<PAGE>   1
                                                                    EXHIBIT 10.2

                          FREESHOP INTERNATIONAL, INC.
                             1997 STOCK OPTION PLAN


        This Stock Option Plan (the "Plan") provides for the grant of options to
acquire shares of Common Stock, no par value (the "Common Stock"), of FreeShop
International, Inc., a Washington corporation (the "Company"). Stock options
granted under this Plan that qualify under Section 422 of the Internal Revenue
Code of 1986, as amended, (the "Code") are referred to in this Plan as
"Incentive Stock Options." Incentive Stock Options and stock options that do not
qualify under Section 422 of the Code ("Non-Qualified Stock Options") granted
under this Plan are referred to as "Options."

        1.     PURPOSES.

        The purposes of this Plan are to retain the services of valued key
employees, directors and consultants of the Company and such other persons as
the Plan Administrator shall select in accordance with Section 3 below, to
encourage such persons to acquire a greater proprietary interest in the Company,
thereby strengthening their incentive to achieve the objectives of the
shareholders of the Company, and to serve as an aid and inducement in the hiring
of new employees, consultants and other persons selected by the Plan
Administrator.

        2.     ADMINISTRATION.

        (a)    This Plan shall be administered initially by the Board of
Directors of the Company (the "Board"). If the Board so desires, the Plan shall
be administered by the full Board or a committee of the Board composed solely of
two or more directors, which committee (the "Committee") may be an executive,
compensation or other committee, including a separate committee especially
created for this purpose. The Board, or any committee thereof appointed to
administer the Plan in accordance with Paragraph (b) below, is referred to
herein as the "Plan Administrator."

        (b)    At such time as the Company becomes subject to the reporting
obligations of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), the Plan shall be administered by the full Board or a Committee composed
solely of two or more "non-employee directors," as defined in Rule 16b-3 (as
amended from time to time) promulgated under the Exchange Act or any successor
rule or regulatory requirement (the "Rule"). The Committee shall have the powers
and authority vested in the Board hereunder (including the power and authority
to interpret any provision of this Plan or of any Option). The members of any
such Committee shall serve at the pleasure of the Board. A majority of the
members of the Committee shall constitute a quorum, and all actions of the
Committee shall be taken by a majority of the members present. Any action may be
taken by a written instrument signed by all of the members of the Committee and
any action so taken shall be fully effective as if it had been taken at a
meeting.

        (c)    Subject to the provisions of this Plan, and with a view to
effecting its purpose, the Plan Administrator shall have sole authority, in its
absolute discretion, to (i) construe


FreeShop International, Inc.
1997 Stock Option Plan
                                      -1-
<PAGE>   2

and interpret this Plan; (ii) define the terms used in this Plan; (iii)
prescribe, amend and rescind rules and regulations relating to this Plan; (iv)
correct any defect, supply any omission or reconcile any inconsistency in this
Plan; (v) grant Options under this Plan; (vi) determine the individuals to whom
Options shall be granted under this Plan and whether the Option is an Incentive
Stock Option or a Non-Qualified Stock Option; (vii) determine the time or times
at which Options shall be granted under this Plan; (viii) determine the number
of shares of Common Stock subject to each Option, the exercise price of each
Option, the duration of each Option and the times at which each Option shall
become exercisable; (ix) determine all other terms and conditions of Options;
and (x) make all other determinations necessary or advisable for the
administration of this Plan. All decisions, determinations and interpretations
made by the Plan Administrator shall be binding and conclusive on all
participants in this Plan and on their legal representatives, heirs and
beneficiaries.

        (d)    The Board or the Committee may delegate to one or more executive
officers of the Company the authority to grant Options under this Plan to
employees of the Company who, on the Date of Grant, are not subjected to Section
16(b) of the Exchange Act with respect to the Common Stock ("Non-Insiders"), and
are not "covered employees" as such term is defined for purposes of Section
162(m) of the Code ("Non-Covered Employees"), and in connection therewith the
authority to determine: (i) the number of shares of Common Stock subject to such
Option; (ii) the duration of the Option; (iii) the vesting schedule for
determining the times at which such Option shall become exercisable; and (iv)
all other terms and conditions of such Options. The exercise price for any
Option granted by action of an executive officer or officers pursuant to such
delegation of authority shall not be less than the fair market value per share
of the Common Stock on the Date of Grant. Unless expressly approved in advance
by the Board or the Committee, such delegation of authority shall not include
the authority to accelerate the vesting, extend the period for exercise or
otherwise alter the terms of outstanding Options. The term "Plan Administrator"
when used in any provision of this Plan other than Sections 2, 5(m), and 11
shall be deemed to refer to the Board or the Committee, as the case may be, and
an executive officer who has been authorized to grant Options pursuant thereto,
insofar as such provisions may be applied to persons that are Non-Insiders and
Non-Covered Employees and Options granted to such persons.

        3.     ELIGIBILITY.

        Incentive Stock Options may be granted to any individual who, at the
time the Option is granted, is a full-time employee of the Company or any
Related Corporation (as defined below) ("Employees") or who is a non-Employee
director of the Company. Non-Qualified Stock Options may be granted to
Employees, directors and such other persons as the Plan Administrator shall
select. Options may be granted in substitution for outstanding Options of
another corporation in connection with the merger, consolidation, acquisition of
property or stock or other reorganization between such other corporation and the
Company or any subsidiary of the Company. Options also may be granted in
exchange for outstanding Options. Any person to whom an Option is granted under
this Plan is referred to as an "Optionee."

        As used in this Plan, the term "Related Corporation," when referring to
a subsidiary corporation, shall mean any corporation (other than the Company) in
an unbroken chain of corporations beginning with the Company if, at the time of
the granting of the Option, each of the corporations other than the last
corporation in the unbroken chain owns stock


FreeShop International, Inc.
1997 Stock Option Plan
                                      -2-
<PAGE>   3

possessing fifty percent (50%) or more of the total combined voting power of all
classes of stock of one of the other corporations in such chain. When referring
to a parent corporation, the term "Related Corporation" shall mean any
corporation (other than the Company) in an unbroken chain of corporations ending
with the Company if, at the time of granting of the Option, each of the
corporations other than the Company owns stock possessing fifty percent (50%) or
more of the total combined voting power of all classes of stock of one of the
other corporations in such chain.

        4.*    STOCK.

        The Plan Administrator is authorized to grant Options to acquire up to a
total of 1,600,000 shares of the Company's authorized but unissued, or
reacquired, Common Stock. The number of shares with respect to which Options may
be granted hereunder is subject to adjustment as set forth in Section 5(m)
hereof. In the event that any outstanding Option expires or is terminated for
any reason, the shares of Common Stock allocable to the unexercised portion of
such Option may again be subject to an Option to the same Optionee or to a
different person eligible under Section 3 of this Plan.

        5.     TERMS AND CONDITIONS OF OPTIONS.

        Each Option granted under this Plan shall be evidenced by a written
agreement approved by the Plan Administrator (the "Agreement"). Agreements may
contain such additional provisions, not inconsistent with this Plan, as the Plan
Administrator in its discretion may deem advisable. All Options also shall
comply with the following requirements:

               (a)  Number of Shares and Type of Option.

        Each Agreement shall state the number of shares of Common Stock to which
it pertains and whether the Option is intended to be an Incentive Stock Option
or a Non-Qualified Stock Option. In the absence of action to the contrary by the
Plan Administrator in connection with the grant of an Option, all Options shall
be Non-Qualified Stock Options. The aggregate fair market value (determined at
the Date of Grant, as defined below) of the stock with respect to which
Incentive Stock Options are exercisable for the first time by the Optionee
during any calendar year (granted under this Plan and all other Incentive Stock
Option plans of the Company, a Related Corporation or a predecessor corporation)
shall not exceed $100,000, or such other limit as may be prescribed by the Code
as it may be amended from time to time. Any Option which exceeds the annual
limit shall not be void but rather shall be a Non-Qualified Stock Option.


--------
* This section was amended and restated by the Third Amendment to 1997 Stock
Option Plan pursuant to a resolution of the Board of Directors dated January 21,
1998 and later amended and restated by the Fourth Amendment to 1997 Stock Option
Agreement pursuant to a resolution of the Board of Directors dated May 24, 1999.


FreeShop International, Inc.
1997 Stock Option Plan
                                      -3-
<PAGE>   4

               (b)  Date of Grant.

        Each Agreement shall state the date the Plan Administrator has deemed to
be the effective date of the Option for purposes of this Plan (the "Date of
Grant").

               (c)  Exercise Price.

        Each Agreement shall state the price per share of Common Stock at which
it is exercisable. The exercise price shall be fixed by the Plan Administrator
at whatever price the Plan Administrator may determine in the exercise of its
sole discretion in good faith; provided, that with respect to Incentive Stock
Options granted to greater-than-10 percent (>10%) shareholders of the Company
(as determined with reference to Section 424(d) of the Code), the exercise price
per share shall not be less than 110 percent (110%) of the fair market value per
share of the Common Stock at the Date of Grant.

               (d)  Duration of Options.

        At the time of the grant of the Option, the Plan Administrator shall
designate, subject to paragraph 5(g) below, the expiration date of the Option,
which date shall not be later than ten (10) years from the Date of Grant in the
case of Incentive Stock Options; provided, that the expiration date of any
Incentive Stock Option granted to a greater-than-10 percent (>10%) shareholder
of the Company (as determined with reference to Section 424(d) of the Code)
shall not be later than five (5) years from the Date of Grant. In the absence of
action to the contrary by the Plan Administrator in connection with the grant of
a particular Option, and except in the case of Incentive Stock Options as
described above, all Options granted under this Plan shall expire ten (10) years
from the Date of Grant.

               (e)** Vesting Schedule.

        No Option shall be exercisable until it has vested. The vesting schedule
for each Option shall be specified by the Plan Administrator at the time of
grant of the Option; provided, that if no vesting schedule is specified at the
time of grant, the Option shall vest according to the following schedule:

<TABLE>
<CAPTION>
                     Number of Months Following                           Percentage of Total
                Date Employment or Services Commence                         Option Vested
<S>                                                                        <C>
                                 12                                              25%
                                 15                                              31.25%
                                 18                                              37.50%
                                 21                                              43.75%
                                 24                                              50%
                                 27                                              56.25%
                                 30                                              62.50%
                                 33                                              68.75%
                                 36                                              75%
                                 39                                              81.25%
                                 42                                              87.50%
                                 45                                              93.75%
                                 48                                              100%
</TABLE>

--------------
** This section was amended and restated by the First Amendment to 1997 Stock
Option Plan pursuant to a resolution of the Board of Directors dated July 1,
1997 and later amended and restated by the Second Amendment to 1997 Stock Option
Plan pursuant to a resolution of the Board of Directors dated August 22, 1997.


FreeShop International, Inc.
1997 Stock Option Plan
                                      -4-
<PAGE>   5

               (f)  Acceleration of Vesting.

        The vesting of one or more outstanding Options may be accelerated by the
Plan Administrator at such times and in such amounts as it shall determine in
its sole discretion. The vesting of Options also shall be accelerated under the
circumstances described in Sections 5(m) below and under such other
circumstances, if any, as may be described in individual Agreements.

               (g)  Term of Option.

        Vested Options shall terminate, to the extent not previously exercised,
upon the occurrence of the first of the following events: (i) the expiration of
the Option, as designated by the Plan Administrator in accordance with Section
5(d) above; (ii) the expiration of ninety (90) days from the date of an
Optionee's termination of employment or contractual relationship with the
Company or any Related Corporation for any reason whatsoever other than death or
Disability (as defined below) unless, in the case of a Non-Qualified Stock
Option, the exercise period is extended by the Plan Administrator until a date
not later than the expiration date of the Option; or (iii) the expiration of one
(1) year from (A) the date of death of the Optionee or (B) cessation of an
Optionee's employment or contractual relationship by reason of Disability (as
defined below) unless, in the case of a Non-Qualified Stock Option, the exercise
period is extended by the Plan Administrator until a date not later than the
expiration date of the Option. If an Optionee's employment or contractual
relationship is terminated by death, any Option then held by the Optionee shall
be exercisable only by the person or persons to whom such Optionee's rights
under such Option shall pass by the Optionee's will or by the laws of descent
and distribution of the state or county of the Optionee's domicile at the time
of death. For purposes of the Plan, unless otherwise defined in the Agreement,
"Disability" shall mean any physical, mental or other health condition which
substantially impairs the Optionee's ability to perform her or his assigned
duties for one hundred twenty (120) days or more in any two hundred forty (240)
day period or that can be expected to result in death. The Plan Administrator
shall determine whether an Optionee has incurred a Disability on the basis of
medical evidence acceptable to the Plan Administrator. Upon making a
determination of Disability, the Plan Administrator shall, for purposes of the
Plan, determine the date of an Optionee's termination of employment or
contractual relationship.

        Unless accelerated in accordance with Section 5(f) above, unvested
Options shall terminate immediately upon termination of employment or
contractual relationship of the Optionee by the Company for any reason
whatsoever, including death or Disability.


FreeShop International, Inc.
1997 Stock Option Plan
                                      -5-
<PAGE>   6

        For purposes of this Plan, transfer of employment or contractual
relationship between or among the Company and/or any Related Corporation shall
not be deemed to constitute a termination of employment with the Company or any
Related Corporations. For purposes of this Plan, if an Employee Optionee's
relationship with the Company changes (e.g., from an Employee to a non-Employee,
such as a part-time employee or a consultant, or by reason of military leave,
sick leave or other leave of absence), such change shall be deemed to constitute
a termination of employment unless otherwise determined by the Plan
Administrator; provided, that if, in the case of an Incentive Stock Option, the
Plan Administrator determines that for purposes hereof a change from an Employee
to a part-time employee or consultant shall not constitute a termination of the
Optionee's employment with the Company, then the Optionee's Incentive Stock
Option shall automatically be converted into a Non-Qualified Stock Option; and
provided further, that with respect to Incentive Stock Options, employment shall
in no event be deemed to continue beyond the first ninety (90) days of any leave
of absence unless the Optionee's re-employment rights are guaranteed by statute
or by contract.

               (h)  Exercise of Options.

        Options shall be exercisable, either all or in part, at any time after
vesting, until termination; provided, that after registration of any of the
Company's securities under Section 12 of the Exchange Act and regardless of when
the Option is exercised, any Optionee who is an Insider shall be precluded from
selling or transferring any Common Stock or other security underlying an Option
during the six (6) months immediately following the grant of that Option. If
less than all of the shares included in the vested portion of any Option are
purchased, the remainder may be purchased at any subsequent time prior to the
expiration of the Option term. No portion of any Option for less than five (5)
shares (as adjusted pursuant to Section 5(m) below) may be exercised; provided,
that if the vested portion of any Option is less than five (5) shares, it may be
exercised with respect to all shares for which it is vested. Only whole shares
may be issued pursuant to an Option, and to the extent that an Option covers
less than one (1) share, it is unexercisable. Options or portions thereof may be
exercised by giving written notice to the Company, which notice shall specify
the number of shares to be purchased, and be accompanied by payment in the
amount of the aggregate exercise price for the Common Stock so purchased, which
payment shall be in the form specified in Section 5(i) below. The Company shall
not be obligated to issue, transfer or deliver a certificate of Common Stock to
any Optionee, or to his personal representative, until the aggregate exercise
price has been paid for all shares for which the Option shall have been
exercised and adequate provision has been made by the Optionee for satisfaction
of any tax withholding obligations associated with such exercise. During the
lifetime of an Optionee, Options are exercisable only by the Optionee.

               (i)  Payment upon Exercise of Option.

        Upon the exercise of any Option, the aggregate exercise price shall be
paid to the Company in cash or by certified or cashier's check. In addition,
upon approval of the Plan Administrator, an Optionee may pay for all or any
portion of the aggregate exercise price (1) by delivering to the Company shares
of Common Stock previously held by such Optionee, (2) by having shares withheld
from the amount of shares of Common Stock to be received by Optionee or (3) by
complying with any other payment mechanism approved by the Plan Administrator


FreeShop International, Inc.
1997 Stock Option Plan
                                      -6-
<PAGE>   7

from time to time. The shares of Common Stock received or withheld by the
Company as payment for shares of Common Stock purchased upon the exercise of
Options shall have a fair market value at the date of exercise (as determined by
the Plan Administrator) equal to the aggregate exercise price (or portion
thereof) to be paid by the Optionee upon such exercise.

               (j)  Rights as a Shareholder.

        An Optionee shall have no rights as a shareholder with respect to any
shares covered by an Option until such Optionee becomes a record holder of such
shares, irrespective of whether such Optionee has given notice of exercise.
Subject to the provisions of Section 5(m) hereof, no rights shall accrue to an
Optionee and no adjustments shall be made on account of dividends (ordinary or
extraordinary, whether in cash, securities or other property) or distributions
or other rights declared on, or created in, the Common Stock for which the
record date is prior to the date the Optionee becomes a record holder of the
shares of Common Stock covered by the Option, irrespective of whether such
Optionee has given notice of exercise.

               (k)  Transfer of Option.

        Unless otherwise specified in the Agreement or by the Plan
Administrator, Options granted under this Plan and the rights and privileges
conferred by this Plan may not be transferred, assigned, pledged or hypothecated
in any manner (whether by operation of law or otherwise) other than by will, by
applicable laws of descent and distribution, or (except in the case of an
Incentive Stock Option) pursuant to a qualified domestic relations order, and
shall not be subject to execution, attachment or similar process; provided
however, that any Agreement may provide or be amended to provide that a
Non-Qualified Stock Option to which it relates is transferable during the
Optionee's lifetime without payment of consideration to immediate family members
of the Optionee or to trusts or partnerships established exclusively for the
benefit of the Optionee and the Optionee's immediate family members. Upon any
attempt to transfer, assign, pledge, hypothecate or otherwise dispose of any
Option or of any right or privilege conferred by this Plan contrary to the
provisions hereof, or upon the sale, levy or any attachment or similar process
upon the rights and privileges conferred by this Plan, such Option shall
thereupon terminate and become null and void.

               (l)  Securities Regulation and Tax Withholding.

                         (1)  Shares shall not be issued with respect to an
Option unless the exercise of such Option and the issuance and delivery of such
shares shall comply with all relevant provisions of law, including, without
limitation, any applicable state securities laws, the Securities Act of 1933, as
amended, (the "Securities Act"), the Exchange Act, the rules and regulations
thereunder and the requirements of any stock exchange upon which such shares may
then be listed, and such issuance shall be further subject to the approval of
counsel for the Company with respect to such compliance, including the
availability of an exemption from registration for the issuance and sale of such
shares. The inability of the Company to obtain from any regulatory body the
authority deemed by the Company to be necessary for the lawful issuance and sale
of any shares under this Plan, or the unavailability of an exemption from


FreeShop International, Inc.
1997 Stock Option Plan
                                      -7-
<PAGE>   8

registration for the issuance and sale of any shares under this Plan, shall
relieve the Company of any liability with respect to the non-issuance or sale of
such shares.

        As a condition to the exercise of an Option, the Plan Administrator may
require the Optionee to represent and warrant in writing at the time of such
exercise that the shares are being purchased only for investment and without any
then-present intention to sell or distribute such shares. At the option of the
Plan Administrator, a stop-transfer order against such shares may be placed on
the stock books and records of the Company, and a legend indicating that the
stock may not be pledged, sold or otherwise transferred unless an opinion of
counsel is provided stating that such transfer is not in violation of any
applicable law or regulation, may be stamped on the certificates representing
such shares in order to assure an exemption from registration. The Plan
Administrator also may require such other documentation as may from time to time
be necessary to comply with federal and state securities laws. It is the intent
of the Company to register the shares issuable upon exercise of the Option as
soon as reasonably practical after such time, if ever, as the Company registers
any of its other shares of common stock under the Securities Act, but THE
COMPANY HAS NO OBLIGATION TO UNDERTAKE REGISTRATION OF OPTIONS OR THE SHARES OF
STOCK ISSUABLE UPON THE EXERCISE OF OPTIONS.

                    (2)  As a condition to the exercise of any Option granted
under this Plan, the Optionee shall make such arrangements as the Plan
Administrator may require for the satisfaction of any federal, state or local
withholding tax obligations that may arise in connection with such exercise.

                    (3)  The issuance, transfer or delivery of certificates of
Common Stock pursuant to the exercise of Options may be delayed, at the
discretion of the Plan Administrator, until the Plan Administrator is satisfied
that the applicable requirements of the federal and state securities laws and
the withholding provisions of the Code have been met.

               (m)  Stock Dividend, Reorganization or Liquidation.

                    (1)  If (i) the Company shall at any time be involved in a
transaction described in Section 424(a) of the Code (or any successor provision)
or any "corporate transaction" described in the regulations thereunder; (ii) the
Company shall declare a dividend payable in, or shall subdivide or combine, its
Common Stock; or (iii) any other event with substantially the same effect shall
occur, the Plan Administrator shall, with respect to each outstanding Option,
proportionately adjust the number of shares of Common Stock and/or the exercise
price per share so as to preserve the rights of the Optionee substantially
proportionate to the rights of the Optionee prior to such event, and to the
extent that such action shall include an increase or decrease in the number of
shares of Common Stock subject to outstanding Options, the number of shares
available under Section 4 of this Plan shall automatically be increased or
decreased, as the case may be, proportionately, without further action on the
part of the Plan Administrator, the Company or the Company's shareholders.


FreeShop International, Inc.
1997 Stock Option Plan


                                      -8-
<PAGE>   9

                    (2) If the Company is liquidated or dissolved, the Plan
Administrator may allow the holders of any outstanding Options to exercise all
or any part of the unvested portion of the Options held by them; provided, that
such Options must be exercised prior to the effective date of such liquidation
or dissolution. If the Option holders do not exercise their Options prior to
such effective date, each outstanding Option shall terminate as of the effective
date of the liquidation or dissolution.

                    (3) The foregoing adjustments in the shares subject to
Options shall be made by the Plan Administrator, or by any successor
administrator of this Plan, or by the applicable terms of any assumption or
substitution document.

                    (4) The grant of an Option shall not affect in any way the
right or power of the Company to make adjustments, reclassifications,
reorganizations or changes of its capital or business structure, to merge,
consolidate or dissolve, to liquidate or to sell or transfer all or any part of
its business or assets.

        6.     EFFECTIVE DATE; TERM.

        This Plan shall be effective as of June 30, 1997. Incentive Stock
Options may be granted by the Plan Administrator from time to time thereafter
through and until June 30, 2007. Non-Qualified Stock Options may be granted
until this Plan is terminated by the Board in its sole discretion. Termination
of this Plan shall not terminate any Option granted prior to such termination.
Any Options granted by the Plan Administrator prior to the approval of this Plan
by a majority of the shareholders of the Company shall be granted subject to
ratification of this Plan by the shareholders of the Company within twelve (12)
months after this Plan is adopted by the Board, and if shareholder ratification
is not obtained, each and every Option granted under this Plan shall be null and
void and shall convey no rights to the holder thereof.

        7.     NO OBLIGATIONS TO EXERCISE OPTION.

        The grant of an Option shall impose no obligation upon the Optionee to
exercise such Option.

        8.     NO RIGHT TO OPTIONS OR TO EMPLOYMENT.

        Whether or not any Options are to be granted under this Plan shall be
exclusively within the discretion of the Plan Administrator, and nothing
contained in this Plan shall be construed as giving any person any right to
participate under this Plan. The grant of an Option shall in no way constitute
any form of agreement or understanding binding on the Company or any Related
Company, express or implied, that the Company or any Related Company will employ
or contract with an Optionee for any length of time, nor shall it interfere in
any way with the Company's or, where applicable, a Related Company's right to
terminate Optionee's employment at any time, which right is hereby reserved.


FreeShop International, Inc.
1997 Stock Option Plan
                                      -9-
<PAGE>   10

        9.     APPLICATION OF FUNDS.

        The proceeds received by the Company from the sale of Common Stock
issued upon the exercise of Options shall be used for general corporate
purposes, unless otherwise directed by the Board.

        10.    INDEMNIFICATION OF PLAN ADMINISTRATOR.

        In addition to all other rights of indemnification they may have as
members of the Board, members of the Plan Administrator shall be indemnified by
the Company for all reasonable expenses and liabilities of any type or nature,
including attorneys' fees, incurred in connection with any action, suit or
proceeding to which they or any of them are a party by reason of, or in
connection with, this Plan or any Option granted under this Plan, and against
all amounts paid by them in settlement thereof (provided that such settlement is
approved by independent legal counsel selected by the Company), except to the
extent that such expenses relate to matters for which it is adjudged that such
Plan Administrator member is liable for willful misconduct; provided, that
within fifteen (15) days after the institution of any such action, suit or
proceeding, the Plan Administrator member involved therein shall, in writing,
notify the Company of such action, suit or proceeding, so that the Company may
have the opportunity to make appropriate arrangements to prosecute or defend the
same.

        11.    AMENDMENT OF PLAN.

        The Plan Administrator may, at any time, modify, amend or terminate this
Plan and Options granted under this Plan, including, without limitation, such
modifications or amendments as are necessary to maintain compliance with
applicable statutes, rules or regulations; provided, that any amendment for
which shareholder approval is required by the Rule in order for the Plan to be
eligible or continue to qualify for the benefits of the Rule shall be subject to
approval of the requisite percentage of the shareholders of the Company in
accordance with the Rule. Without limiting the generality of the foregoing, the
Plan Administrator may modify grants to persons who are eligible to receive
Options under this Plan who are foreign nationals or employed outside the United
States to recognize differences in local law, tax policy or custom.

        Date Approved by Board of Directors of Company: June 30, 1997.


        Date Approved by Shareholders of Company: June 30, 1997.





FreeShop International, Inc.
1997 Stock Option Plan
                                      -10-


<PAGE>   11

                          FREESHOP INTERNATIONAL, INC.
                    FIRST AMENDMENT TO 1997 STOCK OPTION PLAN


        This First Amendment (the "First Amendment") to 1997 Stock Option Plan
(the "Plan") is dated to be effective as of July 1, 1997. On June 30, 1997,
FreeShop International, Inc. (the "Company") adopted the Plan. Capitalized terms
used in this First Amendment and not otherwise defined have the meanings
assigned to such terms in the Plan.

        By resolution adopted by the Board of Directors of the Company on July
1, 1997, the Company hereby amends Section 5(e) of the Plan and restates such
section in its entirety as follows:

               "(e) Vesting Schedule.

        No Option shall be exercisable until it has vested. The vesting schedule
for each Option shall be specified by the Plan Administrator at the time of
grant of the Option; provided, that if no vesting schedule is specified at the
time of grant, the Option shall vest according to the following schedule:

<TABLE>
<CAPTION>
                Number of Months Following
           Date Employment or Services Commence                                  Percentage of Total
              (Date of Grant: After 7/01/97)                                        Option Vested

<S>                                                                                       <C>
                             0                                                            0.0%
                             3                                                            0.0%
                             6                                                            9.1%
                             9                                                            9.1%
                            12                                                            9.1%
                            15                                                            9.1%
                            18                                                            9.1%
                            21                                                            9.1%
                            24                                                            9.1%
                            27                                                            9.1%
                            30                                                            9.1%
                            33                                                            9.1%
                            36                                                            9.0%"
</TABLE>


<PAGE>   12
                          FREESHOP INTERNATIONAL, INC.
                   SECOND AMENDMENT TO 1997 STOCK OPTION PLAN

        This Second Amendment (the "Second Amendment") to 1997 Stock Option Plan
(the "Plan") is dated to be effective as of August 22, 1997. On June 30, 1997,
FreeShop International, Inc. (the "Company") adopted the Plan. Capitalized terms
used in this Second Amendment and not otherwise defined have the meanings
assigned to such terms in the Plan.

        By resolution adopted by the Board of Directors of the Company on August
22, 1997, the Company hereby amends Section 5(e) of the Plan and restates such
section in its entirety as follows:

               "(e) Vesting Schedule.

        No Option shall be exercisable until it has vested. The vesting schedule
for each Option shall be specified by the Plan Administrator at the time of
grant of the Option; provided, that if no vesting schedule is specified at the
time of grant, the Option shall vest according to the following schedule:

<TABLE>
<CAPTION>
                Number of Months Following
           Date Employment or Services Commence                                  Percentage of Total
              (Date of Grant: After 7/01/97)                                        Option Vested

<S>                                                                                       <C>
                             0                                                            0.0%
                             3                                                            0.0%
                             6                                                            0.0%
                             9                                                            0.0%
                            12                                                            20.0%
                            15                                                            6.7%
                            18                                                            6.7%
                            21                                                            6.7%
                            24                                                            6.7%
                            27                                                            6.7%
                            30                                                            6.7%
                            33                                                            6.7%
                            36                                                            6.7%
                            39                                                            6.7%
                            42                                                            6.7%
                            45                                                            6.7%
                            48                                                            6.3%"
</TABLE>

<PAGE>   13
                          FREESHOP INTERNATIONAL, INC.
                    THIRD AMENDMENT TO 1997 STOCK OPTION PLAN

        This Third Amendment (the "Third Amendment") to 1997 Stock Option Plan
(the "Plan") is dated to be effective as of January 21, 1998. On June 30, 1997,
FreeShop International, Inc. (the "Company") adopted the Plan. Capitalized terms
used in this Third Amendment and not otherwise defined have the meanings
assigned to such terms in the Plan.

        By resolution adopted by the Board of Directors of the Company on
January 21, 1998, the Company hereby amends Section 4 of the Plan and restates
such section in its entirety as follows:

        "4.    STOCK.

        The Plan Administrator is authorized to grant Options to acquire up to a
total of 2,800,000 shares of the Company's authorized but unissued, or
reacquired, Common Stock. The number of shares with respect to which Options may
be granted hereunder is subject to adjustment as set forth in Section 5(m)
hereof. In the event that any outstanding Option expires or is terminated for
any reason, the shares of Common Stock allocable to the unexercised portion of
such option may again be subject to an Option to the same Optionee or to a
different person eligible under Section 3 of this Plan."



<PAGE>   14

                               FREESHOP.COM, INC.
                    (FORMERLY "FREESHOP INTERNATIONAL, INC.")
                   FOURTH AMENDMENT TO 1997 STOCK OPTION PLAN

        This Fourth Amendment (the "Fourth Amendment") to 1997 Stock Option Plan
(the "Plan") is dated to be effective as of May 24, 1999. On June 30, 1997,
FreeShop.com, Inc. (formerly "FreeShop International, Inc." and herein referred
to as the "Company") adopted the Plan. Capitalized terms used in this Fourth
Amendment and not otherwise defined have the meanings assigned to such terms in
the Plan.

        By resolution adopted by the Board of Directors of the Company on May
24, 1999, the Company hereby amends Section 4 of the Plan and restates such
section in its entirety as follows:

        "4.    STOCK.

        The Plan Administrator is authorized to grant Options to acquire up to a
total of 6,000,000 shares of the Company's authorized but unissued, or
reacquired, Common Stock. The number of shares with respect to which Options may
be granted hereunder is subject to adjustment as set forth in Section 5(m)
hereof. In the event that any outstanding Option expires or is terminated for
any reason, the shares of Common Stock allocable to the unexercised portion of
such option may again be subject to an Option to the same Optionee or to a
different person eligible under Section 3 of this Plan."