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                                                                EXHIBIT 10(xiii)

                            INVESTORS TITLE COMPANY

                 2001 STOCK OPTION AND RESTRICTED STOCK  PLAN

                                   ARTICLE I
                                   ---------
                              GENERAL PROVISIONS
                              ------------------

          Section 1.1  Purpose.  This 2001 Stock Option and Restricted Stock
                       -------
Plan (the "Plan") of Investor's Title Company and its subsidiaries (the
"Company") is intended to induce those persons who are in a position to
contribute materially to the success of the Company to remain with the Company,
to offer them rewards in recognition of their contributions to the Company and
to offer them incentives to continue to promote the Company's best interests.

          Section 1.2  Elements of the Plan.  The Plan provides for the grant of
                       --------------------
stock options pursuant to ARTICLE II of the Plan ("Options") and restricted
stock awards pursuant to ARTICLE III of the Plan ("Restricted Stock Awards").
Each Option granted pursuant to the Plan shall be designated as provided in
ARTICLE II as either an Incentive Stock Option or a Nonqualified Stock Option.
Incentive Stock Options granted under the Plan are intended to qualify as such
under Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"),
and shall be construed and interpreted to comply with the requirements of that
section and any regulations promulgated thereunder.

          Section 1.3  Administration.  The Plan shall be administered by an
                       --------------
option committee (the "Committee") appointed by the Board of Directors of the
Company (the "Board"). The Committee shall be comprised of not less than two
members, all of whom must be persons who are both "Non-Employee Directors"
within the meaning of Rule 16b-3 as promulgated by the Securities and Exchange
Commission under the Securities Exchange Act of 1934 and "outside directors"
within the meaning of Section 162(m) of the Code and the regulations promulgated
thereunder. The Board from time to time may appoint members of the Committee in
substitution for or in addition to members previously appointed, and may fill
vacancies in the Committee, however caused. Any action by the Committee shall be
taken by majority vote at a meeting thereof called in accordance with procedures
adopted thereby, or by unanimous written consent of the Committee.

          Section 1.4  Authority of Committee.
                       ----------------------

          (a)  Subject to the other provisions of this Plan, the Committee shall
     have sole authority in its absolute discretion:  to grant Options and
     Restricted Stock Awards under the Plan; to determine the officers,
     employees and directors to whom Options and/or Restricted Stock Awards
     shall be granted under the Plan; to determine the number of

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     shares subject to any Option or Restricted Stock Award under the Plan; to
     fix the option price and the duration of each Option; to establish
     corporate or individual performance or other vesting standards for Options
     or Restricted Stock Awards; to establish any other terms and conditions of
     Options and Restricted Stock Awards; and to accelerate the time at which
     any outstanding Option may be exercised or the time when restrictions and
     conditions on Restricted Stock Awards will lapse. The Board may also grant
     Options and/or Restricted Stock Awards from time to time to consultants who
     are not employees of the Company. No member of the Board or of the
     Committee shall be liable for any action or determination made in good
     faith with respect to the Plan or any Option or Restricted Stock Award
     granted thereunder. In addition, directors or former directors of the
     Company, including members or former members of the Committee, shall be
     entitled to indemnification by the Company to the extent permitted by
     applicable law and by the Company's Articles of Incorporation or Bylaws
     with respect to any liability or expense arising out of such person's
     participation in the administration of this Plan.

          (b)  Subject to the other provisions of this Plan, and with a view to
     effecting its purpose, the Committee shall have sole authority in its
     absolute discretion: to construe and interpret the Plan; to prescribe,
     amend, and rescind rules and regulations relating to the Plan; to make any
     other determinations relating to the Plan; and to do everything necessary
     or advisable to administer the Plan.

          (c)  All decisions, determinations, and interpretations made by the
     Committee shall be binding and conclusive on all optionees and holders of
     restricted stock and on their legal representatives, heirs and
     beneficiaries.

          Section 1.5  Shares Subject to the Plan: Reservation of Shares.  The
                       -------------------------------------------------
maximum aggregate number of shares of common stock of the Company available
pursuant to the Plan for the grant of Options and for Restricted Stock Awards,
subject to adjustments as provided in Section 1.7, shall be 250,000 shares of
the Company's common stock, no par value (the "Common Stock").  The aggregate
number of shares of Common Stock with respect to which Options and Restricted
Stock Awards under the Plan may be granted to any individual (including Options
and Restricted Stock Awards that are subsequently cancelled) shall not exceed an
aggregate of 50,000 shares of Common Stock.  If any Option granted pursuant to
the Plan expires or terminates for any reason before it has been exercised in
full, the unpurchased shares subject to that Option shall again be available for
the purposes of the Plan.  If any shares issued pursuant to a Restricted Stock
Award are forfeited, they shall again be available for the purposes of the Plan.
The Company shall at all times reserve and keep available such number of shares
of its Common Stock as shall be sufficient to satisfy the requirements of the
Plan.

          Section 1.6  Eligibility.  Options and Restricted Stock Awards may be
                       -----------
granted under the Plan to such key employees (including statutory employees
within the meaning of Section 3121(d) of the Code), officers, directors or
consultants of the Company or a subsidiary of the Company, whether or not
employees, as the Committee shall select from time to time in its discretion.
Incentive Stock Options, however, may be granted under the Plan only to key
employees of the Company or a subsidiary of the Company who qualify for the
grant of an Incentive Stock Option under Section 422 of the Code.

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          Section 1.7  Adjustments.  If the shares of Common Stock of the
                       -----------
Company are increased, decreased, changed into or exchanged for a different
number or kind of shares or securities through merger, consolidation,
combination, exchange of shares, other reorganization, recapitalization,
reclassification, stock dividend, stock split or reverse stock split in which
the Company is the surviving entity, an appropriate and proportionate adjustment
shall be made in the maximum number and kind of shares as to which Options and
Restricted Stock Awards may be granted under this Plan.  A corresponding
adjustment changing the number or kind of shares allocated to unexercised
Options or unvested Restricted Stock Awards that shall have been granted prior
to any such change shall likewise be made.  Any such adjustment in outstanding
Options shall be made without change in the aggregate purchase price applicable
to the unexercised portion of any such Option, but with a corresponding
adjustment in the price for each share covered by the Option, and shall be made
in a manner as not to constitute a modification, within the meaning of Section
424(h) of the Code, of outstanding Incentive Stock Options.  In making any
adjustment pursuant to this Section 1.7, any fractional shares shall be
disregarded.

     In the event of a change in the Common Stock of the Company as presently
constituted, which is limited to a change of all of its authorized shares with
par value into the same number of shares with a different par value or without
par value, the shares resulting from any such change shall be deemed to be
Common Stock within the meaning of the Plan.

     The grant of an Option or a Restricted Stock Award under the Plan shall not
affect in any way the right or power of the Company to make adjustments,
reclassifications, reorganizations or changes in its capital or business
structure.

ARTICLE II
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STOCK OPTIONS
-------------

          Section 2.1  Grant.  The Committee may cause the Company to grant
                       -----
Stock Options for the purchase of shares of Common Stock to eligible
participants under the Plan in such amounts as the Committee, in its sole
discretion shall determine.  Options granted pursuant to the Plan that are
intended to qualify as "incentive stock options" under Section 422 of the Code
shall be designated as such at the time of their grant and are referred to
herein as Incentive Stock Options.  Options not intended to qualify as Incentive
Stock Options are referred to herein as Nonqualified Stock Options and shall be
designated as such in the applicable option agreement.

          Section 2.2  Terms and Conditions of Options.  Options granted under
                       -------------------------------
the Plan shall be evidenced by written agreements ("option agreements") in such
form as the Committee may from time to time approve.  The terms and conditions
of Options granted under the Plan, including the satisfaction of corporate or
individual performance or other vesting standards, may differ one from another
as the Committee shall in its discretion determine, as long as all Options
granted under the Plan satisfy the terms and conditions applicable to Options
set forth in this Plan.

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          (a)  Number of Shares; Designation.  Each Option shall state the
               -----------------------------
     number of shares of Common Stock to which it pertains and that it is either
     an Incentive Stock Option or a Nonqualified Stock Option.

          (b)  Option Price.  Each Option shall state the option price, which
               ------------
     shall not be less than the fair market value (as hereinafter defined) per
     share of the Common Stock at the time the option is granted (except that
     for Incentive Stock Options granted to any employee who owns more than 10%
     of the combined voting power of all classes of stock of the Company, the
     option price shall not be less than 110% of fair market value). For the
     purpose of the Plan, the "fair market value" per share of Common Stock on
     any date of reference shall be the Closing Price of the Common Stock
     referred to in clauses (i), (ii) or (iii) below, whichever appropriate, on
     the business day immediately preceding such date.  For this purpose, the
     Closing Price of the Common Stock on any business day shall be: (i) if the
     Common Stock is listed or admitted for trading on any United States
     national securities exchange, or if actual transactions are otherwise
     reported on the National Market System of the National Association of
     Securities Dealers Automated Quotation System ("NASDAQ") or other
     consolidated transaction reporting system, the last reported sale price of
     Common Stock on such exchange or reporting system on which the Common Stock
     is principally traded, as reported in any newspaper of general circulation;
     (ii) if clause (i) is not applicable and the Common Stock is otherwise
     quoted on NASDAQ, or any similar system of automated dissemination of
     quotations of securities prices in common use, the mean between the closing
     high bid and low asked quotations for the Common Stock on such system for
     such day; or (iii) if neither clause (i) nor (ii) is applicable, the mean
     between the high bid and low asked quotations for the Common Stock as
     reported by the National Quotation Bureau, Incorporated if at least two
     securities dealers have inserted both bid and asked quotations for Common
     Stock on at least five of the preceding ten days.  If neither clause (i)
     nor clauses (ii) or (iii) are applicable, "fair market value" per share of
     Common Stock shall be such value as shall be determined by the Committee in
     its sole discretion, unless the Committee shall identify a different method
     for determining fair market value in a fair and uniform manner.

          (c)  Exercise of Options.  Each Option shall be exercisable in one or
               -------------------
     more installments during its term, as provided in the applicable Option
     agreement, and the right to exercise may be cumulative.  No Option may be
     exercised for a fraction of a share of Common Stock.  Unless otherwise
     provided by the applicable Option agreement, the purchase price of any
     shares purchased shall be paid in full in cash or by cashier's check
     payable to the order of the Company, by surrender of shares of Common Stock
     held by the grantee for more than six months and having a value at the
     exercise date equal to the exercise price, or through a cashless exercise
     through a broker-dealer registered with the Securities and Exchange
     Commission, or by a combination of any of the foregoing.  If any portion of
     the purchase price is paid in shares of Common Stock, those shares shall be
     valued at their fair market value as of the day of delivery, as determined
     in accordance with Section 2.2(b).  No optionee, or optionee's executor,
     administrator, legatee, or distributee, shall be deemed to be a holder of
     any shares subject to an Option unless and until a stock certificate or
     certificates for such are issued to such person(s) under the terms of the
     Plan.  No adjustment shall be made for dividends (ordinary or
     extraordinary, whether in cash, securities or other property) or
     distributions or other rights for which the

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     record date is prior to the date such stock certificate is issued, except
     as provided in Section 1.7. The exercise of Options under the Plan shall be
     subject to the withholding requirements as set forth in Section 4.2.

          (d)  Written Notice Required.  An Option granted pursuant to the terms
               ------------------------
     of this Plan shall be exercised when written notice of that exercise,
     stating the number of shares with respect to which the Option is being
     exercised, has been given to the Company at its principal office, from the
     person entitled to exercise the Option and full payment for the shares with
     respect to which the Option is exercised has been received by the Company.

          (e)  Options Not Transferable.  Options granted pursuant to this Plan
               ------------------------
     may not be sold, pledged, assigned or transferred in any manner other than
     by will or the laws of descent or distribution and may be exercised during
     the lifetime of an optionee only by that optionee.

          (f)  Duration of Options.  Each Option and all rights thereunder
               -------------------
     granted pursuant to the terms of this Plan shall expire on the date
     specified in the applicable option agreement, but in no event shall any
     Option expire later than ten (10) years from the date on which the Option
     is granted; provided, however, that any Incentive Stock Option granted to
     an employee who owns more than 10% of the combined voting power of all
     classes of stock of the Company may not be exercisable after the date five
     (5) years from the date the Option is granted.  In addition, each Option
     shall be subject to early termination as provided in this Plan or the
     applicable option agreement.

          (g)  Termination of Employment, Disability or Death.
               ----------------------------------------------

               (i)   If an optionee ceases to be employed by the Company, or any
          subsidiary corporation, for any reason other than death or disability,
          any Option granted to such optionee that is unexercised or still
          subject to any restrictions or conditions shall be terminated and
          forfeited, unless otherwise provided in the applicable option
          agreement.

               (ii)  If an optionee becomes disabled within the meaning of
          Section 22(e)(3) of the Code while employed by the Company, or any
          subsidiary corporation, any Option may be exercised at any time within
          three months after the date of termination of employment due to
          disability, unless a longer or shorter period is provided in the
          applicable option agreement.

               (iii) If an optionee dies while employed by the Company, or any
          subsidiary corporation, any Option shall expire one year after the
          date of death, unless a longer or shorter period of exercise is
          provided in the applicable option agreement.  During this period, the
          Option may be exercised, except as otherwise provided in the
          applicable option agreement, by the person or persons to whom the
          optionee's rights under the Option shall pass by will or by the laws
          of descent and distribution, but in no event may the Option be
          exercisable more than ten years from the date of grant.

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               (iv) Unless otherwise provided in the applicable option
          agreement, any Option that may be exercised for a period following
          termination of the optionee's employment may be exercised only to the
          extent it was exercisable immediately before such termination and in
          no event after the Option would expire by its terms without regard to
          such termination.

               (v)  If a nonemployee director ceases to serve the Company in
          that capacity, the optionee's rights upon such termination shall be
          governed in the manner of a optionee's rights upon termination of
          employment as set forth above.

          (h)  Reorganizations.  If the Company shall be a party to any merger
               ---------------
     or consolidation in which it is not the surviving entity or pursuant to
     which the shareholders of the Company exchange their Common Stock for other
     securities or for cash in any acquisition transaction, or if the Company
     shall dissolve or liquidate or sell all or substantially all of its assets,
     or upon consummation of a tender offer approved by the Board, all Options
     outstanding under this Plan, unless otherwise provided in the applicable
     option agreement, shall terminate on the effective date of such merger,
     consolidation, dissolution, liquidation, sale or tender offer; provided,
     however, that prior to such effective date, the Committee may, in its
     discretion, either (i) make any or all outstanding Options immediately
     exercisable, (ii) authorize a payment to any optionee that approximates the
     economic benefit that he would realize if his option were exercised
     immediately before such effective date, (iii) authorize a payment in such
     other amount as it deems appropriate to compensate any optionee for the
     termination of his Option, or (iv) arrange for the granting of a substitute
     Option to any optionee.

          Section 2.3  Maximum Amount of Incentive Stock Options.  The maximum
                       -----------------------------------------
aggregate fair market value of Common Stock, determined as of the time the
Incentive Stock Option is granted, with respect to which Incentive Stock Options
are exercisable by an optionee for the first time during any calendar year,
under this Plan and all other incentive stock option plans of the Company and
any parent, subsidiary, and predecessor corporations, shall not exceed $100,000.
Any Option in excess of the foregoing limitation shall be deemed a Nonqualified
Stock Option to the extent of such excess.

ARTICLE III
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RESTRICTED STOCK AWARDS
-----------------------

          Section 3.1  Grant of Restricted Shares.  The Committee may cause
                       --------------------------
the Company to grant Restricted Stock Awards to eligible participants under the
Plan in such amounts as the Committee, in its sole discretion, shall determine.
Restricted Stock Awards may be issued either alone or in addition to Options
granted under the Plan.

          Section 3.2  Agreement.  Each Restricted Stock Award shall be
                       ---------
evidenced by a written agreement in such form and containing such provisions not
inconsistent with the Plan as the Committee may from time to time approve.  Each
Restricted Stock Award shall be effective as of the date so stated in the
resolution of the Committee making the award.

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          Section 3.3  Restrictions and Conditions.  Shares of Common Stock
                       ---------------------------
awarded under this ARTICLE III shall be subject to such restrictions and
conditions, if any, as may be imposed by the Committee at the time of making the
award.  Such restrictions and conditions may include, without limitation, the
satisfaction of specified performance criteria by the Company or by the grantee
of the Restricted Stock Award, or other vesting standards; provided, however,
that no award shall require any payment of cash consideration by the grantee.
Restrictions and conditions imposed on shares of Common Stock awarded under this
ARTICLE III may differ from one award to another as the Committee shall, in its
discretion, determine.  Any restrictions and conditions shall lapse, in whole or
in part, as provided in the agreement evidencing the Restricted Stock Award, but
must lapse, if at all, not later than ten (10) years from the date of the award.

     Shares with respect to which no restrictions or conditions are imposed and
shares with respect to which the restrictions and conditions imposed thereon
have lapsed are hereinafter referred to as "Unrestricted Shares."  Shares with
respect to which the restrictions and conditions imposed thereon have not lapsed
are hereinafter referred to as "Restricted Shares."

          Section 3.4  Rights as a Shareholder.  A holder of Unrestricted Shares
                       -----------------------
shall have all of the rights of a shareholder of the Company with respect
thereto and shall be entitled to receive a stock certificate evidencing such
Unrestricted Shares.  Such certificate shall be issued without legend, except to
the extent that a legend may be necessary for compliance with applicable
securities laws.

     A holder of Restricted Shares shall be the record owner thereof and shall,
subject to the restrictions and conditions, have all of the rights of a
shareholder with respect thereto, including, but not limited to, the right to
receive all dividends paid on the Common Stock (ordinary or extraordinary,
whether in cash, securities or other property) and the right to vote the
Restricted Shares; provided, however, that each stock certificate evidencing
Restricted Shares shall bear a conspicuous legend stating that the shares
evidenced thereby are subject to restrictions as to transferability as provided
in Section 3.6 and to such other restrictions and conditions as have been
imposed by the Committee, and each such certificate shall be deposited by the
Holder with the Company or its designee together with a stock power endorsed in
blank.

          Section 3.5  Forfeiture.  Unless otherwise provided in the applicable
                       ----------
Restricted Stock Award agreement, upon termination of the grantee's employment
with the Company or any of its subsidiaries for any reason whatsoever
(voluntarily or involuntarily, with or without cause), all Restricted Shares
then owned by him shall automatically and without any action on his part be
forfeited and transferred to the Company.

          Section 3.6  Transferability.  Restricted Shares held by a grantee
                       ---------------
shall not be subject to alienation, sale, transfer, assignment, pledge,
attachment or encumbrances of any kind, and any attempt to alienate, sell,
transfer, assign, pledge or otherwise encumber any Restricted Shares shall be
void.  In addition, the Company may impose such restrictions on the transfer of
Unrestricted Shares as it deems necessary or desirable to assure compliance with
all applicable federal and state securities laws.

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          Section 3.7  Adjustments.  If there is a change in the Common Stock of
                       -----------
the Company as described in Section 1.7 of this Plan, any stock or other
securities or other property issued with respect to Restricted Shares shall be
subject to the same restrictions and conditions as are applicable to such
Restricted Shares, and the certificates or other evidence of such stock,
securities or other property, together with an appropriate stock power or power
of attorney, shall be delivered to the Company or its designee and held until
such time as the restrictions and conditions applicable thereto lapse or until
the stock, securities or other property is forfeited in accordance with the
provisions of this ARTICLE III.

     If the Company shall be a party to any merger or consolidation in which it
is not the surviving company or pursuant to which the shareholders of the
Company exchange their Common Stock for other securities or for cash in any
acquisition transaction, if the Company shall dissolve or liquidate or sell all
or substantially all of its assets, or upon consummation of a tender offer
approved by the Board, the Committee may, in its discretion, cause all
Restricted Stock Awards that are still subject to any restrictions and
conditions to become immediately vested in full on the effective date of any
such transaction, unless otherwise provided in the applicable agreement
evidencing such Restricted Stock Award.

ARTICLE IV
----------

MISCELLANEOUS PROVISIONS
------------------------

          Section 4.1  Tax Reimbursement Payments or Loans.  In view of the
                       -----------------------------------
federal and state income tax savings expected to be realized by the Company upon
exercise of a Nonqualified Stock Option or the lapse of restrictions and
conditions imposed upon Restricted Shares, the Committee may, in its discretion,
provide that the Company will make a cash payment or a loan or a combination
thereof to the grantee of a Nonqualified Stock Option or the recipient of a
Restricted Stock Award (or his personal representatives or heirs) for the
purpose of assisting such optionee or grantee in the payment of personal income
taxes arising from such exercise or lapse of restrictions and conditions.  The
basis for determining the amount and conditions of such cash payment or loan or
combination thereof and the terms and conditions of any such loan shall be
specified in the agreement pursuant to which the grant or award is made or may
be subsequently determined by the Committee.  The Committee, in its discretion,
may from time to time forgive any such loan in whole or in part.

          Section 4.2  Tax Withholding. No optionee shall be entitled to
                       ---------------
issuance of a stock certificate representing shares purchased upon exercise of a
Nonqualified Stock Option, and no grantee of a Restricted Stock Award shall be
entitled to issuance of a stock certificate evidencing Unrestricted Shares,
until such optionee or grantee has paid, or made arrangements for payment, to
the Company of an amount equal to the income and other taxes that the Company is
required to withhold from such person as a result of his exercise of a
Nonqualified Stock Option or his receipt of Unrestricted Shares.  In addition,
such amounts as the Company is required to withhold by reason of any tax
reimbursement payments made pursuant to Section 4.1 may be deducted from such
payments.

          Section 4.3  Employment.  Nothing in the Plan or in any Option or
                       ----------
Restricted Stock Award shall confer upon any eligible employee any right to
continued employment by the

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Company or any subsidiary of the Company, or limit in any way the right of the
Company or any subsidiary of the Company at any time to terminate or alter the
terms of that employment.

          Section 4.4  Effective Date of Plan.  This Plan shall be effective
                       ----------------------
February 12, 2001, the date of adoption of the Plan by the Board of Directors of
the Company, subject to approval of the Plan by the shareholders of the Company
by the majority of the votes cast at a meeting at which a majority of the
Company's Common Stock is present either in person or by proxy held within 12
months of the date of adoption of the Plan by the Board.

          Section 4.5  Termination and Amendment of Plan.  The Plan may be
                       ---------------------------------
amended, revised or terminated at any time by the Board; provided, however, that
no amendment or revision shall, without the approval of the Company's
Shareholders, (a) increase the maximum aggregate number of shares subject to
this Plan, except as permitted under Section 1.7; (b) change the minimum
purchase price for shares subject to Options granted under the Plan; (c) extend
the maximum duration established under the Plan for any Option or for a
Restricted Stock Award; or (d) permit the granting of an Option or Restricted
Stock Award to anyone other than those individuals described in Section 1.6
hereof.  Unless sooner terminated, the Plan shall terminate on February 11,
2011.  No Option or Restricted Stock Award shall be granted under the Plan after
the Plan is terminated.

          Section 4.6  Prior Rights and Obligations.  No amendment, suspension,
                       ----------------------------
or termination of the Plan shall, without the consent of the person who has
received an Option or Restricted Stock Award, alter or impair any of that
person's rights or obligations under any Option or Restricted Stock Award
granted under the Plan prior to such amendment, suspension, or termination.

          Section 4.7  Securities Laws.  Shares of Common Stock issuable
                       ---------------
pursuant to this Plan may, at the option of the Company, be registered under
applicable federal and state securities laws, but the Company shall have no
obligation to undertake such registrations and may, in lieu thereof, issue
shares hereunder only pursuant to applicable exemptions from such registrations.
In the event that no such registrations are undertaken, the shares shall be
issued only to persons who qualify to receive such shares in accordance with the
exemption from registration on which the Company relies.  In connection with any
award of shares or the reissuance of certificates under the Plan, the Committee
may require appropriate representations from the recipient of such shares and
take such other action as the Committee may deem necessary, including but not
limited to placing restrictive legends on certificates evidencing such shares
and placing stop transfer instructions in the Company's stock transfer records,
or delivering such instructions to the Company's transfer agent, in order to
assure compliance with any such exemptions.  Notwithstanding any other provision
of the Plan, no shares will be issued pursuant to the Plan unless such shares
have been registered under all applicable federal and state securities laws or
unless, in the opinion of counsel satisfactory to the Company, exemptions from
such registrations are available.

                                       9<PAGE>

                                                                   EXHIBIT 10.92

                             EMPLOYMENT AGREEMENT

          THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into
                                          ---------
as of November 14, 2000, by and between drkoop.com, Inc., a Delaware corporation
(the "Company"), and Greg Taylor ("Employee").
      -------                      --------

                                   RECITALS
                                   --------

          WHEREAS, the Company desires to obtain the services of the Employee as
its Chief Operating Officer in the manner hereinafter specified in its business,
and also to make provisions for the payment of compensation to the Employee for
such services; and

          WHEREAS, the Employee is willing to be employed by the Company as its
Chief Operating Officer and to perform the duties incident to such employment
upon the terms and subject to the conditions hereinafter set forth;

          NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements contained herein, the parties hereto agree as follows:

                                   AGREEMENT
                                   ---------

          NOW, THEREFORE, in consideration of the mutual promises and agreements
contained herein, and for other good and valuable consideration, the receipt of
which is hereby acknowledged, the parties hereto agree as follows:

          1.   Start Date. The "Term of Employment" (as defined herein) shall
               ----------
commence as of the date Employee begins providing services to the Company as its
Chief Executive Officer hereunder, which date shall be referred to herein as the
"Start Date."
 ----------

          2.   Position and Duties.
               -------------------

               (a)  The Company hereby employs Employee as the Chief Operating
Officer of the Company commencing as of the Start Date for the Term of
Employment. In this capacity, Employee shall devote his best efforts to the
performance of the services customarily incident to such office and position and
to such other services of as may be requested by the President or Chief
Executive Officer of the Company which may include services for one or more
other subsidiaries of the Company. Employee, in his capacity as an employee of
the Company, shall be responsible to and obey the reasonable and lawful
directives of the Chief Executive Officer and President of the Company. Employee
shall report to the President or any other person designated by the President,
and Employee shall have such authority and duties as are customary in such
position.

               (b)  Employee shall devote all of his business time and attention
to such duties, except for sick leave, reasonable vacations, and excused leaves
of absence as more particularly provided herein. Notwithstanding the foregoing,
to the extent that the time so spent does not conflict with the Company's
business, Employee may devote time to personal and

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family investments. The existence of such a conflict shall be determined in good
faith by the Board of Directors of the Company (the "Board"). Employee shall use
                                                     -----
his best efforts during the Term of Employment to protect, encourage, and
promote the interests of the Company.

               (c)  For a period of six (6) months after the Start Date,
Employee shall, at the request of the Company, provide services hereunder at the
Company's Austin, Texas offices for up to 4 days per week.

          3.   Compensation.
               ------------

               (a)  Base Salary.  The Company shall pay to Employee during the
                    -----------
Term of Employment a base salary at the rate of Two Hundred Thousand Dollars
($200,000) per calendar year. Such salary shall be payable at least semi-monthly
in accordance with the Company's normal payroll procedures. (Employee's annual
salary, as set forth above or as it may be increased from time to time in the
Board's sole discretion, shall be referred to hereinafter as the "Base
                                                                  ----
Salary.").
------

               (b)  Performance Bonus. In addition to the compensation otherwise
                    -----------------
payable to Employee pursuant to this Agreement, Employee shall be eligible to
receive additional annual bonuses to the extent, if any, approved by the Board
in its sole discretion.

               (c)  Options.  The Company will grant you a stock options to
                    -------
purchase up to 1,700,000 shares of the Company's common stock (the "Options")
                                                                    -------
upon the terms and subject to the conditions set forth in the Company's 2000
Non-Qualified Stock Option Plan and to be documented in a customary stock option
agreement pursuant to such Plan. The stock option agreement with respect to the
Options shall provide for an exercise price per share for such Options of the
market value of the Company's common stock on the date of grant and that the
Options vest according to the following schedule: Options to purchase 50,000
shares shall vest upon the date of grant; Options to purchase 550,000 shares
shall vest upon the first anniversary of the Start Date; Options to purchase
550,000 shares shall vest on the second anniversary of the Start Date; and the
remaining Options to purchase 550,000 shares shall vest on the third anniversary
of the Start Date. The stock option agreement with respect to the Options shall
also provide that (i) in the event of a Change in Control, 50% of any unvested
Options as of the date of such Change in Control shall immediately vest and
become exercisable and (ii) in the event that Employee is terminated without
Cause (as defined below) or terminates his employment for Good Reason (as
defined below), any unvested Options as of the date of such termination shall
immediately vest and become exercisable. For purposes of the Options, "Change in
                                                                       ---------
Control" shall mean: (i) any sale, merger, consolidation, tender offer or
-------
similar acquisition of shares, or other transaction or series of related
transactions (each a "Transaction") as a result of which at least a majority of
                      -----------
the voting power of Company is not held, directly or indirectly, by the persons
or entities who held the Company's securities with voting power before such
Transaction; (ii) a sale or other disposition of all or substantially all of the
Company's assets, whether in one transaction or a series of related
transactions; or (iii) individuals who on the date hereof constitute Company's
Board of Directors and any new director (other than a director designated by a
person or entity who has entered into an agreement to effect a

                                       2
<PAGE>

transaction described in clause (i) or (ii) above) whose nomination and/or
election to the Board was approved by a vote of at least a majority of the
directors then still in office who either were directors on the date hereof or
whose election or nomination for election was previously so approved, cease for
any reason to constitute a majority of the Company's or such parent's Board of
Directors. Employee acknowledges that as of the date of this Agreement there
will be more shares reserved for issuance than are authorized and unissued under
the Company's Certificate of Incorporation and waives any breach hereof or of
the related option agreement and option plan if remedied within 9 months of the
date of this Agreement; provided that if the Company is unable to deliver shares
                        --------
issuable upon exercise of vested options following a Change in Control or
Employee's termination of employment without Cause or for Good Reason within 9
months of the date of this Agreement, then, upon such exercise, the Company
shall deliver to Employee cash equal to the excess of the fair market value of
the shares issuable upon such exercise over the exercise price, within 10
business days of Employee's delivery of his notice of exercise.

          4.   Benefits.  During the Term of Employment:
               --------

               (a)  Employee shall be eligible to participate in any life,
health and long-term disability insurance programs, pension and retirement
programs, stock option and other incentive compensation programs, and other
fringe benefit programs made available to executive employees of the Company
from time to time, and Employee shall be entitled to receive such other fringe
benefits as may be granted to him from time to time by the Board. Nothing
herein, however, is intended or shall be construed to require the Company to
institute or continue all, or any particular, plan or benefits.

               (b)  Employee shall be allowed four (4) weeks vacations with pay,
and leaves of absence with pay in accordance with the Company's policies in
effect from time to time.

               (c)  The Company shall reimburse Employee in accordance with the
policies of the Company, as adopted and amended from time to time, for
reasonable and necessary business expenses incurred in performing Employee's
duties and promoting the business of the Company, including, without limitation,
reasonable and necessary cellular telephone, travel and lodging, and temporary
living expenses Employee may incur in connection with Section 2(c) of this
Agreement; provided Employee shall, as a condition of such reimbursement, submit
verification of the nature and amount of such expenses in accordance with the
business expense reimbursement policies from time to time adopted by the
Company.

          5.   Term; Termination of Employment.  As used herein, the phrase
               -------------------------------
"Term of Employment" shall mean the period commencing on the Start Date and
-------------------
ending one (1) year from the Start Date; provided that as of the expiration date
of such initial one (1) year Term of Employment and (ii) if applicable, any
Renewal Period (as defined below), the Term of Employment shall automatically be
extended for one (1) year periods (each a "Renewal Period") unless either the
                                           --------------
Company or Employee provides two (2) months notice to the contrary prior to

                                       3
<PAGE>

the end of the Term of Employment or applicable Renewal Period. Notwithstanding
the foregoing, the Term of Employment shall expire on the first to occur of the
following:

               (a)  Termination by the Company Without Cause.  Notwithstanding
                    ----------------------------------------
anything to the contrary in this Agreement, whether express or implied, the
Company may, at any time, terminate Employee's employment for any reason other
than Cause (as defined below) by giving Employee at least thirty (30) days prior
written notice of the effective date of termination. In the event Employee's
employment hereunder is terminated by the Company other than for Cause, Employee
shall be entitled to receive his Base Salary as he would have received such
amounts during the period commencing on the effective date of such termination
and ending six (6) months after such date of termination, whether during the
initial Term of Employment, a Renewal Period or otherwise (such period
hereinafter referred to as the "Salary Continuation Period"), as if Employee
                                --------------------------
were still employed hereunder during the Salary Continuation Period; provided
                                                                     --------
that the Company's election not to extend the Term of Employment for any Renewal
Period shall be treated as a termination by the Company without Cause.

               (b)  Termination for Cause.  The Company shall have the right to
                    ---------------------
terminate Employee's employment at any time for Cause (as defined below) by
giving Employee written notice of the effective date of termination (which
effective date may, except as otherwise provided below, be the date of such
notice).  If the Company terminates Employee's employment for Cause, Employee
shall be paid his unpaid Base Salary through the date of termination, and the
Company shall have no further obligation hereunder from and after the effective
date of termination and shall have all other rights and remedies available under
this or any other agreement and at law or in equity.

               For purposes of this Agreement, "Cause" shall mean:
                                                -----

                    (i)    theft, forgery, fraud, misappropriation,
               embezzlement, moral turpitude or other act of material misconduct
               against the Company or any of its affiliates;

                    (ii)   fraudulent or willful and material misrepresentations
               or concealments on any written reports submitted to the Company
               or any of its affiliates;

                    (iii)  Employee's violation of the Company's substance abuse
               policy;

                    (iv)   gross negligence or material misconduct in the
               performance of the duties of Employee required hereunder or his
               habitual neglect thereof;

                    (v)    a material failure by the Employee to follow or
               comply with the lawful directives of the Board of Directors of
               the Company;

                    (vi)   a material breach by Employee of the provisions of
               this Agreement or other agreements with the Company;

                                       4
<PAGE>

                    (vii)  willful and knowing violation of any rules or
               regulations of any governmental or regulatory body, which is or
               is reasonably expected to be materially injurious to the
               financial condition of the Company;

                    (viii) Employee's conviction of, or plea of nolo contendere
               to, any felony or to any crime or offense causing substantial
               harm to the Company or any of its affiliates (whether or not for
               personal gain) or involving acts of theft, forgery, fraud,
               misappropriation, embezzlement, moral turpitude or similar
               conduct;

                    (ix)   Employee shall become associated with any company in
               the tobacco industry;

                    (xi)   a material violation of any fiduciary duty owed to
               the Company; or

                    (xii)  engagement in any act (including, but not limited to,
               unlawful discriminatory conduct) that results in substantial
               injury to the reputation, business or business relationships of
               the Company or that, in each case, has subjected, or if generally
               known would subject, the Company to public ridicule or
               embarrassment.

               provided, however, that in the case of the foregoing clauses
(iv), (v) and (vi) Employee shall have been informed, in writing, of such
material failure referred to in the foregoing clauses (iv), (v) and (vi) and
provided with a reasonable opportunity to cure such material failure, if such
failure is subject to cure (if such failure is subject to cure, "reasonable
opportunity to cure" shall mean a period of thirty (30) days).

               (c)  Resignation for Good Reason.  Employee may terminate his
                    ---------------------------
employment for Good Reason (as defined below) by giving the Company at least
thirty (30) days prior written notice of the effective date of termination. In
the event Employee's employment hereunder is terminated by Employee for Good
Reason, Employee shall be entitled to receive his Base Salary as he would have
received such amounts during the Salary Continuation Period, whether during the
initial Term of Employment, a Renewal Period or otherwise, as if Employee were
still employed hereunder during the Salary Continuation Period.

               For purposes of this Agreement, "Good Reason" shall mean:
                                                -----------

                    (i)  (a) the assignment of Employee without his consent to a
               position, responsibilities or duties of a materially lesser
               status or degree of responsibility than his position,
               responsibilities or duties at the Start Date which remains
               uncured for at least 30 days after receipt of notice thereof
               given by Employee; or

                                       5
<PAGE>

                    (ii) any material breach by the Company in performing its
               obligations hereunder which remains uncured for at least 30 days
               after receipt of notice thereof given by Employee.

               (d)  Termination on Account of Death.  In the event of Employee's
                    -------------------------------
death while in the employ of the Company, his employment hereunder shall
terminate on the date of his death and Employee shall be paid his unpaid Base
Salary through the date of termination. In addition, any other benefits payable
on behalf of Employee shall be determined under the Company's insurance and
other compensation and benefit plans and programs then in effect in accordance
with the terms of such programs.

               (e)  Termination on Account of Disability.  To the extent not
                    ------------------------------------
prohibited by The Americans With Disabilities Act of 1990, if, as a result of
Employee's incapacity due to physical or mental illness (as determined in good
faith by a physician acceptable to the Company and Employee), Employee is unable
to substantially render to the Company the services required under this
Agreement for more than ninety (90) days out of any consecutive one hundred and
eighty (180) day period or if a physician acceptable to the Company advises the
Company that it is likely that Employee will be unable to return to the
performance of his duties for more than ninety (90) days out of any consecutive
one hundred and eighty (180) day period his employment may be terminated for
"Disability." During any period that Employee fails to perform his duties with
 ----------
the Company as a result of incapacity due to physical or mental illness, he
shall continue to receive his Base Salary and other benefits provided hereunder,
together with all compensation payable to him under the Company's disability
plan or program or other similar plan during such period, until Employee's
employment hereunder is terminated pursuant to this subparagraph (e).
Thereafter, Employee's benefits shall be determined under the Company's
retirement, insurance, and other compensation and benefit plans and programs
then in effect, in accordance with the terms of such programs, and the Company
shall cease to be obligated to pay the Employee a Base Salary (other than any
amounts owed to the Employee at the time of such termination).

          6.   Confidential Information, Non-Solicitation and Non-Competition.
               --------------------------------------------------------------

               (a)  During the Term of Employment and thereafter, Employee shall
not, except as may be required to perform his duties hereunder or as required by
applicable law, disclose to others or use, whether directly or indirectly, any
Confidential Information regarding the Company. "Confidential Information" shall
                                                 ------------------------
mean information about the Company, its subsidiaries and affiliates, and their
respective clients and customers that is not available to the general public and
that was learned by Employee in the course of his employment by the Company,
including, but not limited to, any proprietary knowledge, trade secrets, data,
formulae, information, and client and customer lists and all papers, resumes,
records (including computer records) and the documents containing such
Confidential Information. Employee acknowledges that such Confidential
Information is specialized, unique in nature and of great value to the Company,
and that such information gives the Company a competitive advantage. This
confidentiality covenant has no temporal, geographic or territorial restriction.
Upon the termination of his employment for any reason whatsoever, Employee shall
promptly deliver to the Company all documents, computer tapes and disks (and all
copies thereof) containing any

                                       6
<PAGE>

Confidential Information, and any other tangible property of the Company which
has been produced by, received by or otherwise submitted to the Employee during
or prior to the Term of Employment.

               (b)  By and in consideration of Employee's employment hereunder
and the payments to be made and benefits to be provided by the Company hereunder
and further in consideration of Employee's exposure to the proprietary
information of the Company, Employee agrees that; provided that there has not
                                                  --------
been any material breach by the Company in performing its obligations hereunder
which remains uncured for at least 30 days after receipt of written notice
thereof given by Employee, (i) during the Term of Employment and thereafter
during the Consulting Term, Employee shall not, directly or indirectly in any
manner or capacity (e.g., as an advisor, principal, agent, partner, officer,
director, shareholder, employee, member of any association or otherwise) engage
in, work for, consult, provide advice or assistance or otherwise participate in
any activity which is competitive with the Business of the Company (it being
understood that this Section 6(b) shall not prohibit Employee from working for,
consulting, providing advice or other assistance to or otherwise participating
in a business (an "Other Company") that engages in the Business but whose
principal line of business is not the Business so long as Employee does not work
for, consult, provide advice or other assistance to (including, without
limitation, by way of promotion or endorsement) or otherwise participate in any
aspect of the Business conducted or proposed to be conducted by the Other
Company) and (ii) during the Consulting Term, Employee shall provide consulting
services to the Company upon reasonable request by the Company; provided,
however, that Employee shall not be required to provide any consulting services
that would interfere with Employee's other business or employment endeavors. For
purposes of this Agreement, the "Business" shall mean any specific business
activity conducted by the Company or any of its subsidiaries or proposed to be
conducted thereby at the time of the Employee's termination pursuant to this
Agreement. Employee further agrees that during such period he will not assist or
encourage any other person in carrying out any activity that would be prohibited
by the foregoing provisions of this Section 6 if such activity were carried out
by Employee and, in particular, Employee agrees that he will not induce any
employee of the Company to carry out any such activity; provided, however, that
the "beneficial ownership" by Employee, either individually or as a member of a
"group," as such terms are used in Rule 13d of the General Rules and Regulations
under the Exchange Act, of not more than one percent (1%) of the voting stock of
any publicly held corporation shall not be a violation of this Agreement. For
purposes of this Agreement, the "Consulting Term" shall mean the period that the
                                 ---------------
Employee is receiving payments under this Agreement in accordance with the terms
hereof (with the Company having reasonable opportunity to cure any breaches of
its payment obligations hereunder); provided, however, that the Company, in its
sole discretion, shall have the right, upon written notice to Employee prior to
the date upon which payments to Employee under this Agreement are to cease, to
extend the Consulting Term for an additional period of time to be determined in
the sole discretion of the Company which shall not exceed one (1) year or, in
the event that the Employee's employment was terminated pursuant to Section 5(a)
or Section 5(c), six (6) months after the end of the Salary Continuation Period.
During any such extension of the Consulting Term, the Company shall continue to
pay Employee one hundred percent (100%) of his Base Salary, in accordance with
the Company's normal payroll practices with respect to base salary, at the rate
in effect on the date of Employee's termination of

                                       7
<PAGE>

employment. It is further expressly agreed that the Company will or would suffer
irreparable injury if Employee were to compete with the Company or any
subsidiary or affiliate of the Company in violation of this Agreement and that
the Company would by reason of such competition be entitled to injunctive relief
in a court of appropriate jurisdiction, and Employee further consents and
stipulates to the entry of such injunctive relief in such a court prohibiting
Employee from competing with the Company or any subsidiary or affiliate of the
Company in violation of this Agreement. Employee agrees that the terms of this
paragraph shall not prevent the Company and/or its subsidiaries from pursuing
any other available remedies for any breach or threatened breach thereof,
including but not limited to the recovery of damages from the Employee. Employee
and the Company further agree that the provisions of the covenants contained in
this Agreement are reasonable and necessary to protect the businesses of the
Company and its subsidiaries because of Employee's access to Confidential
Information and his material participation in the operation of such businesses.
Employee hereby acknowledges that due to the global aspects of the Company's and
its subsidiaries' businesses and competitors, it would not be appropriate to
include any geographic limitation in this Agreement.

               (c)  During the period that Employee is receiving payments under
this Agreement, Employee shall not, directly or indirectly, influence or attempt
to influence suppliers of the Company or any of its subsidiaries or affiliates,
to divert their business to any competitor of the Company.

               (d)  Employee recognizes that he will possess confidential
information or trade secrets about other employees of the Company relating to
their education, experience, skills, abilities, compensation and benefits, and
interpersonal relationships with customers of the Company (the "Employee
                                                                --------
Information"). Employee recognizes that the Employee Information he will possess
-----------
is not generally known, is of substantial value to the Company in developing its
business and in securing and retaining customers, and will be acquired by him
because of his business position with the Company. Employee agrees that, during
the period that Employee is receiving payments under this Agreement and for one
(1) year thereafter, Employee will not, directly or indirectly, solicit or
recruit any employee of the Company for the purpose of being employed by
Employee or by any competitor of the Company on whose behalf he is acting as an
agent, representative or employee and that he will not convey any Employee
Information to any other person.

               (e)  If it is determined by a court of competent jurisdiction in
any state that any restriction in this Section 6 is excessive in duration or
scope or is unreasonable or unenforceable under the laws of that state, it is
the intention of the parties that such restriction may be modified or amended by
the court to render it enforceable to the maximum extent permitted by the law of
that state.

          7.   Designated Beneficiary.  In the event of the death of Employee
               ----------------------
while in the employ of the Company, or at any time thereafter during which
amounts remain payable to Employee under Section 5, such payments (other than
the right to continuation of welfare benefits) shall thereafter be made to such
person or persons as Employee may specifically designate (successively or
contingently) to receive payments under this Agreement following

                                       8
<PAGE>

Employee's death by filing a written beneficiary designation with the Company
during Employee's lifetime. Such beneficiary designation shall be in such form
as may be prescribed by the Company and may be amended from time to time or may
be revoked by Employee pursuant to written instruments filed with the Company
during his lifetime. Beneficiaries designated by Employee may be any natural or
legal person or persons, including a fiduciary, such as a trustee or a trust or
the legal representative of an estate. Unless otherwise provided by the
beneficiary designation filed by Employee, if all of the persons so designated
die before Employee on the occurrence of a contingency not contemplated in such
beneficiary designation, then the amounts payable under this Agreement shall be
paid to Employee's estate.

          8.   Taxes.  All payments to be made to Employee under this Agreement
               -----
will be subject to any applicable withholding of federal, state and local income
and employment taxes.

          9.   Resolution of Disputes.  Notwithstanding anything herein to the
               ----------------------
contrary, in the event that there shall be a dispute among the parties arising
out of or relating to this Agreement or the breach thereof, other than, at the
option of Company, Section 6, the parties agree that such dispute shall be
resolved by final and binding arbitration in New York, New York in accordance
Commercial Arbitration Rules then in effect of JAMS/ENDISPUTE.  Depositions may
be taken and other discovery may be obtained during such arbitration proceedings
to the same extent as authorized in civil judicial proceedings.  Any award
issued as a result of such arbitration shall be final and binding between the
parties thereto, and shall be enforceable by any court having jurisdiction over
the party against whom enforcement is sought.  The fees and expenses of such
arbitration (including, but not limited to, reasonable attorneys' fees) or any
action to enforce an arbitration award shall be paid by the party that does not
prevail in such arbitration.

          10.  Attorneys' Fees.  Should either party hereto or their successors
               ---------------
retain counsel for the purpose of enforcing, or preventing the breach of, any
provision hereof, including, but not limited to, by instituting any action or
proceeding in arbitration or a court to enforce any provision hereof or to
enjoin a breach of any provision of this Agreement, or for a declaration of such
party's rights or obligations under the Agreement, or for any other remedy,
whether in arbitration or in a court of law, then each party shall bear their
own costs and expenses incurred thereby, including, but not limited to,
reasonable fees and expenses of attorneys and expert witnesses, including costs
of appeal.

          11.  Limitation of Liabilities.  If Employee is awarded any damages as
               -------------------------
compensation for any breach or action related to this Agreement, a breach of any
covenant contained in this Agreement (whether express or implied by either law
or fact), or any other cause of action based in whole or in part on any breach
of any provision of this Agreement, such damages shall be limited to contractual
damages and shall exclude (i) punitive damages, and (ii) consequential and/or
incidental damages (e.g., lost profits and other indirect or speculative
damages). The maximum amount of damages that Employee may recover for any reason
shall be the amount equal to all amounts owed (but not yet paid) to Employee
pursuant to this Agreement

                                       9
<PAGE>

through its natural term or through any period for which severance is due
pursuant to Section 5 hereof.

          12.  Miscellaneous.  This Agreement shall also be subject to the
               -------------
following miscellaneous considerations:

               (a)  Representations and Warranties.
                    ------------------------------

                    (i)  Employee represents and warrants to the Company that he
has the authorization, power and right to deliver, execute and fully perform his
obligations under this Agreement in accordance with its terms. Employee further
represents and warrants that this Agreement does not require any authorization,
consent, approval, exemption or other action by any other party and does not (A)
conflict with or result in the breach of the terms, conditions or provisions of,
(B) constitute a default under, or (C) result in a violation of any agreement,
instrument, order, judgment or decree to which Employee is subject. Employee
will, to the fullest extent permitted by applicable law, as from time to time in
effect, indemnify the Company and hold the Company harmless for any breach of
the representations set forth in this subparagraph (i).

                    (ii) The Company represents and warrants to Employee that it
has the authorization, power and right to deliver, execute and fully perform its
obligations under this Agreement in accordance with its terms. The Company
further represents and warrants that this Agreement does not require any
authorization, consent, approval, exemption or other action by any other party
and does not (A) conflict with or result in the breach of the terms, conditions
or provisions of, (B) constitute a default under, or (C) result in a violation
of any agreement, instrument, order, judgment or decree to which the Company is
subject. The Company will, to the fullest extent permitted by applicable law, as
from time to time in effect, indemnify Employee and hold Employee harmless for
any breach of its representations set forth in this subparagraph (ii).

               (b)  Divisibility of the Agreement.  If any provision of this
                    -----------------------------
Agreement or any portion thereof is declared invalid, illegal, or incapable of
being enforced by any court of competent jurisdiction, the remainder of such
provisions and all of the remaining provisions of this Agreement shall continue
in full force and effect.

               (c)  Choice of Law.  This Agreement shall be construed,
                    -------------
interpreted and the rights of the parties determined in accordance with the
internal laws of the State of California without reference to the choice of law
provisions of such State's law, except with respect to matters of law concerning
the internal corporate affairs of any corporate entity which is a party to or
the subject of this Agreement, and as to those matters of the law the
jurisdiction under which the respective entity derives its powers shall govern,
and to the extent governed by federal law.

               (d)  Assignment.  The Company may assign this Agreement to any
                    ----------
direct or indirect subsidiary or parent of the Company or joint venture in which
the Company has an interest, or any successor (whether by merger, consolidation,
purchase or otherwise) to all or

                                       10
<PAGE>

substantially all of the stock, assets or business of the Company and this
Agreement shall be binding upon and inure to the benefit of such successors and
assigns. The duties and covenants of Employee under this Agreement, being
personal, may not be delegated. Except as expressly provided herein, Employee
may not sell, transfer, assign, or pledge any of his rights or interests
pursuant to this Agreement.

               (e)  No Abrogation.  Any rights of Employee hereunder shall be in
                    -------------
addition to any rights Employee may otherwise have under benefit plans,
agreements, or arrangements of the Company to which he is a party or in which he
is a participant, including, but not limited to, any Company-sponsored employee
benefit plans.  Provisions of this Agreement shall not in any way abrogate
Employee's rights under such other plans, agreements, or arrangements.

               (f)  Notice.  For the purposes of this Agreement, notices,
                    ------
demands and all other communications provided for in this Agreement shall be in
writing and shall be deemed to have been duly given when personally delivered or
one day after delivery to an overnight air courier guaranteeing next day
delivery, addressed as follows:

          If to Employee:           Greg Taylor
          --------------
                                    One White Horse Lane
                                    Spring City, PA 19475

          If to the Company:        drkoop.com, Inc.
          -----------------
                                    7000 North Mopac, Suite 400
                                    Austin, Texas 78731
                                    Attention: Board of Directors

          With copies to:           Latham & Watkins
          --------------
                                    633 W. Fifth Street, Suite 4000
                                    Los Angeles, California 90071-2007
                                    Attention: W. Alex Voxman, Esq.

               or to such other address as any party may have furnished to the
others in writing in accordance herewith, except that notices of change of
address shall be effective only upon receipt.

               (g)  Headings.  Section headings in this Agreement are included
                    --------
herein for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose.

               (h)  Waiver.  Failure to insist upon strict compliance with any
                    ------
of the terms, covenants, or conditions hereof shall not be deemed a waiver of
such term, covenant, or condition, nor shall any waiver or relinquishment of, or
failure to insist upon strict compliance with, any right or power hereunder at
any one or more times be deemed a waiver or relinquishment of such right or
power at any other time or times.

                                       11
<PAGE>

               (i)  Employee's Acknowledgment.  Employee acknowledges (i) that
                    -------------------------
he has consulted with or has had the opportunity to consult with independent
counsel of his own choice concerning this Agreement and has been advised to do
so by the Company, and (ii) that he has read and understands the Agreement, is
fully aware of its legal effect, and has entered into it freely based on his own
judgment.

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

               (k)  Entire Agreement; Amendment.  This Agreement (i) contains a
                    ---------------------------
complete statement of all the arrangements between the parties with respect to
Employee's employment by the Company, (ii) supersedes all prior and existing
negotiations and agreements between the parties concerning Employee's employment
and (iii) can only be changed or modified pursuant to a written instrument duly
executed by each of the parties hereto.

               (l)  Expenses.  Each party to this Agreement shall bear its
                    --------
respective expenses incurred in connection with the preparation, negotiation,
execution and performance of this Agreement; provided that, the Company shall
pay up to $10,000 of the reasonable fees and expenses of counsel to Employee
incurred with respect to this Agreement.

                           (Signature Page Follows)

                                       12
<PAGE>

          IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.

                                   DR.KOOP.COM, INC.

                                   By:  /s/ EDWARD A. CESPEDES
                                      --------------------------------
                                      Name:   Edward A. Cespedes
                                      Title:  President

                                   EMPLOYEE

                                    /s/ GREG TAYLOR
                                   -----------------------------------
                                   Greg Taylor

                                      S-1

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