Document:

Exhibit 10.1

   
 EXHIBIT 10.1
 STOCK OPTION AGREEMENT

     This Stock Option Agreement (“Option Agreement”) is dated as of September 22, 2002, between Acadiana Bancshares, Inc. (ANA”) and IBERIABANK Corporation
(“IBKC”).
 WITNESSETH
      Whereas, the Boards of Directors of ANA and IBKC have approved
an Agreement and Plan of Merger (“Merger Agreement”) dated as of the date hereof pursuant to which ANA would be merged into IBKC;
      Whereas, as a condition to
IBKC’s entry into the Merger Agreement and to induce such entry, ANA has agreed to grant to IBKC the option set forth herein to purchase shares of ANA Common Stock;
      Now, Therefore, in consideration of the premises herein contained, the parties agree as follows:
 1. Definitions.
      Capitalized terms defined in the Merger Agreement and used herein shall have the same meanings as in the Merger Agreement.
 2. Grant of
Option.
      Subject to the terms and conditions set forth herein, ANA hereby grants to IBKC an option (“Option”)to purchase up to such number of shares of
ANA Common Stock, at a price of $23.76 per share payable in cash as provided in Section 4 hereof, as shall equal 4.9% of the outstanding shares of ANA Common Stock after the exercise of the Option; provided, however, that if ANA issues or agrees to
issue any shares of ANA Common Stock (other than as permitted under the Merger Agreement) at a price less than $23.76 per share (as adjusted pursuant to Section 6 hereof), the exercise price shall be equal to such lesser price; in no event, however,
shall the number of shares for which the Option is exercisable exceed 4.9% of ANA’s issued and outstanding Common Stock after the exercise of the Option.
 3. Exercise of
Option.
      (a) Unless IBKC shall have breached in any material respect any covenant or agreement contained in the Merger Agreement and such breach shall not have been
cured after notice from ANA, IBKC may exercise the Option, in whole or part, at any time or from time to time within six months which period of time shall be extended pursuant to 

  Section 10(a)) following the occurrence of a Purchase Event (as defined below); provided that to the extent the Option shall not have been exercised, it shall terminate and be
of no further force and effect (i) on the Effective Date of the Merger under the Merger Agreement, or (ii) upon termination of the Merger Agreement in accordance with the provisions thereof if such termination occurs before the first Purchase Event
to occur, or (iii) the date that is one year following the termination of the Merger Agreement, if such termination occurs after the first Purchase Event to occur. Notwithstanding the foregoing, this Option Agreement shall terminate, and all
unexercised rights hereunder will simultaneously terminate, whether or not a Purchase Event has occurred, upon any termination of the Merger Agreement (i) under Section 9.1(a) thereof, (ii) by ANA under Section 9.1(b) thereof, or (iii) by either
Party under Section 9.1(h) thereof.
      (b) As used herein, a "Purchase Event" means any of the following events or transactions occurring after the date
hereof:
           (i) any person (other than IBKC or any IBKC Subsidiary) shall have commenced a bona fide tender or exchange offer to purchase
shares of ANA Common Stock such that upon consummation of such offer such person would own or control 20% or more of the outstanding shares of ANA Common Stock;
           (ii) ANA or any ANA Subsidiary, without having received IBKC’s prior written consent, shall have entered into an agreement with any person (other than IBKC or any IBKC Subsidiary), or any person (other than IBKC
or any IBKC Subsidiary), other than in connection with a transaction to which IBKC has given its prior written consent, shall have filed an application or notice with the Federal Reserve Board or any other federal or state regulatory agency for
clearance or approval, and, in cases in which ANA has not consented to and not cooperated in such filing, such application or notice has been approved to (x) merge or consolidate, or enter into any similar transaction, with ANA or any ANA Subsidiary
other than with respect to any requirement of divestiture in connection with the Merger Agreement under the federal banking or antitrust laws, (y) purchase, lease or otherwise acquire all or substantially all of the assets of ANA or any ANA
Subsidiary other than in the ordinary course of business of ANA or such ANA Subsidiary, or (z) purchase or otherwise acquire (including by way of merger, consolidation, share exchange or any similar transaction) securities representing 20% or more
of the voting power of ANA or any ANA Subsidiary;
           (iii) any person (other than IBKC, any IBKC Subsidiary or the ANA Subsidiaries in a
fiduciary capacity) shall have acquired beneficial ownership or the right to acquire beneficial ownership of 20% or more of the outstanding shares of ANA Common Stock or the common stock of any ANA Subsidiary (the term "beneficial ownership" for
purposes of this Option Agreement having the meaning assigned thereto in Section 13(d) of the 1934 Act and the regulations thereunder); provided, however, that
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  in calculating the number of shares owned by any person, no shares which were beneficially owned before the effective date of this Agreement shall be included;

          (iv) (A) any person (other than IBKC or any IBKC Subsidiary) shall have made prior to the Shareholder’s Meeting a bona fide proposal to ANA by
public announcement or written communication that is or becomes the subject of public disclosure to (x) acquire ANA or any ANA Subsidiary by merger, consolidation, share exchange, purchase of all or substantially all of its assets or any other
similar transaction, or (y) make an offer described in clause (i) or (ii) above; and (B) either (1) the shareholders of ANA fail to approve the Merger Agreement or (2) the Merger Agreement is terminated pursuant to Section 9.1(l) thereof.

          (v) any person shall have solicited proxies in a proxy solicitation subject to Regulation 14A under the 1934 Act in opposition to approval of the
Merger Agreement by ANA’s shareholders and the shareholders fail to approve the Merger Agreement; or
           (vi) any transaction of the
type referred to in clause (ii) above shall have been consummated.
 If more than one of the transactions giving rise to a Purchase Event under this Section 3(b) is undertaken or effected, then all
such transactions shall give rise to successive Purchase Events, but the successive nature of such Purchase Events shall not increase the number of shares of ANA Common Stock as to which the Option may be exercised. As used in this Option Agreement,
"person" shall have the meanings specified in Sections 3(a)(9) and 13(d)(3) of the 1934 Act.
      (c) If IBKC wishes to exercise the Option, it shall send to ANA a written
notice (the date of which being herein referred to as “Notice Date”) specifying (i) the total number of shares it will purchase pursuant to such exercise, and (ii) a place and date not earlier than three business days nor later than 60
business days from the Notice Date for the closing of such purchase (“Closing Date”); provided that if prior notification to or approval of the Federal Reserve Board or any other Regulatory Authority is required in connection with such
purchase, IBKC shall promptly file the required notice or application for approval and shall expeditiously process the same and the period of time that otherwise would run pursuant to this sentence shall run instead from the date on which any
required notification period has expired or been terminated or such approval has been obtained and any requisite waiting period shall have passed.
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  4. Payment and Delivery of Certificates.
      (a) At the closing referred to in Section 3
hereof, IBKC shall pay to ANA the aggregate purchase price for the shares of ANA Common Stock purchased pursuant to the exercise of the Option in immediately available funds by a wire transfer to a bank account designated by ANA or by federal funds
check if no account has been designated.
      (b) At such closing, simultaneously with the delivery of cash as provided in subsection (a), ANA shall deliver to IBKC a
certificate or certificates representing the number of shares of ANA Common Stock purchased by IBKC and IBKC shall deliver to ANA a letter agreeing that IBKC will not offer to sell or otherwise dispose of such shares in violation of applicable law
or the provisions of this Option Agreement.
      (c) Certificates for ANA Common Stock delivered at a closing hereunder may be endorsed with a restrictive legend which
shall read substantially as follows:
 “The transfer of the shares represented by this certificate is subject to certain provisions of an agreement between the registered holder hereof
and Acadiana Bancshares, Inc. and to resale restrictions arising under the Securities Act of 1933, as amended, a copy of which agreement is on file at the principal office of Acadiana Bancshares, Inc. A copy of such agreement will be provided to the
holder hereof without charge upon receipt by Acadiana Bancshares, Inc. of a written request.”
 It is understood and agreed that the above legend shall be removed by delivery of
substitute certificate(s) without such legend on the earlier of one year from the date of exercise or the date IBKC shall have delivered to ANA a copy of a letter from the staff of the SEC, or an opinion of counsel, in form and substance reasonably
satisfactory to ANA, to the effect that such legend is not required for purposes of the 1933 Act.
 5. Representations.
 ANA hereby
represents, warrants and covenants to IBKC as follows:
      (a) ANA shall at all times maintain sufficient authorized but unissued shares of ANA Common Stock so that the
Option may be exercised without authorization of additional shares of ANA Common Stock.
      (b) The shares to be issued upon due exercise, in whole or in part, of the
Option, when paid for as provided herein, will be duly authorized, validly issued, fully paid and
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  nonassessable and will be delivered free and clear of all claims, liens, encumbrances and security interests and not subject to any preemptive rights. 

     (c) ANA will not, by amendment of its Articles of Incorporation or through reorganization, consolidation, merger, dissolution or sale of assets, or by any other voluntary act,
avoid or seek to avoid the observance or performance of any of the covenants, stipulations or conditions to be observed or performed hereunder by it; and will promptly take all action as may from time to time be required (including cooperating fully
with IBKC in preparing applications or notices and providing information with respect to regulatory approval) in order to permit IBKC to exercise the Option and ANA duly and effectively to issue shares of ANA Common Stock pursuant hereto.

 6. Adjustment Upon Changes in Capitalization.
      If ANA should split or combine the ANA Common Stock, or pay a stock
dividend or other stock distribution in ANA Common Stock, or otherwise change the ANA Common Stock into any other securities, or make any other dividend or distribution in respect of the ANA Common Stock (other than normal cash dividends), then the
number of shares of ANA Common Stock subject to the Option shall be adjusted so that, after such issuance, it equals 4.9% of the number of shares of ANA Common Stock issued and outstanding after giving effect to any shares subject or issued pursuant
to the Option. Nothing contained in this Section 6 shall be deemed to authorize ANA to breach any provisions of the Merger Agreement. Whenever the number of shares of ANA Common Stock purchasable upon exercise hereof is adjusted as provided in this
Section 6, the option exercise price shall be adjusted by multiplying the option exercise price by a fraction, the numerator of which shall be equal to the number of shares of ANA Common Stock purchasable prior to the adjustment and the denominator
of which shall be equal to the number of shares of ANA Common Stock purchasable after the adjustment.
 7. Registration Rights.
      ANA shall, if requested by IBKC, as expeditiously as possible file a registration statement on a form of general use under the 1933 Act if necessary in order to permit the sale or other disposition of this Option
and/or the shares of ANA Common Stock acquired upon exercise of the Option in accordance with the intended method of sale or other disposition requested by IBKC. IBKC shall provide all information reasonably requested by ANA for inclusion in any
registration statement to be filed hereunder. ANA will use its reasonable best efforts to cause such registration statement first to become effective and then to remain effective for such period not in excess of 270 days from the day such
registration statement first becomes effective as may be reasonably necessary to effect such sales or other dispositions. The first registration effected under this Section 7 shall be at ANA’s expense except for underwriting commissions and the
fees and
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  disbursements of IBKC’s counsel attributable to the registration. A second registration may be requested hereunder at IBKC’s expense. In no event shall ANA be
required to effect more than two registrations hereunder. If requested by ANA, in connection with any such registration, IBKC will become a party to any underwriting agreement relating to the sale of such shares, but only to the extent of obligating
itself in respect of representations, warranties, indemnities and other agreements customarily included by a selling shareholder in such underwriting agreements.
 8. Certain Puts.

     (a) Upon the occurrence of a Purchase Event that occurs prior to termination of the Option,
 (i) at the request of IBKC,
delivered while the Option (in whole or part) is exercisable, ANA shall repurchase the Option from IBKC at a price equal to (x) the amount by which (a) the market/offer price (as defined below) exceeds (b) the Option exercise price, multiplied by
(y) the number of shares for which the Option may then be exercised; and
 (ii) at the request from time to time of the owner of shares purchased pursuant to the Option, delivered while the Option
(in whole or part) is exercisable (or, if it has been fully exercised, would have been exercisable had such exercise not been made),
 ANA shall repurchase such number of the shares issued pursuant
to the Option from the owner as the owner shall designate at a price equal to (x) the market/offer price multiplied by the number of such shares so designated. The term “market/offer price” shall mean the highest of (i) the price per share
of ANA Common Stock at which a tender offer or exchange offer therefor has been made after the date hereof, (ii) the price per share of ANA Common Stock to be paid by any third party pursuant to any merger, consolidation, share exchange or other
agreement with ANA entered into after the date hereof, (iii) the highest closing price for shares of ANA Common Stock within the 30-day period immediately preceding the date IBKC gives notice of the required repurchase of this Option or the owner
gives notice of the required repurchase of shares, as the case may be, or (iv) in the event of a sale of all or substantially all of ANA’s assets, the sum of the price paid in such sale for such assets and the current market value of the
remaining assets of ANA as determined by a nationally recognized investment banking firm selected by the parties (or by an arbitrator if they cannot agree) divided by the number of shares of ANA Common Stock outstanding at the time of such sale. In
determining the market/offer price, the value of consideration other than cash shall be determined by a nationally recognized investment banking firm selected by the parties (or by an arbitrator if they cannot agree), and such determination shall be
conclusive and binding on all parties.
      (b) IBKC or the owner, as the case may be, may exercise its right to require ANA to repurchase the Option and any shares
pursuant to this Section 8 by surrendering for such
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  purpose to ANA, at its principal office, this Option Agreement or certificates for the shares, as applicable, accompanied by a written notice or notices stating that IBKC or
the owner, as the case may be, elects to require ANA to repurchase the Option and/or the shares in accordance with the provisions of this Section 8. As promptly as practicable, and in any event within five business days after the surrender of the
Option and/or certificates representing shares and the receipt of such notice or notices relating thereto, ANA shall deliver or cause to be delivered to IBKC or the owner the applicable repurchase price therefor or the portion thereof that ANA is
not then prohibited from so delivering under applicable law and regulation or as a consequence of administrative policy.
      (c) ANA hereby undertakes to use its best
efforts to obtain all required regulatory and legal consents and to file any required notices in order to accomplish any repurchase contemplated by this Section 8. Nonetheless, to the extent that ANA is prohibited under applicable law or regulation,
or as a consequence of administrative policy, from repurchasing the Option and/or the shares in full, ANA shall immediately so notify IBKC and the owner and thereafter deliver or cause to be delivered, from time to time, the portion of the
repurchase price that it is no longer prohibited from delivering. If ANA at any time after delivery of a notice of repurchase pursuant to Section 8 is prohibited under applicable law or regulation, or as a consequence of administrative policy, from
delivering the repurchase price in full (and ANA hereby undertakes to use its best efforts to obtain all required regulatory and legal approvals and to file any required notices as promptly as practicable in order to accomplish such repurchase),
IBKC and/or the owner may revoke its notice of repurchase either in whole or to the extent of the prohibition.
 9. Severability.
      If any term, provision, covenant or restriction contained in this Option Agreement is held by a court or a federal or state regulatory agency of competent jurisdiction to be invalid, void or unenforceable, the
remainder of the terms, provisions and covenants and restrictions contained in this Option Agreement shall remain in full force and effect, and shall in no way be affected, impaired or invalidated. If for any reason such court or regulatory agency
determines that the Option will not permit the holder to acquire the full number of shares of ANA Common Stock provided in Section 2 hereof (as adjusted pursuant to Section 6 hereof), it is the express intention of ANA to allow the holder to acquire
or to require ANA to repurchase such lesser number of shares as may be permissible, without any amendment or modification hereof. 
 10. Miscellaneous.

     (a) Extension. The period for exercise by IBKC and its assignees of any rights under this Option Agreement shall be extended (i) to the extent necessary to obtain
all
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  regulatory approvals for the exercise of such rights, and for the expiration of all statutory waiting periods; and (ii) to the extent necessary to avoid liability under Section
16(b) of the 1934 Act by reason of such exercise.
      (b) Consents. Each of IBKC and ANA will use its best efforts to make all filings with, and to obtain consents
of, all third parties and Regulatory Authorities necessary to the consummation of the transactions contemplated by this Option Agreement, including without limitation applying to the Federal Reserve Board under the Bank Holding Company Act for
approval to acquire the shares issuable hereunder.
      (c) Expenses. Except as otherwise expressly provided herein or in the Merger Agreement each of the parties
hereto shall bear and pay all costs and expenses incurred by it or on its behalf in connection with the transactions contemplated hereunder, including fees and expenses of its own financial consultants, investment bankers, accountants and
counsel.
      (d) Entire Agreement. Except as otherwise expressly provided herein or in the Merger Agreement, this Option Agreement contains the entire agreement
between the parties with respect to the transactions contemplated hereunder and supersedes all prior agreements or understandings with respect thereto, written or oral. The terms and conditions of this Option Agreement shall inure to the benefit of
and be binding upon the parties hereto and their respective successors and assigns. Nothing in this Option Agreement, expressed or implied, is intended to confer upon any party, other than the parties hereof, and their respective successors and
assigns, any rights, remedies, obligations or liabilities under or by reason of this Option Agreement, except as expressly provided herein.
      (e) Assignment.
Neither of the parties hereto may assign any of its rights or obligations under this Option Agreement or the Option created hereunder to any other person, without the express written consent of the other party, except that if a Purchase Event shall
have occurred and be continuing IBKC may assign in whole or in part its rights and obligations hereunder; provided, however, that until the date 30 days following the date on which the Federal Reserve Board approves an application by IBKC under the
Bank Holding Company Act to acquire the shares of ANA Common Stock subject to the Option, IBKC may not assign its rights under the Option except in (i) a widely dispersed public distribution, (ii) a private placement in which no one party acquires
the rights to purchase in excess of 2% of the ANA Common Stock, (iii) an assignment to a single party (e.g., a broker or investment banker) for the purpose of conducting a widely dispersed public distribution on IBKC's behalf, or (iv) any other
manner approved by the Federal Reserve Board.
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       (f) Notices. All notices or other communications which are required or permitted hereunder shall be in writing and sufficient if delivered
personally or sent by overnight express or by registered or certified mail, postage prepaid, addressed as follows:
 If to IBKC:
      IBERIABANK Corporation
      2110 Pinhook Road
      Lafayette, LA 70508-3230
      Attention: Daryl G. Byrd
 With a copy to:
      Correro Fishman Haygood Phelps Walmsley & Casteix, L.L.P.
      201 St. Charles
Avenue, 46th Floor
      New Orleans, LA 70170-4600
      Attention: Anthony J. Correro, III
 If to ANA:

     Acadiana Bancshares, Inc.
      200 W. Congress Street
      Lafayette, LA 70502

     Attention: Gerald Reaux
 With a copy to:
      Elias, Matz, Tiernan & Herrick,
L.L.P.
      735 15th Street, N.W., 12th Floor
      Washington, D.C. 20005
      Attention: Hugh Wilkinson
 A
party may change its address for notice purposes by written notice to the other party hereto.
      (g) Counterparts. This Option Agreement may be executed in any
number of counterparts, and each such counterpart shall be deemed to be an original instrument, but all such counterparts together shall constitute but one agreement.
      (h) Specific Performance. The parties agree that damages would be an inadequate remedy for a breach of the provisions of this Option Agreement by either party hereto
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  and that this Option Agreement may be enforced by either party hereto through injunctive or other equitable relief.
      (i) Governing Law. This Option Agreement shall be governed by and construed in accordance with the laws of the State of Louisiana applicable to agreements made and entirely to be performed within such state,
and such federal laws as may be applicable.
      In Witness Whereof, each of the parties hereto has executed this Option Agreement as of the day and year first written
above.

	 	IBERIABANK Corporation

	 	by    /s/    Daryl G. Byrd
 

	 	Acadiana Bancshares, Inc.

	 	by    /s/    Gerald G. Reaux, Jr.

 10PEET'S COFFEE & TEA, INC.
        AMENDED AND RESTATED 2000 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
                            ADOPTED NOVEMBER 1, 2000
                   APPROVED BY SHAREHOLDERS NOVEMBER 17, 2000
                      AMENDED AND RESTATED ON MARCH 4, 2002

1.     PURPOSES.

     (A) ELIGIBLE OPTION RECIPIENTS. The persons eligible to receive Options are
the  Non-Employee  Directors  of  the  Company.

     (B)  AVAILABLE  OPTIONS.  The  purpose of the Plan is to provide a means by
which  Non-Employee  Directors  may  be  given  an  opportunity  to benefit from
increases  in  value  of  the  Common Stock through the granting of Nonstatutory
Stock  Options.

     (C) GENERAL PURPOSE. The Company, by means of the Plan, seeks to retain the
services of its Non-Employee Directors, to secure and retain the services of new
Non-Employee  Directors  and  to  provide  incentives  for such persons to exert
maximum  efforts  for  the  success  of  the  Company  and  its  Affiliates.

2.     DEFINITIONS.

     (A)  "AFFILIATE"  means any parent corporation or subsidiary corporation of
the  Company,  whether  now or hereafter existing, as those terms are defined in
Sections  424(e)  and  (f),  respectively,  of  the  Code.

     (B)  "ANNUAL  GRANT"  means  an Option granted annually to all Non-Employee
Directors  who  meet  the  criteria  specified  in  subsection 6(b) of the Plan.

     (C)  "ANNUAL  MEETING"  means the annual meeting of the shareholders of the
Company.

     (D)  "BOARD"  means  the  Board  of  Directors  of  the  Company.

     (E)  "CODE"  means  the  Internal  Revenue  Code  of  1986,  as  amended.

     (F)  "COMMON  STOCK"  means  the  common  stock  of  the  Company.

     (G)  "COMPANY"  means  Peet's Coffee & Tea, Inc., a Washington corporation.

     (H) "CONSULTANT" means any person, including an advisor, (i) engaged by the
Company  or  an  Affiliate  to render consulting or advisory services and who is
compensated  for such services or (ii) who is a member of the Board of Directors
of  an  Affiliate.  However,  the  term  "Consultant"  shall  not include either

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<PAGE>

Directors  of  the  Company  who  are  not  compensated by the Company for their
services  as  Directors  or  Directors  of  the  Company  who  are merely paid a
director's  fee  by  the  Company  for  their  services  as  Directors.

     (I)  "CONTINUOUS  SERVICE"  means  that the Optionholder's service with the
Company  or an Affiliate, whether as an Employee, Director or Consultant, is not
interrupted  or  terminated.  The Optionholder's Continuous Service shall not be
deemed  to  have  terminated merely because of a change in the capacity in which
the  Optionholder renders service to the Company or an Affiliate as an Employee,
Consultant  or  Director  or  a  change in the entity for which the Optionholder
renders  such  service, provided that there is no interruption or termination of
the Optionholder's service. For example, a change in status without interruption
from  a  Non-Employee Director of the Company to a Consultant of an Affiliate or
an  Employee  of  the  Company will not constitute an interruption of Continuous
Service.  The  Board  or  the  chief  executive  officer of the Company, in that
party's  sole  discretion,  may  determine  whether  Continuous Service shall be
considered  interrupted  in  the  case  of any leave of absence approved by that
party,  including  sick  leave,  military  leave  or  any  other personal leave.

     (J)  "DIRECTOR"  means  a  member of the Board of Directors of the Company.

     (K)  "DISABILITY"  means  the  inability  of  a person, in the opinion of a
qualified  physician  acceptable  to the Company, to perform the major duties of
that  person's  position with the Company or an Affiliate of the Company because
of  the  sickness  or  injury  of  the  person.

     (L)  "EMPLOYEE"  means  any person employed by the Company or an Affiliate.
Mere  service  as a Director or payment of a director's fee by the Company or an
Affiliate  shall  not be sufficient to constitute "employment" by the Company or
an  Affiliate.

     (M)  "EXCHANGE  ACT" means the Securities Exchange Act of 1934, as amended.

     (N)  "FAIR  MARKET  VALUE"  means,  as of any date, the value of the Common
Stock  determined  as  follows:

          (I) If the Common Stock is listed on any established stock exchange or
     traded  on  the  Nasdaq  National Market or the Nasdaq SmallCap Market, the
     Fair  Market  Value  of  a share of Common Stock shall be the closing sales
     price  for  such  stock  (or the closing bid, if no sales were reported) as
     quoted  on  such  exchange  or  market  (or the exchange or market with the
     greatest  volume of trading in the Common Stock) on the last market trading
     day  prior  to  the  day  of  determination, as reported in The Wall Street
     Journal  or  such  other  source  as  the  Board  deems  reliable.

          (II)  In  the  absence  of such markets for the Common Stock, the Fair
     Market  Value  shall  be  determined  in  good  faith  by  the  Board.

     (O)  "INITIAL GRANT" means an Option granted to a Non-Employee Director who
meets  the  criteria  specified  in  subsection  6(a)  of  the  Plan.

     (P)  "IPO  DATE" means the effective date of the initial public offering of
the  Common  Stock,  which  was  January  25,  2001.

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<PAGE>

     (Q)  "NON-EMPLOYEE  DIRECTOR"  means  a  Director  who  is not an Employee.

     (R)  "NONSTATUTORY STOCK OPTION" means an Option not intended to qualify as
an  incentive stock option within the meaning of Section 422 of the Code and the
regulations  promulgated  thereunder.

     (S)  "OFFICER"  means  a person who is an officer of the Company within the
meaning  of  Section  16  of  the  Exchange  Act  and  the rules and regulations
promulgated  thereunder.

     (T)  "OPTION"  means  a  Nonstatutory  Stock Option granted pursuant to the
Plan.

     (U) "OPTION AGREEMENT" means a written agreement between the Company and an
Optionholder  evidencing the terms and conditions of an individual Option grant.
Each  Option Agreement shall be subject to the terms and conditions of the Plan.

     (V)  "OPTIONHOLDER" means a person to whom an Option is granted pursuant to
the  Plan  or, if applicable, such other person who holds an outstanding Option.

     (W)  "PLAN" means this Peet's Coffee & Tea, Inc. 2000 Non-Employee Director
Stock  Option  Plan,  as  amended  and  restated  on  March  4,  2002.

     (X) "RULE 16B-3" means Rule 16b-3 promulgated under the Exchange Act or any
successor  to  Rule  16b-3,  as  in  effect  from  time  to  time.

     (Y)  "SECURITIES  ACT"  means  the  Securities  Act  of  1933,  as amended.

3.     ADMINISTRATION.

     (A) ADMINISTRATION BY BOARD. The Board shall administer the Plan. The Board
may  not  delegate  administration  of  the  Plan  to  a  committee.

     (B) POWERS OF BOARD. The Board shall have the power, subject to, and within
the  limitations  of,  the  express  provisions  of  the  Plan:

          (I)  To  determine  the  provisions  of  each Option to the extent not
     specified  in  the  Plan.

          (II)  To construe and interpret the Plan and Options granted under it,
     and  to  establish,  amend  and  revoke  rules  and  regulations  for  its
     administration.  The  Board, in the exercise of this power, may correct any
     defect,  omission  or inconsistency in the Plan or in any Option Agreement,
     in  a manner and to the extent it shall deem necessary or expedient to make
     the  Plan  fully  effective.

          (III)  To  amend  the  Plan  or  an  Option as provided in Section 12.

          (IV)  To  terminate  or  suspend  the  Plan as provided in Section 13.

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<PAGE>

          (V) Generally, to exercise such powers and to perform such acts as the
     Board  deems  necessary  or  expedient to promote the best interests of the
     Company  that  are  not  in  conflict  with  the  provisions  of  the Plan.

     (C)  EFFECT  OF  BOARD'S  DECISION. All determinations, interpretations and
constructions  made by the Board in good faith shall not be subject to review by
any  person  and  shall  be  final,  binding  and  conclusive  on  all  persons.

4.     SHARES  SUBJECT  TO  THE  PLAN.

     (A)  SHARE  RESERVE.  Subject  to  the provisions of Section 11 relating to
adjustments,  the  Common Stock that may be issued pursuant to Options shall not
exceed  three  hundred  thirty  thousand  (330,000)  shares of Common Stock (the
"Reserved Shares"). As of each Annual Meeting, beginning in 2002, and continuing
through  and including the Annual Meeting in 2020, the number of Reserved Shares
will  be  increased  automatically  by  the  least  of (i) three quarters of one
percent  (0.75%)  of  the  total number of shares of Common Stock outstanding on
such  date,  (ii)  sixty  thousand  (60,000) shares, or (iii) a number of shares
determined  by the Board prior to such date, which number shall be less than (i)
and  (ii)  above.

     (B)  REVERSION  OF SHARES TO THE SHARE RESERVE. If any Option shall for any
reason  expire  or otherwise terminate, in whole or in part, without having been
exercised  in  full,  the  shares of Common Stock not acquired under such Option
shall  revert  to  and  again  become  available  for  issuance  under the Plan.

     (C) SOURCE OF SHARES. The shares of Common Stock subject to the Plan may be
unissued  shares  or  reacquired  shares,  bought  on  the  market or otherwise.

5.     ELIGIBILITY.

     The  Options  as  set forth in Section 6 of the Plan automatically shall be
granted  under  the  Plan  to  all  Non-Employee  Directors.

6.     NON-DISCRETIONARY  GRANTS.

     (A)  INITIAL  GRANTS.  Without any further action of the Board, each person
who  is  a  Non-Employee Director on the IPO Date or who is elected or appointed
for  the  first  time  to  be  a  Non-Employee  Director  after  the  IPO  Date
automatically  shall,  upon the IPO Date, or upon the date of his or her initial
election  or  appointment  to  be  a  Non-Employee  Director  by  the  Board  or
shareholders of the Company, whichever date is applicable, be granted an Initial
Grant  to  purchase  twenty-five thousand (25,000) shares of Common Stock on the
terms  and  conditions  set  forth  herein.

     (B)  ANNUAL GRANTS. Without any further action of the Board, a Non-Employee
Director  shall be granted an Annual Grant as follows: On the day following each
Annual  Meeting  commencing  with the Annual Meeting in 2001, each person who is
then  a  Non-Employee Director automatically shall be granted an Annual Grant to
purchase  ten  thousand  (10,000)  shares  of  Common  Stock  on  the  terms and
conditions set forth herein. In the event a Non-Employee Director begins service
on  a  date  other  than  the date of the Annual Meeting, such Director shall be

                                        4
<PAGE>

granted  the  pro  rata  amount  of  shares representing the number of months of
service  remaining  until  the  next  Annual  Meeting.

7.     OPTION  PROVISIONS.

     Each  Option  shall  be  in  such  form  and  shall  contain such terms and
conditions  as  required by the Plan.  Each Option shall contain such additional
terms  and  conditions,  not inconsistent with the Plan, as the Board shall deem
appropriate.  Each  Option  shall  include  (through incorporation of provisions
hereof  by  reference  in  the Option or otherwise) the substance of each of the
following  provisions:

     (A)  TERM.  No Option shall be exercisable after the expiration of ten (10)
years  from  the  date  it  was  granted.

     (B)  EXERCISE PRICE. The exercise price of each Option shall be one hundred
percent  (100%)  of  the Fair Market Value of the stock subject to the Option on
the  date the Option is granted. Notwithstanding the foregoing, an Option may be
granted  with  an  exercise  price  lower  than  that set forth in the preceding
sentence if such Option is granted pursuant to an assumption or substitution for
another  option  in  a manner satisfying the provisions of Section 424(a) of the
Code.

     (C)  CONSIDERATION.  The  purchase  price  of stock acquired pursuant to an
Option  may  be  paid,  to  the  extent  permitted  by  applicable  statutes and
regulations,  in  any  combination  of  the  following  methods:

          (I)  By  cash  or  check.

          (II)  Provided  that  at  the  time  of  exercise  the Common Stock is
     publicly  traded  and  quoted  regularly  in  The  Wall  Street Journal, by
     delivery  of  already-owned  shares  of  Common  Stock  either  that  the
     Optionholder  has  held  for  the  period required to avoid a charge to the
     Company's reported earnings (generally six months) or that the Optionholder
     did  not  acquire,  directly or indirectly from the Company, that are owned
     free  and  clear  of any liens, claims, encumbrances or security interests,
     and  that  are  valued  at  Fair  Market  Value  on  the  date of exercise.
     "Delivery"  for these purposes shall include delivery to the Company of the
     Optionholder's attestation of ownership of such shares of Common Stock in a
     form  approved  by  the  Company.  Notwithstanding  the  foregoing,  the
     Optionholder may not exercise the Option by tender to the Company of Common
     Stock  to  the  extent such tender would violate the provisions of any law,
     regulation  or agreement restricting the redemption of the Company's stock.

          (III)  Provided  that  at  the  time  of  exercise the Common Stock is
     publicly  traded  and quoted regularly in The Wall Street Journal, pursuant
     to  a  program  developed  under Regulation T as promulgated by the Federal
     Reserve  Board  that,  prior  to  the  issuance of Common Stock, results in
     either  the  receipt  of  cash  (or check) by the Company or the receipt of
     irrevocable instructions to pay the aggregate exercise price to the Company
     from  the  sales  proceeds.

     (D)  TRANSFERABILITY.  An  Option is transferable by will or by the laws of
descent and distribution. An Option also is transferable (i) by instrument to an
inter  vivos  or testamentary trust, in a form accepted by the Company, in which

                                        5
<PAGE>

the  Option  is  to  be  passed  to  beneficiaries upon the death of the trustor
(settlor)  and  (ii)  by gift, in a form accepted by the Company, to a member of
the  "immediate family" of the Optionholder as that term is defined in 17 C.F.R.
240.16a-1(e).  An  Option  shall  be  exercisable  during  the  lifetime  of the
Optionholder  only  by  the  Optionholder and a permitted transferee as provided
herein.  However,  the  Optionholder  may,  by  delivering written notice to the
Company,  in a form satisfactory to the Company, designate a third party who, in
the  event  of  the  death  of the Optionholder, shall thereafter be entitled to
exercise  the  Option.

     (E)  EXERCISE  SCHEDULE.  The  Option shall be exercisable as the shares of
Common  Stock  subject  to  the  Option  vest.

     (F)  VESTING SCHEDULE. With respect to Initial Grants, 1/36th of the shares
subject  to  the  Initial Grant shall vest one month after the date of grant and
1/36th  of the shares shall vest monthly thereafter for the next 35 months. With
respect  to  Annual  Grants, [ALTERNATIVE 1: 1/12th of the shares subject to the
Annual  Grant  shall  vest  one  month after the date of grant and 1/12th of the
shares  shall  vest  monthly  thereafter for the next 11 months.][ALTERNATIVE 2:
100%  of  the shares subject to the Annual Grant shall vest on the day preceding
the next Annual Meeting; provided, however, that if the Non-Employee Director is
not in Continuous Service between the date of grant and the next Annual Meeting,
then  the  number  of  shares  that shall vest as of the Non-Employee Director's
termination  of  Continuous  Service will represent the pro rata amount for each
full month such Non-Employee Director was in Continuous Service from the date of
grant  to  the  next  Annual  Meeting.]

     (G)  TERMINATION  OF  CONTINUOUS  SERVICE.  In  the event an Optionholder's
Continuous  Service  terminates  (other  than  upon  the Optionholder's death or
Disability), the Optionholder may exercise his or her Option (to the extent that
the  Optionholder was entitled to exercise it as of the date of termination) but
only  within such period of time ending on the earlier of (i) the date three (3)
months  following  the  termination of the Optionholder's Continuous Service, or
(ii)  the  expiration  of  the  term  of  the  Option as set forth in the Option
Agreement.  If, after termination, the Optionholder does not exercise his or her
Option  within  the  time  specified  in  the Option Agreement, the Option shall
terminate.

     (H)  EXTENSION OF TERMINATION DATE. If the exercise of the Option following
the  termination  of  the Optionholder's Continuous Service (other than upon the
Optionholder's  death  or  Disability)  would  be  prohibited at any time solely
because the issuance of shares would violate the registration requirements under
the  Securities  Act,  then the Option shall terminate on the earlier of (i) the
expiration  of  the  term of the Option set forth in subsection 7(a) or (ii) the
expiration  of  a  period  of  three  (3)  months  after  the termination of the
Optionholder's  Continuous Service during which the exercise of the Option would
not  be  in  violation  of  such  registration  requirements.

     (I)  DISABILITY  OF OPTIONHOLDER. In the event an Optionholder's Continuous
Service  terminates  as  a  result  of  the  Optionholder's  Disability,  the
Optionholder may exercise his or her Option (to the extent that the Optionholder
was entitled to exercise it as of the date of termination), but only within such
period  of  time  ending  on  the  earlier  of  (i)  the date twelve (12) months
following  such  termination or (ii) the expiration of the term of the Option as

                                        6
<PAGE>

set  forth in the Option Agreement. If, after termination, the Optionholder does
not  exercise  his  or  her  Option within the time specified herein, the Option
shall  terminate.

     (J)  DEATH  OF  OPTIONHOLDER. In the event (i) an Optionholder's Continuous
Service  terminates  as  a  result  of  the  Optionholder's  death  or  (ii) the
Optionholder  dies  within  the  three-month period after the termination of the
Optionholder's Continuous Service for a reason other than death, then the Option
may  be  exercised  (to the extent the Optionholder was entitled to exercise the
Option  as  of  the date of death) by the Optionholder's estate, by a person who
acquired  the  right  to  exercise  the Option by bequest or inheritance or by a
person designated to exercise the Option upon the Optionholder's death, but only
within  the  period  ending  on the earlier of (1) the date eighteen (18) months
following  the date of death or (2) the expiration of the term of such Option as
set  forth in the Option Agreement. If, after death, the Option is not exercised
within  the  time  specified  herein,  the  Option  shall  terminate.

8.     COVENANTS  OF  THE  COMPANY.

     (A)  AVAILABILITY  OF  SHARES. During the terms of the Options, the Company
shall  keep available at all times the number of shares of Common Stock required
to  satisfy  such  Options.

     (B)  SECURITIES  LAW COMPLIANCE. The Company shall seek to obtain from each
regulatory commission or agency having jurisdiction over the Plan such authority
as may be required to grant Options and to issue and sell shares of Common Stock
upon exercise of the Options; provided, however, that this undertaking shall not
require the Company to register under the Securities Act the Plan, any Option or
any  stock  issued or issuable pursuant to any such Option. If, after reasonable
efforts,  the Company is unable to obtain from any such regulatory commission or
agency  the  authority  which  counsel  for  the Company deems necessary for the
lawful  issuance and sale of stock under the Plan, the Company shall be relieved
from  any  liability  for  failure to issue and sell stock upon exercise of such
Options  unless  and  until  such  authority  is  obtained.

9.     USE  OF  PROCEEDS  FROM  STOCK.

     Proceeds  from  the  sale  of  stock  pursuant  to Options shall constitute
general  funds  of  the  Company.

10.     MISCELLANEOUS.

     (A)  STOCKHOLDER  RIGHTS.  No Optionholder shall be deemed to be the holder
of, or to have any of the rights of a holder with respect to, any shares subject
to such Option unless and until such Optionholder has satisfied all requirements
for  exercise  of  the  Option  pursuant  to  its  terms.

     (B)  NO  SERVICE  RIGHTS. Nothing in the Plan or any instrument executed or
Option  granted pursuant thereto shall confer upon any Optionholder any right to
continue  to  serve  the  Company as a Non-Employee Director or shall affect the
right  of  the  Company  or  an  Affiliate to terminate (i) the employment of an
Employee with or without notice and with or without cause, (ii) the service of a
Consultant pursuant to the terms of such Consultant's agreement with the Company
or an Affiliate or (iii) the service of a Director pursuant to the Bylaws of the

                                        7
<PAGE>

Company  or  an Affiliate, and any applicable provisions of the corporate law of
the state in which the Company or the Affiliate is incorporated, as the case may
be.

     (C)  INVESTMENT  ASSURANCES.  The Company may require an Optionholder, as a
condition of exercising or acquiring stock under any Option, (i) to give written
assurances  satisfactory  to  the Company as to the Optionholder's knowledge and
experience  in  financial  and  business  matters  and/or  to employ a purchaser
representative  reasonably  satisfactory to the Company who is knowledgeable and
experienced  in  financial and business matters and that he or she is capable of
evaluating,  alone or together with the purchaser representative, the merits and
risks of exercising the Option; and (ii) to give written assurances satisfactory
to  the  Company stating that the Optionholder is acquiring the stock subject to
the Option for the Optionholder's own account and not with any present intention
of  selling or otherwise distributing the stock. The foregoing requirements, and
any  assurances given pursuant to such requirements, shall be inoperative if (1)
the  issuance  of the shares upon the exercise or acquisition of stock under the
Option  has  been  registered  under  a  then  currently  effective registration
statement  under  the  Securities Act or (2) as to any particular requirement, a
determination  is made by counsel for the Company that such requirement need not
be  met  in  the  circumstances  under  the then applicable securities laws. The
Company  may,  upon  advice  of  counsel  to the Company, place legends on stock
certificates  issued  under  the  Plan  as  such  counsel  deems  necessary  or
appropriate  in  order to comply with applicable securities laws, including, but
not  limited  to,  legends  restricting  the  transfer  of  the  stock.

     (D)  WITHHOLDING  OBLIGATIONS.  The  Optionholder  may satisfy any federal,
state  or  local  tax  withholding  obligation  relating  to  the  exercise  or
acquisition  of stock under an Option by any of the following means (in addition
to  the  Company's  right  to  withhold  from  any  compensation  paid  to  the
Optionholder  by the Company) or by a combination of such means: (i) tendering a
cash payment; (ii) authorizing the Company to withhold shares from the shares of
the  Common  Stock  otherwise  issuable  to  the Optionholder as a result of the
exercise  or  acquisition  of stock under the Option, provided, however, that no
shares of Common Stock are withheld with a value exceeding the minimum amount of
tax required to be withheld by law; or (iii) delivering to the Company owned and
unencumbered  shares  of  the  Common  Stock.

11.     ADJUSTMENTS  UPON  CHANGES  IN  STOCK.

     (A)  CAPITALIZATION ADJUSTMENTS. If any change is made in the stock subject
to  the  Plan, or subject to any Option, without the receipt of consideration by
the  Company  (through  merger, consolidation, reorganization, recapitalization,
reincorporation,  stock  dividend,  dividend  in property other than cash, stock
split,  liquidating  dividend, combination of shares, exchange of shares, change
in  corporate  structure  or  other  transaction  not  involving  the receipt of
consideration  by  the  Company), the Plan will be appropriately adjusted in the
class(es)  and maximum number of securities subject both to the Plan pursuant to
subsection  4(a) and to the nondiscretionary Options specified in Section 5, and
the  outstanding  Options  will  be  appropriately adjusted in the class(es) and
number  of  securities  and price per share of stock subject to such outstanding
Options.  The  Board shall make such adjustments, and its determination shall be
final,  binding and conclusive. (The conversion of any convertible securities of
the  Company  shall  not  be  treated  as  a  transaction  "without  receipt  of
consideration"  by  the  Company.)

                                        8
<PAGE>

     (B)  DISSOLUTION  OR  LIQUIDATION.  In  the  event  of  a  dissolution  or
liquidation  of  the  Company,  then  all  outstanding  Options  shall terminate
immediately  prior  to  such  event.

     (C)  CORPORATE  TRANSACTION.  In  the  event  of (i) a sale, lease or other
disposition  of  all  or  substantially  all  of the securities or assets of the
Company,  (ii)  a  merger  or  consolidation  in  which  the  Company is not the
surviving  corporation  or  (iii)  a  reverse merger in which the Company is the
surviving  corporation  but  the  shares of Common Stock outstanding immediately
preceding  the merger are converted by virtue of the merger into other property,
whether  in  the  form  of  securities,  cash  or  otherwise (each, a "Corporate
Transaction"),  then  with  respect  to  Options  held  by  Optionholders  whose
Continuous Service has not terminated, the vesting of such Options (and the time
during  which  such  Options may be exercised) shall be accelerated in full, and
the  Options  shall  terminate  if  not  exercised  at or prior to the Corporate
Transaction.  With respect to any other Options outstanding under the Plan, such
Options  shall  terminate  if  not exercised prior to the Corporate Transaction.

12.     AMENDMENT  OF  THE  PLAN  AND  OPTIONS.

     (A)  AMENDMENT  OF  PLAN. The Board at any time, and from time to time, may
amend  the  Plan.  However,  except  as  provided  in  Section  11  relating  to
adjustments  upon  changes  in  stock,  no  amendment  shall be effective unless
approved  by  the shareholders of the Company to the extent stockholder approval
is  necessary  to  satisfy  the  requirements  of  Rule  16b-3  or any Nasdaq or
securities  exchange  listing  requirements.

     (B) STOCKHOLDER APPROVAL. The Board may, in its sole discretion, submit any
other  amendment  to  the  Plan  for  stockholder  approval.

     (C)  NO  IMPAIRMENT  OF  RIGHTS.  Rights  under  any  Option granted before
amendment  of the Plan shall not be impaired by any amendment of the Plan unless
(i)  the  Company  requests  the  consent  of  the  Optionholder  and  (ii)  the
Optionholder  consents  in  writing.

     (D) AMENDMENT OF OPTIONS. The Board at any time, and from time to time, may
amend  the  terms of any one or more Options; provided, however, that the rights
under  any  Option  shall  not  be impaired by any such amendment unless (i) the
Company  requests  the  consent  of  the  Optionholder and (ii) the Optionholder
consents  in  writing.

13.     TERMINATION  OR  SUSPENSION  OF  THE  PLAN.

     (A)  PLAN TERM. The Board may suspend or terminate the Plan at any time. No
Options may be granted under the Plan while the Plan is suspended or after it is
terminated.

     (B)  NO  IMPAIRMENT  OF RIGHTS. Suspension or termination of the Plan shall
not  impair rights and obligations under any Option granted while the Plan is in
effect  except  with  the  written  consent  of  the  Optionholder.

                                        9
<PAGE>

14.     EFFECTIVE  DATE  OF  PLAN.

     The  Plan became effective on the IPO Date and the Plan was approved by the
shareholders of the Company on November 17, 2000.  The amended and restated Plan
shall  become  effective  as  the  date  approved  by  the  Board.

15.     CHOICE  OF  LAW.

     All  questions  concerning the construction, validity and interpretation of
this  Plan  shall  be  governed  by  the law of the State of Washington, without
regard  to  such  state's  conflict  of  laws  rules.

                                        10
<PAGE>

                            PEET'S COFFEE & TEA, INC.
                  2000 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN

                             STOCK OPTION AGREEMENT
                           (NONSTATUTORY STOCK OPTION)

     Pursuant  to your Stock Option Grant Notice ("Grant Notice") and this Stock
Option Agreement, Peet's Coffee and Tea, Inc. (the "Company") has granted you an
option  under  its  2000 Non-Employee Director Stock Option Plan (the "Plan") to
purchase  the  number  of shares of the Company's Common Stock indicated in your
Grant  Notice  at  the  exercise  price indicated in your Grant Notice.  Defined
terms  not  explicitly defined in this Stock Option Agreement but defined in the
Plan  shall  have  the  same  definitions  as  in  the  Plan.

     The  details  of  your  option  are  as  follows:

     1.  VESTING.  Subject to the limitations contained herein, your option will
vest as provided in your Grant Notice, provided that vesting will cease upon the
termination  of  your  Continuous  Service.

     2.  NUMBER  OF  SHARES  AND  EXERCISE PRICE. The number of shares of Common
Stock  subject  to  your  option and your exercise price per share referenced in
your  Grant  Notice  may  be  adjusted  from  time  to  time  for Capitalization
Adjustments,  as  provided  in  the  Plan.

     3.  METHOD  OF  PAYMENT.  Payment of the exercise price is due in full upon
exercise of all or any part of your option. You may elect to make payment of the
exercise  price  in  cash  or  by check or in any other manner PERMITTED BY YOUR
                                                               -----------------
GRANT  NOTICE,  which  may  include  one  or  more  of  the  following:
-------------

          (A)  In  the  Company's  sole  discretion  at  the time your option is
     exercised  and  provided  that  at the time of exercise the Common Stock is
     publicly  traded  and quoted regularly in The Wall Street Journal, pursuant
     to  a  program  developed  under Regulation T as promulgated by the Federal
     Reserve  Board  that,  prior  to  the  issuance of Common Stock, results in
     either  the  receipt  of  cash  (or check) by the Company or the receipt of
     irrevocable instructions to pay the aggregate exercise price to the Company
     from  the  sales  proceeds.

          (B) Provided that at the time of exercise the Common Stock is publicly
     traded  and  quoted  regularly  in  The Wall Street Journal, by delivery of
     already-owned  shares  of  Common  Stock  either that you have held for the
     period  required  to  avoid  a  charge  to  the Company's reported earnings
     (generally  six months) or that you did not acquire, directly or indirectly
     from  the  Company,  that  are  owned  free and clear of any liens, claims,
     encumbrances  or  security  interests,  and  that are valued at Fair Market
     Value  on  the date of exercise. "Delivery" for these purposes, in the sole
     discretion  of  the  Company  at  the  time you exercise your option, shall
     include  delivery  to  the Company of your attestation of ownership of such
     shares  of  Common Stock in a form approved by the Company. Notwithstanding
     the foregoing, you may not exercise your option by tender to the Company of
     Common  Stock to the extent such tender would violate the provisions of any

                                        1
<PAGE>

     law,  regulation  or  agreement restricting the redemption of the Company's
     stock.

     4.  WHOLE  SHARES.  You  may  exercise your option only for whole shares of
Common  Stock.

     5.  SECURITIES  LAW  COMPLIANCE.  Notwithstanding  anything to the contrary
contained  herein,  you may not exercise your option unless the shares of Common
Stock  issuable  upon such exercise are then registered under the Securities Act
or,  if  such shares of Common Stock are not then so registered, the Company has
determined that such exercise and issuance would be exempt from the registration
requirements of the Securities Act. The exercise of your option must also comply
with  other  applicable  laws and regulations governing your option, and you may
not  exercise your option if the Company determines that such exercise would not
be  in  material  compliance  with  such  laws  and  regulations.

     6.  TERM.  You  may not exercise your option before the commencement of its
term or after its term expires. The term of your option commences on the Date of
Grant  and  expires  upon  the  EARLIEST  of  the  following:

          (A)  three (3) months after the termination of your Continuous Service
     for any reason other than your Disability or death, provided that if during
     any  part  of  such three- (3-) month period your option is not exercisable
     solely  because  of  the  condition  set  forth  in the preceding paragraph
     relating to "Securities Law Compliance," your option shall not expire until
     the  earlier of the Expiration Date or until it shall have been exercisable
     for  an  aggregate period of three (3) months after the termination of your
     Continuous  Service;

          (B)  twelve  (12)  months  after  the  termination  of your Continuous
     Service  due  to  your  Disability;

          (C)  eighteen  (18)  months  after your death if you die either during
     your  Continuous  Service  or within three (3) months after your Continuous
     Service  terminates;

          (D)  the  Expiration  Date  indicated  in  your  Grant  Notice;  or

          (E)  the day before the tenth (10th) anniversary of the Date of Grant.

     7.  EXERCISE.

          (A)  You  may  exercise  the  vested  portion  of your option (and the
     unvested portion of your option if your Grant Notice so permits) during its
     term  by  delivering  a  Notice  of  Exercise  (in a form designated by the
     Company)  together with the exercise price to the Secretary of the Company,
     or  to  such  other  person  as  the  Company may designate, during regular
     business  hours, together with such additional documents as the Company may
     then  require.

          (B)  By  exercising  your option you agree that, as a condition to any
     exercise  of  your  option,  the  Company  may require you to enter into an
     arrangement  providing  for  the  payment  by you to the Company of any tax
     withholding obligation of the Company arising by reason of (1) the exercise
     of  your  option,  (2)  the  lapse of any substantial risk of forfeiture to

                                        2
<PAGE>

     which  the  shares  of Common Stock are subject at the time of exercise, or
     (3)  the disposition of shares of Common Stock acquired upon such exercise.

     8.  TRANSFERABILITY.  Your option is transferable to the extent provided in
the Plan and by will or by the laws of descent and distribution. In addition, by
delivering written notice to the Company, in a form satisfactory to the Company,
you  may  designate  a  third  party  who,  in  the  event  of your death, shall
thereafter  be  entitled  to  exercise  your  option.

     9.  RIGHT  OF REPURCHASE. To the extent provided in the Company's bylaws as
amended from time to time, the Company shall have the right to repurchase all or
any  part  of the shares of Common Stock you acquire pursuant to the exercise of
your  option.

     10.  OPTION  NOT  A  SERVICE  CONTRACT. Your option is not an employment or
service  contract,  and  nothing in your option shall be deemed to create in any
way  whatsoever  any  obligation  on  your part to continue in the employ of the
Company  or  an  Affiliate,  or  of the Company or an Affiliate to continue your
employment. In addition, nothing in your option shall obligate the Company or an
Affiliate,  their  respective  shareholders,  Boards  of  Directors, Officers or
Employees  to  continue  any  relationship  that you might have as a Director or
Consultant  for  the  Company  or  an  Affiliate.

     11.  WITHHOLDING  OBLIGATIONS.

          (A)  At  the time you exercise your option, in whole or in part, or at
     any  time  thereafter  as  requested  by  the Company, you hereby authorize
     withholding  from  payroll  and  any  other  amounts  payable  to  you, and
     otherwise  agree  to  make  adequate provision for (including by means of a
     "cashless  exercise"  pursuant to a program developed under Regulation T as
     promulgated  by  the  Federal  Reserve Board to the extent permitted by the
     Company),  any  sums  required  to  satisfy  the  federal, state, local and
     foreign tax withholding obligations of the Company or an Affiliate, if any,
     which  arise  in  connection  with  your  option.

          (B)  Upon  your request and subject to approval by the Company, in its
     sole  discretion,  and  compliance  with  any  applicable  conditions  or
     restrictions  of  law, the Company may withhold from fully vested shares of
     Common  Stock  otherwise issuable to you upon the exercise of your option a
     number  of  whole  shares  of  Common  Stock  having  a  Fair Market Value,
     determined  by the Company as of the date of exercise, not in excess of the
     minimum  amount  of  tax  required  to  be  withheld by law. If the date of
     determination of any tax withholding obligation is deferred to a date later
     than the date of exercise of your option, share withholding pursuant to the
     preceding  sentence  shall  not  be  permitted unless you make a proper and
     timely  election  under  Section  83(b) of the Code, covering the aggregate
     number  of  shares of Common Stock acquired upon such exercise with respect
     to  which  such  determination  is  otherwise  deferred,  to accelerate the
     determination of such tax withholding obligation to the date of exercise of
     your  option. Notwithstanding the filing of such election, shares of Common
     Stock  shall  be  withheld  solely from fully vested shares of Common Stock
     determined  as  of  the  date of exercise of your option that are otherwise
     issuable to you upon such exercise. Any adverse consequences to you arising
     in  connection  with  such  share  withholding procedure shall be your sole
     responsibility.

                                        3
<PAGE>

          (C)  You  may  not  exercise  your  option  unless the tax withholding
     obligations of the Company and/or any Affiliate are satisfied. Accordingly,
     you  may  not be able to exercise your option when desired even though your
     option  is  vested,  and  the  Company  shall have no obligation to issue a
     certificate  for  such  shares  of  Common  Stock or release such shares of
     Common  Stock  from  any  escrow  provided  for  herein.

     12.  NOTICES.  Any notices provided for in your option or the Plan shall be
given  in  writing and shall be deemed effectively given upon receipt or, in the
case  of  notices  delivered  by mail by the Company to you, five (5) days after
deposit in the United States mail, postage prepaid, addressed to you at the last
address  you  provided  to  the  Company.

     13.  GOVERNING  PLAN DOCUMENT. Your option is subject to all the provisions
of  the Plan, the provisions of which are hereby made a part of your option, and
is  further  subject  to  all interpretations, amendments, rules and regulations
which  may from time to time be promulgated and adopted pursuant to the Plan. In
the event of any conflict between the provisions of your option and those of the
Plan,  the  provisions  of  the  Plan  shall  control.

                                        4
<PAGE>

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