Document:

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                                 EXHIBIT 10.25

                                EMACHINES, INC.

                       2000 EMPLOYEE STOCK PURCHASE PLAN

     The following constitute the provisions of the 2000 Employee Stock Purchase
Plan of emachines, Inc..

     1.  Purpose.  The purpose of the Plan is to provide employees of the
         -------
Company and its Designated Subsidiaries with an opportunity to purchase Common
Stock of the Company through accumulated payroll deductions. It is the intention
of the Company to have the Plan qualify as an "Employee Stock Purchase Plan"
under Section 423 of the Internal Revenue Code of 1986, as amended. The
provisions of the Plan, accordingly, shall be construed so as to extend and
limit participation in a manner consistent with the requirements of that section
of the Code.

     2.  Definitions.
         -----------

         (a)  "Board" shall mean the Board of Directors of the Company.
               -----

         (b)  "Code" shall mean the Internal Revenue Code of 1986, as amended.
               ----

         (c)  "Common Stock" shall mean the common stock of the Company.
               ------------

         (d)  "Company" shall mean emachines, Inc. and any Designated Subsidiary
               -------
of the Company.

         (e)  "Compensation" shall mean all base straight time gross earnings
               ------------
and commissions, but exclusive of payments for overtime, shift premium,
incentive compensation, incentive payments, bonuses and other compensation.

         (f)  "Designated Subsidiary" shall mean any Subsidiary that has been
               ---------------------
designated by the Board from time to time in its sole discretion as eligible to
participate in the Plan.

         (g)  "Employee" shall mean any individual who is an Employee of the
               --------
Company for tax purposes whose customary employment with the Company is at least
twenty (20) hours per week and more than five (5) months in any calendar year.
For purposes of the Plan, the employment relationship shall be treated as
continuing intact while the individual is on sick leave or other leave of
absence approved by the Company. Where the period of leave exceeds 90 days and
the individual's right to reemployment is not guaranteed either by statute or by
contract, the employment relationship shall be deemed to have terminated on the
91st day of such leave.

         (h)  "Enrollment Date" shall mean the first Trading Day of each
               ---------------
Offering Period.

         (i)  "Exercise Date" shall mean the last Trading Day of each Purchase
               -------------
Period.
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         (j)  "Fair Market Value" shall mean, as of any date, the value of
               -----------------
Common Stock determined as follows:

              (i)   If the Common Stock is listed on any established stock
exchange or a national market system, including without limitation the Nasdaq
National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its
Fair Market Value shall be the closing sales price for such stock (or the
closing bid, if no sales were reported) as quoted on such exchange or system for
the last market trading day prior to the date of determination, as reported in
The Wall Street Journal or such other source as the Board deems reliable;

              (ii)  If the Common Stock is regularly quoted by a recognized
securities dealer but selling prices are not reported, its Fair Market Value
shall be the mean of the closing bid and asked prices for the Common Stock prior
to the date of determination, as reported in The Wall Street Journal or such
other source as the Board deems reliable;

              (iii) In the absence of an established market for the Common
Stock, the Fair Market Value thereof shall be determined in good faith by the
Board; or

              (iv)  For purposes of the Enrollment Date of the first Offering
Period under the Plan, the Fair Market Value shall be the initial price to the
public as set forth in the final prospectus included within the registration
statement in Form S-1 filed with the Securities and Exchange Commission for the
initial public offering of the Company's Common Stock (the "Registration
Statement").

         (k)  "Offering Periods" shall mean the periods of approximately twenty-
               ----------------
four (24) months during which an option granted pursuant to the Plan may be
exercised, commencing on the first Trading Day on or after May 1 and November 1
of each year and terminating on the last Trading Day in the periods ending
twenty-four months later; provided, however, that the first Offering Period
under the Plan shall commence with the first Trading Day on or after the date on
which the Securities and Exchange Commission declares the Company's Registration
Statement effective and ending on the last Trading Day on or before April 30,
2002. The duration and timing of Offering Periods may be changed pursuant to
Section 4 of this Plan.

         (l)  "Plan" shall mean this 2000 Employee Stock Purchase Plan.
               ----

         (m)  "Purchase Period" shall mean the approximately six month period
               ---------------
commencing after one Exercise Date and ending with the next Exercise Date,
except that the first Purchase Period of any Offering Period shall commence on
the Enrollment Date and end with the next Exercise Date.

         (n)  "Purchase Price" shall mean 85% of the Fair Market Value of a
               --------------
share of Common Stock on the Enrollment Date or on the Exercise Date, whichever
is lower; provided however, that the Purchase Price may be adjusted by the Board
pursuant to Section 20.

         (o)  "Reserves" shall mean the number of shares of Common Stock covered
               --------
by each option under the Plan which have not yet been exercised and the number
of shares of Common Stock which have been authorized for issuance under the Plan
but not yet placed under option.

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         (p)  "Subsidiary" shall mean a corporation, domestic or foreign, of
               ----------
which not less than 50% of the voting shares are held by the Company or a
Subsidiary, whether or not such corporation now exists or is hereafter organized
or acquired by the Company or a Subsidiary.

          (q)  "Trading Day" shall mean a day on which national stock exchanges
                -----------
and the Nasdaq System are open for trading.

     3.  Eligibility.
         -----------

         (a)  Any Employee who shall be employed by the Company on a given
Enrollment Date shall be eligible to participate in the Plan.

         (b)  Any provisions of the Plan to the contrary notwithstanding, no
Employee shall be granted an option under the Plan (i) to the extent that,
immediately after the grant, such Employee (or any other person whose stock
would be attributed to such Employee pursuant to Section 424(d) of the Code)
would own capital stock of the Company and/or hold outstanding options to
purchase such stock possessing five percent (5%) or more of the total combined
voting power or value of all classes of the capital stock of the Company or of
any Subsidiary, or (ii) to the extent that his or her rights to purchase stock
under all employee stock purchase plans of the Company and its subsidiaries
accrues at a rate which exceeds Twenty-Five Thousand Dollars ($25,000) worth of
stock (determined at the fair market value of the shares at the time such option
is granted) for each calendar year in which such option is outstanding at any
time.

     4.  Offering Periods.  The Plan shall be implemented by consecutive,
         ----------------
overlapping Offering Periods with a new Offering Period commencing on the first
Trading Day on or after May 1 and November 1 each year, or on such other date as
the Board shall determine, and continuing thereafter until terminated in
accordance with Section 20 hereof; provided, however, that the first Offering
Period under the Plan shall commence with the first Trading Day on or after the
date on which the Securities and Exchange Commission declares the Company's
Registration Statement effective and ending on the last Trading Day on or before
April 30, 2002. The Board shall have the power to change the duration of
Offering Periods (including the commencement dates thereof) with respect to
future offerings without shareholder approval if such change is announced [at
least five (5) days] prior to the scheduled beginning of the first Offering
Period to be affected thereafter.

     5.  Participation.
         -------------

         (a)  An eligible Employee may become a participant in the Plan by
completing a subscription agreement authorizing payroll deductions in the form
of Exhibit A to this Plan and filing it with the Company's payroll office prior
to the applicable Enrollment Date.

         (b)  Payroll deductions for a participant shall commence on the first
payroll following the Enrollment Date and shall end on the last payroll in the
Offering Period to which such authorization is applicable, unless sooner
terminated by the participant as provided in Section 10 hereof.

                                                                             -3-
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     6.  Payroll Deductions.
         ------------------

         (a)  At the time a participant files his or her subscription agreement,
he or she shall elect to have payroll deductions made on each pay day during the
Offering Period in an amount not exceeding ten percent (10%) of the Compensation
which he or she receives on each pay day during the Offering Period.

         (b)  All payroll deductions made for a participant shall be credited to
his or her account under the Plan and shall be withheld in whole percentages
only. A participant may not make any additional payments into such account.

         (c)  A participant may discontinue his or her participation in the Plan
as provided in Section 10 hereof, or may increase or decrease the rate of his or
her payroll deductions during the Offering Period by completing or filing with
the Company a new subscription agreement authorizing a change in payroll
deduction rate. The Board may, in its discretion, limit the number of
participation rate changes during any Offering Period. The change in rate shall
be effective with the first full payroll period following five (5) business days
after the Company's receipt of the new subscription agreement unless the Company
elects to process a given change in participation more quickly. A participant's
subscription agreement shall remain in effect for successive Offering Periods
unless terminated as provided in Section 10 hereof.

         (d)  Notwithstanding the foregoing, to the extent necessary to comply
with Section 423(b)(8) of the Code and Section 3(b) hereof, a participant's
payroll deductions may be decreased to zero percent (0%) at any time during a
Purchase Period. Payroll deductions shall recommence at the rate provided in
such participant's subscription agreement at the beginning of the first Purchase
Period which is scheduled to end in the following calendar year, unless
terminated by the participant as provided in Section 10 hereof.

         (e)  At the time the option is exercised, in whole or in part, or at
the time some or all of the Company's Common Stock issued under the Plan is
disposed of, the participant must make adequate provision for the Company's
federal, state, or other tax withholding obligations, if any, which arise upon
the exercise of the option or the disposition of the Common Stock. At any time,
the Company may, but shall not be obligated to, withhold from the participant's
compensation the amount necessary for the Company to meet applicable withholding
obligations, including any withholding required to make available to the Company
any tax deductions or benefits attributable to sale or early disposition of
Common Stock by the Employee.

     7.  Grant of Option.  On the Enrollment Date of each Offering Period, each
         ---------------
eligible Employee participating in such Offering Period shall be granted an
option to purchase on each Exercise Date during such Offering Period (at the
applicable Purchase Price) up to a number of shares of the Company's Common
Stock determined by dividing such Employee's payroll deductions accumulated
prior to such Exercise Date and retained in the Participant's account as of the
Exercise Date by the applicable Purchase Price; provided that in no event shall
an Employee be permitted to purchase during each Purchase Period more than 5,000
shares of the Company's Common Stock (subject to any adjustment pursuant to
Section 19), and provided further that such purchase shall be subject to the
limitations set forth in Sections 3(b) and 12 hereof.  The Board may, for future
Offering Periods, increase or decrease, in its absolute discretion, the maximum
number of

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shares of the Company's Common Stock an Employee may purchase during each
Purchase Period of such Offering Period. Exercise of the option shall occur as
provided in Section 8 hereof, unless the participant has withdrawn pursuant to
Section 10 hereof. The option shall expire on the last day of the Offering
Period.

     8.  Exercise of Option.
         ------------------

         (a)  Unless a participant withdraws from the Plan as provided in
Section 10 hereof, his or her option for the purchase of shares shall be
exercised automatically on the Exercise Date, and the maximum number of full
shares subject to option shall be purchased for such participant at the
applicable Purchase Price with the accumulated payroll deductions in his or her
account. No fractional shares shall be purchased; any payroll deductions
accumulated in a participant's account which are not sufficient to purchase a
full share shall be retained in the participant's account for the subsequent
Purchase Period or Offering Period, subject to earlier withdrawal by the
participant as provided in Section 10 hereof. Any other monies left over in a
participant's account after the Exercise Date shall be returned to the
participant. During a participant's lifetime, a participant's option to purchase
shares hereunder is exercisable only by him or her.

     (b)  If the Board determines that, on a given Exercise Date, the number of
shares with respect to which options are to be exercised may exceed (i) the
number of shares of Common Stock that were available for sale under the Plan on
the Enrollment Date of the applicable Offering Period, or (ii) the number of
shares available for sale under the Plan on such Exercise Date, the Board may in
its sole discretion (x) provide that the Company shall make a pro rata
allocation of the shares of Common Stock available for purchase on such
Enrollment Date or Exercise Date, as applicable, in as uniform a manner as shall
be practicable and as it shall determine in its sole discretion to be equitable
among all participants exercising options to purchase Common Stock on such
Exercise Date, and continue all Offering Periods then in effect, or (y) provide
that the Company shall make a pro rata allocation of the shares available for
purchase on such Enrollment Date or Exercise Date, as applicable, in as uniform
a manner as shall be practicable and as it shall determine in its sole
discretion to be equitable among all participants exercising options to purchase
Common Stock on such Exercise Date, and terminate any or all Offering Periods
then in effect pursuant to Section 20 hereof. The Company may make pro rata
allocation of the shares available on the Enrollment Date of any applicable
Offering Period pursuant to the preceding sentence, notwithstanding any
authorization of additional shares for issuance under the Plan by the Company's
shareholders subsequent to such Enrollment Date.

     9.  Delivery.  As promptly as practicable after each Exercise Date on which
         --------
a purchase of shares occurs, the Company shall arrange the delivery to each
participant, as appropriate, of a certificate representing the shares purchased
upon exercise of his or her option.

     10.  Withdrawal.
          ----------

          (a)  A participant may withdraw all but not less than all the payroll
deductions credited to his or her account and not yet used to exercise his or
her option under the Plan at any time by giving written notice to the Company in
the form of Exhibit B to this Plan. All of the participant's payroll deductions
credited to his or her account shall be paid to such participant

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promptly after receipt of notice of withdrawal and such participant's option for
the Offering Period shall be automatically terminated, and no further payroll
deductions for the purchase of shares shall be made for such Offering Period. If
a participant withdraws from an Offering Period, payroll deductions shall not
resume at the beginning of the succeeding Offering Period unless the participant
delivers to the Company a new subscription agreement.

          (b)  A participant's withdrawal from an Offering Period shall not have
any effect upon his or her eligibility to participate in any similar plan which
may hereafter be adopted by the Company or in succeeding Offering Periods which
commence after the termination of the Offering Period from which the participant
withdraws.

     11.  Termination of Employment.  Upon a participant's ceasing to be an
          -------------------------
Employee, for any reason, he or she shall be deemed to have elected to withdraw
from the Plan and the payroll deductions credited to such participant's account
during the Offering Period but not yet used to exercise the option shall be
returned to such participant or, in the case of his or her death, to the person
or persons entitled thereto under Section 15 hereof, and such participant's
option shall be automatically terminated. The preceding sentence
notwithstanding, a participant who receives payment in lieu of notice of
termination of employment shall be treated as continuing to be an Employee for
the participant's customary number of hours per week of employment during the
period in which the participant is subject to such payment in lieu of notice.

     12.  Interest.  No interest shall accrue on the payroll deductions of a
          --------
participant in the Plan.

     13.  Stock.
          -----

          (a)  Subject to adjustment upon changes in capitalization of the
Company as provided in Section 19 hereof, the maximum number of shares of the
Company's Common Stock which shall be made available for sale under the Plan
shall be 300,000 shares, plus an annual increase to be added on the first day of
the Company's fiscal year beginning in 2001 equal to the lesser of (i) 300,000
shares, (ii) 1% of the outstanding shares on such date or (iii) a lesser amount
determined by the Board.

          (b)  The participant shall have no interest or voting right in shares
covered by his option until such option has been exercised.

          (c)  Shares to be delivered to a participant under the Plan shall be
registered in the name of the participant or in the name of the participant and
his or her spouse.

     14.  Administration.  The Plan shall be administered by the Board or a
          --------------
committee of members of the Board appointed by the Board. The Board or its
committee shall have full and exclusive discretionary authority to construe,
interpret and apply the terms of the Plan, to determine eligibility and to
adjudicate all disputed claims filed under the Plan. Every finding, decision and
determination made by the Board or its committee shall, to the full extent
permitted by law, be final and binding upon all parties.

                                                                             -6-
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     15.  Designation of Beneficiary.
          --------------------------

          (a)  A participant may file a written designation of a beneficiary who
is to receive any shares and cash, if any, from the participant's account under
the Plan in the event of such participant's death subsequent to an Exercise Date
on which the option is exercised but prior to delivery to such participant of
such shares and cash. In addition, a participant may file a written designation
of a beneficiary who is to receive any cash from the participant's account under
the Plan in the event of such participant's death prior to exercise of the
option. If a participant is married and the designated beneficiary is not the
spouse, spousal consent shall be required for such designation to be effective.

          (b)  Such designation of beneficiary may be changed by the participant
at any time by written notice. In the event of the death of a participant and in
the absence of a beneficiary validly designated under the Plan who is living at
the time of such participant's death, the Company shall deliver such shares
and/or cash to the executor or administrator of the estate of the participant,
or if no such executor or administrator has been appointed (to the knowledge of
the Company), the Company, in its discretion, may deliver such shares and/or
cash to the spouse or to any one or more dependents or relatives of the
participant, or if no spouse, dependent or relative is known to the Company,
then to such other person as the Company may designate.

     16.  Transferability.  Neither payroll deductions credited to a
          ---------------
participant's account nor any rights with regard to the exercise of an option or
to receive shares under the Plan may be assigned, transferred, pledged or
otherwise disposed of in any way (other than by will, the laws of descent and
distribution or as provided in Section 15 hereof) by the participant. Any such
attempt at assignment, transfer, pledge or other disposition shall be without
effect, except that the Company may treat such act as an election to withdraw
funds from an Offering Period in accordance with Section 10 hereof.

     17.  Use of Funds.  All payroll deductions received or held by the Company
          ------------
under the Plan may be used by the Company for any corporate purpose, and the
Company shall not be obligated to segregate such payroll deductions.

     18.  Reports.  Individual accounts shall be maintained for each participant
          -------
in the Plan. Statements of account shall be given to participating Employees at
least annually, which statements shall set forth the amounts of payroll
deductions, the Purchase Price, the number of shares purchased and the remaining
cash balance, if any.

     19.  Adjustments Upon Changes in Capitalization, Dissolution, Liquidation,
          ---------------------------------------------------------------------
Merger or Asset Sale.
--------------------

          (a)  Changes in Capitalization.  Subject to any required action by the
               -------------------------
shareholders of the Company, the Reserves, the maximum number of shares each
participant may purchase each Purchase Period (pursuant to Section 7), as well
as the price per share and the number of shares of Common Stock covered by each
option under the Plan which has not yet been exercised shall be proportionately
adjusted for any increase or decrease in the number of issued shares of Common
Stock resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock, or any other increase or
decrease in the number of shares of Common Stock effected without receipt of
consideration by the Company; provided, however, that conversion of

                                                                             -7-
<PAGE>

any convertible securities of the Company shall not be deemed to have been
"effected without receipt of consideration." Such adjustment shall be made by
the Board, whose determination in that respect shall be final, binding and
conclusive. Except as expressly provided herein, no issuance by the Company of
shares of stock of any class, or securities convertible into shares of stock of
any class, shall affect, and no adjustment by reason thereof shall be made with
respect to, the number or price of shares of Common Stock subject to an option.

          (b)  Dissolution or Liquidation.  In the event of the proposed
               --------------------------
dissolution or liquidation of the Company, the Offering Period then in progress
shall be shortened by setting a new Exercise Date (the "New Exercise Date"), and
shall terminate immediately prior to the consummation of such proposed
dissolution or liquidation, unless provided otherwise by the Board. The New
Exercise Date shall be before the date of the Company's proposed dissolution or
liquidation. The Board shall notify each participant in writing, at least ten
(10) business days prior to the New Exercise Date, that the Exercise Date for
the participant's option has been changed to the New Exercise Date and that the
participant's option shall be exercised automatically on the New Exercise Date,
unless prior to such date the participant has withdrawn from the Offering Period
as provided in Section 10 hereof.

          (c)  Merger or Asset Sale.  In the event of a proposed sale of all or
               --------------------
substantially all of the assets of the Company, or the merger of the Company
with or into another corporation, each outstanding option shall be assumed or an
equivalent option substituted by the successor corporation or a Parent or
Subsidiary of the successor corporation. In the event that the successor
corporation refuses to assume or substitute for the option, any Purchase Periods
then in progress shall be shortened by setting a new Exercise Date (the "New
Exercise Date") and any Offering Periods then in progress shall end on the New
Exercise Date. The New Exercise Date shall be before the date of the Company's
proposed sale or merger. The Board shall notify each participant in writing, at
least ten (10) business days prior to the New Exercise Date, that the Exercise
Date for the participant's option has been changed to the New Exercise Date and
that the participant's option shall be exercised automatically on the New
Exercise Date, unless prior to such date the participant has withdrawn from the
Offering Period as provided in Section 10 hereof.

     20.  Amendment or Termination.
          ------------------------

          (a)  The Board of Directors of the Company may at any time and for any
reason terminate or amend the Plan. Except as provided in Section 19 hereof, no
such termination can affect options previously granted, provided that an
Offering Period may be terminated by the Board of Directors on any Exercise Date
if the Board determines that the termination of the Offering Period or the Plan
is in the best interests of the Company and its shareholders. Except as provided
in Section 19 and this Section 20 hereof, no amendment may make any change in
any option theretofore granted which adversely affects the rights of any
participant. To the extent necessary to comply with Section 423 of the Code (or
any successor rule or provision or any other applicable law, regulation or stock
exchange rule), the Company shall obtain shareholder approval in such a manner
and to such a degree as required.

     (b)  Without shareholder consent and without regard to whether any
participant rights may be considered to have been "adversely affected," the
Board (or its committee) shall be entitled to change the Offering Periods, limit
the frequency and/or number of changes in the amount

                                                                             -8-
<PAGE>

withheld during an Offering Period, establish the exchange ratio applicable to
amounts withheld in a currency other than U.S. dollars, permit payroll
withholding in excess of the amount designated by a participant in order to
adjust for delays or mistakes in the Company's processing of properly completed
withholding elections, establish reasonable waiting and adjustment periods
and/or accounting and crediting procedures to ensure that amounts applied toward
the purchase of Common Stock for each participant properly correspond with
amounts withheld from the participant's Compensation, and establish such other
limitations or procedures as the Board (or its committee) determines in its sole
discretion advisable which are consistent with the Plan.

          (c)  In the event the Board determines that the ongoing operation of
the Plan may result in unfavorable financial accounting consequences, the Board
may, in its discretion and, to the extent necessary or desirable, modify or
amend the Plan to reduce or eliminate such accounting consequence including, but
not limited to:

               (i)   altering the Purchase Price for any Offering Period
including an Offering Period underway at the time of the change in Purchase
Price;

               (ii)  shortening any Offering Period so that Offering Period ends
on a new Exercise Date, including an Offering Period underway at the time of the
Board action; and

               (iii) allocating shares.

          Such modifications or amendments shall not require stockholder
approval or the consent of any Plan participants.

     21.  Notices.  All notices or other communications by a participant to the
          -------
Company under or in connection with the Plan shall be deemed to have been duly
given when received in the form specified by the Company at the location, or by
the person, designated by the Company for the receipt thereof.

     22.  Conditions Upon Issuance of Shares.  Shares shall not be issued with
          ----------------------------------
respect to an option unless the exercise of such option and the issuance and
delivery of such shares pursuant thereto shall comply with all applicable
provisions of law, domestic or foreign, including, without limitation, the
Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as
amended, the rules and regulations promulgated thereunder, and the requirements
of any stock exchange upon which the shares may then be listed, and shall be
further subject to the approval of counsel for the Company with respect to such
compliance.

          As a condition to the exercise of an option, the Company may require
the person exercising such option to represent and warrant at the time of any
such exercise that the shares are being purchased only for investment and
without any present intention to sell or distribute such shares if, in the
opinion of counsel for the Company, such a representation is required by any of
the aforementioned applicable provisions of law.

     23.  Term of Plan.  The Plan shall become effective upon the earlier to
          ------------
occur of its adoption by the Board of Directors or its approval by the
shareholders of the Company. It shall continue in effect for a term of ten (10)
years unless sooner terminated under Section 20 hereof.

                                                                             -9-
<PAGE>

     24.  Automatic Transfer to Low Price Offering Period.  To the extent
          -----------------------------------------------
permitted by any applicable laws, regulations, or stock exchange rules if the
Fair Market Value of the Common Stock on any Exercise Date in an Offering Period
is lower than the Fair Market Value of the Common Stock on the Enrollment Date
of such Offering Period, then all participants in such Offering Period shall be
automatically withdrawn from such Offering Period immediately after the exercise
of their option on such Exercise Date and automatically re-enrolled in the
immediately following Offering Period as of the first day thereof.

                                                                            -10-
<PAGE>

                                   EXHIBIT A
                                   ---------

                                EMACHINES, INC.

                       2000 EMPLOYEE STOCK PURCHASE PLAN

                            SUBSCRIPTION AGREEMENT

_____ Original Application                         Enrollment Date: ___________
_____ Change in Payroll Deduction Rate
_____ Change of Beneficiary(ies)

1.   ____________________ hereby elects to participate in the emachines, Inc.
     2000 Employee Stock Purchase Plan (the "Employee Stock Purchase Plan") and
     subscribes to purchase shares of the Company's Common Stock in accordance
     with this Subscription Agreement and the Employee Stock Purchase Plan.

2.   I hereby authorize payroll deductions from each paycheck in the amount of
     ____% of my Compensation on each payday (from 1 to 10%) during the Offering
     Period in accordance with the Employee Stock Purchase Plan.  (Please note
     that no fractional percentages are permitted.)

3.   I understand that said payroll deductions shall be accumulated for the
     purchase of shares of Common Stock at the applicable Purchase Price
     determined in accordance with the Employee Stock Purchase Plan.  I
     understand that if I do not withdraw from an Offering Period, any
     accumulated payroll deductions will be used to automatically exercise my
     option.

4.   I have received a copy of the complete Employee Stock Purchase Plan.  I
     understand that my participation in the Employee Stock Purchase Plan is in
     all respects subject to the terms of the Plan.  I understand that my
     ability to exercise the option under this Subscription Agreement is subject
     to shareholder approval of the Employee Stock Purchase Plan.

5.   Shares purchased for me under the Employee Stock Purchase Plan should be
     issued in the name(s) of (Employee or Employee and Spouse only).

6.   I understand that if I dispose of any shares received by me pursuant to the
     Plan within 2 years after the Enrollment Date (the first day of the
     Offering Period during which I purchased such shares) or one year after the
     Exercise Date, I will be treated for federal income tax purposes as having
     received ordinary income at the time of such disposition in an amount equal
     to the excess of the fair market value of the shares at the time such
     shares were purchased by me over the price which I paid for the shares. I
                                                                             -
     hereby agree to notify the Company in writing within 30 days after the date
     ---------------------------------------------------------------------------
     of any disposition of my shares and I will make adequate provision for
     ----------------------------------------------------------------------
     Federal, state or other tax withholding obligations, if any, which arise
     ------------------------------------------------------------------------
     upon the disposition of the Common Stock.  The Company may, but will not be
     ----------------------------------------
     obligated to, withhold
<PAGE>

     from my compensation the amount necessary to meet any applicable
     withholding obligation including any withholding necessary to make
     available to the Company any tax deductions or benefits attributable to
     sale or early disposition of Common Stock by me. If I dispose of such
     shares at any time after the expiration of the 2-year and 1-year holding
     periods, I understand that I will be treated for federal income tax
     purposes as having received income only at the time of such disposition,
     and that such income will be taxed as ordinary income only to the extent of
     an amount equal to the lesser of (1) the excess of the fair market value of
     the shares at the time of such disposition over the purchase price which I
     paid for the shares, or (2) 15% of the fair market value of the shares on
     the first day of the Offering Period. The remainder of the gain, if any,
     recognized on such disposition will be taxed as capital gain.

7.   I hereby agree to be bound by the terms of the Employee Stock Purchase
     Plan.  The effectiveness of this Subscription Agreement is dependent upon
     my eligibility to participate in the Employee Stock Purchase Plan.

8.   In the event of my death, I hereby designate the following as my
     beneficiary(ies) to receive all payments and shares due me under the
     Employee Stock Purchase Plan:

     NAME: (Please print)__________________________________________________
                                 (First)        (Middle)       (Last)

     _________________________        _____________________________________
     Relationship
                                      _____________________________________
                                      Address

                                                                             -2-
<PAGE>

     Employee's Social
     Security Number:                     __________________________________

     Employee's Address:                  __________________________________

                                          __________________________________

                                          __________________________________

I UNDERSTAND THAT THIS SUBSCRIPTION AGREEMENT SHALL REMAIN IN EFFECT THROUGHOUT
SUCCESSIVE OFFERING PERIODS UNLESS TERMINATED BY ME.

Dated:______________   ____________________________________________________
                       Signature of Employee
                       ____________________________________________________
                       Spouse's Signature (If beneficiary other than spouse)

                                                                             -3-
<PAGE>

                                   EXHIBIT B
                                   ---------

                                EMACHINES, INC.

                       2000 EMPLOYEE STOCK PURCHASE PLAN

                             NOTICE OF WITHDRAWAL

     The undersigned participant in the Offering Period of the emachines, Inc.
2000 Employee Stock Purchase Plan which began on ____________, ______ (the
"Enrollment Date") hereby notifies the Company that he or she hereby withdraws
from the Offering Period.  He or she hereby directs the Company to pay to the
undersigned as promptly as practicable all the payroll deductions credited to
his or her account with respect to such Offering Period.  The undersigned
understands and agrees that his or her option for such Offering Period will be
automatically terminated.  The undersigned understands further that no further
payroll deductions will be made for the purchase of shares in the current
Offering Period and the undersigned shall be eligible to participate in
succeeding Offering Periods only by delivering to the Company a new Subscription
Agreement.

                                    Name and Address of Participant:

                                    _______________________________________

                                    _______________________________________

                                    _______________________________________

                                    Signature:

                                    _______________________________________

                                    Date:__________________________________<PAGE>

                                 EXHIBIT 10.26

                                eMachines, Inc.

                       STAND-ALONE STOCK OPTION AGREEMENT

I.  NOTICE OF STOCK OPTION GRANT
    ----------------------------

     [Name]
     -----------------------

     [Address]
     -----------------------

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

      You have been granted a Nonstatutory Stock Option to purchase Common Stock
of the Company, subject to the terms and conditions of this Agreement, as
follows:

     Date of Grant
                                              -----------------------
     Vesting Commencement Date
                                              -----------------------
     Exercise Price per Share                 $
                                              -----------------------

     Total Number of Shares Granted
                                              -----------------------
     Total Exercise Price                     $
                                              -----------------------

     Term/Expiration Date:
                                              -----------------------
     Vesting Schedule:
     ----------------

     This Option shall vest and may be exercised, in whole or in part, in
accordance with the following schedule:

     [__% of the Shares subject to the Option shall vest one year after the
Vesting Commencement Date, and 1/__th of the Shares subject to the Option shall
vest each month thereafter, so that the Option shall be fully vested ____(_)
years from the Date of Grant, subject to the Optionee continuing to be a Service
Provider on such dates.]

     Termination Period
     ------------------

     This Option may be exercised for [_____ (__) months] after Optionee ceases
to be a Service Provider in accordance with Section 8 of this Agreement.  Upon
the death or Disability of the
<PAGE>

Optionee, this Option may be exercised for [___year] after the Optionee ceases
to be a Service Provider in accordance with Sections 9 and 10 of this Agreement.
In no event shall this Option be exercised later that the Term/Expiration Date
provided.

II.  AGREEMENT
     ---------
     1.  Definitions.  As used herein, the following definitions shall apply:
         -----------
         (a)  "Agreement" means this stock option agreement between the
               ---------
Company and Optionee evidencing the terms and conditions of this Option.

         (b)  "Applicable Laws" means the requirements relating to the
               ---------------
administration of stock options under U.S. state corporate laws, U.S. federal
and state securities laws, the Code, any stock exchange or quotation system on
which the Common Stock is listed or quoted and the applicable laws of any
foreign country or jurisdiction that may apply to this Option.

         (c)  "Board" means the Board of Directors of the Company or any
               -----
committee of the Board that has been designated by the Board to administer this
Agreement.

         (d)  "Code" means the Internal Revenue Code of 1986, as amended.
               ----
         (e)  "Common Stock" means the common stock of the Company.
               ------------
         (f)  "Company" means eMachines, Inc. a Delaware corporation.
               -------
         (g)  "Consultant" means any person, including an advisor, engaged by
               ----------
the Company or a Parent or Subsidiary to render services to such entity.

         (h)  "Director" means a member of the Board.
               --------
         (i)  "Disability" the Company means total and permanent disability as
               ----------
defined in Section 22(e)(3) of the Code.

         (j)  "Employee" means any person, including Officers and Directors,
               --------
employed by the Company or any Parent or Subsidiary of the Company. A Service
Provider shall not cease to be an Employee in the case of (i) any leave of
absence approved by the Company or (ii) transfers between locations of the
Company or between the Company, its Parent, any Subsidiary, or any successor.
Neither service as a Director nor payment of a director's fee by the Company
shall be sufficient to constitute "employment" by the Company.

         (k)  "Exchange Act" means the Securities Exchange Act of 1934,
               ------------
as amended.

         (l)  "Fair Market Value" means, as of any date, the value of
               -----------------
Common Stock determined as follows:

                   (1)  If the Common Stock is listed on any established stock
exchange or a national market system, including without limitation the Nasdaq
National Market or

                                      -2-
<PAGE>

The Nasdaq SmallCap Market of The Nasdaq Stock Market, its Fair Market Value
shall be the closing sales price for such stock (or the closing bid, if no sales
were reported) as quoted on such exchange or system for the last market trading
day prior to the time of determination, as reported in The Wall Street Journal
or such other source as the Administrator deems reliable;

                   (2) If the Common Stock is regularly quoted by a recognized
securities dealer but selling prices are not reported, its Fair Market Value
shall be the mean between the high bid and low asked prices for the Common Stock
on the last market trading day prior to the day of determination; or

                   (3) In the absence of an established market for the Common
Stock, the Fair Market Value thereof shall be determined in good faith by the
Board.

         (m)  "Nonstatutory Stock Option" means an Option not intended to
               -------------------------
qualify as an incentive stock option within the meaning of Section 422 of the
Code and the regulations promulgated thereunder.

         (n)  "Notice of Grant" means a written notice, in Part I of this
               ---------------
Agreement, evidencing certain the terms and conditions of this Option grant. The
Notice of Grant is part of the Option Agreement.

         (o)  "Officer" means a person who is an officer of the Company within
               -------
the meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.

        (p)  "Option" means this stock option.
              ------

        (q)  "Optioned Stock" means the Common Stock subject to this Option.
              --------------

        (r) "Optionee" means the person named in the Notice of Grant or such
             --------
person's successor.

        (s) "Parent" means a "parent corporation," whether now or hereafter
             ------
existing, as defined in Section 424(e) of the Code.

        (t)  "Service Provider" means an Employee, Director or Consultant.
              ----------------
        (u) "Share" means a share of the Common Stock, as adjusted in accordance
             -----
with Section 11 of this Agreement.

        (v) "Subsidiary" means a "subsidiary corporation", whether now or
             ----------
hereafter existing, as defined in Section 424(f) of the Code.

     2.  Grant of Option.  The Board hereby grants to the Optionee named in the
         ---------------
Notice of Grant attached as Part I of this Agreement the Option to purchase the
number of Shares, as set forth in the Notice of Grant, at the exercise price per
share set forth in the Notice of Grant (the "Exercise Price"), subject to the
terms and conditions of this Agreement.

                                      -3-
<PAGE>

     3.  Exercise of Option.
         ------------------

         (a)  Right to Exercise.  This Option is exercisable during its term in
              -----------------
accordance with the Vesting Schedule set out in the Notice of Grant and the
applicable provisions of this Agreement.

         (b) Method of Exercise. This Option is exercisable by delivery of an
             ------------------
exercise notice, in the form attached as Exhibit A (the "Exercise Notice"),
                                         ---------
which shall state the election to exercise the Option, the number of Shares in
respect of which the Option is being exercised (the "Exercised Shares"), and
such other representations and agreements as may be required by the Company. The
Exercise Notice shall be completed by the Optionee and delivered to Secretary of
the Company. The Exercise Notice shall be accompanied by payment of the
aggregate Exercise Price as to all Exercised Shares. This Option shall be deemed
to be exercised upon receipt by the Company of such fully executed Exercise
Notice accompanied by such aggregate Exercise Price.

         (c) Legal Compliance. No Shares shall be issued pursuant to the
             ----------------
exercise of this Option unless such issuance and exercise complies with
Applicable Laws. Assuming such compliance, for income tax purposes the Exercised
Shares shall be considered transferred to the Optionee on the date the Option is
exercised with respect to such Exercised Shares.

         (d) Buyout Provisions. The Board may at any time offer to buy out for a
             -----------------
payment in cash or Shares an Option previously granted based on such terms and
conditions as the Board shall establish and communicate to the Optionee at the
time that such offer is made.

         4.  Optionee's Representations.  In the event the Shares have not been
             --------------------------
registered under the Securities Act of 1933, as amended, at the time this Option
is exercised, the Optionee shall, if required by the Company, concurrently with
the exercise of all or any portion of this Option, deliver to the Company his or
her Investment Representation Statement in the form attached hereto as Exhibit
                                                                       -------
B.
-
         5.  Method of Payment. Payment of the aggregate Exercise Price shall be
             -----------------
by any of the following, or a combination thereof, at the election of the
Optionee:

             (a)  cash or check;

             (b)  consideration received by the Company under a cashless
exercise program implemented by the Company; or

             (c)  surrender of other Shares which (i) in the case of Shares
acquired upon exercise of an option, have been owned by the Optionee for more
than six (6) months on the date of surrender, and (ii) have a Fair Market Value
on the date of surrender equal to the aggregate Exercise Price of the Exercised
Shares.

         6.  Non-Transferability of Option. This Option may not be transferred
             -----------------------------
in any manner otherwise than by will or by the laws of descent or distribution
and may be exercised during the lifetime of Optionee only by the Optionee. The
terms of this Agreement shall be binding upon the executors, administrators,
heirs, successors and assigns of the Optionee.

                                      -4-
<PAGE>

         7. Term of Option. This Option may be exercised only within the term
            --------------
set out in the Notice of Grant, and may be exercised during such term only in
accordance with the terms of this Agreement.

         8. Termination of Relationship as a Service Provider. If the Optionee
            -------------------------------------------------
ceases to be a Service Provider (other than for death or Disability), this
Option may be exercised for a period of three (3) months after the date of such
termination (but in no event later than the expiration date of this Option as
set forth in the Notice of Grant) to the extent that the Option is vested on the
date of such termination. To the extent that the Optionee does not exercise this
Option within the time specified herein, the Option shall terminate.

         9. Disability of Optionee. If the Optionee ceases to be a Service
            ----------------------
Provider as a result of the Optionee's Disability, this Option may be exercised
for a period of twelve (12) months after the date of such termination (but in no
event later than the expiration date of this Option as set forth in the Notice
of Grant) to the extent that the Option is vested on the date of such
termination. To the extent that Optionee does not exercise this Option within
the time specified herein, the Option shall terminate.

         10. Death of Optionee. If the Optionee dies while a Service Provider,
             -----------------
the Option may be exercised at any time within twelve (12) months following the
date of death (but in no event later than the expiration date of this Option as
set forth in the Notice of Grant), by the Optionee's estate or by a person who
acquired the right to exercise the Option by bequest or inheritance, but only to
the extent that the Optionee was entitled to exercise the Option at the date of
death. If, after death, the Optionee's estate or a person who acquired the right
to exercise the Option by bequest or inheritance does not exercise the Option
within the time specified herein, the Option shall terminate.

         11.  Adjustments Upon Changes in Capitalization, Dissolution, Merger or
              ------------------------------------------------------------------
Asset Sale.
----------

              (a)  Changes in Capitalization. Subject to any required action by
                   -------------------------
the stockholders of the Company, the number of shares of Common Stock covered by
this Option, as well as the price per share of Common Stock covered by this
Option, shall be proportionately adjusted for any increase or decrease in the
number of issued shares of Common Stock resulting from a stock split, reverse
stock split, stock dividend, combination or reclassification of the Common
Stock, or any other increase or decrease in the number of issued shares of
Common Stock effected without receipt of consideration by the Company; provided,
however, that conversion of any convertible securities of the Company shall not
be deemed to have been "effected without receipt of consideration." Such
adjustment shall be made by the Board, whose determination in that respect shall
be final, binding and conclusive. Except as expressly provided herein, no
issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall affect, and no adjustment
by reason thereof shall be made with respect to, the number or price of shares
of Common Stock subject to this Option.

             (b) Dissolution or Liquidation. In the event of the proposed
                 --------------------------
dissolution or liquidation of the Company, the Board shall notify Optionee as
soon as practicable prior to the effective date of such proposed transaction.
The Board in its discretion may provide for the Optionee to have the right to
exercise his or her Option until fifteen (15) days prior to such

                                      -5-
<PAGE>

transaction as to all of the Optioned Stock covered thereby, including Shares as
to which the Option would not otherwise be exercisable. To the extent it has not
been previously exercised, the Option will terminate immediately prior to the
consummation of such proposed

             (c) Merger or Asset Sale. In the event of a merger of the Company
                 --------------------
with or into another corporation, or the sale of substantially all of the assets
of the Company, the Option shall be assumed or an equivalent option substituted
by the successor corporation or a Parent or Subsidiary of the successor
corporation. In the event that the successor corporation refuses to assume or
substitute for the Option, the Optionee shall fully vest in and have the right
to exercise the Option as to all of the Optioned Stock, including Shares as to
which it would not otherwise be vested or exercisable. If the Option becomes
fully vested and exercisable in lieu of assumption or substitution in the event
of a merger or sale of assets, the Board shall notify the Optionee in writing or
electronically that the Option shall be fully exercisable for a period of
fifteen (15) days from the date of such notice, and the Option shall terminate
upon the expiration of such period. For the purposes of this paragraph, the
Option shall be considered assumed if, following the merger or sale of assets,
the option confers the right to purchase or receive, for each Share of Optioned
Stock subject to the Option immediately prior to the merger or sale of assets,
the consideration (whether stock, cash, or other securities or property)
received in the merger or sale of assets by holders of Common Stock for each
Share held on the effective date of the transaction (and if holders were offered
a choice of consideration, the type of consideration chosen by the holders of a
majority of the outstanding Shares); provided, however, that if such
consideration received in the merger or sale of assets is not solely common
stock of the successor corporation or its Parent, the Administrator may, with
the consent of the successor corporation, provide for the consideration to be
received upon the exercise of the Option, for each Share of Optioned Stock
subject to the Option, to be solely common stock of the successor corporation or
its Parent equal in fair market value to the per share consideration received by
holders of Common Stock in the merger or sale of assets.

             12. Lock-Up Period. Optionee hereby agrees that, if so requested by
                 --------------
the Company or any representative of the underwriters (the "Managing
Underwriter") in connection with any registration of the offering of any
securities of the Company under the Securities Act, Optionee shall not sell or
otherwise transfer any Shares or other securities of the Company during the 180-
day period (or such other period as may be requested in writing by the Managing
Underwriter and agreed to in writing by the Company) (the "Market Standoff
Period") following the effective date of a registration statement of the Company
filed under the Securities Act. Such restriction shall apply only to the first
registration statement of the Company to become effective under the Securities
Act that includes securities to be sold on behalf of the Company to the public
in an underwritten public offering under the Securities Act. The Company may
impose stop-transfer instructions with respect to securities subject to the
foregoing restrictions until the end of such Market Standoff Period.

             13. Notices. Any notice to be given to the Company hereunder shall
                 -------
be in writing and shall be addressed to the Company. at its then current
principal executive office or to such other address as the Company may hereafter
designate to the Optionee by notice as provided in this Section. Any notice to
be given to the Optionee hereunder shall be addressed to the Optionee at the
address set forth beneath his signature hereto, or at such other address as the
Optionee may hereafter designate to the Company by notice as provided herein. A
notice shall be deemed to have been duly

                                      -6-
<PAGE>

given when personally delivered or mailed by registered or certified mail to the
party entitled to receive it.

     14. Tax Consequences. Some of the federal tax consequences relating to this
         ----------------
Option, as of the date of this Option, are set forth below. THIS SUMMARY IS
NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE.
THE OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THIS OPTION OR
DISPOSING OF THE SHARES.

          (a) Exercising the Option. The Optionee may incur regular federal
              ---------------------
income tax liability upon exercise of a Nonstatutory Stock Option (an "NSO").
The 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 Exercised Shares on the date of exercise over their aggregate Exercise
Price. If the Optionee is an Employee or a former Employee, the Company will be
required to withhold from his or her compensation or collect from Optionee and
pay to the applicable taxing authorities an amount in cash equal to a percentage
of this compensation income at the time of exercise, and may refuse to honor the
exercise and refuse to deliver Shares if such withholding amounts are not
delivered at the time of exercise.

          (b)  Disposition of Shares.  If the Optionee holds NSO Shares for at
               ---------------------
least one year, any gain realized on disposition of the Shares will be treated
as long-term capital gain for federal income tax purposes.

     15.  Entire Agreement; Governing Law.  This Agreement constitute the entire
          -------------------------------
agreement of the parties with respect to the subject matter hereof and supersede
in their entirety all prior undertakings and agreements of the Company and
Optionee with respect to the subject matter hereof, and may not be modified
adversely to the Optionee's interest except by means of a writing signed by the
Company and Optionee.  This agreement is governed by the internal substantive
laws, but not the choice of law rules, of [     ].

     16. NO GUARANTEE OF CONTINUED SERVICE. OPTIONEE ACKNOWLEDGES AND AGREES
         ---------------------------------
THAT THE VESTING OF SHARES PURSUANT TO THE VESTING SCHEDULE HEREOF IS EARNED
ONLY BY CONTINUING AS A SERVICE PROVIDER AT THE WILL OF THE COMPANY (AND NOT
THROUGH THE ACT OF BEING HIRED, BEING GRANTED AN OPTION OR PURCHASING SHARES
HEREUNDER). OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, THE
TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO
NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUES ENGAGEMENT AS A
SERVICE PROVIDER FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND SHALL
NOT INTERFERE WITH OPTIONEE'S RIGHT OR THE COMPANY'S RIGHT TO TERMINATE
OPTIONEE'S RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME, WITH OR WITHOUT
CAUSE.

                                      -7-
<PAGE>

     By your signature and the signature of the Company's representative below,
you and the Company agree that this Option is granted under and governed by the
terms and conditions of this Agreement.  Optionee has reviewed this Agreement in
its entirety, has had an opportunity to obtain the advice of counsel prior to
executing this Agreement and fully understands all provisions of this Agreement.
Optionee hereby agrees to accept as binding, conclusive and final all decisions
or interpretations of the Board upon any questions relating to this Agreement.
Optionee further agrees to notify the Company upon any change in the residence
address indicated below.

OPTIONEE                            EMACHINES, INC.

---------------------------         --------------------------------
Signature                           By

---------------------------         --------------------------------
Print Name                          Title

---------------------------
Residence Address

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

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

                                      -8-
<PAGE>

                               CONSENT OF SPOUSE

     The undersigned spouse of Optionee has read and hereby approves the terms
and conditions of this Agreement.  In consideration of the Company's granting
his or her spouse the right to purchase Shares as set forth in this Agreement,
the undersigned hereby agrees to be irrevocably bound by the terms and
conditions of this Agreement and further agrees that any community property
interest shall be similarly bound.  The undersigned hereby appoints the
undersigned's spouse as attorney-in-fact for the undersigned with respect to any
amendment or exercise of rights under this Agreement.

                                  ----------------------------------
                                  Spouse of Optionee
<PAGE>

                                   EXHIBIT A
                                   ---------

                                eMACHINES, INC.

                                EXERCISE NOTICE

eMACHINES, INC.
[Address]

Attention:

     1. Exercise of Option. Effective as of today, ________________, 199__, the
        ------------------
undersigned ("Purchaser") hereby elects to purchase ______________ shares (the
"Shares") of the Common Stock of eMACHINES, INC. (the "Company") under and
pursuant to the Stock Option Agreement dated [_____________] (the "Option
Agreement"). The purchase price for the Shares shall be [$_______], as required
by the Option Agreement.

     2. Delivery of Payment. Purchaser herewith delivers to the Company the full
        -------------------
purchase price for the Shares.

     3. Representations of Purchaser. Purchaser acknowledges that Purchaser has
        ----------------------------
received, read and understood the Option Agreement and agrees to abide by and be
bound by their terms and conditions.

     4. Rights as Shareholder. Until the issuance (as evidenced by the
        ---------------------
appropriate entry on the books of the Company or of a duly authorized transfer
agent of the Company) of the Shares, no right to vote or receive dividends or
any other rights as a stockholder shall exist with respect to the Optioned
Stock, notwithstanding the exercise of the Option. The Shares so acquired shall
be issued to the Optionee as soon as practicable after exercise of the Option.
No adjustment will be made for a dividend or other right for which the record
date is prior to the date of issuance, except as provided in Section 11 of the
Option Agreement.

     5. Company's Right of First Refusal. Before any Shares held by Optionee or
        --------------------------------
any transferee (either being sometimes referred to herein as the "Holder") may
be sold or otherwise transferred (including transfer by gift or operation of
law), the Company or its assignee(s) shall have a right of first refusal to
purchase the Shares on the terms and conditions set forth in this Section (the
"Right of First Refusal").

        (a) Notice of Proposed Transfer. The Holder of the Shares shall deliver
            ---------------------------
to the Company a written notice (the "Notice") stating: (i) the Holder's bona
fide intention to sell or otherwise transfer such Shares; (ii) the name of each
proposed purchaser or other transferee ("Proposed Transferee"); (iii) the number
of Shares to be transferred to each Proposed Transferee; and (iv) the bona fide
cash price or other consideration for which the Holder proposes to transfer the

                                      -2-
<PAGE>

Shares (the "Offered Price"), and the Holder shall offer the Shares at the
Offered Price to the Company or its assignee(s).

        (b) Exercise of Right of First Refusal. At any time within thirty (30)
            ----------------------------------
days after receipt of the Notice, the Company and/or its assignee(s) may, by
giving written notice to the Holder, elect to purchase all, but not less than
all, of the Shares proposed to be transferred to any one or more of the Proposed
Transferees, at the purchase price determined in accordance with subsection (c)
below.

        (c) Purchase Price. The purchase price ("Purchase Price") for the Shares
            --------------
purchased by the Company or its assignee(s) under this Section shall be the
Offered Price. If the Offered Price includes consideration other than cash, the
cash equivalent value of the non-cash consideration shall be determined by the
Board in good faith.

        (d) Payment. Payment of the Purchase Price shall be made, at the option
            -------
of the Company or its assignee(s), in cash (by check), by cancellation of all or
a portion of any outstanding indebtedness of the Holder to the Company (or, in
the case of repurchase by an assignee, to the assignee), or by any combination
thereof within 30 days after receipt of the Notice or in the manner and at the
times set forth in the Notice.

        (e) Holder's Right to Transfer. If all of the Shares proposed in the
            --------------------------
Notice to be transferred to a given Proposed Transferee are not purchased by the
Company and/or its assignee(s) as provided in this Section, then the Holder may
sell or otherwise transfer such Shares to that Proposed Transferee at the
Offered Price or at a higher price, provided that such sale or other transfer is
consummated within 120 days after the date of the Notice, that any such sale or
other transfer is effected in accordance with any applicable securities laws and
that the Proposed Transferee agrees in writing that the provisions of this
Section shall continue to apply to the Shares in the hands of such Proposed
Transferee. If the Shares described in the Notice are not transferred to the
Proposed Transferee within such period, a new Notice shall be given to the
Company, and the Company and/or its assignees shall again be offered the Right
of First Refusal before any Shares held by the Holder may be sold or otherwise
transferred.

        (f) Exception for Certain Family Transfers. Anything to the contrary
            --------------------------------------
contained in this Section notwithstanding, the transfer of any or all of the
Shares during the Optionee's lifetime or on the Optionee's death by will or
intestacy to the Optionee's immediate family or a trust for the benefit of the
Optionee's immediate family shall be exempt from the provisions of this Section.
"Immediate Family" as used herein shall mean spouse, lineal descendant or
antecedent, father, mother, brother or sister. In such case, the transferee or
other recipient shall receive and hold the Shares so transferred subject to the
provisions of this Section, and there shall be no further transfer of such
Shares except in accordance with the terms of this Section.

        (g) Termination of Right of First Refusal. The Right of First Refusal
            -------------------------------------
shall terminate as to any Shares upon the first sale of Common Stock of the
Company to the general public pursuant to a registration statement filed with
and declared effective by the Securities and Exchange Commission under the
Securities Act of 1933, as amended.

                                      -3-
<PAGE>

        6. Tax Consultation. Purchaser understands that Purchaser may suffer
           ----------------
adverse tax consequences as a result of Purchaser's purchase or disposition of
the Shares. Purchaser represents that Purchaser has consulted with any tax
consultants Purchaser deems advisable in connection with the purchase or
disposition of the Shares and that Purchaser is not relying on the Company for
any tax advice.

        7.  Restrictive Legends and Stop-Transfer Orders.
            --------------------------------------------
            (a) Legends. Optionee understands and agrees that the Company shall
                -------
cause the legends set forth below or legends substantially equivalent thereto,
to be placed upon any certificate(s) evidencing ownership of the Shares together
with any other legends that may be required by the Company or by state or
federal securities laws:

               THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER
               THE SECURITIES ACT OF 1933 (THE "ACT") AND MAY NOT BE OFFERED,
               SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND
               UNTIL REGISTERED UNDER THE ACT OR, IN THE OPINION OF COMPANY
               COUNSEL SATISFACTORY TO THE ISSUER OF THESE SECURITIES, SUCH
               OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS IN COMPLIANCE
               THEREWITH.

               THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
               RESTRICTIONS ON TRANSFER AND A RIGHT OF FIRST REFUSAL HELD BY THE
               ISSUER OR ITS ASSIGNEE(S) AS SET FORTH IN THE EXERCISE NOTICE
               BETWEEN THE ISSUER AND THE ORIGINAL HOLDER OF THESE SHARES, A
               COPY OF WHICH MAY BE OBTAINED AT THE PRINCIPAL OFFICE OF THE
               ISSUER.  SUCH TRANSFER RESTRICTIONS AND RIGHT OF FIRST REFUSAL
               ARE BINDING ON TRANSFEREES OF THESE SHARES.

        (b) Stop-Transfer Notices. Optionee agrees that, in order to ensure
            ---------------------
compliance with the restrictions referred to herein, the Company may issue
appropriate "stop transfer" instructions to its transfer agent, if any, and
that, if the Company transfers its own securities, it may make appropriate
notations to the same effect in its own records.

        (c) Refusal to Transfer. The Company shall not be required (i) to
            -------------------
transfer on its books any Shares that have been sold or otherwise transferred in
violation of any of the provisions of this Exercise Notice or (ii) to treat as
owner of such Shares or to accord the right to vote or pay dividends to any
purchaser or other transferee to whom such Shares shall have been so
transferred.

     8. Successors and Assigns. The Company may assign any of its rights under
        ----------------------
this Exercise Notice to single or multiple assignees, and this Exercise Notice
shall inure to the benefit of the successors and assigns of the Company. Subject
to the restrictions on transfer herein set forth, this Exercise Notice shall be
binding upon Optionee and his or her heirs, executors, administrators,
successors and assigns.

                                      -4-
<PAGE>

     9. Interpretation. Any dispute regarding the interpretation of this
        --------------
Exercise Notice shall be submitted by Optionee or by the Company forthwith to
the Administrator which shall review such dispute at its next regular meeting.
The resolution of such a dispute by the Administrator shall be final and binding
on all parties.

     10.  Entire Agreement; Governing Law.  The Option Agreement is incorporated
          -------------------------------
herein by reference.  This Agreement, and the Option Agreement constitute the
entire agreement of the parties with respect to the subject matter hereof and
supersede in their entirety all prior undertakings and agreements of the Company
and Purchaser with respect to the subject matter hereof, and may not be modified
adversely to the Purchaser's interest except by means of a writing signed by the
Company and Purchaser.  This agreement is governed by the internal substantive
laws, but not the choice of law rules, of [___].

Submitted by:                       Accepted by:

OPTIONEE                            eMACHINES, INC.

------------------------
Signature

------------------------
Print Name

------------------------            ------------------------
Address                             Address

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

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

                                    Date Received:
                                                  ----------

                                      -5-
<PAGE>

                                   EXHIBIT B
                                   ---------

                      INVESTMENT REPRESENTATION STATEMENT

OPTIONEE:
         ------------------------
COMPANY:  eMACHINES, INC.

SECURITY: COMMON STOCK

AMOUNT:
        --------------------------
DATE:
       ---------------------------

     In connection with the purchase of the above-listed Securities, the
undersigned Optionee represents to the Company the following:

        (a) Optionee is aware of the Company's business affairs and financial
condition and has acquired sufficient information about the Company to reach an
informed and knowledgeable decision to acquire the Securities. Optionee is
acquiring these Securities for investment for Optionee's own account only and
not with a view to, or for resale in connection with, any "distribution" thereof
within the meaning of the Securities Act of 1933, as amended (the "Securities
Act").

        (b) Optionee acknowledges and understands that the Securities constitute
"restricted securities" under the Securities Act and have not been registered
under the Securities Act in reliance upon a specific exemption therefrom, which
exemption depends upon, among other things, the bona fide nature of Optionee's
investment intent as expressed herein. In this connection, Optionee understands
that, in the view of the Securities and Exchange Commission, the statutory basis
for such exemption may be unavailable if Optionee's representation was
predicated solely upon a present intention to hold these Securities for the
minimum capital gains period specified under tax statutes, for a deferred sale,
for or until an increase or decrease in the market price of the Securities, or
for a period of one year or any other fixed period in the future. Optionee
further understands that the Securities must be held indefinitely unless they
are subsequently registered under the Securities Act or an exemption from such
registration is available. Optionee further acknowledges and understands that
the Company is under no obligation to register the Securities. Optionee
understands that the certificate evidencing the Securities will be imprinted
with a legend which prohibits the transfer of the Securities unless they are
registered or such registration is not required in the opinion of counsel
satisfactory to the Company, and any other legend required under applicable
state securities laws.
<PAGE>

(c)  Optionee is familiar with the provisions of Rule 701 and Rule 144, each
     promulgated under the Securities Act, which, in substance, permit limited
     public resale of "restricted securities" acquired, directly or indirectly
     from the issuer thereof, in a non-public offering subject to the
     satisfaction of certain conditions.  Rule 701 provides that if the issuer
     qualifies under Rule 701 at the time of the grant of the Option to the
     Optionee, the exercise will be exempt from registration under the
     Securities Act.  In the event the Company becomes subject to the reporting
     requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934,
     ninety (90) days thereafter (or such longer period as any market stand-off
     agreement may require) the Securities exempt under Rule 701 may be resold,
     subject to the satisfaction of certain of the conditions specified by Rule
     144, including:  (1) the resale being made through a broker in an
     unsolicited "broker's transaction" or in transactions directly with a
     market maker (as said term is defined under the Securities Exchange Act of
     1934); and, in the case of an affiliate, (2) the availability of certain
     public information about the Company, (3) the amount of Securities being
     sold during any three month period not exceeding the limitations specified
     in Rule 144(e), and (4) the timely filing of a Form 144, if applicable.

          In the event that the Company does not qualify under Rule 701 at the
time of grant of the Option, then the Securities may be resold in certain
limited circumstances subject to the provisions of Rule 144, which requires the
resale to occur not less than one year after the later of the date the
Securities were sold by the Company or the date the Securities were sold by an
affiliate of the Company, within the meaning of Rule 144; and, in the case of
acquisition of the Securities by an affiliate, or by a non-affiliate who
subsequently holds the Securities less than two years, the satisfaction of the
conditions set forth in sections (1), (2), (3) and (4) of the paragraph
immediately above.

        (d) Optionee further understands that in the event all of the applicable
requirements of Rule 701 or 144 are not satisfied, registration under the
Securities Act, compliance with Regulation A, or some other registration
exemption will be required; and that, notwithstanding the fact that Rules 144
and 701 are not exclusive, the Staff of the Securities and Exchange Commission
has expressed its opinion that persons proposing to sell private placement
securities other than in a registered offering and otherwise than pursuant to
Rules 144 or 701 will have a substantial burden of proof in establishing that an
exemption from registration is available for such offers or sales, and that such
persons and their respective brokers who participate in such transactions do so
at their own risk. Optionee understands that no assurances can be given that any
such other registration exemption will be available in such event.

                                 Signature of Optionee:

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

                                 Date:
                                 ----------------------------------------

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