Document:

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                                                                   Exhibit 10.29

                                HOMEGROCER.COM

                       1999 EMPLOYEE STOCK PURCHASE PLAN
                       ---------------------------------

     The following constitute the provisions of the 1999 Employee Stock Purchase
Plan of HomeGrocer.com.

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

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

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

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

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

          (d) "Company" means HomeGrocer.com, Inc., a Delaware corporation.
               -------

          (e) "Compensation" means all regular straight time gross earnings and
               ------------
shall include commissions or payments for overtime, shift premium, incentive
compensation, incentive payments, bonuses and other compensation. Compensation
shall exclude one-time payments such as relocation or hiring bonuses, severance
pay as well as stock option proceeds.

          (f) "Continuous Status as an Employee" means the absence of any
               --------------------------------
interruption or termination of service as an Employee.  Continuous Status as an
Employee shall not be considered interrupted in the case of (i) sick leave; (ii)
military leave; (iii) any other leave of absence approved by the Plan
Administrator, provided that such leave is for a period of not more than 90
days, unless reemployment upon the expiration of such leave is guaranteed by
contract or statute, or unless provided otherwise pursuant to Company policy
adopted from time to time; or (iv) in the case of transfers between locations of
the Company or between the Company and its Designated Subsidiaries.

          (g) "Contributions" means all amounts credited to the account of a
               -------------
participant pursuant to the Plan.

          (h) "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.

          (i) "Designated Subsidiaries" means the Subsidiaries which have been
               -----------------------
designated by the Board from time to time in its sole discretion as eligible to
participate in the
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Plan; provided however that the Board shall only have the discretion to
designate a Subsidiary if the issuance of options to such Subsidiary's Employees
pursuant to the Plan would not cause the Company to incur adverse accounting
charges.

          (j) "Employee" means any person, including an Officer, who is
               --------
regularly scheduled to work at least an average of twenty (20) hours per week
and whose customary employment is for more than five (5) months in a calendar
year by the Company or any of the Designated Subsidiaries.

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

          (l) "Fair Market Value" means, as of any date, the value of Common
               -----------------
Stock determined by the Board in its discretion based on the closing sales price
of the Common Stock for such date (or, in the event that the Common Stock is not
traded on such date, on the immediately preceding Trading Day), as reported by
the National Association of Securities Dealers Automated Quotation (Nasdaq)
National Market or, if such price is not reported, the mean of the bid and asked
prices per share of the Common Stock as reported by Nasdaq or, in the event the
Common Stock is listed on a stock exchange, the Fair Market Value per share
shall be the closing sales price on such exchange on such date (or, in the event
that the Common Stock is not traded on such date, on the immediately preceding
Trading Day), as reported in The Wall Street Journal.  For purposes of the
Offering Date of the first Offering Period under the Plan, the Fair Market Value
of a share of the Common Stock of the Company shall be the initial price to the
public as set forth in the final prospectus included within the registration
statement in Form S-1 filed with the Securities and Exchange Commission pursuant
to Rule 424 under the Securities Act of 1933, as amended, for the initial public
offering of the Company's Common Stock (the "Registration Statement").
                                             ----------------------

          (m) "Offering Date" means the first Trading Day of each Offering
               -------------
Period of the Plan.

          (n) "Offering Period" means a period of months not exceeding twenty-
               ---------------
seven (27) months, as determined by the Board.  The duration and timing of the
Offering Periods may be changed pursuant to Section 4 of the Plan.

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

          (p) "Payroll Period" means the cycle under which the Company processes
               --------------
normal, regular employee paychecks.

          (q) "Plan" means this Employee Stock Purchase Plan.
               ----

          (r) "Plan Administrator" means the Board or Committee designated in
               ------------------
accordance with Section 15 with authority to administer the Plan.

          (s) "Purchase Date" means the last day of each Purchase Period of the
               -------------
Plan.

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          (t) "Purchase Period" means a period of six (6) months within an
               ---------------
Offering Period, except for the first Purchase Period as set forth in Section
4(b).

          (u) "Purchase Price" means with respect to a Purchase Period an amount
               --------------
equal to 85% of the Fair Market Value (as defined in Section 2(l) above) of a
Share of Common Stock on the Offering Date or on the Purchase Date, whichever is
lower; provided, however, that in the event (i) of any increase in the number of
Shares available for issuance under the Plan (including without limitation an
automatic increase pursuant to Section 14 below or as a result of a stockholder-
approved amendment to the Plan), and (ii) all or a portion of such additional
Shares are to be issued with respect to one or more Offering Periods that are
underway at the time of such increase ("Additional Shares"), and (iii) the Fair
                                        -----------------
Market Value of a Share of Common Stock on the date of such increase is higher
than the Fair Market Value on the Offering Date for any such Offering Period,
then in such instance the Purchase Price with respect to such Additional Shares
shall be 85% of the Fair Market Value of a Share of Common Stock on the date of
such increase or the Fair Market Value of a Share of Common Stock on the
Purchase Date, whichever is lower.

          (v) "Share" means a share of Common Stock, as adjusted in accordance
               -----
with Section 20 of the Plan.

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

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

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

          (a) Any person who is an Employee as of the Offering Date of a given
Offering Period shall be eligible to participate in such Offering Period under
the Plan, subject to the requirements of Section 5(a) and the limitations
imposed by Section 423(b) of the Code; provided however that eligible.

          (b) Employees may not participate in more than one Offering Period at
a time.

          (c) Any provisions of the Plan to the contrary notwithstanding, no
Employee shall be granted an option under the Plan (i) if, immediately after the
grant, such Employee (or any other person whose stock would be attributed to
such Employee pursuant to Section 424(d) of the Code) would own capital stock of
the Company and/or hold outstanding options to purchase stock possessing five
percent (5%) or more of the total combined voting power or value of all classes
of stock of the Company or of any subsidiary of the Company, or (ii) if such
option would permit his or her rights to purchase stock under all employee stock
purchase plans (described in Section 423 of the Code) of the Company and its
Subsidiaries to accrue at a rate which exceeds Twenty-Five Thousand Dollars
($25,000) of the Fair Market Value (as defined in

                                      -3-
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Section 2(l) above) of such stock (determined at the time such option is
granted) for each calendar year in which such option is outstanding at any time.

     4.   Offering Periods and Purchase Periods.
          -------------------------------------

          (a) Offering Periods.  The Plan shall be implemented by a series of
              ----------------
Offering Periods generally of twelve (12)  months duration, with new Offering
Periods commencing on or about January 1 and July 1 of each year (or at such
other time or times as may be determined by the Board of Directors).  The first
Offering Period shall commence on the beginning of the effective date of the
Registration Statement on Form S-1 for the initial public offering of the
Company's Common Stock (the "IPO Date") and continue until December 31, 2000.
                             --------
The Plan shall continue until terminated in accordance with Section 20 hereof.
The Board of Directors of the Company shall have the power to change the
duration and/or the frequency of Offering Periods with respect to future
offerings (provided that no Offering Period shall be extended to a period beyond
twenty-seven (27) months) without stockholder approval if such change is
announced at least five (5) days prior to the scheduled beginning of the first
Offering Period to be affected.

          (b) Purchase Periods.  Each Offering Period shall generally consist of
              ----------------
consecutive purchase periods of six (6) months' duration.  The last day of each
Purchase Period shall be the "Purchase Date" for such Purchase Period.  A
                              -------------
Purchase Period commencing on January 1 shall end on the next June 30.  A
Purchase Period commencing on July 1 shall end on the next December 31.  The
first Purchase Period shall commence on the IPO Date and shall end on December
31, 2000.  The Board of Directors of the Company shall have the power to change
the duration and/or frequency of Purchase Periods with respect to future
purchases without stockholder approval if such change is announced at least five
(5) days prior to the scheduled beginning of the first Purchase Period to be
affected.

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

          (a) An eligible Employee may become a participant in the Plan by
completing a subscription agreement on the form provided by the Company and
filing it with the Company's payroll office prior to the applicable Offering
Date, unless a later time for filing the subscription agreement is set by the
Board for all eligible Employees with respect to a given Offering Period.

          (b) The subscription agreement shall set forth the Employee's
participation election in the form of a designation of the percentage of the
participant's Compensation to be paid as Contributions pursuant to the Plan,
which percentage shall be not less than one percent (1%) and not more than
fifteen percent 15% or such greater percentage as the Board may establish from
time to time before an Offering Date, which percentage shall not exceed twenty
percent (20%) of such participant's Compensation on each payday during the
Offering Period.

          (c) A participant's subscription shall be effective for each
successive Offering Period in which he or she is eligible to participate, unless
the participant withdraws in accordance with Section 11(a).

                                      -4-
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          (d) In addition to the limits on an Employee's participation in the
Plan set forth herein, the Board may establish limits on the number of shares an
Employee may elect to purchase with respect to any Offering Period if such limit
is announced at least fifteen (15) days prior to the scheduled beginning of the
first Offering Period to be affected.

     6.   Grant of Option.  On the Offering Date of each Offering Period, each
          ---------------
eligible Employee participating in such Offering Period shall be granted an
option to purchase on each Purchase Date a number of Shares of the Company's
Common Stock determined by dividing such Employee's Contributions accumulated
prior to such Purchase Date and retained in the participant's account as of the
Purchase Date by the applicable Purchase Price; provided however that the
maximum number of Shares an Employee may purchase during each Purchase Period
shall be 2,500 Shares, and provided further that such purchase shall be subject
to the limitations set forth in Sections 3(c), 8(b) and 14, as applicable.

     7.   Method of Payment of Contributions.
          ----------------------------------

          (a) A participant's payment of contributions to the Plan shall be made
by payroll deductions made on each payday during the Offering Period, commencing
on the first payroll following the Offering Date and shall end on the last
payroll paid on or prior to the last Purchase Period of the Offering Period to
which the subscription agreement is applicable, unless sooner terminated by the
participant as provided in Section 11.  All payroll deductions made by a
participant shall be credited to his or her account under the Plan.

          (b) A participant may discontinue his or her participation in the Plan
as provided in Section 11, or, on one occasion only during the Offering Period
may decrease the rate of his or her Contributions with respect to the Offering
Period by completing and filing with the Company a new subscription agreement
authorizing a change in the payroll deduction rate.  The change in rate shall be
effective as of the beginning of the next payroll period following the date of
filing of the new subscription agreement, if the agreement is filed at least ten
(10) business days prior to such date and, if not, as of the beginning of the
next succeeding payroll period.

          (c) Notwithstanding the foregoing, to the extent necessary to comply
with Section 423(b)(8) of the Code and Section 3(b), a participant's payroll
deductions may be decreased by the Company to 0% at any time during a Purchase
Period.  Payroll deductions shall re-commence at the rate provided in such
participant's subscription agreement at the beginning of the first Purchase
Period which is scheduled to end in the following calendar year, unless
terminated by the participant as provided in Section 10.  In addition, a
participant's payroll deductions may be decreased by the Company to 0% at any
time during a Purchase Period in order to avoid unnecessary payroll
contributions as a result of application of the maximum share limit set forth in
Section 7(a), in which case payroll deductions shall re-commence at the rate
provided in such participant's subscription agreement at the beginning of the
next Purchase Period, unless terminated by the participant as provided in
Section 10.

          (d) In the event a participant's contributions cannot be made by
payroll deduction because such participant is on an unpaid military leave, sick
leave or other approved

                                      -5-
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leave of absence not exceeding 90 days, or during a longer approved leave so
long as the participant's right to reemployment with the Company is guaranteed
by statute or by contract, such participant's payment of contributions to the
Plan shall be suspended during such unpaid leave. Upon such participant's return
to active service, such participant's contributions shall recommence in
accordance with the participant's participation election.

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

          (a) Unless a participant withdraws from the Plan as provided in
Section 11 or 12, his or her option for the purchase of Shares will be exercised
automatically on each Purchase Date of an Offering Period, and the maximum
number of full Shares subject to the option will be purchased at the applicable
Purchase Price with the accumulated Contributions in his or her account. No
fractional Shares shall be issued.  The Shares purchased upon exercise of an
option hereunder shall be deemed to be transferred to the participant on the
Purchase Date.  During his or her lifetime, a participant's option to purchase
Shares hereunder is exercisable only by him or her.

          (b) If the Board determines that, on a given Purchase Date, the number
of Shares with respect to which options are to be exercised may exceed (i) the
number of Shares of Common Stock that were available for sale under the Plan on
the Offering Date of the applicable Offering Period (after deduction of all
Shares for which options have been exercised or are then outstanding), or (ii)
the number of shares available for sale under the Plan on such Purchase Date
(after deduction of all Shares for which options have been exercised or are then
outstanding), the Board may, in its sole discretion, provide that the Shares of
Common Stock available for purchase on such Offering Date or Purchase Date, as
applicable, shall be allocated pro rata, in as uniform a manner as shall be
practicable and as it shall determine in its sole discretion to be equitable
among all participants exercising options to purchase Common Stock on such
Purchase Date and (x) continue all Offering Periods then in effect or (y)
pursuant to Section 21 below, terminate any or all Offering Periods then in
effect.  The Board may direct that the Shares available on the Offering Date of
any applicable Offering Period pursuant to the preceding sentence be allocated
pro rata, notwithstanding any authorization of additional Shares for issuance
under the Plan by the Company's stockholders subsequent to such Offering Date.

          (c) Any cash remaining to the credit of a participant's account under
the Plan after a purchase by him or her of Shares at the termination of each
Purchase Period which is insufficient to purchase a full Share shall be carried
over to the next Purchase Period if the Employee continues to participate in the
Plan, or if the Employee does not continue to participate, shall be returned to
the participant.  Any other amounts left over in a participant's account after a
Purchase Date shall be returned to the participant.

     9.   Withholding Tax Obligations.  At the time the option is exercised, in
          ---------------------------
whole or in part, or at the time some or all of the Company's Common Stock
issued under the Plan is disposed of, the participant must make adequate
provision for payment to the Company of the Company's federal, state or other
tax withholding obligations, if any, which arise upon the exercise of the option
or the disposition of the Common Stock.  At any time, the Company may withhold
from the participant's compensation the amount necessary for the Company to meet

                                      -6-
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applicable federal, state and other withholding obligations, including any
withholding required to make available to the Company any tax deductions or
benefits attributable to the sale or early disposition of Common Stock by the
participant.

     10.  Rights as Stockholder; ESPP Stock Account; Delivery of Certificate.
          ------------------------------------------------------------------

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

          (b) The Company may require that all Shares purchased under the Plan
be held in an account (the participant's "ESPP Stock Account) established in the
name of the participant (or in the name of the participant and his or her
spouse, as designated by the participant on his or her subscription agreement).
In such event the Company or, in the event the Plan Administrator designates or
approves a stock brokerage or other financial services firm (an "ESPP Broker")
to hold Shares purchased under the Plan for the accounts of participants then
such ESPP Broker, shall hold all Shares purchased by a participant under the
Plan in his or her ESPP Stock Account and the participant (and his or her
spouse, if applicable) shall be the beneficial owner of the Shares in his or her
ESPP Stock Account.  The following rules shall apply to ESPP Stock Accounts:

               (i)    Promptly following each Purchase Date the number of Shares
     purchased by each participant shall be deposited into the participant's
     ESPP Stock Account.

               (ii)   Each participant shall receive periodic statements of his
     or her ESPP Stock Account.

               (iii)  The Plan Administrator may establish a holding requirement
     for Shares in a participant's ESPP Stock Account for a period not exceeding
     the holding periods set forth in Code section 423.  In the absence of such
     holding requirement, a participant shall be free to undertake a disposition
     of the Shares in his or her ESPP Stock Account at any time by giving notice
     to the ESPP Broker (or the Company, if the Company maintains the account)
     in such form and manner as determined by the Plan Administrator.

               (iv)   In the absence of such a disposition by the participant,
     until the holding period set forth in Code section 423 has been satisfied
     with respect to Shares in a participant's ESPP Stock Account, such Shares
     must remain in the participant's ESPP Stock Account.  A participant may
     transfer Shares as to which such holding period has been satisfied to
     another brokerage account of the participant's choosing, or may request
     that a stock certificate be issued and delivered to him or her with respect
     to Shares as to which such holding period has been satisfied.

               (v)    Dividends paid in the form of Shares with respect to
     Shares in a participant's ESPP Stock Account shall be credited to such
     account.

                                      -7-
<PAGE>

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

     11.  Voluntary Withdrawal.
          --------------------

          (a) A participant may withdraw all but not less than all the
Contributions credited to his or her account under the Plan at any time prior to
each Purchase Date by giving written notice to the Company.  All of the
participant's Contributions credited to his or her account will be paid to him
or her promptly after receipt of his or her notice of withdrawal and his or her
option for the current Offering Period will be automatically terminated, and no
further Contributions for the purchase of Shares will be made during and with
respect to such Offering Period.

          (b) A participant's voluntary withdrawal from the Plan with respect to
an Offering Period will not have any effect upon his or her eligibility to
participate in a succeeding Offering Period or in any similar plan which may
hereafter be adopted by the Company.

     12.  Automatic Withdrawal.
          --------------------

          (a) Termination of Employment.  Upon termination of the participant's
              -------------------------
Continuous Status as an Employee prior to the Purchase Date of an Offering
Period (other than on account of death), he or she will be automatically
withdrawn from the Plan effective as of the date of such termination of his or
her Continuous Status as an Employee, the Contributions credited to his or her
account will be returned to him or her, and his or her option will be
automatically terminated.

          (b) Death of Participant.  Upon the death of a participant prior to
              --------------------
the Purchase Date of an Offering Period, he or she will be automatically
withdrawn from the Plan, the Contributions credited to his or her account will
be returned to the person or persons entitled thereto under Section 16, and his
or her option will be automatically terminated.

          (c) Reduction of  Hours.  In the event a participant fails to remain
              -------------------
in Continuous Status as an Employee of the Company for at least an average of
twenty (20) hours per week during the Offering Period in which the employee is a
participant, he or she will be deemed to have elected to withdraw from the Plan
and the Contributions credited to his or her account will be returned to him or
her and his or her option terminated.  Notwithstanding the preceding sentence,
if such participant's reduction in hours is on account of an unpaid military
leave, sick leave or other approved leave of absence not exceeding ninety (90)
days, or during a longer approved leave so long as the participant's right to
reemployment with the Company is guaranteed by statute or by contract (including
a temporary reduction in hours for purposes of a leave taken under the Family
Medical Leave Act or similar applicable state law), such participant shall not
be deemed to have withdrawn from the Plan during such leave.  A participant who
fails to return to active employment following such leave shall be deemed to
have withdrawn from the Plan on the 91st day following the commencement of the
leave or, if later, the date such participant ceases to have a right to
reemployment with the Company guaranteed by statute or contract.

                                      -8-
<PAGE>

          (d) Reduction in Fair Market Value.  To the extent permitted by any
              ------------------------------
applicable laws, regulations or stock exchange rules, if the Fair Market Value
of the Shares on a Purchase Date of an Offering Period (other than the final
Purchase Date of such Offering Period) is less than the Fair Market Value of the
Shares on the Offering Date for such Offering Period, then every participant
shall automatically be withdrawn from such Offering Period at the close of such
Purchase Date and after the acquisition of Shares for such Purchase Period.
Participants shall thereafter automatically be re-enrolled in the first Offering
Period commencing subsequent to such Purchase Date. All payroll deductions
accumulated in a participant's account as of a withdrawal date pursuant to this
Section 12(d) shall be retained in the participant's account.

     13.  Interest.  No interest shall accrue on the Contributions of a
          --------
participant in the Plan.

     14.  Stock.  Subject to adjustment as provided in Section 20, the maximum
          -----
number of Shares which shall be made available for sale under the Plan shall be
3,000,000 Shares, subject to further adjustment pursuant to Section 20 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) 500,000
Shares subject to further adjustment pursuant to Section 20 below, (ii) five
tenths of one percent (.5%) of the Shares outstanding on the last day of the
immediately preceding fiscal year, or (iii) such lesser number of Shares as is
determined by the Board.

     15.  Administration.  The Board, or a committee named by the Board (the
          --------------
"Plan Administrator"), shall supervise and administer the Plan and shall have
-------------------
full power to adopt, amend and rescind any rules deemed desirable and
appropriate for the administration of the Plan and not inconsistent with the
Plan, to construe and interpret the Plan, and to make all other determinations
necessary or advisable for the administration of the Plan.  The Plan
Administrator may delegate its duties to such of the Company's officers as it so
determines.

     16.  Designation of Beneficiary.
          --------------------------

          (a) A participant may file a written designation of a beneficiary who
is to receive any Shares and cash, if any, from the participant's account under
the Plan in the event of such participant's death subsequent to the end of a
Purchase Period but prior to delivery to him or her of such Shares and cash.  In
addition, a participant may file a written designation of a beneficiary who is
to receive any cash from the participant's account under the Plan in the event
of such participant's death prior to the Purchase Date of an Offering Period.
If a participant is married and the designated beneficiary is not the spouse,
spousal consent shall be required for such designation to be effective.

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

                                      -9-
<PAGE>

or if no spouse, dependent or relative is known to the Company, then to such
other person as the Company may designate.

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

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

     19.  Reports.  Individual accounts will be maintained for each participant
          -------
in the Plan.  Statements of account will be given to participating Employees at
least annually, which statements will set forth the amounts of Contributions,
the per Share Purchase Price, the number of Shares purchased and the remaining
cash balance, if any.

     20.  Adjustments Upon Changes in Capitalization; Corporate Transactions.
          ------------------------------------------------------------------

          (a) Adjustment.  Subject to any required action by the stockholders of
              ----------
the Company, the number of Shares covered by each option under the Plan which
has not yet been exercised and the number of Shares which have been authorized
for issuance under the Plan but have not yet been placed under option
(collectively, the "Reserves"), the number of shares of Common Stock set forth
                    --------
in Section 14(a)(i) above, and the price per Share of Common Stock covered by
each option under the Plan which has not yet been exercised, shall be
proportionately adjusted for any increase or decrease in the number of issued
Shares resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock (including any such change
in the number of Shares of Common Stock effected in connection with a change in
domicile of the Company), or any other increase or decrease in the number of
Shares effected without receipt of consideration by the Company; provided
however that conversion of any convertible securities of the Company shall not
be deemed to have been "effected without receipt of consideration."  Such
adjustment shall be made by the Board, whose determination in that respect shall
be final, binding and conclusive.  Except as expressly provided herein, no issue
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 subject to an
option.

          (b) Corporate Transactions.  In the event of a dissolution or
              ----------------------
liquidation of the Company, any Purchase Period and Offering Period then in
progress will terminate immediately prior to the consummation of such action,
unless otherwise provided by the Board. In the event of a Corporate Transaction,
each option outstanding under the Plan shall be assumed or an equivalent option
shall be substituted by the successor corporation or a parent or Subsidiary of
such successor corporation.  In the event that the successor corporation refuses
to assume or substitute for outstanding options, each Purchase Period and
Offering Period then in progress

                                     -10-
<PAGE>

shall be shortened and a new Purchase Date shall be set (the "New Purchase
                                                              ------------
Date"), as of which date any Purchase Period and Offering Period then in
----
progress will terminate. The New Purchase Date shall be on or before the date of
consummation of the transaction and the Board shall notify each participant in
writing, at least ten (10) days prior to the New Purchase Date, that the
Purchase Date for his or her option has been changed to the New Purchase Date
and that his or her option will be exercised automatically on the New Purchase
Date, unless prior to such date he or she has withdrawn from the Offering Period
as provided in Section 11 or Section 12. For purposes of this Section 20, an
option granted under the Plan shall be deemed to be assumed, without limitation,
if, at the time of issuance of the stock or other consideration upon a Corporate
Transaction, each holder of an option under the Plan 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 the 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 20); provided however that if the consideration received in the
transaction is not solely common stock of the successor corporation or its
parent (as defined in Section 424(e) of the Code), the Board may, with the
consent of the successor corporation, provide for the consideration to be
received upon exercise of the option to be solely common stock of the successor
corporation or its parent equal in Fair Market Value to the per Share
consideration received by holders of Common Stock in the transaction.

     The Board may, if it so determines in the exercise of its sole discretion,
also make provision for adjusting the Reserves, as well as the price per Share
of Common Stock covered by each outstanding option, in the event that the
Company effects one or more reorganizations, recapitalizations, rights offerings
or other increases or reductions of Shares of its outstanding Common Stock, and
in the event of the Company's being consolidated with or merged into any other
corporation.

     21.  Amendment or Termination.
          ------------------------

          (a) The Board may at any time and for any reason terminate or amend
the Plan.  Except as provided in Section 20, no such termination of the Plan may
affect options previously granted, provided that the Plan or an Offering Period
may be terminated by the Board on a Purchase Date or by the Board's setting a
new Purchase Date with respect to an Offering Period and Purchase Period then in
progress if the Board determines that termination of the Plan and/or the
Offering Period is in the best interests of the Company and the stockholders or
if continuation of the Plan and/or the Offering Period would cause the Company
to incur adverse accounting charges as a result of a change after the effective
date of the Plan in the generally accepted accounting rules applicable to the
Plan.  Except as provided in Section 20 and in this Section 21, no amendment to
the Plan shall make any change in any option previously granted which adversely
affects the rights of any participant.  In addition, to the extent necessary to
comply with Rule 16b-3 under the Exchange Act, or under Section 423 of the Code
(or any successor rule or provision or any applicable law or regulation), the
Company shall obtain stockholder approval in such a manner and to such a degree
as so required.

                                     -11-
<PAGE>

          (b) Without stockholder consent and without regard to whether any
participant rights may be considered to have been adversely affected, the Board
(or its committee) shall be entitled to change the Offering Periods and Purchase
Periods, limit the frequency and/or number of changes in the amount withheld
during an Offering Period, establish the exchange ratio applicable to amounts
withheld in a currency other than U.S. dollars, permit payroll withholding in
excess of the amount designated by a participant in order to adjust for delays
or mistakes in the Company's processing of properly completed withholding
elections, establish reasonable waiting and adjustment periods and/or accounting
and crediting procedures to ensure that amounts applied toward the purchase of
Common Stock for each participant properly correspond with amounts withheld from
the participant's Compensation, and establish such other limitations or
procedures as the Board (or its committee) determines in its sole discretion
advisable which are consistent with the Plan.

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

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

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

     24.  Term of Plan; Effective Date.  The Plan shall become effective upon
          ----------------------------
the IPO Date.  It shall continue in effect for a term of twenty (20) years
unless sooner terminated under Section 20.

     25.  Additional Restrictions of Rule 16b-3.  The terms and conditions of
          -------------------------------------
options granted hereunder to, and the purchase of Shares by, persons subject to
Section 16 of the Exchange Act shall comply with the applicable provisions of
Rule 16b-3.  This Plan shall be deemed to contain, and such options shall
contain, and the Shares issued upon exercise thereof shall be subject to, such
additional conditions and restrictions as may be required by Rule 16b-3 to
qualify for the maximum exemption from Section 16 of the Exchange Act with
respect to Plan transactions.

                                     -12-<PAGE>

                                                                   EXHIBIT 10.30

                                HOMEGROCER.COM

                       1999 DIRECTORS' STOCK OPTION PLAN
                       ---------------------------------

     1.   Purposes of the Plan.  The purposes of this Directors' Stock Option
          --------------------
Plan are to attract and retain the best available personnel for service as
Directors of the Company, to provide additional incentive to the Outside
Directors of the Company to serve as Directors, and to encourage their continued
service on the Board.

          All options granted hereunder shall be nonstatutory stock options.

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

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

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

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

          (d)  "Company" shall mean HomeGrocer.com, a Delaware corporation.
                -------

          (e)  "Continuous Status as a Director" shall mean the absence of any
                -------------------------------
interruption or termination of service as a Director.

          (f)  "Director" shall mean a member of the Board.
                --------

          (g)  "Employee" shall mean any person, including any officer or
                --------
director, employed by the Company or any Parent or Subsidiary of the Company.
The payment of a director's fee by the Company shall not be sufficient in and of
itself to constitute "employment" by the Company.

          (h)  "Exchange Act" shall mean the Securities Exchange Act of 1934, as
                ------------
amended.

          (i)  "Option" shall mean a stock option granted pursuant to the Plan.
                ------
All options shall be nonstatutory stock options (i.e., options that are not
intended to qualify as incentive stock options under Section 422 of the Code).

          (j)  "Optioned Stock" shall mean the Common Stock subject to an
                --------------
Option.

          (k)  "Optionee" shall mean an Outside Director who receives an Option.
                --------

          (l)  "Outside Director" shall mean a Director who is not an Employee.
                ----------------

          (m)  "Parent" shall mean a "parent corporation," whether now or
                ------
hereafter existing, as defined in Section 424(e) of the Code.
<PAGE>

          (n) "Plan" shall mean this HomeGrocer.com 1999 Directors' Stock Option
               ----
Plan.

          (o) "Share" shall mean a share of the Common Stock, as adjusted in
               -----
accordance with Section 11 of the Plan.

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

     3.   Stock Subject to the Plan.  Subject to the provisions of Section 11 of
          -------------------------
the Plan, the maximum aggregate number of Shares which may be sold under the
Plan is 500,000 Shares (the "Pool") of Common Stock.  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, the unpurchased Shares which were subject
thereto shall, unless the Plan shall have been terminated, become available for
future grant under the Plan.  If Shares which were acquired upon exercise of an
Option are subsequently repurchased by the Company, such Shares shall not in any
event be returned to the Plan and shall not become available for future grant
under the Plan.

     4.   Administration of and Grants of Options under the Plan.
          ------------------------------------------------------

          (a) Administrator.  Except as otherwise required herein, the Plan
              -------------
shall be administered by the Board.

          (b) Procedure for Grants.  All grants of Options hereunder shall be
              --------------------
automatic and nondiscretionary and shall be made strictly in accordance with the
following provisions:

              (i)   No person shall have any discretion to select which Outside
Directors shall be granted Options or to determine the number of Shares to be
covered by Options granted to Outside Directors.

              (ii)  Each Outside Director shall be automatically granted an
Option to purchase 20,000 Shares (the "First Option") on the date on which such
                                       ------------
person first becomes an Outside Director, whether through election by the
stockholders of the Company or appointment by the Board of Directors to fill a
vacancy.

              (iii) After the First Option has been granted to an Outside
Director, such Outside Director shall thereafter be automatically granted an
Option to purchase 5,000 Shares (a "Subsequent Option") on the date of each
                                    -----------------
Annual Meeting of the Company's stockholders immediately following which such
Outside Director is serving on the Board, provided that, on such date, he or she
shall have served on the Board for at least six (6) months prior to the date of
such Annual Meeting.

              (iv)  Notwithstanding the provisions of subsections (ii) and (iii)
hereof, in the event that a grant would cause the number of Shares subject to
outstanding Options plus the

                                      -2-
<PAGE>

number of Shares previously purchased upon exercise of Options to exceed the
Pool, then each such automatic grant shall be for that number of Shares
determined by dividing the total number of Shares remaining available for grant
by the number of Outside Directors receiving an Option on such date on the
automatic grant date. Any further grants shall then be deferred until such time,
if any, as additional Shares become available for grant under the Plan through
action of the stockholders to increase the number of Shares which may be issued
under the Plan or through cancellation or expiration of Options previously
granted hereunder.

               (v)   Notwithstanding the provisions of subsections (ii) and
(iii) hereof, any grant of an Option made before the Company has obtained
stockholder approval of the Plan in accordance with Section 17 hereof shall be
conditioned upon obtaining such stockholder approval of the Plan in accordance
with Section 17 hereof.

               (vi)  The terms of each First Option granted hereunder shall be
as follows:

                     (1) the First Option shall be exercisable only while the
Outside Director remains a Director of the Company, except as set forth in
Section 9 hereof;

                     (2) the exercise price per Share shall be 100% of the fair
market value per Share on the date of grant of the First Option, determined in
accordance with Section 8 hereof; and

                     (3) the First Option shall become vested and exercisable in
installments cumulatively as to 25% of the Shares subject to the First Option on
each of the first, second, third and fourth anniversaries of the date of grant
of the Option.

               (vii) The terms of each Subsequent Option granted hereunder
shall be as follows:

                     (1) the Subsequent Option shall be exercisable only while
the Outside Director remains a Director of the Company, except as set forth in
Section 9 hereof;

                     (2) the exercise price per Share shall be 100% of the fair
market value per Share on the date of grant of the Subsequent Option, determined
in accordance with Section 8 hereof; and

                     (3) the Subsequent Option shall be 100% vested and
exercisable as of the date of grant of the Option.

          (c)  Powers of the Board.  Subject to the provisions and restrictions
               -------------------
of the Plan, the Board shall have the authority, in its discretion:  (i) to
determine, upon review of relevant information and in accordance with Section
8(b) of the Plan, the fair market value of the Common Stock; (ii) to determine
the exercise price per share of Options to be granted, which exercise price
shall be determined in accordance with Section 8(a) of the Plan; (iii) to
interpret the Plan; (iv) to prescribe, amend and rescind rules and regulations
relating to the Plan; (v) to authorize any person to execute on behalf of the
Company any instrument required to effectuate

                                      -3-
<PAGE>

the grant of an Option previously granted hereunder; (vi) to make all other
determinations deemed necessary or advisable for the administration of the Plan;
and (vii) to delegate its powers to a committee of the Board or to two or more
Company Officers.

          (d)  Effect of Board's Decision.  All decisions, determinations and
               --------------------------
interpretations of the Board or its delegates shall be final and binding on all
Optionees and any other holders of any Options granted under the Plan.

          (e)  Suspension or Termination of Option.  If the Chief Executive
               -----------------------------------
Officer or his or her designee reasonably believes that an Optionee has
committed an act of misconduct, the Chief Executive Officer may suspend the
Optionee's right to exercise any option pending a determination by the Board of
Directors (excluding the Outside Director accused of such misconduct).  If the
Board of Directors (excluding the Outside Director accused of such misconduct)
determines an Optionee has committed an act of embezzlement, fraud, dishonesty,
nonpayment of an obligation owed to the Company, breach of fiduciary duty or
deliberate disregard of the Company rules resulting in loss, damage or injury to
the Company, or if an Optionee makes an unauthorized disclosure of any Company
trade secret or confidential information, engages in any conduct constituting
unfair competition, induces any Company customer to breach a contract with the
Company or induces any principal for whom the Company acts as agent to terminate
such agency relationship, neither the Optionee nor his or her estate shall be
entitled to exercise any Option whatsoever.  In making such determination, the
Board of Directors (excluding the Outside Director accused of such misconduct)
shall act fairly and shall give the Optionee an opportunity to appear and
present evidence on Optionee's behalf at a hearing before the Board or a
committee of the Board.

     5.   Eligibility.  Options may be granted only to Outside Directors.  All
          -----------
Options shall be automatically granted in accordance with the terms set forth in
Section 4(b) hereof.  An Outside Director who has been granted an Option may, if
he or she is otherwise eligible, be granted an additional Option or Options in
accordance with such provisions.

          The Plan shall not confer upon any Optionee any right with respect to
continuation of service as a Director or nomination to serve as a Director, nor
shall it interfere in any way with any rights which the Director or the Company
may have to terminate his or her directorship at any time.

     6.   Term of Plan; Effective Date.  The Plan shall become effective on the
          ----------------------------
effectiveness of the registration statement under the Securities Act of 1933, as
amended, relating to the Company's initial public offering of securities.  It
shall continue in effect for a term of ten (10) years unless sooner terminated
under Section 13 of the Plan.

     7.   Term of Options.  The term of each Option shall be ten (10) years from
          ---------------
the date of grant thereof.

                                      -4-
<PAGE>

     8.   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 100% of the fair market value
per Share on the date of grant of the Option.

          (b) Fair Market Value.   The fair market value of Common Stock shall
              -----------------
be determined, as of any date,  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, or the exchange with the greatest volume of trading
in Common Stock for the last market trading day prior to the time of
determination, as reported in The Wall Street Journal or such other source as
the Administrator deems reliable;

              (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 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 last
market trading day prior to the time of determination, as reported in The Wall
Street Journal or such other source as the Administrator deems reliable; 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
Board.

          With respect to any Options granted hereunder concurrently with the
initial effectiveness of the Plan, the fair market value shall be the Price to
Public as set forth in the final prospectus relating to such initial public
offering.

          (c) Form of Consideration.  The consideration to be paid for the
              ---------------------
Shares to be issued upon exercise of an Option shall consist entirely of cash,
check, other Shares of Common Stock having a fair market value on the date of
surrender equal to the aggregate exercise price of the Shares as to which said
Option shall be exercised (which, if acquired from the Company, shall have been
held for at least six months), or any combination of such methods of payment
and/or any other consideration or method of payment as shall be permitted under
applicable corporate law.

     9.   Exercise of Option.
          ------------------

          (a) Procedure for Exercise; Rights as a Stockholder.  Any Option
              -----------------------------------------------
granted hereunder shall be exercisable at such times as are set forth in Section
4(b) hereof; provided, however, that no Options shall be exercisable prior to
stockholder approval of the Plan in accordance with Section 17 hereof has been
obtained.

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

                                      -5-
<PAGE>

               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 full payment for the
Shares with respect to which the Option is exercised has been received by the
Company. Full payment may consist of any consideration and method of payment
allowable under Section 8(c) 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, notwithstanding the exercise of the
Option. A share certificate for the number of Shares so acquired shall be issued
to the Optionee as soon as practicable after exercise of the Option. No
adjustment will be made for a dividend or other right for which the record date
is prior to the date the stock certificate is issued, except as provided in
Section 11 of the Plan.

               Exercise of an Option in any manner shall result in a decrease in
the number of Shares which 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 Status as a Director.  If an Outside Director
               -----------------------------------
ceases to serve as a Director, he or she may, but only within seven (7) months
after the date he or she ceases to be a Director of the Company, exercise his or
her Option to the extent that he or she was entitled to exercise it at the date
of such termination.  Notwithstanding the foregoing, in no event may the Option
be exercised after its term set forth in Section 7 has expired.  To the extent
that such Outside Director was not entitled to exercise an Option at the date of
such termination, or does not exercise such Option (which he or she was entitled
to exercise) within the time specified herein, the Option shall terminate.

          (c)  Disability of Optionee.  Notwithstanding Section 9(b) above, in
               ----------------------
the event a Director is unable to continue his or her service as a Director with
the Company as a result of his or her total and permanent disability (as defined
in Section 22(e)(3) of the Code), he or she may, but only within twelve (12)
months from the date of such termination, exercise his or her Option to the
extent he or she was entitled to exercise it at the date of such termination.
Notwithstanding the foregoing, in no event may the Option be exercised after its
term set forth in Section 7 has expired.  To the extent that he or she was not
entitled to exercise the Option at the date of termination, or if he or she does
not exercise such Option (which he or she was entitled to exercise) within the
time specified herein, the Option shall terminate.

          (d)  Death of Optionee.  Notwithstanding Section 9(b) above, in the
               -----------------
event a Director's Continuous Status as a Director terminates as a result of his
or her death, the Option may be exercised, at any time within twelve (12) months
following the date of death, by the Optionee's estate or by a person who
acquired the right to exercise the Option by bequest or inheritance, but only to
the extent the Optionee was entitled to exercise it at the date of death.
Notwithstanding the foregoing, in no event may the Option be exercised after its
term set forth in Section 7 has expired.  To the extent that the Optionee was
not entitled to exercise the Option at the date of death, or if the Option is
not exercised in accordance with the preceding sentence within the time
specified therein, the Option shall terminate.

                                      -6-
<PAGE>

     10.  Nontransferability of Options.  The Option 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 or pursuant to a qualified
domestic relations order (as defined by the Code or the rules thereunder).  The
designation of a beneficiary by an Optionee does not constitute a transfer.  An
Option may be exercised during the lifetime of an Optionee only by the Optionee
or a transferee permitted by this Section.

     11.  Adjustments Upon Changes in Capitalization; Corporate Transactions.
          ------------------------------------------------------------------

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

          (b) Corporate Transactions. In the event of a dissolution or
              ----------------------
liquidation of the Company, Options not exercised as of the consummation of the
transaction shall terminate.  In the event of (i) a sale of all or substantially
all of the Company's assets, (ii) a merger, consolidation or other capital
reorganization of the Company with or into another corporation where the holders
of more than fifty percent (50%) of the shares of capital stock of the Company
outstanding immediately prior to such transaction do not immediately after such
transaction continue to hold (either by the voting securities remaining
outstanding or by being converted into voting securities of the surviving
entity), or (iii) a change in the composition of the Board such that during any
consecutive two (2) year period persons who constitute the Board at the
beginning of such period (or who were appointed or approved by a majority of the
Board in place at the beginning of such period ) cease to constitute at least
50% of the Board, the Company shall give to the Eligible Director, at the time
of adoption of the plan for liquidation, dissolution, sale, merger,
consolidation or reorganization, either a reasonable time thereafter within
which to exercise the Option, including Shares as to which the Option would not
be otherwise exercisable, prior to the effectiveness of such liquidation,
dissolution, sale, merger, consolidation or reorganization, at the end of which
time the Option shall terminate, or the right to exercise the Option, including
Shares as to which the Option would not be otherwise exercisable (or receive a
substitute option with comparable terms), as to an equivalent number of shares
of stock of the corporation succeeding the Company or acquiring its business by
reason of such sale, merger, consolidation or reorganization.

                                      -7-
<PAGE>

     12.  Time of Granting Options.  The date of grant of an Option shall, for
          ------------------------
all purposes, be the date determined in accordance with Section 4(b) hereof.
Notice of the determination shall be given to each Outside Director to whom an
Option is so granted within a reasonable time after the date of such grant.

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

          (a) Amendment and Termination.  The Board may amend or terminate the
              -------------------------
Plan from time to time in such respects as the Board may deem advisable;
provided that, to the extent necessary and desirable to comply with Rule 16b-3
-------- ----
under the Exchange Act (or any other applicable law or regulation), the Company
shall obtain approval of the stockholders of the Company to Plan amendments to
the extent and in the manner required by such law or regulation.
Notwithstanding the foregoing, the provisions set forth in Section 4 of this
Plan (and any other Sections of this Plan that affect the formula award terms
required to be specified in this Plan by Rule 16b-3) shall not be amended more
than once every six months, other than to comport with changes in the Code, the
Employee Retirement Income Security Act of 1974, as amended, or the rules
thereunder.

          (b) Effect of Amendment or Termination.  Any such amendment or
              ----------------------------------
termination of the Plan that would impair the rights of any Optionee shall not
affect Options already granted to such Optionee and such Options shall remain in
full force and effect as if this Plan had not been amended or terminated, unless
mutually agreed otherwise between the Optionee and the Board, which agreement
must be in writing and signed by the Optionee and the Company.

          14. Conditions Upon Issuance of Shares.  Shares shall not be issued
              ----------------------------------
pursuant to the exercise of an Option unless the exercise of such Option and the
issuance and delivery of such Shares pursuant thereto shall comply with all
relevant provisions of law, including, without limitation, the Securities Act of
1933, as amended, the Exchange Act, the rules and regulations promulgated
thereunder, state securities laws, and the requirements of any stock exchange
upon which the Shares may then be listed, and shall be further subject to the
approval of counsel for the Company with respect to such compliance. As a
condition to the exercise of an Option, the Company may require the person
exercising such Option to represent and warrant at the time of any such exercise
that the Shares are being purchased only for investment and without any present
intention to sell or distribute such Shares, if, in the opinion of counsel for
the Company, such a representation is required by any of the aforementioned
relevant provisions of law.

     15.  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.  Inability of the Company to
obtain authority from any regulatory body having jurisdiction, which authority
is deemed by the Company's counsel to be necessary to the lawful issuance and
sale of any Shares hereunder, shall relieve the Company of any liability in
respect of the failure to issue or sell such Shares as to which such requisite
authority shall not have been obtained.

     16.  Option Agreement.  Options shall be evidenced by written notice or
          ----------------
option agreements setting forth the terms of the Options.

                                      -8-
<PAGE>

     17.  Stockholder Approval.  If required by the applicable laws, continuance
          --------------------
of the Plan shall be subject to approval by the stockholders of the Company.
Such stockholder approval shall be obtained in the manner and to the degree
required under the applicable laws.  Options may be granted, but not exercised,
before such stockholder approval.

                                      -9-

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