Document:

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                                                                    EXHIBIT 10.3

                  AMENDED AND RESTATED 1997 STOCK OPTION PLAN

                                  Article I.
                       Purpose and Adoption of the Plan
                       --------------------------------

     1.01  Purpose.  The purpose of the coolsavings.com inc. Stock Option Plan
           -------
(the "Plan") is to provide certain employees and consultants of coolsavings.com
inc. (f/k/a Interactive Coupon Marketing Group, Inc.), a Michigan corporation
(the "Company"), with an additional incentive to promote the Company's financial
success and to provide an incentive which the Company may use to induce able
persons to enter into or remain in the service of the Company or a Subsidiary.

     1.02  Adoption and Term.  The initial 1997 Stock Option Plan was approved
           -----------------
by the Board on December 4, 1997 and by the Company's stockholders on August 17,
1998.  This Amended and Restated 1997 Stock Option Plan was approved by the
Board as of December 1, 1998, subject to the approval of the Company's
stockholders on or before December 1, 1999,  and will remain in effect until all
shares authorized under the terms of the Plan have been issued, unless earlier
terminated or abandoned by action of the Board; provided, however, that no
Incentive Stock Option may be granted after December 4, 2007.

                                  Article II.
                                  Definitions
                                  -----------

     2.01  Administrator means the group of persons having authority to
administer the Plan pursuant to Section 3.01.

     2.02  Award means any one or combination of Non-Qualified Stock Options,
Performance Based Options, Incentive Stock Options, Stock Appreciation Rights,
Restricted Share Rights or any other award made under the terms of the Plan.

     2.03  Award Agreement means a written agreement between the Company and
Participant or a written acknowledgment from the Company specifically setting
forth the terms and conditions of an Award granted under the Plan.

     2.04  Award Period means, with respect to an Award, the period of time set
forth in the Award Agreement during which specified conditions set forth in the
Award Agreement must be satisfied.

     2.05  Beneficiary means (a) an individual, trust or estate who or which, by
will or by operation of the laws of descent and distribution, succeeds to the
rights and obligations of the Participant under the Plan and Award Agreement
upon the Participant's death; or (b) an individual, who by designation of the
Participant, succeeds to the rights and obligations of the Participant under the
Plan and Award Agreement upon the Participant's death.

     2.06  Board means the Board of Directors of the Company.

     2.07  Change of Control Event means (a) an event or series of events by
which any Person or other entity or group (as such term is used in Section 13(d)
and 14(d) of the Exchange Act) of Persons or other entities acting in concert as
a partnership or other group (a "Group of Persons") (other than Persons who are,
or Groups of Persons entirely made up of, (i) management personnel of the
Company or (ii) any affiliates of any such management personnel) shall, as a
result of a tender or exchange offer or offers, an open market purchase or
purchases, a privately negotiated purchase or purchases or otherwise, become the
beneficial owner (within the meaning of Rule 13d-3 under the Exchange Act,
except that a Person shall be deemed to have
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"beneficial ownership" of all securities that such Person has the right to
acquire, whether such right is exercisable immediately or only after the passage
of time), directly or indirectly, of 20% or more of the combined voting power of
the then outstanding voting stock of the Company; (b) the Company consolidates
with, or merges with or into, another Person (other than a Subsidiary in a
transaction which is not otherwise a Change of Control Event), or sells,
assigns, conveys, transfers, leases or otherwise disposes of all or
substantially all of its assets to any Person, or any Person consolidates with,
or merges with or into the Company, in any such event pursuant to a transaction
in which the outstanding voting stock of the Company is converted into or
exchanged for cash, securities or other property; (c) during any consecutive
two-year period, individuals who at the beginning of such period constituted the
Board (together with any new directors whose election by such Board or whose
nomination for election by the stockholders of the Company, was approved by a
vote of 66-2/3% of the directors then still in office who were either directors
at the beginning of such period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of the
Board then in office; or (d) any liquidation or dissolution of the Company
(other than a liquidation into a Subsidiary that is not otherwise a Change of
Control Event).

     2.08  Code means the Internal Revenue Code of 1986, as amended.  References
to a section of the Code shall include that section and any comparable section
or sections of any future legislation that amends, supplements or supersedes
that section.

     2.09  Common Stock means the Common Stock of the Company, no par value.

     2.10  Company means coolsavings.com inc. (f/k/a Interactive Coupon
Marketing Group, Inc.), a Michigan corporation.

     2.11  Date of Grant means the date designated by the Administrator as the
date as of which it grants an Award, which shall not be earlier than the date on
which the Administrator approves the granting of such Award.

     2.12  Director means a member of the Board of Directors of the Company.

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

     2.14  Exercise Price means, with respect to a Stock Appreciation Right, the
amount established by the Administrator, in accordance with Section 7.03
hereunder, and set forth in the Award Agreement, which is to be subtracted from
the Fair Market Value on the date of exercise in order to determine the amount
of the Incremental Value to be paid to the Participant.

     2.15  Expiration Date means the date specified in an Award Agreement as the
expiration date of such Award.

     2.16  Fair Market Value means, on any given date, the fair market value of
the Common Stock as determined in good faith by the Board; provided, however,
that: (a) if the Common Stock is admitted to quotation on the National
Association of Securities Dealers Automated Quotation System ("Nasdaq") Small-
Cap Market on the date the Option is granted, the Fair Market Value means the
average of the highest bid and lowest asked prices of the Common Stock on Nasdaq
reported for such date; (b) if the Common Stock is admitted to trading on a
national securities exchange or the Nasdaq National Market on the date the
Option is granted, the Fair Market Value means the closing price reported for
the Common 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; and (c) the Fair Market Value of the Common Stock on the effective
date of the registration statement for the Company's initial public offering
shall be the initial offering price.

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     2.17  Incentive Stock Option means a stock option described in Section 422
of the Code.

     2.18  Incremental Value has the meaning given such term in Section 7.01 of
the Plan.

     2.19  Non-Qualified Stock Option means a stock option which is not an
Incentive Stock Option.

     2.20  Officer means a president, vice president, treasurer, secretary,
controller, and any other person who performs functions corresponding to the
foregoing officers for the Company, and any other participant who is deemed to
be an officer of the Company for purposes of Section 16 of the Exchange Act and
the rules thereunder, as currently in effect or as amended from time to time.

     2.21  Options means all Non-Qualified Stock Options, Incentive Stock
Options and Performance Based Options granted at any time under the Plan.

     2.22  Participant shall have the meaning set forth in Article V.

     2.23  Performance Based Option means a stock option which, upon exercise or
at any other time, would not result in or give rise to "applicable employee
remuneration" within the meaning of Section 162(m) of the Code.

     2.24  Plan means the coolsavings.com inc. Amended and Restated 1997 Stock
Option Plan, as described herein and as it may be amended from time to time.

     2.25  Purchase Price, with respect to options, shall have the meaning set
forth in Section 6.02.

     2.26  Restricted Share Right means a right to receive Common Stock subject
to restrictions imposed under the terms of an Award granted pursuant to Article
IX.

     2.27  Rule 16b-3 means Rule 16b-3 promulgated by the Securities and
Exchange Commission under Section 16 of the Exchange Act, as currently in effect
and as it may be amended from time to time, and any successor rule.

     2.28  Stock Appreciation Right means an Award granted in accordance with
Article VII.

     2.29  Subsidiary shall have the meaning set forth in Section 424(f) of the
Code.

     2.30  Termination of Employment means the voluntary or involuntary
termination of a Participant's employment with the Company for any reason,
including death, disability, retirement or as the result of the divestiture of
the Participant's employer or any other similar transaction in which the
Participant's employer ceases to be the Company or a Subsidiary of the Company.
Whether an authorized leave of absence or absence on military or government
service, absence due to disability, or absence for any other reason shall
constitute Termination of Employment shall be determined in each case by the
Administrator in its sole discretion.

     2.31  Trading Day means a day on which public trading of securities occurs
and is reported in the principal consolidated reporting system referred to in
Section  2.16 above, or if

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the Common Stock is not listed or admitted to trading on a national securities
exchange or included for quotation on the Nasdaq National Market, any business
day.

                                 Article III.
                                Administration
                                --------------

     3.01  Administration.  The Plan shall be administered by the Board or, to
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the extent determined by the Board, a committee (the "Compensation Committee")
consisting of not less than two non-employee directors of the Company (within
the meaning of Rule 16b-3) to be appointed by, and to serve at the pleasure of,
the Board (in either case, the "Administrator").  It is the intention of the
Company that, with respect to Awards designated as Performance Based Options,
each of the members of the Compensation Committee shall also be "outside
directors" within the meaning of Section 162(m) of the Code.  The Administrator
shall administer the Plan in accordance with this provision and shall have the
sole discretionary authority to interpret the Plan, to establish and modify
administrative rules for the Plan, to impose such conditions and restrictions on
Awards as it determines appropriate, to cancel Awards (including those made
pursuant to other plans of the Company) and to substitute new options (including
options granted under other plans of the Company) with the consent of the
recipient, and to take such steps in connection with the Plan and Awards granted
thereunder as it may deem necessary or advisable.  The Administrator may, with
respect to Participants who are not Officers, delegate such of its powers and
authority under the Plan as it deems appropriate to designated officers or
employees of the Company.

     3.02  Indemnification.  Members of the Administrator shall be entitled to
           ---------------
indemnification and reimbursement from the Company for any action or any failure
to act in connection with service as Administrator to the full extent provided
for or permitted by the Company's articles of incorporation or bylaws or by any
insurance policy or other agreement intended for the benefit of the Company's
officers, directors or employees or by any applicable law.

                                  Article IV.
                  Common Stock Issuable Pursuant to the Plan
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     4.01  Shares Issuable.  Shares to be issued under the Plan may be
           ---------------
authorized and unissued shares or issued shares which have been reacquired by
the Company.  Except as provided in Section 4.03, the Awards granted to any
Participant and to all Participants in the aggregate under the Plan shall be
limited so that the sum of the following shall never exceed fifteen percent
(15%) of the total number of outstanding shares of Common Stock from time to
time: (i) all shares which shall be issued upon the exercise of outstanding
Options or other Awards granted under the Plan, (ii) all shares for which
payment of Incremental Value shall be made by reason of the exercise of Stock
Appreciation Rights at any time granted under the Plan, (iii) the number of
shares otherwise issuable under an Award which are applied by the Company to
payment of the withholding or tax liability discussed in Section 11.04, and (iv)
all shares of Common Stock which shall be issued upon the exercise of the
options granted under that certain Stock Option Agreement, dated as of October
15, 1996, by and between the Company and Matthew Moog; provided, however, that
in no event shall the number of shares of Common Stock which may be issued upon
the exercise of Incentive Stock Options exceed 5,000 shares, subject to
adjustment in accordance with Section 4.03.

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     4.02  Shares Subject to Terminated Awards.  In the event that any Award at
           -----------------------------------
any time granted under the Plan shall be surrendered to the Company, be
terminated or expire before it shall have been fully exercised, or an award of
Stock Appreciation Rights is exercised for cash, then all shares formerly
subject to such Award as to which such Award shall not have been exercised shall
be available for any Award subsequently granted in accordance with the Plan.
Shares of Common Stock subject to Options, or portions thereof, which have been
surrendered in connection with the exercise of tandem Stock Appreciation Rights
shall not be available for subsequent Awards under the Plan, and shares of
Common Stock issued in payment of such Stock Appreciation Rights shall be
charged against the number of shares of Common Stock available for the grant of
Awards.  Shares which are reacquired by the Company or shares issuable subject
to Restricted Share Rights which are forfeited pursuant to forfeiture provisions
in the Award Agreement shall be available for subsequently granted Awards only
if the forfeiting Participant received no benefits of ownership (such as
dividends actually paid to the Participant) other than voting rights of the
forfeited shares.  Any shares of Common Stock issued by the Company pursuant to
its assumption or substitution of outstanding grants from acquired companies
shall not reduce the number of shares available for Awards under this Plan
unless issued under this Plan.

     4.03  Adjustments to Reflect Capital Changes.
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           (a)   Recapitalization.  The number and kind of shares subject to
                 ----------------
     outstanding Awards, the Purchase Price or Exercise Price for such shares,
     and the number and kind of shares available for Awards subsequently granted
     under the Plan shall be appropriately adjusted to reflect any stock
     dividend, stock split, combination or exchange of shares, merger,
     consolidation or other change in capitalization with a similar substantive
     effect upon the Plan or the Awards granted under the Plan.  The
     Administrator shall have the power to determine the amount of the
     adjustment to be made in each case.

           (b)   Sale or Reorganization.  After any reorganization, merger or
                 ----------------------
     consolidation in which the Company is a surviving corporation, each
     Participant shall, at no additional cost, be entitled upon exercise of an
     Award to receive (subject to any required action by stockholders), in lieu
     of the number of shares of Common Stock receivable or exercisable pursuant
     to such Award, a number and class of shares of stock or other securities to
     which such Participant would have been entitled pursuant to the terms of
     the reorganization, merger or consolidation if, at the time of such
     reorganization, merger or consolidation, such Participant had been the
     holder of record of a number of shares of Common Stock equal to the number
     of shares receivable or exercisable pursuant to such Award.  Comparable
     rights shall accrue to each Participant in the event of successive
     reorganizations, mergers or consolidations of the character described
     above.

           (c)   Options to Purchase Stock of Acquired Companies.  After any
                 -----------------------------------------------
     reorganization, merger or consolidation in which the Company or a
     Subsidiary of the Company shall be a surviving corporation, the
     Administrator may grant substituted Options under the provisions of the
     Plan, pursuant to Section 424 of the Code, replacing old options granted
     under a plan of another party to the reorganization, merger or
     consolidation, where such party's stock may no longer be issued following
     such merger or consolidation.  The foregoing adjustments and manner of
     application of the foregoing provisions shall be determined by the
     Administrator in its sole discretion.  Any adjustments may provide for the
     elimination of any fractional shares which might otherwise have become
     subject to any Awards.

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                                  Article V.
                                 Participation
                                 -------------

     5.01  Eligible Participants. Participants in the Plan shall be the
           ---------------------
employees and consultants of the Company or any Subsidiary, as determined and
selected from time to time by the Administrator, in its sole and absolute
discretion. The Administrator's designation of a Participant in any year shall
not require the Administrator to designate such person to receive Awards in any
other year.  The Administrator shall consider such factors as it deems pertinent
in selecting Participants and in determining the type and amount of their
respective Awards.

                                  Article VI.
                                 Option Awards
                                 -------------

     6.01  Power to Grant Options.  The Administrator may grant, to such
           ----------------------
Participants as the Administrator may select, Options entitling the Participant
to purchase Common Stock from the Company at such price, in such quantity and on
such terms and subject to such conditions, not inconsistent with the terms of
this Plan, as may be established by the Administrator.  The terms of any Option
granted under this Plan shall be set forth in an Award Agreement.
Notwithstanding the foregoing, Options granted to Officers shall not be
exercisable for a period of at least six months from the Date of Grant.

     6.02  Purchase Price of Options.  The Purchase Price of each share of
           -------------------------
Common Stock which may be purchased upon exercise of any Option granted under
the Plan shall be equal to or greater than the Fair Market Value on the Date of
Grant; provided, however, that the Purchase Price of each share of Common Stock
which may be purchased upon exercise of a Non-Qualified Stock Option shall be no
less than ninety percent (90%) of the Fair Market Value on the Date of Grant if
such discount is expressly granted in lieu of a reasonable amount of salary or
bonus; provided, further, that the Purchase Price for shares of Common Stock
purchased pursuant to Stock Options designated by the Administrator as Incentive
Stock Options shall be equal to or greater than the Fair Market Value on the
Date of Grant as required under Section 422 of the Code and provided further
that the Purchase Price for shares of Common Stock purchased pursuant to Stock
Options designated by the Administrator as Performance Based Options shall be
equal to or greater than the Fair Market Value on the Date of Grant.

     6.03  Designation of Incentive Stock Options.  Except as otherwise
           --------------------------------------
expressly provided in the Plan, the Administrator may designate, at the Date of
Grant of each Option to a Participant that is an employee of the Company or a
Subsidiary, that the Option is an Incentive Stock Option under Section 422 of
the Code.

           (a)   Incentive Stock Option Share Limitation.  No Participant may be
                 ---------------------------------------
     granted Incentive Stock Options under the Plan (or any other plans of the
     Company) which would result in stock with an aggregate Fair Market Value
     (measured on the Date of Grant) of more than $100,000 first becoming
     exercisable in any one calendar year, or which would entitle such
     Participant to purchase a number of shares greater than the maximum number
     permitted by Section 422 of the Code as in effect on the Date of Grant.

           (b)   Other Incentive Stock Option Terms.  Whenever possible, each
                 ----------------------------------
     provision in the Plan and in every Option granted under this Plan which is
     designated by the Administrator as an Incentive Stock Option shall be
     interpreted in such a manner as to entitle the Option to the tax treatment
     afforded by Section 422 of the Code.  If any provision of this Plan or any
     Option designated by the Administrator as an Incentive Stock Option shall
     be held not to comply with requirements necessary to entitle such Option to
     such tax treatment, then (i) such provision shall be deemed to have
     contained from the outset such language as shall be necessary to entitle
     the Option to the tax

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     treatment afforded under Section 422 of the Code, and (ii) all other
     provisions of this Plan and the Award Agreement shall remain in full force
     and effect. If any agreement covering an Option designated by the
     Administrator to be an Incentive Stock Option under this Plan shall not
     explicitly include any terms required to entitle such Incentive Stock
     Option to the tax treatment afforded by Section 422 of the Code, all such
     terms shall be deemed implicit in the designation of such Option and the
     Option shall be deemed to have been granted subject to all such terms.

     6.04  Designation of Performance Based Options.  Except as otherwise
           ----------------------------------------
expressly provided in the Plan, the Administrator may designate, at the Date of
Grant of each Option to a Participant that is an employee of the Company or a
Subsidiary, that the Option is a Performance Based Option.  A Performance Based
Option shall have a Purchase Price not less than the Fair Market Value on the
Date of Grant and shall contain such other terms and conditions as the
Administrator may deem necessary so that, upon exercise or at any other time,
the Performance Based Option does not result in or give rise to "applicable
employee remuneration" within the meaning of Section 162(m) of the Code.

     6.05  Rights as a Stockholder.  The Participant or any transferee of an
           -----------------------
Option pursuant to Section 8.02 or Section 11.05 shall have no rights as a
stockholder with respect to any shares of Common Stock covered by an Option
until the Participant or transferee shall have become the holder of record of
any such shares, and no adjustment shall be made for dividends and cash or other
property or distributions or other rights with respect to any such shares of
Common Stock for which the record date is prior to the date on which the
Participant or a transferee of the Option shall have become the holder of record
of any such shares covered by the Option.

                                 Article VII.
                           Stock Appreciation Rights
                           -------------------------

     7.01  Power to Grant Stock Appreciation Rights.  The Administrator is
           ----------------------------------------
authorized to grant to any Participant, on such terms established by the
Administrator on or prior to the Date of Grant and subject to and not
inconsistent with the provisions of this Plan, the right to receive the payment
from the Company, payable as provided in Section 7.04, of an amount equal to the
Incremental Value of the Stock Appreciation Rights, which shall be an amount
equal to the remainder derived from subtracting (i) the Exercise Price for the
right established in the Award Agreement from (ii) the Fair Market Value of a
share of Common Stock on the date of exercise.  The terms of any Stock
Appreciation Right granted under the Plan shall be set forth in an Award
Agreement.

     7.02  Tandem Stock Appreciation Rights.  The Administrator may grant to any
           --------------------------------
Participant a Stock Appreciation Right consistent with the provisions of this
Plan covering any share of Common Stock which is, at the Date of Grant of the
Stock Appreciation Right, also covered by an Option granted to the same
Participant, either prior to or simultaneously with the grant to such
Participant of the Stock Appreciation Right, provided:  (i) any Option covering
any share of Common Stock shall expire and not be exercisable upon the exercise
of any Stock Appreciation Right with respect to the same share; (ii) any Stock
Appreciation Right covering any share of Common Stock shall not be exercisable
upon the exercise of any related Option with respect to the same share; and
(iii) an Option and Stock Appreciation Right covering the same share of Common
Stock may not be exercised simultaneously.

     7.03  Exercise Price.  The Exercise Price established under any Stock
           --------------
Appreciation Right granted under this Plan shall be determined by the
Administrator and, in the case of a tandem Stock Appreciation Right, shall not
be less than the Purchase Price of the related Option.  Upon exercise of the
Stock Appreciation Rights, the number of shares subject to exercise under a

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related Option. Upon exercise of the Stock Appreciation Rights, the number of
shares subject to exercise under a related Option shall automatically be reduced
by the number of shares of Common Stock represented by the Option or portion
thereof which is surrendered as a result of the exercise of such Stock
Appreciation Rights.

     7.04  Payment of Incremental Value.  Any payment which may become due from
           ----------------------------
the Company by reason of Participant's exercise of a Stock Appreciation Right
may be paid to the Participant as determined by the Administrator (i) all in
cash, (ii) all in Common Stock, or (iii) in any combination of cash and Common
Stock.  In the event that all or a portion of the payment is made in Common
Stock, the number of shares of the Common Stock delivered in satisfaction of
such payment shall be determined by dividing the amount of the payment by the
Fair Market Value on the date of exercise.  The Administrator may determine
whether payment upon exercise of a Stock Appreciation Right will be made in cash
or in stock, or a combination thereof, upon or at any time prior to the exercise
of such Stock Appreciation Right.  No fractional share of Common Stock shall be
issued to make any payment; if any fractional shares would be issuable, the mix
of cash and Common Stock payable to the Participant shall be adjusted as
directed by the Administrator to avoid the issuance of any fractional share.
Payment may be made in cash to Officers only if the Stock Appreciation Right is
exercised during the "window period" required under Rule 16b-3(e)(3) and
otherwise in accordance with Rule 16b-3.

                                 Article VIII.
                Terms of Options and Stock Appreciation Rights
                ----------------------------------------------

     8.01  Duration of Options and Stock Appreciation Rights.  Options and Stock
           -------------------------------------------------
Appreciation Rights shall terminate after the first to occur of the following
events:

           (a) Expiration Date of the Award as provided in the Award Agreement;
     or

           (b) Termination of the Award as provided in Section 8.02; or

           (c) In the case of an Incentive Stock Option, ten years from the Date
     of Grant; or

           (d) Solely in the case of tandem Stock Appreciation Rights, upon the
     Expiration Date of the related Option.

     8.02  Exercise on Death or Termination of Employment.
           ----------------------------------------------

           (a) Unless otherwise provided in the Award Agreement, in the event of
     the death of a Participant while an employee of the Company or a Subsidiary
     of the Company, the right to exercise all unexpired Awards shall be
     accelerated and shall accrue as of the date of death, and the Participant's
     Awards may be exercised by his Beneficiary at any time within one year
     after the date of the Participant's death.

           (b) Unless otherwise provided in the Award Agreement, in the event of
     a Participant's Termination of Employment at any time for any reason
     (including disability or retirement) other than death or for "cause" (as
     defined in paragraph (d) below), an Award may be exercised, but only to the
     extent it was otherwise exercisable, on the date of Termination of
     Employment, within ninety days after the date of Termination of Employment.
     In the event of the death of the Participant within the ninety-day period
     following Termination of Employment, his Award may be exercised by his
     Beneficiary within the one year period provided in subparagraph (a) above.

           (c) With respect to an Award which is intended to constitute an
     Incentive Stock Option, upon Termination of Employment, such Award shall be
     exercisable as

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     provided in Section 422 of the Code.

           (d) In the event that a Participant's Termination of Employment is
     for "cause", all Awards shall terminate immediately upon Termination of
     Employment.  A Participant's employment shall be deemed to have been
     terminated for "cause" if such termination is determined, in the sole
     discretion of the Administrator, to have resulted from an act or omission
     by the Participant constituting active and deliberate dishonesty, as
     established by a final judgment or actual receipt of an improper benefit or
     profit in money, property or services, or from the Participant's continuous
     failure to perform his or her duties under any employment agreement in
     effect between the Participant and the Company in any material manner (or,
     in the absence of such an agreement, the consistent failure or refusal of
     the Participant to perform according to reasonable expectations and
     standards set by the Board and/or management consistent with Participant's
     title and position) after receipt of notice of such failure from the
     Company specifying how the Participant has so failed to perform.

     8.03  Acceleration of Exercise Time.  The Administrator, in its sole
           -----------------------------
discretion, shall have the right (but shall not in any case be obligated) to
permit purchase of shares under any Award prior to the time such Award would
otherwise become exercisable under the terms of the Award Agreement.

     8.04  Extension of Exercise Time.  The Administrator, in its sole
           --------------------------
discretion, shall have the right (but shall not in any case be obligated) to
permit any Award granted under this Plan to be exercised after its Expiration
Date or after the ninety day period following Termination of Employment or
service on the Board, subject, however, to the limitations described in Section
8.01 (c) and (d).

     8.05  Conditions for Exercise.  An Award Agreement may contain such waiting
           -----------------------
periods, exercise dates and restrictions on exercise (including, but not limited
to, periodic installments which may be cumulative) as may be determined by the
Administrator at the Date of Grant.  No Stock Appreciation Right may be
exercised prior to six months from the Date of Grant.

     8.06  Change of Control Event.  Unless otherwise provided in the Award
           -----------------------
Agreement, and subject to such other terms and conditions as the Administrator
may establish in the Award Agreement, upon the occurrence of a Change of Control
Event, irrespective of whether or not an Award is then exercisable, the
Participant shall have the right to exercise in full any unexpired Award to the
extent not theretofore exercised or terminated; provided, however, that any
Stock Appreciation Right so exercised must have a Date of Grant at least six
months prior to the date of exercise.

     8.07  Exercise Procedures.  Each Option and Stock Appreciation Right
           -------------------
granted under the Plan shall be exercised by written notice to the Company which
must be received by the officer of the Company designated in the Award Agreement
on or before the Expiration Date of the Award.  The Purchase Price of shares
purchased upon exercise of an Option granted under the Plan shall be paid in
full in cash by the Participant pursuant to the Award Agreement; provided,
however, that the Administrator may (but need not) permit payment to be made by
delivery to the Company of either (a) shares of Common Stock (including shares
issuable to the Participant pursuant to the exercise of the Option), or (b) any
combination of cash and shares of Common Stock, or (c) such other consideration
as the Administrator deems appropriate and in compliance with applicable law
(including payment in accordance with a cashless exercise program under which,
if so instructed by the Participant, shares of Common Stock may be issued
directly to the Participant's broker or dealer upon receipt of the Purchase
Price in cash from the broker or dealer.)  In the event that any Common Stock
shall be transferred to the Company to

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satisfy all or any part of the Purchase Price, the part of the Purchase Price
deemed to have been satisfied by such transfer of Common Stock shall be equal to
the product derived by multiplying the Fair Market Value as of the date of
exercise times the number of shares transferred. The Participant may not
transfer to the Company in satisfaction of the Purchase Price (y) a number of
shares which when multiplied times the Fair Market Value as of the date of
exercise would result in a product greater than the Purchase Price or (z) any
fractional share of Common Stock. Any part of the Purchase Price paid in cash
upon the exercise of any Option shall be added to the general funds of the
Company and used for any proper corporate purpose. Unless the Administrator
shall otherwise determine, any Common Stock transferred to the Company as
payment of all or part of the Purchase Price upon the exercise of any Option
shall be held as treasury shares.

                                  Article IX.
                            Restricted Stock Awards
                            -----------------------

     9.01  Restricted Share Awards.  The Administrator may grant to any
           -----------------------
Participant an Award of Restricted Share Rights entitling such person to receive
shares of Common Stock in such quantity, and on such terms, conditions and
restrictions (whether based on performance standards, periods of service or
otherwise) as the Administrator shall determine on or prior to the Date of
Grant.  The terms of any Award of Restricted Share Rights granted under the Plan
shall be set forth in an Award Agreement.

     9.02  Duration of Restricted Share Rights.  In no event shall any
           -----------------------------------
Restricted Share Rights granted entitle the holder to receive shares of Common
Stock free of all restrictions on transfer at any time prior to the expiration
of three years from the Date of Grant, and each Award Agreement shall provide
that the Participant shall remain employed by the Company or a Subsidiary for
that three year period (subject to the Company's or Subsidiary's right to
terminate such employment).

     9.03  Forfeiture of Restricted Share Rights.  Subject to Section 9.05, all
           -------------------------------------
Restricted Share Rights shall be forfeited and all Restricted Share Awards shall
terminate unless the Participant continues in the service of the Company or a
Subsidiary until the expiration of the forfeiture and satisfies any other
conditions set forth in the Award Agreement.  If the Award Agreement shall so
provide, in the case of death, disability or retirement (as defined in the Award
Agreement) of the Participant, all of the shares covered by the Restricted Share
Rights shall immediately vest and any restrictions shall lapse as of the date of
such death, disability or retirement.

     9.04  Delivery of Shares Upon Vesting.  Upon the lapse of the restrictions
           -------------------------------
established in the Award Agreement, the Participant shall be entitled to
receive, without payment of any cash or other consideration, certificates for
the number of shares covered by the Award.

     9.05  Waiver or Modification of Forfeiture Provisions.  The Administrator
           -----------------------------------------------
has full power and authority to modify or waive any or all terms, conditions or
restrictions (other than the minimum restriction period set forth in Section
9.02) applicable to any Restricted Share Rights granted to a Participant under
the Plan; provided that no modification shall, without consent of the
Participant, adversely affect the Participant's rights thereunder and no
modification shall reduce the employment requirement to less than three years,
except in the case of death, disability or retirement.

     9.06  Rights as a Stockholder.  No person shall have any rights as a
           -----------------------
stockholder with respect to any shares subject to Restricted Share Rights until
such time as the person shall have been issued a certificate for such shares.

                                      -10-
<PAGE>

                                  Article X.
                           Other Stock Based Awards
                           ------------------------

     10.01  Grant of Other Awards.  Other Awards of Common Stock or other
            ---------------------
securities of the Company and other Awards that are valued in whole or in part
by reference to, or are otherwise based on, Common Stock ("Other Awards") may be
granted either alone or in addition to or in conjunction with Options or Stock
Appreciation Rights under the Plan.  Subject to the provisions of the Plan, the
Administrator shall have the sole and complete authority to determine the
persons to whom and the time or times at which Other Awards shall be made, the
number of shares of Common Stock or other securities, if any, to be granted
pursuant to such Other Awards, and all other conditions of such Other Awards.
Any Other Award shall be confirmed by an Award Agreement executed by the
Administrator and the Participant, which agreement shall contain such provisions
as the Administrator determines to be necessary or appropriate to carry out the
intent of this Plan with respect to the Other Award.

     10.02  Terms of Other Awards.  In addition to the terms and conditions
            ---------------------
specified in the Award Agreement, Other Awards made pursuant to this Article X
shall be subject to the following:

            (a) Any shares of Common Stock subject to such Other Awards may not
     be sold, assigned, transferred or otherwise encumbered prior to the date on
     which the shares are issued, or, if later, the date on which any applicable
     restriction, performance or deferral period lapses; and

            (b) If specified by the Administrator and the Award Agreement, the
     recipient of an Other Award shall be entitled to receive, currently or on a
     deferred basis, interest or dividends or dividend equivalents with respect
     to the Common Stock or other securities covered by the Other Award; and

            (c) The Award Agreement with respect to any Other Award shall
     contain provisions providing for the disposition of such Other Award in the
     event of Termination of Employment prior to the exercise, realization or
     payment of such Other Award, with such provisions to take account of the
     specific nature and purpose of the Other Award.

                                  Article XI.
                        Terms Applicable to All Awards
                        ------------------------------

     11.01  Award Agreement. The grant and the terms and conditions of the Award
            ---------------
shall be set forth in an Award Agreement between the Company and the
Participant.  No person shall have any rights under any Award granted under the
Plan unless and until the Administrator and the Participant to whom the Award is
granted shall have executed and delivered an Award Agreement expressly granting
the Award to such person and setting forth the terms of the Award.

     11.02  Plan Provisions Control Award Terms.  The terms of the Plan shall
            -----------------------------------
govern all Awards granted under the Plan, and in no event shall the
Administrator have the power to grant any Award under the Plan which is contrary
to any of the provisions of the Plan.  In the event any provision of any Award
granted under the Plan shall conflict with any term in the Plan as constituted
on the Date of Grant of such Award, the term in the Plan as constituted on the
Date of Grant of such Award shall control.  Except as provided in Section 4.03,
(i) the terms of any Award granted under the Plan may not be changed after the
granting of such Award without the express approval of the Participant and (ii)
no modification may be made to an Award granted to an Officer except in
compliance with Rule 16b-3.

     11.03  Modification of Award After Grant. Each Award granted under the Plan
            ---------------------------------
to a

                                      -11-
<PAGE>

Participant other than an Officer may be modified after the date of its grant by
express written agreement between the Company and the Participant, provided that
such change (i) shall not be inconsistent with the terms of the Plan and (ii)
shall be approved by the Administrator. No modifications may be made to any
Awards granted to an Officer except in compliance with Rule 16b-3.

     11.04  Taxes. The Company shall be entitled, if the Administrator deems it
            -----
necessary or desirable, to withhold (or secure payment from the Participant in
lieu of withholding) the amount of any withholding or other tax required by law
to be withheld or paid by the Company with respect to any amount payable and/or
shares issuable under such Participant's Award, or with respect to any income
recognized upon a disqualifying disposition of shares received pursuant to the
exercise of an Incentive Stock Option, and the Company may defer payment or
issuance of the cash or stock upon exercise or vesting of an Award unless
indemnified to its satisfaction against any liability for such tax.  The amount
of such withholding or tax payment shall be determined by the Administrator and,
unless otherwise provided by the Administrator, shall be payable by the
Participant at the time of issuance or payment in accordance with the following
rules:

           (a) A Participant, other than an Officer, shall have the right to
     elect to meet his or her withholding requirement by:  (1) having the
     Company withhold from such Award the appropriate number of shares of Common
     Stock, rounded out to the next whole number, the Fair Market Value of which
     is equal to such amount, or, in the case of the cash payment, the amount of
     cash, as is determined by the Company to be sufficient to satisfy
     applicable tax withholding requirements; or (2) direct payment to the
     Company in cash of the amount of any taxes required to be withheld with
     respect to such Award.

           (b) Unless otherwise provided by the Administrator, with respect to
     Officers, the Company shall withhold from such Award the appropriate number
     of shares of Common Stock, rounded up to the next whole number, the Fair
     Market Value of which is equal to the amount, as determined by the
     Administrator, (or, in the case of a cash payment, the amount of cash)
     required to satisfy applicable tax withholding requirements.

           (c) In the event that an Award or property received upon exercise of
     an Award has already been transferred to the Participant on the date upon
     which withholding requirements apply, the Participant shall pay directly to
     the Company the cash amount determined by the Company to be sufficient to
     satisfy applicable federal, state or local withholding requirements.  The
     Participant shall provide to the Company such information as the Company
     shall require to determine the amounts to be withheld and the time such
     withholding requirements become applicable.

           (d) If permitted under applicable federal income tax laws, a
     Participant may elect to be taxed in the year in which an Award is
     exercised or received, even if it would not otherwise have become taxable
     to the Participant.  If the Participant makes such an election, the
     Participant shall promptly notify the Company in writing and shall provide
     the Company with a copy of the executed election form as filed with the
     Internal Revenue Service no later than thirty days from the date of
     exercise or receipt.  Promptly following such notification, the Participant
     shall pay directly to the Company the cash amount determined by the Company
     to be sufficient to satisfy applicable federal, state or local withholding
     tax requirements.

     11.05 Limitations on Transfer.  A Participant's rights and interest under
           -----------------------
the Plan may not be assigned or transferred other than by will or the laws of
descent and distribution.  Notwithstanding the foregoing, or any other provision
of this Plan, a Participant who holds Non-Qualified Stock Options may transfer
such Options to his or her spouse, lineal ascendants, lineal

                                      -12-
<PAGE>

descendants, or to a duly established trust for the benefit of one or more of
these individuals. Options so transferred may thereafter be transferred only to
the Participant who originally received the Options or to an individual or trust
to whom the Participant could have initially transferred the Option pursuant to
this Section 11.05. Options which are transferred pursuant to this Section 11.05
shall be exercisable by the transferee according to the same terms and
conditions as applied to the Participant.

     11.06 General Restriction.  Notwithstanding anything to the contrary
           -------------------
herein, the Company shall have no obligation or liability to deliver any shares
of Common Stock under the Plan or to make any other distribution of benefits
under the Plan unless such delivery or distribution would comply with all
applicable laws, rules and regulations, including, without limitation, the
Securities Act of 1933, as amended, and the Exchange Act.

     11.07 Surrender of Awards.  Any Award granted under the Plan may be
           -------------------
surrendered to the Company for cancellation on such terms as the Administrator
and Participant approve, including, but not limited to, terms which provide that
upon such surrender the Company will pay to the Participant cash or Common
Stock, or a combination of cash and Common Stock.

                                 Article XII.
                              General Provisions
                              ------------------

     12.01 Amendment and Termination of Plan.
           ---------------------------------

           (a) Amendment.  The Board shall have complete power and authority to
               ---------
     amend the Plan at any time and to add any other stock based Award or other
     incentive compensation programs to the Plan as it deems necessary or
     appropriate and no approval by the stockholders of the Company or by any
     other person, committee or entity of any kind shall be required to make any
     amendment; provided, however, that the Board shall not, without the
     requisite affirmative approval of the stockholders of the Company, (i) make
     any amendment which requires stockholder approval under any applicable law,
     including Rule 16b-3 or the Code; or (ii) which, unless approved by the
     requisite affirmative approval of stockholders of the Company, would cause,
     result in or give rise to "applicable employee remuneration" within the
     meaning of Section 162(m) of the Code with respect to any Performance Based
     Option.  No termination or amendment of the Plan may, without the consent
     of the Participant to whom any Award shall theretofore have been granted
     under the Plan, adversely affect the right of such individual under such
     Award.  For the purposes of this section, an amendment to the Plan shall be
     deemed to have the affirmative approval of the stockholders of the Company
     if such amendment shall have been submitted for a vote by the stockholders
     at a duly called meeting of such stockholders at which a quorum was present
     and the majority of votes cast with respect to such amendment at such
     meeting shall have been cast in favor of such amendment, or if the holders
     of outstanding stock having not less than a majority of the outstanding
     shares consent to such amendment in writing in the manner provided under
     the Company's bylaws.

           (b) Termination.  The Board shall have the right and the power to
               -----------
     terminate the Plan at any time.  If the Plan is not earlier terminated, the
     Plan shall terminate when all shares authorized under the Plan have been
     issued.  No Award shall be granted under the Plan after the termination of
     the Plan, but the termination of the Plan shall not have any other effect
     and any Award outstanding at the time of the termination of the Plan may be
     exercised after termination of the Plan at any time prior to the expiration
     date of such Award to the same extent such award would have been
     exercisable if the Plan had not been terminated.

                                      -13-
<PAGE>

     12.02 No Right To Employment.  No employee or other person shall have any
           ----------------------
claim or right to be granted an Award under this Plan.  Neither the Plan nor any
action taken hereunder shall be construed as giving any employee any right to be
retained in the employ of the Company or a Subsidiary of the Company.

     12.03 Compliance with Rule 16b-3.  It is intended that the Plan be applied
           --------------------------
and administered in compliance with Rule 16b-3.  If any provision of the Plan
would be in violation of Rule 16b-3 if applied as written, such provision shall
not have effect as written and shall be given effect so as to comply with Rule
16b-3, as determined by the Administrator.  The Board is authorized to amend the
Plan and to make any such modifications to Award Agreements to comply with Rule
16b-3, as it may be amended from time to time, and to make any other such
amendments or modifications as it deems necessary or appropriate to better
accomplish the purposes of the Plan in light of any amendments made to Rule 16b-
3.

     12.04 Securities Law Restrictions.  The shares of Common Stock issuable
           ---------------------------
pursuant to the terms of any Awards granted under the Plan may not be issued by
the Company without registration or qualification of such shares under the
Securities Act of 1933, as amended, or under various state securities laws or
without an exemption from such registration requirements.  Unless the shares to
be issued under the Plan have been registered and/or qualified as appropriate,
the Company shall be under no obligation to issue shares of Common Stock upon
exercise of an Award unless and until such time as there is an appropriate
exemption available from the registration or qualification requirements of
federal or state law as determined by the Administrator in its sole discretion.
The Administrator may require any person who is granted an award hereunder to
agree with the Company to represent and agree in writing that if such shares are
issuable under an exemption from registration requirements, the shares will be
"restricted" securities which may be resold only in compliance with applicable
securities laws, and that such person is acquiring the shares issued upon
exercise of the Award for investment, and not with the view toward distribution.

     12.05 Nonexclusivity of the Plan.  Neither the adoption of the Plan by the
           --------------------------
Board nor the submission of the Plan to the stockholders of the Company for
approval shall be construed as creating any limitations on the power of the
Board to adopt such other incentive arrangements as it may deem desirable,
including, without limitation, the granting of stock or stock options otherwise
than under the Plan.

     12.06 Captions.  The captions (i.e., all section headings) used in the Plan
           --------
are for convenience only, do not constitute a part of the Plan, and shall not be
deemed to limit, characterize or affect in any way any provisions of the Plan,
and all provisions of the Plan shall be construed as if no captions have been
used in the Plan.

     12.07 Severability.  Whenever possible, each provision in the Plan and
           ------------
every Award at any time granted under the Plan shall be interpreted in such a
manner as to be effective and valid under applicable law, but if any provision
of the Plan or any Award at any time granted under the Plan shall be held to be
prohibited or invalid under applicable law, then (a) such provision shall be
deemed amended to accomplish the objectives of the provision as originally
written to the fullest extent permitted by law and (b) all other provisions of
the Plan and every other Award at any time granted under the Plan shall remain
in full force and effect.

     12.08 No Strict Construction.  No rule of strict construction shall be
           ----------------------
implied against the Company, the Administrator, or any other person in the
interpretation of any of the terms of the Plan, any Award granted under the Plan
or any rule or procedure established by the Administrator.

     12.09 Choice of Law.  The Plan shall be governed by and construed in
           -------------
accordance with the laws of the State of Michigan.

                                      -14-<PAGE>

                                                                    Exhibit 10.4

                             coolsavings.com inc.

                 1999 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN

                                  Article I.
                       Purpose and Adoption of the Plan
                       --------------------------------

     1.01  Purpose.  The purpose of the coolsavings.com inc. Non-Employee
           -------
Director Stock Option Plan is to attract and retain the services of experienced
and knowledgeable independent directors of coolsavings.com inc. (the "Company")
and to provide an additional incentive for such directors to continue to work
for the best interests of the Company and its stockholders.

     1.02  Adoption and Term. The Plan was approved by the Board on July 13,
           -----------------
1999, subject to approval of the Company's stockholders on or before July 13,
2000, and will remain in effect until all shares authorized under the terms of
the Plan have been issued, unless earlier terminated or abandoned by action of
the Board.

                                  Article II.
                                  Definitions
                                  -----------

     2.01  Annual Option has the meaning described in Section 5.01(b).

     2.02  Beneficiary means (a) an individual, trust or estate who or which, by
will or by operation of the laws of descent and distribution, succeeds to the
rights and obligations of the Non-Employee Director under the Plan and Option
Agreement upon the Non-Employee Director's death; or (b) an individual, who by
designation of the Non-Employee Director, succeeds to the rights and obligations
of the Non-Employee Director under the Plan and Option Agreement upon the Non-
Employee Director's death.

     2.03  Board means the Board of Directors of the Company.

     2.04  Code means the Internal Revenue Code of 1986, as amended. References
to a section of the Code shall include that section and any comparable section
or sections of any future legislation that amends, supplements or supersedes
that section.

     2.05  Company means coolsavings.com inc., a Michigan corporation.

     2.06  Company Common Stock means the Common Stock of the Company, no par
value.

     2.07  Corporate Transaction means a dissolution or liquidation of the
Company, a sale of all or substantially all of the Company's assets, or a
merger, consolidation or other capital reorganization of the Company with or
into another entity.

     2.08  Date of Grant means (a) for purposes of the Initial Option, the later
of (i) the date this Plan becomes effective under Section 1.02 or (ii) the date
such Optionee first becomes a Non-Employee Director, and (b) for purposes of the
Annual Option, the date of the annual meeting of the Company's stockholders.

     2.09  Director means a member of the Board of Directors of the Company.

     2.10  Employee means any person, including any officer or Director,
employed by the Company or any Parent or Subsidiary of the Company. The payment
of a director's fee by the Company shall not be sufficient in and of itself to
constitute "employment" by the Company.
<PAGE>

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

     2.12  Expiration Date means the date specified in an Option Agreement as
the expiration date of such Award.

     2.13  Fair Market Value means, on any given date, the fair market value of
the Company Common Stock as determined in good faith by the Board; provided,
however, that: (a) if the Company Common Stock is admitted to quotation on the
National Association of Securities Dealers Automated Quotation System ("Nasdaq")
Small-Cap Market on the date the Option is granted, the Fair Market Value means
the average of the highest bid and lowest asked prices of the Company Common
Stock on Nasdaq reported for such date; (b) if the Company Common Stock is
admitted to trading on a national securities exchange or the Nasdaq National
Market on the date the Option is granted, the Fair Market Value means the
closing price reported for the Company Common 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; and (c) the Fair Market Value
of the Company Common Stock on the effective date of the registration statement
for the Company's initial public offering shall be the initial offering price.

     2.14  Initial Option has the meaning described in Section 5.01(a).

     2.15  Non-Employee Director means a Director who is not an Employee.

     2.16  Non-Qualified Stock Option means a stock option which is not an
Incentive Stock Option as described in Section 422 of the Code.

     2.17  Option means a Non-Qualified Stock Option granted at any time under
the Plan.

     2.18  Option Agreement means a written agreement between the Company and
the optionholder evidencing the grant of an Option and setting forth the terms
and conditions of the Option.

     2.19  Optionee means a Non-Employee Director who receives an Option.

     2.20  Option Shares means a number of shares of Company Common Stock
(rounded down to the nearest whole number) equal to the quotient derived by
dividing $50,000 by the Fair Market Value on the Date of Grant.

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

     2.22  Plan means the coolsavings.com inc. 1999 Non-Employee Director Stock
Option Plan, as described herein and as it may be amended from time to time.

     2.23  Purchase Price, with respect to Options, has the meaning set forth in
Section 5.02.

     2.24  Rule 16b-3 means Rule 16b-3 promulgated by the Securities and
Exchange Commission under Section 16 of the Exchange Act, as currently in effect
and as it may be amended from time to time, and any successor rule.

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

                                      -2-
<PAGE>

                                 Article III.
              Company Common Stock Issuable Pursuant to the Plan
              --------------------------------------------------

     3.01  Shares Issuable.  Shares to be issued under the Plan may be
           ---------------
authorized and unissued shares or issued shares which have been reacquired by
the Company. Except as provided in Section 3.03, the Options granted under the
Plan shall be limited so that all shares which shall be issued upon the exercise
of outstanding Options granted under the Plan shall never exceed two percent
(2%) of the issued and outstanding shares of Company Common Stock.

     3.02  Shares Subject to Terminated Options.  In the event that any Option
           ------------------------------------
at any time granted under the Plan shall be surrendered to the Company, be
terminated or expire before it shall have been fully exercised, then all shares
formerly subject to such Option as to which such Option shall not have been
exercised shall be available for any Option subsequently granted in accordance
with the Plan.

     3.03  Adjustments to Reflect Capital Changes.
           --------------------------------------

           (a)  Recapitalization.  The number and kind of shares subject to
                ----------------
     outstanding Options, the Purchase Price for such shares, and the number and
     kind of shares available for Options subsequently granted under the Plan
     shall be appropriately adjusted to reflect any stock dividend, stock split,
     reverse stock split, combination or classification of Company Common Stock
     or any other increase or decrease in the number of issued shares of Company
     Common Stock effected without receipt of consideration by the Company;
     provided, however, that conversion of any convertible securities of the
     Company shall not be deemed to have been "effected without receipt of
     consideration." The Board shall have the power to determine the amount of
     the adjustment to be made in each case and the Board's determination in
     that respect shall be final, binding and conclusive. Except as expressly
     provided herein, no issuance by the Company of shares of stock of any
     class, or securities convertible into shares of stock of any class, shall
     affect, and no adjustment by reason thereof shall be made with respect to,
     the number or Purchase Price of shares of Company Common Stock subject to
     an Option.

           (b)  Corporate Transactions. In the event of a Corporate Transaction,
                ----------------------
     outstanding Options may be assumed or equivalent options may be substituted
     by the successor corporation or a Parent or Subsidiary thereof (the
     "Successor Corporation"). If an Option is assumed or substituted for, the
     Option or equivalent option shall continue to be exercisable in accordance
     with this Plan for so long as the Optionee serves as a Director or a
     director of the Successor Corporation. Following such assumption or
     substitution, if the Optionee's status as a Director or director of the
     Successor Corporation, as applicable, is terminated other than upon a
     voluntary resignation by the Optionee, the Option or option shall become
     fully exercisable, including as to shares for which it would not otherwise
     be exercisable. Thereafter, the Option or option shall remain exercisable
     in accordance with Section 5.04.

           If the Successor Corporation does not assume an outstanding Option or
     substitute for it an equivalent option, the Option shall become fully
     vested and exercisable, including as to shares for which it would not
     otherwise be exercisable. In such event, the Board shall notify the
     Optionee that the Option shall be fully exercisable for a period of thirty
     (30) days from the date of such notice, and upon the expiration of such
     period the Option shall terminate.

           For the purposes of this Section 3.03(b), an Option shall be
     considered

                                      -3-
<PAGE>

     assumed, if at the time of issuance of the stock or other consideration
     upon such Corporate Transaction, each Optionee would be entitled to receive
     upon exercise of an Option the same number and kind of shares of stock or
     the same amount of property, cash or securities as the Optionee would have
     been entitled to receive upon the occurrence of such transaction if the
     Optionee had been, immediately prior to such transaction, the holder of the
     number of shares of Company Common Stock subject to the Option at such time
     (after giving effect to any adjustments in the number of shares covered by
     the Option as provided for in Section 3.03(a)); provided, however, that if
     such consideration received in the Corporate Transaction is not solely
     common stock of the Successor Corporation, the Board may, with the consent
     of the Successor Corporation, provide for the consideration to be received
     upon exercise of the Option, for each share of Company Common Stock subject
     to the Option, to be solely common stock of the Successor Corporation equal
     in fair market value to the per share consideration received by holders of
     Company Common Stock in the Corporate Transaction.

                                  Article IV.
                                 Participation
                                 -------------

     4.01  Eligible Individuals.  All Non-Employee Directors of the Company
           --------------------
shall be eligible to receive Options under the Plan.

                                  Article V.
                                 Option Awards
                                 -------------

     5.01  Grant of 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 the following provisions:

           (a)  Initial Options.  On the date that this Plan is adopted by the
                ---------------
     Board, each Non-Employee Director shall automatically receive a Non-
     Qualified Stock Option to purchase the Option Shares, subject to adjustment
     in accordance with Section 3.03 (the "Initial Option"). Thereafter, each
     Non-Employee Director shall automatically receive the Initial Option on the
     day he or she first becomes a Director. All Options under this Section
     5.01(a) shall be evidenced by an Option Agreement.

           (b)  Annual Options.  Each Non-Employee Director shall automatically
                --------------
     receive a Non-Qualified Stock Option to purchase the Option Shares, subject
     to adjustment in accordance with Section 3.03 (the "Annual Option"), on the
     date of each annual meeting of the Company's stockholders occurring after
     the stockholders approve the Plan in accordance with Section 1.02, provided
     he or she is then a Non-Employee Director and, as of such date, he or she
     has served on the Board for at least six (6) months prior to the date of
     such annual meeting. All Options granted under this Section 5.01(b) shall
     be evidenced by an Option Agreement.

     5.02  Purchase Price of Options.  The Purchase Price of each share of
           -------------------------
Company Common Stock which may be purchased upon exercise of an Option granted
under the Plan shall be 100% of the Fair Market Value on the Date of Grant.

     5.03  Vesting of Options.  No Option may be exercised prior to the date one
           ------------------
(1) year after the Date of Grant but each Option shall be fully (100%)
exercisable from and after the date one (1) year after the Date of Grant.

     5.04  Duration of Options.  Options granted under the Plan shall terminate
           -------------------
after the first to occur of the following events:

                                      -4-
<PAGE>

           (a)  Ten years from the Date of Grant.

           (b)  Three months after the Optionee ceases to be a Director, except
     in the case of death, as described in (c) below.

           (c)  In the event of the death of an Optionee while a Director, the
     right to exercise all unexpired Options shall be accelerated and shall
     accrue as of the date of death, and the Optionee's Options may be exercised
     by his Beneficiary at any time within one year after the date of the
     Optionee's death. In the event of the death of an Optionee within the
     ninety day period after he or she ceases to be a Director, the Optionee's
     Beneficiary may exercise his or her Options, to the extent exercisable on
     the date of death, within one year after the date of the Optionee's death.

     5.05  Exercise Procedures.  Each Option granted under the Plan may be
           -------------------
exercised by written notice to the Company which must be received by the
Secretary of the Company on or before the Expiration Date of the Option. An
Option may not be exercised for a fraction of a share of Company Common Stock.
The Purchase Price of shares purchased upon exercise of an Option granted under
the Plan shall be paid by the Optionee at the time of exercise in the form of
(a) cash, (b) check, (c) other shares which (i) have been owned by the Optionee
for more than six (6) months on the date of surrender and (ii) have a Fair
Market Value on the date of surrender equal to the aggregate Purchase Price of
shares purchased upon exercise of the Option, (d) consideration received by the
Company under a cashless exercise program implemented by the Company in
connection with the Plan, (e) any combination of the foregoing methods of
payment, and/or (f) any other consideration or method of payment as shall be
permitted under applicable corporate law.

     5.06  Rights as a Stockholder.  The Optionee or any transferee of an Option
           -----------------------
pursuant to Section 5.04(c) or Section 5.09 shall have no rights as a
stockholder with respect to any shares of Company Common Stock covered by an
Option until the Optionee or transferee shall have become the holder of record
of any such shares, and no adjustment shall be made for dividends and cash or
other property or distributions or other rights with respect to any such shares
of Company Common Stock for which the record date is prior to the date on which
the Optionee or a transferee of the Option shall have become the holder of
record of any such shares covered by the Option.

     5.07  Plan Provisions Control Option Terms.  The terms of the Plan shall
           ------------------------------------
govern all Options granted under the Plan. In the event any provision of any
Option granted under the Plan shall conflict with any term in the Plan as
constituted on the Date of Grant of such Option, the term in the Plan as
constituted on the Date of Grant of such Option shall control. Except as
provided in Section 3.03, (i) the terms of any Option granted under the Plan may
not be changed after the granting of such Option without the express approval of
the Optionee and (ii) no modification may be made to an Option granted under the
Plan except in compliance with Rule 16b-3.

     5.08  Taxes.  The Company shall be entitled, if the Company deems it
           -----
necessary or desirable, to withhold (or secure payment from the Non-Employee
Director in lieu of withholding) the amount of any withholding or other tax
required by law to be withheld or paid by the Company with respect to any shares
issuable upon exercise of an Option, and the Company may defer issuance of the
stock upon exercise unless indemnified to its satisfaction against any liability
for such tax.

     5.09  Limitations on Transfer.  An Optionee's rights and interest under the
           -----------------------
Plan may not be assigned or transferred other than by will or the laws of
descent and distribution.

                                      -5-
<PAGE>

Notwithstanding the foregoing, or any other provision of this Plan, an Optionee
may transfer Options to his or her spouse, lineal ascendants, lineal
descendants, or to a duly established trust for the benefit of one or more of
these individuals. Options so transferred may thereafter be transferred only to
the Optionee who originally received the Options or to an individual or trust to
whom the Optionee could have initially transferred the Option pursuant to this
Section 5.09. Options which are transferred pursuant to this Section 5.09 shall
be exercisable by the transferee according to the same terms and conditions as
applied to the Optionee.

     5.10  Suspension or Termination of Option.  If the Chief Executive Officer
           -----------------------------------
or his or her designee reasonably believes that an Optionee has committed an act
of misconduct, such officer may suspend the Optionee's right to exercise any
Option pending a determination by the Board (excluding the Non-Employee Director
accused of such misconduct). If the Board (excluding the Non-Employee Director
accused of such misconduct) determines an Optionee has committed an act of
embezzlement, fraud, dishonesty, nonpayment of an obligation owed to the
Company, breach of fiduciary duty or deliberate disregard of the Company rules
resulting in loss, damage or injury to the Company, or if an Optionee makes an
unauthorized disclosure of any Company trade secret or confidential information,
fails to attend at least 50% of all Board meetings, engages in any conduct
constituting unfair competition or induces any Company customer to breach a
contract with the Company, neither the Optionee nor any Beneficiary shall be
entitled to exercise any Option whatsoever. In making such determination, the
Board (excluding the Non-Employee Director accused of such misconduct) shall act
fairly and shall give the Optionee an opportunity to appear and present evidence
on such Optionee's behalf at a hearing before the Board or a committee thereof.

                                  Article VI.
                              General Provisions
                              ------------------

     6.01  Amendment and Termination of Plan.
           ---------------------------------

           (a)  Amendment.  The Board shall have complete power and authority to
                ---------
     amend the Plan at any time as it deems necessary or appropriate and no
     approval by the stockholders of the Company or by any other person,
     committee or entity of any kind shall be required to make any amendment;
     provided, however, that the Board shall not, without the requisite
     affirmative approval of stockholders of the Company, make any amendment
     which requires stockholder approval under any applicable law, including
     Rule 16b-3 or the Code, unless such compliance, if discretionary, is no
     longer desired. No termination or amendment of the Plan may, without the
     consent of the Non-Employee Director to whom any Option shall theretofore
     have been granted under the Plan, adversely affect the right of such
     individual under such Option. For the purposes of this section, an
     amendment to the Plan shall be deemed to have the affirmative approval of
     the stockholders of the Company if such amendment shall have been submitted
     for a vote by the stockholders at a duly called meeting of such
     stockholders at which a quorum was present and the majority of votes cast
     with respect to such amendment at such meeting shall have been cast in
     favor of such amendment, or if the holders of outstanding stock having not
     less than a majority of the outstanding shares consent to such amendment in
     writing in the manner provided under the Company's bylaws.

           (b)  Termination.  The Board shall have the right and the power to
                -----------
     terminate the Plan at any time. If the Plan is not earlier terminated, the
     Plan shall terminate when all shares authorized under the Plan have been
     issued. No Option shall be granted under the Plan after the termination of
     the Plan, but the termination of the Plan shall not have any other effect
     and any Option outstanding at the time of the termination of the Plan may
     be exercised after termination of the Plan at any time prior to the
     expiration date of such Option to the same extent such award would have
     been exercisable if the Plan had

                                      -6-
<PAGE>

     not been terminated.

     6.02  No Right To Continue as Director.  Neither the Plan nor any action
           --------------------------------
taken hereunder shall be construed as giving any Non-Employee Director any right
to be retained as a Director, or to limit in any way the right of the
stockholders of the Company to remove such person as a Director.

     6.03  Securities Law Restrictions.  The shares of Company Common Stock
           ---------------------------
issuable pursuant to the terms of any Options granted under the Plan may not be
issued by the Company without registration or qualification of such shares under
the Securities Act of 1933, as amended, or under various state securities laws
or without an exemption from such registration requirements. Unless the shares
to be issued under the Plan have been registered and/or qualified as
appropriate, the Company shall be under no obligation to issue shares of Company
Common Stock upon exercise of an Option unless and until such time as there is
an appropriate exemption available from the registration or qualification
requirements of federal or state law as determined by the Company in its sole
discretion. The Company may require any person who is granted an award hereunder
to agree with the Company to represent and agree in writing that if such shares
are issuable under an exemption from registration requirements, the shares will
be "restricted" securities which may be resold only in compliance with
applicable securities laws, and that such person is acquiring the shares issued
upon exercise of the Option for investment, and not with the view toward
distribution.

     6.04  General Restriction.  Notwithstanding anything to the contrary
           -------------------
herein, the Company shall have no obligation or liability to deliver any shares
of Company Common Stock under the Plan or to make any other distribution of
benefits under the Plan unless such delivery or distribution would comply with
all applicable laws, rules and regulations, including, without limitation, the
Securities Act of 1933, as amended, and the Exchange Act.

     6.05  Non-Exclusivity of the Plan.  Neither the adoption of the Plan by the
           ---------------------------
Board nor the submission of the Plan to the stockholders of the Company for
approval shall be construed as creating any limitations on the power of the
Board to adopt such other incentive arrangements as it may deem desirable,
including, without limitation, the granting of stock or stock options otherwise
than under the Plan.

     6.06  Captions. The captions (i.e., all section headings) used in the Plan
           --------
are for convenience only, do not constitute a part of the Plan, and shall not be
deemed to limit, characterize or affect in any way any provisions of the Plan,
and all provisions of the Plan shall be construed as if no captions have been
used in the Plan.

     6.07  Severability.  Whenever possible, each provision in the Plan and
           ------------
every Option at any time granted under the Plan shall be interpreted in such a
manner as to be effective and valid under applicable law, but if any provision
of the Plan or any Option at any time granted under the Plan shall be held to be
prohibited or invalid under applicable law, then (a) such provision shall be
deemed amended to accomplish the objectives of the provision as originally
written to the fullest extent permitted by law and (b) all other provisions of
the Plan and every other Option at any time granted under the Plan shall remain
in full force and effect.

     6.08  Choice of Law.  All determinations made and actions taken pursuant to
           -------------
the Plan shall be governed by the laws of Michigan and construed in accordance
therewith.

                                      -7-

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