BROADCAST INTERNATIONAL, INC.
2008 EQUITY INCENTIVE PLAN

1.

PURPOSE.  The purpose of this Plan is to provide incentives to attract, retain
and motivate eligible persons whose present and potential contributions are
important to the success of the Company, and any Parents and Subsidiaries that
exist now or in the future, by offering them an opportunity to participate in
the Company’s future performance through the grant of Awards.  Capitalized terms
not defined elsewhere in the text are defined in Section 27.

2.

SHARES SUBJECT TO THE PLAN.

2.1

Number of Shares Available.  Subject to Sections 2.5 and 21 and any other
applicable provisions hereof, the total number of Shares reserved and available
for grant and issuance pursuant to this Plan is 4,000,000.  The Company may
issue Shares that are authorized but unissued shares pursuant to the Awards
granted under the Plan.

2.2

Lapsed, Returned Awards.  Shares subject to Awards, and Shares issued upon
exercise of Awards, will again be available for grant and issuance in connection
with subsequent Awards under this Plan to the extent such Shares: (i) are
subject to issuance upon exercise of an Option or SAR granted under this Plan
but which cease to be subject to the Option or SAR for any reason other than
exercise of the Option or SAR; (ii) are subject to Awards granted under this
Plan that are forfeited or are repurchased by the Company at the original issue
price; (iii) are subject to Awards granted under this Plan that otherwise
terminate without such Shares being issued; or (iv) are surrendered pursuant to
an Exchange Program.  Shares used to pay the exercise price of an Award or to
satisfy the tax withholding obligations related to an Award will become
available for future grant or sale under the Plan.  To the extent an Award under
the Plan is paid out in cash rather than Shares, such cash payment will not
result in reducing the number of Shares available for issuance under the Plan.

2.3

Minimum Share Reserve.  At all times the Company shall reserve and keep
available a sufficient number of Shares as shall be required to satisfy the
requirements of all outstanding Awards granted under this Plan and all other
outstanding but unvested Awards granted under this Plan.

2.4

Limitations.  No more than 3,000,000 Shares shall be issued pursuant to the
exercise of ISOs.  

2.5

Adjustment of Shares.  If the number of outstanding Shares is changed by a stock
dividend, recapitalization, stock split, reverse stock split, subdivision,
combination, reclassification or similar change in the capital structure of the
Company, without consideration, then (a) the number of Shares reserved for
issuance and future grant under the Plan set forth in Section 2.1, (b) the
Exercise Prices of and number of Shares subject to outstanding Options and SARs,
(c) the number of Shares subject to other outstanding Awards, (d) the maximum
number of shares that may be issued as ISOs set forth in Section 2.4, and (e)
the maximum number of Shares that may be issued to an individual or to a new
Employee in any one calendar year set forth in Section 3, shall be
proportionately adjusted, subject to any required action by the Board

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or the stockholders of the Company and in compliance with applicable securities
laws; provided that fractions of a Share will not be issued.  

3.

ELIGIBILITY.  ISOs may be granted only to Employees.  All other Awards may be
granted to Employees, Consultants, Directors and Outside Directors of the
Company or any Parent or Subsidiary of the Company; provided such Consultants,
Directors and Outside Directors render bona fide services not in connection with
the offer and sale of securities in a capital-raising transaction.

4.

ADMINISTRATION.

4.1

Committee Composition; Authority.  This Plan will be administered by the
Committee or by the Board acting as the Committee.  Subject to the general
purposes, terms and conditions of this Plan, and to the direction of the Board,
the Committee will have full power to implement and carry out this Plan.  The
Committee will have the authority to:

(a)

construe and interpret this Plan, any Award Agreement and any other agreement or
document executed pursuant to this Plan;

(b)

prescribe, amend and rescind rules and regulations relating to this Plan or any
Award;

(c)

select persons to receive Awards;

(d)

determine the form and terms and conditions, not inconsistent with the terms of
the Plan, of any Award granted hereunder.  Such terms and conditions include,
but are not limited to, the exercise price, the time or times when Awards may be
exercised (which may be based on performance criteria), any vesting acceleration
or waiver of forfeiture restrictions, and any restriction or limitation
regarding any Award or the Shares relating thereto, based in each case on such
factors as the Committee will determine;

(e)

determine the number of Shares or other consideration subject to Awards;

(f)

determine the Fair Market Value in good faith, if necessary;

(g)

determine whether Awards will be granted singly, in combination with, in tandem
with, in replacement of, or as alternatives to, other Awards under this Plan or
any other incentive or compensation plan of the Company or any Parent or
Subsidiary of the Company;

(h)

grant waivers of Plan or Award conditions;

(i)

determine the vesting, exercisability and payment of Awards;

(j)

correct any defect, supply any omission or reconcile any inconsistency in this
Plan, any Award or any Award Agreement;

(k)

determine whether an Award has been earned;

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(l)

determine the terms and conditions of any, and to institute any Exchange
Program;

(m)

reduce or waive any criteria with respect to Performance Factors;

(n)

adjust Performance Factors to take into account changes in law and accounting or
tax rules as the Committee deems necessary or appropriate to reflect the impact
of extraordinary or unusual items, events or circumstances to avoid windfalls or
hardships provided that such adjustments are consistent with the regulations
promulgated under Section 162(m) of the Code with respect to persons whose
compensation is subject to Section 162(m) of the Code; and

(o)

make all other determinations necessary or advisable for the administration of
this Plan.  

4.2

Committee Interpretation and Discretion.  Any determination made by the
Committee with respect to any Award shall be made in its sole discretion at the
time of grant of the Award or, unless in contravention of any express term of
the Plan or Award, at any later time, and such determination shall be final and
binding on the Company and all persons having an interest in any Award under the
Plan.  Any dispute regarding the interpretation of the Plan or any Award
Agreement shall be submitted by the Participant or Company to the Committee for
review.  The resolution of such a dispute by the Committee shall be final and
binding on the Company and the Participant.  The Committee may delegate to one
or more executive officers the authority to review and resolve disputes with
respect to Awards held by Participants who are not Insiders, and such resolution
shall be final and binding on the Company and the Participant.  

4.3

Section 162(m) of the Code and Section 16 of the Exchange Act.  When necessary
or desirable for an Award to qualify as “performance-based compensation” under
Section 162(m) of the Code the Committee shall include at least two persons who
are “outside directors” (as defined under Section 162(m) of the Code) and at
least two (or a majority if more than two then serve on the Committee) such
“outside directors” shall approve the grant of such Award and timely determine
(as applicable) the Performance Period and any Performance Factors upon which
vesting or settlement of any portion of such Award is to be subject.  When
required by Section 162(m) of the Code, prior to settlement of any such Award at
least two (or a majority if more than two then serve on the Committee) such
“outside directors” then serving on the Committee shall determine and certify in
writing the extent to which such Performance Factors have been timely achieved
and the extent to which the Shares subject to such Award have thereby been
earned.  Awards granted to Insiders must be approved by two or more
“non-employee directors” (as defined in the regulations promulgated under
Section 16 of the Exchange Act).  

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5.

OPTIONS.  The Committee may grant Options to Participants and will determine
whether such Options will be Incentive Stock Options within the meaning of the
Code (“ISOs”) or Nonqualified Stock Options (“NQSOs”), the number of Shares
subject to the Option, the Exercise Price of the Option, the period during which
the Option may be exercised, and all other terms and conditions of the Option,
subject to the following:

5.1

Option Grant.  Each Option granted under this Plan will identify the Option as
an ISO or an NQSO.  An Option may be, but need not be, awarded upon satisfaction
of such Performance Factors during any Performance Period as are set out in
advance in the Participant’s individual Award Agreement.  If the Option is being
earned upon the satisfaction of Performance Factors, then the Committee will:
 (x) determine the nature, length and starting date of any Performance Period
for each Option; and (y) select from among the Performance Factors to be used to
measure the performance, if any.  Performance Periods may overlap and
Participants may participate simultaneously with respect to Options that are
subject to different performance goals and other criteria.  

5.2

Date of Grant.  The date of grant of an Option will be the date on which the
Committee makes the determination to grant such Option, or a specified future
date.  The Award Agreement and a copy of this Plan will be delivered to the
Participant within a reasonable time after the granting of the Option.  

5.3

Exercise Period.  Options may be exercisable within the times or upon the
conditions as set forth in the Award Agreement governing such Option; provided,
however, that no Option will be exercisable after the expiration of ten (10)
years from the date the Option is granted; and provided further that no ISO
granted to a person who, at the time the ISO is granted, directly or by
attribution owns more than ten percent (10%) of the total combined voting power
of all classes of stock of the Company or of any Parent or Subsidiary of the
Company (“Ten Percent Stockholder”) will be exercisable after the expiration of
five (5) years from the date the ISO is granted.  The Committee also may provide
for Options to become exercisable at one time or from time to time, periodically
or otherwise, in such number of Shares or percentage of Shares as the Committee
determines.  

5.4

Exercise Price.  The Exercise Price of an Option will be determined by the
Committee when the Option is granted; provided that: (i) the Exercise Price of
an ISO will be not less than one hundred percent (100%) of the Fair Market Value
of the Shares on the date of grant and (ii) the Exercise Price of any ISO
granted to a Ten Percent Stockholder will not be less than one hundred ten
percent (110%) of the Fair Market Value of the Shares on the date of grant.
 Payment for the Shares purchased may be made in accordance with Section 11.
 The Exercise Price of a NQSO may not be less than one hundred percent (100%) of
the Fair Market Value per Share on the date of grant.  

5.5

Method of Exercise.  Any Option granted hereunder will be exercisable according
to the terms of the Plan and at such times and under such conditions as
determined by the Committee and set forth in the Award Agreement.  An Option may
not be exercised for a fraction of a Share.  An Option will be deemed exercised
when the Company receives: (i) notice of exercise (in such form as the Committee
may specify from time to time) from the person entitled to exercise the Option,
and (ii) full payment for the Shares with respect to which the

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Option is exercised (together with applicable withholding taxes).  Full payment
may consist of any consideration and method of payment authorized by the
Committee and permitted by the Award Agreement and the Plan.  Shares issued upon
exercise of an Option will be issued in the name of the Participant.  Until the
Shares are issued (as evidenced by the appropriate entry on the books of the
Company or of a duly authorized transfer agent of the Company), no right to vote
or receive dividends or any other rights as a stockholder will exist with
respect to the Shares, notwithstanding the exercise of the Option.  The Company
will issue (or cause to be issued) such Shares promptly after the Option is
exercised.  No adjustment will be made for a dividend or other right for which
the record date is prior to the date the Shares are issued, except as provided
in Section 2.5 of the Plan.  Exercising an Option in any manner will decrease
the number of Shares thereafter available, both for purposes of the Plan and for
sale under the Option, by the number of Shares as to which the Option is
exercised.  

5.6

Termination.  The exercise of an Option will be subject to the following (except
as may be otherwise provided in an Award Agreement):

(a)

If the Participant is Terminated for any reason except for the Participant’s
death or Disability, then the Participant may exercise such Participant’s
Options only to the extent that such Options would have been exercisable by the
Participant on the Termination Date no later than three (3) months after the
Termination Date (or such shorter time period or longer time period not
exceeding five (5) years as may be determined by the Committee, with any
exercise beyond three (3) months after the Termination Date deemed to be an
NQSO), but in any event no later than the expiration date of the Options.  

(b)

If the Participant is Terminated because of the Participant’s death (or the
Participant dies within three (3) months after a Termination), then the
Participant’s Options may be exercised only to the extent that such Options
would have been exercisable by the Participant on the Termination Date and must
be exercised by the Participant’s legal representative, or authorized assignee,
no later than twelve (12) months after the Termination Date (or such shorter
time period or longer time period not exceeding five (5) years as may be
determined by the Committee), but in any event no later than the expiration date
of the Options.  

(c)

If the Participant is Terminated because of the Participant’s Disability, then
the Participant’s Options may be exercised only to the extent that such Options
would have been exercisable by the Participant on the Termination Date and must
be exercised by the Participant (or the Participant’s legal representative or
authorized assignee) no later than twelve (12) months after the Termination Date
(with any exercise beyond (a) three (3) months after the Termination Date when
the Termination is for a Disability that is not a “permanent and total
disability” as defined in Section 22(e)(3) of the Code, or (b) twelve (12)
months after the Termination Date when the Termination is for a Disability that
is a “permanent and total disability” as defined in Section 22(e)(3) of the
Code, deemed to be exercise of an NQSO), but in any event no later than the
expiration date of the Options.  

5.7

Limitations on Exercise.  The Committee may specify a minimum number of Shares
that may be purchased on any exercise of an Option, provided that such minimum
number will not prevent any Participant from exercising the Option for the full
number of Shares for which it is then exercisable.  

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5.8

Limitations on ISOs.  With respect to Awards granted as ISOs, to the extent that
the aggregate Fair Market Value of the Shares with respect to which such ISOs
are exercisable for the first time by the Participant during any calendar year
(under all plans of the Company and any Parent or Subsidiary) exceeds one
hundred thousand dollars ($100,000), such Options will be treated as NQSOs.  For
purposes of this Section 5.8, ISOs will be taken into account in the order in
which they were granted.  The Fair Market Value of the Shares will be determined
as of the time the Option with respect to such Shares is granted.  In the event
that the Code or the regulations promulgated thereunder are amended after the
Effective Date to provide for a different limit on the Fair Market Value of
Shares permitted to be subject to ISOs, such different limit will be
automatically incorporated herein and will apply to any Options granted after
the effective date of such amendment.  

5.9

Modification, Extension or Renewal.  The Committee may modify, extend or renew
outstanding Options and authorize the grant of new Options in substitution
therefor, provided that any such action may not, without the written consent of
a Participant, impair any of such Participant’s rights under any Option
previously granted.  Any outstanding ISO that is modified, extended, renewed or
otherwise altered will be treated in accordance with Section 424(h) of the Code.
 Subject to Section 18 of this Plan, by written notice to affected Participants,
the Committee may reduce the Exercise Price of outstanding Options without the
consent of such Participants; provided, however, that the Exercise Price may not
be reduced below the Fair Market Value on the date the action is taken to reduce
the Exercise Price.  

5.10

No Disqualification.  Notwithstanding any other provision in this Plan, no term
of this Plan relating to ISOs will be interpreted, amended or altered, nor will
any discretion or authority granted under this Plan be exercised, so as to
disqualify this Plan under Section 422 of the Code or, without the consent of
the Participant affected, to disqualify any ISO under Section 422 of the Code

5.11

Termination of Participant.  Except as may be set forth in the Participant’s
Award Agreement, vesting ceases on such Participant’s Termination Date (unless
determined otherwise by the Committee).  

6.

RESTRICTED STOCK AWARDS.

6.1

Awards of Restricted Stock.  A Restricted Stock Award is an offer by the Company
to sell to a Participant Shares that are subject to restrictions (“Restricted
Stock”).  The Committee will determine to whom an offer will be made, the number
of Shares the Participant may purchase, the Purchase Price, the restrictions
under which the Shares will be subject and all other terms and conditions of the
Restricted Stock Award, subject to the Plan.  

6.2

Restricted Stock Purchase Agreement.  All purchases under a Restricted Stock
Award will be evidenced by an Award Agreement.  Except as may otherwise be
provided in an Award Agreement, a Participant accepts a Restricted Stock Award
by signing and delivering to the Company an Award Agreement with full payment of
the Purchase Price, within thirty (30) days from the date the Award Agreement
was delivered to the Participant.  If the Participant does not accept such Award
within thirty (30) days, then the offer of such Restricted Stock Award will
terminate, unless the Committee determines otherwise.  

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6.3

Purchase Price.  The Purchase Price for a Restricted Stock Award will be
determined by the Committee and may be less than Fair Market Value on the date
the Restricted Stock Award is granted.  Payment of the Purchase Price must be
made in accordance with Section 11 of the Plan, and the Award Agreement.  

6.4

Terms of Restricted Stock Awards.  Restricted Stock Awards will be subject to
such restrictions as the Committee may impose or are required by law.  These
restrictions may be based on completion of a specified number of years of
service with the Company or upon completion of Performance Factors, if any,
during any Performance Period as set out in advance in the Participant’s Award
Agreement.  Prior to the grant of a Restricted Stock Award, the Committee shall:
(a) determine the nature, length and starting date of any Performance Period for
the Restricted Stock Award; (b) select from among the Performance Factors to be
used to measure performance goals, if any; and (c) determine the number of
Shares that may be awarded to the Participant.  Performance Periods may overlap
and a Participant may participate simultaneously with respect to Restricted
Stock Awards that are subject to different Performance Periods and having
different performance goals and other criteria.  

6.5

Termination of Participant.  Except as may be set forth in the Participant’s
Award Agreement, vesting ceases on such Participant’s Termination Date (unless
determined otherwise by the Committee).  

7.

STOCK BONUS AWARDS.

7.1

Awards of Stock Bonuses.  A Stock Bonus Award is an award to an eligible person
of Shares (which may consist of Restricted Stock or Restricted Stock Units) for
services to be rendered or for past services already rendered to the Company or
any Parent or Subsidiary.  All Stock Bonus Awards shall be made pursuant to an
Award Agreement.  No payment from the Participant will be required for Shares
awarded pursuant to a Stock Bonus Award.  

7.2

Terms of Stock Bonus Awards.  The Committee will determine the number of Shares
to be awarded to the Participant under a Stock Bonus Award and any restrictions
thereon.  These restrictions may be based upon completion of a specified number
of years of service with the Company or upon satisfaction of performance goals
based on Performance Factors during any Performance Period as set out in advance
in the Participant’s Stock Bonus Agreement.  Prior to the grant of any Stock
Bonus Award the Committee shall: (a) determine the nature, length and starting
date of any Performance Period for the Stock Bonus Award; (b) select from among
the Performance Factors to be used to measure performance goals; and (c)
determine the number of Shares that may be awarded to the Participant.
 Performance Periods may overlap and a Participant may participate
simultaneously with respect to Stock Bonus Awards that are subject to different
Performance Periods and different performance goals and other criteria.  

7.3

Form of Payment to Participant.  Payment may be made in the form of cash, whole
Shares, or a combination thereof, based on the Fair Market Value of the Shares
earned under a Stock Bonus Award on the date of payment, as determined in the
sole discretion of the Committee.  

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7.4

Termination of Participation.  Except as may be set forth in the Participant’s
Award Agreement, vesting ceases on such Participant’s Termination Date (unless
determined otherwise by the Committee).  

8.

STOCK APPRECIATION RIGHTS.

8.1

Awards of SARs.  A Stock Appreciation Right (“SAR”) is an award to a Participant
that may be settled in cash, or Shares (which may consist of Restricted Stock),
having a value equal to (a) the difference between the Fair Market Value on the
date of exercise over the Exercise Price multiplied by (b) the number of Shares
with respect to which the SAR is being settled (subject to any maximum number of
Shares that may be issuable as specified in an Award Agreement).  All SARs shall
be made pursuant to an Award Agreement.  

8.2

Terms of SARs.  The Committee will determine the terms of each SAR including,
without limitation: (a) the number of Shares subject to the SAR; (b) the
Exercise Price and the time or times during which the SAR may be settled; (c)
the consideration to be distributed on settlement of the SAR; and (d) the effect
of the Participant’s Termination on each SAR.  The Exercise Price of the SAR
will be determined by the Committee when the SAR is granted, and may not be less
than Fair Market Value.  A SAR may be awarded upon satisfaction of Performance
Factors, if any, during any Performance Period as are set out in advance in the
Participant’s individual Award Agreement.  If the SAR is being earned upon the
satisfaction of Performance Factors, then the Committee will: (x) determine the
nature, length and starting date of any Performance Period for each SAR; and (y)
select from among the Performance Factors to be used to measure the performance,
if any.  Performance Periods may overlap and Participants may participate
simultaneously with respect to SARs that are subject to different Performance
Factors and other criteria.  

8.3

Exercise Period and Expiration Date.  A SAR will be exercisable within the times
or upon the occurrence of events determined by the Committee and set forth in
the Award Agreement governing such SAR.  The SAR Agreement shall set forth the
expiration date; provided that no SAR will be exercisable after the expiration
of ten (10) years from the date the SAR is granted.  The Committee may also
provide for SARs to become exercisable at one time or from time to time,
periodically or otherwise (including, without limitation, upon the attainment
during a Performance Period of performance goals based on Performance Factors),
in such number of Shares or percentage of the Shares subject to the SAR as the
Committee determines.  Except as may be set forth in the Participant’s Award
Agreement, vesting ceases on such Participant’s Termination Date (unless
determined otherwise by the Committee).  Notwithstanding the foregoing, the
rules of Section 5.6 also will apply to SARs.  

8.4

Form of Settlement.  Upon exercise of a SAR, a Participant will be entitled to
receive payment from the Company in an amount determined by multiplying (i) the
difference between the Fair Market Value of a Share on the date of exercise over
the Exercise Price; times (ii) the number of Shares with respect to which the
SAR is exercised.  At the discretion of the Committee, the payment from the
Company for the SAR exercise may be in cash, in Shares of equivalent value, or
in some combination thereof.  

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8.5

Termination of Participation.  Except as may be set forth in the Participant’s
Award Agreement, vesting ceases on such Participant’s Termination Date (unless
determined otherwise by the Committee).  

9.

RESTRICTED STOCK UNITS.

9.1

Awards of Restricted Stock Units.  A Restricted Stock Unit (“RSU”) is an award
to a Participant covering a number of Shares that may be settled in cash, or by
issuance of those Shares (which may consist of Restricted Stock).  All RSUs
shall be made pursuant to an Award Agreement.  

9.2

Terms of RSUs.  The Committee will determine the terms of an RSU including,
without limitation: (a) the number of Shares subject to the RSU; (b) the time or
times during which the RSU may be settled; and (c) the consideration to be
distributed on settlement, and the effect of the Participant’s Termination on
each RSU.  An RSU may be awarded upon satisfaction of such Performance Factors
(if any) during any Performance Period as are set out in advance in the
Participant’s Award Agreement.  If the RSU is being earned upon satisfaction of
Performance Factors, then the Committee will: (x) determine the nature, length
and starting date of any Performance Period for the RSU; (y) select from among
the Performance Factors to be used to measure the performance, if any; and (z)
determine the number of Shares deemed subject to the RSU.  Performance Periods
may overlap and participants may participate simultaneously with respect to RSUs
that are subject to different Performance Periods and different performance
goals and other criteria.  

9.3

Form and Timing of Settlement.  Payment of earned RSUs shall be made as soon as
practicable after the date(s) determined by the Committee and set forth in the
Award Agreement.  The Committee, in its sole discretion, may settle earned RSUs
in cash, Shares, or a combination of both.  

9.4

Termination of Participant.  Except as may be set forth in the Participant’s
Award Agreement, vesting ceases on such Participant’s Termination Date (unless
determined otherwise by the Committee).  

10.

PERFORMANCE SHARES.

10.1

Awards of Performance Shares.  A Performance Share Award is an award to a
Participant denominated in Shares that may be settled in cash, or by issuance of
those Shares (which may consist of Restricted Stock).  Grants of Performance
Shares shall be made pursuant to an Award Agreement.  

10.2

Terms of Performance Shares.  The Committee will determine, and each Award
Agreement shall set forth, the terms of each award of Performance Shares
including, without limitation: (a) the number of Shares deemed subject to such
Award; (b) the Performance Factors and Performance Period that shall determine
the time and extent to which each award of Performance Shares shall be settled;
(c) the consideration to be distributed on settlement, and the effect of the
Participant’s Termination on each award of Performance Shares.  In establishing
Performance Factors and the Performance Period the Committee will: (x) determine
the nature, length and starting date of any Performance Period; (y) select from
among the Performance

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Factors to be used; and (z) determine the number of Shares deemed subject to the
award of Performance Shares.  Prior to settlement the Committee shall determine
the extent to which Performance Shares have been earned.  Performance Periods
may overlap and Participants may participate simultaneously with respect to
Performance Shares that are subject to different Performance Periods and
different performance goals and other criteria.  

10.3

Value, Earning and Timing of Performance Shares.  Each Performance Share will
have an initial value equal to the Fair Market Value of a Share on the date of
grant.  After the applicable Performance Period has ended, the holder of
Performance Shares will be entitled to receive a payout of the number of
Performance Shares earned by the Participant over the Performance Period, to be
determined as a function of the extent to which the corresponding Performance
Factors or other vesting provisions have been achieved.  The Committee, in its
sole discretion, may pay earned Performance Shares in the form of cash, in
Shares (which have an aggregate Fair Market Value equal to the value of the
earned Performance Shares at the close of the applicable Performance Period) or
in a combination thereof.  

10.4

Termination of Participant.  Except as may be set forth in the Participant’s
Award Agreement, vesting ceases on such Participant’s Termination Date (unless
determined otherwise by the Committee).  

11.

PAYMENT FOR SHARE PURCHASES.  

Payment from a Participant for Shares purchased pursuant to this Plan may be
made in cash or by check or, where expressly approved for the Participant by the
Committee and where permitted by law (and to the extent not otherwise set forth
in the applicable Award Agreement):

(a)

by cancellation of indebtedness of the Company to the Participant;

(b)

by surrender of shares of the Company held by the Participant that have a Fair
Market Value on the date of surrender equal to the aggregate exercise price of
the Shares as to which said Award will be exercised or settled;

(c)

by waiver of compensation due or accrued to the Participant for services
rendered or to be rendered to the Company or a Parent or Subsidiary of the
Company;

(d)

by consideration received by the Company pursuant to a broker-assisted and/or
same day sale (or other) cashless exercise program implemented by the Company in
connection with the Plan;

(e)

by any combination of the foregoing; or

(f)

by any other method of payment as is permitted by applicable law.  

12.

GRANTS TO OUTSIDE DIRECTORS.

12.1

Types of Awards.  Outside Directors are eligible to receive any type of Award
offered under this Plan except ISOs.  Awards pursuant to this Section 12 may be
automatically

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made pursuant to policy adopted by the Board, or made from time to time as
determined in the discretion of the Board.  

12.2

Eligibility.  Awards pursuant to this Section 12 shall be granted only to
Outside Directors.  An Outside Director who is elected or re-elected as a member
of the Board will be eligible to receive an Award under this Section 12.

12.3

Vesting, Exercisability and Settlement.  Except as set forth in Section 21,
Awards shall vest, become exercisable and be settled as determined by the Board.
 With respect to Options and SARs, the exercise price granted to Outside
Directors shall not be less than the Fair Market Value of the Shares at the time
that such Option or SAR is granted.  

13.

WITHHOLDING TAXES.

13.1

Withholding Generally.  Whenever Shares are to be issued in satisfaction of
Awards granted under this Plan, the Company may require the Participant to remit
to the Company an amount sufficient to satisfy applicable federal, state, local
and international withholding tax requirements prior to the delivery of Shares
pursuant to exercise or settlement of any Award.  Whenever payments in
satisfaction of Awards granted under this Plan are to be made in cash, such
payment will be net of an amount sufficient to satisfy applicable federal,
state, local and international withholding tax requirements.  

13.2

Sock Withholding.  The Committee, in its sole discretion and pursuant to such
procedures as it may specify from time to time, may require or permit a
Participant to satisfy such tax withholding obligation, in whole or in part by
(without limitation) (i) paying cash, (ii) electing to have the Company withhold
otherwise deliverable cash or Shares having a Fair Market Value equal to the
minimum statutory amount required to be withheld, or (iii) delivering to the
Company already-owned Shares having a Fair Market Value equal to the minimum
statutory amount required to be withheld.  The Fair Market Value of the Shares
to be withheld or delivered will be determined as of the date that the taxes are
required to be withheld.  

14.

TRANSFERABILITY.  Unless determined otherwise by the Committee, an Award may not
be sold, pledged, assigned, hypothecated, transferred, or disposed of in any
manner other than by will or by the laws of descent or distribution.  If the
Committee makes an Award transferable, such Award will contain such additional
terms and conditions as the Committee deems appropriate.  All Awards shall be
exercisable: (i) during the Participant’s lifetime only by (A) the Participant,
or (B) the Participant’s guardian or legal representative; and (ii) after the
Participant’s death, by the legal representative of the Participant’s heirs or
legatees

15.

PRIVILEGES OF STOCK OWNERSHIP; RESTRICTIONS ON SHARES.  

15.1

Voting and Dividends.  No Participant will have any of the rights of a
stockholder with respect to any Shares until the Shares are issued to the
Participant.  After Shares are issued to the Participant, the Participant will
be a stockholder and have all the rights of a stockholder with respect to such
Shares, including the right to vote and receive all dividends or other
distributions made or paid with respect to such Shares; provided, that if such
Shares are Restricted Stock, then any new, additional or different securities
the Participant may become entitled to receive with respect to such Shares by
virtue of a stock dividend, stock split or any

11

other change in the corporate or capital structure of the Company will be
subject to the same restrictions as the Restricted Stock; provided, further,
that the Participant will have no right to retain such stock dividends or stock
distributions with respect to Shares that are repurchased at the Participant’s
Purchase Price or Exercise Price, as the case may be, pursuant to Section 15.2.
 

15.2

Restrictions on Shares.  At the discretion of the Committee, the Company may
reserve to itself and/or its assignee(s) a right to repurchase (a “Right of
Repurchase”) a portion of any or all Unvested Shares held by a Participant
following such Participant’s Termination at any time within ninety (90) days
after the later of the Participant’s Termination Date and the date the
Participant purchases Shares under this Plan, for cash and/or cancellation of
purchase money indebtedness, at the Participant’s Purchase Price or Exercise
Price, as the case may be.  

16.

CERTIFICATES.  All certificates for Shares or other securities delivered under
this Plan will be subject to such stock transfer orders, legends and other
restrictions as the Committee may deem necessary or advisable, including
restrictions under any applicable federal, state or foreign securities law, or
any rules, regulations and other requirements of the SEC or any stock exchange
upon which the Shares may be listed or quoted.  

17.

ESCROW; PLEDGE OF SHARES.  To enforce any restrictions on a Participant’s
Shares, the Committee may require the Participant to deposit all certificates
representing Shares, together with stock powers or other instruments of transfer
approved by the Committee, appropriately endorsed in blank, with the Company or
an agent designated by the Company to hold in escrow until such restrictions
have lapsed or terminated, and the Committee may cause a legend or legends
referencing such restrictions to be placed on the certificates.  Any Participant
who is permitted to execute a promissory note as partial or full consideration
for the purchase of Shares under this Plan will be required to pledge and
deposit with the Company all or part of the Shares so purchased as collateral to
secure the payment of the Participant’s obligation to the Company under the
promissory note; provided, however, that the Committee may require or accept
other or additional forms of collateral to secure the payment of such obligation
and, in any event, the Company will have full recourse against the Participant
under the promissory note notwithstanding any pledge of the Participant’s Shares
or other collateral.  In connection with any pledge of the Shares, the
Participant will be required to execute and deliver a written pledge agreement
in such form as the Committee will from time to time approve.  The Shares
purchased with the promissory note may be released from the pledge on a pro rata
basis as the promissory note is paid.  

18.

REPRICING; EXCHANGE AND BUYOUT OF AWARDS.  Except in connection with a (i)
Corporate Transaction or (ii) a stock dividend, recapitalization, stock split,
reverse stock split, subdivision, combination, reclassification or similar
change in the capital structure of the Company without consideration, the terms
of outstanding awards may not be amended to reduce the exercise price of
outstanding Options or SARs or cancel outstanding Options or SARS in exchange
for cash or other Awards (including Options or SARs) with an exercise price that
is less than the exercise price of the original Option or SAR without prior
stockholder approval.  

19.

SECURITIES LAW AND OTHER REGULATORY COMPLIANCE.  An Award will not be effective
unless such Award is in compliance with all applicable federal and state

12

securities laws, rules and regulations of any governmental body, and the
requirements of any stock exchange upon which the Shares may then be listed or
quoted, as they are in effect on the date of grant of the Award and also on the
date of exercise or other issuance.  Notwithstanding any other provision in this
Plan, the Company will have no obligation to issue or deliver certificates for
Shares under this Plan prior to: (a) obtaining any approvals from governmental
agencies that the Company determines are necessary or advisable; and/or (b)
completion of any registration or other qualification of such Shares under any
state or federal law or ruling of any governmental body that the Company
determines to be necessary or advisable.  The Company will be under no
obligation to register the Shares with the SEC or to effect compliance with the
registration, qualification or listing requirements of any state securities
laws, stock exchange or automated quotation system, and the Company will have no
liability for any inability or failure to do so.  

20.

NO OBLIGATION TO EMPLOY.  Nothing in this Plan or any Award granted under this
Plan will 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
Parent or Subsidiary of the Company or limit in any way the right of the Company
or any Parent or Subsidiary of the Company to terminate Participant’s employment
or other relationship at any time.  

21.

CORPORATE TRANSACTIONS.  

21.1

Assumption or Replacement of Awards by Successor.  In the event of a Corporate
Transaction any or all outstanding Awards may be assumed or replaced by the
successor corporation, which assumption or replacement shall be binding on all
Participants.  In the alternative, the successor corporation may substitute
equivalent Awards or provide substantially similar consideration to Participants
as was provided to stockholders (after taking into account the existing
provisions of the Awards).  The successor corporation may also issue, in place
of outstanding Shares of the Company held by the Participant, substantially
similar shares or other property subject to repurchase restrictions no less
favorable to the Participant.  In the event such successor or acquiring
corporation (if any) refuses to assume, convert, replace or substitute Awards,
as provided above, pursuant to a Corporate Transaction, then notwithstanding any
other provision in this Plan to the contrary, such Awards will expire on such
transaction at such time and on such conditions as the Board will determine; the
Board (or, the Committee, if so designated by the Board) may, in its sole
discretion, accelerate the vesting of such Awards in connection with a Corporate
Transaction.  In addition, in the event such successor or acquiring corporation
(if any) refuses to assume, convert, replace or substitute Awards, as provided
above, pursuant to a Corporate Transaction, the Committee will notify the
Participant in writing or electronically that such Award will be exercisable for
a period of time determined by the Committee in its sole discretion, and such
Award will terminate upon the expiration of such period.  Awards need not be
treated similarly in a Corporate Transaction.  

21.2

Assumption of Awards by the Company.  The Company, from time to time, also may
substitute or assume outstanding awards granted by another company, whether in
connection with an acquisition of such other company or otherwise, by either;
(a) granting an Award under this Plan in substitution of such other company’s
award; or (b) assuming such award as if it had been granted under this Plan if
the terms of such assumed award could be applied to an Award granted under this
Plan.  Such substitution or assumption will be

13

permissible if the holder of the substituted or assumed award would have been
eligible to be granted an Award under this Plan if the other company had applied
the rules of this Plan to such grant.  In the event the Company assumes an award
granted by another company, the terms and conditions of such award will remain
unchanged (except that the Purchase Price or the Exercise Price, as the case may
be, and the number and nature of Shares issuable upon exercise or settlement of
any such Award will be adjusted appropriately pursuant to Section 424(a) of the
Code).  

21.3

Outside Directors’ Awards.  Notwithstanding any provision to the contrary
herein, in the event of a Corporate Transaction, the vesting of all Awards
granted to Outside Directors shall accelerate and such Awards shall become
exercisable (as applicable) in full prior to the consummation of such event at
such times and on such conditions as the Committee determines.  

22.

ADOPTION AND STOCKHOLDER APPROVAL.  This Plan shall be submitted for the
approval of the Company’s stockholders, consistent with applicable laws, within
twelve (12) months before or after the date this Plan is adopted by the Board.  

23.

TERM OF PLAN/GOVERNING LAW.  Unless earlier terminated as provided herein, this
Plan will become effective on the Effective Date and will terminate ten (10)
years from the date this Plan is adopted by the Board.  This Plan and all Awards
granted hereunder shall be governed by and construed in accordance with the laws
of the State of Utah.

24.

AMENDMENT OR TERMINATION OF PLAN.  The Board may at any time terminate or amend
this Plan in any respect, including, without limitation, amendment of any form
of Award Agreement or instrument to be executed pursuant to this Plan; provided,
however, that the Board will not, without the approval of the stockholders of
the Company, amend this Plan in any manner that requires such stockholder
approval; provided further, that a Participant’s Award shall be governed by the
version of this Plan then in effect at the time such Award was granted.  

25.

NONEXCLUSIVITY OF THE PLAN.  Neither the adoption of this Plan by the Board, the
submission of this Plan to the stockholders of the Company for approval, nor any
provision of this Plan will be construed as creating any limitations on the
power of the Board to adopt such additional compensation arrangements as it may
deem desirable, including, without limitation, the granting of stock awards and
bonuses otherwise than under this Plan, and such arrangements may be either
generally applicable or applicable only in specific cases.  

26.

INSIDER TRADING POLICY.  Each Participant who receives an Award shall comply
with any policy adopted by the Company from time to time covering transactions
in the Company’s securities by Employees, officers and/or directors of the
Company.  

27.

DEFINITIONS.  As used in this Plan, and except as elsewhere defined herein, the
following terms will have the following meanings:

“Award” means any award under the Plan, including any Option, Restricted Stock,
Stock Bonus, Stock Appreciation Right, Restricted Stock Unit or award of
Performance Shares.  

14

“Award Agreement” means, with respect to each Award, the written or electronic
agreement between the Company and the Participant setting forth the terms and
conditions of the Award, which shall be in substantially a form (which need not
be the same for each Participant) that the Committee has from time to time
approved, and will comply with and be subject to the terms and conditions of
this Plan.  

“Board” means the Board of Directors of the Company.  

“Code” means the United States Internal Revenue Code of 1986, as amended, and
the regulations promulgated thereunder.  

“Committee” means the Compensation Committee of the Board or those persons to
whom administration of the Plan, or part of the Plan, has been delegated as
permitted by law.  

“Company” means Broadcast International, Inc., or any successor corporation.  

“Consultant” means any person, including an advisor or independent contractor,
engaged by the Company or a Parent or Subsidiary to render services to such
entity.  

“Corporate Transaction” means the occurrence of any of the following events: (i)
any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange
Act) becomes the “beneficial owner” (as defined in Rule 13d-3 of the Exchange
Act), directly or indirectly, of securities of the Company representing fifty
percent (50%) or more of the total voting power represented by the Company’s
then-outstanding voting securities; (ii) the consummation of the sale or
disposition by the Company of all or substantially all of the Company’s assets;
(iii) the consummation of a merger or consolidation of the Company with any
other corporation, other than a merger or consolidation which would result in
the voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity or its parent) at least fifty
percent (50%) of the total voting power represented by the voting securities of
the Company or such surviving entity or its parent outstanding immediately after
such merger or consolidation or (iv) any other transaction which qualifies as a
“corporate transaction” under Section 424(a) of the Code wherein the
stockholders of the Company give up all of their equity interest in the Company
(except for the acquisition, sale or transfer of all or substantially all of the
outstanding shares of the Company).  

“Director” means a member of the Board.  

“Disability” means total and permanent disability as defined in Section 22(e)(3)
of the Code, provided, however, that except with respect to Awards granted as
ISOs, the Committee in its discretion may determine whether a total and
permanent disability exists in accordance with non-discriminatory and uniform
standards adopted by the Committee from time to time, whether temporary or
permanent, partial or total, as determined by the Committee.  

“Effective Date” means the date this Plan is approved by the Company’s
stockholders, the date of which shall be within twelve (12) months before or
after the date this Plan is adopted by the Board.  

15

“Employee” means any person, including Officers and Directors, employed by the
Company or any Parent or Subsidiary of the Company.  Neither service as a
Director nor payment of a director’s fee by the Company will be sufficient to
constitute “employment” by the Company.  

“Exchange Act” means the United States Securities Exchange Act of 1934, as
amended.  

“Exercise Price” means, with respect to an Option, the price at which a holder
may purchase the Shares issuable upon exercise of an Option and with respect to
a SAR, the price at which the SAR is granted to the holder thereof.  

“Exchange Program” means a program pursuant to which outstanding Awards are
surrendered, cancelled or exchanged for cash, the same type of Award or a
different Award (or combination thereof).  

“Fair Market Value” means, as of any date, the value of a share of the Company’s
Common Stock determined as follows:

(a)

if such Common Stock is publicly traded and is then listed on a national
securities exchange, its closing price on the date of determination on the
principal national securities exchange on which the Common Stock is listed or
admitted to trading as reported in The Wall Street Journal or such other source
as the Board or the Committee deems reliable;

(b)

if such Common Stock is publicly traded but is neither listed nor admitted to
trading on a national securities exchange, the average of the closing bid and
asked prices on the date of determination as reported in The OTC Bulletin Board
or such other source as the Board or the Committee deems reliable; or

(c)

if none of the foregoing is applicable, by the Board or the Committee in good
faith.  

“GAAP” means generally accepted accounting principles.  

“Insider” means an officer or director of the Company or any other person whose
transactions in the Company’s Common Stock are subject to Section 16 of the
Exchange Act.  

“Option” means an award of an option to purchase Shares pursuant to Section 5 or
Section 12 of the Plan.  

“Outside Director” means a Director who is not an Employee of the Company or any
Parent or Subsidiary.  

“Parent” means any corporation (other than the Company) in an unbroken chain of
corporations ending with the Company if each of such corporations other than the
Company owns stock possessing fifty percent (50%) or more of the total combined
voting power of all classes of stock in one of the other corporations in such
chain.  

“Participant” means a person who holds an Award under this Plan.  

16

“Performance Factors” means the factors selected by the Committee, which may
include, but are not limited to the, the following measures (whether or not in
comparison to other peer companies) to determine whether the performance goals
established by the Committee and applicable to Awards have been satisfied:

·

Net revenue and/or net revenue growth;

·

Earnings per share and/or earnings per share growth;

·

Earnings before income taxes and amortization and/or earnings before income
taxes and amortization growth;

·

Operating income and/or operating income growth;

·

Net income and/or net income growth;

·

Total stockholder return and/or total stockholder return growth;

·

Return on equity;

·

Operating cash flow return on income;

·

Adjusted operating cash flow return on income;

·

Economic value added;

·

Individual business objectives;

·

Company specific operational metrics; and

·

Any of the foregoing may be based on GAAP or NonGAAP standards.

“Performance Period” means the period of service determined by the Committee,
not to exceed five (5) years, during which years of service or performance is to
be measured for the Award.  

“Performance Share” means an Award granted pursuant to Section 10 or Section 12
of the Plan.  

“Plan” means this Broadcast International, Inc. 2008 Equity Incentive Plan.  

“Purchase Price” means the price to be paid for Shares acquired under the Plan,
other than Shares acquired upon exercise of an Option or SAR.  

“Restricted Stock Award” means an award of Shares pursuant to Section 6 or
Section 12 of the Plan, or issued pursuant to the early exercise of an Option.  

17

“Restricted Stock Unit” means an Award granted pursuant to Section 9 or Section
12 of the Plan.  

“SEC” means the United States Securities and Exchange Commission.  

“Securities Act” means the United States Securities Act of 1933, as amended.  

“Shares” means shares of the Company’s Common Stock and any successor security.
 

“Stock Appreciation Right” means an Award granted pursuant to Section 8 and
Section 12 of the Plan.  

“Stock Bonus” means an Award granted pursuant to Section 7 or Section 12 of the
Plan.  

“Subsidiary” means any corporation (other than the Company) in an unbroken chain
of corporations beginning with the Company if each of the corporations other
than the last corporation in the unbroken chain owns stock possessing fifty
percent (50%) or more of the total combined voting power of all classes of stock
in one of the other corporations in such chain.  

“Termination” or “Terminated” means, for purposes of this Plan with respect to a
Participant, that the Participant has for any reason ceased to provide services
as an employee, officer, director, consultant, independent contractor or advisor
to the Company or a Parent or Subsidiary of the Company.  An employee will not
be deemed to have ceased to provide services in the case of (i) sick leave, (ii)
military leave, or (iii) any other leave of absence approved by the Committee;
provided, that such leave is for a period of not more than 90 days, unless
reemployment upon the expiration of such leave is guaranteed by contract or
statute or unless provided otherwise pursuant to formal policy adopted from time
to time by the Company and issued and promulgated to employees in writing.  In
the case of any employee on an approved leave of absence, the Committee may make
such provisions respecting suspension of vesting of the Award while on leave
from the employ of the Company or a Parent or Subsidiary of the Company as it
may deem appropriate, except that in no event may an Award be exercised after
the expiration of the term set forth in the applicable Award Agreement.  The
Committee will have sole discretion to determine whether a Participant has
ceased to provide services and the effective date on which the Participant
ceased to provide services (the “Termination Date”).

“Unvested Shares” means Shares that have not yet vested or are subject to a
right of repurchase in favor of the Company (or any successor thereto).

18