Document:

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                                                                   EXHIBIT 10.28

                              Master Agreement

                                   between

                 Vicinity Corporation and AltaVista Company

                           Agreement No. 00400154

[*]=CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.

<PAGE>

                              Master Agreement

                                  Between

                 Vicinity Corporation and AltaVista Company

This is the Master Agreement ("Agreement") between AltaVista Company, a Delaware
corporation (hereinafter referred to as "AltaVista") with an address for
purposes of this Agreement at 111 Theory, Irvine, CA 92612, and Vicinity
Corporation, a California corporation (hereinafter referred to as "Vicinity")
with an address at 1135A San Antonio Road, Palo Alto, CA 94303-4310 with an
effective date of January 11, 2000  ("Effective Date").

The parties intend to create a strategic relationship which includes, but is not
limited to, the following objectives:

 .  Vicinity to provide AltaVista with technologies for selected services
   available within AltaVista's shopping services such as yellow pages.
 .  Provide end users with an enriched shopping experience by providing rich
   product information for local online and offline purchasing opportunities.
 .  Establish a leadership position in the web-based shopping services space.
 .  Provide enhanced services for online and offline merchants by presenting
   product availability by brand, category, * * * * to the extent such
   information is available.
 .  Create a * * * *  merchant initiative that provides for product integration
   and services within the AltaVista shopping services.
 .  Develop an overall merchant acquisition strategy that provides increased
   benefits for web--based shopping and web-based location of local merchants
   while maintaining a competitive advantage within the AltaVista/Vicinity
   affiliation.
 .  Jointly develop a strategy and execution plan to integrate the sales efforts
   of both AltaVista and Vicinity to ensure that the supporting merchant base is
   expanded upon rapidly.
 .  Create a bundle of value added services for merchants that includes both
   * * * *  and * * * *
 .  Build on the competitive advantage created by the parties' affiliation.
 .  Become a leader in providing new technologies (products and services) in the
   industry.
 .  Work together on one or more * * * * initiatives similar to the * * * * web-
   based initiatives that the parties are currently discussing.
 .  Lead the industry in the creation of world-class web-based shopping
   standards.

[*]=CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
<PAGE>

1)  Purpose.  Vicinity and AltaVista are interested in satisfying the needs of
    -------
    their respective customers and increasing the effective use and
    interoperability of their respective products and services. Vicinity has
    developed and intends to continue to develop infrastructure and services
    that integrate local merchants with online product locator services.
    AltaVista has developed and intends to continue to develop its online
    shopping service and to integrate both online and offline purchasing
    solutions.

    This Agreement describes the business relationship between the parties with
    respect to the foregoing.

2)  Organization Of This Agreement.  This Agreement contains the terms and
    ------------------------------
    conditions that will apply to all business transactions falling within the
    scope of this Agreement between the parties unless otherwise specified in
    one or more of the Project Statements. The purposes of this Agreement will
    be implemented through one or more Project Statements.

    a)  Types of Project Statements.  Under this Agreement, the parties may
        ---------------------------
        enter into Project Statements which include but are not limited to the
        following types:

        i)    Product Development Project Statement.
        ii)   Marketing Project Statement.
        iii)  Services Project Statement.
        iv)   Administrative Project Statements.
        v)    Joint Project Statements.

    b)  Contents of Each Project Statement.  Each Project Statement must
        ----------------------------------
        contain (or incorporate as attachments or by reference):

        i)    A reference to this Agreement by agreement number;
        ii)   Designation of the names, business addresses, and telephone
              numbers of the Project Manager for the Project Statement
              (contact information);
        iii)  Amount, discounts, schedule and method of compensation, if any
        iv)   Identification of any materials, deliverables and/or services to
              be provided to either party pursuant to the Project Statement
              and related technology ownership and license terms, including
              limitations, if any; and
        v)    Timetable and location (if applicable) for performance and
              completion, including milestones, schedules and delivery dates,
              where appropriate.
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    c)  In addition, when applicable or appropriate, a Project Statement shall
contain (or incorporate as attachments or by reference):

        i)    Provision for written progress reports to be prepared by the
              Project Managers;
        ii)   Acceptance standards for deliverables and/or reports, including
              any or all of the following:
              (1)  Documentation, specifications and standards;
              (2)  Quality standards;
              (3)  Performance specifications;
              (4)  Usability and architecture requirements;
              (5)  A list and description of any equipment, components, and
                   software to be supplied for use (specifying the party who
                   is responsible for the supply of such equipment, component,
                   or software) in connection with the Project Statement; and
              (6)  Any limitation on the locations of performance or storage
                   of AltaVista or Vicinity confidential information;
        iii)  Resource requirements, including training and assignment of key
              personnel;
        iv)   Any applicable termination provisions; and
        v)    A list of the trademarks licensed (if any) under the Project
              Statement and applicable guidelines and use restrictions, if
              any, for any such licensed trademarks.

3)  Definitions.  Unless the context clearly requires otherwise, the capitalized
    -----------
    terms used within Contract Documents shall have the same meaning as
    ascribed to the terms below.

    a)  Contract Documents - shall mean this Agreement, its attachments, its
        ------------------
        schedules and all Project Statements issued under this Agreement, and
        any amendments to the foregoing in effect from time to time during the
        term or terms of the applicable Contract Documents.

    b)  Deliverables - shall mean any materials or services which result from
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        performance by the parties under a Project Statement and which are
        required to be delivered in fulfillment of a Project Statement.

    c)  Documentation     - shall mean user manuals and other written materials
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        that relate to a particular product or service developed pursuant to a
        Project Statement, including but not limited to materials useful for
        design (for example, logic manuals, flow charts, and functional
        specifications), and machine-readable text or graphic files subject to
        display or print-out.
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    d)  Invention - shall mean any idea, design, concept, technique,
        ---------
        invention, discovery or improvement whether or not patentable, that is
        conceived or reduced to practice by the inventing party in the
        performance of any Project Statement.

    e)  Licensed Work - shall mean any software, Documentation, Deliverable
        -------------
        or other proprietary technology licensed by one of the parties to the
        other pursuant to a Project Statement.

    f)  Updates - shall mean any modifications or revisions, other than a new
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        Version of software, Documentation or Deliverables that correct errors
        or provide other incidental corrections. Updates are typically
        identified by increases to the right of the decimal such as 1.x or
        1.y.

    g)  Version - shall mean modifications or revisions that result from
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        significant changes or functional additions to any product or service
        and related Documentation and Deliverables that provide additional
        value, utility, content and/or other significant enhancements. New
        Versions are typically identified by increases in the version number
        associated with the product or service to the left of the decimal such
        as 2.x to 3.y

    h)  Joint Invention - shall mean any idea, design, concept, technique,
        ---------------
        invention, discovery or improvement that is conceived or reduced to
        practice by the collaborative efforts of the representatives of
        Vicinity and AltaVista in the performance of any Project Statement.

4)  Trademarks.
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        Each party grants the other a non exclusive, non transferable, royalty
        free right to display during the Term of this Agreement the
        trademarks, tradenames, service marks and logos made available by such
        party for use only to fulfil the obligations under one or more Project
        Statements and for no other purpose. Such use shall be subject to the
        terms of this Agreement and/or the terms of a Project Statement. In
        the event that a party determines that the other's use of the
        applicable trademarks, tradenames, or service marks or logos is
        inconsistent with the applicable trademark or service mark owner's
        standard quality standards or the terms set forth in a Project
        Statement, then such party shall provide the non-conforming party with
        ten (10) days written notice to conform its use of the trademark,
        tradename, service mark or logo to the applicable standards. If after
        the ten (10) days notice, the non-conforming party
<PAGE>

        fails to conform to the applicable trademark, tradename, service mark
        or logo to the standards of the requesting owner, then the owner of
        the marks shall have the right to immediately terminate the other
        party's right to use such marks under the terms of this Agreement or a
        Project Statement.

5)  Compensation.
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    a)  Compensation.  Any compensation due from one party to the other shall be
        ------------
        specified in a relevant Project Statement.

    b)  Payments.  Unless otherwise stated in a relevant Project Statement, any
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        payments due hereunder, shall be due within forty-five (45) days of
        the invoice date and shall be payable in U.S. Dollars. Notwithstanding
        any other remedies available to either party under this Agreement or
        under applicable law, payment in arrears of more than forty-five (45)
        days shall bear interest from the date payment is due at the rate of
        one percent (1%) per month or the maximum rate permitted by law,
        unless the amount in arrears is disputed in good faith.

    c)  Audit.  The parties shall maintain complete and accurate accounting
        -----
        records, in accordance with generally acceptable accounting practices,
        to support and document any amounts due hereunder. Such records shall
        be retained for a period of at least two (2) years after the payments
        to which such records relate have been made. Each party shall, upon
        written request, during normal business hours, but not more frequently
        than once each calendar year, provide access to such accounting
        records to an independent accounting firm chosen and compensated by
        the requesting party, for purposes of audit. Such accounting firm
        shall be required to sign an agreement protecting the party's
        confidential information and shall be authorized to report only the
        amounts due and payable for the period requested. If any such audit
        reveals that the audited party has underpaid by more than five percent
        (5%) the amounts owed to the auditing party for the period covered by
        the audit, the audited party will promptly pay any shortfall and
        reimburse the auditing party for all expenses reasonably incurred by
        the auditing party in connection with the audit.

6)  Procedure For Entering Into Project Statements.  Each Project Statement
    ----------------------------------------------
    issued under this Agreement shall become effective only when executed by
    authorized representatives of both parties. Neither party gives any
    assurance as to the issuance or execution of any subsequent Project
    Statements. Each Project Statement entered into under this Agreement shall
    be construed to incorporate the provisions of, and to be governed by, this
    Agreement unless otherwise provided for in the Project Statement.
<PAGE>

7)  Contract Administration.
    -----------------------

    a)  Executive Coordinator.  Upon the execution of this Agreement,
        ---------------------
        AltaVista and Vicinity shall each submit to the other party in writing
        the name, business address and telephone number of the Executive
        Coordinator(s) who shall be responsible for all overall matters
        pertaining to this Agreement and all other Contract Documents. The
        responsibilities of the Executive Coordinators are as follows:

        i)    Administer and coordinate the overall aspects of the Contract
              Documents; and

        ii)   Arrange meetings, visits and consultations between the parties
              concerning matters related to this Agreement and material
              performance issues or amendments related to a relevant Project
              Statement.

    b)  Project Management.  Unless otherwise specified in a Project Statement,
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        the Project Manager shall be responsible for the design and
        development of Deliverables developed under a Project Statement; the
        Project Manager shall be responsible for providing customer
        requirements and testing the Deliverables. Each party shall have only
        one Project Manager for each Project Statement. All communications
        between the parties relating to technical performance and the
        preparation and the delivery of Deliverables under a Project Statement
        shall take place between the Project Managers named in the Project
        Statement. The additional responsibilities of the Project Manager with
        respect to the applicable Project Statements are as follows:

        i)    Arrange meetings, visits and consultations between the parties
              concerning matters related to the applicable Project Statement;

        ii)   Chair periodic status reviews of the applicable Project Statement;

        iii)  Coordinate amendments (including documenting and signing or
              initialing such amendments) to the Project Statements, to the
              extent the Project Managers are authorized to make such
              amendments;

        iv)   Supervise submission and acceptance of all Materials pursuant to
              the Project Statement, including the delivery, testing and
              acceptance of Deliverables;
<PAGE>

        v)    Supervise the transfer of any information as required hereunder;
              and

        vi)   Prepare written progress reports required under this Agreement
              or a relevant Project Statement.

    c)  Changes in Coordinators.  Either party may replace any of the people
        -----------------------
        referenced in this Section by delivering written notice of the change
        to the other party. The notice must be signed by either the Executive
        Coordinator of the party making the change, or by an authorized
        signatory of that party. The notice shall set forth the name, business
        address and telephone number of the replacement.

8)  Changes To Contract Documents.
    -----------------------------

    a)  Changes.  Either party, through the respective Executive Coordinator or
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        Project Manager, may propose changes to Contract Documents. Either
        party may at its sole option accept or reject changes proposed by the
        other.

    b)  Material Increases.  In the event that a party proposes changes which
        ------------------
        materially increase the other party's cost or work effort, such
        proposal shall include a proposed equitable adjustment in payments
        and/or schedule. Where the parties agree to make a change to the
        Contract Documents, the parties shall negotiate in good faith such
        change.

    c)  Amendments.  All changes to the Contract Documents must be made in
        ----------
        writing and executed by authorized representatives of both parties.
        The terms of the Agreement may only be changed by a written amendment
        referring to the clauses of the Agreement to be changed and signed by
        an authorized representative of each party. Amendments to terms and
        conditions of this Agreement implemented through a signed Project
        Statement shall be effective only with respect to that Project
        Statement.

    d)  Authority to Make Changes.  The parties' respective Project Manager
        -------------------------
        named in a Project Statement may propose, accept (by signature) and
        implement changes to technical aspects of such Project Statement
        provided such changes do not change dollar amounts or materially
        change Deliverables or time schedules. Changes in the Project
        Statement that involve adjustment in payments or material changes in
        Deliverable to time schedules require the approval of the parties'
        Executive Coordinators. Such changes are effective only if accepted
        (by signature) by both parties.
<PAGE>

    e)  Changes Effective Upon Execution of Documentation.  No change or
        -------------------------------------------------
        amendment, including related modifications (if any) in payment
        obligations and schedules, shall be effective, nor shall it be
        implemented until it is:

        i)    reduced to a written amendment;

        ii)   signed by the appropriate authorized representative of each
              party, as authorized by this Section; and

        iii)  The terms of the Agreement may only be changed by a written
              amendment referring to the clauses of the Agreement to be
              changed and signed by the Executive Coordinator of each party or
              his or her designee. Each party assumes its risk of any work
              done or action taken by it based on oral statements, or on
              documents or notations, not in accordance with this Section.

9)  Progress Reports.  Unless otherwise provided in the applicable Project
    ----------------
    Statement, the Project Manager of one party shall provide to the Project
    Manager of the other party monthly written progress reports for such
    Project Statement specifying the current work progress level and
    identifying any problems that have been resolved and any problems that are
    unresolved, along with a projected date of resolution, changes in the
    assignment of its key employees, strikes and labor unrest, or
    unavailability of critical resources, or of any factor, event or
    anticipated event that may affect the ability to meet the requirements of
    any Project Statement.

10) Inventions & Ownership.
    ----------------------

    a)  Ownership of Inventions.  The inventing party shall own each Invention
        -----------------------
        made by its employees, applications filed thereon and patents issuing
        thereon except Joint Inventions which shall be jointly owned. Each
        party shall account to the other regarding any monies collected with
        respect to such Joint Inventions. With respect to Joint Inventions,
        Vicinity and AltaVista shall share equally in the expenses of seeking
        and maintaining patent protection. Either party may elect at its own
        expense to seek and maintain patent protection if the other party
        declines to share such expenses; such patent shall be in name of the
        party who registers the patent and the other party shall be given a
        free, perpetual license to use such patent.

    b)  Inventions Licenses.  Subject to a license being granted in a Project
        -------------------
        Statement, the licensing party hereby grants the other party a
        worldwide, nonexclusive, non-transferable and royalty-free license to
        the Inventions, but only as
<PAGE>

        necessary to exercise the grant contained in such Project Statement.
        The license granted by the inventing party shall not include any right
        to sublicense without the consent of the inventing party.

    c)  No Other License.  Except as stated in this  Agreement, no license under
        ----------------
        any patents or patent applications arising out of any idea, design,
        concept, technique, invention, discovery or improvement made by either
        party shall be deemed granted, at any time to either party, whether
        expressly or by implication, estoppel, or otherwise.

    d)  Notice of Infringement.  If either party becomes aware that an item it
        ----------------------
        has produced under this Agreement infringes, or allegedly infringes, a
        patent of a third-party, that party agrees to notify the other party
        promptly in writing.

11) CONFIDENTIALITY AND INFORMATION EXCHANGE.
    ----------------------------------------

    a)  Exchange.  It is the intention of AltaVista and Vicinity to transfer
        --------
        and/or exchange information as may be essential for completing Project
        Statements under this Agreement and to explore other business
        relationships between the parties. Such information may be disclosed
        in oral, visual, or written form (including magnetic media). The
        obligations of the parties regarding confidentiality under this
        Agreement and any Project Statement entered into by the parties
        pursuant to the Agreement shall be governed by the Confidentiality and
        Nondisclosure Agreement between the parties dated January 11, 2000 or
        any renewals thereof.

    b)  Disclosure to Others.  Neither party shall disclose the financial terms
        --------------------
        and conditions under the Contract Documents to third parties, without
        the prior written consent of the other party. If, however, a party
        determines, upon the opinion of counsel, that disclosure regarding the
        Contract Documents and/or the relationship between the parties is
        required by law, then disclosure shall be permitted, but only after
        the nondisclosing party is given reasonable opportunity (upon not less
        than three (3) business days notice) to dispute the required
        disclosure. The non-disclosing party shall reasonably cooperate with
        the disclosing party to mitigate such required disclosure by taking
        reasonable steps to secure confidentiality through a protective order
        or other available protective procedures.
<PAGE>

12) Proprietary Notices.
    -------------------

    a)  Copyright Notices.  Any publication by AltaVista or Vicinity of
        -----------------
        copyrighted works shall contain an appropriate copyright notice in
        accordance with, and in the form prescribed by the copyright statutes
        or by this Agreement or a Project Statement.

    b)  Vicinity Content.  All Vicinity content distributed under this Agreement
        ----------------
        shall include and display the copyright notices, trademarks and any
        other proprietary legends of Vicinity and Vicinity's licensors in the
        manner required by Vicinity, as set forth on the attached Schedule A
        as such Schedule may be amended from time to time by Vicinity upon
        written notice to AltaVista.

    c)  Modification of Copyright Notices.  Each party shall not alter, modify
        ---------------------------------
        or delete, obscure the other party's copyright notice statement
        without the other party's written consent.

13) Enforcement of Copyright and other Proprietary Rights.  Each party shall
    -----------------------------------------------------
    be responsible for maintaining the validity and enforceability of its
    copyrights and all other proprietary rights that it may have in all
    Licensed Works and Deliverables.

14) Representation And Warranties.  Each party makes the following
    -----------------------------
    representations and warranties for the benefit of the other, as a present
    and ongoing affirmation of facts in existence at all times when this
    Agreement is in effect:

    a)  Ownership and Authority.
        -----------------------

        i)    EACH PARTY REPRESENTS AND WARRANTS (1) THAT IT IS THE SOLE OWNER
              OF ALL DELIVERABLES PROVIDED BY IT UNDER EACH PROJECT STATEMENT,
              OR HAS LICENSES FROM THIRD PARTIES TO PROVIDE ALL DELIVERABLES
              IDENTIFIED IN SUCH PROJECT STATEMENT AS BELONGING TO THIRD
              PARTIES, AND (2) THAT IT HAS FULL AND SUFFICIENT AUTHORITY TO
              GRANT THE RIGHTS AND OR LICENSES GRANTED TO THE OTHER PARTY IN
              THE CONTRACT DOCUMENTS.

        ii)   EXCEPT AS EXPRESSLY SET FORTH IN THE CONTRACT DOCUMENTS, NEITHER
              PARTY MAKES ANY WARRANTIES OR REPRESENTATIONS OF ANY KIND,
              EXPRESS OR IMPLIED, WITH RESPECT TO DELIVERABLES, LICENSED
              WORKS, INVENTIONS, JOINT INVENTIONS, DOCUMENTATION, INFORMATION
              OR ANY OTHER
<PAGE>

              WORK OR OTHERWISE UNDER THE CONTRACT DOCUMENTS, AND EACH PARTY
              HEREBY EXPRESSLY DISCLAIMS ALL SUCH WARRANTIES, INCLUDING, BUT
              NOT LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY,
              FITNESS FOR A PARTICULAR PURPOSE AND TITLE.

    b)  No Extrinsic Assurances.  Each party represents and warrants that,
        -----------------------
        time during the term of this Agreement, it does not and will not rely
        on any promises, inducements, or representations made by the other
        with respect to the subject matter of such Contract Documents, nor on
        the expectation of any other business dealings with the other party,
        now or in the future, except as specifically provided in the Contract
        Documents.

15) INDEMNIFICATION.
    ---------------

    a)  Statement of Indemnification.  Each party that provides Deliverables
        ----------------------------
        under this Agreement agrees to defend and indemnify, at its expense,
        any suit, claim or the like against the party that receives the
        Deliverables to the extent such suit, claim or the like is based upon
        an assertion that (1) the licensing party does not have sufficient
        right, title and interest in the Deliverables to enter into, and/or
        convey the rights and licenses required by this Agreement, and/or (2)
        that the Deliverables infringe a patent, copyright, trademark, trade
        name, or trade secret of a third-party. The delivering party agrees to
        pay the amount of any settlement (with prior written approval by the
        delivering party), judgment, damages, costs (including reasonable
        attorney's fees) finally awarded in any such suit, claim or the like
        provided, that:

              (1)  The delivering party is notified promptly in writing of any
                   notice of claim or of threatened or actual suit;
              (2)  The delivering party has sole control of the defense of
                   such suit, claim or the like and related settlement
                   negotiations if any;
              (3)  The receiving party cooperates in the defense and
                   settlement of such suit, claim or the like at the expense
                   of the delivering party; and
              (4)  Any such settlement shall contain no admission of the
                   delivering party's liability without the prior written
                   approval of the delivering party.

        Following notice from the receiving party of a claim or of a
        threatened or actual suit, to the extent based on the above, the
        delivering party shall, at its expense, elect to 1) procure for the
        receiving party the right to continue to market, use, and/or have
        others market or use the allegedly infringing product, 2) replace or
<PAGE>

        modify the same to make it non-infringing or 3) refund payment
        prorated to the receiving party for the alleged infringed
        Deliverables. If the delivering party elects to replace or modify such
        Deliverables such replacement shall substantially meet the
        specifications contained in the applicable Project Statement.
        Notwithstanding the foregoing, in the event that any settlement (with
        prior written approval by each party), judgment, damages, costs
        (including reasonable attorney's fees) finally awarded in any such
        suit related to a third party claim of infringement contemplated by
        this Section arises from or is related to a Joint Invention, the
        parties will equally share the burden of all such damages, costs and
        expenses.

    b)  Exceptions.  The delivering party assumes no liability arising from or
        ----------
        related to the combination of the Deliverables with other products or
        services not provided by the delivering party, if such infringement
        would have been avoided without such combination. The delivering party
        shall also have no indemnity obligation for claims resulting from
        compliance with the other party's specifications where the delivering
        party's method of compliance has been compelled by the terms of the
        other party's specifications.

    c)  Exclusive Statement.  This Section shall represent the entire and
        -------------------
        exclusive obligation of one party to the other regarding any claim of
        infringement.

16) TERM AND TERMINATION.
    --------------------

    a)  Stated Term of Agreement.  This Agreement shall be effective upon the
        ------------------------
        date specified at the beginning of this Agreement, and shall remain in
        force for a period of three (3) years, unless otherwise terminated as
        provided herein; provided, however, that this Agreement shall continue
        to remain in effect with respect to any Project Statement already in
        effect hereunder until such Project Statements are themselves
        terminated and/or performance thereunder is completed. After the
        initial three (3) year term, this Agreement shall automatically renew
        for additional one (1) year periods unless either party provides the
        other with written notice at least ninety (90) days or more prior to
        the end of any term.

    b)  Project Statement Terms.  The term of a Project Statement shall be
        -----------------------
        stated in the Project Statement.

    c)  Earlier Termination of the Agreement.  Either party may terminate this
        ------------------------------------
        Agreement for convenience upon not less than one hundred eighty (180)
        days' written notice to the other party; provided, however, that this
        Agreement shall
<PAGE>

        continue to remain in effect with respect to any Project Statements
        already in effect hereunder until such Project Statements are
        themselves terminated in accordance with their respective terms and/or
        performance thereunder is completed.

    d)  Suspension of Link. In the event that a Project Statement creates a web
        ------------------
        site that is co-branded by both parties, either party may suspend the
        other party's rights to provide the co-branded web site upon thirty
        (30) days written notice to the other party (such notice specifying in
        reasonable detail the offending portions of the co-branded web site),
        if the suspending party, in its sole judgment, determines that the
        content of the co-branded site negatively affects that party.

    e)  Termination for Cause.  Either party may, at its option, terminate the
        ---------------------
        applicable Contract Documents in the event that the other party
        materially breaches a particular Contract Document and the breach
        remains uncured after a period of thirty (30) days from receipt of
        written notice of breach.

    f)  Termination Upon Certain Events.  Either party may terminate this
        -------------------------------
        Agreement immediately upon written notice if the other party (i)
        institutes bankruptcy or similar proceedings; (ii) has bankruptcy
        similar proceedings instituted against it, and such proceedings are
        not stayed or dismissed within sixty (60) days; or (iii) makes an
        assignment of property or assets for the benefit of its creditors.

    g)  Change of Control or Acquisition.  If a Change of Control to one of the
        --------------------------------
        parties to this Agreement occurs, the other party shall have the
        option to immediately terminate all of the Contract Documents with the
        exception of any Project Statement in progress, and have returned to
        it all Confidential Information then in the possession of the other
        party and any Deliverables provided under any of the Contract
        Documents. A Change of Control shall not be deemed to have occurred in
        the event that a party makes a registered public offering of its
        securities. For purposes of the foregoing, a "Change of Control" shall
        be deemed to have occurred with respect to a party if that party is
        involved in a merger, reorganization, stock sale or similar
        transaction with an entity (or its affiliates) that is reasonably
        deemed a competitor of the other party. In the event of a Change of
        Control, if the parties do not terminate all of the Contract Documents
        as provided above, the acquiring, surviving or purchasing entity (i)
        shall agree in writing to assume all of the rights and obligations
        under the unterminated Contract Documents and (ii) shall not be
        permitted to terminate any of the unterminated Contract Documents.
<PAGE>

    h)  Survival.  In the event of any termination of this Agreement, Sections
        --------
        5, 10, 11, 12, 14, 15, 16, 17 and 19 shall survive and continue in
        effect to the extent necessary to protect the rights granted in the
        Contract Documents which expressly survive termination and shall inure
        to the benefit of and be binding upon the parties and their legal
        representatives, heirs, successors and assigns.

    i)  Effect of Termination. Upon any termination or expiration of the
        ----------------------
        Agreement or a Project Statement, each party agrees to return to the
        other party within thirty (30) days of the effective date of such
        termination or expiration, the confidential information and other
        materials provided to the other party.

17) LIMITATION OF LIABILITIES.  IN NO EVENT SHALL THE LIABILITY OF EITHER
    -------------------------
    PARTY ARISING OUT OF THIS AGREEMENT OR THE TERMINATION OF THIS AGREEMENT
    EXCEED THE NET AMOUNTS PAID BY ONE PARTY TO THE OTHER PARTY PURSUANT TO,
    AND DURING THE PREVIOUS TWELVE (12) MONTHS OF THIS AGREEMENT. IN NO EVENT
    SHALL EITHER PARTY BE LIABLE FOR LOST PROFITS, LOSS OF DATA, OR ANY
    INDIRECT, SPECIAL, INCIDENTAL, CONSEQUENTIAL, OR PUNITIVE DAMAGES, HOWEVER
    CAUSED, WHETHER FOR BREACH OF CONTRACT, NEGLIGENCE OR OTHERWISE, AND
    WHETHER OR NOT IT HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
    THESE LIMITATIONS WILL APPLY NOTWITHSTANDING ANY FAILURE OF ESSENTIAL
    PURPOSE OF ANY LIMITED REMEDY. THE FOREGOING ALLOCATION OF RISK IS
    REFLECTED IN THE FEES CHARGED UNDER THIS AGREEMENT.

18) FREEDOM OF ACTION.  Unless specifically set forth in a Project Statement
    -----------------
    or signed addendum to this Agreement, nothing in any Contract Document
    shall be construed as prohibiting or restricting either party from
    independently developing or acquiring and marketing materials and/or
    programs which are competitive with the Deliverables or from entering into
    similar agreement with other parties.

19) GENERAL.
    -------

    a)  Notice.  Unless otherwise agreed to by the parties, all notices required
        ------
        under this Agreement (except those relating to product pricing,
        changes and upgrades) shall be deemed effective when received and made
        in writing by either (i) registered mail, (ii) certified mail, return
        receipt requested, or (iii) overnight mail, addressed and sent to the
        attention:

        Vicinity:   Vicinity Corporation
                    11 Lafayette Street
<PAGE>

                    Lebanon, NH
                    Attn: Marty Himmelstein

        AltaVista:  AltaVista Company
                    111 Theory
                    Irvine, CA 92679
                    Attn.: Director of Business Development

        with a copy of non-technical notices to:

        Vicinity:   Vicinity Corporation
                    1135A San Antonio Road
                    Palo Alto, CA 94303-4310
                    Attn: Director of Business Development - Bruce Horowitz

        AltaVista:  AltaVista Company
                    529 Bryant Street
                    Palo Alto, CA
                    Attn.: General Counsel

    b)  Construction.
        ------------

        i)    Headings.  The headings of this Agreement are provided for
              --------
              reference only and shall not be used as a guide to interpretation.

        ii)   Order of Precedence.  In rendering performance under this
              -------------------
              Agreement, each party shall comply with all applicable
              provisions contained in each of the Contract Documents. In the
              event of inconsistency between or among the various Contract
              Documents, the following order of precedence shall govern:

              (a)  The Project Statements (including the terms specifically
                   identified in a particular Project Statement as modifying
                   or amending terms of this Agreement);
              (b)  This Agreement and its attachments (other than Project
                   Statements);

        iii)  Singular, Plural and Gender      .  When used in this Agreement,
              ---------------------------
              the singular includes the plural, the plural includes the
              singular and gender related pronouns include the feminine,
              masculine and neuter.
<PAGE>

    c)  Independent Contractor.  Each party is and shall remain an
        ----------------------
        independent contractor with respect to all performance rendered
        pursuant to the Contract Documents. Neither party nor any employee
        thereof shall be considered an employee or agent of the other party
        for any purpose and shall have no authority to bind or make
        commitments on behalf of such other party for any purpose and shall
        not hold itself or themselves out as having such authority. Each party
        assumes full responsibility for its actions and the actions of its
        personnel in rendering performance pursuant to the Contract Documents,
        and each party shall have sole responsibility for the supervision,
        daily direction and control, payment of salary (including withholding
        of income taxes and social security), worker's compensation,
        disability benefits and the like of its personnel. Each party assumes
        full responsibility for the acts of all subcontractors.

    d)  Publicity.  Each party agrees to be a customer reference for the other
        ---------
        party's customer prospects' inquiries as well as press inquiries. It
        is understood that this will be a controlled effort and will be
        managed to ensure minimum impact on the parties. Either party may
        disclose the other as a customer or supplier of other party during the
        term of this Agreement or relevant Project Statement. The parties
        agree to issue press releases (separate or joint) relating to the
        parties' business relationship under this Agreement provided that such
        releases are coordinated on a mutually agreed upon time. No press
        releases or publicity statements, references to this Agreement or any
        Project Statements may be made without the express written approval of
        the other party.

    e)  Compliance with Laws.  Each party shall, at its own expense, comply
        --------------------
        with any governmental law, statute, ordinance, administrative order,
        rule or regulation relating to its duties, obligations and performance
        under the Contract Documents and shall procure all licenses and pay
        all fees and other charges required thereby.

    f)  Export of Technical Data.  The parties shall not, nor shall they
        ------------------------
        authorize or permit their employees, agents or subcontractors to,
        export or reexport any Deliverable, any technical information, or any
        process, product or service that is produced under the Contract
        Documents to any country specified as a prohibited destination in
        applicable national, state and local laws, regulations and ordinances,
        including the Regulations of the U.S. Department of Commerce and/or
        the U.S. State Department, without first obtaining government
        approval.

    g)  Taxes.  Each party shall have sole responsibility for the payment of
        -----
        all taxes and duties imposed by all governmental entities, as they
        pertain to its duties, obligations and performance under the Contract
        Documents.
<PAGE>

    h)  Force Majeure.  Neither party shall be held liable for failure to
        -------------
        fulfill its obligations under the Contract Documents, if the failure
        is caused by flood, extreme weather, fire, or other natural calamity,
        acts of governmental agency, or similar causes beyond the control of
        such party.

    i)  Assignment.  Neither party may sell, transfer, assign, or subcontract
        ----------
        any right or obligation set forth in the Contract Documents, except as
        expressly provided herein or therein, without the prior written
        consent of the other party. Any act in derogation of the foregoing
        shall be null and void. Neither party may sell, transfer, assign, or
        subcontract this Agreement, except as expressly provided herein ,
        without the prior written consent of the other party. Any act in
        derogation of the foregoing shall be null and void.

    j)  Governing Law.  The validity, construction, and performance of all
        -------------
        Contract Documents will be governed by the substantive law of the
        State of California (without reference to its conflicts of laws
        principles).

    k)  No Other Rights.  This Agreement shall not be construed to grant any
        ---------------
        rights by implication, estoppel, or otherwise, that are not granted
        through the express provisions of the Contract Documents.

    l)  Severability.  Each Project Statement is intended to constitute an
        ------------
        independent and distinct agreement of the parties, notwithstanding the
        fact that each shall be construed to incorporate all applicable
        provisions of this Agreement. If any provision of any Contract
        Document is held by a court of competent jurisdiction to be contrary
        to law, the remaining provisions of the Contract Document will remain
        in full force and effect and shall be interpreted, to the extent
        possible, to achieve the purpose of this Agreement and any affected
        Project Statements as originally expressed without the invalid,
        illegal or unenforceable provision.

    m)  Counterparts. This Agreement may be executed in multiple counterparts,
        ------------
        each of which taken together shall constitute a single instrument.

    n)  Entire Agreement.  The provisions of the Contract Documents, as in
        ----------------
        effect from time to time by their terms, constitute the entire
        agreement between the parties and supersede all prior agreements, oral
        or written, and all other communications relating to the subject
        matter of the Contract Documents. Any terms contained in invoices,
        acknowledgments, shipping instructions, or other forms that are
        inconsistent with or different from the terms of the Contract
        Documents shall be void and of no effect.
<PAGE>

                            (Signature Page Follows)

SIGNATURES.  The parties have caused this Agreement to be executed by
----------
their duly Authorized Representatives.

Vicinity Corporation                    AltaVista Company

Signature_______________________        Signature___________________________

Print Name______________________        Print Name__________________________

Print Title_____________________        Print Title_________________________
<PAGE>

                                   SCHEDULE A
                       VICINITY - PROPRIETARY INFORMATION

The bottom of each web page that displays any Vicinity Content must have the
following hyper-linked notice:  "Powered by Vicinity Corporation".  The notice
must hyperlink to a web page that displays the Vicinity URL `www.vicinity.com'.

Each map containing data from or derived from Geographic Data Technology
supplied data will display the following copyright notice: "Map Data, GDT, Inc.
(C) 1999."

The bottom of each web page that displays a Canadian map image will include the
following notice: "(C) 1999 Desktop Mapping Technologies Inc."  The bottom of
each web page that displays a European map image will include the following
notice: "NAVTECH(TM) and (C) 1999 Navigation Technologies B.V.  All rights
reserved.  Some portions (C) 1999 AND-USA, Inc."

Each driving directions display that uses Navigation Technologies data will
include the following trademark and copyright notices conspicuously displayed
within the image: "NAVTECH and (C) 1999 Navigation Technologies. All rights
reserved."

The bottom of each web page that displays any Vicinity Content will include the
following notice: "(C) 1999 Vicinity Corporation.  All rights reserved.  Terms
of Use." The words "Terms of Use" will be hyperlinked to a Vicinity URL that
displays Vicinity's then-current public end user terms and conditions of use.
Such terms and conditions will be subject to change by Vicinity and its
licensors at any time and from time to time.
<PAGE>

                           PROJECT STATEMENT NO. 1
                                     to
                      the MASTER AGREEMENT No. 00400154
                                   between
                 VICINITY CORPORATION and ALTAVISTA COMPANY

     This Project Statement No. 1 entered into on January 11, 2000 and
incorporates all terms and conditions in the Master Agreement No. 00400154 dated
January 11, 2000 between the Vicinity Corporation ("Vicinity") and AltaVista
Company ("AltaVista").

I.      Purpose

Vicinity will provide its Brand Finder services to Alta Vista for use on Alta
Vista's Shopping.com shopping engine located at the following URL:
http://shopping.altavista.com/home.  The parties forecast a "go live" date of
February 28, 2000.

II.     Project Managers

        Alta Vista               Vicinity
        ----------               --------
        Gannon Giguiere          Marty Himmelstein
        111 Theory               115 Etna Road
        Irvine, CA 92679         Lebanon, NH 03766

III.    Payments

A.      Annual License Fee for Brand Finder Services
        --------------------------------------------

        AltaVista shall pay Vicinity an annual license fee of * * * *  for the
        Brand Finder services;  provided, however, that Vicinity will waive this
        fee for the first year provided this Project Statement is signed by Alta
        Vista and returned to Vicinity on or before January 11, 2000.

B.      Customer Fees
        -------------

        If AltaVista elects to participate in Vicinity's Channel Partner
        Program, the following compensation shall be paid by Vicinity to
        AltaVista:

        1.  Referral Fees - Subject to the terms and conditions of the Channel
            Partner Program, AltaVista will receive * * * *  of the fees (of the
            first 12 months) received by Vicinity from customers that were
            referred by AltaVista.

        2.  Integration Partner Fees - Subject to the terms and conditions of
            the Channel Partner Program, AltaVista will receive * * * *  of the
            fees received

[*]= CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.

<PAGE>

            by Vicinity during the first twelve months and * * * * of the fees
            received in the subsequent years from customers recruited by
            AltaVista.

        Vicinity represents and warrants to AltaVista that as of the date
        hereof no other Internet portal has been afforded a more favorable
        compensation arrangement with respect to the Channel Partner Program
        than that outlined above.

C.      Revenue Splits
        --------------

        1.  Priority Listing - Vicinity agrees to pay AltaVista * * * * of all
            Net Revenue (as defined) received from its customers for priority
            listings on the Shopping.com site. For purposes of the foregoing,
            "Net Revenue" shall mean all revenue received by Vicinity net of all
            Vicinity third party expenses directly related to obtaining such
            priority listing; provided that in no event shall such Vicinity
            expenses exceed 35% of Net Revenue.

        2.  Banner Ads or Other Advertising - AltaVista agrees to pay Vicinity
            * * * * of all Net Revenue (as defined) received for banner ads or
            other advertising on the Shopping.com site that contains Vicinity
            content. For purposes of the foregoing, "Net Revenue" shall mean
            all revenue received by AltaVista net of all third party expenses
            and costs directly related to providing such banner ads or other
            advertising including, but not limited to, third party sales
            commissions and ad serving fees. Such third party expenses and
            costs will not exceed similar third party costs and expenses
            related to banner ads and other advertising across the
            Shopping.com site.

IV.     Press Releases

The parties agree to issue one or more press releases related to this Project.
The parties currently contemplate that they will issue a press release upon
execution of the Master Agreement, and another Press Release upon implementation
of the Brand Finder services on the Shopping.com site.  The press releases will
emphasize unique customer benefits and CMGI keiretsu benefits, and will feature
quotes from upper level management of both companies.

V.      Project Deliverables

Vicinity will use good faith efforts to provide its Brand Finder services for
the AltaVista Shopping.com site on or before February 28, 2000.  Such forecast
date is subject to AltaVista providing Vicinity the required data and assistance
in a timely manner.

VI.     Term

This Project Statement shall be for a term of one (1) year from the date the
Project Statement is executed by the parties, and shall automatically renew for
additional one (1) year periods unless either party provides the other with
written notice of termination at

[*]= CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.

<PAGE>

least ninety (90) days or more prior to the end of the then current term, or
this Project Statement or the Master Agreement is terminated as otherwise
provided.

VII.    Termination

This Project Statement may be terminated as provided above, or as provided for
in the Master Agreement.

IN WITHNESS WHEREOF,  the parties have caused the Project Statement to be
executed by their duly authorized representatives.

Vicinity Corporation                      AltaVista Company

Signature_________________________        Signature_________________________

Print Name________________________        Print Name________________________

Print Title_______________________        Print Title_______________________

Date______________________________        Date______________________________<PAGE>

                                                                   Exhibit 10.02

                               ALLADVANTAGE.COM

                          1999 EQUITY INCENTIVE PLAN

                         As Adopted on April 26, 1999
                        As Amended on September 9, 1999
                        As Amended on November 16, 1999

     1.   PURPOSE. The purpose of this Plan is to provide incentives to attract,
          -------
retain and motivate eligible persons whose present and potential contributions
are important to the success of the Company, its Parent and Subsidiaries, by
offering them an opportunity to participate in the Company's future performance
through awards of Options and Restricted Stock.  Capitalized terms not defined
in the text are defined in Section 22 hereof.  This Plan is intended to be a
written compensatory benefit plan within the meaning of Rule 701 promulgated
under the Securities Act.

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

          2.1  Number of Shares Available.  Subject to Sections 2.2 and 17
               --------------------------
hereof, the total number of Shares reserved and available for grant and issuance
pursuant to this Plan will be 15,200,000 Shares or such lesser number of Shares
as permitted under Section 260.140.45 of Title 10 of the California Code of
Regulations.  Subject to Sections 2.2, 5.10 and 17 hereof, Shares subject to
Awards previously granted will again be available for grant and issuance in
connection with future Awards under this Plan to the extent such Shares:  (i)
cease to be subject to issuance upon exercise of an Option, other than due to
exercise of such Option; (ii) are subject to an Award granted hereunder but the
Shares subject to such Award are forfeited or repurchased by the Company at the
original issue price; or (iii) are subject to an Award that otherwise terminates
without Shares being issued.  At all times the Company will reserve and keep
available a sufficient number of Shares as will be required to satisfy the
requirements of all Awards granted and outstanding under this Plan.

          2.2  Adjustment of Shares.  In the event that the number of
               --------------------
outstanding shares of the Company's Common Stock is changed by a stock dividend,
recapitalization, stock split, reverse stock split, subdivision, combination,
reclassification or similar change in the capital structure of the Company
without consideration, then (i) the number of Shares reserved for issuance under
this Plan, (ii) the Exercise Prices of and number of Shares subject to
outstanding Options and (iii) the Purchase Prices of and number of Shares
subject to other outstanding Awards will be proportionately adjusted, subject to
any required action by the Board or the shareholders of the Company and
compliance with applicable securities laws; provided, however, that fractions of
a Share will not be issued but will either be paid in cash at the Fair Market
Value of such fraction of a Share or will be rounded down to the nearest whole
Share, as determined by the Committee.

     3.   ELIGIBILITY. ISOs (as defined in Section 5 hereof) may be granted only
          -----------
to employees (including officers and directors who are also employees) of the
Company or of a Parent or Subsidiary of the Company.  NQSOs (as defined in
Section 5 hereof) and Restricted Stock Awards may be granted to employees,
officers, directors and consultants of the Company or any Parent or Subsidiary
of the Company; provided such consultants render bona fide services

                                       1
<PAGE>

not in connection with the offer and sale of securities in a capital-raising
transaction. A person may be granted more than one Award under this Plan.

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

          4.1  Committee Authority.  This Plan will be administered by the
               -------------------
Committee or the Board if no Committee is created by the Board.  Subject to the
general purposes, terms and conditions of this Plan, and to the direction of the
Board, the Committee will have full power to implement and carry out this Plan.
Without limitation, the Committee will have the authority to:

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

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

          (c)  approve persons to receive Awards;

          (d)  determine the form and terms of Awards;

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

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

          (g)  grant waivers of any conditions of this Plan or any Award;

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

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

          (j)  determine whether an Award has been earned;

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

          (l)  extend the vesting period beyond a Participant's Termination
               Date.

          4.2  Committee Discretion.  Unless in contravention of any express
               --------------------
terms of this Plan or Award, any determination made by the Committee with
respect to any Award will be made in its sole discretion either (i) at the time
of grant of the Award, or (ii) subject to Section 5.9 hereof, at any later time.
Any such determination will be final and binding on the Company and on all
persons having an interest in any Award under this Plan.  The Committee may
delegate to one or more officers of the Company the authority to grant an Award
under this Plan, provided such officer or officers are members of the Board.

     5.   OPTIONS. The Committee may grant Options to eligible persons described
          -------
in Section 3 hereof and will determine whether such Options will be Incentive
Stock Options within

                                       2
<PAGE>

the meaning of the Code ("ISOs") or Nonqualified Stock Options ("NQSOs"), the
number of Shares subject to the Option, the Exercise Price of the Option, the
period during which the Option may be exercised, and all other terms and
conditions of the Option, subject to the following:

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

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

          5.3  Exercise Period.  Options may be exercisable immediately but
               ---------------
subject to repurchase pursuant to Section 11 hereof or may be exercisable within
the times or upon the events determined by the Committee as set forth in the
Stock Option Agreement governing such Option; provided, however, that no Option
will be exercisable after the expiration of ten (10) years from the date the
Option is granted; and provided further that no ISO granted to a person who
directly or by attribution owns more than ten percent (10%) of the total
combined voting power of all classes of stock of the Company or of any Parent or
Subsidiary of the Company ("Ten Percent Shareholder") will be exercisable after
the expiration of five (5) years from the date the ISO is granted.  The
Committee also may provide for Options to become exercisable at one time or from
time to time, periodically or otherwise, in such number of Shares or percentage
of Shares as the Committee determines.  Subject to earlier termination of the
Option as provided herein, each Participant who is not an officer, director or
consultant of the Company or of a Parent or Subsidiary of the Company shall have
the right to exercise an Option granted hereunder at the rate of no less than
twenty percent (20%) per year over five (5) years from the date such Option is
granted.

          5.4  Exercise Price.  The Exercise Price of an Option will be
               --------------
determined by the Committee when the Option is granted and may not be less than
eighty-five percent (85%) of the Fair Market Value of the Shares on the date of
grant; provided that (i) the Exercise Price of an ISO will not be less than one
hundred percent (100%) of the Fair Market Value of the Shares on the date of
grant and (ii) the Exercise Price of any Option granted to a Ten Percent
Shareholder will not be less than one hundred ten percent (110%) of the Fair
Market Value of the Shares on the date of grant.  Payment for the Shares
purchased must be made in accordance with Section 7 hereof.

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

                                       3
<PAGE>

with payment in full of the Exercise Price, and any applicable taxes, for the
number of Shares being purchased.

          5.6  Termination.  Subject to earlier termination pursuant to Sections
               -----------
17 and 18 hereof and notwithstanding the exercise periods set forth in the Stock
Option Agreement, exercise of an Option will always be subject to the following:

          (a)  If the Participant is Terminated for any reason other than death,
               Disability or for Cause, then the Participant may exercise such
               Participant's Options only to the extent that such Options are
               exercisable upon the Termination Date or as otherwise determined
               by the Committee.  Such Options must be exercised by the
               Participant, if at all, as to all or some of the Vested Shares
               calculated as of the Termination Date or such other date
               determined by the Committee, within three (3) months after the
               Termination Date (or within such shorter time period, not less
               than thirty (30) days, or within such longer time period, not
               exceeding five (5) years, after the Termination Date as may be
               determined by the Committee, with any exercise beyond three (3)
               months after the Termination Date deemed to be an NQSO) but in
               any event, no later than the expiration date of the Options.

          (b)  If the Participant is Terminated because of Participant's death
               or Disability (or the Participant dies within three (3) months
               after a Termination other than for Cause), then Participant's
               Options may be exercised only to the extent that such Options are
               exercisable by Participant on the Termination Date or as
               otherwise determined by the Committee.  Such options must be
               exercised by Participant (or Participant's legal representative
               or authorized assignee), if at all, as to all or some of the
               Vested Shares calculated as of the Termination Date or such other
               date determined by the Committee, within twelve (12) months after
               the Termination Date (or within such shorter time period, not
               less than six (6) months, or within such longer time period, not
               exceeding five (5) years, after the Termination Date as may be
               determined by the Committee, with any exercise beyond (i) three
               (3) months after the Termination Date when the Termination is for
               any reason other than the Participant's death or disability,
               within the meaning of Section 22(e)(3) of the Code, or (ii)
               twelve (12) months after the Termination Date when the
               Termination is for Participant's disability, within the meaning
               of Section 22(e)(3) of the Code, deemed to be an NQSO) but in any
               event no later than the expiration date of the Options.

          (c)  If the Participant is terminated for Cause, then Participant's
               Options shall expire on such Participant's Termination Date, or
               at such later time and on such conditions as are determined by
               the Committee.

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

          5.8  Limitations on ISOs.  The aggregate Fair Market Value (determined
               -------------------
as of the date of grant) of Shares with respect to which ISOs are exercisable
for the first time by a

                                       4
<PAGE>

Participant during any calendar year (under this Plan or under any other
incentive stock option plan of the Company or any Parent or Subsidiary of the
Company) will not exceed One Hundred Thousand Dollars ($100,000). If the Fair
Market Value of Shares on the date of grant with respect to which ISOs are
exercisable for the first time by a Participant during any calendar year exceeds
One Hundred Thousand Dollars ($100,000), then the Options for the first One
Hundred Thousand Dollars ($100,000) worth of Shares to become exercisable in
such calendar year will be ISOs and the Options for the amount in excess of One
Hundred Thousand Dollars ($100,000) that become exercisable in that calendar
year will be NQSOs. In the event that the Code or the regulations promulgated
thereunder are amended after the Effective Date (as defined in Section 18
hereof) to provide for a different limit on the Fair Market Value of Shares
permitted to be subject to ISOs, then such different limit will be automatically
incorporated herein and will apply to any Options granted after the effective
date of such amendment.

          5.9  Modification, Extension or Renewal.  The Committee may modify,
               ----------------------------------
extend or renew outstanding Options and authorize the grant of new Options in
substitution therefor, provided that any such action may not, without the
written consent of a Participant, impair any of such Participant's rights under
any Option previously granted.  Any outstanding ISO that is modified, extended,
renewed or otherwise altered will be treated in accordance with Section 424(h)
of the Code.  Subject to Section 5.10 hereof, the Committee may reduce the
Exercise Price of outstanding Options without the consent of Participants by a
written notice to them; provided, however, that the Exercise Price may not be
reduced below the minimum Exercise Price that would be permitted under Section
5.4 hereof for Options granted on the date the action is taken to reduce the
Exercise Price.

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

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

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

                                       5
<PAGE>

          6.2  Purchase Price.  The Purchase Price of Shares sold pursuant to a
               --------------
Restricted Stock Award will be determined by the Committee and will be at least
eighty-five percent (85%) of the Fair Market Value of the Shares on the date the
Restricted Stock Award is granted or at the time the purchase is consummated,
except in the case of a sale to a Ten Percent Shareholder, in which case the
Purchase Price will be one hundred percent (100%) of the Fair Market Value on
the date the Restricted Stock Award is granted or at the time the purchase is
consummated.  Payment of the Purchase Price must be made in accordance with
Section 7 hereof.

          6.3  Restrictions.  Restricted Stock Awards may be subject to the
               ------------
restrictions set forth in Section 11 hereof or such other restrictions not
inconsistent with Section 25102(o) of the California Corporations Code.

     7.   PAYMENT FOR SHARE PURCHASES.
          ---------------------------

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

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

          (b)  by surrender of shares that:  (i) either (A) have been owned by
               Participant for more than six (6) months and have been paid for
               within the meaning of SEC Rule 144 (and, if such shares were
               purchased from the Company by use of a promissory note, such note
               has been fully paid with respect to such shares) or (B) were
               obtained by Participant in the public market and (ii) are clear
               of all liens, claims, encumbrances or security interests;

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

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

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

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

                                       6
<PAGE>

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

          (f)  by any combination of the foregoing.

          7.2  Loan Guarantees.  The Committee may, in its sole discretion,
               ---------------
elect to assist the Participant in paying for Shares purchased under this Plan
by authorizing a guarantee by the Company of a third-party loan to the
Participant.

     8.   WITHHOLDING TAXES.
          -----------------

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

          8.2  Stock Withholding.  When, under applicable tax laws, a
               -----------------
Participant incurs tax liability in connection with the exercise or vesting of
any Award that is subject to tax withholding and the Participant is obligated to
pay the Company the amount required to be withheld, the Committee may in its
sole discretion allow the Participant to satisfy the minimum withholding tax
obligation by electing to have the Company withhold from the Shares to be issued
that number of Shares having a Fair Market Value equal to the minimum amount
required to be withheld, determined on the date that the amount of tax to be
withheld is to be determined.  All elections by a Participant to have Shares
withheld for this purpose will be made in accordance with the requirements
established by the Committee for such elections and be in writing in a form
acceptable to the Committee.

     9.   PRIVILEGES OF STOCK OWNERSHIP.
          -----------------------------

          9.1  Voting and Dividends.  No Participant will have any of the rights
               --------------------
of a shareholder with respect to any Shares until the Shares are issued to the
Participant.  After Shares are issued to the Participant, the Participant will
be a shareholder and have all the rights of a shareholder with respect to such
Shares, including the right to vote and receive all dividends or other
distributions made or paid with respect to such Shares; provided, that if such
Shares are Restricted Stock, then any new, additional or different securities
the Participant may become entitled to receive with respect to such Shares by
virtue of a stock dividend, stock split or any other change in the corporate or
capital structure of the Company will be subject to the same restrictions as the
Restricted Stock.  The Participant will have no right to retain such stock
dividends or stock distributions with respect to Unvested Shares that are
repurchased pursuant to Section 11 hereof.  The Company will comply with Section
260.140.1 of Title 10 of the California Code of Regulations with respect to the
voting rights of Common Stock.

                                       7
<PAGE>

          9.2  Financial Statements.  The Company will provide financial
               --------------------
statements to each Participant annually during the period such Participant has
Awards outstanding, or as otherwise required under Section 260.140.46 of Title
10 of the California Code of Regulations.  Notwithstanding the foregoing, the
Company will not be required to provide such financial statements to
Participants when issuance is limited to key employees whose services in
connection with the Company assure them access to equivalent information.

     10.  TRANSFERABILITY.  Awards granted under this Plan, and any interest
          ---------------
therein, will not be transferable or assignable by Participant, other than by
will or by the laws of descent and distribution, and may not be made subject to
execution, attachment or similar process.  During the lifetime of the
Participant an Award will be exercisable only by the Participant or
Participant's legal representative and any elections with respect to an Award
may be made only by the Participant or Participant's legal representative.

     11.  RESTRICTIONS ON SHARES.
          ----------------------

          11.1  Right of First Refusal.  At the discretion of the Committee, the
                ----------------------
Company may reserve to itself and/or its assignee(s) in the Award Agreement a
right of first refusal to purchase all Shares that a Participant (or a
subsequent transferee) may propose to transfer to a third party, unless
otherwise not permitted by Section 25102(o) of the California Corporations Code,
provided that such right of first refusal terminates upon the Company's initial
public offering of Common Stock pursuant to an effective registration statement
filed under the Securities Act.

          11.2  Right of Repurchase.  At the discretion of the Committee, the
                -------------------
Company may reserve to itself and/or its assignee(s) in the Award Agreement a
right to repurchase Unvested Shares held by a Participant for cash and/or
cancellation of purchase money indebtedness owed to the Company by the
Participant following such Participant's Termination at any time within the
later of ninety (90) days after the Participant's Termination Date and the date
the Participant purchases Shares under the Plan at the Participant's Exercise
Price or Purchase Price, as the case may be, provided that, unless the
Participant is an officer, director or consultant of the Company or of a Parent
or Subsidiary of the Company, such right of repurchase lapses at the rate of no
less than twenty percent (20%) per year over five (5) years from:  (a) the date
of grant of the Option or (b) in the case of Restricted Stock, the date the
Participant purchases the Shares.

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

     13.  ESCROW; PLEDGE OF SHARES.  To enforce any restrictions on a
          ------------------------
Participant's Shares set forth in Section 11 hereof, the Committee may require
the Participant to deposit all certificates representing Shares, together with
stock powers or other instruments of transfer approved by the Committee,
appropriately endorsed in blank, with the Company or an agent designated by the
Company to hold in escrow until such restrictions have lapsed or terminated.
The Committee may cause a legend or legends referencing such restrictions to be
placed on the certificates.  Any Participant who is permitted to execute a
promissory note as partial or full consideration for the purchase of Shares
under this Plan will be required to pledge

                                       8
<PAGE>

and deposit with the Company all or part of the Shares so purchased as
collateral to secure the payment of Participant's obligation to the Company
under the promissory note; provided, however, that the Committee may require or
accept other or additional forms of collateral to secure the payment of such
obligation and, in any event, the Company will have full recourse against the
Participant under the promissory note notwithstanding any pledge of the
Participant's Shares or other collateral. In connection with any pledge of the
Shares, Participant will be required to execute and deliver a written pledge
agreement in such form as the Committee will from time to time approve.

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

     15.  SECURITIES LAW AND OTHER REGULATORY COMPLIANCE.  This Plan is intended
          ----------------------------------------------
to comply with Section 25102(o) of the California Corporations Code.  Any
provision of this Plan which is inconsistent with Section 25102(o) shall,
without further act or amendment by the Company or the Board, be reformed to
comply with the requirements of Section 25102(o).  An Award will not be
effective unless such Award is in compliance with all applicable federal and
state securities laws, rules and regulations of any governmental body, and the
requirements of any stock exchange or automated quotation system upon which the
Shares may then be listed or quoted, as they are in effect on the date of grant
of the Award and also on the date of exercise or other issuance.
Notwithstanding any other provision in this Plan, the Company will have no
obligation to issue or deliver certificates for Shares under this Plan prior to
(i) obtaining any approvals from governmental agencies that the Company
determines are necessary or advisable, and/or (ii) compliance with any
exemption, completion of any registration or other qualification of such Shares
under any state or federal law or ruling of any governmental body that the
Company determines to be necessary or advisable.  The Company will be under no
obligation to register the Shares with the SEC or to effect compliance with the
exemption, registration, qualification or listing requirements of any state
securities laws, stock exchange or automated quotation system, and the Company
will have no liability for any inability or failure to do so.

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

     17.  CORPORATE TRANSACTIONS.
          ----------------------

          17.1 Assumption or Replacement of Awards by Successor or Acquiring
               -------------------------------------------------------------
Corporation.  In the event of (i) a dissolution or liquidation of the Company,
-----------
(ii) a merger or consolidation in which the Company is not the surviving
corporation (other than a merger or consolidation with a wholly-owned
subsidiary, a reincorporation of the Company in a different

                                       9
<PAGE>

jurisdiction, or other transaction in which there is no substantial change in
the shareholders of the Company or their relative stock holdings and the Awards
granted under this Plan are assumed, converted or replaced by the successor or
acquiring corporation, which assumption, conversion or replacement will be
binding on all Participants), (iii) a merger in which the Company is the
surviving corporation but after which the shareholders of the Company
immediately prior to such merger (other than any shareholder which merges with
the Company in such merger, or which owns or controls another corporation which
merges with the Company in such merger) cease to own their shares or other
equity interests in the Company, or (iv) the sale of all or substantially all of
the assets of the Company, any or all outstanding Awards may be assumed,
converted or replaced by the successor or acquiring corporation (if any), which
assumption, conversion or replacement will be binding on all Participants. In
the alternative, the successor or acquiring corporation may substitute
equivalent Awards or provide substantially similar consideration to Participants
as was provided to shareholders (after taking into account the existing
provisions of the Awards). The successor or acquiring corporation may also
substitute by issuing, in place of outstanding Shares of the Company held by the
Participant, substantially similar shares or other property subject to
repurchase restrictions and other provisions no less favorable to the
Participant than those which applied to such outstanding Shares immediately
prior to such transaction described in this Section 17.1. In the event such
successor or acquiring corporation (if any) refuses to assume or substitute
Awards, as provided above, pursuant to a transaction described in this Section
17.1, then notwithstanding any other provision in this Plan to the contrary,
such Awards will expire on such transaction at such time and on such conditions
as the Board will determine.

          17.2 Other Treatment of Awards.  Subject to any greater rights
               -------------------------
granted to Participants under the foregoing provisions of this Section 17, in
the event of the occurrence of any transaction described in Section 17.1 hereof,
any outstanding Awards will be treated as provided in the applicable agreement
or plan of merger, consolidation, dissolution, liquidation or sale of assets.

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

     18.  ADOPTION AND SHAREHOLDER APPROVAL.  This Plan will become effective on
          ---------------------------------
the date that it is adopted by the Board (the "Effective Date").  This Plan will
be approved by the shareholders of the Company (excluding Shares issued pursuant
to this Plan), consistent with applicable laws, within twelve (12) months before
or after the Effective Date.  Upon the Effective Date, the Board may grant
Awards pursuant to this Plan; provided, however,

                                       10
<PAGE>

that: (i) no Option may be exercised prior to initial shareholder approval of
this Plan; (ii) no Option granted pursuant to an increase in the number of
Shares approved by the Board shall be exercised prior to the time such increase
has been approved by the shareholders of the Company; (iii) in the event that
initial shareholder approval is not obtained within the time period provided
herein, all Awards granted hereunder shall be canceled, any Shares issued
pursuant to any Award shall be canceled and any purchase of Shares issued
hereunder shall be rescinded; and (iv) Awards granted pursuant to an increase in
the number of Shares approved by the Board which increase is not timely approved
by shareholders shall be canceled, any Shares issued pursuant to any such Awards
shall be canceled, and any purchase of Shares subject to any such Award shall be
rescinded.

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

     20.  AMENDMENT OR TERMINATION OF PLAN.  Subject to Section 5.9 hereof, the
          ---------------------------------
Board may at any time terminate or amend this Plan in any respect, including
without limitation amendment of any form of Award Agreement or instrument to be
executed pursuant to this Plan; provided, however, that the Board will not,
without the approval of the shareholders of the Company, amend this Plan in any
manner that requires such shareholder approval pursuant to Section 25102(o) of
the California Corporations Code or the Code or the regulations promulgated
thereunder as such provisions apply to ISO plans.

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

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

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

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

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

          "Cause" means Termination because of (i) any willful, material
violation by the Participant of any law or regulation applicable to the business
of the Company or a Parent or Subsidiary of the Company, the Participant's
conviction for, or guilty plea to, a felony or a crime involving moral
turpitude, or any willful perpetration by the Participant of a common law fraud,
(ii) the Participant's commission of an act of personal dishonesty which
involves personal profit in connection with the Company or any other entity
having a business relationship with the Company, (iii) any material breach by
the Participant of any provision of any agreement or

                                       11
<PAGE>

understanding between the Company or any Parent or Subsidiary of the Company and
the Participant regarding the terms of the Participant's service as an employee,
officer, director or consultant to the Company or a Parent or Subsidiary of the
Company, including without limitation, the willful and continued failure or
refusal of the Participant to perform the material duties required of such
Participant as an employee, officer, director or consultant of the Company or a
Parent or Subsidiary of the Company, other than as a result of having a
Disability, or a breach of any applicable invention assignment and
confidentiality agreement or similar agreement between the Company or a Parent
or Subsidiary of the Company and the Participant, (iv) Participant's disregard
of the policies of the Company or any Parent or Subsidiary of the Company so as
to cause loss, damage or injury to the property, reputation or employees of the
Company or a Parent or Subsidiary of the Company, or (v) any other misconduct by
the Participant which is materially injurious to the financial condition or
business reputation of, or is otherwise materially injurious to, the Company or
a Parent or Subsidiary of the Company.

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

          "Committee" means the committee created and appointed by the Board to
administer this Plan, or if no committee is created and appointed, the Board.

          "Company" means AllAdvantage.com, or any successor corporation.

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

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

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

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

          (b)  if such Common Stock is publicly traded and is then listed on a
               national securities exchange, its closing price on the date of
               determination on the principal national securities exchange on
               which the Common Stock is listed or admitted to trading as
               reported in The Wall Street Journal;
                           -----------------------

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

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

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

                                       12
<PAGE>

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

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

          "Plan" means this AllAdvantage.com, 1999 Equity Incentive Plan, as
amended from time to time.

          "Purchase Price" means the price at which a Participant may purchase
Restricted Stock.

          "Restricted Stock" means Shares purchased pursuant to a Restricted
Stock Award.

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

          "SEC" means the Securities and Exchange Commission.

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

          "Shares" means shares of the Company's Common Stock reserved for
issuance under this Plan, as adjusted pursuant to Sections 2 and 17 hereof, and
any successor security.

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

          "Termination" or "Terminated" means, for purposes of this Plan with
respect to a Participant, that the Participant has for any reason ceased to
provide services as an employee, officer, director or consultant to the Company
or a Parent or Subsidiary of the Company.  A Participant will not be deemed to
have ceased to provide services in the case of (i) sick leave, (ii) military
leave, or (iii) any other leave of absence approved by the Committee, provided
that such leave is for a period of not more than ninety (90) days (a) unless
reinstatement (or, in the case of an employee with an ISO, reemployment) upon
the expiration of such leave is guaranteed by contract or statute, or (b) unless
provided otherwise pursuant to formal policy adopted from time to time by the
Company's Board and issued and promulgated in writing.  In the case of any
Participant on (i) sick leave, (ii) military leave or (iii) an approved leave of
absence, the Committee may make such provisions respecting suspension of vesting
of the Award while on leave from the Company or a Parent or Subsidiary of the
Company as it may deem appropriate, except that in no event may an Option be
exercised after the expiration of the term set forth in the Stock Option
Agreement.  The Committee will have sole discretion to determine whether a
Participant has ceased to provide services and the effective date on which the
Participant ceased to provide services (the "Termination Date").

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

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

                                       13
<PAGE>

                                                                          No.___

                               ALLADVANTAGE.COM

                          1999 EQUITY INCENTIVE PLAN

                            STOCK OPTION AGREEMENT

          This Stock Option Agreement (the "Agreement") is made and entered into
as of the date of grant set forth below (the "Date of Grant") by and between
AllAdvantage.com, a California corporation (the "Company"), and the participant
named below (the "Participant").  Capitalized terms not defined herein shall
have the meaning ascribed to them in the Company's 1999 Equity Incentive Plan
(the "Plan").

Participant:                  _____________________________________________

Social Security Number:       _____________________________________________

Address:                      _____________________________________________

                              _____________________________________________

Total Option Shares:          _____________________________________________

Exercise Price Per Share:     _____________________________________________

Date of Grant:                _____________________________________________

First Vesting Date:           _____________________________________________

Expiration Date:              _____________________________________________
                              (unless earlier terminated under Section 5.6 of
                              the Plan)
Type of Stock Option

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

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

          2.   Exercise Period.
               ---------------

               2.1  Exercise Period of Option.  This Option is immediately
                    -------------------------
exercisable although the Shares issued upon exercise of the Option will be
subject to the restrictions on transfer, Repurchase Option and Right of First
Refusal set forth in Sections 7, 8 and 9 below.  Provided Participant continues
to provide services to the Company or to any Parent or Subsidiary

                                       14
<PAGE>

of the Company, the Shares issuable upon exercise of this Option will become
vested with respect to twenty-five percent (25%) of the Total Option Shares (as
set forth on the first page of this Agreement) on the First Vesting Date set
forth on the first page of this Agreement (the "First Vesting Date") and
thereafter at the end of each full succeeding month after the First Vesting Date
an additional 2.08333% of the Total Option Shares will become vested until the
Shares are vested with respect to one hundred percent (100%) of the Shares. If
application of the vesting percentage causes a fractional share, such share
shall be rounded down to the nearest whole share for each month except for the
36th month following the First Vesting Date, at the end of which month this
Option shall become exercisable for the full remainder of the Shares. Unvested
Shares may not be sold or otherwise transferred by Participant without the
Company's prior written consent. Notwithstanding any provision in the Plan or
this Agreement to the contrary, Options for Unvested Shares (as defined in
Section 2.2 of this Agreement) will not be exercisable on or after Participant's
Termination Date.

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

          2.3  Expiration. The Option shall expire on the Expiration Date set
               ----------
forth above or earlier as provided in Section 3 below or pursuant to Section 5.6
of the Plan.

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

          3.1  Termination for Any Reason Except Death, Disability or Cause. If
               ------------------------------------------------------------
Participant is Terminated for any reason, except death, Disability or for Cause,
the Option, to the extent (and only to the extent) that it would have been
exercisable by Participant on the Termination Date, may be exercised by
Participant no later than three (3) months after the Termination Date, but in
any event no later than the Expiration Date.

          3.2  Termination Because of Death or Disability. If Participant is
               ------------------------------------------
Terminated because of death or Disability of Participant (or Participant dies
within three (3) months of Termination when Termination is for any reason other
than Participant's Disability or for Cause), the Option, to the extent that it
is exercisable by Participant on the Termination Date, may be exercised by
Participant (or Participant's legal representative) no later than twelve (12)
months after the Termination Date, but in any event no later than the Expiration
Date. Any exercise beyond (i) three (3) months after the Termination Date when
the Termination is for any reason other than the Participant's death or
disability, within the meaning of Section 22(e)(3) of the Code; or (ii) twelve
(12) months after the Termination Date when the termination is for Participant's
disability, within the meaning of Section 22(e)(3) of the Code, is deemed to be
an NQSO.

          3.3  Termination for Cause. If Participant is Terminated for Cause,
               ---------------------
then the Option will expire on Participant's Termination Date, or at such later
time and on such conditions as are determined by the Committee.

          3.4  No Obligation to Employ. Nothing in the Plan or this Agreement
               -----------------------
shall confer on Participant any right to continue in the employ of, or other
relationship with, the Company or any Parent or Subsidiary of the Company, or
limit in any way the right of the

                                       15
<PAGE>

Company or any Parent or Subsidiary of the Company to terminate Participant's
employment or other relationship at any time, with or without Cause.

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

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

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

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

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

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

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

               (d)  provided that a public market for the Company's stock
                    exists: (i) through a "same day sale" commitment from
                    Participant and a broker-dealer that is a member of the
                    National Association of Securities Dealers (an "NASD
                    Dealer") whereby Participant irrevocably elects to exercise
                    the Option and to sell a portion of the Shares so purchased
                    sufficient to pay for the total Exercise Price and whereby
                    the NASD Dealer irrevocably commits upon receipt of such
                    Shares to forward the total Exercise Price directly to the
                    Company, or (ii) through a "margin" commitment from
                    Participant

                                       16
<PAGE>

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

               (e)  any other form of consideration approved by the Committee;
                    or

               (f)  by any combination of the foregoing.

               4.4  Tax Withholding.  Prior to the issuance of the Shares upon
                    ---------------
exercise of the Option, Participant must pay or provide for any applicable
federal, state and local withholding obligations of the Company.  If the
Committee permits, Participant may provide for payment of withholding taxes upon
exercise of the Option by requesting that the Company retain the minimum number
of Shares with a Fair Market Value equal to the minimum amount of taxes required
to be withheld; but in no event will the Company withhold Shares if such
withholding would result in adverse accounting consequences to the Company.  In
such case, the Company shall issue the net number of Shares to the Participant
by deducting the Shares retained from the Shares issuable upon exercise.

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

          5.   Notice of Disqualifying Disposition of ISO Shares.  If the Option
               -------------------------------------------------
is an ISO, and if Participant sells or otherwise disposes of any of the Shares
acquired pursuant to the ISO on or before the later of (i) the date two (2)
years after the Date of Grant, and (ii) the date one (1) year after transfer of
such Shares to Participant upon exercise of the Option, Participant shall
immediately notify the Company in writing of such disposition.  Participant
agrees that Participant may be subject to income tax withholding by the Company
on the compensation income recognized by Participant from the early disposition
by payment in cash or out of the current wages or other compensation payable to
Participant.

          6.   Compliance with Laws and Regulations.  The Plan and this
               ------------------------------------
Agreement are intended to comply with Section 25102(o) of the California
Corporations Code and any regulations relating thereto.  Any provision of this
Agreement which is inconsistent with Section 25102(o) or any regulations
relating thereto shall, without further act or amendment by the Company or the
Board, be reformed to comply with the requirements of Section 25102(o) and any
regulations relating thereto.  The exercise of the Option and the issuance and
transfer of Shares shall be subject to compliance by the Company and Participant
with all applicable requirements of federal and state securities laws and with
all applicable requirements of any stock exchange on which the Company's Common
Stock may be listed at the time of such issuance or transfer.  Participant
understands that the Company is under no obligation to register or qualify the
Shares with the SEC, any state securities commission or any stock exchange to
effect such compliance.

                                       17
<PAGE>

          7.   Nontransferability of Option.  The Option may not be transferred
               ----------------------------
in any manner other than by will or by the laws of descent and distribution and
may be exercised during the lifetime of Participant only by Participant or in
the event of Participant's incapacity, by Participant's legal representative.
The terms of the Option shall be binding upon the executors, administrators,
successors and assigns of Participant.

          8.   Company's Repurchase Option for Unvested Shares.  The Company, or
               -----------------------------------------------
its assignee, shall have the option to repurchase Participant's Unvested Shares
(as defined in Section 2.2 of this Agreement) on the terms and conditions set
forth in the Exercise Agreement (the "Repurchase Option") if Participant is
Terminated (as defined in the Plan) for any reason, or no reason, including
without limitation Participant's death, Disability (as defined in the Plan),
voluntary resignation or termination by the Company with or without Cause.
Notwithstanding the foregoing, the Company shall retain the Repurchase Option
for Unvested Shares only as to that number of Unvested Shares (whether or not
exercised) that exceeds the number of shares which remain unexercised.

          9.   Company's Right of First Refusal.  Unvested Shares may not be
               --------------------------------
sold or otherwise transferred by Participant without the Company's prior written
consent.  Before any Vested Shares held by Participant or any transferee of such
Vested Shares may be sold or otherwise transferred (including without limitation
a transfer by gift or operation of law), the Company and/or its assignee(s)
shall have an assignable right of first refusal to purchase the Vested Shares to
be sold or transferred on the terms and conditions set forth in the Exercise
Agreement (the "Right of First Refusal").  The Company's Right of First Refusal
will terminate when the Company's securities become publicly traded.

          10.  Tax Consequences.  Set forth below is a brief summary as of the
               ----------------
Effective Date of the Plan of some of the federal and California tax
consequences of exercise of the Option and disposition of the Shares.  THIS
SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT
TO CHANGE.  PARTICIPANT SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THE
OPTION OR DISPOSING OF THE SHARES.

               10.1 Exercise of ISO.  If the Option qualifies as an ISO, there
                    ---------------
will be no regular federal or California income tax liability upon the exercise
of the Option, although the excess, if any, of the Fair Market Value of the
Shares on the date of exercise over the Exercise Price will be treated as a tax
preference item for federal alternative minimum tax purposes and may subject the
Participant to the alternative minimum tax in the year of exercise.

               10.2 Exercise of Nonqualified Stock Option.  If the Option does
                    -------------------------------------
not qualify as an ISO, there may be a regular federal and California income tax
liability upon the exercise of the Option.  Participant will be treated as
having received compensation income (taxable at ordinary income tax rates) equal
to the excess, if any, of the Fair Market Value of the Shares on the date of
exercise over the Exercise Price.  If Participant is a current or former
employee of the Company, the Company may be required to withhold from
Participant's compensation or collect from Participant and pay to the applicable
taxing authorities an amount equal to a percentage of this compensation income
at the time of exercise.

                                       18
<PAGE>

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

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

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

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

               10.4. Section 83(b) Election for Unvested Shares. With respect to
                     ------------------------------------------
Unvested Shares, which are subject to the Repurchase Option, unless an election
is filed by the Participant with the Internal Revenue Service (and, if
necessary, the proper state taxing authorities), within 30 days of the purchase
                                                 --------------
of the Unvested Shares, electing pursuant to Section 83(b) of the Code (and
similar state tax provisions, if applicable) to be taxed currently on any
difference between the Exercise Price of the Unvested Shares and their Fair
Market Value on the date of purchase, there may be a recognition of taxable
income (including, where applicable, alternative minimum taxable income) to the
Participant, measured by the excess, if any, of the Fair Market Value of the
Unvested Shares at the time they cease to be Unvested Shares, over the Exercise
Price of the Unvested Shares.

          11.  Privileges of Stock Ownership.  Participant shall not have any of
               -----------------------------
the rights of a shareholder with respect to any Shares until the Shares are
issued to Participant.

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

          13.  Entire Agreement.  The Plan is incorporated herein by reference.
               ----------------
This Agreement and the Plan constitute the entire agreement of the parties and
supersede all prior undertakings and agreements with respect to the subject
matter hereof.

          14.  Notices.  Any notice required to be given or delivered to the
               -------
Company under the terms of this Agreement shall be in writing and addressed to
the Corporate Secretary of the Company at its principal corporate offices.  Any
notice required to be given or delivered to Participant shall be in writing and
addressed to Participant at the address indicated above or to such other address
as such party may designate in writing from time to time to the Company.

                                       19
<PAGE>

All notices shall be deemed to have been given or delivered upon: (i) personal
delivery; (ii) three (3) days after deposit in the United States mail by
certified or registered mail (return receipt requested); (iii) one (1) business
day after deposit with any return receipt express courier (prepaid); or (iv) one
(1) business day after transmission by facsimile, rapifax or telecopier.

          15.  Successors and Assigns.  The Company may assign any of its rights
               ----------------------
under this Agreement, including its rights to purchase Shares under the
Repurchase Option and the Right of First Refusal.  This Agreement shall be
binding upon and inure to the benefit of the successors and assigns of the
Company.  Subject to the restrictions on transfer set forth herein, this
Agreement shall be binding upon Participant and Participant's heirs, executors,
administrators, legal representatives, successors and assigns.

          16.  Governing Law.  This Agreement shall be governed by and construed
               -------------
in accordance with the laws of the State of California as such laws are applied
to agreements between California residents entered into and to be performed
entirely within California.  If any provision of this Agreement is determined by
a court of law to be illegal or unenforceable, then such provision will be
enforced to the maximum extent possible and the other provisions will remain
fully effective and enforceable.

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

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

ALLADVANTAGE.COM                    PARTICIPANT

By:___________________________      ______________________________
                                    (Signature)

_____________________________       ______________________________
(Please print name)                 (Please print name)

_____________________________
(Please print title)

                                       20
<PAGE>

                                   EXHIBIT A
                                   ---------

                    FORM OF STOCK OPTION EXERCISE AGREEMENT

                                       1
<PAGE>

                                                                          No.___

                               ALLADVANTAGE.COM

                          1999 EQUITY INCENTIVE PLAN

                        STOCK OPTION EXERCISE AGREEMENT

     This Stock Option Exercise Agreement (the "Exercise Agreement") is made and
entered into as of _________________________, _____ (the "Effective Date") by
and between AllAdvantage.com, a California corporation (the "Company"), and the
purchaser named below (the "Purchaser").  Capitalized terms not defined herein
shall have the meanings ascribed to them in the Company's 1999 Equity Incentive
Plan (the "Plan").

Purchaser:                ____________________________________________________

                          ____________________________________________________

Social Security Number:   ____________________________________________________

Address:                  ____________________________________________________

                          ____________________________________________________

Total Option Shares:      ____________________________________________________

Exercise Price Per Share: ____________________________________________________

Date of Grant:            ____________________________________________________

First Vesting Date:       ____________________________________________________

Expiration Date:          ____________________________________________________
                          (Unless earlier terminated under Section 5.6 of the
                          Plan)

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

     1.   Exercise of Option.
          ------------------

          1.1  Exercise.  Pursuant to exercise of that certain option (the
               --------
"Option") granted to Purchaser under the Plan and subject to the terms and
conditions of this Exercise Agreement, Purchaser hereby purchases from the
Company, and the Company hereby sells to Purchaser, the Total Number of Shares
set forth above (the "Shares") of the Company's Common Stock at the Exercise
Price Per Share set forth above (the "Exercise Price").  As used in this
Exercise Agreement, the term "Shares" refers to the Shares purchased under this
Exercise Agreement and includes all securities received (i) in replacement of
the Shares, (ii) as a result of stock dividends or stock splits with respect to
the Shares, and (iii) all securities received in

                                       2
<PAGE>

replacement of the Shares in a merger, recapitalization, reorganization or
similar corporate transaction.

          1.2  Title to Shares.  The exact spelling of the name(s) under which
               ---------------
Purchaser will take title to the Shares is:

               ________________________________________________________________

               ________________________________________________________________

          Purchaser desires to take title to the Shares as follows:

               [  ] Individual, as separate property

               [  ] Husband and wife, as community property

               [  ] Joint Tenants

               [  ] Other; please specify:_____________________________________

          To assign the Shares to a trust, a stock transfer agreement in the
form reasonably requested by the Company must be completed and executed;
provided, that Unvested Shares may not be assigned to a trust.

          1.3  Payment. Purchaser hereby delivers payment of the Exercise Price
               -------
in the manner permitted in the Stock Option Agreement as follows (check and
complete as appropriate):

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

               [ ]  by cancellation of indebtedness of the Company owed to
                    Purchaser in the amount of $_______________;

               [ ]  by delivery of _________ fully-paid, nonassessable and
                    vested shares of the Common Stock of the Company owned by
                    Purchaser for at least six (6) months prior to the date
                    hereof which have been paid for within the meaning of SEC
                    Rule 144, (if purchased by use of a promissory note, such
                    note has been fully paid with respect to such vested
                    shares), or obtained by Purchaser in the open public market,
                    and owned free and clear of all liens, claims, encumbrances
                    or security interests, valued at the current Fair Market
                    Value of $___________ per share;

                [ ] by the waiver hereby of compensation due or accrued for
                    services rendered in the amount of $_________.]

     2.   Delivery.
          --------

          2.1  Deliveries by Purchaser. Purchaser hereby delivers to the Company
               -----------------------
(i) this Exercise Agreement, (ii) two (2) copies of a blank Stock Power and
Assignment Separate from Stock Certificate in the form of Exhibit 1 attached
                                                          ---------
hereto (the "Stock Powers"), both executed by Purchaser (and Purchaser's spouse,
if any), (iii) if Purchaser is married, a Consent of

                                       3
<PAGE>

Spouse in the form of Exhibit 2 attached hereto (the "Spouse Consent") executed
                      ---------
by Purchaser's spouse, and (iv) the Exercise Price and payment or other
provision for any applicable tax obligations.

          2.2  Deliveries by the Company. Upon its receipt of the Exercise
               -------------------------
Price, payment or other provision for any applicable tax obligations and all the
documents to be executed and delivered by Purchaser to the Company under Section
2.1, the Company will issue a duly executed stock certificate evidencing the
Shares in the name of Purchaser to be placed in escrow as provided in Section 11
until expiration or termination of the Company's Repurchase Option and Right of
First Refusal described in Section 8 and 9.

     3.   Representations and Warranties of Purchaser. Purchaser represents and
          -------------------------------------------
warrants to the Company that:

          3.1  Agrees to Terms of the Plan. Purchaser has received a copy of the
               ---------------------------
Plan and the Stock Option Agreement, has read and understands the terms of the
Plan, the Stock Option Agreement and this Exercise Agreement, and agrees to be
bound by their terms and conditions. Purchaser acknowledges that there may be
adverse tax consequences upon exercise of the Option or disposition of the
Shares, and that Purchaser should consult a tax adviser prior to such exercise
or disposition.

          3.2  Purchase for Own Account for Investment. Purchaser is purchasing
               ---------------------------------------
the Shares for Purchaser's own account for investment purposes only and not with
a view to, or for sale in connection with, a distribution of the Shares within
the meaning of the Securities Act. Purchaser has no present intention of selling
or otherwise disposing of all or any portion of the Shares and no one other than
Purchaser has any beneficial ownership of any of the Shares.

          3.3  Access to Information. Purchaser has had access to all
               ---------------------
information regarding the Company and its present and prospective business,
assets, liabilities and financial condition that Purchaser reasonably considers
important in making the decision to purchase the Shares, and Purchaser has had
ample opportunity to ask questions of the Company's representatives concerning
such matters and this investment.

          3.4  Understanding of Risks. Purchaser is fully aware of: (i) the
               ----------------------
highly speculative nature of the investment in the Shares; (ii) the financial
hazards involved; (iii) the lack of liquidity of the Shares and the restrictions
on transferability of the Shares (e.g., that Purchaser may not be able to sell
                                  ----
or dispose of the Shares or use them as collateral for loans); (iv) the
qualifications and backgrounds of the management of the Company; and (v) the tax
consequences of investment in the Shares. Purchaser is capable of evaluating the
merits and risks of this investment, has the ability to protect Purchaser's own
interests in this transaction and is financially capable of bearing a total loss
of this investment.

          3.5  No General Solicitation. At no time was Purchaser presented with
               -----------------------
or solicited by any publicly issued or circulated newspaper, mail, radio,
television or other form of general advertising or solicitation in connection
with the offer, sale and purchase of the Shares.

                                       4
<PAGE>

     4.   Compliance with Securities Laws.
          -------------------------------

          4.1  Compliance with U.S. Federal Securities Laws. Purchaser
               --------------------------------------------
understands and acknowledges that the Shares have not been registered with the
SEC under the Securities Act and that, notwithstanding any other provision of
the Stock Option Agreement to the contrary, the exercise of any rights to
purchase any Shares is expressly conditioned upon compliance with the Securities
Act and all applicable state securities laws. Purchaser agrees to cooperate with
the Company to ensure compliance with such laws. The Shares are being issued
under the Securities Act pursuant to the exemption provided by SEC Rule 701.

          4.2  Compliance with California Securities Laws. THE PLAN, THE STOCK
               ------------------------------------------
OPTION AGREEMENT, AND THIS EXERCISE AGREEMENT ARE INTENDED TO COMPLY WITH
SECTION 25102(o) OF THE CALIFORNIA CORPORATIONS CODE AND ANY RULES (INCLUDING
COMMISSIONER RULES, IF APPLICABLE) OR REGULATIONS PROMULGATED THEREUNDER BY THE
CALIFORNIA DEPARTMENT OF CORPORATIONS (THE "REGULATIONS"). ANY PROVISION OF THIS
EXERCISE AGREEMENT WHICH IS INCONSISTENT WITH SECTION 25102(o) SHALL, WITHOUT
FURTHER ACT OR AMENDMENT BY THE COMPANY OR THE BOARD, BE REFORMED TO COMPLY WITH
THE REQUIREMENTS OF SECTION 25102(o). THE SALE OF THE SECURITIES THAT ARE THE
SUBJECT OF THIS EXERCISE AGREEMENT, IF NOT YET QUALIFIED WITH THE CALIFORNIA
COMMISSIONER OF CORPORATIONS AND NOT EXEMPT FROM SUCH QUALIFICATION, IS SUBJECT
TO SUCH QUALIFICATION, AND THE ISSUANCE OF SUCH SECURITIES, AND THE RECEIPT OF
ANY PART OF THE CONSIDERATION THEREFOR PRIOR TO SUCH QUALIFICATION IS UNLAWFUL
UNLESS THE SALE IS EXEMPT. THE RIGHTS OF THE PARTIES TO THIS EXERCISE AGREEMENT
ARE EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED OR AN EXEMPTION
BEING AVAILABLE.

     5.   Restricted Securities.
          ---------------------

          5.1  No Transfer Unless Registered or Exempt. Purchaser understands
               ---------------------------------------
that Purchaser may not transfer any Shares unless such Shares are registered
under the Securities Act or qualified under applicable state securities laws or
unless, in the opinion of counsel to the Company, exemptions from such
registration and qualification requirements are available. Purchaser understands
that only the Company may file a registration statement with the SEC and that
the Company is under no obligation to do so with respect to the Shares.
Purchaser has also been advised that exemptions from registration and
qualification may not be available or may not permit Purchaser to transfer all
or any of the Shares in the amounts or at the times proposed by Purchaser.

          5.2  SEC Rule 144. In addition, Purchaser has been advised that SEC
               ------------
Rule 144 promulgated under the Securities Act, which permits certain limited
sales of unregistered securities, is not presently available with respect to the
Shares and, in any event, requires that the Shares be held for a minimum of one
(1) year, and in certain cases two (2) years, after they have been purchased and
                                                                             ---
paid for (within the meaning of Rule 144).  Purchaser understands that Rule 144
--------
may indefinitely restrict transfer of the Shares so long as Purchaser remains an
"affiliate" of

                                       5
<PAGE>

the Company or if "current public information" about the Company (as defined in
Rule 144) is not publicly available.

          5.3  SEC Rule 701.  The Shares are issued pursuant to SEC Rule 701
               ------------
promulgated under the Securities Act and may become freely tradeable by non-
affiliates (under limited conditions regarding the method of sale) ninety (90)
days after 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
SEC, subject to the lengthier market standoff agreement contained in Section 7
of this Exercise Agreement or any other agreement entered into by Purchaser.
Affiliates must comply with the provisions (other than the holding period
requirements) of Rule 144.

     6.   Restrictions on Transfers.
          -------------------------

          6.1  Disposition of Shares. Purchaser hereby agrees that Purchaser
               ---------------------
shall make no disposition of the Shares (other than as permitted by this
Exercise Agreement) unless and until:

               (a)  Purchaser shall have notified the Company of the proposed
disposition and provided a written summary of the terms and conditions of the
proposed disposition;

               (b)  Purchaser shall have complied with all requirements of this
Exercise Agreement applicable to the disposition of the Shares;

               (c)  Purchaser shall have provided the Company with written
assurances, in form and substance satisfactory to counsel for the Company, that
(i) the proposed disposition does not require registration of the Shares under
the Securities Act or (ii) all appropriate actions necessary for compliance with
the registration requirements of the Securities Act or of any exemption from
registration available under the Securities Act (including Rule 144) have been
taken; and

               (d)  Purchaser shall have provided the Company with written
assurances, in form and substance satisfactory to the Company, that the proposed
disposition will not result in the contravention of any transfer restrictions
applicable to the Shares pursuant to the provisions of the Regulations referred
to in Section 4.2 hereof.

          6.2  Restriction on Transfer. Purchaser shall not transfer, assign,
               -----------------------
grant a lien or security interest in, pledge, hypothecate, encumber or otherwise
dispose of any of the Shares which are subject to the Company's Repurchase
Option or the Company's Right of First Refusal described below, except as
permitted by this Exercise Agreement.

          6.3  Transferee Obligations. Each person (other than the Company) to
               ----------------------
whom the Shares are transferred by means of one of the permitted transfers
specified in this Exercise Agreement must, as a condition precedent to the
validity of such transfer, acknowledge in writing to the Company that such
person is bound by the provisions of this Exercise Agreement and that the
transferred Shares are subject to (i) both the Company's Repurchase Option and
the Company's Right of First Refusal granted hereunder and (ii) the market
stand-off provisions of Section 7 hereof, to the same extent such Shares would
be so subject if retained by the Purchaser.

                                       6
<PAGE>

     7.   Market Standoff Agreement. Purchaser agrees in connection with any
          -------------------------
registration of the Company's securities that, upon the request of the Company
or the underwriters managing any public offering of the Company's securities,
Purchaser will not sell or otherwise dispose of any Shares without the prior
written consent of the Company or such underwriters, as the case may be, for
such period of time (not to exceed one hundred eighty (180) days) after the
effective date of such registration requested by such managing underwriters and
subject to all restrictions as the Company or the underwriters may specify.
Purchaser further agrees to enter into any agreement reasonably required by the
underwriters to implement the foregoing. The term "Company", as used in this
Section 7, includes any wholly-owned subsidiary of the Company into or with
which the Company merges or consolidates.

     8.   Company's Repurchase Option for Unvested Shares. The Company, or its
          -----------------------------------------------
assignee, shall have the option to repurchase all or a portion of the
Purchaser's Unvested Shares (as defined in Section 2.2 of the Stock Option
Agreement) on the terms and conditions set forth in this Section (the
"Repurchase Option") if Purchaser is Terminated (as defined in the Plan) for any
reason, or no reason, including without limitation, Purchaser's death,
Disability (as defined in the Plan), voluntary resignation or termination by the
Company with or without Cause. Notwithstanding the foregoing, the Company shall
retain the Repurchase Option for Unvested Shares only as to that number of
Unvested Shares (whether or not exercised) that exceeds the number of shares
which remain unexercised.

          8.1  Termination and Termination Date. In case of any dispute as to
               --------------------------------
whether Purchaser is Terminated, the Committee shall have discretion to
determine whether Purchaser has been Terminated and the effective date of such
Termination (the "Termination Date").

          8.2  Exercise of Repurchase Option.  At any time within ninety (90)
               -----------------------------
days after the Purchaser's Termination Date (or, in the case of securities
issued upon exercise of an Option after the Purchaser's Termination Date, within
ninety (90) days after the date of such exercise), the Company, or its assignee,
may elect to repurchase any or all the Purchaser's Unvested Shares by giving
Purchaser written notice of exercise of the Repurchase Option.

          8.3  Calculation of Repurchase Price for Unvested Shares. The Company
               ---------------------------------------------------
or its assignee shall have the option to repurchase from Purchaser (or from
Purchaser's personal representative as the case may be) the Unvested Shares at
the Purchaser's Exercise Price, proportionately adjusted for any stock split or
similar change in the capital structure of the Company as set forth in Section
2.2 of the Plan (the "Repurchase Price").

          8.4  Payment of Repurchase Price. The Repurchase Price shall be
               ---------------------------
payable, at the option of the Company or its assignee, by check or by
cancellation of all or a portion of any outstanding indebtedness owed by
Purchaser to the Company or such assignee, or by any combination thereof. The
Repurchase Price shall be paid without interest within sixty (60) days after
exercise of the Repurchase Option.

          8.5  Right of Termination Unaffected. Nothing in this Exercise
               -------------------------------
Agreement shall be construed to limit or otherwise affect in any manner
whatsoever the right or power of the Company (or any Parent or Subsidiary of the
Company) to terminate Purchaser's employment or other relationship with Company
(or the Parent or Subsidiary of the Company) at any time, for any reason or no
reason, with or without Cause.

                                       7
<PAGE>

     9.   Company's Right of First Refusal. Unvested Shares may not be sold or
          --------------------------------
otherwise transferred by Purchaser without the Company's prior written consent.
Before any Vested Shares held by Purchaser or any transferee of such Vested
Shares (either sometimes referred to herein as the "Holder") may be sold or
otherwise transferred (including, without limitation, a transfer by gift or
operation of law), the Company and/or its assignee(s) will have a right of first
refusal to purchase the Vested Shares to be sold or transferred (the "Offered
Shares") on the terms and conditions set forth in this Section (the "Right of
First Refusal").

          9.1  Notice of Proposed Transfer. The Holder of the Offered Shares
               ---------------------------
will deliver to the Company a written notice (the "Notice") stating: (i) the
Holder's bona fide intention to sell or otherwise transfer the Offered Shares;
(ii) the name and address of each proposed purchaser or other transferee (the
"Proposed Transferee"); (iii) the number of Offered Shares to be transferred to
each Proposed Transferee; (iv) the bona fide cash price or other consideration
for which the Holder proposes to transfer the Offered Shares (the "Offered
Price"); and (v) that the Holder acknowledges this Notice is an offer to sell
the Offered Shares to the Company and/or its assignee(s) pursuant to the
Company's Right of First Refusal at the Offered Price as provided for in this
Exercise Agreement.

          9.2  Exercise of Right of First Refusal.  At any time within thirty
               ----------------------------------
(30) days after the date of the Notice, the Company and/or its assignee(s) may,
by giving written notice to the Holder, elect to purchase all (or, with the
consent of the Holder, less than all) the Offered Shares proposed to be
transferred to any one or more of the Proposed Transferees named in the Notice,
at the purchase price, determined as specified below.

          9.3  Purchase Price. The purchase price for the Offered Shares
               --------------
purchased under this Section will be the Offered Price, provided that if the
Offered Price consists of no legal consideration (as, for example, in the case
of a transfer by gift) the purchase price will be the fair market value of the
Offered Shares as determined in good faith by the Company's Board of Directors.
If the Offered Price includes consideration other than cash, then the value of
the non-cash consideration, as determined in good faith by the Company's Board
of Directors, will conclusively be deemed to be the cash equivalent value of
such non-cash consideration.

          9.4  Payment. Payment of the purchase price for the Offered Shares
               -------
will be payable, at the option of the Company and/or its assignee(s) (as
applicable), by check or by cancellation of all or a portion of any outstanding
indebtedness owed by the Holder to the Company (or to such assignee, in the case
of a purchase of Offered Shares by such assignee) or by any combination thereof.
The purchase price will be paid without interest within sixty (60) days after
the Company's receipt of the Notice, or, at the option of the Company and/or its
assignee(s), in the manner and at the time(s) set forth in the Notice.

          9.5  Holder's Right to Transfer. If all of the Offered 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 Offered Shares to each Proposed
Transferee at the Offered Price or at a higher price, provided that (i) such
                                                      --------
sale or other transfer is consummated within one hundred twenty (120) days after
the date of the Notice, (ii) any such sale or other transfer is effected in
compliance with all applicable securities laws, and (iii) each Proposed
Transferee agrees in writing that the provisions of this Section will continue
to apply to the Offered Shares in the hands of such

                                       8
<PAGE>

Proposed Transferee. If the Offered Shares described in the Notice are not
transferred to each Proposed Transferee within such one hundred twenty (120) day
period, then a new Notice must be given to the Company pursuant to which the
Company will again be offered the Right of First Refusal before any Shares held
by the Holder may be sold or otherwise transferred.

          9.6  Exempt Transfers. Notwithstanding anything to the contrary in
               ----------------
this Section, the following transfers of Vested Shares will be exempt from the
Right of First Refusal: (i) the transfer of any or all of the Vested Shares
during Purchaser's lifetime by gift or on Purchaser's death by will or intestacy
to Purchaser's "Immediate Family" (as defined below) or to a trust for the
benefit of Purchaser or Purchaser's Immediate Family, provided that each
transferee or other recipient agrees in a writing satisfactory to the Company
that the provisions of this Section will continue to apply to the transferred
Vested Shares in the hands of such transferee or other recipient; (ii) any
transfer of Vested Shares made pursuant to a statutory merger or statutory
consolidation of the Company with or into another corporation or corporations
(except that the Right of First Refusal will continue to apply thereafter to
such Vested Shares, in which case the surviving corporation of such merger or
consolidation shall succeed to the rights of the Company under this Section
unless the agreement of merger or consolidation expressly otherwise provides);
or (iii) any transfer of Vested Shares pursuant to the winding up and
dissolution of the Company. As used herein, the term "Immediate Family" will
mean Purchaser's spouse, the lineal descendant or antecedent, father, mother,
brother or sister, child, adopted child, grandchild or adopted grandchild of the
Purchaser or the Purchaser's spouse, or the spouse of any child, adopted child,
grandchild or adopted grandchild of Purchaser or the Purchaser's spouse or
Spousal Equivalent, as defined herein. As used herein, a person is deemed to be
a "Spousal Equivalent" provided the following circumstances are true: (i)
irrespective of whether or not the Participant and the Spousal Equivalent are
the same sex, they are the sole spousal equivalent of the other for the last
twelve (12) months, (ii) they intend to remain so indefinitely, (iii) neither
are married to anyone else, (iv) both are at least 18 years of age and mentally
competent to consent to contract, (v) they are not related by blood to a degree
of closeness that which would prohibit legal marriage in the state in which they
legally reside, (vi) they are jointly responsible for each other's common
welfare and financial obligations, and (vii) they reside together in the same
residence for the last twelve (12) months and intend to do so indefinitely.

          9.7  Termination of Right of First Refusal. The Right of First Refusal
               -------------------------------------
will terminate as to all Shares on the effective date of 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 SEC under the Securities Act
(other than a registration statement relating solely to the issuance of Common
Stock pursuant to a business combination or an employee incentive or benefit
plan).

          9.8  Encumbrances on Vested Shares.  Purchaser may grant a lien or
               -----------------------------
security interest in, or pledge, hypothecate or encumber Vested Shares only if
each party to whom such lien or security interest is granted, or to whom such
pledge, hypothecation or other encumbrance is made, agrees in a writing
satisfactory to the Company that: (i) such lien, security interest, pledge,
hypothecation or encumbrance will not apply to such Vested Shares after they are
acquired by the Company and/or its assignees under this Section; and (ii) the
provisions of this Section will continue to apply to such Vested Shares in the
hands of such party and any transferee of such party. Purchaser may not grant a
lien or security interest in, or pledge, hypothecate or encumber, any Unvested
Shares.

                                       9
<PAGE>

     10.  Rights as a Shareholder. Subject to the terms and conditions of this
          -----------------------
Exercise Agreement, Purchaser will have all of the rights of a shareholder of
the Company with respect to the Shares from and after the date that Shares are
issued to Purchaser until such time as Purchaser disposes of the Shares or the
Company and/or its assignee(s) exercise(s) the Repurchase Option or Right of
First Refusal. Upon an exercise of the Repurchase Option or the Right of First
Refusal, Purchaser will have no further rights as a holder of the Shares so
purchased upon such exercise, other than the right to receive payment for the
Shares so purchased in accordance with the provisions of this Exercise
Agreement, and Purchaser will promptly surrender the stock certificate(s)
evidencing the Shares so purchased to the Company for transfer or cancellation.

     11.  Escrow. As security for Purchaser's faithful performance of this
          ------
Exercise Agreement, Purchaser agrees, immediately upon receipt of the stock
certificate(s) evidencing the Shares, to deliver such certificate(s), together
with the Stock Powers executed by Purchaser and by Purchaser's spouse, if any
(with the date and number of Shares left blank), to the Secretary of the Company
or other designee of the Company (the "Escrow Holder"), who is hereby appointed
to hold such certificate(s) and Stock Powers in escrow and to take all such
actions and to effectuate all such transfers and/or releases of such Shares as
are in accordance with the terms of this Exercise Agreement. Purchaser and the
Company agree that Escrow Holder will not be liable to any party to this
Exercise Agreement (or to any other party) for any actions or omissions unless
Escrow Holder is grossly negligent or intentionally fraudulent in carrying out
the duties of Escrow Holder under this Exercise Agreement. Escrow Holder may
rely upon any letter, notice or other document executed with any signature
purported to be genuine and may rely on the advice of counsel and obey any order
of any court with respect to the transactions contemplated by this Exercise
Agreement. The Shares will be released from escrow upon termination of both the
Repurchase Option and the Right of First Refusal.

     12.  Restrictive Legends and Stop-Transfer Orders.
          --------------------------------------------

          12.1  Legends. Purchaser understands and agrees that the Company will
                -------
place the legends set forth below or similar legends on any stock certificate(s)
evidencing the Shares, together with any other legends that may be required by
state or U.S. Federal securities laws, the Company's Articles of Incorporation
or Bylaws, any other agreement between Purchaser and the Company or any
agreement between Purchaser and any third party:

          THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
          UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
          "SECURITIES ACT"), OR UNDER THE SECURITIES LAWS OF CERTAIN
          STATES. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON
          TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR
          RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES ACT AND
          APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION
          OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY
          MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS
          INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. THE ISSUER OF
          THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN FORM
          AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT
          ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE
          SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS.

                                      10
<PAGE>

          THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
          CERTAIN RESTRICTIONS ON PUBLIC RESALE AND TRANSFER,
          INCLUDING THE RIGHT OF REPURCHASE AND RIGHT OF FIRST REFUSAL
          OPTIONS HELD BY THE ISSUER AND/OR ITS ASSIGNEE(S) AS SET
          FORTH IN A STOCK OPTION EXERCISE AGREEMENT 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 PUBLIC SALE AND TRANSFER RESTRICTIONS INCLUDING THE
          RIGHT OF REPURCHASE AND RIGHT OF FIRST REFUSAL ARE BINDING
          ON TRANSFEREES OF THESE SHARES.

          THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A
          180 DAY MARKET STANDOFF RESTRICTION AS SET FORTH IN A
          CERTAIN AGREEMENT BETWEEN THE ISSUER AND THE ORIGINAL HOLDER
          OF THESE SHARES, A COPY OF WHICH MAY BE OBTAINED AT THE
          PRINCIPAL OFFICE OF THE ISSUER. AS A RESULT OF SUCH
          AGREEMENT, THESE SHARES MAY NOT BE TRADED PRIOR TO 180 DAYS
          AFTER THE EFFECTIVE DATE OF THE INITIAL PUBLIC OFFERING OF
          THE COMMON STOCK OF THE ISSUER HEREOF. SUCH RESTRICTION IS
          BINDING ON TRANSFEREES OF THESE SHARES.

          12.2    Stop-Transfer Instructions.  Purchaser agrees that, to ensure
                  --------------------------
compliance with the restrictions imposed by this Exercise Agreement, the Company
may issue appropriate "stop-transfer" instructions to its transfer agent, if
any, and if the Company transfers its own securities, it may make appropriate
notations to the same effect in its own records.

          12.3    Refusal to Transfer.  The Company will 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 Agreement 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 have been so transferred.

   13.    Tax Consequences.  PURCHASER UNDERSTANDS THAT PURCHASER MAY SUFFER
          ----------------
ADVERSE TAX CONSEQUENCES AS A RESULT OF PURCHASER'S PURCHASE OR DISPOSITION OF
THE SHARES. PURCHASER REPRESENTS: (i) THAT PURCHASER HAS CONSULTED WITH ANY TAX
ADVISER THAT PURCHASER DEEMS ADVISABLE IN CONNECTION WITH THE PURCHASE OR
DISPOSITION OF THE SHARES AND (ii) THAT PURCHASER IS NOT RELYING ON THE COMPANY
FOR ANY TAX ADVICE. IN PARTICULAR, IF UNVESTED SHARES ARE SUBJECT TO REPURCHASE
BY THE COMPANY, PURCHASER REPRESENTS THAT PURCHASER HAS CONSULTED WITH
PURCHASER'S OWN TAX ADVISER CONCERNING THE ADVISABILITY OF FILING AN 83(b)
ELECTION WITH THE INTERNAL REVENUE SERVICE WHICH MUST BE FILED WITHIN THIRTY
(30) DAYS OF THE PURCHASE OF SHARES TO BE EFFECTIVE. Set forth below is a brief
summary as of the date the Plan was adopted by the Board of some of the U.S.
Federal and California tax consequences of exercise of the Option and
disposition of the Shares. THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX
LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. PURCHASER SHOULD CONSULT HIS

                                      11
<PAGE>

OR HER OWN TAX ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE SHARES.

          13.1  Exercise of Incentive Stock Option.  If the Option qualifies
                ----------------------------------
as an ISO, there will be no regular U.S. Federal income tax liability or
California income tax liability upon the exercise of the Option, although the
excess, if any, of the Fair Market Value of the Shares on the date of exercise
over the Exercise Price will be treated as a tax preference item for U.S.
Federal alternative minimum tax purposes and may subject Purchaser to the
alternative minimum tax in the year of exercise.

          13.2  Exercise of Nonqualified Stock Option.  If the Option does not
                -------------------------------------
qualify as an ISO, there may be a regular U.S. Federal income tax liability and
a California income tax liability upon the exercise of the Option.  Purchaser
will be treated as having received compensation income (taxable at ordinary
income tax rates) equal to the excess, if any, of the Fair Market Value of the
Shares on the date of exercise over the Exercise Price.  If Purchaser is or was
an employee of the Company, the Company may be required to withhold from
Purchaser's compensation or collect from Purchaser and pay to the applicable
taxing authorities an amount equal to a percentage of this compensation income
at the time of exercise.

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

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

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

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

          13.4  Section 83(b) Election for Unvested Shares.  With respect to
                ------------------------------------------
Unvested Shares, which are subject to the Repurchase Option, unless an election
is filed by the Purchaser with the Internal Revenue Service (and, if necessary,
the proper state taxing authorities), within 30 days of the purchase of the
                                      ------------------------------
Unvested Shares, electing pursuant to Section 83(b) of the Code (and similar
state tax provisions, if applicable) to be taxed currently on any difference
between the Exercise Price of the Unvested Shares and their Fair  Market Value
on the date of purchase, there may be a recognition of taxable income
(including, where applicable, alternative minimum taxable income) to the
Purchaser, measured by the excess, if any, of the Fair Market Value of the
Unvested Shares at the time they cease to be Unvested Shares, over the Exercise
Price of the

                                      12
<PAGE>

Unvested Shares. A form of Election under Section 83(b) is attached hereto as
Exhibit 3 for reference.
---------

   14.  Compliance with Laws and Regulations.  The issuance and transfer of the
        ------------------------------------
Shares will be subject to and conditioned upon compliance by the Company and
Purchaser with all applicable state and U.S. Federal laws and regulations and
with all applicable requirements of any stock exchange or automated quotation
system on which the Company's Common Stock may be listed or quoted at the time
of such issuance or transfer.

   15.  Successors and Assigns.  The Company may assign any of its rights under
        ----------------------
this Exercise Agreement, including its rights to purchase Shares under the
Repurchase Option and the Right of First Refusal.  This Exercise Agreement shall
be binding upon and inure to the benefit of the successors and assigns of the
Company.  Subject to the restrictions on transfer herein set forth, this
Exercise Agreement will be binding upon Purchaser and Purchaser's heirs,
executors, administrators, legal representatives, successors and assigns.

   16.  Governing Law; Severability.  This Exercise Agreement shall be governed
        ---------------------------
by and construed in accordance with the internal laws of the State of California
as such laws are applied to agreements between California residents entered into
and to be performed entirely within California.  If any provision of this
Exercise Agreement is determined by a court of law to be illegal or
unenforceable, then such provision will be enforced to the maximum extent
possible and the other provisions will remain fully effective and enforceable.

   17.  Notices.  Any notice required to be given or delivered to the Company
        -------
shall be in writing and addressed to the Corporate Secretary of the Company at
its principal corporate offices.  Any notice required to be given or delivered
to Purchaser shall be in writing and addressed to Purchaser at the address
indicated above or to such other address as Purchaser may designate in writing
from time to time to the Company.  All notices shall be deemed effectively given
upon personal delivery, (i) three (3) days after deposit in the United States
mail by certified or registered mail (return receipt requested), (ii) one (1)
business day after its deposit with any return receipt express courier
(prepaid), or (iii) one (1) business day after transmission by rapifax or
telecopier.

   18.  Further Instruments.  The parties agree to execute such further
        -------------------
instruments and to take such further action as may be reasonably necessary to
carry out the purposes and intent of this Exercise Agreement.

   19.  Headings.  The captions and headings of this Exercise Agreement are
        --------
included for ease of reference only and will be disregarded in interpreting or
construing this Exercise Agreement.  All references herein to Sections will
refer to Sections of this Exercise Agreement.

   20.  Entire Agreement.  The Plan, the Stock Option Agreement and this
        ----------------
Exercise Agreement, together with all Exhibits thereto, constitute the entire
agreement and understanding of the parties with respect to the subject matter of
this Exercise Agreement, and supersede all prior understandings and agreements,
whether oral or written, between the parties hereto with respect to the specific
subject matter hereof.

                                      13
<PAGE>

   IN WITNESS WHEREOF, the Company has caused this Exercise Agreement to be
executed in triplicate by its duly authorized representative and Purchaser has
executed this Exercise Agreement in triplicate as of the Effective Date,
indicated above.

ALLADVANTAGE.COM                        PURCHASER

By:__________________________           __________________________________
                                        (Signature)

_____________________________           __________________________________
(Please print name)                     (Please print name)

_____________________________
(Please print title)

     [Signature page to AllAdvantage.com Stock Option Exercise Agreement]

                                      14
<PAGE>

                                LIST OF EXHIBITS
                                ----------------

Exhibit 1:  Stock Power and Assignment Separate from Stock Certificate

Exhibit 2:  Spouse Consent

Exhibit 3:  Section 83(b) Election

                                      15
<PAGE>

                                   EXHIBIT 1
                                   ---------

                          STOCK POWER AND ASSIGNMENT
                          --------------------------
                        SEPARATE FROM STOCK CERTIFICATE
                        -------------------------------

                                      16
<PAGE>

                          Stock Power and Assignment
                          --------------------------
                        Separate from Stock Certificate
                        -------------------------------

     FOR VALUE RECEIVED and pursuant to that certain Stock Option Exercise
Agreement No. ________ dated as of _______________, _____, (the "Agreement"),
the undersigned hereby sells, assigns and transfers unto
_______________________________, __________ shares of the Common Stock of
AllAdvantage.com, a California corporation (the "Company"), standing in the
undersigned's name on the books of the Company represented by Certificate No(s).
______ delivered herewith, and does hereby irrevocably constitute and appoint
the Secretary of the Company as the undersigned's attorney-in-fact, with full
power of substitution, to transfer said stock on the books of the Company.  THIS
ASSIGNMENT MAY ONLY BE USED AS AUTHORIZED BY THE AGREEMENT AND ANY EXHIBITS
THERETO.

Dated: _______________, _____

                                        PURCHASER

                                        __________________________________
                                        (Signature)

                                        __________________________________
                                        (Please Print Name)

                                        _________________________________
                                        (Spouse's Signature, if any)

                                        __________________________________
                                        (Please Print Spouse's Name)

Instructions to Purchaser:  Please do not fill in any blanks other than the
-------------------------
signature line.  The purpose of this Stock Power and Assignment is to enable the
Company to acquire the shares and to exercise its "Repurchase Option" and/or
"Right of First Refusal" set forth in the Exercise Agreement without requiring
additional signatures on the part of the Purchaser or Purchaser's Spouse.

                                      17
<PAGE>

                          Stock Power and Assignment
                          --------------------------
                        Separate from Stock Certificate
                        -------------------------------

     FOR VALUE RECEIVED and pursuant to that certain Stock Option Exercise
Agreement No. ________ dated as of _______________, _____, (the "Agreement"),
the undersigned hereby sells, assigns and transfers unto
_______________________________, __________ shares of the Common Stock of
AllAdvantage.com, a California corporation (the "Company"), standing in the
undersigned's name on the books of the Company represented by Certificate No(s).
______ delivered herewith, and does hereby irrevocably constitute and appoint
the Secretary of the Company as the undersigned's attorney-in-fact, with full
power of substitution, to transfer said stock on the books of the Company.  THIS
ASSIGNMENT MAY ONLY BE USED AS AUTHORIZED BY THE AGREEMENT AND ANY EXHIBITS
THERETO.

Dated:  _______________, _____

                                             PURCHASER

                                             ________________________________
                                             (Signature)

                                             ________________________________
                                             (Please Print Name)

                                             ________________________________
                                             (Spouse's Signature, if any)

                                             ________________________________
                                             (Please Print Spouse's Name)

Instructions to Purchaser:  Please do not fill in any blanks other than the
-------------------------
signature line.  The purpose of this Stock Power and Assignment is to enable the
Company to acquire the shares and to exercise its "Repurchase Option" and/or
"Right of First Refusal" set forth in the Exercise Agreement without requiring
additional signatures on the part of the Purchaser or Purchaser's Spouse.

                                      18
<PAGE>

                                   EXHIBIT 2
                                   ---------

                                SPOUSE CONSENT
                                --------------

                                      19
<PAGE>

                                Spouse Consent
                                --------------

     The undersigned spouse of ______________________________ (the "Purchaser")
has read, understands, and hereby approves the Stock Option Exercise Agreement
between Purchaser and the Company (the "Agreement").  In consideration of the
Company's granting my spouse the right to purchase the Shares as set forth in
the Agreement, the undersigned hereby agrees to be irrevocably bound by the
Agreement and further agrees that any community property interest I may have in
the Shares shall similarly be bound by the Agreement.  The undersigned hereby
appoints Purchaser as my attorney-in-fact with respect to any amendment or
exercise of any rights under the Agreement.

Date: _______________________

                                        ______________________________________
                                        Print Name of Purchaser's Spouse

                                        ______________________________________
                                        Signature of Purchaser's Spouse

                                        Address:______________________________

                                                ______________________________

                                                ______________________________

                                      20
<PAGE>

                                   EXHIBIT 3
                                   ---------

                            SECTION 83(b) ELECTION
                            ----------------------
                                       1
<PAGE>

                FOR AMT AND DISQUALIFYING DISPOSITION PURPOSES

           ELECTION UNDER SECTION 83(b) OF THE INTERNAL REVENUE CODE

The undersigned Taxpayer hereby elects, pursuant to Section 83(b) of the
Internal Revenue Code of 1986, as amended, to include the excess, if any, of the
fair market value of the  property described below at the time of transfer over
the amount paid for such property, as compensation for services in the
calculation of: (1) regular gross income; (2) alternative minimum taxable income
or (3) disqualifying disposition gross income, as the case may be.

1.   TAXPAYER'S NAME:              ___________________________________________

     TAXPAYER'S ADDRESS:           ___________________________________________

                                   ___________________________________________

     SOCIAL SECURITY NUMBER:       ___________________________________________

2.   The property with respect to which the election is made is described as
     follows: _______ shares of Common Stock of AllAdvantage.com, a California
     corporation (the "Company") which were transferred upon exercise of an
     option by Company, which is Taxpayer's employer or the corporation for whom
     the Taxpayer performs services.

3.   The date on which the shares were transferred pursuant to the exercise of
     the option was ____________________, _____ and this election is made for
     calendar year _____.

4.   The shares received upon exercise of the option are subject to the
     following restrictions:  The Company may repurchase all or a portion of the
     shares at the Taxpayer's original purchase price under certain conditions
     at the time of Taxpayer's termination of employment or services.

5.   The fair market value of the shares (without regard to restrictions other
     than restrictions which by their terms will never lapse) was $_____ per
     share at the time of exercise of the option.

6.   The amount paid for such shares upon exercise of the option was $_____ per
     share.

7.   The Taxpayer has submitted a copy of this statement to the Company.

THIS ELECTION MUST BE FILED WITH THE INTERNAL REVENUE SERVICE ("IRS"), AT THE
OFFICE WHERE THE TAXPAYER FILES ANNUAL INCOME TAX RETURNS, WITHIN 30 DAYS AFTER
                                                           --------------
THE DATE OF TRANSFER OF THE SHARES, AND MUST ALSO BE FILED WITH THE TAXPAYER'S
INCOME TAX RETURNS FOR THE CALENDAR YEAR.  THE ELECTION CANNOT BE REVOKED
WITHOUT THE CONSENT OF THE IRS.

Dated:_______________________           _____________________________________
                                        Taxpayer's Signature

                                       1

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