Document:

Exhibit 10.5

IT IS UNLAWFUL TO CONSUMMATE A SALE OR TRANSFER OF THIS SECURITY, OR ANY
INTEREST THEREIN, OR TO RECEIVE ANY CONSIDERATION THEREFOR, WITHOUT THE PRIOR
WRITTEN CONSENT OF THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA,
EXCEPT AS PERMITTED IN THE COMMISSIONER'S RULES.

                         ALADDIN SYSTEMS HOLDINGS, INC.

                             1999 STOCK OPTION PLAN
                          (Effective October 25, 1999)

                        INCENTIVE STOCK OPTION AGREEMENT

      Aladdin Systems Holdings, Inc., a Nevada corporation (The "Company"),
hereby grants an option to purchase Shares of its common stock to the optionee
named below. The terms and conditions of the option are set forth in this cover
sheet, in the attachment and in the Company's 1999 Stock Option Plan (the
"Plan").

Date of Option Grant: ____________, 1999

Name of Optionee: _______________________________________________

Optionee's Social Security Number: ____-___-_____

Number of Shares of Common Stock Covered by Option: _____________

Exercise Price per Share:$_______________________________________

Vesting Start Date: _______________, 1999

            By signing this cover sheet, you agree to all of the terms and
            conditions described in the attached Agreement and in the Plan, a
            copy of which is also enclosed.

Optionee: _______________________________________________________
                                    (Signature)

Company: ________________________________________________________
                                    (Signature)
                  Title: ________________________________________________
Attachment

<PAGE>

                         ALADDIN SYSTEMS HOLDINGS, INC.
                             1999 STOCK OPTION PLAN
                        INCENTIVE STOCK OPTION AGREEMENT

Incentive Stock Option

This option is intended to be an incentive stock option under section 422 of the
Internal Revenue Code and will be interpreted accordingly.

Vesting

Your right to exercise this option vests monthly beginning on the Vesting Start
Date, as shown on the cover sheet; provided, however, no portion of this option
may be exercised prior to the expiration of twelve (12) months from the Date of
Grant, as shown on the cover sheet. The number of Shares which may be purchased
under this option by you at the Purchase Price shall be equal to the difference
between (i) the product (rounded to the nearest integer) of the number of full
months of your continuous employment with the Company (including all days of any
approved leaves of absence) from the Vesting Starting Date times the number of
Shares covered by this option times .02083333, minus (ii) the number of Shares
purchased pursuant to this Option prior to such exercise. The resulting number
of Shares will be rounded to the nearest whole number. No additional Shares will
vest after your Company service has terminated for any reason.

Term

Your option will expire in any event at the close of business at Company
headquarters on the day before the 10th anniversary of the Date of Grant, as
shown on the cover sheet. (It will expire earlier if your Company service
terminates, as described below.)

Regular Termination

If your service as an employee of the Company (or any subsidiary) terminates for
any reason except death or Disability, then your option will expire at the close
of business at Company headquarters on the 30th day after your termination date.

Notwithstanding anything else in this Agreement to the contrary, in the event
that you cease to be employed by the Company within twelve (12) months from the
Date of Grant for any reason all rights to purchase shares under this Option
shall immediately terminate.

Death

If you die as an employee of the Company (or any subsidiary), then your option
will expire at the close of business at Company headquarters on the date six (6)
months after the date of death.

During that 6-month period, your estate or heirs may exercise the vested portion
of your option.

<PAGE>

DisabilityIf your service as an employee of the Company (or any subsidiary)
terminates because of your Disability, then your option will expire at the close
of business at Company headquarters on the date six (6) months after your
termination date.

"Disability" means that you are unable to engage in any substantial gainful
activity by reason of any medically determinable physical or mental impairment.

Leaves of Absence

For purposes of this option, your service does not terminate when you go on a
bona fide leave of absence that was approved by the Company in writing, if the
terms of the leave provide for continued service crediting, or when continued
service crediting is required by applicable law. However, for purposes of
determining whether your option is entitled to ISO status, your service will be
treated as terminating 90 days after you went on leave, unless your right to
return to active work is guaranteed by law or by a contract. Your service
terminates in any event when the approved leave ends unless you immediately
return to active work.

The Company determines which leaves count for this purpose, and when your
service terminates for all purposes under the Plan.

Restrictions on Exercise

The Company will not permit you to exercise this option if the issuance of
Shares at that time would violate any law or regulation.

Notice of Exercise

When you wish to exercise this option, you must notify the Company by filing the
proper "Notice of Exercise" form at the address given on the form. Your notice
must specify how many Shares you wish to purchase. Your notice must also specify
how your Shares should be registered (in your name only or in you and your
spouse's names as community property or as joint tenants with right of
survivorship). The Notice will be effective when it is received by the Company.

If someone else wants to exercise this option after your death, that person must
prove to the Company's satisfaction that he or she is entitled to do so.

Periods of Nonexercisability

<PAGE>

Any other provision of this Agreement notwithstanding, the Company shall have
the right to designate one or more periods of time, each of which shall not
exceed 180 days in length, during which this option shall not be exercisable if
the Company determines (in its sole discretion) that such limitation on exercise
could in any way facilitate a lessening of any restriction on transfer pursuant
to the Securities Act or any state securities laws with respect to any issuance
of securities by the Company, facilitate the registration or qualification of
any securities by the Company under the Securities Act or any state securities
laws, or facilitate the perfection of any exemption from the registration or
qualification requirements of the Securities Act or any applicable state
securities laws for the issuance or transfer of any securities. Such limitation
on exercise shall not alter the vesting schedule set forth in this Agreement
other than to limit the periods during which this option shall be exercisable.

Form of Payment

When you submit your notice of exercise, you must include payment of the option
price for the Shares you are purchasing. Payment may be made in one (or a
combination) of the following forms:

o Your personal check, a cashier's check or a money order.

o To the extent that a public market for the Shares exists as determined by the
Company, by delivery (on a form prescribed by the Committee) of an irrevocable
direction to a securities broker to sell Shares and to deliver all or part of
the sale proceeds to the Company in payment of the aggregate Exercise Price.

Withholding Taxes

You will not be allowed to exercise this option unless you make acceptable
arrangements to pay any withholding or other taxes that may be due as a result
of the option exercise or the sale of shares acquired upon exercise of this
option and the sale of the shares.

Restrictions on Resale

In connection with any underwritten public offering by the Company of its equity
securities pursuant to an effective registration statement filed under the 1933
Act, you shall not sell, make any short sale of, loan, hypothecate, pledge,
grant any option for the purchase of, or otherwise dispose or transfer for value
or agree to engage in any of the foregoing transactions with respect to any
shares without the prior written consent of the Company or its underwriters, for
such period of time after the effective date of such registration statement as
may be requested by the Company or such underwriters (not to exceed one
hundred-eighty (180) days).

<PAGE>

In order to enforce the provisions of the foregoing paragraph, the Company may
impose stop-transfer instructions with respect to the shares until the end of
the applicable stand-off period.

You represent and agree that the Shares to be acquired upon exercising this
option will be acquired for investment, and not with a view to the sale or
distribution thereof. In the event that the sale of Shares under the Plan is not
registered under the Securities Act of 1933 but an exemption is available which
requires an investment representation or other representation, you shall
represent and agree at the time of exercise that the Shares being acquired upon
exercising this option are being acquired for investment, and not with a view to
the sale or distribution thereof, and shall make such other representations as
are deemed necessary or appropriate by the Company and its counsel.

Transfer of Option

Prior to your death, only you may exercise this option. You cannot transfer or
assign this option. For instance, you may not sell this option or use it as
security for a loan. If you attempt to do any of these tings, this option will
immediately become invalid. You may, however, dispose of this option in your
will.

Regardless of any marital property settlement agreement, the Company is not
obligated to honor a notice of exercise from your spouse or former spouse, nor
is the Company obligated to recognize such individual's interest in your option
in any other way.

Retention Rights

Your option or this Agreement do not give you the right to be retained by the
Company (or any subsidiaries) in any capacity. The Company (and any
subsidiaries) reserve the right to terminate your service at any time and for
any reason.

Shareholder Rights

You, or your estate or heirs, have no rights as a shareholder of the Company
until a certificate for your option Shares has been issued. No adjustments are
made for dividends or other rights if the applicable record date occurs before
your stock certificate is issued, except as described in the Plan.

Adjustments

In the event of a stock split, a stock dividend or a similar change in the
Company stock, the number of Shares covered by this option and the exercise
price per

<PAGE>

share may be adjusted pursuant to the Plan. Your option shall be subject to the
terms of the agreement of merger, liquidation or reorganization in the event the
Company is subject to such corporate activity.

Legends

In the event that the Shares under the Plan is not registered under the
Securities Act of 1933 all certificates representing the Shares issued upon
exercise of this option shall, where applicable, have endorsed thereon the
following legends:

      "THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
      SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED, OR
      OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH
      ACT OR AN OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY AND ITS COUNSEL,
      THAT SUCH REGISTRATION IS NOT REQUIRED."

Applicable Law

This Agreement will be interpreted and enforced under the internal laws of the
State of California

The Plan and Other Agreements

The text of the Plan is incorporated in this Agreement by reference. Certain
capitalized terms used in this Agreement are defined in the Plan.

This Agreement and the Plan constitute the entire understanding between you and
the Company regarding this option. Any prior agreements, commitments or
negotiations concerning this option are superseded.

By signing the cover sheet of this Agreement, you agree to all of the terms and
conditions described above and in the Plan.<PAGE>

                                                                    Exhibit 10.2

                               HEALTHCENTRAL.COM

                                1999 STOCK PLAN

                          (as amended January 2000)

     1.  Purposes of the Plan.  The purposes of this 1999 Stock Plan are to
         --------------------
attract and retain the best available personnel for positions of substantial
responsibility, to provide additional incentive to Employees and Consultants and
to promote the success of the Company's business.  Options granted under the
Plan may be Incentive Stock Options or Nonstatutory Stock Options, as determined
by the Administrator at the time of grant of an Option and subject to the
applicable provisions of Section 422 of the Code and the regulations promulgated
thereunder.  Stock Purchase Rights may also be granted under the Plan.

     2.  Definitions.  As used herein, the following definitions shall apply:
         -----------

          (a) "Administrator" means the Board or its Committee appointed
               -------------
pursuant to Section 4 of the Plan.

          (b) "Affiliate" means an entity other than a Subsidiary (as defined
               ---------
below) in which the Company owns an equity interest or which, together with the
Company, is under common control of a third person or entity.

          (c) "Applicable Laws" means the legal requirements relating to the
               ---------------
administration of stock option and restricted stock purchase plans under
applicable U.S. state corporate laws, U.S. federal and applicable state
securities laws, the Code, any Stock Exchange rules or regulations and the
applicable laws of any other country or jurisdiction where Options or Stock
Purchase Rights are granted under the Plan, as such laws, rules, regulations and
requirements shall be in place from time to time.

          (d) "Board" means the Board of Directors of the Company.
               -----

          (e) "Change in Control" means a sale of all or substantially all of
               -----------------
the Company's assets, or a merger, consolidation or other capital reorganization
of the Company with or into another corporation; provided however that a merger,
consolidation or other capital reorganization in which the holders of more than
50% of the shares of capital stock of the Company outstanding immediately prior
to such transaction continue to hold (either by the voting securities remaining
outstanding or by being converted into voting securities of the surviving
entity) more than 50% of the total voting power represented by the voting
securities of the Company, or such surviving entity, outstanding immediately
after such transaction shall not constitute a Change in Control.

          (f) "Code" means the Internal Revenue Code of 1986, as amended.
               ----

          (g) "Committee" means one or more committees or subcommittees of the
               ---------
Board appointed by the Board to administer the Plan in accordance with Section 4
below.
<PAGE>

          (h) "Common Stock" means the Common Stock of the Company.
               ------------

          (i) "Company" means HealthCentral.com, a California corporation.
               -------

          (j) "Consultant" means any person, including an advisor, who is
               ----------
engaged by the Company or any Parent, Subsidiary or Affiliate to render services
and is compensated for such services, and any director of the Company whether
compensated for such services or not.

          (k) "Continuous Service Status" means the absence of any interruption
               -------------------------
or termination of service as an Employee or Consultant.  Continuous Service
Status shall not be considered interrupted in the case of:  (i) sick leave; (ii)
military leave; (iii) any other leave of absence approved by the Administrator,
provided that such leave is for a period of not more than ninety (90) days,
unless reemployment upon the expiration of such leave is guaranteed by contract
or statute, or unless provided otherwise pursuant to Company policy adopted from
time to time; or (iv) in the case of transfers between locations of the Company
or between the Company, its Parents, Subsidiaries, Affiliates or their
respective successors.  Unless otherwise determined by the Administrator or the
Company, a change in status from an Employee to a Consultant or from a
Consultant to an Employee will not constitute an interruption of Continuous
Service Status.

          (l) "Corporate Transaction" means a sale of all or substantially all
               ---------------------
of the Company's assets, or a merger, consolidation or other capital
reorganization of the Company with or into another corporation.

          (m) "Director" means a member of the Board.
               --------

          (n) "Employee" means any person (including, if appropriate, any Named
               --------
Executive, officer or Director) employed by the Company or any Parent,
Subsidiary or Affiliate of the Company, with the status of employment determined
based upon such minimum number of hours or periods worked as shall be determined
by the Administrator in its discretion, subject to any requirements of the Code.
The payment by the Company of a director's fee to a Director shall not be
sufficient to constitute "employment" of such Director by the Company.

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

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

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

              (ii)      If the Common Stock is quoted on the Nasdaq System (but
not on the National Market thereof) or regularly quoted by a recognized
securities dealer but selling

                                      -2-
<PAGE>

prices are not reported, its Fair Market Value shall be the mean between the
high bid and low asked prices for the Common Stock for the date of determination
(or if no bids occurred on the date of determination, on the last trading day
prior to the date of determination); or

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

          (q) "Incentive Stock Option" means an Option intended to qualify as an
               ----------------------
incentive stock option within the meaning of Section 422 of the Code, as
designated in the applicable Option Agreement.

          (r) "Listed Security" means any security of the Company that is listed
               ---------------
or approved for listing on a national securities exchange or designated or
approved for designation as a national market system security on an interdealer
quotation system by the National Association of Securities Dealers, Inc.

          (s) "Named Executive" means any individual who, on the last day of the
               ---------------
Company's fiscal year, is the chief executive officer of the Company (or is
acting in such capacity) or among the four most highly compensated officers of
the Company (other than the chief executive officer).  Such officer status shall
be determined pursuant to the executive compensation disclosure rules under the
Exchange Act.

          (t) "Nonstatutory Stock Option" means an Option not intended to
               -------------------------
qualify as an Incentive Stock Option, as designated in the applicable Option
Agreement.

          (u) "Option" means a stock option granted pursuant to the Plan.
               ------

          (v) "Option Agreement" means a written document, the form(s) of which
               ----------------
shall be approved from time to time by the Administrator, reflecting the terms
of an Option granted under the Plan and includes any documents attached to or
incorporated into such Option Agreement, including, but not limited to, a notice
of stock option grant and a form of exercise notice.

          (w) "Option Exchange Program" means a program approved by the
               -----------------------
Administrator whereby outstanding Options are exchanged for Options with a lower
exercise price.

          (x) "Optioned Stock" means the Common Stock subject to an Option or a
               --------------
Stock Purchase Right.

          (y) "Optionee" means an Employee or Consultant who receives an Option.
               --------

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

          (aa) "Participant" means any holder of one or more Options or Stock
                -----------
Purchase Rights, or the Shares issuable or issued upon exercise of such awards,
under the Plan.

                                      -3-
<PAGE>

          (bb) "Plan" means this 1999 Stock Plan.
                ----

          (cc) "Reporting Person" means an officer, Director, or greater than
                ----------------
ten percent stockholder of the Company within the meaning of Rule 16a-2 under
the Exchange Act, who is required to file reports pursuant to Rule 16a-3 under
the Exchange Act.

          (dd) "Restricted Stock" means Shares of Common Stock acquired pursuant
                ----------------
to a grant of a Stock Purchase Right under Section 11 below.

          (ee) "Restricted Stock Purchase Agreement" means a written document,
                -----------------------------------
the form(s) of which shall be approved from time to time by the Administrator,
reflecting the terms of a Stock Purchase Right granted under the Plan and
includes any documents attached to such agreement.

          (ff) "Rule 16b-3" means Rule 16b-3 promulgated under the Exchange Act,
                ----------
as amended from time to time, or any successor provision.

          (gg) "Share" means a share of the Common Stock, as adjusted in
                -----
accordance with Section 14 of the Plan.

          (hh) "Stock Exchange" means any stock exchange or consolidated stock
                --------------
price reporting system on which prices for the Common Stock are quoted at any
given time.

          (ii) "Stock Purchase Right" means the right to purchase Common Stock
                --------------------
pursuant to Section 11 below.

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

          (kk) "Ten Percent Holder" means a person who owns stock representing
                ------------------
more than ten percent (10%) of the voting power of all classes of stock of the
Company or any Parent or Subsidiary.

     3.  Stock Subject to the Plan.  Subject to the provisions of Section 14 of
         -------------------------
the Plan, the maximum aggregate number of Shares that may be sold under the Plan
is 4,625,000 Shares of Common Stock (after giving effect to the Company's 5-for-
4 stock split effected in connection with its reincorporation under the laws of
Delaware and subject to further adjustment pursuant to Section 14 below), plus
an annual increase on the first day of each of the Company's fiscal years
beginning in 2001, 2002, 2003, 2004 and 2005 equal to the lesser of (i) 787,500
Shares (after giving effect to the Company's 5-for-4 stock split effected in
connection with its reincorporation under the laws of Delaware and subject to
further adjustment pursuant to Section 14 below), (ii) 3.5 percent of the Shares
outstanding on the last day of the immediately preceding fiscal year, or (iii)
such lesser number of Shares as the Board shall determine.  The Shares may be
authorized, but unissued, or reacquired Common Stock.  If an Option should
expire or become unexercisable for any reason without having been exercised in
full, or is surrendered pursuant to an Option Exchange Program, the unpurchased
Shares that were subject thereto shall, unless the Plan shall have been
terminated, become available for future grant under the Plan.  In addition, any
Shares of Common Stock which are retained by the Company upon exercise of an
Option or Stock Pur-

                                      -4-
<PAGE>

chase Right in order to satisfy the exercise or purchase price for such Option
or Stock Purchase Right or any withholding taxes due with respect to such
exercise or purchase shall be treated as not issued and shall continue to be
available under the Plan. Shares issued under the Plan and later repurchased by
the Company pursuant to any repurchase right which the Company may have shall
not be available for future grant under the Plan.

     4.  Administration of the Plan.
         --------------------------

          (a) General.  The Plan shall be administered by the Board or a
              -------
Committee, or a combination thereof, as determined by the Board.  The Plan may
be administered by different administrative bodies with respect to different
classes of Participants and, if permitted by the Applicable Laws, the Board may
authorize one or more officers to grant Options or Stock Purchase Rights to
Employees and Consultants.

          (b) Administration with respect to Reporting Persons.  With respect to
              ------------------------------------------------
Options granted to Reporting Persons and Named Executives, the Plan may (but
need not) be administered so as to permit such Options to qualify for the
exemption set forth in Rule 16b-3(d) and to qualify as performance-based
compensation under Section 162(m) of the Code.

          (c) Committee Composition.  If a Committee has been appointed pursuant
              ---------------------
to this Section 4, such Committee shall continue to serve in its designated
capacity until otherwise directed by the Board.  From time to time the Board may
increase the size of any Committee and appoint additional members thereof,
remove members (with or without cause) and appoint new members in substitution
therefor, fill vacancies (however caused) and remove all members of a Committee
and thereafter directly administer the Plan, all to the extent permitted by the
Applicable Laws and, in the case of a Committee administering the Plan pursuant
to Section 4(b) above, to the extent permitted or required by Rule 16b-3 and
Section 162(m) of the Code.

          (d) Powers of the Administrator.  Subject to the provisions of the
              ---------------------------
Plan and in the case of a Committee, the specific duties delegated by the Board
to such Committee, the Administrator shall have the authority, in its
discretion:

              (i)       to determine the Fair Market Value of the Common Stock,
in accordance with Section 2(p) of the Plan;

              (ii)      to select the Employees and Consultants to whom Options
and Stock Purchase Rights or any combination thereof may from time to time be
granted;

              (iii)     to determine whether and to what extent Options and
Stock Purchase Rights or any combination thereof are granted;

              (iv)      to determine the number of Shares of Common Stock to be
covered by each such award granted;

              (v)       to approve forms of agreement for use under the Plan;

              (vi)      to determine the terms and conditions, not inconsistent
with the terms of the Plan, of any award granted hereunder, which terms and
conditions include but are

                                      -5-
<PAGE>

not limited to the exercise or purchase price, the time or times when Options or
Stock Purchase Rights may be exercised (which may be based on performance
criteria), any vesting acceleration or waiver of forfeiture restrictions, and
any restriction or limitation regarding any Option, Optioned Stock, Stock
Purchase Right or Restricted Stock, based in each case on such factors as the
Administrator, in its sole discretion, shall determine;

              (vii)     to determine whether and under what circumstances an
Option may be settled in cash under Section 10(f) instead of Common Stock;

              (viii)    to reduce the exercise price of any Option to the then
current Fair Market Value if the Fair Market Value of the Common Stock covered
by such Option shall have declined since the date the Option was granted and to
make any other amendments or adjustments to any Option that the Administrator
determines, in its discretion and under the authority granted to it under the
Plan, to be necessary or advisable, provided however that no amendment or
adjustment to an Option that would materially and adversely affect the rights of
any Optionee shall be made without the prior written consent of the Optionee;

              (ix)      to determine the terms and restrictions applicable to
Stock Purchase Rights and the Restricted Stock purchased by exercising such
Stock Purchase Rights;

              (x)       to initiate an Option Exchange Program;

              (xi)      to construe and interpret the terms of the Plan and
awards granted under the Plan; and

              (xii)     in order to fulfill the purposes of the Plan and without
amending the Plan, to modify grants of Options or Stock Purchase Rights to
Participants who are foreign nationals or employed outside of the United States
in order to recognize differences in local law, tax policies or customs.

          (d) Effect of Administrator's Decision.  All decisions, determinations
              ----------------------------------
and interpretations of the Administrator shall be final and binding on all
Participants.

     5.  Eligibility.
         -----------

          (a) Recipients of Grants.  Nonstatutory Stock Options and Stock
              --------------------
Purchase Rights may be granted to Employees and Consultants.  Incentive Stock
Options may be granted only to Employees, provided however that Employees of
Affiliates shall not be eligible to receive Incentive Stock Options.  An
Employee or Consultant who has been granted an Option or Stock Purchase Right
may, if he or she is otherwise eligible, be granted additional Options or Stock
Purchase Rights.

          (b) Type of Option.  Each Option shall be designated in Option
              --------------
Agreement as either an Incentive Stock Option or a Nonstatutory Stock Option.
However, notwithstanding such designations, to the extent that the aggregate
Fair Market Value of Shares with respect to which Options designated as
Incentive Stock Options are exercisable for the first time by any Optionee
during any calendar year (under all plans of the Company or any Parent or
Subsidiary) exceeds $100,000, such excess Options shall be treated as
Nonstatutory Stock Options.  For

                                      -6-
<PAGE>

purposes of this Section 5(b), Incentive Stock Options shall be taken into
account in the order in which they were granted, and the Fair Market Value of
the Shares subject to an Incentive Stock Option shall be determined as of the
date of the grant of such Option.

          (c) No Employment Rights.  The Plan shall not confer upon any
              --------------------
Participant any right with respect to continuation of an employment or
consulting relationship with the Company, nor shall it interfere in any way with
such Participant's right or the Company's right to terminate his or her
employment or consulting relationship at any time, with or without cause.

     6.  Term of Plan.  The Plan shall become effective upon its adoption by the
         ------------
Board.  It shall continue in effect for a term of ten (10) years unless sooner
terminated under Section 16 of the Plan.

     7.  Term of Option.  The term of each Option shall be the term stated in
         --------------
the Option Agreement; provided however that the term shall be no more than ten
(10) years from the date of grant thereof or such shorter term as may be
provided in the Option Agreement and provided further that, in the case of an
Incentive Stock Option granted to a person who at the time of such grant is a
Ten Percent Holder, the term of the Option shall be five (5) years from the date
of grant thereof or such shorter term as may be provided in the Option
Agreement.

     8.  Limitation on Grants to Employees.  Subject to adjustment as provided
         ---------------------------------
in Section 14 below, the maximum number of Shares which may be subject to
Options and Stock Purchase Rights granted to any one Employee under this Plan
for any fiscal year of the Company shall be 2,000,000 (after giving effect to
the Company's 5-for-4 stock split effected in connection with its
reincorporation under the laws of Delaware and subject to further adjustment
pursuant to Section 14 below).

     9.  Option Exercise Price and Consideration.
         ---------------------------------------

          (a) Exercise Price.  The per Share exercise price for the Shares to be
              --------------
issued pursuant to exercise of an Option shall be such price as is determined by
the Administrator and set forth in the Option Agreement, but shall be subject to
the following:

              (i)       In the case of an Incentive Stock Option

                        (A) granted to an Employee who at the time of grant is a
Ten Percent Holder, the per Share exercise price shall be no less than 110% of
the Fair Market Value per Share on the date of grant; or

                        (B) granted to any other Employee, the per Share
exercise price shall be no less than 100% of the Fair Market Value per Share on
the date of grant.

              (ii)      In the case of a Nonstatutory Stock Option, the per
Share exercise price shall be such price as is determined by the Administrator;
provided however that in the case of a Nonstatutory Stock option granted to a
person who, at the time of the grant of such Option, is a Named Executive of the
Company, the per Share Exercise Price shall be no less than 100% of the Fair
Market Value on the date of grant if such Option is intended to qualify as

                                      -7-
<PAGE>

performance-based compensation under Section 162(m) of the Code and if not so
intended shall be such price as is determined by the Administrator.

              (iii)     Notwithstanding the foregoing, Options may be granted
with a per Share exercise price other than as required above pursuant to a
merger or other corporate transaction.

          (b) Permissible Consideration.  The consideration to be paid for the
              -------------------------
Shares to be issued upon exercise of an Option, including the method of payment,
shall be determined by the Administrator (and, in the case of an Incentive Stock
Option, shall be determined at the time of grant) and may consist entirely of
(1) cash; (2) check; (3) delivery of Optionee's promissory note with such
recourse, interest, security and redemption provisions as the Administrator
determines to be appropriate (subject, if applicable, to the provisions of
Section 153 of the Delaware General Corporation Law); (4) cancellation of
indebtedness; (5) other Shares that (x) in the case of Shares acquired upon
exercise of an Option either have been owned by the Optionee for more than six
months on the date of surrender (or such other period as may be required to
avoid a charge to the Company's earnings) or were not acquired, directly or
indirectly, from the Company, and (y) have a Fair Market Value on the date of
surrender equal to the aggregate exercise price of the Shares as to which the
Option is exercised; (6) authorization from the Company to retain from the total
number of Shares as to which the Option is exercised that number of Shares
having a Fair Market Value on the date of exercise equal to the exercise price
for the total number of Shares as to which the Option is exercised; (7) delivery
of a properly executed exercise notice together with such other documentation as
the Administrator and the broker, if applicable, shall require to effect
exercise of the Option and prompt delivery to the Company of the sale or loan
proceeds required to pay the exercise price and any applicable withholding
taxes; (8) any combination of the foregoing methods of payment; or (9) such
other consideration and method of payment for the issuance of Shares to the
extent permitted under the Applicable Laws.  In making its determination as to
the type of consideration to accept, the Administrator shall consider if
acceptance of such consideration may be reasonably expected to benefit the
Company and the Administrator may refuse to accept a particular form of
consideration at the time of any Option exercise if, in its sole discretion,
acceptance of such form of consideration is not in the best interests of the
Company at such time.

     10.  Exercise of Option.
          ------------------

          (a) Procedure for Exercise; Rights as a Stockholder. Any Option
              -----------------------------------------------
granted hereunder shall be exercisable at such times and under such conditions
as determined by the Administrator, consistent with the terms of the Plan, and
reflected in the Option Agreement, including vesting requirements and/or
performance criteria with respect to the Company and/or the Optionee.  The
Administrator shall have the discretion to determine whether and to what extent
the vesting of Options shall be tolled during any unpaid leave of absence.

              An Option may not be exercised for a fraction of a Share.

              An Option shall be deemed to be exercised when written notice of
such exercise has been given to the Company in accordance with the terms of the
Option by the person entitled to exercise the Option and the Company has
received full payment for the Shares with

                                      -8-
<PAGE>

respect to which the Option is exercised. Full payment may, as authorized by the
Administrator, consist of any consideration and method of payment allowable
under Section 9(b) of the Plan. Until the issuance (as evidenced by the
appropriate entry on the books of the Company or of a duly authorized transfer
agent of the Company) of the stock certificate evidencing such Shares, no right
to vote or receive dividends or any other rights as a stockholder shall exist
with respect to the Optioned Stock, not withstanding the exercise of the Option.
The Company shall issue (or cause to be issued) such stock certificate promptly
upon exercise of the Option. No adjustment will be made for a dividend or other
right for which the record date is prior to the date the stock certificate is
issued, except as provided in Section 14 of the Plan.

              Exercise of an Option in any manner shall result in a decrease in
the number of Shares that thereafter may be available, both for purposes of the
Plan and for sale under the Option, by the number of Shares as to which the
Option is exercised.

          (b) Termination of Employment or Consulting Relationship.  In the
              ----------------------------------------------------
event of termination of an Optionee's Continuous Service Status, such Optionee
may, but only within three (3) months (or such other period of time as is
determined by the Administrator, with such determination in the case of an
Incentive Stock Option being made at the time of grant of the Option) after the
date of such termination (but in no event later than the expiration date of the
term of such Option as set forth in the Option Agreement), exercise his or her
Option to the extent that the Optionee was entitled to exercise it at the date
of such termination.  To the extent that the Optionee was not entitled to
exercise the Option at the date of such termination, or if the Optionee does not
exercise such Option to the extent so entitled within the time specified herein,
the Option shall terminate.  Unless otherwise determined by the Administrator or
the Company, no termination shall be deemed to occur and this Section 10(b)
shall not apply if (i) the Optionee is a Consultant who becomes an Employee; or
(ii) the Optionee is an Employee who becomes a Consultant.

          (c) Disability of Optionee.   Notwithstanding Section 10(b) above,
              ----------------------

              (i)       In the event of termination of an Optionee's Continuous
Service Status as a result of his or her total and permanent disability (within
the meaning of Section 22(e)(3) of the Code), Optionee may, but only within
twelve (12) months (or such other period of time as is determined by the
Administrator, with such determination in the case of an Incentive Stock Option
made at the time of grant of the Option) from the date of such termination (but
in no event later than the expiration date of the term of such Option as set
forth in the Option Agreement), exercise the Option to the extent otherwise
entitled to exercise it at the date of such termination. To the extent that
Optionee was not entitled to exercise the Option at the date of termination, or
if Optionee does not exercise such Option to the extent so entitled within the
time specified herein, the Option shall terminate.

              (ii)      In the event of termination of an Optionee's Continuous
Service Status as a result of a disability which does not fall within the
meaning of total and permanent disability (as set forth in Section 22(e)(3) of
the Code), Optionee may, but only within six (6) months (or such other period of
time as is determined by the Administrator, with such determination in the case
of an Incentive Stock Option made at the time of grant of the Option) from the
date of such termination (but in no event later than the expiration date of the
term of

                                      -9-
<PAGE>

such Option as set forth in the Option Agreement), exercise the Option to the
extent otherwise entitled to exercise it at the date of such termination.
However, to the extent that such Optionee fails to exercise an Option which is
an Incentive Stock Option within three (3) months of the date of such
termination, the Option will not qualify for Incentive Stock Option treatment
under the Code. To the extent that Optionee was not entitled to exercise the
Option at the date of termination, or if Optionee does not exercise such Option
to the extent so entitled within six months (6) from the date of termination,
the Option shall terminate.

          (d) Death of Optionee.  Notwithstanding Section 10(b) above, in the
              -----------------
event of the death of an Optionee during the period of Continuous Service Status
since the date of grant of the Option, or within thirty (30) days following
termination of Optionee's Continuous Service Status, the Option may be
exercised, at any time within twelve (12) months (or such other period of time
as is determined by the Administrator, with such determination in the case of an
Incentive Stock Option made at the time of grant of the Option) following the
date of death (but in no event later than the expiration date of the term of
such Option as set forth in the Option Agreement), by Optionee's estate or by a
person who acquired the right to exercise the Option by bequest or inheritance,
but only to the extent of the right to exercise that had accrued at the date of
death or, if earlier, the date of termination of Optionee's Continuous Service
Status.  To the extent that Optionee was not entitled to exercise the Option at
the date of death or termination, as the case may be, or if Optionee does not
exercise such Option to the extent so entitled within the time specified herein,
the Option shall terminate.

          (e) Extension of Exercise Period.  The Administrator shall have full
              ----------------------------
power and authority to extend the period of time for which an Option is to
remain exercisable following termination of an Optionee's Continuous Service
Status from the periods set forth in Sections 10(b), 10(c) and 10(d) above or in
the Option Agreement to such greater time as the Administrator shall deem
appropriate, provided that in no event shall such Option be exercisable later
than the date of expiration of the term of such Option as set forth in the
Option Agreement.

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

     11.  Stock Purchase Rights.
          ---------------------

          (a) Rights to Purchase.  Stock Purchase Rights may be issued either
              ------------------
alone, in addition to, or in tandem with other awards granted under the Plan
and/or cash awards made outside of the Plan.  After the Administrator determines
that it will offer Stock Purchase Rights under the Plan, it shall advise the
offeree in writing of the terms, conditions and restrictions related to the
offer, including the number of Shares that such person shall be entitled to
purchase, the price to be paid, and the time within which such person must
accept such offer.  The purchase price of Shares subject to Stock Purchase
Rights shall be as determined by the Administrator in accordance with the
Applicable Laws.  The offer to purchase Shares subject to Stock Purchase Rights
shall be accepted by execution of a Restricted Stock Purchase Agreement in the
form determined by the Administrator.

                                      -10-
<PAGE>

          (b) Repurchase Option.  Unless the Administrator determines otherwise,
              -----------------
the Restricted Stock Purchase Agreement shall grant the Company a repurchase
option exercisable upon the voluntary or involuntary termination of the
purchaser's employment or consulting relationship with the Company for any
reason (including death or disability).  The purchase price for Shares
repurchased pursuant to the Restricted Stock Purchase Agreement shall be the
original purchase price paid by the purchaser and may be paid by cash or
cancellation of any indebtedness of the purchaser to the Company. The repurchase
option shall lapse at such rate as the Administrator may determine in accordance
with the Applicable Laws.

          (c) Other Provisions.  The Restricted Stock Purchase Agreement shall
              ----------------
contain such other terms, provisions and conditions not inconsistent with the
Plan as may be determined by the Administrator in its sole discretion.  In
addition, the provisions of Restricted Stock Purchase Agreements need not be the
same with respect to each purchaser.

          (d) Rights as a Stockholder.  Once the Stock Purchase Right is
              -----------------------
exercised, the purchaser shall have the rights equivalent to those of a
stockholder, and shall be a stockholder when his or her purchase is entered upon
the records of the duly authorized transfer agent of the Company.  No adjustment
will be made for a dividend or other right for which the record date is prior to
the date the Stock Purchase Right is exercised, except as provided in Section 14
of the Plan.

     12.  Taxes.
          -----

          (a) As a condition of the exercise of an Option or Stock Purchase
Right granted under the Plan, the Participant (or in the case of the
Participant's death, the person exercising the Option or Stock Purchase Right)
shall make such arrangements as the Administrator may require for the
satisfaction of any applicable federal, state, local or foreign withholding tax
obligations that may arise in connection with the exercise of Option or Stock
Purchase Right and the issuance of Shares.  The Company shall not be required to
issue any Shares under the Plan until such obligations are satisfied.

          (b) In the case of an Employee and in the absence of any other
arrangement, the Employee shall be deemed to have directed the Company to
withhold or collect from his or her compensation an amount sufficient to satisfy
such tax obligations from the next payroll payment otherwise payable after the
date of an exercise of the Option or Stock Purchase Right.

          (c) This Section 12(c) shall apply only after the date, if any, upon
which the Common Stock becomes a Listed Security.  In the case of Participant
other than an Employee (or in the case of an Employee where the next payroll
payment is not sufficient to satisfy such tax obligations, with respect to any
remaining tax obligations), in the absence of any other arrangement and to the
extent permitted under the Applicable Laws, the Participant shall be deemed to
have elected to have the Company withhold from the Shares to be issued upon
exercise of the Option or Stock Purchase Right that number of Shares having a
Fair Market Value determined as of the applicable Tax Date (as defined below)
equal to the minimum statutory withholding rates for federal and state tax
purposes, including payroll taxes, applicable to the exercise. For purposes of
this Section 12, the Fair Market Value of the Shares to be withheld shall be
determined on the date that the amount of tax to be withheld is to be
determined under the Applicable Laws (the "Tax Date").
                                           --------

                                      -11-
<PAGE>

          (d) If permitted by the Administrator, in its discretion, a
Participant may satisfy his or her tax withholding obligations upon exercise of
an Option or Stock Purchase Right by surrendering to the Company Shares that (i)
in the case of Shares previously acquired from the Company, have been owned by
the Participant for more than six (6) months on the date of surrender, and (ii)
have a Fair Market Value determined as of the applicable Tax Date equal to the
minimum statutory withholding rates for federal and state tax purposes,
including payroll taxes, applicable to the exercise.

          (e) Any election or deemed election by a Participant to have Shares
withheld to satisfy tax withholding obligations under Section 12(c) or (d) above
shall be irrevocable as to the particular Shares as to which the election is
made and shall be subject to the consent or disapproval of the Administrator.
Any election by a Participant under Section 12(d) above must be made on or prior
to the applicable Tax Date.

          (f) In the event an election to have Shares withheld is made by a
Participant and the Tax Date is deferred under Section 83 of the Code because no
election is filed under Section 83(b) of the Code, the Participant shall receive
the full number of Shares with respect to which the Option or Stock Purchase
Right is exercised but such Participant shall be unconditionally obligated to
tender back to the Company the proper number of Shares on the Tax Date.

     13.  Non-Transferability of Options and Stock Purchase Rights.  Options and
          --------------------------------------------------------
Stock Purchase Rights may not be sold, pledged, assigned, hypothecated,
transferred or disposed of in any manner other than by will or by the laws of
descent or distribution; provided that the Administrator may in its discretion
and to the extent permitted by the Applicable Laws grant transferable
Nonstatutory Stock Options pursuant to Option Agreements specifying (i) the
manner in which such Nonstatutory Stock Options are transferable and (ii) that
any such transfer shall be subject to the Applicable Laws.  The designation of a
beneficiary by an Optionee will not constitute a transfer.  An Option or Stock
Purchase Right may be exercised, during the lifetime of the holder of Option or
Stock Purchase Right, only by such holder or a transferee permitted by this
Section 13.

     14.  Adjustments Upon Changes in Capitalization, Merger or Certain Other
          -------------------------------------------------------------------
Transactions.
------------

          (a) Changes in Capitalization.  Subject to any required action by the
              -------------------------
stockholders of the Company, the number of Shares of Common Stock covered by
each outstanding Option or Stock Purchase Right, the number of Shares set forth
in Sections 3(a)(i) and 8 above, and the number of Shares of Common Stock that
have been authorized for issuance under the Plan but as to which no Options or
Stock Purchase Rights have yet been granted or that have been returned to the
Plan upon cancellation or expiration of an Option or Stock Purchase Right, as
well as the price per Share of Common Stock covered by each such outstanding
Option or Stock Purchase Right, shall be proportionately adjusted for any
increase or decrease in the number of issued Shares of Common Stock resulting
from a stock split, reverse stock split, stock dividend, combination,
recapitalization or reclassification of the Common Stock, or any other increase
or decrease in the number of issued Shares of Common Stock effected without
receipt of consideration by the Company; provided however that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration."  Such

                                      -12-
<PAGE>

adjustment shall be made by the Administrator, whose determination in that
respect shall be final, binding and conclusive. Except as expressly provided
herein, no issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall affect, and no
adjustment by reason thereof shall be made with respect to, the number or price
of Shares of Common Stock subject to an Option or Stock Purchase Right.

          (b) Dissolution or Liquidation.  In the event of the proposed
              --------------------------
dissolution or liquidation of the Company, the Board shall notify the Optionee
at least fifteen (15) days prior to such proposed action.  To the extent it has
not been previously exercised, the Option or Stock Purchase Right will terminate
immediately prior to the consummation of such proposed action.

          (c) Corporate Transaction; Change in Control.  In the event of a
              ----------------------------------------
Corporate Transaction or a Change in Control, each outstanding Option and Stock
Purchase Right shall be assumed or an equivalent option or right shall be
substituted by the successor corporation or a Parent or Subsidiary of such
successor corporation (such entity, the "Successor Corporation"), unless the
                                         ---------------------
Successor Corporation does not agree to assume the outstanding Options or Stock
Purchase Rights or to substitute equivalent options or rights, in which case
such Options or Stock Purchase Rights shall terminate upon the consummation of
the transaction. In the event of a transaction that qualifies as a Change
Control (i) in which outstanding awards are being continued, assumed or
substituted, the vesting and exercisability of each outstanding Option and Stock
Purchase Right shall accelerate such that (A) with respect to awards held by
optionees who are not Officers (as defined below), such awards shall become
vested and exercisable to the extent of 50% of the Shares then unvested, and any
repurchase right of the Company with respect to Shares issued upon exercise of
an Option or Stock Purchase Right shall lapse as to 50% of the Shares subject to
such repurchase right prior to consummation of the Change in Control, and the
vesting and exercisability of the awards shall thereafter continue on the
schedule set forth in the applicable agreement (subject to continued service
requirements), and (B) with respect to awards held by optionees who are
Officers, such awards shall become vested and exercisable to the extent of 50%
of the Shares then unvested, and any repurchase right of the Company with
respect to Shares issued upon exercise of an Option or Stock Purchase Right
shall lapse as to 50% of the Shares subject to such repurchase right prior to
consummation of the Change in Control, and the vesting and exercisability
schedule of the awards thereafter shall be reset such the Shares remaning
unvested as of the consummation of the transaction shall vest as to 1/12th of
such remaining Shares each month following such consummation (subject to
continued service requirements), and (ii) in which outstanding awards are
terminating, the vesting and exercisability of each outstanding Option and Stock
Purchase Right shall accelerate such that the Options and Stock Purchase Rights
shall become vested and exercisable to the extent of 100% of the Shares then
unvested, and any repurchase right of the Company with respect to Shares issued
upon exercise of an Option or Stock Purchase Right shall lapse as to 100% of the
Shares subject to such repurchase right prior to consummation of the Change in
Control, in each case upon such conditions as the Administrator shall determine.
For purposes of this Section 14(c), an "Officer" means any employee holding at
least the position of Vice President. To the extent that an Option or Stock
Purchase Right is not exercised prior to consummation of a Corporate Transaction
or Change in Control in which the Option or Stock Purchase Right is terminating,
such Option or Stock Purchase Right shall terminate upon such consummation.

          For purposes of this Section 14, an Option shall be considered
assumed, without limitation, if, at the time of issuance of the stock or other
consideration upon a Corporate Transaction or Change of Control, as the case may
be, each holder of an Option would be entitled to receive upon exercise of the
Option the same number and kind of shares of stock or the same amount of
property, cash or securities as such holder would have been entitled to receive
upon the occurrence of the transaction if the holder had been, immediately prior
to such transaction, the holder of the number of Shares of Common Stock covered
by the Option at such time (after giving effect to any adjustments in the number
of Shares covered by the Option as provided for in this Section 14); provided,
however, that if such consideration received in the transaction was not solely
common stock of the Successor Corporation, the Administrator may, with the
consent of the Successor Corporation, provide for the consideration to be
received upon exercise of the

                                      -13-
<PAGE>

Option to be solely Common Stock of the Successor Corporation equal to the Fair
Market Value of the per Share consideration received by holders of Common Stock
in the transaction.

          (d) Certain Distributions.  In the event of any distribution to the
              ---------------------
Company's stockholders of securities of any other entity or other assets (other
than dividends payable in cash or stock of the Company) without receipt of
consideration by the Company, the Administrator may, in its discretion,
appropriately adjust the price per Share of Common Stock covered by each
outstanding Option or Stock Purchase Right to reflect the effect of such
distribution.

          (e) Limitation on Payments.  In the event that the vesting
              ----------------------
acceleration provided for in subsection (c) above (x) constitutes "parachute
payments" within the meaning of Section 280G of the Internal Revenue Code (the

"Code"), and (y) but for this Section 14(e) would be subject to the excise tax
-----
imposed by Section 4999 of the Code (or any corresponding provisions of state
income tax law), then such vesting acceleration shall be either

                 (A)  delivered in full, or

                 (B)  delivered as to such lesser extent which would result in
no portion of such severance benefits being subject to excise tax under Code
Section 4999,

whichever of the foregoing amounts, taking into account the applicable federal,
state and local income taxes and the excise tax imposed by Code Section 4999,
results in the receipt by the optionee on an after-tax basis of the greater
amount of acceleration benefits, notwithstanding that all or some portion of
such benefits may be taxable under Code Section 4999. Any determination required
under this Section 14(e) shall be made in writing by the Company's independent
accountants or other outside tax advisors, whose determination shall be based on
factual assertions provided by the Company, and which will be conclusive and
binding for all purposes on the Company and the optionee. In the event that (A)
above applies, then the optionee shall be responsible for any excise taxes
imposed with respect to such benefits. In the event that (B) above applies, then
each benefit provided hereunder shall be proportionately reduced to the extent
necessary to avoid imposition of such excise taxes.

     15.  Time of Granting Options and Stock Purchase Rights.  The date of grant
          --------------------------------------------------
of an Option or Stock Purchase Right shall, for all purposes, be the date on
which the Administrator makes the determination granting such Option or Stock
Purchase Right, or such other date as is determined by the Administrator;
provided however that in the case of any Incentive Stock Option, the grant date
shall be the later of the date on which the Administrator makes the
determination granting such Incentive Stock Option or the date of commencement
of the Optionee's employment relationship with the Company.  Notice of the
determination shall be given to each Employee or Consultant to whom an Option or
Stock Purchase Right is so granted within a reasonable time after the date of
such grant.

     16.  Amendment and Termination of the Plan.
          -------------------------------------

          (a) Authority to Amend or Terminate.  The Board may at any time amend,
              -------------------------------
alter, suspend or discontinue the Plan, but no amendment, alteration, suspension
or discontinuation (other than an adjustment pursuant to Section 14 above) shall
be made that would materially and adversely affect the rights of any
Participant, without his or her consent.  In addition, to the extent necessary
and desirable to comply with the Applicable Laws, the Company shall obtain
stockholder approval of any Plan amendment in such a manner and to such a degree
as required.

          (b) Effect of Amendment or Termination.  No amendment or termination
              ----------------------------------
of the Plan shall materially and adversely affect Options or Stock Purchase
Rights already granted, unless mutually agreed otherwise between the Participant
and the Administrator, which agreement must be in writing and signed by the
Participant and the Company.

     17.  Conditions Upon Issuance of Shares.  Notwithstanding any other
          ----------------------------------
provision of the Plan or any agreement entered into by the Company pursuant to
the Plan, the Company shall not be obligated, and shall have no liability for
failure, to issue or deliver any Shares under the Plan unless such issuance or
delivery would comply with the Applicable Laws, with such compliance determined
by the Company in consultation with its legal counsel.  As a condition to the
exercise of an Option or Stock Purchase Right, the Company may require the
person exercising such Option or Stock Purchase Right to represent and warrant
at the time of any such exercise that the Shares are being purchased only for
investment and without any present intention to sell or distribute such Shares
if, in the opinion of counsel for the Company, such a representation is required
by law.

                                      -14-
<PAGE>

     18.  Reservation of Shares.  The Company, during the term of this Plan,
          ---------------------
will at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.

     19.  Agreements.  Options and Stock Purchase Rights shall be evidenced by
          ----------
Option Agreements and Restricted Stock Purchase Agreements, respectively, in
such form(s) as the Administrator shall from time to time approve.

     20.  Stockholder Approval.  If required by the Applicable Laws, continuance
          --------------------
of the Plan shall be subject to approval by the stockholders of the Company
within twelve (12) months before or after the date the Plan is adopted.  Such
stockholder approval shall be obtained in the manner and to the degree required
under the Applicable Laws.

                                      -15-
<PAGE>

                  [Post-IPO Officer Form of Option Agreement]

                               HEALTHCENTRAL.COM

                                1999 STOCK PLAN

                          NOTICE OF STOCK OPTION GRANT
                          ----------------------------

Optionee

     You have been granted an option to purchase Common Stock of
HealthCentral.com (the "Company") as follows:
                        -------

  Board Approval Date:                GrantDate

  Date of Grant (Later of Board
  Approval Date or Commencement of
  Employment/Consulting):             GrantDate

  Exercise Price Per Share:           PricePerShare

  Total Number of Shares Granted:     NumberofShares

  Total Price of Shares Granted:      TotalExercisePrice

  Type of Option:                     NoSharesISO Incentive Stock Option
                                      -------------
                                      NoSharesNSO Nonstatutory Stock Option
                                      -------------

  Term/Expiration Date:               Expiration

  Vesting Commencement Date:          VestingCommencement

  Vesting Schedule:                   VestingSchedule: One fourth of the total
                                      shares vests on the annual anniversary
                                      of the vesting commencement date and
                                      1/48 of the total shares vests on the
                                      monthly anniversary of the vesting
                                      commencement date thereafter.

  Termination Period:                 Option may be exercised for a period of
                                      ______ after termination of employment or
                                      consulting relationship except as set out
                                      in Sections 7 and 8 of the Stock Option
                                      Agreement (but in no event later than the
                                      Expiration Date).

     By your signature and the signature of the Company's representative below,
you and the Company agree that this option is granted under and governed by the
terms and conditions of the HealthCentral.com 1999 Stock Plan and the Stock
Option Agreement, all of which are attached and made a part of this document.

                                      -1-
<PAGE>

OPTIONEE                          HEALTHCENTRAL.COM

                                  By:
-----------------------               ---------------------
Signature

Address:                          Title:
        ---------------                 -------------------
-----------------------

                                      -2-
<PAGE>

                               HEALTHCENTRAL.COM
                             STOCK OPTION AGREEMENT
                             ----------------------

      1.  Grant of Option.
          ---------------

          (a) General Terms.  HealthCentral.com (the "Company"), hereby grants
              -------------                           -------
to the Optionee named in the Notice of Stock Option Grant attached to this
Agreement ("Optionee"), an option (the "Option") to purchase the total number of
            --------                    ------
shares of Common Stock (the "Shares") set forth in the Notice of Stock Option
                             ------
Grant, at the exercise price per share set forth in the Notice of Stock Option
Grant (the "Exercise Price") subject to the terms, definitions and provisions of
            --------------
the 1999 Stock Plan (the "Plan") adopted by the Company, which is incorporated
                          ----
in this Agreement by reference.  In the event of a conflict between the terms of
the Plan and the terms of this Agreement, the terms of the Plan shall govern.
Unless otherwise defined in this Agreement, the terms used in this Agreement
shall have the meanings defined in the Plan.

          (b) Tax Status of Option.  Unless and to the extent designated a
              --------------------
Nonstatutory Stock Option in the Notice of Stock Option Grant, this Option is
intended to be an Incentive Stock Option as defined in Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code"), to the maximum extent
                                                ----
permitted under applicable tax law.  If any portion of this Option is designated
as an Incentive Stock Option it shall qualify as such only to the extent that
the aggregate fair market value of the Shares (generally, the Option's exercise
price) subject to this Option (and all other Incentive Stock Options granted to
Optionee by the Company or any Parent or Subsidiary) that first become
exercisable in any calendar year does not exceed $100,000.  To the extent that
the aggregate fair market value of such Shares exceeds $100,000, the Shares in
excess of such limit shall be treated as subject to a Nonstatutory Stock Option,
in accordance with Section 5 of the Plan.

      2.  Exercise of Option.  This Option shall be exercisable during its term
          ------------------
in accordance with the Vesting Schedule set out in the Notice of Stock Option
Grant and with the provisions of Sections 9 and 10 of the Plan as follows:

          (a)  Right to Exercise.
               -----------------

               (i) This Option may not be exercised for a fraction of a share.

              (ii) In the event of Optionee's death, disability or other
termination of employment, the exercisability of the Option is governed by this
Section 2 and by Sections 6, 7 and 8 below.

             (iii) In no event may this Option be exercised after the Expiration
Date of the Option as set forth in the Notice of Stock Option Grant.

          (b)  Method of Exercise.
               ------------------

              (i) This Option shall be exercisable by delivering to the Company
a written notice of exercise (in the form attached as Exhibit A) which shall
                                                      ---------
state the election to exercise the Option, the number of Shares in respect of
which the Option is being exercised, and such other representations and
agreements as to the holder's investment intent with respect to such Shares of
Common Stock as may be required by the Company pursuant to the provisions of the
Plan. Such written notice shall be signed by Optionee and shall be delivered in
person or by certified mail to the Secretary of the Company. The written notice
shall be accompanied by payment of the Exercise Price. This Option

                                      -1-
<PAGE>

shall be deemed to be exercised upon receipt by the Company of such written
notice accompanied by the Exercise Price.

           (ii) As a condition to the exercise of this Option, Optionee agrees
to make adequate provision for federal, state or other tax withholding
obligations, if any, which arise upon the exercise of the Option or disposition
of Shares, whether by withholding, direct payment to the Company, or otherwise.

          (iii) No Shares will be issued pursuant to the exercise of an Option
unless such issuance and such exercise shall comply with all relevant provisions
of law and the requirements of any stock exchange upon which the Shares may then
be listed.  Assuming such compliance, for income tax purposes the Shares shall
be considered transferred to Optionee on the date on which the Option is
exercised with respect to such Shares.

     3.  Optionee's Representations.  In the event the Shares purchasable
         --------------------------
pursuant to the exercise of this Option have not been registered under the
Securities Act of 1933, as amended (the "Securities Act"), at the time this
                                         --------------
Option is exercised, Optionee shall, if required by the Company, concurrently
with the exercise of all or any portion of this Option, deliver to the Company
an investment representation statement in customary form, a copy of which is
available for Optionee's review from the Company upon request.

     4.  Method of Payment.  Payment of the Exercise Price shall be by any of
         -----------------
the following, or a combination of the following, at the election of Optionee:
(a) cash; (b) check; (c) surrender of other Shares of Common Stock of the
Company that (i) either have been owned by Optionee for more than six (6) months
on the date of surrender or were not acquired, directly or indirectly, from the
Company, and (ii) have a Fair Market Value on the date of surrender equal to the
aggregate exercise price of the Shares as to which the Option shall be
exercised; or (d) if there is a public market for the Shares and they are
registered under the Securities Act, delivery of a properly executed exercise
notice together with irrevocable instructions to a broker to deliver promptly
to the Company the amount of sale or loan proceeds required to pay the
exercise price.

     5.  Restrictions on Exercise.  This Option may not be exercised until such
         ------------------------
time as the Plan has been approved by the stockholders of the Company, or if the
issuance of such Shares upon such exercise or the method of payment of
consideration for such shares would constitute a violation of any applicable
federal or state securities or other law or regulation, including any rule under
Part 207 of Title 12 of the Code of Federal Regulations ("Regulation G") as
                                                          ------------
promulgated by the Federal Reserve Board.  As a condition to the exercise of
this Option, the Company may require Optionee to make any representation and
warranty to the Company as may be required by any applicable law or regulation.

     6.  Termination of Relationship.  In the event of termination of Optionee's
         ---------------------------
Continuous Service Status, Optionee may, to the extent otherwise so entitled at
the date of such termination (the "Termination Date"), exercise this Option
                                   ----------------
during the Termination Period set out in the Notice of Stock Option Grant.  To
the extent that Optionee was not entitled to exercise this Option at the date of
such termination, or if Optionee does not exercise this Option within the time
specified in the Notice of Stock Option Grant, the Option shall terminate.

     7.  Disability of Optionee.  Notwithstanding the provisions of Section 6
         ----------------------
above, in the event of termination of Optionee's Continuous Service Status as a
result of total and permanent disability (as

                                      -2-
<PAGE>

defined in Section 22(e)(3) of the Code), Optionee may, but only within twelve
(12) months from the date of termination of employment (but in no event later
than the Expiration Date of the Option as set forth in the Notice of Stock
Option Grant), exercise the Option to the extent otherwise so entitled at the
date of such termination. To the extent that Optionee was not entitled to
exercise the Option at the date of termination, or if Optionee does not exercise
such Option (to the extent otherwise so entitled) within the time specified in
this Agreement, the Option shall terminate.

     8.  Death of Optionee.  In the event of the death of Optionee (a) during
         -----------------
the term of this Option and while an Employee or Consultant of the Company and
having been in Continuous Service Status since the date of grant of the Option,
or (b) within thirty (30) days after the termination of Optionee's Continuous
Service Status, the Option may be exercised, at any time within twelve (12)
months following the date of death (but in no event later than the Expiration
Date of the Option as set forth in the Notice of Stock Option Grant), by
Optionee's estate or by a person who acquired the right to exercise the Option
by bequest or inheritance, but only to the extent of the right to exercise that
had accrued at the date of death or termination, as applicable.  To the extent
that Optionee was not entitled to exercise this Option at the date of death or
termination, as applicable, or if Optionee's estate or the person who acquired
the right to exercise the Option as a result of Optionee's death does not
exercise this Option within the time specified in the Notice of Stock Option
Grant, the Option shall terminate

     9.  Non-Transferability of Option.  Except as otherwise provided in this
         -----------------------------
Section 9, this Option may not be transferred in any manner otherwise than by
will or by the laws of descent or distribution and may be exercised during the
lifetime of Optionee only by him or her.  However, Optionee, with the approval
of the Administrator, may transfer the Option to or for the benefit of one or
more members of Optionee's Immediate Family (as defined below), including,
without limitation, to a trust for the benefit of one or more members of
Optionee's Immediate Family or to a partnership or limited liability company
composed of one or more members of Optionee's Immediate Family, and subject to
such limits as the Administrator may establish.  The terms of this Option shall
be binding upon the executors, administrators, heirs, successors and permitted
transferees of Optionee.  No transfer for consideration shall be permitted
except to a partnership or limited liability company composed of one or more
members of Optionee's Immediate Family.

     The foregoing right to transfer the Option shall apply to the right to
consent to amendments to this Agreement and, in the discretion of the
Administrator, shall also apply to the right to transfer ancillary rights
associated with the Option.  The term "Immediate Family" shall mean Optionee's
spouse or former spouse, parents, children, stepchildren, adoptive
relationships, sisters, brothers, grandchildren, nieces, nephews, mother-in-law,
father-in-law, sons-in-law, daughters-in-law, brothers-in-law or sisters-in-law
(and, for this purpose, shall also include Optionee). Optionee acknowledges and
agrees that Optionee shall be responsible for payment of any applicable income
and employment tax withholdings imposed upon the transfer and/or subsequent
exercise of a transferred Option, and such transfer and the transferee's right
to receive the shares subject to this Option upon exercise thereof is
conditioned on satisfaction of such withholding taxes as the Company determines
may be due.

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

     11.  No Additional Employment Rights.  Optionee understands and agrees that
          -------------------------------
the vesting of Shares pursuant to the Vesting Schedule is earned only by
continuing as an Employee or Consultant at the will of the Company (not through
the act of being hired, being granted this Option or acquiring Shares under this
Agreement).  Optionee further acknowledges and agrees that nothing in this
Agreement

                                      -3-
<PAGE>

or the Plan shall confer upon Optionee any right with respect to continuation as
an Employee or Consultant with the Company, nor shall it interfere in any way
with his or her right or the Company's right to terminate his or her employment
or consulting relationship at any time, with or without cause.

     12.  Tax Consequences.  Optionee acknowledges that he or she has read the
          ----------------
brief summary set forth below of certain federal tax consequences of exercise of
this Option and disposition of the Shares under the law in effect as of the date
of grant.  OPTIONEE UNDERSTANDS THAT THIS SUMMARY IS NECESSARILY INCOMPLETE AND
DOES NOT ADDRESS STATE, LOCAL OR FOREIGN ISSUES, AND THAT THE TAX LAWS AND
REGULATIONS SUMMARIZED ARE SUBJECT TO CHANGE.  OPTIONEE SHOULD CONSULT HIS OR
HER OWN TAX ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE SHARES.

          (a) Exercise of Incentive Stock Option.  If this Option is an
              ----------------------------------
Incentive Stock Option, there will be no regular federal 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 an item of alternative minimum taxable income for federal tax
purposes and may subject Optionee to the alternative minimum tax in the year of
exercise.

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

          (c) Disposition of Shares.  If this Option is an Incentive Stock
              ---------------------
Option and if Shares transferred pursuant to the Option are held for more than
one year after exercise and more than two years after the Date of Grant, any
gain realized on disposition of the Shares will be treated as long-term capital
gain for federal income tax purposes.  If Shares purchased under an Incentive
Stock Option are disposed of before the end of either of such two holding
periods, then 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 lesser of (i) the fair market value of the Shares on the
date of exercise, or (ii) the sales proceeds, over the Exercise Price.  If this
Option is a Nonstatutory Stock Option, then gain realized on the disposition of
Shares will be treated as long-term or short-term capital gain depending on
whether or not the disposition occurs more than one year after the exercise
date.  In the case of either an Incentive Stock Option or a Nonstatutory Stock
Option, the long-term capital gain will be taxed for federal income tax and
alternative minimum tax purposes as a maximum rate of 20% if the Shares are held
more than one year after exercise.

          (d) Notice of Disqualifying Disposition.  If the Option granted to
              -----------------------------------
Optionee in this Agreement is an Incentive Stock Option, and if Optionee sells
or otherwise disposes of any of the Shares acquired pursuant to the Incentive
Stock Option on or before the later of (i) the date two years after the Date of
Grant, or (ii) the date one year after transfer of such Shares to Optionee upon
exercise of the Incentive Stock Option, Optionee shall notify the Company in
writing within thirty (30) days after the date of any such disposition.
Optionee agrees that Optionee may be subject to income tax withholding by the
Company on the compensation income recognized by Optionee from the early
disposition by payment in cash or out of the current earnings paid to Optionee.

     13.  Withholding Tax Obligations.
          ---------------------------

                                      -4-
<PAGE>

          (a) General Withholding Obligations.  As a condition to the exercise
              -------------------------------
of Option granted hereunder, Optionee shall make such arrangements as the
Administrator may require for the satisfaction of any federal, state, local or
foreign withholding tax obligations that may arise in connection with the
exercise, receipt or vesting of the Option.  The Company shall not be required
to issue any Shares under the Plan until such obligations are satisfied.
Optionee understands that, upon exercising a Nonstatutory Stock Option, he or
she will recognize income for tax purposes in an amount equal to the excess of
the then Fair Market Value of the Shares over the Exercise Price.  If Optionee
is an employee, the Company will be required to withhold from Optionee's
compensation, or collect from Optionee and pay to the applicable taxing
authorities an amount equal to a percentage of this compensation income.
Additionally, Optionee may at some point be required to satisfy tax withholding
obligations with respect to the disqualifying disposition of an Incentive Stock
Option. Optionee shall satisfy his or her tax withholding obligation arising
upon the exercise of this Option by one or some combination of the following
methods:  (i) by cash or check payment, (ii) out of Optionee's current
compensation, (iii) if permitted by the Administrator, in its discretion, by
surrendering to the Company Shares which (A) in the case of Shares previously
acquired from the Company, have been owned by Optionee for more than six months
on the date of surrender, and (B) have a Fair Market Value determined as of the
applicable Tax Date (as defined in Section 11(c) below) on the date of surrender
equal to the amount required to be withheld, or (iv) by electing to have the
Company withhold from the Shares to be issued upon exercise of the Option that
number of Shares having a Fair Market Value determined as of the applicable Tax
Date equal to the amount required to be withheld.

          (b) Stock Withholding to Satisfy Withholding Tax Obligations.  In the
              --------------------------------------------------------
event the Administrator allows Optionee to satisfy his or her tax withholding
obligations as provided in Section 11(a)(iii) or (iv) above, such satisfaction
must comply with the requirements of this Section (11)(b) and all Applicable
Laws.  All elections by Optionee to have Shares withheld to satisfy tax
withholding obligations shall be made in writing in a form acceptable to the
Administrator and shall be subject to the following restrictions:

             (i) the election must be made on or prior to the applicable Tax
Date (as defined in Section 11(c) below);

            (ii) once made, the election shall be irrevocable as to the
particular Shares of the Option as to which the election is made; and

            (iii) all elections shall be subject to the consent or
disapproval of the Administrator.

     In the event the election to have Shares withheld is made by Optionee and
the Tax Date is deferred under Section 83 of the Code because no election is
filed under Section 83(b) of the Code, Optionee shall receive the full number of
Shares with respect to which the Option is exercised but Optionee shall be
unconditionally obligated to tender back to the Company the proper number of
Shares on the Tax Date.

          (c) Definitions.  For purposes of this Section 11, the Fair Market
              -----------
Value of the Shares to be withheld shall be determined on the date that the
amount of tax to be withheld is to be determined under the applicable laws (the
"Tax Date").
 --------

     14.  Signature.  This Stock Option Agreement shall be deemed executed by
          ---------
the Company and Optionee upon execution by such parties of the Notice of Stock
Option Grant attached to this Stock Option Agreement.

                                      -5-
<PAGE>

                  [Remainder of page left intentionally blank]

                                      -6-
<PAGE>

                                   EXHIBIT A
                                   ---------

                               NOTICE OF EXERCISE
                               ------------------

To:       HealthCentral.com
Attn:     Stock Option Administrator
Subject:  Notice of Intention to Exercise Stock Option
          --------------------------------------------

     This is official notice that the undersigned ("Optionee") intends to
                                                    --------
exercise Optionee's option to purchase __________ shares of HealthCentral.com
Common Stock, under and pursuant to the Company's 1999 Stock Plan and the Stock
Option Agreement dated ___________, as follows:

          Grant Number:  ________________________________

          Date of Purchase:  ________________________________

          Number of Shares:  ________________________________

          Purchase Price:  ________________________________

          Method of Payment

          of Purchase Price:  ________________________________

     Social Security No.:  ________________________________

     The shares should be issued as follows:

          Name:
                     ________________________________

          Address:
                     ________________________________
          Signed:
                     ________________________________
          Date:
                     ________________________________
<PAGE>

                               HEALTHCENTRAL.COM

                                1999 STOCK PLAN

                          NOTICE OF STOCK OPTION GRANT
                          ----------------------------

Optionee

     You have been granted an option to purchase Common Stock of
HealthCentral.com (the "Company") as follows:
                        -------

  Board Approval Date:                    GrantDate

  Date of Grant (Later of Board
  Approval Date or Commencement of
  Employment/Consulting):                 GrantDate

  Exercise Price Per Share:               PricePerShare

  Total Number of Shares Granted:         NumberofShares

  Total Price of Shares Granted:          TotalExercisePrice

  Type of Option:                         NoSharesISO Incentive Stock Option
                                          -------------
                                          NoSharesNSO Nonstatutory Stock Option
                                          -------------

  Term/Expiration Date:                   Expiration

  Vesting Commencement Date:              VestingCommencement

  Vesting Schedule:                       VestingSchedule

  Termination Period:                     Option may be exercised for a period
                                          of ______ after termination of
                                          employment or consulting relationship
                                          except as set out in Sections 7 and 8
                                          of the Stock Option Agreement (but in
                                          no event later than the Expiration
                                          Date).

     By your signature and the signature of the Company's representative below,
you and the Company agree that this option is granted under and governed by the
terms and conditions of the HealthCentral.com 1999 Stock Plan and the Stock
Option Agreement, all of which are attached and made a part of this document.

OPTIONEE                           HEALTHCENTRAL.COM

                                   By:
---------------------------           ----------------------------
Signature

Address:                           Title:
        -------------------              -------------------------

---------------------------
                                      -1-
<PAGE>

                               HEALTHCENTRAL.COM
                             STOCK OPTION AGREEMENT
                             ----------------------

     1.  Grant of Option.
         ---------------

          (a) General Terms.  HealthCentral.com (the "Company"), hereby grants
              -------------                           -------
to the Optionee named in the Notice of Stock Option Grant attached to this
Agreement ("Optionee"), an option (the "Option") to purchase the total number of
            --------                    ------
shares of Common Stock (the "Shares") set forth in the Notice of Stock Option
                             ------
Grant, at the exercise price per share set forth in the Notice of Stock Option
Grant (the "Exercise Price") subject to the terms, definitions and provisions of
            --------------
the 1999 Stock Plan (the "Plan") adopted by the Company, which is incorporated
                          ----
in this Agreement by reference.  In the event of a conflict between the terms of
the Plan and the terms of this Agreement, the terms of the Plan shall govern.
Unless otherwise defined in this Agreement, the terms used in this Agreement
shall have the meanings defined in the Plan.

          (b) Tax Status of Option.  Unless and to the extent designated a
              --------------------
Nonstatutory Stock Option in the Notice of Stock Option Grant, this Option is
intended to be an Incentive Stock Option as defined in Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code"), to the maximum extent
                                                ----
permitted under applicable tax law.  If any portion of this Option is designated
as an Incentive Stock Option it shall qualify as such only to the extent that
the aggregate fair market value of the Shares (generally, the Option's exercise
price) subject to this Option (and all other Incentive Stock Options granted to
Optionee by the Company or any Parent or Subsidiary) that first become
exercisable in any calendar year does not exceed $100,000.  To the extent that
the aggregate fair market value of such Shares exceeds $100,000, the Shares in
excess of such limit shall be treated as subject to a Nonstatutory Stock Option,
in accordance with Section 5 of the Plan.

     2.  Exercise of Option.  This Option shall be exercisable during its term
         ------------------
in accordance with the Vesting Schedule set out in the Notice of Stock Option
Grant and with the provisions of Sections 9 and 10 of the Plan as follows:

          (a)  Right to Exercise.
               -----------------

          (i)    This Option may not be exercised for a fraction of a share.

          (ii)   In the event of Optionee's death, disability or other
termination of employment, the exercisability of the Option is governed by this
Section 2 and by Sections 6, 7 and 8 below.

          (iii)  In no event may this Option be exercised after the Expiration
Date of the Option as set forth in the Notice of Stock Option Grant.

          (b)  Method of Exercise.
               ------------------

          (i) This Option shall be exercisable by delivering to the Company a
written notice of exercise (in the form attached as Exhibit A) which shall state
                                                    ---------
the election to exercise the Option, the number of Shares in respect of which
the Option is being exercised, and such other representations and agreements as
to the holder's investment intent with respect to such Shares of Common Stock as
may be required by the Company pursuant to the provisions of the Plan.  Such
written notice shall be signed by Optionee and shall be delivered in person or
by certified mail to the Secretary of the Company.  The written notice shall be
accompanied by payment of the Exercise Price.  This Option

                                      -1-
<PAGE>

shall be deemed to be exercised upon receipt by the Company of such written
notice accompanied by the Exercise Price.

          (ii) As a condition to the exercise of this Option, Optionee agrees to
make adequate provision for federal, state or other tax withholding obligations,
if any, which arise upon the exercise of the Option or disposition of Shares,
whether by withholding, direct payment to the Company, or otherwise.

          (iii)  No Shares will be issued pursuant to the exercise of an Option
unless such issuance and such exercise shall comply with all relevant provisions
of law and the requirements of any stock exchange upon which the Shares may then
be listed.  Assuming such compliance, for income tax purposes the Shares shall
be considered transferred to Optionee on the date on which the Option is
exercised with respect to such Shares.

     3.  Optionee's Representations.  In the event the Shares purchasable
         --------------------------
pursuant to the exercise of this Option have not been registered under the
Securities Act of 1933, as amended (the "Securities Act"), at the time this
                                         --------------
Option is exercised, Optionee shall, if required by the Company, concurrently
with the exercise of all or any portion of this Option, deliver to the Company
an investment representation statement in customary form, a copy of which is
available for Optionee's review from the Company upon request.

     4.  Method of Payment.  Payment of the Exercise Price shall be by any of
         -----------------
the following, or a combination of the following, at the election of Optionee:
(a) cash; (b) check; (c) surrender of other Shares of Common Stock of the
Company that (i) either have been owned by Optionee for more than six (6) months
on the date of surrender or were not acquired, directly or indirectly, from the
Company, and (ii) have a Fair Market Value on the date of surrender equal to the
aggregate exercise price of the Shares as to which the Option shall be
exercised; or (d) if there is a public market for the Shares and they are
registered under the Securities Act, delivery of a properly executed exercise
notice together with irrevocable instructions to a broker to deliver promptly
to the Company the amount of sale or loan proceeds required to pay the
exercise price.

     5.  Restrictions on Exercise.  This Option may not be exercised until such
         ------------------------
time as the Plan has been approved by the stockholders of the Company, or if the
issuance of such Shares upon such exercise or the method of payment of
consideration for such shares would constitute a violation of any applicable
federal or state securities or other law or regulation, including any rule under
Part 207 of Title 12 of the Code of Federal Regulations ("Regulation G") as
                                                          ------------
promulgated by the Federal Reserve Board.  As a condition to the exercise of
this Option, the Company may require Optionee to make any representation and
warranty to the Company as may be required by any applicable law or regulation.

     6.  Termination of Relationship.  In the event of termination of Optionee's
         ---------------------------
Continuous Service Status, Optionee may, to the extent otherwise so entitled at
the date of such termination (the "Termination Date"), exercise this Option
                                   ----------------
during the Termination Period set out in the Notice of Stock Option Grant.  To
the extent that Optionee was not entitled to exercise this Option at the date of
such termination, or if Optionee does not exercise this Option within the time
specified in the Notice of Stock Option Grant, the Option shall terminate.

     7.  Disability of Optionee.  Notwithstanding the provisions of Section 6
         ----------------------
above, in the event of termination of Optionee's Continuous Service Status as a
result of total and permanent disability (as

                                      -2-
<PAGE>

defined in Section 22(e)(3) of the Code), Optionee may, but only within twelve
(12) months from the date of termination of employment (but in no event later
than the Expiration Date of the Option as set forth in the Notice of Stock
Option Grant), exercise the Option to the extent otherwise so entitled at the
date of such termination. To the extent that Optionee was not entitled to
exercise the Option at the date of termination, or if Optionee does not exercise
such Option (to the extent otherwise so entitled) within the time specified in
this Agreement, the Option shall terminate.

     8.  Death of Optionee.  In the event of the death of Optionee (a) during
         -----------------
the term of this Option and while an Employee or Consultant of the Company and
having been in Continuous Service Status since the date of grant of the Option,
or (b) within thirty (30) days after the termination of Optionee's Continuous
Service Status, the Option may be exercised, at any time within twelve (12)
months following the date of death (but in no event later than the Expiration
Date of the Option as set forth in the Notice of Stock Option Grant), by
Optionee's estate or by a person who acquired the right to exercise the Option
by bequest or inheritance, but only to the extent of the right to exercise that
had accrued at the date of death or termination, as applicable.  To the extent
that Optionee was not entitled to exercise this Option at the date of death or
termination, as applicable, or if Optionee's estate or the person who acquired
the right to exercise the Option as a result of Optionee's death does not
exercise this Option within the time specified in the Notice of Stock Option
Grant, the Option shall terminate

     9.  Non-Transferability of Option.  This Option may not be transferred in
         -----------------------------
any manner otherwise than by will or by the laws of descent or distribution.
The designation of a beneficiary does not constitute a transfer.  An Option may
be exercised during the lifetime of Optionee only by Optionee or a transferee
permitted by this section.  The terms of this Option shall be binding upon the
executors, administrators, heirs, successors and assigns of Optionee.

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

     11.  No Additional Employment Rights.  Optionee understands and agrees that
          -------------------------------
the vesting of Shares pursuant to the Vesting Schedule is earned only by
continuing as an Employee or Consultant at the will of the Company (not through
the act of being hired, being granted this Option or acquiring Shares under this
Agreement).  Optionee further acknowledges and agrees that nothing in this
Agreement or the Plan shall confer upon Optionee any right with respect to
continuation as an Employee or Consultant with the Company, nor shall it
interfere in any way with his or her right or the Company's right to terminate
his or her employment or consulting relationship at any time, with or without
cause.

     12.  Tax Consequences.  Optionee acknowledges that he or she has read the
          ----------------
brief summary set forth below of certain federal tax consequences of exercise of
this Option and disposition of the Shares under the law in effect as of the date
of grant.  OPTIONEE UNDERSTANDS THAT THIS SUMMARY IS NECESSARILY INCOMPLETE AND
DOES NOT ADDRESS STATE, LOCAL OR FOREIGN ISSUES, AND THAT THE TAX LAWS AND
REGULATIONS SUMMARIZED ARE SUBJECT TO CHANGE.  OPTIONEE SHOULD CONSULT HIS OR
HER OWN TAX ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE SHARES.

          (a) Exercise of Incentive Stock Option.  If this Option is an
              ----------------------------------
Incentive Stock Option, there will be no regular federal 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 an item of alternative minimum taxable income for federal tax
purposes and may subject Optionee to the alternative minimum tax in the year of
exercise.

                                      -3-
<PAGE>

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

          (c) Disposition of Shares.  If this Option is an Incentive Stock
              ---------------------
Option and if Shares transferred pursuant to the Option are held for more than
one year after exercise and more than two years after the Date of Grant, any
gain realized on disposition of the Shares will be treated as long-term capital
gain for federal income tax purposes.  If Shares purchased under an Incentive
Stock Option are disposed of before the end of either of such two holding
periods, then 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 lesser of (i) the fair market value of the Shares on the
date of exercise, or (ii) the sales proceeds, over the Exercise Price.  If this
Option is a Nonstatutory Stock Option, then gain realized on the disposition of
Shares will be treated as long-term or short-term capital gain depending on
whether or not the disposition occurs more than one year after the exercise
date.  In the case of either an Incentive Stock Option or a Nonstatutory Stock
Option, the long-term capital gain will be taxed for federal income tax and
alternative minimum tax purposes as a maximum rate of 20% if the Shares are held
more than one year after exercise.

          (d) Notice of Disqualifying Disposition.  If the Option granted to
              -----------------------------------
Optionee in this Agreement is an Incentive Stock Option, and if Optionee sells
or otherwise disposes of any of the Shares acquired pursuant to the Incentive
Stock Option on or before the later of (i) the date two years after the Date of
Grant, or (ii) the date one year after transfer of such Shares to Optionee upon
exercise of the Incentive Stock Option, Optionee shall notify the Company in
writing within thirty (30) days after the date of any such disposition.
Optionee agrees that Optionee may be subject to income tax withholding by the
Company on the compensation income recognized by Optionee from the early
disposition by payment in cash or out of the current earnings paid to Optionee.

     13.  Withholding Tax Obligations.
          ---------------------------

          (a) General Withholding Obligations.  As a condition to the exercise
              -------------------------------
of Option granted hereunder, Optionee shall make such arrangements as the
Administrator may require for the satisfaction of any federal, state, local or
foreign withholding tax obligations that may arise in connection with the
exercise, receipt or vesting of the Option.  The Company shall not be required
to issue any Shares under the Plan until such obligations are satisfied.
Optionee understands that, upon exercising a Nonstatutory Stock Option, he or
she will recognize income for tax purposes in an amount equal to the excess of
the then Fair Market Value of the Shares over the Exercise Price.  If Optionee
is an employee, the Company will be required to withhold from Optionee's
compensation, or collect from Optionee and pay to the applicable taxing
authorities an amount equal to a percentage of this compensation income.
Additionally, Optionee may at some point be required to satisfy tax withholding
obligations with respect to the disqualifying disposition of an Incentive Stock
Option. Optionee shall satisfy his or her tax withholding obligation arising
upon the exercise of this Option by one or some combination of the following
methods:  (i) by cash or check payment, (ii) out of Optionee's current
compensation, (iii) if permitted by the Administrator, in its discretion, by
surrendering to the Company Shares which (A) in the case of Shares previously
acquired from the Company, have been owned by Optionee for more than six months
on the date of surrender, and (B) have a Fair Market Value determined as of the
applicable Tax Date (as defined in Section 11(c) below) on the date of surrender
equal to the amount required to be

                                      -4-
<PAGE>

withheld, or (iv) by electing to have the Company withhold from the Shares to be
issued upon exercise of the Option that number of Shares having a Fair Market
Value determined as of the applicable Tax Date equal to the amount required to
be withheld.

          (b) Stock Withholding to Satisfy Withholding Tax Obligations.  In the
              --------------------------------------------------------
event the Administrator allows Optionee to satisfy his or her tax withholding
obligations as provided in Section 11(a)(iii) or (iv) above, such satisfaction
must comply with the requirements of this Section (11)(b) and all Applicable
Laws.  All elections by Optionee to have Shares withheld to satisfy tax
withholding obligations shall be made in writing in a form acceptable to the
Administrator and shall be subject to the following restrictions:

          (i)    the election must be made on or prior to the applicable Tax
Date (as defined in Section 11(c) below);

          (ii)   once made, the election shall be irrevocable as to the
particular Shares of the Option as to which the election is made; and

          (iii)  all elections shall be subject to the consent or
disapproval of the Administrator.

     In the event the election to have Shares withheld is made by Optionee and
the Tax Date is deferred under Section 83 of the Code because no election is
filed under Section 83(b) of the Code, Optionee shall receive the full number of
Shares with respect to which the Option is exercised but Optionee shall be
unconditionally obligated to tender back to the Company the proper number of
Shares on the Tax Date.

          (c) Definitions.  For purposes of this Section 11, the Fair Market
              -----------
Value of the Shares to be withheld shall be determined on the date that the
amount of tax to be withheld is to be determined under the applicable laws (the
"Tax Date").
 --------

     14.  Signature.  This Stock Option Agreement shall be deemed executed by
          ---------
the Company and Optionee upon execution by such parties of the Notice of Stock
Option Grant attached to this Stock Option Agreement.

                  [Remainder of page left intentionally blank]

                                      -5-
<PAGE>

                                   EXHIBIT A
                                   ---------

                               NOTICE OF EXERCISE
                               ------------------

To:       HealthCentral.com
Attn:     Stock Option Administrator
Subject:  Notice of Intention to Exercise Stock Option
          --------------------------------------------

     This is official notice that the undersigned ("Optionee") intends to
                                                    --------
exercise Optionee's option to purchase __________ shares of HealthCentral.com
Common Stock, under and pursuant to the Company's 1999 Stock Plan and the Stock
Option Agreement dated ___________, as follows:

          Grant Number:  ________________________________

          Date of Purchase:  ________________________________

          Number of Shares:  ________________________________

          Purchase Price:  ________________________________

          Method of Payment
          of Purchase Price:  ________________________________

     Social Security No.:  ________________________________

     The shares should be issued as follows:

          Name:_______________________________

          Address:____________________________

                  ____________________________

                  ____________________________

          Signed: ____________________________

          Date:_______________________________
<PAGE>

     The parties have executed this Exercise Notice and Restricted Stock
Purchase Agreement as of the date first set forth above.

                              COMPANY:

                              HealthCentral.com

                              By:
                                 -------------------------------

                              Name:
                                   -----------------------------
                                     (print)

                              Title:
                                    ----------------------------

                              <CompanyAddressLine1>

                              <CompanyAddressLine2>

                              PURCHASER:

                              <Optionee>

                              -----------------------------------
                              (Signature)

                              ____________________________________
                              (Print Name)

                              Address:

                              <OptioneeAddress1>
                              <OptioneeAddress2>

I, ______________________, spouse of <Optionee>, have read and hereby approve
the foregoing Agreement.  In consideration of the Company's granting my spouse
the right to purchase the Shares as set forth in the Agreement, I hereby agree
to be bound irrevocably by the Agreement and further agree that any community
property or similar interest that I may have in the Shares shall hereby be
similarly bound by the Agreement.  I hereby appoint my spouse as my attorney-in-
fact with respect to any amendment or exercise of any rights under the
Agreement.

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

                                      -8-

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