement shall be binding upon and inure to the
benefit of the successors and assigns of the Company.  Subject to the
restrictions on transfer set forth herein, this Agreement shall be binding upon
Optionee and Optionee's heirs, executors, administrators, legal representatives,
successors and assigns.

         13.  Governing Law.  This Agreement shall be governed by and construed
              -------------
in accordance with the internal laws of the State of California, without regard
to that body of law pertaining to choice of law or conflict of law.

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

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

SNOWBALL.COM, INC.               OPTIONEE

By:-------------------------     -----------------------------------
                                 (Signature)

----------------------------     -----------------------------------
(Please print name)              (Please print name)

----------------------------
(Please print title)

                                       5
<PAGE>

                                   Exhibit A
                                   ---------

                              SNOWBALL.COM, INC.
                    2000 EQUITY INCENTIVE PLAN (the "Plan")
                        STOCK OPTION EXERCISE AGREEMENT
                        -------------------------------

      I hereby elect to purchase the number of shares of Common Stock of
Snowball.com, Inc. (the "Company") as set forth below:

<TABLE>
<S>                                                             <C>
Optionee____________________________________________________    Number of Shares Purchased:_________________________________________
Social Security Number:_____________________________________    Purchase Price per Share:___________________________________________
Address:____________________________________________________    Aggregate Purchase Price:___________________________________________
               _____________________________________________    Date of Option Agreement:____________________
               _____________________________________________
Type of Option:   [  ]   Incentive Stock Option                 Exact Name of Title to Shares:______________________________________
                  [  ]   Nonqualified Stock                     ____________________________________________________________________
</TABLE>

1.  Delivery of Purchase Price.  Optionee hereby delivers to the Company the
Aggregate Purchase Price, to the extent permitted in the Option Agreement (the
"Option Agreement") as follows (check as applicable and complete):

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

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

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

[ ]  by the waiver hereby of compensation due or accrued to Optionee for
     services rendered in the amount of $____________________________________;

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

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

2.   Market Standoff Agreement.  Optionee, if requested by the Company and an
underwriter of Common Stock (or other securities) of the Company, agrees not to
sell or otherwise transfer or dispose of any Common Stock (or other securities)
of the Company held by Optionee during the period requested by the managing
underwriter following the effective date of a registration statement of the
Company filed under the Securities Act, provided that all officers and directors
of the Company are required to enter into similar agreements.  Such agreement
shall be in writing in a form satisfactory to the Company and such underwriter.
The Company may impose stop-transfer instructions with respect to the shares (or
other securities) subject to the foregoing restriction until the end of such
period.

3.    Tax Consequences.  OPTIONEE UNDERSTANDS THAT OPTIONEE MAY SUFFER ADVERSE
TAX CONSEQUENCES AS A RESULT OF OPTIONEE'S PURCHASE OR DISPOSITION OF THE
SHARES.  OPTIONEE REPRESENTS THAT OPTIONEE HAS CONSULTED WITH ANY TAX
CONSULTANT(S) OPTIONEE DEEMS ADVISABLE IN CONNECTION WITH THE PURCHASE OR
DISPOSITION OF THE SHARES AND THAT OPTIONEE IS NOT RELYING ON THE COMPANY FOR
ANY TAX ADVICE.

4.    Entire Agreement. The Plan and Option Agreement are incorporated herein by
reference.  This Exercise Agreement, the Plan and the Option Agreement
constitute the entire agreement and understanding of the parties and supersede
in their entirety all prior understandings and agreements of the Company and
Optionee with respect to the subject matter hereof, and are governed by
California law except for that body of law pertaining to choice of law or
conflict of law.

Date:_____________________________           ___________________________________
                                             Signature of Optionee

<PAGE>

                                Spousal Consent

     I acknowledge that I have read the foregoing Stock Option Exercise
Agreement (the "Agreement") and that I know its contents.  I hereby consent to
and approve all of the provisions of the Agreement, and agree that the shares of
the Common Stock of Snowball.com, Inc. purchased thereunder (the "Shares") and
any interest I may have in such Shares are subject to all the provisions of the
Agreement.  I will take no action at any time to hinder operation of the
Agreement on these Shares or any interest I may have in or to them.

         __________________________________       Date:__________________
         Signature of Optionee's Spouse

         __________________________________
         Spouse's Name - Typed or Printed

         __________________________________
         Optionee's Name - Typed or Printed

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