Document:

EXHIBIT 10.1

                            BUFFALO WILD WINGS, INC.
                           2003 EQUITY INCENTIVE PLAN
                     (As Amended Through February 16, 2006)

                                   SECTION 1.
                                  DEFINITIONS
                                  -----------

     As used herein, the following terms shall have the meanings indicated
below:

     (a)  "Affiliates" shall mean a Parent or Subsidiary of the Company.

     (b)  "Committee"  shall mean a Committee of two or more directors who shall
          be  appointed  by and  serve  at the  pleasure  of the  Board.  If the
          Company's  securities  are  registered  pursuant  to Section 12 of the
          Securities  Exchange  Act of 1934,  as  amended,  then,  to the extent
          necessary for compliance with Rule 16b-3, or any successor  provision,
          each  of  the  members  of  the  Committee  shall  be a  "non-employee
          director."  Solely for  purposes of this Section  1(a),  "non-employee
          director"  shall have the same meaning as set forth in Rule 16b-3,  or
          any successor  provision,  as then in effect, of the General Rules and
          Regulations under the Securities Exchange Act of 1934, as amended.

     (c)  The  "Company"  shall mean  Buffalo  Wild  Wings,  Inc.,  a  Minnesota
          corporation.

     (d)  "Fair  Market  Value" as of any date  shall  mean (i) if such stock is
          listed on the Nasdaq National Market,  Nasdaq SmallCap  Market,  or an
          established  stock  exchange,  the price of such stock at the close of
          the regular  trading  session of such market or exchange on such date,
          as  reported  by The Wall  Street  Journal or a  comparable  reporting
          service,  or, if no sale of such  stock  shall have  occurred  on such
          date,  on the next  preceding  day on which there was a sale of stock;
          (ii) if such  stock is not so listed on the  Nasdaq  National  Market,
          Nasdaq SmallCap Market, or an established stock exchange,  the average
          of the closing  "bid" and "asked"  prices  quoted by the OTC  Bulletin
          Board,  the National  Quotation  Bureau,  or any comparable  reporting
          service  on such date or, if there  are no  quoted  "bid" and  "asked"
          prices on such date,  on the next  preceding  date for which there are
          such quotes;  or (iii) if such stock is not publicly traded as of such
          date,  the  per  share  value  as  determined  by  the  Board,  or the
          Committee,  in its sole discretion by applying principles of valuation
          with respect to the Company's Common Stock.

     (e)  The "Internal  Revenue Code" is the Internal  Revenue Code of 1986, as
          amended from time to time.

     (f)  The  "Participant"  means  (i)  an  employee  of  the  Company  or any
          Subsidiary to whom an incentive stock option has been granted pursuant
          to Section 9, (ii) a consultant or advisor to or director, employee or

<PAGE>

          officer of the Company or any Subsidiary to whom a nonqualified  stock
          option has been granted  pursuant to Section 10, or (iii) a consultant
          or advisor to, or director,  employee or officer of the Company or any
          Subsidiary to whom a restricted  stock award has been granted pursuant
          to Section 17.

     (g)  "Parent" shall mean any corporation which owns, directly or indirectly
          in an unbroken chain,  fifty percent (50%) or more of the total voting
          power of the Company's outstanding stock.

     (h)  The "Plan" means the Buffalo Wild Wings,  Inc.  2003 Equity  Incentive
          Plan,  as amended from time to time,  including the form of Option and
          Award  Agreements  as they may be  modified  by the Board from time to
          time. This Plan amends and restates the Buffalo Wild Wings,  Inc. 1995
          Stock Option Plan,  formerly known as the bw-3, Inc. 1995 Stock Option
          Plan, and, prior to that, known as the JMS Associates, Inc. 1995 Stock
          Option Plan. For purposes of the ten-year period  described in Section
          7, this restatement shall be deemed a new stock option plan.

     (i)  "Stock" shall mean Common Stock of the Company  (subject to adjustment
          as described in Section 12) reserved for  incentive  and  nonqualified
          stock options and restricted stock awards pursuant to this Plan.

     (j)  A "Subsidiary" shall mean any corporation of which fifty percent (50%)
          or more of the  total  voting  power of  outstanding  stock is  owned,
          directly or indirectly in an unbroken chain, by the Company.

                                   SECTION 2.
                                    PURPOSE
                                    -------

     The  purpose of the Plan is to promote  the  success of the Company and its
Subsidiaries by facilitating the employment and retention of competent personnel
and by furnishing incentive to officers, directors, employees,  consultants, and
advisors upon whose efforts the success of the Company and its Subsidiaries will
depend to a large degree.

     It is the  intention  of the  Company  to carry  out the Plan  through  the
granting of stock options which will qualify as "incentive  stock options" under
the  provisions  of Section 422 of the Internal  Revenue  Code, or any successor
provision,  pursuant  to  Section  9 of  this  Plan,  through  the  granting  of
"nonqualified"  stock options  pursuant to Section 10 of this Plan,  and through
the granting of  restricted  stock  awards  pursuant to Section 17 of this Plan.
Adoption  of this Plan shall be and is  expressly  subject to the  condition  of
approval by the  shareholders of the Company within twelve (12) months before or
after the adoption of the Plan by the Board of Directors.

                                       2
<PAGE>

                                   SECTION 3.
                             EFFECTIVE DATE OF PLAN
                             ----------------------

     The Plan  originally  became  effective  as of its date of  adoption by the
Board of Directors on April 18, 1995. The effective  date of the  restatement of
the Plan is the date such  restatement  is approved  by the Board of  Directors,
subject to approval by the shareholders of the Company as required in Section 2.

                                   SECTION 4.
                                 ADMINISTRATION
                                 --------------

     The Plan shall be  administered  by the Board of  Directors  of the Company
(hereinafter  referred  to as  the  "Board")  or by a  Committee  which  may  be
appointed by the Board from time to time to  administer  the Plan  (collectively
referred to as the  "Administrator").  The  Administrator  shall have all of the
powers vested in it under the provisions of the Plan,  including but not limited
to exclusive  authority (where  applicable and within the limitations  described
herein) to determine, in its sole discretion, whether an incentive stock option,
nonqualified  stock  option or  restricted  stock award  shall be  granted,  the
individuals to whom, and the time or times at which, options and awards shall be
granted, the number of shares subject to each option or award, the option price,
and terms and conditions of each option or award. The  Administrator  shall have
full power and authority to administer and interpret the Plan, to make and amend
rules,  regulations and guidelines for  administering the Plan, to prescribe the
form and  conditions of the respective  stock option and restricted  stock award
agreements  (which may vary from  Participant to  Participant)  evidencing  each
option or award and to make all other determinations  necessary or advisable for
the administration of the Plan. The Administrator's  interpretation of the Plan,
and all actions taken and determinations  made by the Administrator  pursuant to
the power vested in it hereunder, shall be conclusive and binding on all parties
concerned.

     No member  of the Board or the  Committee  shall be liable  for any  action
taken or determination  made in good faith in connection with the administration
of the Plan. In the event the Board appoints a Committee as provided  hereunder,
any action of the Committee with respect to the administration of the Plan shall
be taken pursuant to a majority vote of the Committee members or pursuant to the
written resolution of all Committee members.

                                   SECTION 5.
                                 PARTICIPANTS
                                 ------------

     The  Administrator  shall from time to time, at its  discretion and without
approval of the shareholders,  designate those employees to whom incentive stock
options  shall be granted  pursuant to Section 9 of the Plan;  those  employees,
officers,  directors,  consultants  and  advisors  of  the  Company  or  of  any
Subsidiary  to whom  nonqualified  stock  options  shall be granted  pursuant to
Section 10 of the Plan; and those employees,  officers,  directors,  consultants
and advisors of the Company or any  Subsidiary to whom  restricted  stock awards
shall be granted  pursuant to Section 11 of the Plan;  provided,  however,  that
consultants  or  advisors  shall not be  eligible  to receive  stock  options or

                                       3
<PAGE>

restricted stock awards hereunder unless such consultant or advisor renders bona
fide  services  to the  Company  or  Subsidiary  and  such  services  are not in
connection with the offer or sale of securities in a capital raising transaction
and do not directly or indirectly promote or maintain a market for the Company's
securities.  The  Administrator  may grant  additional  incentive stock options,
nonqualified  stock options and restricted  stock awards under this Plan to some
or all  Participants  then  holding  options or awards or may grant  options and
awards solely or partially to new Participants. In designating Participants, the
Administrator  shall  also  determine  the  number of shares to be  optioned  or
awarded  to each such  Participant.  The  Board may from time to time  designate
individuals as being ineligible to participate in the Plan.

                                   SECTION 6.
                                     STOCK
                                     -----

     The Stock to be  optioned  or  awarded  under  this Plan  shall  consist of
authorized but unissued shares of Stock. One Million Four Hundred Fifty Thousand
(1,450,000)  shares of Stock shall be reserved and  available  for stock options
and restricted stock awards under the Plan;  provided,  however,  that the total
number of shares of Stock reserved for options and restricted stock awards under
this Plan shall be subject to  adjustment as provided in Section 12 of the Plan.
In the event (i) any portion of an outstanding  stock option or restricted stock
award under the Plan for any reason expires,  (ii) any portion of an outstanding
stock option is  terminated  prior to the exercise of such option,  or (iii) any
portion of a restricted  stock award is  terminated  prior to the lapsing of any
risks of forfeiture on such stock, the shares of Stock allocable to such portion
of the option or award  shall  continue  to be  reserved  for stock  options and
restricted stock awards under the Plan and may be optioned or awarded hereunder.

                                   SECTION 7.
                                DURATION OF PLAN
                                ----------------

     Incentive  stock  options may be granted  pursuant to the Plan from time to
time  during  a  period  of ten  (10)  years  from  the  effective  date  of the
restatement of this Plan as defined in Section 3. Nonqualified stock options and
restricted  stock  awards may be granted  pursuant to the Plan from time to time
after  the  effective  date of the Plan and until  the Plan is  discontinued  or
terminated by the Board. Any incentive stock option granted during such ten-year
period and any nonqualified stock option or restricted stock award granted prior
to the  termination  of the Plan by the Board  shall  remain  in full  force and
effect until the  expiration  of the option or award as specified in the written
stock option or restricted stock award agreement and shall remain subject to the
terms and conditions of this Plan.

                                   SECTION 8.
                                    PAYMENT
                                    -------

     Participants  may pay for shares  upon  exercise of stock  options  granted
pursuant to this Plan with cash, personal check, certified check or, if approved
by the  Administrator  in its sole  discretion,  previously-owned  shares of the

                                       4
<PAGE>

Company's  Common Stock valued at such Stock's then Fair Market  Value,  or such
other  form  of  payment  as  may  be  authorized  by  the  Administrator.   The
Administrator may, in its sole discretion,  limit the forms of payment available
to the  Participant  and may  exercise  such  discretion  any time  prior to the
termination of the option granted to the Participant or upon any exercise of the
option  by  the  Participant.  "Previously-owned  shares"  means  shares  of the
Company's  Common  Stock  which the  Participant  has owned for at least six (6)
months  prior to the exercise of the stock  option,  or for such other period of
time as may be required by generally accepted accounting principles.

     With  respect to payment in the form of Common  Stock of the  Company,  the
Administrator  may  require  advance  approval  or adopt  such rules as it deems
necessary to assure compliance with Rule 16b-3, or any successor  provision,  as
then in  effect,  of the  General  Rules and  Regulations  under the  Securities
Exchange Act of 1934, if applicable.

                                   SECTION 9.
                 TERMS AND CONDITIONS OF INCENTIVE STOCK OPTIONS
                 -----------------------------------------------

     Each  incentive  stock option  granted  pursuant to this Section 9 shall be
evidenced by a written  stock option  agreement  (the "Option  Agreement").  The
Option  Agreement  shall be in such form as may be approved from time to time by
the  Administrator  and may vary  from  Participant  to  Participant;  provided,
however,  that each  Participant and each Option Agreement shall comply with and
be subject to the following terms and conditions:

     (a)  Number of Shares and Option Price.  The Option  Agreement  shall state
          the total number of shares covered by the incentive  stock option.  To
          the extent required to qualify the Option as an incentive stock option
          under  Section 422 of the  Internal  Revenue  Code,  or any  successor
          provision,  the  option  price  per  share  shall not be less than one
          hundred  percent  (100%) of the Fair Market  Value of the Common Stock
          per share on the date the Administrator  grants the option;  provided,
          however,  that if a Participant  owns stock  possessing  more than ten
          percent  (10%) of the total  combined  voting  power of all classes of
          stock of the  Company or of its Parent or any  Subsidiary,  the option
          price  per  share  of  an  incentive  stock  option  granted  to  such
          Participant  shall not be less than one hundred ten percent  (110%) of
          the Fair Market Value of the Common Stock per share on the date of the
          grant of the option.  The Administrator  shall have full authority and
          discretion  in  establishing  the  option  price  and  shall  be fully
          protected in so doing.

     (b)  Term and  Exercisability  of Incentive  Stock Option.  The term during
          which  any  incentive  stock  option  granted  under  the  Plan may be
          exercised shall be established in each case by the  Administrator.  To
          the extent required to qualify the Option as an incentive stock option
          under  Section 422 of the  Internal  Revenue  Code,  or any  successor
          provision, in no event shall any incentive stock option be exercisable
          during a term of more than ten (10) years from the date on which it is
          granted;   provided,   however,  that  if  a  Participant  owns  stock
          possessing  more than ten percent (10%) of the total  combined  voting

                                       5
<PAGE>

          power of all  classes of stock of the  Company or of its Parent or any
          Subsidiary,  the incentive  stock option  granted to such  Participant
          shall be  exercisable  during a term of not more  than  five (5) years
          from the date on which it is granted. The Option Agreement shall state
          when the incentive  stock option  becomes  exercisable  and shall also
          state the maximum  term during which the option may be  exercised.  In
          the event an incentive  stock option is exercisable  immediately,  the
          manner of exercise of the option in the event it is not  exercised  in
          full  immediately  shall be  specified  in the Option  Agreement.  The
          Administrator  may accelerate the exercise date of any incentive stock
          option granted  hereunder which is not  immediately  exercisable as of
          the date of grant.

     (c)  Withholding.  The  Company  or its  Subsidiary  shall be  entitled  to
          withhold and deduct from future wages of the  Participant  all legally
          required  amounts  necessary  to satisfy any and all  withholding  and
          employment-related taxes attributable to the Participant's exercise of
          an incentive stock option or a  "disqualifying  disposition" of shares
          acquired  through the exercise of an incentive stock option as defined
          in Internal Revenue Code Section 421(b).  In the event the Participant
          is required  under the Option  Agreement to pay the  Company,  or make
          arrangements  satisfactory to the Company  respecting payment of, such
          withholding  and  employment-related  taxes,  the  Board  may,  in its
          discretion  and  pursuant  to such rules as it may  adopt,  permit the
          Participant  to  satisfy  such  obligation,  in whole  or in part,  by
          electing to have the Company withhold shares of Common Stock otherwise
          issuable  to the  Participant  as a result  of the  option's  exercise
          having  a  Fair  Market  Value  equal  to  the  minimum  required  tax
          withholding,  based on the  minimum  statutory  withholding  rates for
          federal and state tax  purposes,  including  payroll  taxes,  that are
          applicable to the supplemental income resulting from the option. In no
          event may the Company or any Affiliate  withhold  shares having a Fair
          Market  Value  in  excess  of  such  statutory  minimum  required  tax
          withholding.  The  Participant's  election to have shares withheld for
          this  purpose  shall  be made on or  before  the date  the  option  is
          exercised or, if later, the date that the amount of tax to be withheld
          is  determined  under  applicable  tax  law.  Such  election  shall be
          approved  by the Board and  otherwise  comply  with such  rules as the
          Board may adopt to assure compliance with Rule 16b-3, or any successor
          provision,  as then in effect,  of the General  Rules and  Regulations
          under the Securities Exchange Act of 1934, if applicable.

     (d)  Other Provisions. The Option Agreement authorized under this Section 9
          shall contain such other  provisions as the  Administrator  shall deem
          advisable.  Any such Option  Agreement shall contain such  limitations
          and restrictions upon the exercise of the option as shall be necessary
          to ensure that such  option will be  considered  an  "incentive  stock
          option" as defined in Section 422 of the  Internal  Revenue Code or to
          conform to any change therein.

                                       6
<PAGE>

                                   SECTION 10.
               TERMS AND CONDITIONS OF NONQUALIFIED STOCK OPTIONS
               --------------------------------------------------

     Each nonqualified stock option granted pursuant to this Section 10 shall be
evidenced by a written Option  Agreement.  The Option Agreement shall be in such
form as may be approved from time to time by the Administrator and may vary from
Participant to Participant;  provided,  however,  that each Participant and each
Option  Agreement  shall comply with and be subject to the  following  terms and
conditions:

     (a)  Number of Shares and Option Price.  The Option  Agreement  shall state
          the total number of shares covered by the  nonqualified  stock option.
          Unless otherwise determined by the Administrator, the option price per
          share shall be one hundred  percent (100%) of the Fair Market Value of
          the Common  Stock per share on the date the  Administrator  grants the
          option; provided,  however, that the option price may not be less than
          eighty-five percent (85%) of the Fair Market Value of the Common Stock
          per share on the date of grant.

     (b)  Term and  Exercisability of Nonqualified Stock Option. The term during
          which any  nonqualified  stock  option  granted  under the Plan may be
          exercised shall be established in each case by the Administrator.  The
          Option  Agreement  shall  state  when the  nonqualified  stock  option
          becomes exercisable and shall also state the maximum term during which
          the option may be exercised.  In the event a nonqualified stock option
          is  exercisable  immediately,  the manner of exercise of the option in
          the event it is not exercised in full  immediately  shall be specified
          in the Option Agreement. The Administrator may accelerate the exercise
          date of any nonqualified  stock option granted  hereunder which is not
          immediately exercisable as of the date of grant.

     (c)  Withholding.  The  Company  or its  Subsidiary  shall be  entitled  to
          withhold and deduct from future wages of the  Participant  all legally
          required  amounts  necessary  to satisfy any and all  withholding  and
          employment-related taxes attributable to the Participant's exercise of
          a nonqualified  stock option. In the event the Participant is required
          under the Option  Agreement to pay the Company or Subsidiary,  or make
          arrangements  satisfactory  to the  Company or  Subsidiary  respecting
          payment  of,  such  withholding  and  employment-related   taxes,  the
          Administrator  may, in its discretion and pursuant to such rules as it
          may adopt, permit the Participant to satisfy such obligation, in whole
          or in part, by delivering  shares of the Company's  Common Stock or by
          electing to have the Company or Subsidiary  withhold  shares of Common
          Stock otherwise issuable to the Participant having a Fair Market Value
          equal to the minimum  required tax  withholding,  based on the minimum
          statutory  withholding  rates for  federal  and  state  tax  purposes,
          including  payroll  taxes,  that are  applicable  to the  supplemental
          income resulting from the exercise of the  nonqualified  stock option.
          In no event may the Company or  Subsidiary  withhold  shares  having a
          Fair Market  Value in excess of such  statutory  minimum  required tax
          withholding.  The  Participant's  election to have shares withheld for
          this  purpose  shall  be made on or  before  the date  the  option  is
          exercised or, if later, the date that the amount of tax to be withheld
          is  determined  under  applicable  tax  law.  Such  election  shall be
          approved by the  Administrator and otherwise comply with such rules as
          the  Administrator  may adopt to assure compliance with Rule 16b-3, or

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<PAGE>

          any successor  provision,  as then in effect, of the General Rules and
          Regulations under the Securities Exchange Act of 1934, if applicable.

     (d)  Other Provisions.  The Option Agreement  authorized under this Section
          10 shall contain such other provisions as the Administrator shall deem
          advisable.

                                   SECTION 11.
                               TRANSFER OF OPTIONS
                               -------------------

     No incentive  stock option shall be  transferable,  in whole or in part, by
the Participant  other than by will or by the laws of descent and  distribution.
During the Participant's  lifetime,  the incentive stock option may be exercised
only by the  Participant.  If the Participant  shall attempt any transfer of any
incentive stock option granted under the Plan during the Participant's lifetime,
such transfer  shall be void and the incentive  stock option,  to the extent not
fully exercised, shall terminate.

     No  nonqualified  stock  option  shall  be  transferred,  except  that  the
Administrator  may, in its sole  discretion,  permit the Participant to transfer
any  or all  nonqualified  stock  options  to any  member  of the  Participant's
"immediate  family" as such term is defined in Rule 16a-1(e)  promulgated  under
the Securities  Exchange Act of 1934, or any successor  provision,  or to one or
more trusts whose  beneficiaries  are members of such  Participant's  "immediate
family" or  partnerships  in which such family  members  are the only  partners;
provided, however, that the Participant cannot receive any consideration for the
transfer and such  transferred  nonqualified  stock option shall  continue to be
subject to the same terms and conditions as were applicable to such nonqualified
stock option immediately prior to its transfer.

                                   SECTION 12.
             RECAPITALIZATION, SALE, MERGER, EXCHANGE OR LIQUIDATION
             -------------------------------------------------------

     If,  following  adoption of this Plan,  the Company  effects an increase or
decrease in the number of shares of Common Stock in the form of a subdivision or
consolidation  of shares,  or the  payment of a stock  dividend,  or effects any
other  increase  or  decrease  in the number of shares of Common  Stock  without
receipt of  consideration  by the Company,  the number of shares of Option Stock
reserved under Section 6 hereof and the number of shares of Option Stock covered
by each  outstanding  option and restricted stock award, and the price per share
thereof,  shall be  appropriately  adjusted by the Board to reflect such change.
Additional  shares which may be credited  pursuant to such  adjustment  shall be
subject to the same restrictions as are applicable to the shares with respect to
which the adjustment relates.

     Unless otherwise provided in the Option or Award Agreement, in the event of
an  acquisition  of the  Company  through the sale of  substantially  all of the
Company's assets and the consequent  discontinuance of its business or through a
merger, consolidation, exchange, reorganization, reclassification, extraordinary
dividend, divestiture or liquidation of the Company (collectively referred to as
a "transaction"), the Board may provide for one or more of the following:

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<PAGE>

     (a)  the equitable  acceleration of the  exercisability  of any outstanding
          options and the lapsing of the risks of forfeiture  on any  restricted
          stock awards;

     (b)  the complete termination of this Plan, the cancellation of outstanding
          options not  exercised  prior to a date  specified by the Board (which
          date shall give  Participants a reasonable  period of time in which to
          exercise the options prior to the effectiveness of such  transaction),
          and the  cancellation  of any  restricted  stock  awards for which the
          risks of forfeiture have not lapsed;

     (c)  that  Participants  holding  outstanding  stock options shall receive,
          with respect to each share of Stock subject to such options, as of the
          effective date of any such transaction, cash in an amount equal to the
          excess of the Fair Market Value of such Stock on the date  immediately
          preceding the effective date of such transaction over the option price
          per share of such  options;  provided  that the Board may,  in lieu of
          such cash payment,  distribute to such Participants shares of stock of
          the  Company  or shares  of stock of any  corporation  succeeding  the
          Company  by reason of such  transaction,  such  shares  having a value
          equal to the cash payment herein;

     (d)  that Participants  holding  outstanding  restricted stock awards shall
          receive,  with respect to each share of Stock  subject to such awards,
          as of the effective  date of any such  transaction,  cash in an amount
          equal to the Fair Market  Value of such Stock on the date  immediately
          preceding the effective  date of such  transaction;  provided that the
          Board  may,  in  lieu  of  such  cash  payment,   distribute  to  such
          Participants  shares of stock of the Company or shares of stock of any
          corporation succeeding the Company by reason of such transaction, such
          shares having a value equal to the cash payment herein;

     (e)  the  continuance  of the Plan with  respect to the exercise of options
          which were outstanding as of the date of adoption by the Board of such
          plan for such  transaction  and provide to  Participants  holding such
          options  the  right to  exercise  their  respective  options  as to an
          equivalent number of shares of stock of the corporation succeeding the
          Company by reason of such transaction; and

     (f)  the  continuance  of the Plan with respect to restricted  stock awards
          for which the risks of  forfeiture  have not  lapsed as of the date of
          adoption by the Board of such plan for such transaction and provide to
          Participants  holding  such awards the right to receive an  equivalent
          number of shares of stock of the corporation succeeding the Company by
          reason of such transaction.

The Board may restrict the rights of or the  applicability of this Section 12 to
the extent necessary to comply with Section 16(b) of the Securities Exchange Act
of 1934,  the Internal  Revenue Code or any other  applicable law or regulation.
The grant of an option or restricted  stock award pursuant to the Plan shall not
limit  in any way  the  right  or  power  of the  Company  to make  adjustments,
reclassifications,  reorganizations  or  changes  of  its  capital  or  business
structure or to merge, exchange or consolidate or to dissolve,  liquidate,  sell
or transfer all or any part of its business or assets.

                                       9
<PAGE>

                                   SECTION 13.
                               INVESTMENT PURPOSE
                               ------------------

     No shares of Common  Stock shall be issued  pursuant to the Plan unless and
until there has been compliance,  in the opinion of Company's counsel,  with all
applicable legal requirements,  including without limitation,  those relating to
securities laws and stock exchange listing  requirements.  As a condition to the
issuance of Stock to Participant,  the Administrator may require  Participant to
(i) represent that the shares of Stock are being acquired for investment and not
resale and to make such other  representations  as the Administrator  shall deem
necessary  or  appropriate  to qualify the issuance of the shares as exempt from
the Securities Act of 1933 and any other  applicable  securities  laws, and (ii)
represent that Participant shall not dispose of the shares of Stock in violation
of the Securities  Act of 1933 or any other  applicable  securities  laws or any
company policies then in effect.

     As a further  condition to the grant of any stock option or the issuance of
Stock to Participant, Participant agrees to the following:

     (a)  In the  event  the  Company  advises  Participant  that  it  plans  an
          underwritten  public  offering of its Common Stock in compliance  with
          the Securities Act of 1933, as amended, and the underwriter(s) seek to
          impose  restrictions under which certain  shareholders may not sell or
          contract  to sell or grant any option to buy or  otherwise  dispose of
          part or all of their stock purchase  rights of the  underlying  Common
          Stock,  Participant will not, for a period not to exceed 180 days from
          the prospectus,  sell or contract to sell or grant an option to buy or
          otherwise dispose of any stock option granted to Participant  pursuant
          to the Plan or any of the  underlying  shares of Common Stock  without
          the   prior   written   consent   of   the   underwriter(s)   or   its
          representative(s).

     (b)  In the event the Company makes any public  offering of its  securities
          and determines in its sole  discretion  that it is necessary to reduce
          the number of issued but  unexercised  stock purchase  rights so as to
          comply with any state's  securities or Blue Sky law  limitations  with
          respect thereto,  the Board of Directors of the Company shall have the
          right (i) to accelerate the exercisability of any stock option and the
          date on which such option must be exercised, provided that the Company
          gives Participant prior written notice of such acceleration,  and (ii)
          to cancel any options or portions  thereof which  Participant does not
          exercise prior to or contemporaneously with such public offering.

     (c)  In the event of a transaction  (as defined in Section 12 of the Plan),
          Participant  will comply with Rule 145 of the  Securities  Act of 1933
          and any other  restrictions  imposed under other  applicable  legal or
          accounting  principles if Participant is an "affiliate" (as defined in
          such  applicable  legal and accounting  principles) at the time of the
          transaction,  and Participant will execute any documents  necessary to
          ensure compliance with such rules.

                                       10
<PAGE>

The Company reserves the right to place a legend on any stock certificate issued
upon the  exercise  of an option or upon the grant of a  restricted  stock award
pursuant to the Plan to assure compliance with this Section 13.

                                   SECTION 14.
                             RIGHTS AS A SHAREHOLDER
                             -----------------------

     A Participant (or the Participant's  successor or successors) shall have no
rights as a shareholder with respect to any shares covered by an incentive stock
option or  nonqualified  stock  option until the date of the issuance of a stock
certificate  evidencing such shares.  No adjustment  shall be made for dividends
(ordinary or  extraordinary,  whether in cash,  securities  or other  property),
distributions  or other  rights for which the  record  date is prior to the date
such stock  certificate  is actually  issued  (except as  otherwise  provided in
Section 12 of the Plan).

                                   SECTION 15.
                              AMENDMENT OF THE PLAN
                              ---------------------

     The Board may from time to time,  insofar as permitted  by law,  suspend or
discontinue  the Plan or revise or amend it in any respect;  provided,  however,
that no such revision or amendment, except as is authorized in Section 12, shall
impair the terms and  conditions of any stock option or  restricted  stock award
which is  outstanding  on the date of such revision or amendment to the material
detriment  of  the   Participant   without  the  consent  of  the   Participant.
Notwithstanding the foregoing,  no such revision or amendment shall (i) increase
the  number of shares  subject  to the Plan  except as  provided  in  Section 12
hereof,  (ii)  change the  designation  of the class of  employees  eligible  to
receive stock options or restricted  stock awards,  (iii)  decrease the price at
which  options  may be  granted,  or (iv)  increase  the  benefits  accruing  to
Participants  under the Plan,  without the approval of the  shareholders  of the
Company if such approval is required for compliance with the requirements of any
applicable  law or  regulation.  Furthermore,  the  Plan may  not,  without  the
approval of the shareholders, be amended in any manner that will cause incentive
stock  options to fail to meet the  requirements  of Section 422 of the Internal
Revenue Code.

                                   SECTION 16.
                        NO OBLIGATION TO EXERCISE OPTION
                        --------------------------------

     The  granting  of a stock  option  shall  impose  no  obligation  upon  the
Participant to exercise such option.  Further, the granting of a stock option or
restricted  stock  award  hereunder  shall not  impose  upon the  Company or any
Subsidiary  any  obligation  to retain  the  Participant  in its  employ for any
period.

                                       11
<PAGE>

                                   SECTION 17.
                RESTRICTED STOCK AND RESTRICTED STOCK UNIT AWARDS
                -------------------------------------------------

     Each restricted  stock/restricted  stock unit award granted pursuant to the
Plan shall be  evidenced  by a written  restricted  stock/restricted  stock unit
agreement (the  `Restricted  Stock Agreement' or `Restricted Unit Agreement,' as
the case may be).  The  Restricted  Stock  Agreement  or  Restricted  Stock Unit
Agreement  shall be in such  form as may be  approved  from  time to time by the
Administrator and may vary from Participant to Participant;  provided,  however,
that each  Participant and each Restricted  Stock Agreement or Restricted  Stock
Unit  Agreement  shall  comply  with and be subject to the  following  terms and
conditions:

     (a)  Number of Shares.  The Restricted  Stock Agreement or Restricted Stock
          Unit Agreement shall state the total number of shares of Stock covered
          by the restricted stock/restricted stock unit award.

     (b)  Risks of  Forfeiture.  The  Restricted  Stock  Agreement or Restricted
          Stock Unit Agreement shall set forth the risks of forfeiture,  if any,
          which  shall  apply to the shares of Stock  covered by the  restricted
          stock/restricted  stock unit  award,  and shall  specify the manner in
          which such risks of forfeiture shall lapse. The Administrator  may, in
          its  sole  discretion,  modify  the  manner  in  which  such  risks of
          forfeiture  shall lapse but only with respect to those shares of Stock
          which are restricted as of the effective date of the modification.

     (c)  Issuance of Shares; Rights as Shareholder.

               (i)  With respect to a restricted  stock award, the Company shall
          cause to be issued a stock  certificate  representing  such  shares of
          Stock in the Participant's name, and shall deliver such certificate to
          the  Participant;  provided,  however,  that the Company shall place a
          legend on such  certificate  describing  the risks of  forfeiture  and
          other transfer restrictions set forth in the Participant's  Restricted
          Stock Agreement and providing for the  cancellation and return of such
          certificate  if the shares of Stock  subject to the  restricted  stock
          award are forfeited.  Until the risks of forfeiture have lapsed or the
          shares subject to such restricted stock award have been forfeited, the
          Participant  shall be entitled to vote the shares of Stock represented
          by  such  stock   certificates   and  shall   receive  all   dividends
          attributable to such shares,  but the  Participant  shall not have any
          other rights as a shareholder with respect to such shares.

               (ii) With respect to a restricted  stock unit award, as the risks
          of forfeiture on the restricted stock units lapse,  the  Administrator
          shall  cause  to be  issued  one or  more  stock  certificates  in the
          Participant's   name  and  shall  deliver  such  certificates  to  the
          Participant in satisfaction of such restricted stock units.  Until the
          risks of forfeiture  on the  restricted  stock units have lapsed,  the
          Participant  shall not be  entitled  to vote any shares of stock which
          may be acquired through the restricted stock units,  shall not receive
          any  dividends  attributable  to such  shares,  and shall not have any
          other rights as a shareholder with respect to such shares.

                                       12
<PAGE>

     (d)  Withholding  Taxes. The Company or its Subsidiary shall be entitled to
          withhold and deduct from future wages of the  Participant  all legally
          required  amounts  necessary  to satisfy any and all  withholding  and
          employment-related  taxes attributable to the Participant's restricted
          stock/restricted  stock unit award.  In the event the  Participant  is
          required under the Restricted Stock Agreement or Restricted Stock Unit
          Agreement  to pay the  Company  or  Subsidiary,  or make  arrangements
          satisfactory to the Company or Subsidiary  respecting payment of, such
          withholding and  employment-related  taxes, the Administrator  may, in
          its discretion and pursuant to such rules as it may adopt, require the
          Participant  to  satisfy  such  obligations,  in whole or in part,  by
          delivering   shares  of  Stock  received   pursuant  to  a  restricted
          stock/restricted  stock  unit  award on which the risks of  forfeiture
          have lapsed or to permit the Participant to satisfy such  obligations,
          in whole or in part, by delivering  shares of Common Stock,  including
          shares of Stock  received  pursuant to a  restricted  stock/restricted
          stock unit award on which the risks of  forfeiture  have lapsed.  Such
          shares  shall have a Fair Market  Value equal to the minimum  required
          tax withholding,  based on the minimum statutory withholding rates for
          federal and state tax  purposes,  including  payroll  taxes,  that are
          applicable to the  supplemental  income  resulting from the lapsing of
          the risks of  forfeiture  on such  restricted  stock/restricted  stock
          unit.  In no event may the  Participant  deliver  shares having a Fair
          Market  Value  in  excess  of  such  statutory  minimum  required  tax
          withholding.  The  Participant's  election to deliver shares of Common
          Stock for this  purpose  shall be made on or before  the date that the
          amount of tax to be withheld is determined  under  applicable tax law.
          Such  election  shall be approved by the  Administrator  and otherwise
          comply  with  such  rules as the  Administrator  may  adopt to  assure
          compliance  with Rule 16b-3,  or any successor  provision,  as then in
          effect,  of the General  Rules and  Regulations  under the  Securities
          Exchange Act of 1934, if applicable.

     (e)  Nontransferability.  No restricted  stock/restricted  stock unit award
          shall be transferable, in whole or in part, by the Participant,  other
          than by will or by the laws of descent and distribution,  prior to the
          date  the  risks  of  forfeiture  described  in the  Restricted  Stock
          Agreement or  Restricted  Stock Unit  Agreement  have  lapsed.  If the
          Participant   shall   attempt   any   transfer   of   any   restricted
          stock/restricted stock unit award granted under the Plan prior to such
          date, such transfer shall be void and the restricted  stock/restricted
          stock unit award shall terminate.

     (f)  Other  Provisions.  The Restricted Stock Agreement or Restricted Stock
          Unit  Agreement  authorized  under this Section 17 shall  contain such
          other provisions as the Administrator shall deem advisable.

                                       13Exhibit 10.1

                                [WFF letterhead]

                                 April 30, 2006

ADVANCED MARKETING SERVICES, INC.
5880 Oberlin Drive
San Diego, California 92121
Attn:  Curt Smith, Chief Financial Officer

         Re:      Loan and Security Agreement, dated as of April 27, 2004 (as
                  amended and modified, from time to time, the "Agreement";
                  initially capitalized terms used but not defined herein shall
                  have the meanings ascribed to such terms in the Agreement), by
                  and among, on the one hand, Advanced Marketing Services, Inc.,
                  Publishers Group, Incorporated and Publishers Group West,
                  Incorporated (collectively, "Borrowers"), and, on the other
                  hand, the lenders identified on the signatures pages to the
                  Agreement ("Lenders"), and Wells Fargo Foothill, Inc.
                  ("Agent"), as the arranger and administrative agent for the
                  Lenders.

Dear Curt:

         Pursuant to Section 6.3(d) of the Agreement, Borrowers are required to
deliver to Agent, with copies to each Lender, certain consolidated financial
statements of Parent and its Subsidiaries for each fiscal year, audited by
independent certified public accountants. Borrowers hereby request and Agent and
the Lenders hereby agree, effective April 30, 2006, to (x) extend to May 31,
2006 the date that the Borrowers are required to deliver such financial
statements for Parent's fiscal year ending March 31, 2004, and (y) extend to
September 30, 2006 the date that the Borrowers are required to deliver such
financial statements for Parent's fiscal years ending March 31, 2005 and March
31, 2006.

         Borrowers acknowledge and agree that their failure to satisfy all of
the above requirements of such Section prior to the above deadlines shall
constitute an Event of Default under the Agreement.

         The waivers, amendments, and extensions herein are limited to the
specifics hereof, shall not apply with respect to any Default or Event of
Default, or any other facts or occurrences other than those on which the same
are based, shall not excuse future non-compliance with the Agreement, and,
except as expressly set forth herein, shall not operate as a waiver or an
amendment of any right, power, or remedy of Agent, nor as a consent to or waiver
of any further or other matter, under the Loan Documents.

         This letter shall constitute a Loan Document and shall be subject to
the provisions regarding governing law, waiver of jury trial, jurisdiction and
venue applicable to the Agreement.

         This waiver letter may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be an original, but all of which shall together
constitute one and the same instrument. Delivery of an executed counterpart of
this letter by telefacsimile shall be equally as effective as delivery of an
original executed counterpart of this letter. Any party delivering an executed
counterpart of this letter by telefacsimile shall also deliver an original
executed counterpart of this letter, but the failure to do so shall not affect
the validity, enforceability or binding effect of this letter. This letter shall
be governed by the laws of the state of California applicable to contracts made
and to be performed in the state of California.

<PAGE>

Advanced Marketing Services, Inc.
April 30, 2006
Page 2

         Please sign and return to the undersigned a copy of this letter
confirming your receipt of this letter and your agreement to the extended
compliance date outlined herein.

                                           Very truly yours,

                                           WELLS FARGO FOOTHILL, INC.,
                                           as Agent and a Lender

                                           By:    /s/ Daniel Whitwer
                                              ----------------------------------
                                                  Daniel Whitwer, Vice President

<PAGE>

Advanced Marketing Services, Inc.
April 30, 2006
Page 3

ACKNOWLEDGED AND ACCEPTED:

ADVANCED MARKETING SERVICES, INC.

By:      /s/ Curtis R. Smith
   --------------------------------------------------
Name     Curtis R. Smith
    -------------------------------------------------
Title:   EVP & CFO
      -----------------------------------------------

PUBLISHERS GROUP, INCORPORATED

By:      /s/ Curtis R. Smith
   --------------------------------------------------
Name     Curtis R. Smith
    -------------------------------------------------
Title:   VP & CFO
      -----------------------------------------------

PUBLISHERS GROUP WEST, INCORPORATED

By:      /s/ Richard C. Freese
   --------------------------------------------------
Name     Richard C. Freese
    -------------------------------------------------
Title:   President
      -----------------------------------------------

<PAGE>

Advanced Marketing Services, Inc.
April 30, 2006
Page 4

LASALLE BUSINESS CREDIT, LLC

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

MARATHON STRUCTURED FINANCE FUND L.P.

By:      /s/ Gary L. Lembo
   --------------------------------------------------
Name     Gary L. Lembo
    -------------------------------------------------
Title:   Director
      -----------------------------------------------

CAPITALSOURCE FINANCE LLC

By:      /s/ Mark Fidati
   --------------------------------------------------
Name     Mark Fidati
    -------------------------------------------------
Title:   Portfolio Manager
      -----------------------------------------------

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