Document:

<PAGE>   1
                                                                    EXHIBIT 10.8

                      SEVENTH AMENDMENT TO CREDIT AGREEMENT

        THIS SEVENTH AMENDMENT TO CREDIT AGREEMENT, dated as of February 28,
2001 (this "Amendment" or this "Seventh Amendment"), is by and between THE
ACKERLEY GROUP, INC., a Delaware corporation (the "Borrower"), certain financial
institutions party to the Credit Agreement (as hereinafter defined), and FIRST
UNION NATIONAL BANK, a national banking association, as administrative agent for
the Lenders (the "Administrative Agent"), FLEET BANK, N.A. as documentation
agent ("Documentation Agent"), and KEYBANK NATIONAL ASSOCIATION, as co-agent
(the "Co-Agent").

        This Amendment amends that certain Credit Agreement, dated as of January
22, 1999, between the Borrower, the Lenders, the Administrative Agent, the
Documentation Agent and the Co-Agent (as previously amended, the "Credit
Agreement"). All capitalized terms not otherwise defined in this Amendment shall
have the meanings assigned to them in the Credit Agreement.

                                    RECITALS

        A. The Borrower has requested an extension of the waivers granted in the
Fifth Amendment to Credit Agreement dated as of July 31, 2000 (the "Fifth
Amendment") and the Sixth Amendment to Credit Agreement dated as of December 15,
2000 (the "Sixth Amendment") with respect to Sections 7.1 and 7.2 of the Credit
Agreement.

        B. The Borrower has requested that the Required Lenders agree to
continue, to but not including April 15, 2001, the effect of the amendment to
the definition of "Applicable Margin Percentage" effected by the Sixth
Amendment.

        C. The Borrower intends to request a temporary increase of $20,000,000
in the aggregate Revolving Credit Commitments, as contemplated by Section 2.19
of the Credit Agreement.

        D. The Borrower has requested certain other consents and waivers all as
more particularly set forth herein.

        E. The parties are willing to agree to the foregoing on the terms and
conditions set forth herein.

                             STATEMENT OF AGREEMENT

        NOW, THEREFORE, in consideration of the mutual covenants contained
herein and in the Credit Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
each of the Borrower and the Required Lenders hereby agree as follows:

                                    ARTICLE I

                AMENDMENTS AND WAIVERS UNDER THE CREDIT AGREEMENT

<PAGE>   2
        1.1 FINANCIAL COVENANTS. As of the Effective Date (as defined in Section
3.7), the Required Lenders and the Borrower agree that, with respect to Sections
7.1(a), 7.1(b) and 7.2 of the Credit Agreement:

                (a) compliance by the Borrower with the requirements of Sections
        7.1(a), 7.1(b) and 7.2 (and any Default or Event of Default resulting
        from the Borrower's failure to comply during such period with the
        original terms of such Sections) are waived for the period from December
        15, 2000 to but not including the later of April 15, 2001 and the
        Certificate Date (as defined below);

                (b) the Borrower shall be deemed to have been in compliance with
        Sections 7.1(a), 7.1(b) and 7.2 as of the Certificate Date if (but only
        if) on or before April 15, 2001, the Borrower shall provide to the
        Administrative Agent a certificate executed by a Financial Officer of
        the Borrower (the date such certificate is provided to the
        Administrative Agent being the "Certificate Date"), satisfactory in form
        and substance to the Administrative Agent, setting forth a pro forma
        calculation of the Leverage Ratio, the Senior Leverage Ratio and the
        Interest Coverage Ratio (using (A) Consolidated Funded Debt and
        Consolidated Senior Funded Debt as of the Certificate Date, (B) pro
        forma Consolidated EBITDA for the four consecutive fiscal quarters ended
        December 31, 2000 and (C) pro forma Consolidated Interest Expense for
        the four consecutive fiscal quarters ended December 31, 2000, and taking
        into account (x) any Asset Dispositions completed by the Borrower and
        its Subsidiaries during the period following December 31, 2000 and
        ending on the Certificate Date, and (y) the making of mandatory
        prepayments of Loans under the Credit Agreement and the Sixth Amendment
        in connection therewith), and such pro forma calculation of the Leverage
        Ratio and the Senior Leverage Ratio shall be no greater than 6.00:1.00
        and 3.75:1.00, respectively, and such pro forma calculation of the
        Interest Coverage Ratio shall be no less than 1.75:1.00; and

                (c) the Borrower shall be required to be in compliance with
        Sections 7.1(a), 7.1(b) and 7.2 as provided in the terms of the Credit
        Agreement, as in effect immediately prior to the effectiveness of the
        Fifth Amendment, during all periods from and after the Certificate Date.

The failure of the Borrower to be in full and timely compliance with clauses (b)
and (c) of this Section 1.1 shall be an immediate Event of Default under the
Credit Documents.

        1.2 APPLICABLE MARGIN PERCENTAGE. During the period from the Effective
Date to but not including the Certificate Date only, the Applicable Margin
Percentage for Base Rate Term and Revolving Loans shall be 2.500% and the
Applicable Margin Percentage for LIBOR Term and Revolving Loans shall be 3.500%.
As of the Certificate Date, in the event the certificate required by Section 1.1
is timely delivered and the ratios calculated in the certificate comply with the
requirements set forth in Section 1.1(b) above, the Applicable Margin Percentage
for Base Rate Term and Revolving Loans and the Applicable Margin Percentage for
LIBOR Term and Revolving Loans shall be determined under the definition of
"Applicable Margin Percentage" as in effect immediately prior to the effective
date of the Fifth Amendment (it being understood that (i) in such event, such
reduction in pricing shall be deemed to take effect only as of the Certificate
Date and shall not be retroactive, and (ii) in the event that a certificate
complying with the requirements set forth in Section 1.1(b) above is not
supplied by April 15, 2001, then the Loans shall bear interest as provided in
Section 2.8(b) of the Credit Agreement).

                                       2

<PAGE>   3
        1.3 SALE OF SPORTS ASSETS. The Borrower and the Required Lenders hereby
amend the terms of their agreement with respect to the SuperSonics Sale (as
defined in the Sixth Amendment) by restating Section 1.3 of the Sixth Amendment,
as follows:

                The Required Lenders agree that the Borrower may sell the
        Seattle SuperSonics sports franchise and other sports entertainment
        assets to be approved by the Administrative Agent (the "SuperSonics
        Sale") for an amount which will provide gross cash proceeds to the
        Borrower, prior to April 15, 2001, of not less than $200,000,000, which
        amount shall be calculated before taking into account (i) normal and
        customary prorations and associated liabilities allocated to the
        Borrower as seller, and (ii) customary transaction costs and expenses of
        Borrower as seller, on terms and conditions to be approved by the
        Administrative Agent; provided that after effecting such sale, the
        Borrower shall be in compliance with all terms of the Credit Documents
        and no Default or Event of Default shall have occurred. This Section 1.3
        shall be deemed a consent by the Required Lenders to such sale (subject
        to the approvals of the Administrative Agent of the matters required
        hereby) for purposes of Section 8.4 of the Credit Agreement. Subject to
        the provisions of clause (vi) of Section 2.19(a) (as implemented in this
        Seventh Amendment), the Borrower hereby agrees to apply the entire Net
        Cash Proceeds (as defined in the Credit Agreement, except that for
        purposes of the SuperSonics Sale only, income tax and transfer taxes
        under clause (iii)(z) of such definition shall not be deducted in the
        calculation of Net Cash Proceeds) upon closing of the sale (x) first, to
        prepayment of the Term Loans as required by Section 2.6(h) of the Credit
        Agreement, until all Term Loans are repaid in full, (y) then, to
        prepayment of the Revolving Loans made in respect of any Revolver
        Increase theretofore implemented, until all such Revolving Loans are
        repaid in full and (z) then, to prepayment of all other Revolving Loans,
        until all Revolving Loans are repaid in full, with a corresponding
        reduction of the Revolving Credit Commitments as provided in Section
        2.6(h) of the Credit Agreement; provided that, as contemplated by
        Section 2.6(f) of the Credit Agreement, the Revolving Credit Commitments
        shall not be reduced pursuant to clause (ii) above below $75,000,000
        even if all the Revolving Loans are prepaid in full pursuant to such
        clause. The parties acknowledge that, as of the date hereof, the
        delayed-draw Unutilized Term Loan Commitments under the Third Amendment
        equal $5,000,000.

        1.4 REVOLVER INCREASE. (a) As of the Effective Date, Section 2.19(a) of
the Credit Agreement is hereby amended by adding thereto the following clause
(vi):

                    (vi) In the event the Borrower (a) effects Borrowings
                pursuant to the Revolver Increase and (b) subsequently receives
                any Net Cash Proceeds in connection with the SuperSonics Sale,
                then notwithstanding the prepayment requirements of Sections
                2.6(f) and 2.6(h), and prior to the application of Net Cash
                Proceeds thereunder, the Borrower shall apply such Net Cash
                Proceeds (provided that for purposes of the SuperSonics Sale
                only, income tax and transfer taxes under clause (iii)(z) of the
                definition of "Net Cash Proceeds" shall not be deducted in
                calculated Net Cash Proceeds) to prepayment of Revolving Loans
                borrowed pursuant to the Revolver Increase, with a corresponding
                permanent reduction in the Revolver Increase.

                                       3

<PAGE>   4
        (b) Clause (i) of Section 4.3(a) is hereby deleted in its entirety and
is replaced with the following:

                    (i) For each Lender participating in the Revolver Increase,
                (A) an amended and restated Revolving Note in the amount of such
                Lender's revised Revolving Credit Commitment (after giving
                effect to such Lender's share of the Revolver Increase) or (B) a
                supplemental Revolving Note in the amount of such Lender's share
                of the Revolver Increase; and for each lender who becomes a
                Lender hereunder pursuant to a Lender Addition and
                Acknowledgment Agreement, a new Revolving Note in the amount of
                such Lender's Revolving Credit Commitment, in each case duly
                executed by the Borrower; and

        (c) The Borrower hereby confirms that it intends to effect a Revolver
Increase of $20,000,000 prior to the consummation of the SuperSonics Sale. The
commitment to make Revolving Loans pursuant to the Revolver Increase will be
borne initially by First Union National Bank (whose Revolving Credit Commitment
will at such time be increased by an amount equal to $20,000,000), which entity
will subsequently enter into one or more Assignment and Acceptances with other
Lenders that are willing to participate in the Revolver Increase. The parties
agree, for purposes of such assignments with respect to the Revolver Increase
contemplated hereby only, that the minimum amount of any assignment (as
prescribed by clause (a)(ii) of Section 11.7 of the Credit Agreement) shall be
$500,000.

        1.5 CAPITAL EXPENDITURES. The text of Section 7.5 of the Credit
Agreement is hereby deleted in its entirety and is replaced with the following:

                    The Borrower and its Subsidiaries will not make Capital
                Expenditures in the aggregate in excess of $50,000,000 during
                the period beginning January 1, 2000 through the fiscal quarter
                ending June 30, 2001.

In addition, the Required Lenders hereby waive any Event of Default arising as
of December 31, 2000 under Section 7.5 of the Credit Agreement.

        1.6 BUDGET REQUIREMENT. The Required Lenders hereby defer (on a one-time
basis only) to March 31, 2001 the requirement (as set forth in Section 6.2(c) of
the Credit Agreement) that the Borrower deliver to the Lenders its consolidated
operating budget for the Borrower and its Subsidiaries for the fiscal year
ending December 31, 2001.

        1.7 CAROLE MEDIA. The Required Lenders hereby consent to the Borrower's
acquisition of Carole Media LLC (which acquisition was consummated during the
fiscal quarter ended December 31, 2000) and further waive any Event of Default
occasioned thereby under Section 6.9 of the Credit Agreement.

                                       4

<PAGE>   5
                                   ARTICLE III

                         REPRESENTATIONS AND WARRANTIES

        The Borrower hereby certifies and warrants to the Administrative Agent
and the Lenders that, after giving effect to the amendments and waivers effected
hereby, (i) each of the representations and warranties contained in Article V of
the Credit Agreement and in the other Credit Documents are true and correct as
of the Effective Date with the same effect as though made on the date hereof
(except to the extent any such representation or warranty is expressly stated to
have been made as of a specific date, in which case such representation or
warranty shall be true and correct as of such specified date), and (ii) no
Default or Event of Default shall have occurred and be continuing on the
Effective Date.

                                   ARTICLE III

                                     GENERAL

        3. EFFECT OF WAIVERS AND AMENDMENTS. From and after the Effective Date,
all references to the Credit Agreement set forth in any other Credit Document or
other agreement or instrument shall, unless otherwise specifically provided, be
references to the Credit Agreement as amended by this Seventh Amendment and as
may be further amended, modified, restated or supplemented from time to time.
This Seventh Amendment is limited as specified and shall not constitute or be
deemed to constitute an amendment, modification or waiver of any provision of
the Credit Agreement except as expressly set forth in Articles I and II hereof.
Except as expressly amended hereby, the Credit Agreement shall remain in full
force and effect in accordance with its terms.

        3.1 APPLICABLE LAW. This Amendment shall be governed by and construed in
accordance with the internal laws and judicial decisions of the State of North
Carolina.

        3.2 COUNTERPARTS. This Amendment may be executed in two or more
counterparts, each of which shall constitute an original, but all of which when
taken together shall constitute but one instrument.

        3.3 EXPENSES. The Borrower agrees to pay all reasonable out-of-pocket
expenses incurred by the Administrative Agent in connection with the
preparation, execution and delivery of this Amendment, including without
limitation all reasonable attorneys' fees.

        3.4 FURTHER ASSURANCES. The Borrower shall execute and deliver to
Administrative Agent such documents, certificates and opinions as the
Administrative Agent may reasonably request to effect the amendment contemplated
by this Amendment and to continue the existence, perfection and first priority
of the Administrative Agent's security interests in the Collateral.

        3.5 HEADINGS. The headings of this Amendment are for the purposes of
reference only and shall not affect the construction of this Amendment.

                                       5

<PAGE>   6
        3.7 EFFECTIVENESS. This Amendment shall become effective (the date the
following conditions are first satisfied being the "Effective Date") upon (i)
the execution of a counterpart hereof by the Borrower, the Administrative Agent
and the Required Lenders, (ii) the execution of the Acknowledgement of Guaranty
attached hereto by each of the Guarantors, (iii) the execution by the Borrower
of a fee letter agreement with the Administrative Agent, satisfactory in form
and substance to the Administrative Agent (the "Seventh Amendment Fee Letter"),
(iv) receipt by the Administrative Agent of such executed counterparts,
acknowledgement and Seventh Amendment Fee Letter, and (v) receipt by the
Administrative Agent of the fees required to be paid as of the consummation of
this Amendment pursuant to the Seventh Amendment Fee Letter.

                                       6

<PAGE>   7
        IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed and delivered by their duly authorized officers all as of the date
first above written.
                                      THE ACKERLEY GROUP, INC.

                                      By:
                                         ------------------------------------
                                      Name:
                                           ----------------------------------
                                      Title:
                                            ---------------------------------

                             (signatures continued)

                                       7

<PAGE>   8
                                      FIRST UNION NATIONAL BANK,
                                      as Administrative Agent and as a Lender

                                      By:
                                         ------------------------------------
                                      Name:
                                           ----------------------------------
                                      Title:
                                            ---------------------------------

                             (signatures continued)

                                       8

<PAGE>   9
                                      FLEET BANK, N.A.,
                                      as Documentation Agent and a Lender

                                      By:
                                         ------------------------------------
                                      Name:
                                           ----------------------------------
                                      Title:
                                            ---------------------------------

                             (signatures continued)

                                       9

<PAGE>   10
                                      KEYBANK NATIONAL ASSOCIATION,
                                      as Co-Agent and as a Lender

                                      By:
                                         ------------------------------------
                                      Name:
                                           ----------------------------------
                                      Title:
                                            ---------------------------------

                             (signatures continued)

                                       10

<PAGE>   11
                                      U.S. BANK NATIONAL ASSOCIATION

                                      By:
                                         ------------------------------------
                                      Name:
                                           ----------------------------------
                                      Title:
                                            ---------------------------------

                             (signatures continued)

                                       11

<PAGE>   12
                                      BANK OF AMERICA, N.A.

                                      By:
                                         ------------------------------------
                                      Name:
                                           ----------------------------------
                                      Title:
                                            ---------------------------------

                             (signatures continued)

                                       12

<PAGE>   13
                                      THE BANK OF NOVA SCOTIA

                                      By:
                                         ------------------------------------
                                      Name:
                                           ----------------------------------
                                      Title:
                                            ---------------------------------

                             (signatures continued)

                                       13

<PAGE>   14
                                      DRESDNER BANK AG, NEW YORK &
                                      GRAND CAYMAN BRANCHES

                                      By:
                                         ------------------------------------
                                      Name:
                                           ----------------------------------
                                      Title:
                                            ---------------------------------

                                      By:
                                         ------------------------------------
                                      Name:
                                           ----------------------------------
                                      Title:
                                            ---------------------------------

                             (signatures continued)

                                       14

<PAGE>   15
                                      THE CIT GROUP/EQUIPMENT FINANCING, INC.

                                      By:
                                         ------------------------------------
                                      Name:
                                           ----------------------------------
                                      Title:
                                            ---------------------------------

                             (signatures continued)

                                       15

<PAGE>   16
                                      BNP PARIBAS

                                      By:
                                         ------------------------------------
                                      Name:
                                           ----------------------------------
                                      Title:
                                            ---------------------------------

                                      By:
                                         ------------------------------------
                                      Name:
                                           ----------------------------------
                                      Title:
                                            ---------------------------------

                             (signatures continued)

                                       16

<PAGE>   17
                                      FIRST HAWAIIAN BANK

                                      By:
                                         ------------------------------------
                                      Name:
                                           ----------------------------------
                                      Title:
                                            ---------------------------------

                             (signatures continued)

                                       17

<PAGE>   18
                                      CITIZENS BANK OF MASSACHUSETTS

                                      By:
                                         ------------------------------------
                                      Name:
                                           ----------------------------------
                                      Title:
                                            ---------------------------------

                             (signatures continued)

                                       18

<PAGE>   19
                                      CREDIT INDUSTRIEL ET COMMERCIAL

                                      By:
                                         ------------------------------------
                                      Name:
                                           ----------------------------------
                                      Title:
                                            ---------------------------------

                                      By:
                                         ------------------------------------
                                      Name:
                                           ----------------------------------
                                      Title:
                                            ---------------------------------

                             (signatures continued)

                                       19

<PAGE>   20
                                      MICHIGAN NATIONAL BANK

                                      By:
                                         ------------------------------------
                                      Name:
                                           ----------------------------------
                                      Title:
                                            ---------------------------------

                             (signatures continued)

                                       20

<PAGE>   21
                                      WASHINGTON MUTUAL BANK
                                      (DBA WESTERN BANK)

                                      By:
                                         ------------------------------------
                                      Name:
                                           ----------------------------------
                                      Title:
                                            ---------------------------------

                             (signatures continued)

                                       21

<PAGE>   22
                                      NATEXIS BANQUE

                                      By:
                                         ------------------------------------
                                      Name:
                                           ----------------------------------
                                      Title:
                                            ---------------------------------

                                      By:
                                         ------------------------------------
                                      Name:
                                           ----------------------------------
                                      Title:
                                            ---------------------------------

                                       22

<PAGE>   23
                           ACKNOWLEDGEMENT OF GUARANTY

        Each of the undersigned, as a guarantor of the Obligations of The
Ackerley Group, Inc. (the "Company") under the Credit Agreement, dated as of
January 22, 1999, among the Company, certain financial institutions party
thereto, First Union National Bank, in its capacity as administrative agent,
Fleet Bank, N.A., in its capacity as documentation agent, and KeyBank National
Association, as Co-Agent (as amended, the "Credit Agreement"), hereby consents
to the foregoing Seventh Amendment to Credit Agreement, and further waives any
defense to its guaranty liability occasioned by such amendment. The foregoing
consent and waiver of the undersigned is made as of effective date of the date
of the Seventh Amendment.

ACKERLEY MEDIA GROUP, INC.              ACKERLEY COMMUNICATIONS OF
                                        MASSACHUSETTS, INC.

By:                                     By:
   ---------------------------------       ------------------------------------
Name:                                   Name:
     -------------------------------         ----------------------------------
Title:                                  Title:
      ------------------------------          ---------------------------------

KVOS TV, LTD.                           CENTRAL NY NEWS, INC.

By:                                     By:
   ---------------------------------       ------------------------------------
Name:                                   Name:
     -------------------------------         ----------------------------------
Title:                                  Title:
      ------------------------------          ---------------------------------

AK FLORIDA OUTDOOR, INC.                TC AVIATION, INC.

By:                                     By:
   ---------------------------------       ------------------------------------
Name:                                   Name:
     -------------------------------         ----------------------------------
Title:                                  Title:
      ------------------------------          ---------------------------------

ACKERLEY INTERACTIVE MEDIA, INC.        AK MOBILE TELEVISION, INC.

By:                                     By:
   ---------------------------------       ------------------------------------
Name:                                   Name:
     -------------------------------         ----------------------------------
Title:                                  Title:
      ------------------------------          ---------------------------------

                                       23

<PAGE>   24
ACKERLEY VENTURES, INC.                 ACKERLEY BROADCASTING FRESNO, LLC

By:                                     By:
   ---------------------------------       ------------------------------------
Name:                                   Name:
     -------------------------------         ----------------------------------
Title:                                  Title:
      ------------------------------          ---------------------------------

IKNOW BAKERSFIELD, LLC

By:     Ackerley Interactive, Inc.
Its:    Sole Member

By:
   ---------------------------------
Name:
     -------------------------------
Title:
      ------------------------------

                                       24<PAGE>   1
                                                                   EXHIBIT 10.14

                            THE ACKERLEY GROUP, INC.

                 NONEMPLOYEE-DIRECTORS' EQUITY COMPENSATION PLAN

                        EFFECTIVE AS OF OCTOBER 31, 1995

 ADOPTED BY BOARD OF DIRECTORS OF THE ACKERLEY GROUP, INC. ON NOVEMBER 14, 1995
  AMENDED BY BOARD OF DIRECTORS OF THE ACKERLEY GROUP, INC. ON MARCH 12, 1997

1.      PURPOSE OF THE PLAN

        The purpose of this Nonemployee-Directors' Equity Compensation Plan (the
"Plan") is to provide for the optional payment to the nonemployee-directors of
The Ackerley Group, Inc. (the "Company") of directors' fees in capital stock of
the Company in order to encourage stock ownership by such directors. The
objective is to promote the further alignment of the interests of such directors
with the stockholders of the Company and, through such alignment, promote the
long-term profits and growth of the Company.

2.      DEFINITIONS

        (a) "Share Price" means the closing price per share for Common Stock
reported on the American Stock Exchange on the last trading day before the
Quarter Date.

        (b) "Common Stock" means the Company's voting Common Stock, par value
$.01 per share.

        (c) "Director" means an individual duly elected or chosen as a director
of the Company who is not also an employee of the Company or any of its
subsidiaries.

        (d) "Directors' Fees" means the fees earned by the Directors for
services rendered as directors of the Company as such amounts are established by
resolution of the Company Board of Directors from time to time.

        (e) "Extraordinary Event" has the meaning set forth in Section 4.

        (f) "Quarter" means any of the following consecutive three-month
periods: May through July, August through October, November through January,
February through April.

        (g) "Quarter Date" means the date on which Directors' Fees for such
Quarter are payable, which date is the last day of each Quarter with the
following exception: for the Quarter ended April 30, 1996 the Directors' fees
are payable May 15, 1996.

        (h) "Rule 16b-3" means the new rule 16b-3 promulgated by the Securities
and Exchange Commission under Section 16 of the Securities Exchange Act of 1934
on May 1, 1991 (or any successor rule to the same effect), as in effect from
time to time.

                                      -1-

<PAGE>   2
        (i) "Shares" means shares of Common Stock that are purchased voluntarily
in accordance with Section 3.1.

        (j) "Voluntary Amount" has the meaning set forth in Section 3.1(a).

3.      PURCHASE OF SHARES

3.1     VOLUNTARY AMOUNT

        (a) Directors' Election. For any Quarter, a Director may elect to have
up to 100% of his or her Directors' Fee payable for such Quarter ("Voluntary
Amount"), applied to the purchase of Shares pursuant to this Plan. This election
is subject to the following conditions:

                (i)     the Direct must notify the Company in writing prior to
                        the end of the Quarter, and

                (ii)    any such election will be irrevocable after the
                        notification deadline.

        (b) Share Issuance. Promptly following each Quarter Date, the Company
will issue to each Director a number of whole Shares equal to such Director's
Voluntary Amount for such Quarter divided by the Share Price. To the extent that
the application of the foregoing formulas would result in fractional Shares, no
fractional shares of Common Stock will be issued by the Company pursuant to this
Plan. Instead, the Company will pay each Director in cash any portion of the
Voluntary Amount not convertible into whole Shares. Shares will be fully paid,
nonassessable shares of Common Stock. Shares may be shares of original issuance
or treasury shares or a combination of the foregoing.

        (c) Withholding Taxes. To the extent that the Company is required to
withhold federal, state or local taxes in connection with any cash component of
a Directors' Fee payable to a Director, and the amounts available to the Company
for such withholding are insufficient, it is a condition to the receipt of any
Shares that the Director make arrangements satisfactory to the Company for the
payment of the balance of such taxes required to be withheld, which arrangements
may include relinquishment of Shares. The Company and Director also may make
similar arrangements with respect to the payment of any other taxes derived from
or related to the payment of Shares with respect to which withholding is not
required.

3.2     RESTRICTIONS ON SHARES

        (a) Dividends, Voting Rights, Exchanges, Etc. Except for any
restrictions required by law, a Director on issuance of Shares to him or her has
all rights of a stockholder with respect to such Shares.

        (b) Restrictions on Transfer of Rights to Shares. No rights to Shares
may be assigned, pledged, hypothecated or otherwise transferred by a Director or
any other person, voluntarily, or involuntarily, other than (i) by will or by
the laws of descent and distribution or (ii) pursuant to a qualified domestic
relations order as defined by the Internal Revenue Code of

                                      -2-

<PAGE>   3
1986, as amended.

4.      AMENDMENT AND TERMINATION

        The Board of Directors of the Company may alter or amend this Plan from
time to time or may terminate it in its entirety subject to the exceptions
specified below.

        (a) Consent of Director. No such action will, without the consent of a
Director, affect the rights in any Shares issued or to be issued to such
Director.

        (b) Stockholder Approval. Without further approval by the stockholders
of the Company no such action will (i) increase the total number of shares of
Common Stock to be issued under this Plan as specified in Section 5 (except that
adjustments and additions expressly authorized by this Section 4 will not be
limited by this Section 4(b)); (ii) change the provisions of Section 3.1(b) that
specify the timing of the issuance or the calculation of the number of Shares to
be issued to a Director; or (iii) cause Rule 16b-3 to become inapplicable to
this Plan.

        (c) Adjustments for Extraordinary Events. The Board of Directors may
make or provide for such adjustments in the number and kind of shares of Common
Stock specified in Section 5 as the Company Board of Directors, in its sole
discretion, exercised in good faith, may determine is equitably required to
reflect (i) any stock dividend, stock split, combination of shares,
recapitalization or any other change in the capital structure of the Company;
(ii) any merger, consolidation, spin-off, split-off, spin-out, split-up,
reorganization, partial or complete liquidation or other distribution of assets,
issuance of rights or warrants to purchase securities; or (iii) any other
corporate transaction or event having an effect similar to any of the foregoing
(the matters described in clauses (i), (ii) and (iii) (collectively referred to
as an "Extraordinary Event").

5.      SHARES SUBJECT TO PLAN

        Subject to adjustment as provided in Section 1(d) of this Plan, the
total number of shares of Common Stock which may be issued under this Plan shall
be 100,000.

6.      PLAN APPROVAL BY STOCKHOLDERS

        The Plan must be submitted for approval by the stockholders of the
Company. If such approval has not been obtained by October 31, 1996, this Plan
will be nullified. In such case, all issuances of Shares and deliveries of
certificates therefor will be rescinded and Directors will receive in cash all
Voluntary Amounts previously paid under the Plan without interest.

7.      GENERAL PROVISIONS

        (a) No Continuing Right as Director. Neither the adoption or operation
of this Plan, nor any document describing or referring to this Plan, or any part
thereof, confers upon any Director any right to continue as director of the
Company or any subsidiary of the Company.

        (b) Governing Law. The provisions of this Plan shall be governed by and
construed in accordance with the laws of the State of Washington.

                                      -3-

<PAGE>   4
        (c) Cash If Shares Not Issued. Pending issuance of the Shares, all
Voluntary Amounts are the property of the Directors and will be paid to them in
cash in the event that the Shares are not issued.

        (d) Miscellaneous. Headings are given to the sections of this Plan
solely as a convenience to facilitate reference. Such headings, numbering and
paragraphing are to be deemed material or relevant to the construction of this
Plan or any its provisions. The use of the masculine gender also includes within
its meaning the feminine. The use of the singular also includes within its
meaning the plural, and vice versa.

8.      EFFECTIVE DATE

        The effective date of this Plan is as of October 31, 1995.

                                      -4-

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