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                                                                    EXHIBIT 10.3


                                  iPARTY CORP.
                              AMENDED AND RESTATED
                         1998 INCENTIVE AND NONQUALIFIED
                                STOCK OPTION PLAN
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1.   PURPOSE

     The purpose of the iParty Corp. Amended and Restated 1998 Incentive and
Nonqualified Stock Option Plan (the "Plan") is to encourage and enable key
employees (which term, as used herein, shall include officers), and directors,
of iParty Corp. ("iParty") or Parent (as defined below) (if any) or Subsidiary
thereof (as defined below) (collectively, unless the context otherwise requires,
the "Corporation"), consultants, and advisors to the Corporation, and other
persons or entities providing goods or services to the Corporation to acquire a
proprietary interest in the Corporation through the ownership of common stock of
the Corporation. As used herein, the term "Parent" or "Subsidiary" shall mean
any present or future corporation which is or would be a "parent corporation" or
"subsidiary corporation" of iParty as the term is defined in section 424 of the
Internal Revenue Code of 1986, as amended (the "Code") (determined as if iParty
were the employer corporation). Such directors, consultants, advisors, and other
persons or entities providing goods or services to the Corporation and entitled
to any Option ("Option") to purchase shares of Common Stock (as defined below)
hereunder are hereinafter collectively referred to as the "Associates," and the
relationship of the Associates to the Corporation is hereinafter referred to as
"association with" the Corporation. An employee or Associate to whom an Option
has been granted is referred to as a "Grantee." Such ownership will provide such
Grantees with a more direct stake in the future welfare of the Corporation and
encourage them to remain employed by or associated with the Corporation. It is
also expected that the Plan will encourage qualified persons to seek and accept
employment or association with the Corporation.

2.   ADMINISTRATION

     (a)  The Plan shall be administered by the Board of Directors
(the "Board"); provided, however, that to the extent permitted by law, the Board
may delegate the administration of the Plan to a committee (the "Committee") of
no less than two directors. Any reference herein to any decision to be made or
action to be taken by the Board shall be deemed to be a reference to the
Committee to the extent that the Board has delegated the authority to the
Committee to make such decision or take such action.

     (b)  As it applies to the administration of the Plan, a majority of the
members of the Board shall constitute a quorum, and the action of a majority of
the members of the Board present at a meeting at which a quorum is present, as
well as actions taken pursuant to the unanimous written consent of all the
members of the Board without holding a meeting, shall be deemed to be actions of
the Board. All actions of the Board and all interpretations and decisions made
by the Board with respect to any question arising under the Plan shall be final
and conclusive and shall be binding upon the Corporation and all other
interested parties. If authority for administration of the Plan has been
delegated to a Committee, any decision with respect to

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the Plan must be made by both directors if the Committee comprises only two
directors, or a majority of directors if the Committee comprises more than two
directors.

     (c)  Subject to the terms and conditions of the Plan, the Board shall be
responsible for the overall management and administration of the Plan and shall
have such authority as shall be necessary or appropriate in order to carry out
its responsibilities, including, without limitation, the authority to (i)
interpret and construe the Plan and to determine the terms of all Options
granted pursuant to the Plan, including, but not limited to, the persons to
whom, and the time or times at which grants shall be made, the number of Options
to be included in the grants, the number of Options which shall be treated as
incentive stock options (in the case of Options granted to employees) as
described in section 422 of the Code ("Incentive Stock Options"), the number of
Options which do not qualify as Incentive Stock Options ("Nonqualified
Options"), and the terms and conditions thereof; (ii) to adopt rules and
regulations and to prescribe forms for the operation and administration of the
Plan; and (iii) to take any other action not inconsistent with the provisions of
the Plan that it may deem necessary or appropriate.

3.   ELIGIBILITY AND PARTICIPATION

     (a)  Key employees and Associates of the Corporation are eligible to
receive Options. Each Option shall be granted, and the number of shares and the
vesting schedule of such shares subject thereto shall be determined by the
Board.

     (b)  Each member of the Board who is not an executive officer of the
Corporation shall be granted on the effective date of the beginning of such term
as director of iParty, Options for 25,000 shares of iParty's common stock, par
value $.001 per share (the "Common Stock"). In addition, each such director who
is not an executive officer of the Corporation shall be granted, on an annual
basis on the last trading day of each August, commencing August 1998, Options
for 25,000 shares of the Common Stock, at an exercise price equal to the
aggregate "Fair Market Value" (as defined in Section 8 hereof) of such shares on
the date of grant, and such Options shall vest immediately upon grant. The
Secretary of iParty shall receive the same compensation as Board members who are
not executive officers of the Corporation.

4.   SHARES SUBJECT TO THE PLAN

     (a)  Options shall be evidenced by written agreements which shall, among
other things (i) designate the Option as either an Incentive Stock Option or a
Nonqualified Stock Option, (ii) specify the number of shares covered by the
Option; (iii) specify the exercise price, determined in accordance with Section
7 hereof, for the shares subject to the Option; (iv) specify the Option period
determined in accordance with Section 6 hereof; (v) set forth specifically or
incorporate by reference the applicable provisions of the Plan; and (vi) contain
such other terms and conditions consistent with the Plan as the Board may, in
its discretion, prescribe.

     (b)  The shares of Common Stock to be offered and delivered under the Plan,
pursuant to the exercise of an Option may be unissued shares or reacquired
shares, as the Board may from time to time determine. Subject to adjustment as
provided in Section 13 hereof, the aggregate number of shares to be delivered
under the Plan, shall not exceed eleven million (11,000,000) shares. If an
Option expires or terminates for any reason during the term of the Plan prior to
the

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exercise thereof in full, the shares subject to but not delivered under such
Option shall be available for Options thereafter granted.

5.   INCENTIVE STOCK OPTIONS

     (a)  An Option designated by the Board as an "Incentive Stock Option" is
intended to qualify as an "incentive stock option" within the meaning of section
422 of the Code. An Incentive Stock Option shall be granted only to an employee
of the Corporation.

     (b)  An Option shall be treated as an Incentive Stock Option only to the
extent that the aggregate Fair Market Value (determined at the time the Option
is granted) of the shares with respect to which all Incentive Stock Options held
by a Grantee (under the Plan and all other plans of iParty, any Parent, and any
Subsidiary), become exercisable for the first time during any calendar year does
not exceed $100,000. This limitation shall be applied by taking Options into
account in the order in which they were granted. To the extent this limitation
is exceeded, an Option shall be treated as a Nonqualified Stock Option
regardless of its designation as an Incentive Stock Option. Should any Incentive
Stock Option remain exercisable after three months after employment terminates
for any reason other than Disability (within the meaning of section 22(e)(3) of
the Code) or death, or after one year if employment terminates due to
Disability, the Option shall immediately be converted to a Nonqualified Stock
Option after the lapse of the relevant time period. In order to obtain the
benefits of an Incentive Stock Option under the Code, no sale or other
disposition may be made of any shares acquired upon exercise of such Option
until the later of one year from the date of transfer of the shares acquired
pursuant to the exercise of the Option, or two years from the grant date of the
Option. The Corporation shall have no liability in the event it is determined
that any Option intended to be an Incentive Stock Option fails to qualify as
such, whether such failure is a result of a disqualifying disposition, the terms
of the Plan or any agreement evidencing the Incentive Stock Option.

     (c)  Should Section 422 of the Code be amended during the term of the Plan,
the Board may modify the Plan consistently with such amendment.

6.   TERM OF OPTION PERIOD

     The term during which Options may be exercised under the Plan shall expire
not later than the tenth anniversary of the date the Option is granted, as may
be determined by the Board; provided, however, that in the case of Incentive
Stock Options granted to a person who owns (within the meaning of Section 424(d)
of the Code) more than ten percent (10%) of the total combined voting power of
all classes of stock of iParty (a "Ten-Percent Stockholder"), such term shall
not exceed 5 years.

7.   EXERCISE PRICE

     The price at which shares of Common Stock may be purchased upon exercise of
a particular Option shall be such price as may be fixed by the Board but in no
event less than the minimum required in order to comply with any applicable law,
rule or regulation and, in the case of Incentive Stock Options, shall not be
less than 100 percent, or in the case of Incentive Stock Options granted to a
Grantee who is a Ten-Percent Stockholder, shall not be less than one

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hundred and ten percent (110%), of the Fair Market Value of such shares on the
date such Option is granted.

8.   METHOD OF EXERCISE

     Options may be exercised, in whole or in part, by giving notice of exercise
to iParty (in the form required by iParty), specifying the number of shares of
Common Stock to be purchased. Such notice shall be accompanied by the payment in
full of the Option exercise price. The exercise price may be paid (i) with cash,
certified check or bank check, and (ii) if established by iParty, through a
"same day sale" commitment from Grantee and a broker-dealer selected by iParty
that is a member of the National Association of Securities Dealers (an "NASD
Dealer") whereby the Grantee irrevocably elects to exercise the Option and to
sell a portion of the shares so purchased having a fair market value equal to
the total Option exercise price and whereby the NASD Dealer irrevocably commits
upon receipt of such shares to forward the total Option exercise price directly
to iParty. In the discretion of the Committee, the exercise price of the Option
may also be paid by one or more of the following methods: (i) surrender of
Common Stock (having a fair market value equal to the Option exercise price)
held by the Grantee for at least six (6) months prior to exercise (or such
longer or shorter period as may be required to avoid a charge to earnings for
financial accounting purposes) or the attestation of ownership of such shares,
in either case, if so permitted by iParty, (ii) through additional methods
prescribed by the Committee, including, without limitation, loans, installment
payments and/or guarantees, all under such terms and conditions as deemed
appropriate by the Committee in its discretion, or (iii) by any combination of
any of the foregoing methods, and, in all instances, to the extent permitted by
applicable law. For purposes of the Plan, "Fair Market Value" per share as of a
particular date shall mean, unless otherwise determined by the Board, the last
reported sale price (on the day immediately preceding such date) of the Common
Stock on the New York Stock Exchange (or any other exchange or national market
system upon which price quotations for iParty's Common Stock is regularly
available); provided, however, that if the Common Stock is not publicly traded,
fair market value shall mean, as of any date, the fair market value on such date
as determined in good faith by the Board in its sole discretion. A Grantee's
subsequent transfer or disposition of any shares of Common Stock acquired upon
exercise of an Option shall be subject to any Federal and state laws then
applicable, specifically securities law, and the terms and conditions of this
Plan.

9.   EXERCISE OF OPTIONS

     (a)  Each Option granted shall be exercisable in whole or in part at any
time, or from time to time, during the Option period as the Board may provide in
the terms of such Option; provided that the election to exercise an Option shall
be made in accordance with applicable federal and state laws and regulations.

     (b)  No Option may at any time be exercised with respect to a fractional
share.

     (c)  No shares shall be delivered pursuant to the exercise of any Option,
in whole or in part, until qualified for delivery under such securities laws and
regulations as may be deemed by the Board to be applicable thereto, until such
shares are listed on each securities exchange on which the Common Stock may then
be listed, until, in the case of the exercise of an Option, payment in full of
the Option price is received by the Corporation in cash or stock as provided in

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Section 8 and until payment in cash of any applicable withholding taxes is
received by the Corporation. Unless prior to the exercise of the Option the
shares of the Common Stock issuable upon such exercise have been registered with
the Securities and Exchange Commission pursuant to the Securities Act of 1933,
as amended (the "Act"), the notice of exercise shall be accompanied by a
representation or agreement of the individual exercising the Option to the
Corporation to the effect that such shares are being acquired for investment and
not with a view to the resale or distribution thereof or such other
documentation as may be required by the Corporation unless in the opinion of
counsel to the Corporation such representation, agreement, or documentation is
not necessary to comply with the Act. No holder of an Option, or such holder's
legal representative, legatee, or distributee shall be or be deemed to be a
holder of any shares subject to such Option unless and until a certificate or
certificates therefor is issued in his name.

10.  ACCELERATION OF VESTING

     (a)  An Option shall automatically be vested and immediately exercisable in
full upon the occurrence of any of the following events (each, a "Change in
Control"):

          (i)   Any person within the meaning of Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the "'34 Act"), other than the
Corporation, has become the beneficial owner, within the meaning of Rule 13d-3
under the '34 Act, of 30 percent or more of the combined voting power of the
Corporation's then outstanding voting securities, unless such ownership by such
person has been approved by the Board immediately prior to the acquisition of
such securities by such person;

          (ii)  The first day on which shares of the Common Stock are purchased
pursuant to a tender offer or exchange offer, unless such offer is made by the
Corporation or unless such offer has been approved or not opposed by the Board;

          (iii) The stockholders of the Corporation have approved an agreement
to merge or consolidate with or into another corporation (and the Corporation is
not the survivor of such merger or consolidation) or an agreement to sell or
otherwise dispose of all or substantially all of the Corporation's assets
(including a plan of liquidation), unless the Board has resolved that Options
shall not automatically vest; or

          (iv)  During any period of two consecutive years, individuals who at
the beginning of such period constitute the Board of the Corporation cease for
any reason to constitute at least a majority thereof, unless the election or the
nomination for the election by the Corporation's stockholders of each new
director was approved by a vote of at least a majority of the directors then
still in office who were directors at the beginning of the period.

     (b)  Other than upon the occurrence of any of the events described in
Section 10(a), the Board shall have the authority at any time or from time to
time to accelerate the vesting of any individual Option and to permit any Option
not theretofore exercisable to become immediately exercisable.

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11.  TRANSFER OF OPTIONS

Except with the prior written consent of the Corporation, Options granted under
the Plan may not be transferred except by will or the laws of descent and
distribution, pursuant to a domestic relations order, as defined by the Internal
Revenue Code of 1986, as amended, or Title I of the Employee Retirement Income
Securities Act or the Rules thereunder, and, during the lifetime of the Grantee
to whom granted, may be exercised only by such or by such Grantee's guardian or
legal representative.

12.  TERMINATION OF EMPLOYMENT BY OR SERVICE FOR THE CORPORATION

     (a)  Except as specifically provided in this Section 12, if the Grantee's
employment by or the Associate's service for the Corporation shall terminate for
any reason before the Option has vested in full, then the unvested portion of
the Option shall automatically terminate on the date of termination of
employment or service and all rights and interests of the Grantee in and to such
unvested portion shall thereupon terminate.

     (b)  Unless otherwise provided in an individual Option agreement, after the
date on which any portion of an Option vests, if the Grantee's employment by or
the Associate's service for the Corporation is terminated for any reason, the
Option shall be exercisable for the lesser of (i) three (3) months from the date
of such termination of employment or service or (ii) the balance of such
Option's term; PROVIDED, HOWEVER, that in the event that the termination is as a
result of the death or Disability of the Grantee, the Options held by such
Grantee which were otherwise exercisable on the date of his or her termination
of employment or service shall expire unless exercised by such Grantee, or, in
the case of the death of a Grantee, by his or her heirs, legatees, or personal
representatives, within a period of twelve (12) months after the date of
termination of employment or service. In no event, however, shall any Option be
exercisable after ten (10) years from the date it was granted. Nothing in the
Plan or in any Option shall confer upon any Grantee the right to continue in the
employ or service of the Corporation or interfere in any way with the right of
the Corporation to terminate the employment or service of a Grantee at any time.
The Board's determination that a Grantee's employment or service has terminated
and the date thereof shall be final and conclusive on all persons affected
thereby.

     (c)  The Board may, if it determines that to do so would be in the
Corporation's best interests, provide in a specific case or cases for the
exercise of Options which would otherwise terminate upon termination of
employment or service for the Corporation for any reason, upon such terms and
conditions as the Board determines to be appropriate.

     (d)  In the case of a Grantee on an approved leave of absence, the Board
may, if it determines that to do so would be in the best interests of the
Corporation, provide in a specific case for continuation of Options during such
leave of absence, such continuation to be on such terms and conditions as the
Board determines to be appropriate. Leaves of absence for such period and
purposes conforming to the personnel policy of the Corporation as may be
approved by the Board shall not be deemed terminations or interruptions of
employment.

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13.  ADJUSTMENTS UPON CHANGES IN CAPITALIZATION

     (a)  If the outstanding Common Stock is hereafter changed by reason of
reorganization, merger, consolidation, recapitalization, reclassification, stock
split-up, combination, or exchange of shares or the like, or dividends payable
in shares of the Common Stock, an appropriate adjustment shall be made by the
Board in the aggregate number of shares available under the Plan and in the
number of shares and price per share subject to outstanding Options. If the
Corporation shall be reorganized, consolidated, or merged with another
corporation, or if all or substantially all of the assets of the Corporation
shall be sold or exchanged, the holder of an Option shall, after the occurrence
of such a corporate event, be entitled to receive upon the exercise of his
Option the same number and kind of shares of stock or the same amount of
property, cash, or securities as he would have been entitled to receive upon the
happening of any such corporate event as if he had exercised such Option and had
been, immediately prior to such event, the holder of the number of shares
covered by such Option. All adjustments made pursuant to this Section to the
terms or conditions of an Incentive Stock Option shall be subject to the
requirements of section 424 of the Code.

     (b)  Any adjustment in the number of shares shall apply proportionately to
only the unexercised portion of any Option granted hereunder. If fractions of a
share would result from any such adjustment, the adjustment shall be revised to
the next higher whole number of shares.

14.  TERMINATION, MODIFICATION, AND AMENDMENT

     (a)  The Plan may from time to time be terminated, modified, or amended by
the affirmative vote of a majority of the votes cast at a duly held
stockholders' meeting at which a quorum representing a majority of all
outstanding voting stock is, either in person or by proxy, present and voting on
the plan, or pursuant to any other procedure allowed under applicable state law.

     (b)  The Board may at any time terminate the Plan or from time to time make
such modifications or amendments of the Plan as it may deem advisable including,
without limitation, modifications to reflect changes in applicable law;
provided, however, that the Board of Directors shall not (i) modify or amend the
Plan in any way that would disqualify any Incentive Stock Option issued pursuant
to the Plan as an Incentive Stock Option as defined in section 422 of the Code
or (ii) without approval by the affirmative vote of a majority of the votes cast
at a duly held stockholders' meeting at which a quorum representing a majority
of all outstanding voting stock is, either in person or by proxy, present and
voting on the Plan, or pursuant to any other procedure allowed under applicable
state law, increase (except as provided by Section 14) the maximum number of
shares as to which Options may be granted under the Plan.

     (c)  No termination, modification, or amendment of the Plan or any
outstanding Option may, without the consent of the Grantee, adversely affect the
rights conferred by such Option.

15.  WITHHOLDING OF TAXES

     (a)  Upon the occurrence of a Taxable Event (as defined herein), a Grantee
shall pay an amount equal to the applicable Withholding Taxes (as defined
herein) prior to the Grantee's

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receipt of any Shares or the payment of any cash due the Grantee as the result
of the exercise of any portion of an Option. The Company shall have the right to
deduct from any payment of cash to a Grantee an amount equal to the Withholding
Taxes in satisfaction of the obligation to pay Withholding Taxes. In
satisfaction of the obligation to pay Withholding Taxes to the Company, the
Grantee may make a written election, which may be accepted or rejected in the
discretion of the Committee, to have withheld a portion of the Shares then due
to him or her for payment of Withholding Taxes, but not in excess of the
Grantee's required withholding obligation. For purposes of the Plan, "Taxable
Event" means any event in connection with the receipt of shares of Common Stock
or cash hereunder with respect to which a Grantee recognizes taxable income. For
purposes of the Plan, "Withholding Taxes" means the Corporation's minimum
statutory withholding (based on minimum statutory withholding rates for federal
and state tax purposes, including payroll taxes, that are applicable to a
Taxable Event).

     (b)  If (i) the purchase of shares of Common Stock pursuant to the exercise
of an Incentive Stock Option or (ii) a Grantee's disposition (within the meaning
of Section 424(c) of the Code and the regulations promulgated thereunder) of any
such shares within the two-year period commencing on the day after the date of
the grant or within the one-year period commencing on the day after the date of
transfer of such shares to the Grantee pursuant to such exercise, becomes a
Taxable Event that requires the Company to collect Withholding Taxes, the
Grantee shall cooperate with the Company in the procedures it may establish to
track any such dispositions and to make appropriate arrangements with the
Company for any taxes which the Company is obligated to collect.

16.  EFFECTIVE DATE

The Plan originally became effective on July 14, 1998 and was subsequently
amended to increase the number of shares that may be issued under the Plan.
Section 8 was amended on March 5, 2002, and the Plan as amended and restated
became effective upon adoption by the Board on March 5, 2002.

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