Document:

Exhibit
10.115

       

      
        

         

        AMENDMENT
NO. 1 TO EMPLOYMENT AGREEMENT

         

         

        This Amendment No. 1 to the Employment
Agreement (“Amendment”) is by and between Christopher W. Larkin (“Executive”)
and National Investment Managers Inc. (the “Company”), effective as of August
12, 2010.

         

        Whereas,
reference is made to a certain Employment Agreement (“Employment Agreement”)
between Executive and the Company dated April 15, 2009. All capitalized terms
used herein and not otherwise defined herein shall have the meanings as set
forth in the Employment Agreement;

         

        Whereas,
the Company and Executive are amending the terms of the Employment
Agreement;

         

        Now,
Therefore, for good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, Executive and the Company hereby agree as
follows:

         

        
          	
                  1.  

                	
                  Amend
      Section 2 by replacing it in its entire with the
      following:  “The term of employment under this Agreement shall
      commence on the Effective Date and shall continue, unless otherwise
      terminated earlier pursuant to Section 11, until June 30, 2011. (the
      “Term”).”

                

        

        

        
          	
                  2.  

                	
                  Amend
      11(b) by deleting “without extension as described in Section
      2.”

                

        

         

        
          	
                  3.  

                	
                  Replace
      section 11(f) in its entirety with the
  following:

                

        

        

        
          	
                  (1)  

                	
                  If
      Executive’s employment is terminated by Company other than for Cause, in
      addition to the amounts payable under Section 11(e), Executive shall be
      entitled to receive a one-time single payment, which shall preclude any
      other compensation to Executive (including, without limitation, any other
      payment under this Section 11(f); however, any such payment shall not
      exclude any recapitalization incentive under Section 5.1), equivalent to
      nine months of his then current base salary, and medical and other
      insurance benefits under section 9(a) for a period of twelve (12)
      months.,

                

        

        

        
          	
                  (2)  

                	
                  As
      a condition to the salary and benefit continuation under this Section
      11(f), Executive must first execute and deliver to Company, in a form
      prepared by Company, a release of all claims against Company and other
      appropriate parties, excluding Company’s performance under this Section
      11(f) and of Executive’s vested rights under any Company sponsored
      retirement plans, 401(k) plans and stock ownership
      plans.  Executive shall also be entitled to reimbursement of all
      expenses.

                

        

        

        
          	
                  4.  

                	
                  Add
      a Section 5.1 as follows:

                

        

        

        5.1  Recapitalization
Incentives.

         

        
          
             

          

          
             

            
              

            

          

          
             

          

        

        
          
            Exhibit 10.115

          

        

        
          	
                  a.  

                	
                  Executive
      shall be compensated for work related to a recapitalization effort as
      follows:

                

        

        
          	
                  (i)  

                	
                  Working
      with the Company’s financial advisor to provide information related to
      financial reporting, including budgeting cash flows, cash accounts and
      compliance with established revenue and disbursement
    budgets.

                

        

        
          	
                  (ii)  

                	
                  Developing
      an expense improvement plan, in conjunction with the Company’s financial
      advisor, by which the Company shall reduce its corporate expenses. Working
      to achieve the milestones and targets contained in such plan by the dates
      set forth therein.

                

        

        
          	
                  (iii)  

                	
                  Collaborating
      with the Company’s financial advisor regarding due diligence, preparing
      the offering memorandum, preparing presentation, updating the data site,
      reviewing recapitalization alternatives, negotiating relevant
      recapitalization documents and agreements, and closing a
      transaction.

                

        

        

        
          	
                  b.  

                	
                  The
      recapitalization incentive shall be fifty percent of the amount in Section
      4 of the Employment Agreement to be paid as $1,670.85 bi-monthly (with the
      exception of the first payment for August 13, 2010 which shall be
      $5,012.54), and as part of the Company’s normal payroll, until the close
      of a recapitalization transaction, at which time the unpaid amount of the
      incentive shall be paid.  Notwithstanding any other term herein,
      upon the close of a recapitalization transaction this Section 5.1 and all
      payments hereunder shall become fully vested, earned, accrued, and
      immediately payable.  Executive shall be entitled to the full
      and complete recapitalization incentive provided he does not voluntarily
      resign or is not terminated for
Cause.

                

        

         

        
          	
                  5.  

                	
                  No
      other changes to the Employment Agreement are made, except as expressly
      set forth herein.

                

        

         

        
          	
                  6.  

                	
                  This
      Amendment shall be binding upon and inure to the benefit of the parties
      hereto and their respective successors and assign, and no other parties
      shall be a beneficiary hereunder.  Neither this Amendment nor
      any of the provisions hereof can be changed, waived, discharged or
      terminated except by a written instrument signed by the party against whom
      enforcement the change, waiver, discharge or termination is
      sought.

                

        

         

        
          	
                  7.  

                	
                  This
      Amendment may be signed in counterparts, each of which shall be deemed an
      original and all of which, when taken together, shall constitute one and
      the same instrument.  Signatures delivered by facsimile
      transmission shall have the same force and effect as original signatures
      delivered in person.

                

        

         

        [Remainder
of Page Intentionally Blank – Signature Page Follows]

         

        
          
             

          

          
             

            
              

            

          

          
             

          

        

        Exhibit 10.115

         

         

        IN
WITNESS WHEREOF, the parties have executed this Amendment as of the day and year
first above written.

         

         

        

         

         

        NATIONAL
INVESTMENT MANAGERS
INC.                                                                                          CHRISTOPHER W.
LARKIN

         

        By:_/s/ Steven J.
Ross___________                                                                                                           By:_/s/ Christopher W.
Larkin__

        Name:
Steve. J. Ross

        Title:    CEOPEET’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 3, 2008

    Amended
and Restated on March 16, 2010

     

    
      	
              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.

     

    
      
         

      

      
        1.

        
          

        

      

      
         

      

    

    (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
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 (defined in the Plan the common stock of the company) 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 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 day of
determination.

     

     (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.

     

    
      
         

      

      
        2.

        
          

        

      

      
         

      

    

     

    (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.

     

    
      
         

      

      
        3.

        
          

        

      

      
         

      

    

     

     (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 2009, 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 seventeen thousand five hundred (17,500) 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 five thousand (5,000)
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 granted the pro rata amount of shares
representing the number of full calendar months of service remaining until the
one year anniversary of the previous Annual Meeting.

     

    
      
         

      

      
        4.

        
          

        

      

      
         

      

    

     

    
      	
              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.

     

    
      
         

      

      
        5.

        
          

        

      

      
         

      

    

    (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
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,  100% of the shares
subject to the Annual Grant shall vest on the one year anniversary of the
previous Annual Meeting; provided, however, that if
the Non-Employee Director is not in Continuous Service between the date of grant
and such one year anniversary, 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 calendar month such Non-Employee Director was in
Continuous Service from the date of grant to such one year
anniversary.

     

    (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
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.

     

    
      
         

      

      
        6.

        
          

        

      

      
         

      

    

     

    (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
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.

     

    
      
         

      

      
        7.

        
          

        

      

      
         

      

    

     

    (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.)

     

    (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.

     

    
      
         

      

      
        8.

        
          

        

      

      
         

      

    

     

    (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.

     

    
      	
              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.

     

    
      
         

      

      
        9.

        
          

        

      

      
         

      

    

     

    
      	
              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.

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