Document:

Tully's 1999 Employee Stock Purchase Plan

 Exhibit 10.1 
 TULLY’S COFFEE CORPORATION 
 1999 EMPLOYEE STOCK PURCHASE PLAN 
 Tully’s Coffee Corporation (the “Company”) does hereby establish its 1999 Employee Stock Purchase Plan (the “Plan”) as follows:

 1. PURPOSE OF PLAN. The purpose of this Plan is to provide eligible employees who wish to become shareholders in the Company a convenient
method of doing so. It is believed that employee participation in the ownership of the business will be to the mutual benefit of both the employees and the Company. It is the intention of the Company to have the Plan qualify as an “employee
stock purchase plan” under Section 423 of the Internal Revenue Code of 1986. The provisions of the Plan shall, accordingly, be construed so as to extend and limit participation in a manner consistent with the requirements of that Section
of the Code. 
  

	 	2.	DEFINITIONS. 

 2.1 “BASE PAY” means regular
straight time earnings, plus review cycle bonuses and overtime payments, payments for incentive compensation, and other special payments except to the extent that any such item is specifically excluded by the Board of Directors of the Company (the
“Board”). 
 2.2 “ACCOUNT” shall mean the funds accumulated with respect to an individual employee as a result of
deductions from his paycheck for the purpose of purchasing stock under this Plan. The funds allocated to an employee’s account shall remain the property of the respective employee at all times but may be commingled with the general funds of the
Company. 
 2.3 “CODE” shall mean the Internal Revenue Code of 1986 as further amended. 
 3. EMPLOYEES ELIGIBLE TO PARTICIPATE. Any regular employee of the Company or any of its subsidiaries who is in the employ of the Company on one or more
offering dates is eligible to participate in the Plan, except (a) employees whose customary employment is twenty (20) hours or less per week, and (b) employees whose customary employment is for not more than five (5) months in any
calendar year. 
 4. OFFERINGS. There will be twelve separate consecutive six-month offerings pursuant to the Plan. The first offering shall
commence on January 1, 2000 and terminate June 30, 2000. Thereafter, offerings shall commence on each subsequent July 1 and January 1 and terminate each succeeding December 31 and June 30, and the 

 
final offering under this Plan shall commence on July 1, 2005 and terminate on December 31, 2005. In order to become eligible to purchase shares,
an employee must sign an Enrollment Agreement, and any other necessary papers on or before the commencement date (January 1 or July 1) of the particular offering in which he or she wishes to participate. Participation in one offering under the
Plan shall neither limit, nor require, participation in any other offering. 
 5. PRICE. The purchase price per share shall be the lesser of:
(1) 85% of the fair market value of the stock on the offering date; or (2) 85% of the fair market value of the stock on the last business day of the offering. Fair market value shall mean the closing bid price as reported on the National
Association of Securities Dealers Automated Quotation System (the “NASDAQ”), or if the stock is traded on a stock exchange, the closing price for the stock on the principal such exchange. Until such time as the stock is reported on NASDAQ
or listed on an exchange, reference to the fair market value shall be determined on such basis as shall be established or specified for that purpose by the Board or by a committee selected by the Board. Notwithstanding any provision of the Plan to
the contrary, no determination made with respect to the fair market value of common stock subject to an option shall be inconsistent with Section 423 of the Code or regulations promulgated thereunder. 
 6. OFFERING DATE. The “offering date” as used in this Plan shall be the commencement date of the offering, if such date is a regular business
day, or the first regular business day following such commencement date. A different date may be set by resolution of the Board. 
 7. NUMBER
OF SHARES TO BE OFFERED. The maximum number of shares that may be offered under the Plan shall not exceed four million two hundred thousand (4,200,000) shares of the Company; provided that a portion of the shares so authorized may be allocated to
the 1994 Stock Option Plan. The number of shares allocated to each plan shall be determined by the Board but shall not exceed four million two hundred thousand (4,200,000) shares for both plans. The shares to be sold to participants under the
Plan will be common stock of the Company. If the total number of shares allocated to this Plan for which options are to be granted on any date in accordance with Section 10 exceeds the number of shares then available under the Plan (after
deduction of all shares for which options have been exercised or are then outstanding), the Company shall make a pro rata allocation of the shares remaining available in as nearly a uniform manner as shall be practicable and as it shall determine to
be equitable. In such event, the payroll deductions to be made pursuant to the authorizations therefor shall be reduced accordingly and the Company shall give written notice of such reduction to each employee affected thereby. 
  

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	 	8.	PARTICIPATION. 

 8.1 An eligible employee may become a
participant by completing an Enrollment Agreement provided by the Company and filing it with Shareholder Services prior to the commencement of the offering to which it relates. 
 8.2 Payroll deductions for a participant shall commence on the offering date, and shall end on the termination date of such offering unless earlier
terminated by the employee as provided in Paragraph 14. 
  

	 	9.	PAYROLL DEDUCTIONS. 

 9.1 At the time a participant files
his authorization for a payroll deduction, he or she shall elect to have deductions made from his pay on each payday during the time he or she is a participant in an offering at the rate of 2%, 4%, 6%, 8%, or 10% of his base pay. 
 9.2 All payroll deductions made for a participant shall be credited to his account under the Plan. A participant may not make any separate cash payment
into such account nor may payment for shares be made other than by payroll deduction. 
 9.3 A participant may discontinue his participation
in the Plan as provided in Section 14, but no other change can be made during an offering and, specifically, a participant may not alter the rate of his payroll deductions for that offering. 
 10. GRANTING OF OPTION. On the offering date, this Plan shall be deemed to have granted to the participant an option for as many full shares as he or she
will be able to purchase with the payroll deductions credited to his account during his participation in that offering. Nothwithstanding the foregoing, no participant may purchase more than 2,250 shares of stock during any single offering.

 11. EXERCISE OF OPTION. Each employee who continues to be a participant in an offering on the last business day of that offering shall be
deemed to have exercised his option on such date and shall be deemed to have purchased from the Company such number of full shares of common stock reserved for the purpose of the Plan as his accumulated payroll deductions on such date will pay for
at the option price. 
 12. EMPLOYEE’S RIGHTS AS A SHAREHOLDER. No participating employee shall have any right as a shareholder with
respect to any shares until the shares have been purchased in accordance with Section 11 above and the stock has been issued by the Company. 
  

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	 	13.	EVIDENCE OF STOCK OWNERSHIP. 

 13.1 Promptly following the
end of each offering, the number of shares of common stock purchased by each participant shall be deposited into an account established in the participant’s name at a stock brokerage or other financial services firm designated by the Company
(the “ESPP Broker”). 
 13.2 The participant may direct, by written notice to the Company at the time of his enrollment in the
Plan, that his ESPP Broker account be established in the names of the participant and one other person designated by the participant, as joint tenants with right of survivorship, tenants in common, or community property, to the extent and in the
manner permitted by applicable law. 
 13.3 A participant shall be free to undertake a disposition (as that term is defined in
Section 424(c) of the Code) of the shares in his account at any time, whether by sale, exchange, gift, or other transfer of legal title, but in the absence of such a disposition of the shares, the shares must remain in the participant’s
account at the ESPP Broker until the holding period set forth in Section 423(a) of the Code has been satisfied. With respect to shares for which the Section 423(a) holding period has been satisfied, the participant may move those shares to
another brokerage account of participant’s choosing or request that a stock certificate be issued and delivered to him. 
 13.4 A
participant who is not subject to payment of U.S. income taxes may move his or her shares to another brokerage account of his or her choosing or request that a stock certificate be issued and delivered to him or her at any time, without regard to
the satisfaction of the Section 423(a) holding period. 
  

	 	14.	WITHDRAWAL. 

 14.1 An employee may withdraw from an
offering, in whole but not in part, at any time prior to the last business day of such offering by delivering a Withdrawal Notice to the Company, in which event the Company will refund the entire balance of his or her deductions as soon as
practicable thereafter. 
 14.2 To re-enter the Plan, an employee who has previously withdrawn must file a new Enrollment Agreement in
accordance with Section 8.1. The employee’s re-entry into the Plan will not become effective before the beginning of the next offering following the employees’ withdrawal, and if the withdrawing employee is an officer of the Company
within the meaning of Section 16 of the Securities Exchange Act of 1934, the employee may not re-enter the Plan before the beginning of the second offering following his or her withdrawal. 
 15. CARRYOVER OF ACCOUNT. At the termination of each offering the Company shall automatically re-enroll the employee in the next offering, and the

  

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balance in the employee’s account shall be used for option exercises in the new offering, unless the employee has advised the Company otherwise. Upon
termination of the Plan, the balance of each employee’s account shall be refunded to him or her. 
 16. INTEREST. No interest will be
paid or allowed on any money in the accounts of participating employees. 
 17. RIGHTS NOT TRANSFERABLE. No employee shall be permitted to
sell, assign, transfer, pledge, or otherwise dispose of or encumber either the payroll deductions credited to that employees account or any rights with regard to the exercise of an option or to receive shares under the Plan other than by will or the
laws of descent and distribution, and such right and interest shall not be liable for, or subject to, the debts, contracts, or liabilities of the employee. If any such action is taken by the employee, or any claim is asserted by any other party in
respect of such right and interest whether by garnishment, levy, attachment or otherwise, such action or claim will be treated as an election to withdraw funds in accordance with Section 14. 
 18. TERMINATION OF EMPLOYMENT. Upon termination of employment for any reason whatsoever, including but not limited to death or retirement, the balance in
the account of a participating employee shall be paid to the employee or the employee’s estate. 
 19. AMENDMENT OR DISCONTINUANCE OF
THE PLAN. The Board shall have the right to amend, modify, or terminate the Plan at any time without notice, provided that no employee’s existing rights under any offering already made under Section 4 hereof may be adversely affected
thereby, and provided further that no such amendment of the Plan shall, except as provided in Section 20, increase the shares to be offered above the total number of shares to be offered unless shareholder approval is obtained therefor.

 20. CHANGES IN CAPITALIZATION. In the event of reorganization, recapitalization, stock split, stock dividend, combination of shares,
merger, consolidation, offerings of rights, or any other change in the structure of the common shares of the Company, the Board may make such adjustment, if any, as it may deem appropriate in the number, kind, and the price of shares available for
purchase under the Plan, and in the number of shares which an employee is entitled to purchase. 
 21. SHARE OWNERSHIP. Notwithstanding
anything herein to the contrary, no employee shall be permitted to subscribe for any shares under the Plan if such employee, immediately after such subscription, owns shares (including all shares which may be purchased under outstanding
subscriptions under the Plan) possessing 5% or more of the total combined voting power or value of all classes of shares of the Company or of its parent or subsidiary corporations. For the foregoing purposes the rules of Section 425(d) of the
Code shall apply in determining share ownership. In addition, no employee shall be allowed to subscribe for any shares under the Plan 

  

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which permits him or her rights to purchase shares under all “employee stock purchase plans” (as described in Section 423 of the Code) of the
Company and its subsidiary corporations to accrue at a rate which exceeds $25,000 of the fair market value of such shares (determined at the time such right to subscribe is granted) for each calendar year in which such right to subscribe is
outstanding at any time. 
 22. ADMINISTRATION. The Plan shall be administered by the Board. The Board shall be vested with full authority to
make, administer, and interpret such rules and regulations as it deems necessary to administer the Plan, and any determination, decision, or action of the Board in connection with the construction, interpretation, administration, or application of
the Plan shall be final, conclusive, and binding upon all participants and any and all persons claiming under or through any participant. The Board may delegate any or all of its authority hereunder to such committee as it may designate. 

23. NOTICES. All notices or other communications by a participant to the Company under or in connection with the Plan shall be deemed to have been
duly given when received by Shareholder Services of the Company or when received in the form specified by the Company at the location, or by the person, designated by the Company for the receipt thereof. 
 24. TERMINATION OF THE PLAN. This Plan shall terminate at the earliest of the following: 
 24.1 December 31, 2005. 
 24.2 The date
of the filing of a Statement of Intent To Dissolve by the Company or the effective date or a merger or consolidation wherein the Company is not to be the surviving corporation, which merger or consolidation is not between or among corporations
related to the Company. Prior to the occurrence of either of such events, on such date as the Company may determine, the Company may permit a participating employee to exercise the option to purchase shares for as many full shares as the balance of
his account will allow at the price set forth in accordance with Section 5. If the employee elects to purchase shares, the remaining balance of such employees account will be refunded to him or her after such purchase. 
 24.3 The date the Board acts to terminate the Plan in accordance with Section 19 above. 
 24.4 The date when all shares reserved under the Plan have been purchased. 
 25. LIMITATIONS ON SALE OF STOCK PURCHASED UNDER THE PLAN. The Plan is intended to provide common stock for investment and not for resale. The Company 

  

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does not, however intend to restrict or influence any employee in the conduct of his own affairs. An employee, therefore, may sell stock purchased under the
Plan at any time he or she chooses, subject to compliance with any applicable Federal or state securities laws. THE EMPLOYEE ASSUMES THE RISK OF ANY MARKET FLUCTUATIONS IN THE PRICE OF THE STOCK. 
 26. GOVERNMENTAL REGULATION. The Company’s obligation to sell and deliver shares of the Company’s common stock under this Plan is subject to
the approval of any governmental authority required in connection with the authorization, issuance, or sale of such shares. 
  

 - 7 -Tully's Second Amended and Restated 1994 Stock Option Plan

 Exhibit 10.2 
 TULLY’S COFFEE CORPORATION 
 SECOND AMENDED AND RESTATED 
 1994 STOCK OPTION PLAN 
  

	1.	INTRODUCTION  

 This Plan establishes the
right of and procedures for TULLY’S COFFEE CORPORATION (the “Company”) to grant stock options to its key employees and directors. The Plan provides for the granting of two types of options, namely (1) Non-Qualified Stock Options
to employees and directors and (2) Incentive Stock Options to employees only as the latter are defined and governed by Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”). This Plan sets forth provisions
applicable to both types of options, to Non-Qualified Options only, to Incentive Stock Options only, and to the procedures allowed for the conversion of Non-Qualified Stock Options into Incentive Stock Options. 
  

	2.	PROVISIONS APPLICABLE TO BOTH NON-QUALIFIED OPTIONS AND INCENTIVE STOCK OPTIONS  

 The provisions of this Section 2 apply to both Non-Qualified Options and Incentive Stock Options granted by the Company. 
  

	 	2.1	Objectives of the Plan  

 The purpose of this Plan
is to encourage ownership of shares of common stock of the Company by key employees and directors of the Company and any current or future subsidiary. This Plan is intended to provide an incentive for maximum effort in the successful operation and
management of the Company and is expected to benefit the shareholders by enabling the Company to attract and retain individuals of the best available talent through the opportunity to share, by the proprietary interests created by this Plan, in the
increased value of the Company’s shares to which such individuals have contributed. 
  

	 	2.2	Stock Reserved for This Plan  

 The number of shares
of common stock of the Company reserved for issue upon the exercise of options granted under this Plan shall not exceed four million two hundred thousand (4,200,000) of the issued and outstanding shares of the Company (the “Shares”),
provided that, a portion of the shares so authorized may be allocated to the 1999 Employee Stock Option Plan. The number of shares allocated to each plan shall be determined by the Board of Directors of the Company (the “Board”), but shall

  

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not exceed four million two hundred thousand (4,200,000) Shares for both plans. Shares allocated to this Plan which are subject to any option under this
Plan which are not exercised in full or Shares as to which the right to purchase is forfeited through default or otherwise, shall remain available for other options under this Plan. 
  

	 	2.3	Administration of This Plan  

 This Plan will
be administered by the Board, provided that at all times during which the Company is subject to the periodic reporting requirements of the Securities Exchange Act of 1934 as amended from time to time (the “Exchange Act”) each member of the
Board who participates in the administration of the Plan must be a non-employee director” as that term is defined in Section 16b(3) of the Exchange Act (“Non-employee Directors”). A committee of not less than three members of the
Board who are Non-employee Directors shall be appointed by the Board to carry out the administrative duties of the Board hereunder. 
 A
majority of the Board shall constitute a quorum, and acts of a majority of the members present at any meeting at which a quorum is present, or acts approved in writing by a majority of the Board, shall be deemed the acts of the Board. 
 The Non-employee directors of the Board on consideration of recommendations of the President and of other officers, if the Board shall deem the same
appropriate, shall: 
 (a) Determine the number of Shares subject to each option, the terms thereof, and the type of
options to be granted and direct the President, or other officer in his absence, to issue each such option; 
 (b) Prescribe rules and regulations from time to time for administration of this Plan; and 
 (c) Decide
any questions arising as to the interpretation or application of any provision of this Plan. 
 Any action, decision, interpretation, or
determination by the Board with respect to this Plan shall be final and binding upon any and all employees or directors. 
  

	 	2.4	Eligibility; Facts to Be Considered in Granting Options 

 An option may be granted to any officer, key employee or director who, at the time the option is granted, is an employee or director of the Company or of any subsidiary. In its determination of an employee or director
to whom an option shall be granted and the number of Shares to be covered by such option, the Board shall take into account the duties of the employee or director, the present and potential 

  

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contributions of the employee or director to the success of the Company, and other factors deemed relevant by the Board in connection with accomplishing the
purpose of this Plan. An employee or director who has been granted an option to purchase Shares of the Company, whether under this Plan or otherwise, may, if the Board shall so determine, be granted additional options. 
  

	 	2.5	Vesting of Options 

 The Board shall have the
authority to establish the time of times at which the optioned Shares may be purchased and whether all of the options may be exercised at one time or in increments. 
  

	 	2.6	Rights of Optionee in Event of Merger, Consolidation, Tender Offer, Takeover Bid, Sale of Assets or Dissolution  

 (a) Notwithstanding anything in this Plan to the contrary, the Optionee may purchase the full amount of optioned Shares for which
options have been granted to the Optionee and for which the options have not been exercised under the following conditions: 
 (1) The Optionee may conditionally purchase any or all optioned Shares during the period commencing twenty-seven (27) days and ending (7) days prior to the scheduled effective date of a merger or consolidation (as such
effective date may be delayed from time to time) wherein the Company is not to be the surviving corporation, which merger or consolidation is not between or among the Company and other corporations related to or affiliated with the Company;

 (2) The Optionee may conditionally purchase any or all optioned Shares during the period commencing on the initial
date of a tender offer or takeover bid for the Shares (other than a tender offer by the Company) subject to the Exchange Act and the rules promulgated thereunder and ending on the day preceding the scheduled termination date of acceptance of tenders
of Shares by the offeror under any such tender offer or takeover bid (as such termination date may be extended by such offeror); 
 (3) The Optionee may conditionally purchase any or all optioned Shares during the period commencing on the date the shareholders of the Company approve a sale of substantially all the assets of the Company and ending seven
(7) days prior to the scheduled closing date of such sale (as such closing date may be delayed from time to time); and 
 (4) The Optionee may conditionally purchase any or all optioned Shares during the period commencing on the date the shareholders of the Company approve the dissolution of the Company and ending seven (7) days prior to the
scheduled effective date of such dissolution. 
  

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 (b) If the merger, consolidation, tender offer, takeover bid, sale of assets, or
dissolution, as the case may be and as described in Subsections (1) through (4) of Section 2.6(a), once commenced, is canceled or revoked, the conditional purchase of Shares for which the option to purchase would not have otherwise
been exercisable at the time of said cancellation or revocation, but for the operation of this Section 2.6, shall be rescinded. With respect to all other Shares conditionally purchased, the Optionee may rescind such purchase at his option.

 (c) If the merger, consolidation, tender offer, takeover bid, or sale of assets does occur or one hundred twenty
(120) days passes after the effective date of the dissolution of the Company, as the case may be and as described in Subsections (1) through (4) of Section 2.6(a), and the Optionee has not conditionally purchased all optioned
Shares, all unexercised options shall terminate on the effective, termination, or closing date, or one hundred twenty (120) days after the effective date of said dissolution, as the case may be. 
 (d) If the Company shall be the surviving corporation in any merger or is a party to a merger or consolidation which is between or
among the Company and other corporations related to or affiliated with the Company, any option granted hereunder shall pertain and apply to the securities to which a holder of the number of Shares of common stock subject to the option would have
been entitled. 
 (e) Nothing herein shall allow the Optionee to purchase optioned Shares, the options for which have
expired. 
  

	 	2.7	Terms and Expiration of Options 

 Each option
granted under this Plan shall be in writing, shall be subject to such amendment or modification from time to time as the Board shall deem necessary or appropriate to comply with or take advantage of applicable laws or regulations and shall contain
provisions to the following effect, together with such other provisions as the Board shall from time to time approve: 
 (a) That, subject to the provisions of Section 2.7(b) below, the option, as to the whole or any part thereof, may be exercised only by the Optionee or his personal representative; 
 (b) That neither the whole nor any part of the option shall be transferable by the Optionee or by operation of law otherwise than by
the will of, or by the laws of descent and distribution applicable to, a deceased Optionee and that the option and any and all rights granted to the Optionee thereunder and not theretofore 

  

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effectively and completely exercised shall automatically terminate and expire upon any sale, transfer, or hypothecation of or any attempted sale, transfer,
or hypothecation of such rights or upon the bankruptcy or insolvency of the Optionee or his or her estate; 
 (c) That
subject to the foregoing provisions, an option may be exercised at different times for portions of the total number of option Shares for which the right to purchase shall have vested provided that such portions are in multiples of one hundred
(100) shares; 
 (d) That the Optionee shall have no right to receive any dividend on or to vote or exercise any
right in respect to any Shares the certificate for which has not been issued to him; 
 (e) That each vested option shall
expire at the earliest of the following: 
 (1) The earlier of the date specified in the option or (for options granted
after June 19, 2003) ten (10) years from the date of grant for the option; 
 (2) If the option is an Incentive
Stock Option as described in Section 4.1, then no later than three (3) months after voluntary or involuntary termination of Optionee’s employment other than termination as described in paragraphs (4) or (5) below.

 (3) If the option is not an Incentive Stock Option and the Optionee is, or becomes an employee or a director of the
Company, then no later than three (3) years after: (i) voluntary or involuntary termination of Optionee’s employment if Optionee is a non-director employee or (ii) termination of membership on the Board if Optionee is a
non-employee director, or (iii) termination of both employment and membership on the Board if Optionee is both a director and employee, in all instances other than termination as described in paragraphs (4) or (5) below, provided that
in the event a public market is established for the Company’s stock through an initial public offering or other action, then the exercise period will be reduced from three (3) years to three (3) months effective with the establishment
of the public market (or expiration of any lock-up period associated with the establishment of the public market, if applicable); 
 (4) If the Optionee is, or becomes an employee or a director, upon the discharge of Optionee from employment or resignation or removal from the Board for or related to misconduct, willfully or wantonly harmful to the Company;

 (5) One (1) year after Optionee’s death; or 
  

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 (6) Upon the occurrence of a merger, consolidation, tender offer, takeover bid, sale of assets, or
filing of Articles of Dissolution, as the case may be and as described in Subsections (1) through (4) of Section 2.6(a) (collectively, a “Change of Control Event”), on the date specified in Section 2.6(c). However, if
the merger, consolidation, tender offer, takeover bid, or sale of assets does not occur or if Articles of Dissolution are revoked, as the case may be and as described in Subsections (1) through (4) of Section 2.6(a), all options which
are terminated pursuant to this Subsection (e)(5) shall be reinstated as if no action with respect to any of said events had been contemplated or taken by any party thereto and all Optionees shall be returned to their position on the date of
termination; 
 (f) That, to the extent an option provides for the vesting thereof in increments, such vesting shall
cease as of the date of the Optionee’s death or (i) voluntary or involuntary termination of Optionee’s employment with the Company if Optionee is an non-director employee or, (i) termination or removal of membership on the Board
if Optionee is a non-employee director, or (ii) termination of both employment and membership on the Board if Optionee is both a director and employee, in all instances regardless whether such termination, resignation or removal is voluntary or
involuntary; and 
 (g) That the terms of the option shall not be affected by any change of duties or position so long as
the Optionee shall continue to be employed by the Company or a subsidiary. 
 (h) Each unvested option shall expire upon:
(i) any termination of Optionee’s employment with the Company if Optionee is an non-director employee, or (ii) upon Optionee’s resignation or removal from the Board if Optionee is a non-employee director, or (iii) upon
termination of both employment and membership on the Board if Optionee is both a director and employee, in all instances regardless whether such termination, resignation or removal is voluntary or involuntary, or upon the death of Optionee, or
(iv) upon the death of Optionee. 
  

	 	2.8	Notice of Intent to Exercise Option 

 The Optionee
(or other person or persons, if any, entitled thereto hereunder) desiring to exercise an option granted hereunder as to all or part of the Shares covered thereby shall in writing notify the Company at its principal office in Seattle, Washington, to
the effect specifying the number of option Shares to be purchased and, if required by the Company, representing in form satisfactory to the Company that the Shares are being purchased for investment and not with a view to resale or distribution.
With respect to any Shares conditionally purchased pursuant to Section 2.6(a) above and for which such purchase has not been voluntarily or otherwise rescinded pursuant to Section 2.6(b), the Optionee shall be deemed to have given to the
Company the notice of exercise required by this Section 2.8 as of ten (10) days prior to the closing or 

  

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effective date of the merger, consolidation, tender offer, takeover bid, or sale of assets or as of the tenth (10th) day before the filing of Articles
of Dissolution, as the case may be and as described in Subsections (1) through (4) of Section 2.6(a). 
  

	 	2.9	Method of Exercise of Option 

 Within ten
(10) days after receipt by the Company of the notice provided in the foregoing Section 2.8, but not later than the expiration date specified in Section 2.7(e), the option shall be exercised as to the number of Shares specified in the
notice by payment to the Company of the amount specified in either Section 3.2 or Section 4.5, as may be applicable. Payment of the purchase price provided in the option shall be made in cash, in shares of the Company’s common stock
owned by the Optionee (for a period of not less than six months at the time of exercise*), or in any combination of cash and shares of the Company’s common stock (owned by Optionee for a period of not less than six months at the time of
exercise*). Payment in shares of the Company’s common stock shall be deemed to be the equivalent of payment in cash of the fair market value of those shares. For purposes of the preceding sentence, “fair market value” shall be
determined by the Board in the same manner as utilized in determining the fair market value at the time other options are granted. 
  

	 	*	Six month minimum holding period applies to shares of common stock tendered for options granted after June 19, 2003.  

  

	 	2.10	Recapitalization 

 The aggregate number of Shares
for which options may be granted hereunder, the number of Shares covered by each outstanding option and the price per Share thereof in each such option shall be proportionally adjusted for an increase or decrease in the number of outstanding shares
of common stock of the Company resulting from a division or consolidation of shares or any other increase or decrease in such shares effected without receipt of consideration by the Company excluding any decrease resulting from the purchase of
shares for the treasury. If the adjustment would result in a fractional share, the Optionee shall be entitled to one (1) additional share, provided that the total number of shares to be granted under this Plan shall not be increased above the
equivalent number of Shares initially allocated or later increased by approved amendment to this Plan. 
  

	 	2.11	Substitutions and Assumptions 

 The Board shall have
the right to substitute or assume options in connection with mergers, reorganizations, separations, or other “corporate transactions” as that term is defined in and said substitutions and assumptions are permitted by Section 424 of
the Code and the regulations promulgated thereunder. The number of Shares reserved pursuant to Section 2.2 may be increased by the corresponding number of options assumed and, in the case of a substitution, by the net increase in the number of
Shares subject to options before and after the substitution. 
  

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	 	2.12	Termination 

 The Board may at any time terminate
this Plan provided, however, that no termination of the Plan may adversely affect options granted prior to such action. 
  

	 	2.13	Granting of Options 

 The granting of any option
pursuant to this Plan shall be entirely in the discretion of the Board and nothing herein contained shall be construed to give any officer, employee or director any right to participate under this Plan or to receive any option under it. 

The granting of an option pursuant to this Plan shall not constitute any agreement or an understanding, express or implied, on the part of the Company
or a subsidiary to employ the Optionee for any specified period. 
  

	 	2.14	Government Regulations 

 This Plan and the granting
and exercise of any option hereunder and the obligations of the Company to sell and deliver Shares under any such option shall be subject to all applicable laws, rules and regulations and to such approvals by any governmental agencies as may be
required. 
  

	 	2.15	Proceeds From Sale of Stock 

 Proceeds of the
purchase of optioned Shares by an Optionee shall be for the general business purposes of the Company. 
  

	 	2.16	Shareholder Approval 

 This Plan shall be submitted
to the shareholders for their approval within twelve (12) months from the date hereof. The Company may grant options prior to such approval which shall be conditioned upon subsequent shareholder approval. 
  

	 	2.17	Compliance With Securities Laws 

 The Board shall
have the right to: 
 (a) require an Optionee to execute, as a condition of the exercise of an option, a letter
evidencing Optionee’s intent to acquire the Shares for investment and not with a view to the resale or distribution thereof, 
  

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 (b) place appropriate legends upon the certificate or certificates for the Shares;
and 
 (c) take such other acts as it deems necessary in order to cause the issuance of optioned Shares to comply with
applicable provisions of State and Federal Securities Laws. 
 In furtherance of the foregoing, and not by way of limitation thereof, no
option shall be exercisable unless such option and the Shares to be issued pursuant thereto shall be registered under appropriate Federal and State Securities Laws, or shall be exempt therefrom, in the opinion of the Board upon advice of counsel to
the Company. Each option agreement shall contain adequate provisions to assure that there will be no violation of such laws. This provision shall in no way obligate the Company to undertake registration of options or Shares hereunder. Issue,
transfer or delivery of certificates for Shares pursuant to the exercise of options may be delayed, at the discretion of the Board, until the Board is satisfied that the applicable requirements of the Federal and State Securities Laws have been met.

  

	 	2.18	Termination Date of Plan 

 This Plan shall not
extend beyond October 19, 2004. 
  

	3.	PROVISIONS APPLICABLE SOLELY TO NON-QUALIFIED STOCK OPTIONS 

 In addition to the provisions of Section 2 above, the following paragraphs shall apply to any options granted under this Plan which are not Incentive Stock Options. 
  

	 	3.1	Option Price 

 The option or purchase price of each
Share optioned under this Plan shall be determined by the Board at the time of the action for the granting of the option. 
  

	 	3.2	Method of Exercise of Option 

 The amount to be paid
by the Optionee upon exercise of a Non-Qualified Option shall be the full purchase price thereof provided in the option, together with the amount of federal, state, and local income and FICA taxes required to be withheld by the Company. An Optionee
may elect to pay his federal, state, or local income and FICA withholding tax by having the Company withhold shares of common stock of the Company having a value equal to the amount required to be withheld. The value of the shares to be withheld is
deemed to equal the fair market value of the Shares on the day 

  

 9 

 
the option is exercised. An election by an Optionee to have shares withheld for this purpose will be subject to the following restrictions: 
 (a) If an Optionee has received multiple option grants, a separate election must be made for each grant; 
 (b) The election must be made prior to the day the option is exercised; 
 (c) The election will be irrevocable; 
 (d) The election will be subject to the disapproval of the Board; 
 (e) If the
Optionee is an officer of the Company within the meaning of Section 16 of the Exchange Act (“Section 16”), the election may not be made within six (6) months following the grant of the option; and 
 (f) If the Optionee is an officer of the Company within the meaning of Section 16, the election must be made either six
(6) months prior to the day the option is exercised or the ten (10) day “window” beginning on the third day following the release of the Company’s quarterly or annual summary statement of sales and earnings. 
  

	 	3.3	Eligibility 

 A Non-Qualified Option under this Plan
may be granted to either employees or directors of the Company as determined by the Board in accordance with Section 2, above. 
  

	4.	PROVISIONS APPLICABLE SOLELY TO INCENTIVE STOCK OPTIONS 

 In addition to the provisions of Section 2 above, the following paragraphs shall apply to any options granted under this Plan which are Incentive Stock Options. 
  

	 	4.1	Conformance With Internal Revenue Code 

 Options
granted under this Plan which are “Incentive Stock Options” shall conform to, be governed by and interpreted in accordance with Sections 422 and 424 of the Code and any regulations (“Regulations”) promulgated thereunder and
amendments to the Code and Regulations. 
  

 10 

	 	4.2	Option Price 

 The option or purchase price of each
Share optioned under the Incentive Stock Option provisions of this Plan shall be determined by the Board at the time of the action for the granting of the option but shall not, in any event, be less than the fair market value of the Company’s
common stock on the date of grant. 
  

	 	4.3	Limitation on Amount of Incentive Stock Option  

 The aggregate fair market value of the option Shares (determined as of the date of grant) with respect to which an Optionee’s right to exercise vest in any one calendar year (under this Plan or any other plan of the Company which
authorized Incentive Stock Options) shall not exceed One Hundred Thousand Dollars ($100,000). 
  

	 	4.4	Limitation on Grants to Substantial Shareholders  

 An employee may not, immediately prior to the grant of an Incentive Stock Option hereunder, own stock in the Company representing more than ten percent (10%) of the voting power of all classes of stock of the Company unless the per
share option price specified by the Board for the Incentive Stock Options granted such an employee is at least one hundred ten percent (110%) of the fair market value of the Company’s common stock on the date of grant and such option, by
its terms, is not exercisable after the expiration of five (5) years from the date such option is granted. 
  

	 	4.5	Method of Exercise of Option  

 The amount to be
paid by the Optionee upon exercise of an Incentive Stock Option shall be the full purchase price thereof provided in the option. 
  

	 	4.6	Eligibility 

 An Incentive Stock Option under this
Plan may be granted to employees (but not directors) of the Company as determined by the Board in accordance with Section 2, above. 
  

	5.	EXCHANGE OF NON-QUALIFIED OPTIONS FOR INCENTIVE STOCK OPTIONS 

 At the Optionee’s election and in accordance with the procedures described below, an Optionee may exchange a Non-Qualified Option granted pursuant to this Plan for an Incentive Stock Option for the identical
number of Shares. 
  

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	 	5.1	Notice of Intent to Exchange  

 Not less than
seven (7) days prior to the desired date of exchange, the Optionee shall notify the Company in writing to that effect specifying the number of option Shares granted under Non-Qualified Options which are to be exchanged for option Shares granted
under Incentive Stock Options and the desired date of exchange. 
  

	 	5.2	Limitations on Amount of Options Exchanged 

 Notwithstanding the number of option Shares specified by the Optionee as desired to be exchanged pursuant to this Section 5, the Company will allow exchanges for only so many options as will not violate the aggregate dollar limitations
specified in Section 4.3 above with that limit being based on a calculation of the fair market value on the date of exchange. If an Optionee requests to exchange more option Shares than would be allowed by the preceding sentence, the Company
shall deem the request to apply only to the maximum number of option Shares which would be allowed and shall disregard the request as to the excess. 
  

	 	5.3	Effect of Exchange 

 If an exchange does occur, the
Optionee shall surrender the Non-Qualified Option for cancellation and shall execute a new Incentive Stock Option for the number of option Shares exchanged and, if all of the Non-Qualified Options have not been exchanged, shall execute a new
Non-Qualified Option (or an amendment to the existing option) to specify the remainder of Shares under the Non-Qualified Option. The new Incentive Stock Option shall be deemed a new option granted on the date of exchange. 
  

	6.	AMENDMENT OF PLAN 

 This Plan may be modified or
amended by the affirmative vote of a majority of the whole Board of Directors at any meeting of the Board, if notice of the proposed amendment is contained in the notice of the meeting, provided that no such action shall adversely affect any
material rights of Optionees granted Stock Options under this Plan prior to such action. The Board may modify or amend the terms and conditions of outstanding Stock Options, provided, however, that (i) no such amendment would be adverse to the
holders of such Stock Options, (ii) no such amendment shall extend the period for exercise of an Incentive Stock Option, and (iii) the amended terms of a Stock Option would be permitted under this Plan. In addition, the Board of Directors
may not modify the Plan with respect to any provision applicable to an option which constitutes an Incentive Stock Option under Section 422(b) of the Internal Revenue Code in a manner that would constitute the adoption of a new plan without
obtaining the consent of the Shareholders of the Company within twelve (12) months of the adoption of the modification. 
  

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 DATE Amended Plan adopted by Board of Directors: June 19, 2003 
 DATE Amended Plan adopted by Shareholders: (approval not required for 2nd Amendment) 
 DATE Amended Plan shall terminate: October 19, 2004 
  

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