Document:

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                                                                    EXHIBIT 10.4

                                 FIREPOND, INC.
                              AMENDED AND RESTATED
                        1999 STOCK OPTION AND GRANT PLAN

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                                 FIREPOND, INC.
              AMENDED AND RESTATED 1999 STOCK OPTION AND GRANT PLAN

SECTION 1. GENERAL PURPOSE OF THE PLAN; DEFINITIONS

     The name of the plan is the Firepond, Inc. 1999 Stock Option and Grant Plan
(the "Plan"). The purpose of the Plan is to encourage and enable the officers,
employees, directors, consultants, advisors and other key persons of Firepond,
Inc. (the "Company") and its Subsidiaries (as defined below) upon whose
judgment, initiative and efforts the Company largely depends for the successful
conduct of its business to acquire a proprietary interest in the Company. It is
anticipated that providing such persons with a direct stake in the Company's
welfare will assure a closer identification of their interests with those of the
Company, thereby stimulating their efforts on the Company's behalf and
strengthening their desire to remain with the Company. The following terms shall
be defined as set forth below:

"Act" means the Securities Exchange Act of 1934, as amended.

"Award" or "Awards," except where referring to a particular category of grant
under the Plan, shall include Incentive Stock Options, Non-Qualified Stock
Options, Restricted Stock Awards, and Unrestricted Stock Awards.

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

"Code" means the Internal Revenue Code of 1986, as amended, and any successor
Code, and related rules, regulations and interpretations.

"Committee" has the meaning specified in Section 2.

"Effective Date" means the date on which the Plan is approved by stockholders as
set forth in Section 13.

"Fair Market Value" of the Stock on any given date means (i) if the Stock is
admitted to quotation on the National Association of Securities Dealers
Automated Quotation System ("NASDAQ"), the Fair Market Value on any given date
shall not be less than the average of the highest bid and lowest asked prices of
the Stock reported for such date or, if no bid and asked prices were reported
for such date, for the last day preceding such date for which such prices were
reported; or (ii) if the Stock is admitted to trading on a national securities
exchange or the NASDAQ National Market System, then clause (i) shall not apply
and the Fair Market Value on any date shall not be less than the closing price
reported for the Stock on such exchange or system for such date or, if no sales
were reported for such date, for the last date preceding such date for which a
sale was reported; or (iii) if the Stock is not publicly traded on a securities
exchange or traded in the over-the-counter market or, if traded or quoted, there
are no transactions or quotations within the last ten trading days or trading
has been halted for extraordinary reasons, the Fair Market Value on any given
date shall be determined in good faith by the Committee; and (iv)
notwithstanding the foregoing, the Fair Market Value of the Stock on the
effective date of the Initial Public Offering shall be the offering price to the
public of the Stock on such date.

"Incentive Stock Option" means any Stock Option designated and qualified as an
"incentive stock option" as defined in Section 422 of the Code.

"Independent Director" means a member of the Board who is neither an employee
nor officer of the Company or any Subsidiary.

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"Initial Public Offering" means the first underwritten public offering pursuant
to an effective registration statement under the Securities Act of 1933, as
amended, covering the offer and sale of Stock to the public.

"Non-Qualified Stock Option" means any Stock Option that is not an Incentive
Stock Option.

"Option" or "Stock Option" means any option to purchase shares of Stock granted
pursuant to Section 5.

"Restricted Stock Award" means any Award granted pursuant to Section 6.

"Stock" means the Common Stock, par value $.01 per share, of the Company,
subject to adjustments pursuant to Section 3.

"Subsidiary" means any corporation or other entity (other than the Company) in
any unbroken chain of corporations or other entities, beginning with the
Company, if each of the corporations or entities (other than the last
corporation or entity in the unbroken chain) owns stock or other interests
possessing 50% or more of the economic interest or the total combined voting
power of all classes of stock or other interests in one of the other
corporations or entities in the chain.

"Unrestricted Stock Award" means any Award granted pursuant to Section 7.

SECTION 2. ADMINISTRATION OF PLAN; COMMITTEE AUTHORITY TO SELECT PARTICIPANTS
AND DETERMINE AWARDS.

     (a)  Committee. The Plan shall be administered by the Board of Directors of
          the Company, or at the discretion of the Board, by a committee of the
          Board consisting of not less than two Directors; provided, however,
          that if each member of the Committee is not

               (i)  a "Non-Employee Director" within the meaning of Rule
                    16b-3(a)(3) of the Securities Exchange Act of 1934, as
                    amended (the "Exchange Act") and

               (ii) an "Outside Director" within the meaning of Section 162(m)
                    of the Code and the regulations promulgated thereunder, any
                    Awards granted to individuals subject to the reporting
                    requirements of Section 16 of the Exchange Act shall be
                    approved by the Board of Directors. All references herein to
                    the Committee shall be deemed to refer to the entity then
                    responsible for administration of the Plan at the relevant
                    time (i.e., either the Board of Directors or a committee of
                    the Board, as applicable).

     (b)  Powers of Committee. The Committee shall have the power and authority
          to grant Awards consistent with the terms of the Plan, including the
          power and authority:

               (1)  to select the officers, employees, Independent Directors,
                    consultants, advisers and key persons of the Company and its
                    Subsidiaries to whom Awards may from time to time be
                    granted;

               (2)  to determine the time or times of grant, and the extent, if
                    any, of Incentive Stock Options, Non-Qualified Stock
                    Options, Restricted Stock Awards and Unrestricted Stock
                    Awards, or any combination of the foregoing, granted to any
                    one or more participants;

               (3)  to determine the number of shares of Stock to be covered by
                    any Award;

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               (4)  to determine and modify from time to time the terms and
                    conditions, including restrictions, not inconsistent with
                    the terms of the Plan, of any Award, which terms and
                    conditions may differ among individual Awards and
                    participants, and to approve the form of written instruments
                    evidencing the Awards;

               (5)  to accelerate at any time the exercisability or vesting of
                    all or any portion of any Award and/or to include provisions
                    in Awards providing for such acceleration,

               (6)  to impose any limitations on Awards granted under the Plan,
                    including limitations on transfers repurchase provisions and
                    the like and to exercise repurchase rights or obligations;

               (7)  subject to the provisions of Section 5(a)(3), to extend at
                    anytime the period in which Stock Options may be exercised;

               (8)  to determine at any time whether, to what extent, and under
                    what circumstances Stock and other amounts payable with
                    respect to an Award shall be deferred either automatically
                    or at the election of the participant and whether and to
                    what extent the Company shall pay or credit amounts
                    constituting interest(at rates determined by the Committee)
                    or dividends or deemed dividends on such deferrals; and

               (9)  at any time to adopt, alter and repeal such rules,
                    guidelines and practices for administration of the Plan and
                    for its own acts and proceedings as it shall deem advisable,
                    to interpret the terms and provisions of the Plan and any
                    Award (including related written instruments); to make all
                    determinations it deems advisable for the administration of
                    the Plan; to decide all disputes arising in connection with
                    the Plan; and to otherwise supervise the administration of
                    the Plan. All decisions and interpretations of the Committee
                    shall be binding on all persons, including the Company and
                    Plan participants.

     (c)  Delegation of Authority to Grant Awards. The Committee, in its
          discretion, may delegate to the Chief Executive Officer of the Company
          all or part of the Committee's authority and duties with respect to
          Awards, including the granting thereof, to individuals who are not
          subject to the reporting and other provisions of Section 16 of the Act
          or "covered employees" within the meaning of Section 162(m) of the
          Code. Any such delegation by the Committee shall include a limitation
          as to the amount of Awards that may be granted during the period of
          delegation and shall contain guidelines as to the determination of the
          exercise price of any Option, the price of other Awards and the
          vesting criteria. The Committee may revoke or amend the terms of a
          delegation at anytime but such action shall not invalidate any prior
          actions of the Committee's delegate or delegates that were consistent
          with the terms of the Plan.

SECTION 3. STOCK ISSUABLE UNDER THE PLAN; MERGERS; SUBSTITUTION

     (a)  Stock Issuable. The maximum number of shares of Stock reserved and
          available for issuance under the Plan shall be 8,000,000 shares of
          Stock. For purposes of the foregoing limitations, the shares of Stock
          underlying any Awards which are forfeited, canceled, reacquired by the
          Company, satisfied without the issuance of Stock or otherwise
          terminated (other than by exercise) shall be added back to the shares
          of Stock available for issuance under the Plan. Subject to such
          overall limitation, shares of Stock may be issued up to such maximum
          number pursuant to any type or types of Award; provided, however, that
          from and after the date the Plan is subject to Section 162(m) of the
          Code, Awards with respect to no more than 1,000,000 shares of Stock
          may be granted to any one individual participant during any one

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          calendar year period. The shares available for issuance under the Plan
          may be authorized but unissued shares of Stock or shares of Stock
          reacquired by the Company.

     (b)  Recapitalizations. If, through or as a result of any merger,
          consolidation, sale of all or substantially all of the assets of the
          Company, reorganization, recapitalization, reclassification, stock
          dividend, stock split, reverse stock split or other similar
          transaction, the outstanding shares of Stock are increased or
          decreased or are exchanged for a different number or kind of shares or
          other securities of the Company or any successor company, or
          additional shares or new or different shares or other securities of
          the Company or other non-cash assets are distributed with respect to
          such shares of Stock or other securities, the Committee shall make an
          appropriate or proportionate adjustment in

              (i)    the maximum number of shares reserved for issuance under
                     the Plan,

              (ii)   the number of Stock Options, or other Awards that can be
                     granted to any one individual participant,

              (iii)  the number and kind of shares or other securities subject
                     to any then outstanding Awards under the Plan, and

              (iv)   the price for each share subject to any then outstanding
                     Stock Options or other Awards under the Plan, without
                     changing the aggregate exercise price (i.e., the exercise
                     price multiplied by the number of shares) as to which such
                     Stock Options remain exercisable and the repurchase price
                     for shares subject to repurchase. The adjustment by the
                     Committee shall be final, binding and conclusive. No
                     fractional shares of Stock shall be issued under the Plan
                     resulting from any such adjustment, but the Committee in
                     its discretion may make cash payment in lieu of fractional
                     shares.

     (c)  Mergers and Other Transactions. In the case of

              i)     the dissolution or liquidation of the Company,

              ii)    a merger, reorganization or consolidation between the
                     Company and another person or entity (other than a holding
                     company or subsidiary of the Company) as a result of which
                     the holders of the Company's outstanding voting stock
                     immediately prior to the transaction hold less than a
                     majority of the outstanding voting stock of the surviving
                     entity immediately after the transaction,

              iii)   the sale of all or substantially all of the assets of the
                     Company to an unrelated person or entity,

              iv)    the sale of all of the Stock of the Company to an unrelated
                     person or entity; or

              v)     any other transaction in which the owners of the Company's
                     outstanding voting power prior to such transaction do not
                     own a majority of the outstanding voting power of the
                     relevant entity after the transaction, regardless of the
                     form thereof in each case, a "Transaction", unless
                     provision is made in connection with the Transaction for
                     the assumption of the Awards heretofore granted, or the
                     substitution of such Awards with new Awards of the
                     successor entity or parent thereof, with appropriate
                     adjustment as to the number and kind of shares and, if
                     appropriate, the per share exercise prices, as provided in
                     Section 3(b) above, all of the remaining outstanding Awards
                     held by participants, to the extent not fully vested and
                     exercisable, shall become fully vested and exercisable,
                     except with

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                     respect to specific awards as the Committee otherwise
                     determines. Upon the effectiveness of the transaction, the
                     Plan and all Awards granted hereunder shall, unless assumed
                     by the successor entity, terminate. In the event of such
                     termination, each optionee shall be permitted to exercise
                     for a period of at least 15 days prior to the date of such
                     termination all outstanding Awards held by such optionee
                     which are then exercisable.

     (d)  Substitute Awards. The Committee may grant Awards under the Plan in
          substitution for stock and stock based awards held by employees of
          another corporation who become employees of the Company or a
          Subsidiary as the result of a merger or consolidation of the employing
          corporation with the Company or a Subsidiary or the acquisition by the
          Company or a Subsidiary of property or stock of the employing
          corporation. The Committee may direct that the substitute awards be
          granted on such terms and conditions as the Committee considers
          appropriate in the circumstances.

SECTION 4. ELIGIBILITY.

     Participants in the Plan will be such officers and other employees,
Independent Directors, consultants, advisors and other key persons of the
Company and its Subsidiaries who are responsible for or contribute to the
management, growth or profitability of the Company and its Subsidiaries as are
selected from time to time by the Committee, in its sole discretion.

SECTION 5. STOCK OPTIONS.

     Any Stock Option granted under the Plan shall be pursuant to a stock option
agreement which shall be in such form as the Committee may from time to time
approve. Option agreements need not be identical. Stock Options granted under
the Plan may be either Incentive Stock Options or Non-Qualified Stock Options.
Incentive Stock Options may be granted only to employees of the Company or any
Subsidiary that is a "subsidiary corporation" within the meaning of Section
424(f) of the Code. Non-Qualified Stock Options may be granted to officers,
employees, Independent Directors, advisors, consultants and other key persons of
the Company and its Subsidiaries. To the extent that any Option does not qualify
as an Incentive Stock Option, it shall be deemed a Non-Qualified Stock option.
No Incentive Stock Option shall be granted under the Plan after November7, 2009.

     (a)  Terms of Stock Options. Stock Options granted under the Plan shall be
          subject to the following terms and conditions and shall contain such
          additional terms and conditions, not inconsistent with the terms of
          the Plan as the Committee shall deem desirable:

          (1)  Exercise Price. The exercise price per share for the Stock
               covered by a Stock Option shall be determined by the Committee at
               the time of grant but shall not be less than 100% of the Fair
               Market Value in the case of Incentive Stock Options. If an
               employee owns or is deemed to own (by reason of the attribution
               rules applicable under Section 424(d) of the Code) more than
               10%of the combined voting power of all classes of stock of the
               Company or any parent or Subsidiary corporation and an Incentive
               Stock Option is granted to such employee, the option price of
               such Incentive Stock Option shall be not less than 110% of the
               Fair Market Value on the grant date.

          (2)  Grant of Discount Options in Lieu of Cash Compensation. Upon
               there quest of a participant and with the consent of the
               Committee, such participant may elect each calendar year to
               receive a Non-Qualified Stock Option in lieu of any cash bonus or
               other compensation to which he may become entitled during the
               following calendar year, but only if such participant makes an
               irrevocable election to waive receipt of all

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              or a portion of such cash compensation. Such election shall be
              made on or before the date set by the Committee which date shall
              be no later than 15 days (or such shorter period permitted by the
              Committee) preceding January 1 of the calendar year for which the
              cash compensation would otherwise be paid. A Non-Qualified Stock
              Option shall be granted to each participant who made such an
              irrevocable election on the date the waived cash compensation
              would otherwise be paid. The exercise price per share shall be
              determined by the Committee. The number of shares of Stock subject
              to the Stock Option shall be determined by dividing the amount of
              the waived cash compensation by the difference between the Fair
              Market Value of the Stock on the date the Stock Option is granted
              and the exercise price per share of the Stock Option. The Stock
              Option shall be granted for a whole number of shares so
              determined; the value of any fractional share shall be paid in
              cash.

          (3)  Option Term. The term of each Stock Option shall be fixed by the
               Committee, but no Incentive Stock Option shall be exercisable
               more than ten years after the date the Option is granted. If an
               employee owns or is deemed to own (by reason of the attribution
               rules of Section 424(d) of the Code) more than10% of the combined
               voting power of all classes of Stock of the Company or any parent
               or subsidiary corporation and an Incentive Stock Option is
               granted to such employee, the term of such Option shall be no
               more than five years from the grant date.

          (4)  Exercisability; Rights of a Stockholder. Stock Options shall
               become vested and exercisable at such time or times, whether or
               not in installments, as shall be determined by the Committee at
               or after the grant date; provided, however, that Stock Options
               granted in lieu of cash compensation shall be exercisable in full
               as of the grant date. The Committee may at any time accelerate
               the exercisability of all or any portion of any Stock Option. An
               optionee shall have the rights of a stockholder only as to shares
               acquired upon the exercise of a Stock Option and not as to
               unexercised Stock Options.

          (5)  Method of Exercise. Stock Options may be exercised in whole or in
               part, by giving written notice of exercise to the Company,
               specifying the number of shares to be purchased. Payment of the
               purchase price may be made by one or more of the following
               methods; provided, however, that the methods set forth in
               subsections (B) and (C) below shall become available only after
               the closing of the Initial Public Offering:

                     (i)    In cash by certified or bank check or other
                            instrument acceptable to the Committee,

                     (ii)   In the form of shares of Stock that are not then
                            subject to restrictions under any Company plan and
                            that have been held by the optionee free of such
                            restrictions for at least six months, if permitted
                            by the Committee in its discretion. such surrendered
                            shares shall be valued at Fair Market Value on the
                            exercise date;

                     (iii)  By the optionee delivering to the Company a properly
                            executed exercise notice together with irrevocable
                            instructions to a broker to promptly deliver to the
                            Company cash or a check payable and acceptable to
                            the Company to pay the purchase price; provided that
                            in the event the optionee chooses to pay the
                            purchase price as so provided, the optionee and the
                            broker shall comply with such procedures and enter
                            into such agreements of indemnity and other

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                            agreements as the Committee shall prescribe as a
                            condition of such payment procedure; or

                     (iv)   By the optionee delivering to the Company a
                            promissory note if the Board has authorized the loan
                            of funds to the optionee for the purpose of enabling
                            or assisting the optionee to effect the exercise of
                            his Stock Option; provided that at least so much of
                            the exercise price as represents the par value of
                            the Stock shall be paid other than with a promissory
                            note. Payment instruments will be received subject
                            to collection. The delivery of certificates
                            representing the shares of Stock to be purchased
                            pursuant to the exercise of a Stock Option will be
                            contingent upon receipt from the optionee (or a
                            purchaser acting in his stead in accordance with the
                            provisions of the Stock Option) by the Company of
                            the full purchase price for such shares and the
                            fulfillment of any other requirements contained in
                            the Stock Option or applicable provisions of laws.

          (6)  Termination. Unless otherwise provided in the option agreement or
               determined by the Committee, upon the optionee's termination of
               employment (or other business relationship) with the Company and
               its Subsidiaries, the optionee's rights in his Stock Options
               shall automatically terminate.

          (7)  Annual Limit on Incentive Stock Options. To the extent required
               for "incentive stock option" treatment under Section 422 of the
               Code, the aggregate Fair Market Value (determined as of the time
               of grant) of the shares of Stock with respect to which Incentive
               Stock Options granted under this Plan and any other plan of the
               Company or its parent and subsidiary corporations become
               exercisable for the first time by an optionee during any calendar
               year shall not exceed $100,000. To the extent that any Stock
               Option exceeds this limit, it shall constitute a Non-Qualified
               Stock Option.

     (b)  Reload Options. At the discretion of the Committee, Options granted
          under the Plan may include a "reload" feature pursuant to which an
          optionee exercising an Option by the delivery of number of shares of
          stock in accordance with Section 5(a)(5)(ii) hereof would
          automatically be granted an additional Option (with an exercise price
          equal to the Fair Market Value of the Stock on the date the additional
          Option is granted and with the same expiration date as the original
          Option being exercised, and with such other terms as the Committee may
          provide) to purchase that number of shares of Stock equal to the
          number delivered to exercise the original Option.

     (c)  Non-transferability of Options. No Stock Option shall be transferable
          by the optionee otherwise than by will or by the laws of descent and
          distribution and all Stock Options shall be exercisable, during the
          optionee's lifetime, only by the optionee, or by the optionee's legal
          representative or guardian in the event of the optionee's incapacity.
          Notwithstanding the foregoing, the Board in its sole discretion may
          provide in any Stock Option agreement that the optionee may transfer,
          without consideration for the transfer, his or her Non-Qualified Stock
          Options to members of his or her immediate family, to trusts for the
          benefit of such family members, or to partnerships in which such
          family members are the only partners or to limited liability companies
          in which such family members are the only members, provided that the
          transferee agrees in writing with the Company to be bound by all of
          the terms and conditions of this Plan and the applicable Option.

SECTION 6. RESTRICTED STOCK AWARDS

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     (a)  Nature of Restricted Stock Awards. A Restricted Stock Award is an
          Award entitling the recipient to acquire, at par value or such other
          purchase price determined by the Committee, shares of Stock subject to
          such restrictions and conditions as the Committee may determine at the
          time of grant ("Restricted Stock"). Conditions may be based on
          continuing employment (or other business relationship) and/or
          achievement or pre-established performance goals and objectives.

     (b)  Rights as a Stockholder. Upon execution of a written instrument
          setting forth the Restricted Stock Award and paying any applicable
          purchase price, a participant shall have the rights of a stockholder
          with respect to the voting of the Restricted Stock, subject to such
          conditions contained in the written instrument evidencing the
          Restricted Stock Award. Unless the Committee shall otherwise
          determine, certificates evidencing the Restricted Stock shall remain
          in the possession of the Company until such Restricted Stock is vested
          as provided in Section 6(d) below.

     (c)  Restrictions. Restricted Stock may not be sold, assigned, transferred,
          pledged or otherwise encumbered or disposed of except as specifically
          provided herein or in the written instrument evidencing the Restricted
          Stock Award. If a participant's employment (or other business
          relationship) with the Company and its Subsidiaries terminates under
          the conditions specified in the relevant instrument relating to the
          Award, or upon such other event or events as may be stated in the
          instrument evidencing the Award, the Company or its assigns shall have
          the right or shall agree, as may be specified in the relevant
          instrument, to repurchase some or all of the shares of Stock subject
          to the Award at such purchase price as is set forth in such
          instrument.

     (d)  Vesting of Restricted Stock. The Committee at the time of grant shall
          specify the date or dates and/or the attainment of pre-established
          performance goals, objectives and other conditions on which Restricted
          Stock shall become vested, subject to such further rights of the
          Company or its assigns as may be specified in the instrument
          evidencing the Restricted Stock Award.

     (e)  Waiver, Deferral and Reinvestment of Dividends. The written instrument
          evidencing the Restricted Stock Award may require or permit the
          immediate payment, waiver, deferral or investment of dividends paid on
          the Restricted Stock.

SECTION 7. UNRESTRICTED STOCK AWARDS

     (a)  Grant or Sale of Unrestricted Stock. The Committee may, in its sole
          discretion, grant (or sell at a purchase price determined by the
          Committee)an Unrestricted Stock Award to any participant, pursuant to
          which such participant may receive shares of Stock free of any vesting
          restrictions("Unrestricted Stock") under the Plan. Unrestricted Stock
          Awards may be granted or sold as described in the preceding sentence
          in respect of past services or other valid consideration, or in lieu
          of any cash compensation due to such individual.

     (b)  Elections to Receive Unrestricted Stock In Lieu of Compensation. Upon
          the request of a participant and with the consent of the Committee,
          each such participant may, pursuant to an advance written election
          delivered to the Company no later than the date specified by the
          Committee, receive a portion of the cash compensation otherwise due to
          such participant in the form of shares of Unrestricted Stock either
          currently or on a deferred basis.

     (c)  Restrictions on Transfers. The right to receive shares of Unrestricted
          Stock on a deferred basis may not be sold, assigned, transferred,
          pledged or otherwise encumbered, other than by will or the laws of
          descent and distribution.

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SECTION 8. TAX WITHHOLDING

     (a)  Payment by Participant. Each participant shall, no later than the date
          as of which the value of an Award or of any Stock or other amounts
          received thereunder first becomes includable in the gross income of
          the participant for Federal income tax purposes, pay to the Company,
          or make arrangements satisfactory to the Committee regarding payment
          of, any federal, state, or local taxes of any kind required by law to
          be withheld with respect to such income. The Company and its
          Subsidiaries shall, to the extent permitted by law, have the right to
          deduct any such taxes from any payment of any kind otherwise due to
          the participant.

     (b)  Payment in Stock. Subject to approval by the Committee, a participant
          may elect to have such tax withholding obligation satisfied, in whole
          or in part, by

               (i)  authorizing the Company to withhold from shares of Stock to
                    be issued pursuant to any Award a number of shares with an
                    aggregate Fair Market Value (as of the date the withholding
                    is effected) that would satisfy the withholding amount due,
                    or

               (ii) transferring to the Company shares of Stock owned by the
                    participant with an aggregate Fair Market Value (as of the
                    date the withholding is effected) that would satisfy the
                    withholding amount due.

SECTION 9. TRANSFER, LEAVE OF ABSENCE, ETC.

     For purposes of the Plan, the following events shall not be deemed a
termination of employment:

               (a)  a transfer to the employment of the Company from a
                    Subsidiary or from the Company to a Subsidiary, or from one
                    Subsidiary to another; or

               (b)  an approved leave of absence for military service or
                    sickness, or for any other purpose approved by the Company,
                    if the employee's right tore-employment is guaranteed either
                    by a statute or by contract or under the policy pursuant to
                    which the leave of absence was granted or if the Committee
                    otherwise so provides in writing.

SECTION 10. AMENDMENTS AND TERMINATION

     The Board may, at any time, amend or discontinue the Plan and the Committee
may, at any time, amend or cancel any outstanding Award (or provide substitute
Awards at the same or reduced exercise or purchase price or with no exercise or
purchase price in a manner not inconsistent with the terms of the Plan), but
such price, if any, must satisfy the requirements which would apply to the
substitute or amended Award if it were then initially granted under this Plan
for the purpose of satisfying changes in law or for any other lawful purpose,
but no such action shall adversely affect rights under any outstanding Award
without the holder's consent. If and to the extent determined by the Committee
to be required by the Act to ensure that Incentive Stock Options granted under
the Plan are qualified under Section 422 of the Code, Plan amendments shall be
subject to approval by the Company's stockholders who are eligible to vote at a
meeting of stockholders.

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SECTION 11. STATUS OF PLAN

     With respect to the portion of any Award which has not been exercised and
any payments in cash, Stock or other consideration not received by a
participant, a participant shall have no rights greater than those of a general
creditor of the Company unless the Committee shall otherwise expressly determine
in connection with any Award or Awards. In its sole discretion, the Committee
may authorize the creation of trusts or other arrangements to meet the Company's
obligations to deliver Stock or make payments with respect to Awards hereunder,
provided that the existence of such trusts or other arrangements is consistent
with the foregoing sentence.

SECTION 12. GENERAL PROVISIONS

     (a)  No Distribution; Compliance with Legal Requirements. The Committee may
          require each person acquiring Stock pursuant to an Award to represent
          to and agree with the Company in writing that such person is acquiring
          the shares without a view to distribution thereof. No shares of Stock
          shall be issued pursuant to an Award until all applicable securities
          law and other legal and stock exchange or similar requirements have
          been satisfied. The Committee may require the placing of such stop
          orders and restrictive legends on certificates for Stock and Awards,
          as it deems appropriate.

     (b)  Other Compensation Arrangements; No Employment Rights. Nothing
          contained in this Plan shall prevent the Board from adopting other or
          additional compensation arrangements, including trusts, and such
          arrangements may be either generally applicable or applicable only in
          specific cases. The adopting of this Plan and the grant of Awards do
          not confer upon any employee any right to continued employment with
          the Company or any Subsidiary.

SECTION 13. EFFECTIVE DATE OF PLAN

     This Plan shall become effective upon approval by the holders of a majority
of the shares of Stock of the Company present or represented and entitled to
vote at a meeting of stockholders. Subject to such approval by the stockholders
and to the requirement that no Stock may be issued hereunder prior to such
approval, Stock Options and other Awards may be granted hereunder on and after
adoption of this Plan by the Board.

SECTION 14. GOVERNING LAW

     This Plan shall be governed by Massachusetts law except to the extent such
law is preempted by federal law. Adopted and Effective: November 8, 1999.<PAGE>
                                                                    EXHIBIT 10.5

                                 FIREPOND, INC.
                              AMENDED AND RESTATED
                               1999 DIRECTOR PLAN

SECTION 1.  GENERAL PURPOSE OF THE PLAN, DEFINITIONS

         The name of the plan is the 1999 Director Plan (the "Plan"). The
purpose of the Plan is to enable Firepond, Inc. (the "Company") to attract and
retain non-employee directors and further align their interests with those of
the shareholders by providing for or increasing their equity interests in the
Company. It is anticipated that providing such persons with a direct stake in
the Company's welfare will assure a closer identification of their interests
with those of the Company, thereby stimulating their efforts on the Company's
behalf and strengthening their desire to remain with the Company.

         The following terms shall be defined as set forth below:

         "Act" means the Securities Exchange Act of 1934, as amended.

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

         "Code" means the Internal Revenue Code of 1986, as amended, and any
successor Code, and related rules, regulations and interpretations.

         "Fair Market Value" of the Stock on any given date means (i) if the
Stock is admitted to quotation on the National Association of Securities Dealers
Automated Quotation System ("NASDAQ"), the Fair Market Value on any given date
shall not be less than the average of the highest bid and lowest asked prices of
the Stock reported for such date or, if no bid and asked prices were reported
for such date, for the last day preceding such date for which such prices were
reported; or (ii) if the Stock is admitted to trading on a national securities
exchange or the NASDAQ National Market System, then clause (i) shall not apply
and the Fair Market Value on any date shall not be less than the closing price
reported for the Stock on such exchange or system for such date or, if no sales
were reported for such date, for the last date preceding such date for which a
sale was reported; or (iii) if the Stock is not publicly traded on a securities
exchange or traded in the over-the-counter market or, if traded or quoted, there
are no transactions or quotations within the last ten trading days or trading
has been halted for extraordinary reasons, the Fair Market Value on any given
date shall be determined in good faith by the Committee; and (iv)
notwithstanding the foregoing, the Fair Market Value of the Stock on the
effective date of the Initial Public Offering shall be the offering price to the
public of the Stock on such date.

          "Option" or "Stock Option" means any option to purchase shares of
Stock granted pursuant to Section 5.

         "Non-Qualified Stock Option" means any Stock Option that is not
designated and qualified as an "incentive stock option" as defined in Section
422 of the Code.

<PAGE>

          "Service Relationship" means any relationship as a non-employee
director of the Company or any Subsidiary of the Company.

         "Stock" means the Common Stock, par value $.01 per share, of the
Company, subject to adjustments pursuant to Section 3.

         "Subsidiary" means any corporation or other entity (other than the
Company) in any unbroken chain of corporations or other entities beginning with
the Company if each of the corporations or entities (other than the last
corporation or entity in the unbroken chain) owns stock or other interests
possessing 50 percent or more of the economic interest or the total combined
voting power of all classes of stock or other interests in one of the other
corporations or entities in the chain.

SECTION 2.  ADMINISTRATION OF PLAN; COMMITTEE

         (a)      ADMINISTRATION OF PLAN. The Plan shall be administered by the
Board, or at the discretion of the Board, by a committee or committees of the
Board, comprised, except as contemplated by Section 2(c), of not less than two
directors. All references herein to the Committee shall be deemed to refer to
the group then responsible for administration of the Plan at the relevant time
(i.e., either the Board or a committee or committees of the Board, as
applicable).

         (b)      POWERS OF COMMITTEE. The Committee shall have the power and
authority to grant Options consistent with the terms of the Plan, including the
power and authority:

                  (i)      to determine and modify from time to time the terms
and conditions, including restrictions, not inconsistent with the terms of the
Plan, of any Option, which terms and conditions may differ among individual
Options and participants, and to approve the form of written instruments
evidencing the Options;

                  (ii)     to accelerate at any time the exercisability or
vesting of all or any portion of any Option;

                  (iii)    to impose any limitations on Options granted under
the Plan, including limitations on transfers, repurchase provisions and the like
and to exercise repurchase rights or obligations;

                  (iv)     to extend at any time the period in which Stock
Options may be exercised; and

                  (v)      at any time to adopt, alter and repeal such rules,
guidelines and practices for administration of the Plan and for its own acts and
proceedings as it shall deem advisable; to interpret the terms and provisions of
the Plan and any Option (including related written instruments); to make all
determinations it deems advisable for the administration of the Plan; to decide
all disputes arising in connection with the Plan; and to otherwise supervise the
administration of the Plan.

                                      -2-
<PAGE>

         All decisions and interpretations of the Board shall be binding on all
persons, including the Company and Plan participants.

SECTION 3. STOCK ISSUABLE UNDER THE PLAN: MERGERS: SUBSTITUTION

         (a)      STOCK ISSUABLE. The maximum number of shares of Stock reserved
and available for issuance under the Plan shall be 500,000 shares of Common
Stock subject to adjustment as provided in Section 3(b). For purposes of this
limitation, the shares of Stock underlying any Options which are forfeited,
canceled, reacquired by the Company, satisfied without the issuance of Stock or
otherwise terminated (other than by exercise) shall be added back to the shares
of Stock available for issuance under the Plan. The shares available for
issuance under the Plan may be authorized but unissued shares of Stock or shares
of Stock reacquired by the Company and held in its treasury.

         (b)      CHANGES IN STOCK. Subject to Section 3(c) hereof, if, as a
result of any reorganization, recapitalization, reclassification, stock
dividend, stock split, reverse stock split or other similar change in the
Company's capital stock, the outstanding shares of Stock are increased or
decreased or are exchanged for a different number or kind of shares or other
securities of the Company, or additional shares or new or different shares or
other securities of the Company or other non-cash assets are distributed with
respect to such shares of Stock or other securities, the Board shall make an
appropriate or proportionate adjustment in (i) the maximum number of shares
reserved for issuance under the Plan, (ii) the number of Stock Options that can
be granted to any one individual participant, (iii) the number and kind of
shares or other securities subject to any then outstanding Options under the
Plan, and (iv) the exercise price and/or exchange price for each share subject
to any then outstanding Stock Options under the Plan, without changing the
aggregate exercise price (i.e., the exercise price multiplied by the number of
Stock Options ) as to which such Stock Options remain exercisable. The
adjustment by the Board shall be final, binding and conclusive. No fractional
shares of Stock shall be issued under the Plan resulting from any such
adjustment, but the Board in its discretion may make a cash payment in lieu of
fractional shares.

         The Board may also adjust the number of shares subject to outstanding
Options and the exercise price and the terms of outstanding Options to take into
consideration material changes in accounting practices or principles,
extraordinary dividends, acquisitions or dispositions of stock or property or
any other event if it is determined by the Board that such adjustment is
appropriate to avoid distortion in the operation of the Plan.

         (c)      MERGERS AND OTHER SALE EVENTS. In the case of (i) the
dissolution or liquidation of the Company, (ii) the sale of all or substantially
all of the assets of the Company on a consolidated basis to an unrelated person
or entity, (iii) a merger, reorganization or consolidation between the Company
and another person or entity (other than a holding company or Subsidiary of the
Company) as a result of which, the holders of the Company's outstanding voting
power immediately prior to such transaction do not own a majority of the
outstanding voting power of the surviving or resulting entity immediately upon
completion of such transaction, (iv) the sale of all of the Stock of the Company
to an unrelated person or entity or (v) any other transaction in which the
owners of the Company's outstanding voting power prior to such transaction do
not own at least a majority of the outstanding voting power of the relevant
entity after the

                                      -3-
<PAGE>

transaction, in each case, regardless of the form thereof (in each case, a
"Transaction"), unless provision is made in connection with the Transaction for
the assumption of the Options heretofore granted, or the substitution of such
Options with new Options of the successor entity or parent thereof, with
appropriate adjustment as to the number and kind of shares and, if appropriate,
the per share exercise prices, as provided in Section 3(b) above Transaction all
unvested shares of Stock subject to outstanding Options, to the extent not then
fully vested and/or exercisable, shall become fully vested and exercisable upon
and subject to the consummation of the Transaction, except with respect to
specific Options as the Board otherwise determines at the time of grant of such
Options.

SECTION 4. ELIGIBILITY

         Each member of the Board who is not an employee of the Company or any
of its Subsidiaries (a "Non-Employee Director") shall be eligible for the grant
of Options under this Plan.

SECTION 5. STOCK OPTIONS

         Any Stock Option granted under the Plan shall be pursuant to a Stock
Option Agreement. Stock Options granted under the Plan shall be Non-Qualified
Stock Options. All grants of Options to Non-Employee Directors under this Plan
shall be automatic and non-discretionary and shall be made strictly in
accordance with this Section 5. No person shall have any discretion to select
which Non-Employee Directors shall be granted Options or to determine the number
of shares to be covered by such Options.

         (a)      TERMS OF STOCK OPTIONS. Stock Options granted under the Plan
shall be subject to the following terms and conditions and shall contain such
additional terms and conditions, not inconsistent with the terms of the Plan.

                  (i)      INITIAL GRANTS. Each person who is a Non-Employee
Director, other than Paul Butare, shall, on September 9, 1999 without further
action by the Board automatically be granted an Option to purchase 50,000 shares
of Stock, subject to adjustment as provided in Section 3(b) hereof. Paul Butare
shall, on September 9, 1999 without further action by the Board automatically be
granted an Option to purchase 33,334 shares of Stock, subject to adjustment as
provided in Section (3)(b) hereof. In addition, each person who first becomes a
Non-Employee Director after September 9, 1999 shall, on the date such person
becomes a Non-Employee Director, without further action by the Board,
automatically be granted an Option to purchase 50,000 shares of Stock, subject
to adjustment as provided in Section 3(b) hereof.

                  (ii)     ANNUAL GRANTS. On the date of the Company's annual
meeting of stockholders (provided that in no event shall such date be more than
180 days after the fiscal year end), or, if such date shall not be a business
day, the business day immediately preceding such date, and so long as shares
remain available for issuance under the Plan, each person who is a CONTINUING
Non-Employee Director shall without further action by the Board automatically be
granted an Option to purchase 12,500 Common Shares, subject to adjustment as
provided in Section 3(b) hereof.

                                      -4-
<PAGE>

                  (iii)    INSUFFICIENT SHARES. Notwithstanding the foregoing,
if, on any date upon which Options are to be granted under Section 5(a)(i) or
5(a)(ii) hereof, the shares of Stock remaining available for issuance under this
Plan is insufficient for the grant of Options to purchase the total number of
shares of Stock specified in such section, then each Non-Employee Director
entitled to receive an Option on such date shall be granted an Option to
purchase a proportionate amount of the available number of shares of Stock
(rounded down to the greatest number of whole shares). Except for the specified
Options referred to in Section 5(a)(i) or 5(a)(ii) above, no other Options shall
be granted under this Plan

                  (iv)     EXERCISABILITY; RIGHTS OF A STOCKHOLDER. Stock
Options shall become exercisable at such time or times as set forth in the Stock
Option Agreement. The Board may at any time accelerate the exercisability of all
or any portion of any Stock Option. An optionee shall have the rights of a
stockholder only as to shares acquired upon the exercise of a Stock Option and
not as to unexercised Stock Options.

                  (v)      METHOD OF EXERCISE. Stock Options may be exercised in
whole or in part, by giving written notice of exercise to the Company,
specifying the number of shares to be purchased. Payment of the purchase price
may be made by one or more of the following methods to the extent provided in
the Stock Option Agreement:

                           (A)      In cash, by certified or bank check, or
                                    other instrument acceptable to the Committee
                                    in U.S. funds payable to the order of the
                                    Company in an amount equal to the purchase
                                    price of such Option Shares;

                           (B)      If permitted by the Board, through the
                                    delivery (or attestation to the ownership)
                                    of shares of Stock that have been purchased
                                    by the optionee on the open market or have
                                    been beneficially owned by the optionee for
                                    at least six months and are not then subject
                                    to restrictions under any Company plan. Such
                                    surrendered shares shall be valued at Fair
                                    Market Value on the exercise date; or

                           (C)      If permitted by the Board, by the optionee
                                    delivering to the Company a properly
                                    executed exercise notice together with
                                    irrevocable instructions to a broker to
                                    promptly deliver to the Company cash or a
                                    check payable and acceptable to the Company
                                    to pay the purchase price; provided that in
                                    the event the optionee chooses to pay the
                                    purchase price as so provided, the optionee
                                    and the broker shall comply with such
                                    procedures and enter into such agreements of
                                    indemnity and other agreements as the Board
                                    shall prescribe as a condition of such
                                    payment procedure.

         Payment instruments will be received subject to collection. No
certificates for Option Shares so purchased will be issued to optionee until the
Company has completed all steps required by law to be taken in connection with
the issuance and sale of the shares, including without limitation (i) receipt of
a representation from the optionee at the time of exercise of the Option that
the optionee is purchasing the Option Shares for the optionee's own account and
not with a view to any sale or distribution thereof, (ii) the legending of any
certificate representing the shares to evidence the foregoing representations
and restrictions, and (iii) obtaining from optionee payment or provision for all
withholding taxes due as a result of the exercise of the Option. The delivery of
certificates representing the shares of Stock to be purchased pursuant to

                                      -5-
<PAGE>

the exercise of a Stock Option will be contingent upon receipt from the optionee
(or a purchaser acting in his or her stead in accordance with the provisions of
the Stock Option) by the Company of the full purchase price for such shares and
the fulfillment of any other requirements contained in the Stock Option or
applicable provisions of laws.

         (b)      NON-TRANSFERABILITY OF OPTIONS. No Stock Option shall be
transferable by the optionee otherwise than by will or by the laws of descent
and distribution and all Stock Options shall be exercisable, during the
optionee's lifetime, only by the optionee, or by the optionee's legal
representative or guardian in the event of the optionee's incapacity.
Notwithstanding the foregoing, the Board in its sole discretion may provide in
any Stock Option agreement that the optionee may transfer, without consideration
for the transfer, his or her Non-Qualified Stock Options to members of his or
her immediate family, to trusts for the benefit of such family members, or to
partnerships in which such family members are the only partners or to limited
liability companies in which such family members are the only members, provided
that the transferee agrees in writing with the Company to be bound by all of the
terms and conditions of this Plan and the applicable Option.

         (c)      TERMINATION. Unless otherwise provided in the option agreement
or determined by the Board, upon the termination of the optionee's Service
Relationship with the Company or its Subsidiaries, the optionee's rights in his
or her Stock Options shall automatically terminate upon the effective date of
such termination.

SECTION 6. TAX WITHHOLDING

         (a)      PAYMENT BY PARTICIPANT. Each participant shall, no later than
the date as of which the value of an Option or of any Stock or other amounts
received thereunder first becomes includable in the gross income of the
participant for Federal income tax purposes, pay to the Company, or make
arrangements satisfactory to the Board regarding payment of, any federal, state,
or local taxes of any kind required by law to be withheld with respect to such
income. The Company and its Subsidiaries shall, to the extent permitted by law,
have the right to deduct any such taxes from any payment of any kind otherwise
due to the participant.

         (b)      PAYMENT IN STOCK. Subject to approval by the Board, a
participant may elect to have the minimum required tax withholding obligation
satisfied, in whole or in part, by (i) authorizing the Company to withhold from
shares of Stock to be issued pursuant to any Option a number of shares with an
aggregate Fair Market Value (as of the date the withholding is effected) that
would satisfy the withholding amount due, or (ii) transferring to the Company
shares of Stock owned by the participant with an aggregate Fair Market Value (as
of the date the withholding is effected) that would satisfy the withholding
amount due.

SECTION 7. AMENDMENTS AND TERMINATION

         The Board may, at any time, amend or discontinue the Plan and the Board
may, at any time, amend or cancel any outstanding Option (or provide substitute
Options at the same or reduced exercise or purchase price or with no exercise or
purchase price in a manner not inconsistent with the terms of the Plan), but
such price, if any, must satisfy the requirements which would apply to the
substitute or amended Option if it were then initially granted under this

                                      -6-
<PAGE>

Plan for the purpose of satisfying changes in law or for any other lawful
purpose, but no such action shall adversely affect rights under any outstanding
Option without the holder's consent.

SECTION 8.  STATUS OF PLAN

         With respect to the portion of any Option that has not been exercised
and any payments in cash, Stock or other consideration not received by a
participant, a participant shall have no rights greater than those of a general
creditor of the Company unless the Board shall otherwise expressly determine in
connection with any Option or Options. In its sole discretion, the Board may
authorize the creation of trusts or other arrangements to meet the Company's
obligations to deliver Stock or make payments with respect to Options hereunder,
provided that the existence of such trusts or other arrangements is consistent
with the foregoing sentence.

SECTION 9.  GENERAL PROVISIONS

         (a)      NO DISTRIBUTION; COMPLIANCE WITH LEGAL REQUIREMENTS. The Board
may require each person acquiring Stock pursuant to an Option to represent to
and agree with the Company in writing that such person is acquiring the shares
without a view to distribution thereof. No shares of Stock shall be issued
pursuant to an Option until all applicable securities law and other legal and
stock exchange or similar requirements have been satisfied. The Board may
require the placing of such stop-orders and restrictive legends on certificates
for Stock and Options as it deems appropriate.

         (b)      DELIVERY OF STOCK CERTIFICATES. Stock certificates to
participants under this Plan shall be deemed delivered for all purposes when the
Company or a stock transfer agent of the Company shall have mailed such
certificates in the United States mail, addressed to the participant, at the
participant's last known address on file with the Company.

         (c)      OTHER COMPENSATION ARRANGEMENTS; NO EMPLOYMENT RIGHTS. Nothing
contained in this Plan shall prevent the Board from adopting other or additional
compensation arrangements, including trusts, and such arrangements may be either
generally applicable or applicable only in specific cases.

         (d)      TRADING POLICY RESTRICTIONS. Option exercises under the Plan
shall be subject to such Company's insider-trading-policy-related restrictions,
terms and conditions as may be established by the Board, or in accordance with
policies set by the Board, from time to time.

SECTION 10.  EFFECTIVE DATE OF PLAN

         This Plan shall become effective and shall be deemed to have been
adopted on September 9, 1999, subject to approval by the holders of a majority
of the votes cast at a meeting of stockholders at which a quorum is present or
by written consent in accordance with applicable law within twelve months after
such vote.

                                      -7-
<PAGE>

SECTION 11.  GOVERNING LAW

         This Plan and all Options and actions taken thereunder shall be
governed by the laws of the Commonwealth of Massachusetts, applied without
regard to conflict of law principles thereof.

                                      -8-

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