<PAGE>

                                  Exhibit 10.7
 InterWest Bancorp, Inc. Amended and Restated 1993 Incentive Stock Option Plan



<PAGE>

                             INTERWEST BANCORP, INC.

                              AMENDED AND RESTATED
                        1993 INCENTIVE STOCK OPTION PLAN


         1. Purpose of the Plan. The Plan shall be known as the InterWest
Bancorp, Inc. Amended and Restated 1993 Incentive Stock Option Plan (the
"Plan"). Prior to the formation of the Holding Company, the Plan was maintained
by the Holding Company's wholly-owned subsidiary, InterWest Bank. The purpose of
the amendment and restatement is to reflect the assumption of the Plan by the
Holding Company, to incorporate provisions relating to the grant of
Non-Incentive Stock Options, and to make other changes deemed necessary and
appropriate by the Board. The purpose of the Plan is to attract and retain the
best available personnel as officers and employees and to provide additional
incentive to employees of the Holding Company or any present or future parent or
subsidiary of the Holding Company to promote the success of the business. The
Plan is intended to provide for the grant of Incentive Stock Options, within the
meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code") and Non-Incentive Stock Options. Each and every one of the provisions of
the Plan relating to Incentive Stock Options shall be interpreted to conform to
the requirements of Section 422 of the Code.

         2. Definitions. As used herein, the following definitions shall apply.

                  (a) "Award" means the grant by the Committee of an Incentive
Stock Option, a Non-Incentive Stock Option, or any combination thereof, as
provided in the Plan.

                  (b) "Board" shall mean the Board of Directors of the Holding
Company.

                  (c) "Code" shall mean the Internal Revenue Code of 1986, as
amended.

                  (d) "Common Stock" shall mean common stock, $.20 par value per
share, of the Holding Company.

                  (e) "Committee" shall mean the Stock Option Committee
appointed by the Board in accordance with paragraph 4(a) of the Plan.

                  (f) "Continuous Employment" or "Continuous Status as an
Employee" shall mean the absence of any interruption or termination of
employment by the Holding Company or any present or future Parent or Subsidiary
of the Holding Company. Employment shall not be considered interrupted in the
case of sick leave, military leave or any other leave of absence approved by the
Holding Company or in the case of transfers between payroll locations of the
Holding Company or between the Holding Company, its Parent, its Subsidiaries or
a successor.

                  (g) "Effective Date" shall mean the date specified in Section
14 hereof.



                                       1
<PAGE>

                  (h) "Employee" shall mean any person employed by the Holding
Company or any present or future Parent or Subsidiary of the Holding Company.

                  (i) "Holding Company" shall mean InterWest Bancorp, Inc., a
Washington corporation.

                  (j) "Incentive Stock Option" or "ISO" means an option to
purchase Shares granted by the Committee pursuant to Section 7 hereof which is
subject to the limitations and restrictions of Section 7 hereof and is intended
to qualify under Section 422 of the Code.

                  (k) "Non-Incentive Stock Option" or "Non-ISO" means an option
to purchase Shares granted by the Committee pursuant to Section 8, which option
is not intended to qualify under Section 422 of the Code.

                  (l) "Option" shall mean an Incentive or Non-Incentive Stock
Option granted pursuant to this Plan.

                  (m) "Optioned Stock" shall mean stock subject to an Option
granted pursuant to the Plan.

                  (n) "Optionee" shall mean any person who receives an Option.

                  (o) "Parent" shall mean any present or future corporation
which would be a "parent corporation" as defined in Subsections 424(e) and (g)
of the Code.

                  (p) "Participant" means any officer or key employee of the
Holding Company or any Parent or Subsidiary of the Holding Company or any other
person providing a service to the Holding Company who is selected by the
Committee to receive an Award.

                  (q) "Plan" shall mean this InterWest Bancorp, Inc. Amended and
Restated 1993 Incentive Stock Option and Plan.

                  (r) "Share" shall mean one share of the Common Stock.

                  (s) "Subsidiary" shall mean any present or future corporation
which would be a "subsidiary corporation" as defined in Subsections 424(f) and
(g) of the Code.

         3. Shares Subject to the Plan. Except as otherwise required by the
provisions of Section 12 hereof, the aggregate number of Shares with respect to
which Awards may be made pursuant to the Plan shall not exceed 644,000 shares.
Such Shares may either be authorized but unissued or treasury shares.

                  An Award shall not be considered to have been made under the
Plan with respect to any Option which terminates and new Awards may be granted
under the Plan with respect to the number of Shares as to which such termination
has occurred.



                                       2
<PAGE>

         4. Administration of the Plan.

                  (a) Composition of the Committee. The Plan shall be
administered by the Committee consisting of at least two directors of the
Holding Company who are "nonemployee directors" within the meaning of Rule 16b-3
of the regulations issued under the Securities Exchange Act of 1934, as amended.

                  (b) Powers of the Committee. The Committee is authorized (but
only to the extent not contrary to the expressed provisions of the Plan or to
resolutions adopted by the Board) to interpret the Plan to prescribe, amend and
rescind rules and regulations relating to the Plan, to determine the form and
content of Awards to be issued under the Plan and to make other determinations
necessary or advisable for the administration of the Plan, and shall have and
may exercise such other power and authority as may be delegated to it by the
Board from time to time. A majority of the entire Committee shall constitute a
quorum and the action of a majority of the members present at any meeting at
which a quorum is present shall be deemed the action of the Committee. In no
event may the Committee revoke outstanding Awards without the consent of the
Participant.

                  The Chairman of the Holding Company and such other officers as
shall be designated by the Committee are hereby authorized to execute
instruments evidencing Awards on behalf of the Holding Company and to cause them
to be delivered to the Participants.

                  (c) Effect of Committee's Decision. All decisions,
determinations and interpretations of the Committee shall be final and
conclusive on all persons affected thereby.

         5.       Eligibility.

                  (a) Awards may be granted to officers, key employees and other
persons. The Committee shall from time to time determine the officers and key
employees and other persons who shall be granted Options or Awards under the
Plan, the number to be granted to each such officers and key employees and other
persons under the Plan, and whether Options granted to each such Participant
under the Plan shall be Incentive and/or Non-Incentive Stock Options. In
selecting Participants and in determining the number of shares of Common Stock
to be granted to each such Participant pursuant to each Award granted under the
Plan, the Committee may consider the nature of the services rendered by each
such Participant, each such Participant's current and potential contribution to
the Holding Company, and such other factors as the Committee may, in its sole
discretion, deem relevant. Officers and key employees or other persons who have
been granted an Award may, if otherwise eligible, be granted additional Options
or Awards.

                  (b) The aggregate fair market value (determined as of the date
the Option is granted) of the Shares with respect to which Incentive Stock
Options are exercisable for the first time by each Employee during the calendar
year in which they are first exercisable (under all Incentive Stock Option
plans, as defined in Section 422 of the Code, of the Holding Company or any
present or future Parent or Subsidiary of the Holding Company) shall not exceed
$100,000. Notwithstanding the prior provisions of this Section 5, the Committee
may grant Options in



                                       3
<PAGE>

excess of the foregoing limitations, provided said Options shall be clearly and
specifically designated as not being Incentive Stock Options, as defined in
Section 422 of the Code.

         6. Term of Plan. The Plan shall continue in effect for a term of ten
(10) years from January 1, 1993, the original effective date of the Plan prior
to its amendment and restatement, unless sooner terminated pursuant to Section
17. No Option shall be granted under the Plan after ten (10) years from January
1, 1993.

         7. Terms and Conditions of Incentive Stock Options. Incentive Stock
Options may be granted only to Participants who are Employees. Each Incentive
Stock Option granted pursuant to the Plan shall be evidenced by an instrument in
such form as the Committee shall from time to time approve. Each and every
Incentive Stock Option granted pursuant to the Plan shall comply with, and be
subject to, the following terms and conditions:

                  (a)      OPTION PLAN.

                           (i) The price per share at which each Incentive Stock
         Option granted under the Plan may be exercised shall not, as to any
         particular Incentive Stock Option, be less than the fair market value
         of the Common Stock at the time such Incentive Stock Option is granted.
         For such purposes, the price per share shall be not less than the
         average of the bid and asked price on the business day preceding the
         grant of the options.

                           (ii) In the case of an Employee who owns Common Stock
         representing more than ten percent (10%) of the outstanding Common
         Stock at the time the Incentive Stock Option is granted, the Incentive
         Stock Option price shall not be less than one hundred and ten percent
         (110%) of the fair market value of the Common Stock at the time the
         Incentive Stock Option is granted.

                  (b)      PAYMENT.

                  Full payment for each share of Common Stock purchased upon the
exercise of any Incentive Stock Option granted under the Plan shall be made at
the time of exercise of each such Incentive Stock Option and shall be paid in
cash (in United States Dollars), Common Stock or a combination of cash and
Common Stock. Common Stock utilized in full or partial payment of the exercise
price shall be valued at its fair market value at the date of exercise. The
Holding Company shall accept full or partial payment in Common Stock only to the
extent permitted by applicable law. No shares of Common Stock shall be issued
until full payment therefor has been received by the Holding Company, and no
Optionee shall have any of the rights of a shareholder of the Holding Company
until shares of Common Stock are issued to him.

                  (c)      TERM OF INCENTIVE STOCK OPTION.

                  The term of each Incentive Stock Option granted pursuant to
the Plan shall be not more than ten (10) years from the date each such Incentive
Stock Option is granted, provided that in the case of an Employee who owns stock
representing more than 10% of the Common Stock



                                       4
<PAGE>

outstanding at the time the Incentive Stock Option is granted, the term of the
Incentive Stock Option shall not exceed five (5) years.

                  (d)      EXERCISE GENERALLY.

                  Except as otherwise provided in Section 9 hereof, no Incentive
Stock Option may be exercised unless the optionee shall have been in the employ
of the Holding Company at all times during the period beginning with the date of
grant of any such Incentive Stock Option and ending on the date three (3) months
prior to the date of exercise of any such Incentive Stock Option. The Committee
may impose additional conditions upon the right of an Optionee to exercise any
Incentive Stock Option granted hereunder which are not inconsistent with the
terms of the Plan or the requirements for qualification as an Incentive Stock
Option under Section 422 of the Code.

                  (e)      TRANSFERABILITY.

                  Any Incentive Stock Option granted pursuant to the Plan shall
be exercised during any Optionee's lifetime only by the Optionee to whom it was
granted and shall not be assignable or transferable otherwise than by will or by
the laws of descent and distribution.

         8. Terms and Conditions of Non-Incentive Stock Options. Each
Non-Incentive Stock Option granted pursuant to the Plan shall be evidenced by an
instrument in such form as the Committee shall from time to time approve. Each
and every Non-Incentive Stock Option granted pursuant to the Plan shall comply
with and be subject to the following terms and conditions:

                  (a)      OPTION PRICE.

                  The exercise price per share of Common Stock for each
Non-Incentive Stock Option granted pursuant to the Plan shall be determined in
the same manner as the exercise price of an Incentive Stock Option by applying
the provisions of Section 7(a) of the Plan.

                  (b)      PAYMENT.

                  Full payment for each share of Common Stock purchased upon the
exercise of any Non-Incentive Stock Option granted under the Plan shall be made
at the time of exercise of each such Non-Incentive Stock Option and shall be
paid in cash (in United States Dollars), Common Stock or a combination of cash
and Common Stock. Common Stock utilized in full or partial payment of the
exercise price shall be valued at its fair market value at the date of exercise.
The Holding Company shall accept full or partial payment in Common Stock only to
the extent permitted by applicable law. No shares of Common Stock shall be
issued until full payment therefor has been received by the Holding Company and
no Optionee shall have any of the rights of a shareholder of the Holding Company
until the shares of Common Stock are issued to him.



                                       5
<PAGE>

                  (c)      TERM.

                  The term of each Non-Incentive Stock Option granted pursuant
to the Plan shall be not more than ten (10) years from the date each such
Non-Incentive Stock Option is granted.

                  (d)      EXERCISE GENERALLY.

                  The Committee may impose additional conditions upon the right
of any Participant to exercise any Non-Incentive Stock Option granted hereunder
which are not inconsistent with the terms of the Plan.

                  (e)      TRANSFERABILITY.

                  Except as provided herein, no Non-Qualified Stock Option
granted under this Plan is transferable except by will or the laws of descent
and distribution. The Committee shall have discretionary authority to permit the
transfer of any Non-Incentive Stock Option to members of an Optionee's immediate
family, including trusts for the benefit of such family members and partnerships
in which such family members are the only partners; provided, however, that a
transferred Non-Incentive Stock Option may be exercised by the transferee on any
date only to the extent that the Optionee would have been entitled to exercise
the Non-Incentive Stock Option on such date had the Non-Incentive Stock Option
not been transferred. Any transferred Non-Incentive Stock Option shall remain
subject to the terms and conditions of the Participant's stock option agreement.

         9. Effect of Termination of Employment, Disability or Death on
Incentive Stock Options.

                  (a)      TERMINATION OF EMPLOYMENT.

                  In the event that any Optionee's employment by the Holding
Company shall terminate for any reason, other than Permanent and Total
Disability (as such term is defined in Section 22(e)(3) of the Code) or death,
all of any such Optionee's Incentive Stock Options, and all of any such
Optionee's rights to purchase or receive shares of Common Stock pursuant
thereto, shall automatically terminate on the earlier of (i) the respective
expiration dates of any such Incentive Stock Options or (ii) the expiration of
not more than three (3) months after the date of such termination of employment,
but only if, and to the extent that, the Optionee was entitled to exercise any
such Incentive Stock Options at the date of such termination of employment. In
the event that a subsidiary ceases to be a subsidiary of the Holding Company,
the employment of all of its employees who are not immediately thereafter
employees of the Holding Company shall be deemed to terminate upon the date such
subsidiary so ceases to be a subsidiary of the Holding Company.

                  (b)      DISABILITY.

                  In the event that any Optionee's employment by the Holding
Company shall terminate as the result of the Permanent and Total Disability of
such Optionee, such Optionee



                                       6
<PAGE>

may exercise any Incentive Stock Options granted to him pursuant to the Plan at
any time prior to the earlier of (i) the respective expiration dates of any such
Incentive Stock Options or (ii) the date which is one (1) year after the date of
such termination of employment, but only if, and to the extent that, the
Optionee was entitled to exercise any such Incentive Stock Options at the date
of such termination of employment.

                  (c)      DEATH.

                  In the event of the death of any Optionee, any Incentive Stock
Options granted to any such Optionee may be exercised by the person or persons
to whom the Optionee's rights under any such Incentive Stock Options pass by
will or by the laws of descent and distribution (including the Optionee's estate
during the period of administration) at any time prior to the earlier of (i) the
respective expiration dates of any such Incentive Stock Options or (ii) the date
which is one (1) year after the date of death of such Optionee but only if, and
to the extent that, the Optionee was entitled to exercise any such Incentive
Stock Options at the date of death. For purposes of this Section 9(c), any
Incentive Stock Option held by an Optionee shall be considered exercisable at
the date of his death if the only unsatisfied condition precedent to the
exercisability of such Incentive Stock Option at the date of death is the
passage of a specified period of time.

                  (d)      INCENTIVE STOCK OPTIONS DEEMED EXERCISABLE.

                  For purposes of Sections 9(a), 9(b) and 9(c) above, any
Incentive Stock Option held by any Optionee shall be considered exercisable at
the date of the termination of his employment if any such Incentive Stock Option
would have been exercisable at such date of termination of employment.

                  (e)      TERMINATION OF INCENTIVE STOCK OPTIONS.

                  To the extent that any Incentive Stock Option granted under
the Plan to any Optionee whose employment by the Holding Company terminates
shall not have been exercised within the applicable period set forth in this
Section 9, any such Incentive Stock Option, and all rights to purchase or
receive shares of Common Stock pursuant thereto, as the case may be, shall
terminate on the last day of the applicable period.

         10. Effect of Termination of Employment, Disability or Death on
Non-Incentive Stock Options. To the extent that any Non-Incentive Stock Option
granted under the Plan to any Optionee whose employment by the Holding Company
or the Association has terminated for any reason other than for cause, shall not
have been exercised, such Non-Incentive Stock Option, and the right to purchase
or receive shares of Common Stock pursuant thereto, as the case may be, shall
terminate upon the earlier to occur of (1) the date that is ten (10) years from
the date of grant of the Non-Incentive Stock Option or (2) the date that is one
(1) year from the date of the Optionee's termination of employment (two (2)
years in the event of termination of employment by reason of death or Permanent
and Total Disability (as such term is defined in Section 22(e)(3) of the Code)).



                                       7
<PAGE>

         11. Right of Repurchase and Restrictions on Disposition. The Committee,
in its sole discretion, may include, as a term of any Incentive Stock Option or
Non-Incentive Stock Option, the right (the "Repurchase Right"), but not the
obligation, to repurchase all or any amount of the Shares acquired by an
Optionee pursuant to the exercise of any such Options. The intent of the
Repurchase Right is to encourage the continued employment of the Optionee. The
Repurchase Right shall provide for, among other things, a specified duration of
the Repurchase Right, a specified price per Share to be paid upon the exercise
of the Repurchase Right and a restriction on the disposition of the Shares by
the Optionee during the period of the Repurchase Right. The Repurchase Right may
permit the Holding Company to transfer or assign such right to another party.
The Holding Company may exercise the Repurchase Right only to the extent
permitted by applicable law.

         12. Recapitalization, Merger, Consolidation, Change in Control and
Similar Transactions.

                  (a)      ADJUSTMENT.

                  Subject to any required action by the shareholders of the
Holding Company, the aggregate number of shares of Common Stock for which stock
options may be granted hereunder, the number of shares of Common Stock covered
by each outstanding stock option, and the exercise price per share of Common
Stock of each such stock option, shall be proportionately adjusted for any
increase or decrease in the number of issued and outstanding shares of Common
Stock resulting from a subdivision or consolidation of shares or the payment of
a stock dividend (but only on the Common Stock) or any other increase or
decrease in the number of such shares of Common Stock effected without the
receipt of consideration by the Holding Company.

                  (b)      CHANGE IN CONTROL.

                  All outstanding Options shall become immediately exercisable
in the event of a change in control or imminent change in control of the Holding
Company, as determined by the Committee. In the event of such a change in
control or imminent change in control, the Optionee shall, at the discretion of
the Committee, be entitled to receive cash in an amount equal to the fair market
value of the Common Stock subject to any Incentive Stock Option over the Option
Price of such shares, in exchange for the surrender of such Options by the
Optionee on that date in the event of a change in control or imminent change in
control of the Holding Company. For purposes of this Section, "change in
control" shall mean: (i) the execution of an agreement for the sale of all, or a
material portion, of the assets of the Holding Company; (ii) the execution of an
agreement for a merger or recapitalization of the Holding Company or any merger
or recapitalization whereby the Holding Company is not the surviving entity;
(iii) a change of control of the Holding Company, as otherwise defined or
determined under regulations promulgated by any applicable bank regulatory
agency; or (iv) the acquisition, directly or indirectly, of the beneficial
ownership (within the meaning of that term as it is used in Section 13(d) of the
Securities Exchange Act of 1934, as amended and the rules promulgated
thereunder) of twenty-five percent (25%) or more of the outstanding voting
securities of the Holding Company by any person, trust, entity or group. The
term "person" refers to an individual or a



                                       8
<PAGE>

corporation, partnership, trust, association, joint venture, pool, syndicate,
sole proprietorship, unincorporated organization or any other form of entity not
specifically listed herein. For purposes of this Section, "imminent change in
control" shall refer to any offer or announcement, oral or written, by any
person or persons acting as a group, to acquire control of the Holding Company.
The decision of the Committee as to whether a change in control or imminent
change in control has occurred shall be conclusive and binding.

                  (c)      EXTRAORDINARY CORPORATE ACTION.

                  Subject to any required action by the shareholders of the
Holding Company, in the event of any change in control, recapitalization,
merger, consolidation, exchange of shares, spin-off, reorganization, tender
offer, liquidation or other extraordinary corporate action or event, the
Committee, in its sole discretion, shall have the power, prior or subsequent to
such action or event to:

                           (i) appropriately adjust the number of shares of
         Common Stock subject to each stock option, the exercise price per share
         of Common Stock, and the consideration to be given or received by the
         Holding Company upon the exercise of any outstanding Option;

                           (ii) cancel any or all previously granted Options,
         provided that appropriate consideration is paid to the Optionee in
         connection therewith; and/or

                           (iii) make such other adjustments in connection with
         the Plan as the Committee, in its sole discretion, deems necessary,
         desirable, appropriate or advisable; provided, however, that no action
         shall be taken by the Committee which would cause Incentive Stock
         Options granted pursuant to the Plan to fail to meet the requirements
         of Section 422 of the Code.

                           Except as expressly provided in Section 12(a) and
         12(b) hereof, no Optionee shall have any rights by reason of the
         occurrence of any of the events described in this Section 12.

                  (d)      ACCELERATION.

                  The Committee shall at all times have the power to accelerate
the exercise date of Options previously granted under the Plan.

         13. Time of Granting Options. The date of grant of an Option under the
Plan shall, for all purposes, be the date on which the Committee makes the
determination of granting such Option. Notice of the determination shall be
given to each Employee to whom an Option is so granted within a reasonable time
after the date of such grant.

         14. Effective Date. This amended and restated Plan shall become
effective upon adoption by the Board. Options may be granted prior to
ratification of the Plan by the stockholders if the exercise of such Options is
subject to such stockholder ratification.



                                       9
<PAGE>

         15. Approval of Stockholders. The amended and restated Plan shall be
approved by stockholders of the Holding Company within twelve (12) months before
or after the date it becomes effective.

         16. Modification of Options. At any time and from time to time, the
Board may authorize the Committee to direct the execution of an instrument
providing for the modification of any outstanding Option, provided no such
modification, extension or renewal shall confer on the holder of said Option any
right or benefit which could not be conferred on him by the grant of a new
Option at such time, or shall not materially decrease the Optionee's benefits
under the Option without the consent of the holder of the Option, except as
otherwise permitted under Section 18 hereof.

         17. Reload Options.

         On or after the grant date of any Non-Incentive Stock Option (or any
Incentive Stock Option awarded on or after the Effective Date of the Plan), the
Committee may provide for the automatic grant to the Optionee of a "reload"
Option in the event the Optionee surrenders Shares of Common Stock in
satisfaction of the exercise price upon the exercise of an Option or the
Optionee's tax withholding obligation. Each reload Option shall cover the same
number of Shares of Common Stock as the number of Shares of Common Stock
utilized by the Optionee to exercise the original Option (including shares
related to the Optionee's tax withholding obligation) and shall, to the extent
not inconsistent with any requirements applicable to an Incentive Stock Option
under the Code, be of the same type as the original Option.

         18. Amendment and Termination of the Plan.

                  (a)      ACTION OF THE BOARD.

         The Board shall have complete power and authority to amend the Plan at
any time it is deemed necessary or appropriate; provided, however, that no
amendment shall be made without shareholder approval if such approval is
necessary for the Holding Company to comply with an applicable tax law or
regulatory requirement. No termination or amendment of the Plan may, without the
consent of the Optionee to whom any award shall theretofore have been granted
under the Plan, adversely affect the right of such individual under such award.

                  (b)      CHANGE IN APPLICABLE LAW.

                  Notwithstanding any other provision contained in the Plan, in
the event of a change in any Federal or state law, rule or regulation which
would make the exercise of all or part of any previously granted Incentive
and/or Non-Incentive Stock Option unlawful or subject the Holding Company to any
penalty, the Committee may restrict any such exercise without the consent of the
Optionee or other holder thereof in order to comply with any such law, rule or
regulation or to avoid any such penalty.



                                       10
<PAGE>

         19. Conditions Upon Issuance of Shares. Shares shall not be issued with
respect to any Option granted under the Plan unless the issuance and delivery of
such Shares shall comply with all relevant provisions of law, including, without
limitation, the Securities Act of 1933, as amended, the rules and regulations
promulgated thereunder, any applicable state securities law and the requirements
of any stock exchange upon which the Shares may then be listed.

                  The inability of the Holding Company to obtain from any
regulatory body or authority deemed by the Holding Company's counsel to be
necessary to the lawful issuance and sale of any Shares hereunder shall relieve
the Holding Company of any liability with respect to the nonissuance of such
Shares.

                  As a condition to the exercise of an Option, the Holding
Company may require the person exercising the Option to make such
representations and warranties as may be necessary to assure the availability of
an exemption from the registration requirements of Federal or state securities
law.

         20. Reservation of Shares. During the term of the Plan, the Holding
Company will reserve and keep available a number of Shares sufficient to satisfy
the requirements of the Plan.

         21. Unsecured Obligation. No Participant under the Plan shall have any
interest in any fund or special asset of the Holding Company by reason of the
Plan or the grant of any Incentive or Non-Incentive Stock Option to him under
the Plan. No trust fund shall be created in connection with the Plan or any
grant of any Incentive or Non-Incentive Stock Option hereunder and there shall
be no required funding of amounts which may become payable to any Participant.

         22. Withholding Tax. Where a Participant or other person is entitled to
receive Shares pursuant to the exercise of an Option pursuant to the Plan, the
Holding Company shall have the right to require the Participant or such other
person to pay the Holding Company the amount of any taxes which the Holding
Company is required to withhold with respect to such Shares, or, in lieu
thereof, to retain, or sell without notice, a number of such Shares sufficient
to cover the amount required to be withheld.

         24. Governing Law. The Plan shall be governed by and construed in
accordance with the laws of the State of Washington, except to the extent that
Federal law shall be deemed to apply.

                                       11