ADVANCED DIGITAL INFORMATION CORP
EXHIBIT 10.9
<DOCUMENT>
<TYPE>EX-10.9
<SEQUENCE>5
<FILENAME>v86970orexv10w9.txt
<DESCRIPTION>EXHIBIT 10.9
<TEXT>
<PAGE>
                                                                    Exhibit 10.9


                    ADVANCED DIGITAL INFORMATION CORPORATION

                  2002 TEAM MEMBER RETENTION STOCK OPTION PLAN

                               SECTION 1. PURPOSE

      The purpose of the Advanced Digital Information Corporation 2002 Team
Member Retention Stock Option Plan (the "PLAN") is to enhance the long-term
shareholder value of Advanced Digital Information Corporation, a Washington
corporation (the "COMPANY"), by offering opportunities to selected persons to
participate in the Company's growth and success, and to encourage them to remain
in the service of the Company and its Related Corporations (as defined in
Section 2) and to acquire and maintain stock ownership in the Company.

                             SECTION 2. DEFINITIONS

      For purposes of the Plan, the following terms shall be defined as set
forth below:

      "BOARD" means the Board of Directors of the Company.

      "CAUSE" means dishonesty, fraud, misconduct, unauthorized use or
disclosure of confidential information or trade secrets, or conviction or
confession of a crime punishable by law (except minor violations), in each case
as determined by the Plan Administrator, and its determination shall be
conclusive and binding.

      "CODE" means the Internal Revenue Code of 1986, as amended from time to
time.

      "COMMON STOCK" means the common stock, no par value, of the Company.

      "CORPORATE TRANSACTION" means any of the following events:

            (a)   Consummation of any merger or consolidation of the Company in
which the Company is not the continuing or surviving corporation, or pursuant to
which shares of the Common Stock are converted into cash, securities or other
property, if following such merger or consolidation the holders of the Company's
outstanding voting securities immediately prior to such merger or consolidation
own less than 2/3 of the outstanding voting securities of the surviving
corporation;

            (b)   Consummation of any sale, lease, exchange or other transfer in
one transaction or a series of related transactions of all or substantially all
of the Company's assets other than a transfer of the Company's assets to a
majority-owned subsidiary corporation (as the term "subsidiary corporation" is
defined in Section 424(f) of the Code) of the Company;

            (c)   Approval by the holders of the Common Stock of any plan or
proposal for the liquidation or dissolution of the Company; or

            (d)   Acquisition by a person, within the meaning of Section 3(a)(9)
or of Section 13(d)(3) (as in effect on the date of adoption of the Plan) of the
Exchange Act of a majority or more of the Company's outstanding voting
securities (whether directly or indirectly, beneficially or of record).
Ownership of voting securities shall take into account and shall include
ownership as
<PAGE>
determined by applying Rule 13d-3(d)(1)(i) (as in effect on the date of adoption
of the Plan) pursuant to the Exchange Act.

      "DISABILITY," unless otherwise defined by the Plan Administrator, means a
mental or physical impairment of the Participant that is expected to result in
death or that has lasted or is expected to last for a continuous period of 12
months or more and that causes the Participant to be unable, in the opinion of
the Company, to perform his or her duties for the Company or a Related
Corporation and to be engaged in any substantial gainful activity.

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

      "FAIR MARKET VALUE" shall be as established in good faith by the Plan
Administrator or (a) if the Common Stock is listed on the Nasdaq National
Market, the average of the high and low per share sales prices for the Common
Stock as reported by the Nasdaq National Market for a single trading day or (b)
if the Common Stock is listed on the New York Stock Exchange or the American
Stock Exchange, the average of the high and low per share sales prices for the
Common Stock as such price is officially quoted in the composite tape of
transactions on such exchange for a single trading day. If there is no such
reported price for the Common Stock for the date in question, then such price on
the last preceding date for which such price exists shall be determinative of
Fair Market Value.

      "GOOD REASON" means the occurrence of any of the following events or
conditions and the failure of the Successor Corporation to cure such event or
condition within 30 days after receipt of written notice from the Participant:

            (a)   a change in the Participant's status, title, position or
responsibilities (including reporting responsibilities) that, in the
Participant's reasonable judgment, represents a substantial reduction in the
status, title, position or responsibilities as in effect immediately prior
thereto; the assignment to the Participant of any duties or responsibilities
that, in the Participant's reasonable judgment, are materially inconsistent with
such status, title, position or responsibilities; or any removal of the
Participant from or failure to reappoint or reelect the Participant to any of
such positions, except in connection with the termination of the Participant's
employment for Cause, for Disability or as a result of his or her death, or by
the Participant other than for Good Reason;

            (b)   a reduction in the Participant's annual base salary;

            (c)   the Successor Corporation's requiring the Participant (without
the Participant's consent) to be based at any place outside a 35-mile radius of
his or her place of employment prior to a Corporate Transaction, except for
reasonably required travel on the Successor Corporation's business that is not
materially greater than such travel requirements prior to the Corporate
Transaction;

            (d)   the Successor Corporation's failure to (i) continue in effect
any material compensation or benefit plan (or the substantial equivalent
thereof) in which the Participant was participating at the time of a Corporate
Transaction, including, but not limited to, the Plan, or (ii) provide the
Participant with compensation and benefits substantially equivalent (in terms of
benefit levels and/or reward opportunities) to those provided for under each
material employee benefit plan, program and practice as in effect immediately
prior to the Corporate Transaction;


                                      -2-
<PAGE>
            (e)   any material breach by the Successor Corporation of its
obligations to the Participant under the Plan or any substantially equivalent
plan of the Successor Corporation; or

            (f)   any purported termination of the Participant's employment or
service relationship for Cause by the Successor Corporation that is not in
accordance with the definition of Cause under the Plan.

      "GRANT DATE" means the date on which the Plan Administrator completes the
corporate action relating to the grant of an Option.

      "OPTION" means the right to purchase Common Stock granted under Section 6.

      "OPTION TERM" has the meaning set forth in Section 6.3.

      "PARENT" means any entity, whether now or hereafter existing, that
directly or indirectly controls the Company.

      "PARTICIPANT" means (a) the person to whom an Option is granted; (b) for a
Participant who has died, the personal representative of the Participant's
estate, the person(s) to whom the Participant's rights under the Option have
passed by will or by the applicable laws of descent and distribution, or the
beneficiary designated in accordance with Section 8; or (c) the person(s) to
whom an Option has been transferred in accordance with Section 8.

      "PLAN ADMINISTRATOR" means the Board or any committee or committees
designated by the Board or any person to whom the Board has delegated authority
to administer the Plan under Section 3.1.

      "RETIREMENT" means retirement as of the individual's normal retirement
date under the Company's 401(k) Plan or other similar successor plan applicable
to salaried employees, unless otherwise defined by the Plan Administrator from
time to time for purposes of the Plan.

      "RELATED CORPORATION" means any Parent or Subsidiary of the Company.

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

      "SUBSIDIARY" means any entity that is directly or indirectly controlled by
the Company.

      "SUCCESSOR CORPORATION" has the meaning set forth in Section 9.3.

      "TERMINATION DATE" has the meaning set forth in Section 6.6.

                            SECTION 3. ADMINISTRATION

3.1   PLAN ADMINISTRATOR

      The Plan shall be administered by the Board and/or a committee or
committees (which term includes subcommittees) appointed by, and consisting of
two or more members of, the Board (a "PLAN ADMINISTRATOR"). The Board may
delegate the responsibility for administering the Plan with respect to
designated classes of eligible persons to different committees consisting of two
or more


                                      -3-
<PAGE>
members of the Board, subject to such limitations as the Board deems
appropriate. Committee members shall serve for such term as the Board may
determine, subject to removal by the Board at any time.

3.2   ADMINISTRATION AND INTERPRETATION BY PLAN ADMINISTRATOR

      Except for the terms and conditions explicitly set forth in the Plan, the
Plan Administrator shall have exclusive authority, in its discretion, to
determine all matters relating to Options under the Plan, including the
selection of individuals to be granted Options, the number of shares of Common
Stock subject to an Option, all terms, conditions, restrictions and limitations,
if any, of an Option and the terms of any instrument that evidences the Option.
The Plan Administrator shall also have exclusive authority to interpret the Plan
and the terms of any instrument evidencing the Option and may from time to time
adopt and change rules and regulations of general application for the Plan's
administration. The Plan Administrator's interpretation of the Plan and its
rules and regulations, and all actions taken and determinations made by the Plan
Administrator pursuant to the Plan, shall be conclusive and binding on all
parties involved or affected. The Plan Administrator may delegate administrative
duties to such of the Company's officers as it so determines.

                      SECTION 4. STOCK SUBJECT TO THE PLAN

4.1   AUTHORIZED NUMBER OF SHARES

      Subject to adjustment from time to time as provided in Section 9.1, the
number of shares of Common Stock that shall be available for issuance under the
Plan shall be 540,000 shares.

      Shares issued under the Plan shall be drawn from authorized and unissued
shares or shares now held or subsequently acquired by the Company.

4.2   NO REUSE OF SHARES

      Shares of Common Stock that have been made subject to an Option that cease
to be subject to the Option as a result of the cancellation or expiration of the
Option or for any other reason may not be reused for issuance in connection with
future grants of Options under the Plan.

                             SECTION 5. ELIGIBILITY

      Options may be granted under the Plan to selected officers and other key
employees of the Company and its Related Corporations as the Plan Administrator
from time to time selects, provided that no Options may be granted to any
director or to any executive officer of the Company or any Related Corporation
who is subject to Section 16 of the Exchange Act.

                               SECTION 6. OPTIONS

6.1   GRANT OF OPTIONS

      The Plan Administrator is authorized under the Plan to issue Options only
as nonqualified stock options (options that are not intended to qualify as an
"incentive stock option" under Section 422 of the Code).


                                      -4-
<PAGE>
6.2   OPTION EXERCISE PRICE

      The exercise price for shares purchased under an Option shall be as
determined by the Plan Administrator, but shall not be less than 100% of the
Fair Market Value of the Common Stock on the Grant Date.

6.3   TERM OF OPTIONS

      The term of each Option (the "OPTION TERM") shall be five years from the
Grant Date.

6.4   EXERCISE OF OPTIONS

      The Plan Administrator shall establish and set forth in each instrument
that evidences an Option the time at which, or the installments in which, the
Option shall vest and become exercisable, which provisions may be waived or
modified by the Plan Administrator at any time. If not so established in the
instrument evidencing the Option, the Option shall vest and become exercisable
according to the following schedule, which may be waived or modified by the Plan
Administrator at any time:

<TABLE>
<CAPTION>
        PERIOD OF PARTICIPANT'S CONTINUOUS
      EMPLOYMENT OR SERVICE WITH THE COMPANY       PERCENT OF TOTAL
       OR ITS RELATED CORPORATIONS FROM THE      OPTION THAT IS VESTED
                OPTION GRANT DATE                   AND EXERCISABLE
      --------------------------------------     ---------------------
<S>                                              <C>
                   After 1 year                            25%
                   After 2 years                           50%
                   After 3 years                           75%
                   After 4 years                          100%
</TABLE>

      The Plan Administrator may adjust the vesting schedule of an Option held
by a Participant who works less than "full-time" as that term is defined by the
Plan Administrator.

      To the extent that an Option has vested and become exercisable, the Option
may be exercised from time to time by delivery to the Company of a written stock
option exercise agreement or notice, in a form and in accordance with procedures
established by the Plan Administrator, setting forth the number of shares with
respect to which the Option is being exercised, the restrictions imposed on the
shares purchased under such exercise agreement, if any, and such representations
and agreements as may be required by the Plan Administrator, accompanied by
payment in full as described in Section 6.5. An Option may not be exercised for
less than 100 shares at any one time (or the lesser number of remaining shares
covered by the Option).


                                      -5-
<PAGE>
6.5   PAYMENT OF EXERCISE PRICE

      The exercise price for shares purchased under an Option shall be paid in
full to the Company by delivery of consideration equal to the product of the
Option exercise price and the number of shares purchased. Such consideration
must be paid in cash or by check or, unless the Plan Administrator in its sole
discretion determines otherwise, either at the time the Option is granted or at
any time before it is exercised, in any combination of

            (a)   cash or check;

            (b)   tendering (either actually or, if and so long as the Common
Stock is registered under Section 12(b) or 12(g) of the Exchange Act, by
attestation) shares of Common Stock already owned by the Participant for at
least six months (or any shorter period necessary to avoid a charge to the
Company's earnings for financial reporting purposes) having a Fair Market Value
on the day prior to the exercise date equal to the aggregate Option exercise
price;

            (c)   if and so long as the Common Stock is registered under Section
12(b) or 12(g) of the Exchange Act, delivery of a properly executed exercise
notice, together with irrevocable instructions, to (i) a brokerage firm
designated by the Company to deliver promptly to the Company the aggregate
amount of sale or loan proceeds to pay the Option exercise price and any
withholding tax obligations that may arise in connection with the exercise and
(ii) the Company to deliver the certificates for such purchased shares directly
to such brokerage firm, all in accordance with the regulations of the Federal
Reserve Board; or

            (d)   such other consideration as the Plan Administrator may permit.

      In addition, to assist a Participant (including a Participant who is an
officer of the Company) in acquiring shares of Common Stock pursuant to an
Option granted under the Plan, the Plan Administrator, in its sole discretion,
may authorize, either at the Grant Date or at any time before the acquisition of
Common Stock pursuant to the Option, (i) the payment by a Participant of a
full-recourse promissory note, (ii) the payment by the Participant of the
purchase price, if any, of the Common Stock in installments, or (iii) the
guarantee by the Company of a full-recourse loan obtained by the Participant
from a third party. Subject to the foregoing, the Plan Administrator shall in
its sole discretion specify the terms of any loans, installment payments or loan
guarantees, including the interest rate and terms of and security for repayment.

6.6   POST-TERMINATION EXERCISES

      The Plan Administrator shall establish and set forth in each instrument
that evidences an Option whether the Option shall continue to be exercisable,
and the terms and conditions of such exercise, if a Participant ceases to be
employed by, or to provide services to, the Company or its Related Corporations,
which provisions may be waived or modified by the Plan Administrator at any
time. If not so established in the instrument evidencing the Option, the Option
shall be exercisable according to the following terms and conditions, which may
be waived or modified by the Plan Administrator at any time:


                                      -6-
<PAGE>
            (a)   Any portion of an Option that is not vested and exercisable on
the date of termination of the Participant's employment or service relationship
(the "TERMINATION DATE") shall expire on such date.

            (b)   Any portion of an Option that is vested and exercisable on the
Termination Date shall expire upon the earliest to occur of

                  (i)   the last day of the Option Term;

                  (ii)  if the Participant's Termination Date occurs for reasons
other than Disability, Retirement, Cause or death, the three-month anniversary
of such Termination Date;

                  (iii) if the Participant's Termination Date occurs by reason
of Disability, Retirement or death, the one-year anniversary of such Termination
Date.

      Notwithstanding the foregoing, if the Participant dies after the
Termination Date while the Option is otherwise exercisable, the portion of the
Option that is vested and exercisable on such Termination Date shall expire upon
the earlier to occur of (y) the last day of the Option Term and (z) the first
anniversary of the date of death, unless the Plan Administrator determines
otherwise.

      Also notwithstanding the foregoing, in case of termination of the
Participant's employment or service relationship for Cause, the Option shall
automatically expire upon first notification to the Participant of such
termination, unless the Plan Administrator determines otherwise. If a
Participant's employment or service relationship with the Company is suspended
pending an investigation of whether the Participant shall be terminated for
Cause, all the Participant's rights under any Option likewise shall be suspended
during the period of investigation.

      A Participant's transfer of employment or service relationship between or
among the Company and its Related Corporations, or a change in status from an
employee to a consultant, agent, advisor or independent contractor, shall not be
considered a termination of employment or service relationship for purposes of
this Section 6. The effect of a Company-approved leave of absence on the terms
and conditions of an Option shall be determined by the Plan Administrator, in
its sole discretion.

6.7   SETTLEMENT OF OPTIONS

      The Company may settle Options through the delivery of shares of Common
Stock, cash payments, the granting of replacement Options or any combination
thereof as the Plan Administrator shall determine. Any Option settlement,
including payment deferrals, may be subject to such conditions, restrictions and
contingencies as the Plan Administrator shall determine. The Plan Administrator
may permit or require the deferral of any Option payment, subject to such rules
and procedures as it may establish, which may include provisions for the payment
or crediting of interest, or dividend equivalents, including converting such
credits into deferred stock equivalents. The Plan Administrator may at any time
offer to buy out, for a payment in cash or Common Stock, an Option previously
granted based on such terms and conditions as the Plan Administrator shall
establish and communicate to the Participant at the time such offer is made.


                                      -7-
<PAGE>
                             SECTION 7. WITHHOLDING

      The Company may require the Participant to pay to the Company the amount
of any withholding taxes that the Company is required to withhold with respect
to the grant, vesting or exercise of any Option. Subject to the Plan and
applicable law, the Plan Administrator may, in its sole discretion, permit the
Participant to satisfy withholding obligations, in whole or in part, (a) by
paying cash, (b) by electing to have the Company withhold shares of Common Stock
(up to the minimum required federal tax withholding rate) or (c) by transferring
to the Company shares of Common Stock (already owned by the Participant for the
period necessary to avoid a charge to the Company's earnings for financial
reporting purposes), in such amounts as are equivalent to the Fair Market Value
of the withholding obligation. The Company shall have the right to withhold from
any Option or any shares of Common Stock issuable pursuant to an Option or from
any cash amounts otherwise due or to become due from the Company to the
Participant an amount equal to such taxes. The Company may also deduct from any
Option any other amounts due from the Participant to the Company or a Related
Corporation.

                            SECTION 8. ASSIGNABILITY

      Options granted under the Plan and any interest therein may not be
assigned, pledged or transferred by the Participant and may not be made subject
to attachment or similar proceedings otherwise than by will or by the applicable
laws of descent and distribution, and, during the Participant's lifetime, such
Options may be exercised only by the Participant. Notwithstanding the foregoing,
the Plan Administrator, in its sole discretion, may permit such assignment,
transfer and exercisability and may permit a Participant to designate a
beneficiary who may exercise the Option or receive compensation under the Option
after the Participant's death; provided, however, that any Option so assigned or
transferred shall be subject to all the same terms and conditions contained in
the instrument evidencing the Option.

                             SECTION 9. ADJUSTMENTS

9.1   ADJUSTMENT OF SHARES

      In the event that, at any time or from time to time, a stock dividend,
stock split, spin-off, combination or exchange of shares, recapitalization,
merger, consolidation, distribution to shareholders other than a normal cash
dividend, or other change in the Company's corporate or capital structure
results in (a) the outstanding shares, or any securities exchanged therefor or
received in their place, being exchanged for a different number or class of
securities of the Company or of any other corporation or (b) new, different or
additional securities of the Company or of any other corporation being received
by the holders of shares of Common Stock of the Company, then the Plan
Administrator shall make proportional adjustments in the number and kind of
securities that are subject to any outstanding Option and the per share price of
such securities, without any change in the aggregate price to be paid therefor.
The determination by the Plan Administrator as to the terms of any of the
foregoing adjustments shall be conclusive and binding. Notwithstanding the
foregoing, a dissolution or liquidation of the Company or a Corporate
Transaction shall not be governed by this Section 9.1 but shall be governed by
Sections 9.2 and 9.3, respectively.


                                      -8-
<PAGE>
9.2   DISSOLUTION OR LIQUIDATION

      In the event of the proposed dissolution or liquidation of the Company,
the Plan Administrator shall notify each Participant as soon as practicable
prior to the effective date of such proposed transaction. The Plan Administrator
in its discretion may permit a Participant to exercise an Option until ten days
prior to such transaction with respect to all vested and exercisable shares of
Common Stock covered thereby and with respect to such number of unvested shares
as the Plan Administrator shall determine. In addition, the Plan Administrator
may provide that any forfeiture provision or Company repurchase option
applicable to any Option shall lapse as to such number of shares as the Plan
Administrator shall determine, contingent upon the occurrence of the proposed
dissolution or liquidation at the time and in the manner contemplated. To the
extent an Option has not been previously exercised, the Option shall terminate
automatically immediately prior to the consummation of the proposed action.

9.3   CORPORATE TRANSACTION

      In the event of a Corporate Transaction, each outstanding Option shall be
assumed or continued or an equivalent option or right substituted by the
surviving corporation, the successor corporation or its parent corporation, as
applicable (the "Successor Corporation"). In the event that the Successor
Corporation refuses to assume, continue or substitute for the Option, the
Participant shall fully vest in and have the right to exercise the Option as to
all of the shares of Common Stock subject thereto, including shares as to which
the Option would not otherwise be vested or exercisable. If an Option will
become fully vested and exercisable in lieu of assumption or substitution in the
event of a Corporate Transaction, the Plan Administrator shall notify the
Participant in writing or electronically that the Option shall be fully vested
and exercisable for a specified time period after the date of such notice, and
the Option shall terminate upon the expiration of such period, in each case
conditioned on the consummation of the Corporate Transaction. For the purposes
of this Section 9.3, the Option shall be considered assumed if, following the
Corporate Transaction, the option or right confers the right to purchase or
receive, for each share of Common Stock subject to the Option, immediately prior
to the Corporate Transaction, the consideration (whether stock, cash, or other
securities or property) received in the Corporate Transaction by holders of
Common Stock for each share held on the effective date of the transaction (and
if holders were offered a choice of consideration, the type of consideration
chosen by the holders of a majority of the outstanding shares); provided,
however, that if such consideration received in the Corporate Transaction is not
solely common stock of the Successor Corporation, the Plan Administrator may,
with the consent of the Successor Corporation, provide for the consideration to
be received upon the exercise of the Option, for each share of Common Stock
subject thereto, to be solely common stock of the Successor Corporation equal in
fair market value to the per share consideration received by holders of Common
Stock in the Corporate Transaction. All Options shall terminate and cease to
remain outstanding immediately following the consummation of the Corporate
Transaction, except to the extent assumed by the Successor Corporation. Any such
Options that are assumed or replaced in the Corporate Transaction and do not
otherwise accelerate at that time shall be accelerated in the event the
Participant's employment or services should subsequently terminate within two
years following such Corporate Transaction, unless such employment or services
are terminated by the Successor Corporation for Cause or by the Participant
voluntarily without Good Reason.


                                      -9-
<PAGE>
9.4   FURTHER ADJUSTMENT OF OPTIONS

      Subject to Sections 9.2 and 9.3, the Plan Administrator shall have the
discretion, exercisable at any time before a sale, merger, consolidation,
reorganization, liquidation or change in control of the Company, as defined by
the Plan Administrator, to take such further action as it determines to be
necessary or advisable, and fair and equitable to the Participants, with respect
to Options. Such authorized action may include (but shall not be limited to)
establishing, amending or waiving the type, terms, conditions or duration of, or
restrictions on, Options so as to provide for earlier, later, extended or
additional time for exercise, lifting restrictions and other modifications, and
the Plan Administrator may take such actions with respect to all Participants,
to certain categories of Participants or only to individual Participants. The
Plan Administrator may take such action before or after granting Options to
which the action relates and before or after any public announcement with
respect to such sale, merger, consolidation, reorganization, liquidation or
change in control that is the reason for such action.

9.5   LIMITATIONS

      The grant of Options shall in no way affect the Company's right to adjust,
reclassify, reorganize or otherwise change its capital or business structure or
to merge, consolidate, dissolve, liquidate or sell or transfer all or any part
of its business or assets.

9.6   FRACTIONAL SHARES

      In the event of any adjustment in the number of shares covered by any
Option, each such Option shall cover only the number of full shares resulting
from such adjustment.

                  SECTION 10. AMENDMENT AND TERMINATION OF PLAN

10.1  AMENDMENT OF PLAN

      The Plan may be amended only by the Board in such respects as it shall
deem advisable.

10.2  TERMINATION OF PLAN

      The Board may suspend or terminate the Plan at any time. The Plan shall
have no fixed expiration date.

10.3  CONSENT OF PARTICIPANT

      The amendment or termination of the Plan or the amendment of an
outstanding Option shall not, without the Participant's consent, impair or
diminish any rights or obligations under any Option theretofore granted to the
Participant under the Plan. Notwithstanding the foregoing, any adjustments made
pursuant to Section 9 shall not be subject to these restrictions.


                                      -10-
<PAGE>
                               SECTION 11. GENERAL

11.1  EVIDENCE OF OPTIONS

      Options granted under the Plan shall be evidenced by a written instrument
that shall contain such terms, conditions, limitations and restrictions as the
Plan Administrator shall deem advisable and that are not inconsistent with the
Plan.

11.2  NO INDIVIDUAL RIGHTS

      Nothing in the Plan or any Option granted under the Plan shall be deemed
to constitute an employment contract or confer or be deemed to confer on any
Participant any right to continue in the employ of, or to continue any other
relationship with, the Company or any Related Corporation or limit in any way
the right of the Company or any Related Corporation to terminate a Participant's
employment or other relationship at any time, with or without Cause.

11.3  REGISTRATION

      Notwithstanding any other provision of the Plan, the Company shall have no
obligation to issue or deliver any shares of Common Stock under the Plan or make
any other distribution of benefits under the Plan unless such issuance, delivery
or distribution would comply with all applicable laws (including, without
limitation, the requirements of the Securities Act), and the applicable
requirements of any securities exchange or similar entity.

      The Company shall be under no obligation to any Participant to register
for offering or resale or to qualify for exemption under the Securities Act, or
to register or qualify under state securities laws, any shares of Common Stock,
security or interest in a security paid or issued under, or created by, the
Plan, or to continue in effect any such registrations or qualifications if made.

      To the extent that the Plan or any instrument evidencing an Option
provides for issuance of stock certificates to reflect the issuance of shares of
Common Stock, the issuance may be effected on a noncertificated basis, to the
extent not prohibited by applicable law or the applicable rules of any stock
exchange.

11.4  NO RIGHTS AS A SHAREHOLDER

      No Option shall entitle the Participant to any cash dividend, voting or
other right of a shareholder unless and until the date of issuance under the
Plan of the shares that are the subject of such Option.

11.5  NO TRUST OR FUND

      The Plan is intended to constitute an "unfunded" plan. Nothing contained
herein shall require the Company to segregate any monies or other property, or
shares of Common Stock, or to create any trusts, or to make any special deposits
for any immediate or deferred amounts payable to any Participant, and no
Participant shall have any rights that are greater than those of a general
unsecured creditor of the Company.


                                      -11-
<PAGE>
11.6  SEVERABILITY

      If any provision of the Plan or any Option is determined to be invalid,
illegal or unenforceable in any jurisdiction, or as to any person, or would
disqualify the Plan or any Option under any law deemed applicable by the Plan
Administrator, such provision shall be construed or deemed amended to conform to
applicable laws, or, if it cannot be so construed or deemed amended without, in
the Plan Administrator's determination, materially altering the intent of the
Plan or the Option, such provision shall be stricken as to such jurisdiction,
person or Option, and the remainder of the Plan and any such Option shall remain
in full force and effect.

11.7  CHOICE OF LAW

      The Plan and all determinations made and actions taken pursuant hereto, to
the extent not otherwise governed by the laws of the United States, shall be
governed by the laws of the State of Washington without giving effect to
principles of conflicts of laws.

                           SECTION 12. EFFECTIVE DATE

      The Effective Date of the Plan is May 15, 2002.


                                      -12-

</TEXT>
</DOCUMENT>
