Director Stock Option Plan

CREDIT ACCEPTANCE CORPORATION
DIRECTOR STOCK OPTION PLAN


1. PURPOSE. The purpose of the Plan is to promote the best interests of the Company and its shareholders by attracting and motivating highly qualified individuals to serve as Directors, to encourage Directors' continued service on the Board and to encourage Directors to acquire an ownership interest in the Company, thus identifying their interests with those of the shareholders.


2. ADMINISTRATION. The Board of Directors shall interpret the Plan, prescribe, amend, and rescind rules and regulations relating to the Plan, and make all other determinations necessary or advisable for its administration. The decision of the Board on any question concerning the interpretation of the Plan or any option granted under the Plan shall be final and binding upon all Participants.


3. PARTICIPANTS. Participants in the Plan shall be directors of the Company who are not Employees. The Board may grant options to an individual upon the condition that the individual become a Director, provided that the option shall be deemed to be granted only on the date the individual becomes Director and shall otherwise be void.


4. STOCK. The stock subject to options under the Plan shall be the Common Stock. The total amount of Common Stock on which options may be granted under the Plan shall not exceed 200,000 shares, subject to adjustment in accordance with Section 10. Shares subject to any unexercised portion of a terminated, cancelled, forfeited or expired option granted under the Plan may again be subjected to options under the Plan.


5. AWARD OF OPTIONS. Subject to the limitations set forth in the Plan, the Board of Directors from time to time may grant options to such Participants and for such number of shares of Common Stock and upon such other terms (including, without limitation, the exercise price and the times at which the option may be exercised) as it shall designate. Each option shall be evidenced by a stock option agreement in such form and containing such provisions as the Board shall deem appropriate, provided that such terms shall not be inconsistent with the Plan. The exercise price per share shall not be less than the Fair Market Value per share of the Common Stock on the date of grant and the expiration date shall be no later than the tenth anniversary of the date of grant. The date on which an option is granted shall be the date of the Board's authorization of the option or such later date as shall be determined by the Committee at the time the option is authorized. Any option granted under this Plan shall become immediately exercisable in full upon a Change of Control unless otherwise provided in the option agreement evidencing such option.


6. PAYMENT FOR SHARES. The purchase price for shares of Common Stock to be acquired upon exercise of an option granted hereunder shall be paid in full, at the time of exercise, in any of the following ways: (a) in cash, (b) by certified check, bank draft or money order, or (c) by delivery to the Company of a properly executed exercise notice, acceptable to the Company, together with



irrevocable instructions to the Participant's broker to deliver to the Company a sufficient amount of cash to pay the exercise price and any applicable income and employment withholding taxes, in accordance with a written agreement between the Company and the brokerage firm ("Cashless Exercise") if, at the time of exercise, the Company has entered into such an agreement.


7. WITHHOLDING TAXES. The Company shall have the right to withhold from a Participant's compensation or require a Participant to remit sufficient funds to satisfy applicable withholding for income and employment taxes upon the exercise of an option.


8. NON-ASSIGNABILITY. No option shall be ...