ITEX CORPORATION
2004 EQUITY INCENTIVE PLAN
Effective as of March 15, 2004 and amended and restated as of February 14, 2011

1.           PURPOSE

The purpose of this Plan is to provide a flexible framework that will permit the
Board to develop and implement a variety of stock-based programs based on the
changing needs of ITEX Corporation (the “Company”), its competitive market, and
regulatory climate.

The Board of Directors and senior management of the Company believe it is in the
best interest of its shareholders for officers, employees, and Board Members of
the Company to own stock in the Company and that such ownership will enhance the
Company’s ability to attract highly qualified personnel, strengthen its
retention capabilities, enhance the long-term performance of the Company and its
subsidiaries, to vest in Participants a proprietary interest in the success of
the Company and its subsidiaries, and to provide certain “performance-based
compensation” within the meaning of Section 162(m)(4)(C) of the Code.

This Plan is intended to supplement all current stock option plans maintained by
the Company pursuant to which equity awards may granted to Eligible Persons,
including without limitation the 1995-1996 Key Employee Incentive Stock Option
Plan, the 1996-1997 Key Employee Incentive Stock Option Plan, and the 1997-1998
Key Employee Incentive Stock Option Plan.  The previously approved plans will
cease to be used and this Plan will be utilized for all new stock option and
equity incentive grants.  This Plan is not intended to limit the ability of
Company to create additional or new plans, or to issue additional or new
awards.  Capitalized terms used in this Plan not defined in the text are defined
in Section 34.

2.           EFFECTIVE DATE

This Plan shall become effective as of March 15, 2004.

3.           TERM OF PLAN

Unless earlier terminated as provided herein, this Plan will terminate ten (10)
years from the Effective Date.  Awards may be made under the Plan until March
14, 2014.

4.           SHARES SUBJECT TO THIS PLAN

4.1.           Number of Shares Available. Subject to adjustment as provided by
Section 23, the total number of Shares reserved and available for grant and
issuance pursuant to this Plan will be four hundred thousand (400,000).  Awards
granted under the Plan shall count against the foregoing limits at the time they
are granted but shall again become available for grant under the Plan as
follows:

(a)           Subject to Section 23, Shares that are subject:
 
 
(1)
to issuance upon exercise of an Option but cease to be subject to such Option
for any reason other than exercise of such Option;

 
(2)
to an Award granted hereunder but are forfeited; or

 
 
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(3)
to an Award that otherwise is cancelled, expires, lapses or terminates without
Shares being issued

will again be available for grant and issuance in connection with future Awards
under this Plan.  However, in the event that prior to the Award’s forfeiture,
termination, expiration or lapse, the holder of the Award at any time received
one or more elements of “beneficial ownership” pursuant to such Award (as
defined by the SEC, pursuant to any rule or interpretations promulgated under
Section 16 of the Exchange Act), the Shares subject to such Award shall not
again be made available for regrant under the Plan.

(b)           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.  The Shares to be issued
hereunder upon exercise of an Award shall consist of either newly issued shares
or treasury shares, at the discretion of the Administrators.  The following
rules shall apply for purposes of the determination of the number of Shares
available for grant under the Plan:

 
(1)
The grant of an Option, Stock Bonus Award, or Restricted Stock Award shall
reduce the Shares available for grant under the Plan by the number of Shares
subject to such Award.

 
(2)
While an Option, Stock Bonus Award, or Restricted Stock Award is outstanding, it
shall be counted against the authorized pool of Shares regardless of its vested
status.

 
(3)
If any Option is exercised by tendering Common Stock, either actually or by
attestation, to the Company as full or partial payment in connection with the
exercise of the Option under the Plan, or if the tax withholding requirements
are satisfied through such tender, only the number of shares of Common Stock
issued net of the Common Stock tendered shall be deemed delivered for purposes
of determining the maximum number of shares available for grants under the Plan.

5.           ADMINISTRATION OF THIS PLAN

5.1           Authority.  Authority to control and manage the operation and
administration of this Plan shall be vested in the Board, which may delegate
such responsibilities in whole or in part to a committee or subcommittee
consisting of two (2) or more members of the Board, all of whom are
“non-employee directors” within the meaning of Rule 16b-3 under the Exchange Act
(the “Committee”).  Members of the Committee may be appointed from time to time
by, and shall serve at the pleasure of, the Board.  The Board at any time may
abolish the Committee and reinvest in the Board the administration of this
Plan.  As used herein, the term “Administrator” means the Board or, with respect
to any matter as to which responsibility has been delegated to the Committee,
the term Administrator shall mean the Committee.

5.2.           Administration .

 
(a)
The Plan shall be administered by the Administrator. The Administrator may from
time to time develop and implement specific stock-based plans that are
consistent with the intent and specific terms of the framework created by this
Plan. The Administrator shall have full authority to administer the Plan,
including authority to designate the individuals who shall be granted Awards and
the amount and type of such Awards, interpret and construe any provision of the
Plan and the terms of any Award issued under it, to adopt such rules and
regulations for administering the Plan as it may deem necessary or appropriate,
and to delegate such administrative responsibilities as it deems appropriate,
provided, however, that the Administrator shall retain the responsibility to
designate the Award recipients and the amount and type of such Awards.
 Decisions of the Administrator shall be final and binding on all parties. The
Administrator’s determinations under the Plan may, but need not, be uniform and
may be made on a Participant-by-Participant basis (whether or not two or more
Participants are similarly situated).

 
 
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(b)
The Administrator may, in its absolute discretion, without amendment to the
Plan, (i) accelerate the date on which any Option granted under the Plan becomes
exercisable or otherwise adjust any of the terms of such Option (except that no
such adjustment shall, without the consent of a Participant, reduce
the Participant’s rights under any previously granted and outstanding Award
unless the Administrator determines that such adjustment is necessary or
appropriate to prevent such Award from constituting “applicable employee
remuneration” within the meaning of Section 162(m) of the Code), (ii) or
accelerate the Vesting Date or issue date, or waive any condition imposed
hereunder, with respect to any share of Restricted Stock granted under the Plan
or otherwise adjust any of the terms of such Restricted Stock.

 
(c)
Whether an authorized leave of absence, or absence in military or government
service, shall constitute termination of employment shall be determined by the
Administrator in its absolute discretion, subject to applicable law.

5.3           Limitation on Liability.  To the extent permitted by applicable
law in effect from time to time, no member of the Committee or the Board of
Directors shall be liable for any action, omission, or determination relating to
the Plan, and the Company shall indemnify and hold harmless each member of the
Administrator and each other director or employee of the Company to whom any
duty or power relating to the administration or interpretation of the Plan has
been delegated against any cost or expense (including counsel fees) or liability
(including any sum paid in settlement of a claim with the approval of the
Administrator) arising out of any action, omission or determination relating to
the Plan, unless, in either case, such action, omission or determination was
taken or made by such member, director or employee in bad faith and without
reasonable belief that it was in the best interests of the Company.  The Company
shall pay expenses incurred by, and satisfy a judgment or fine rendered or
levied against, a present or former director or member of the Committee or Board
in any action against such person (whether or not the Company is joined as a
party defendant) to impose liability or a penalty on such person for an act
alleged to have been committed by such person while a director or member of the
Committee or Board arising with respect to this Plan or administration thereof
or out of membership on the Committee or Board or by the Company, or all or any
combination of the preceding, provided, the director or Committee member was
acting in good faith, within what such director or Committee member reasonably
believed to have been within the scope of his or her employment or authority and
for a purpose which he or she reasonably believed to be in the best interests of
the Company or its stockholders.  Payments authorized hereunder include amounts
paid and expenses incurred in settling any such action or threatened
action.  The provisions of this section shall apply to the estate, executor,
administrator, heirs, legatees or devisees of a director or Committee member,
and the term “person” as used on this section shall include the estate,
executor, administrator, heirs, legatees, or devisees of such person.

 
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6.           GRANT OF OPTIONS; TERMS AND CONDITIONS OF GRANT

6.1.           Grant of Options.  One or more Options may be granted to any
Eligible Person.  Subject to the express provisions of this Plan, the
Administrator shall determine from the Eligible Persons those individuals to
whom Options under this Plan may be granted.  Each Option granted under this
Plan will be evidenced by an Award Agreement, in such form and including such
terms as the Administrator may from time to time approve, which will clearly
identify the Option as an Incentive Stock Option or a Non-Qualified Stock
Option.  In the absence of such identification, an Option shall be deemed to be
a Non-Qualified Stock Option.

Further, subject to the express provisions of this Plan, the Administrator shall
specify the Grant Date, the number of Shares covered by the Option, the exercise
price and the terms and conditions for exercise of the Options.  If the
Administrator fails to specify the Grant Date, the Grant Date shall be the date
of the action taken by the Administrator to grant the Option.  As soon as
practicable after the Grant Date, the Company will provide the Participant with
a written Award Agreement in the form approved by the Administrator, which sets
out the Grant Date, the number of Shares covered by the Option, the exercise
price and the terms and conditions for exercise of the Option.

The Administrator may, in its absolute discretion, grant Options under this Plan
at any time and from time to time before the expiration of this Plan.

6.2.           General Terms and Conditions.  Except as otherwise provided
herein, the Options shall be subject to the following terms and conditions and
such other terms and conditions not inconsistent with this Plan as the
Administrator may impose:

6.2.1.                      Vesting Schedule. The Administrator may determine in
its discretion whether any Option shall be subject to vesting and the terms and
conditions of any such vesting.  If subject to vesting, no Option shall be
exercisable until it has vested.  The Award Agreement shall contain any such
vesting schedule; provided that, in the absence of any such designation as to
vesting at the time of grant the entire Option shall vest according to the
following schedule:

NUMBER OF YEARS
FOLLOWING DATE OF GRANT
PERCENTAGE OF TOTAL OPTION
TO BE EXERCISABLE
1
25%
2
50%
3
4
75%
100%

Acceleration of Vesting.  The vesting of one or more outstanding Options may be
accelerated by the Administrator at such times and in such amounts as it shall
determine in its sole discretion.  The vesting of Options also shall be
accelerated under the circumstances described below in Section 24.

6.2.2.                      Option Term.  Each Option and all rights or
obligations thereunder shall expire on such date as shall be determined by the
Administrator, but not later than 10 years after the grant of the Option (5
years in the case of an Incentive Stock Option when the Optionee owns more than
10% of the total combined voting power of all classes of stock of the Company
(“Ten Percent Stockholder”)), and shall be subject to earlier termination as
hereinafter provided.
 
 
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6.2.3.                      Exercise Price.  The Exercise Price of any Option
shall be determined by the Administrator when the Option is granted and may not
be less than one hundred percent (100%) of the Fair Market Value of the Shares
on the date of grant, and the Exercise Price of any Incentive Stock Option
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 shall be made in accordance with
Section 12 of this Plan.  The Administrator is authorized to issue Options,
whether Incentive Stock Options or Non-Qualified Stock Options, at an Option
price in excess of the Fair Market Value on the date the Option is granted (the
so-called “Premium Price” Option) to encourage superior performance.

6.2.4           Partial Exercise.  Each Option shall be exercisable in whole or
in part; provided, however, that no partial exercise of an Option shall be for
an aggregate exercise price of less than $1,000 unless such partial exercise
represents the entire unexercised portion of the Option or the entire portion of
the Option that is then exercisable.  The partial exercise of an Option shall
not cause the expiration, termination or cancellation of the remaining portion
thereof.  Upon the partial exercise of an Option, the Award Agreement evidencing
such Option shall be returned to the Participant exercising such Option together
with the delivery of the certificates for the purchased Shares.

6.2.5.                      Method of Exercise.  An Option shall be exercised by
delivering notice to the Company’s principal office, to the attention of its
Secretary, no less than five business days in advance of the effective date of
the proposed exercise.  Such notice shall be by delivery to the Company of a
written stock option exercise agreement (the “Exercise Agreement”) in a form
approved by the Administrator (which need not be the same for each Participant),
accompanied by the Award Agreement or Agreements evidencing the Option, shall
specify the number of shares of Company Stock with respect to which the Option
is being exercised and the effective date of the proposed exercise and shall
be signed by the Participant.  The Participant may withdraw such notice at any
time prior to the close of business on the business day immediately preceding
the effective date of the proposed exercise, in which case such Award Agreement
or Agreements shall be returned to him. Payment in full of the Exercise Price
for the number of  Shares of Company Stock being purchased upon the exercise of
an Option shall be made on the effective date of such exercise as provided by
Section 12 hereof.

6.2.5.                      Transferability of Options.  Except as otherwise
provided below for Non-Qualified Stock Options, no Option shall be transferable
other than by will or by the laws of descent and distribution and during the
lifetime of a Participant, only the Participant, his guardian or legal
representative may exercise an Option.  A Participant may designate a
beneficiary to exercise his or her Options after the Participant’s death.  If no
beneficiary is designated, the Administrator, at its discretion, may provide for
transfer of an Option (other than an Incentive Stock Option), without payment of
consideration, to the following family members of the Participant, including
adoptive relationships: a child, stepchild, grandchild, parent, stepparent,
grandparent, spouse, sibling, mother-in-law, father-in-law, son-in-law,
daughter-in-law, brother-in-law, sister-in-law, niece, nephew, former spouse
(whether by gift or pursuant to a domestic relations order), any person sharing
the employee’s household (other than a tenant or employee), a family-controlled
partnership, corporation, limited liability company and trust, or a foundation
in which family members heretofore described control the management of assets.
The assigned portion may only be exercised by the person or persons who acquire
a proprietary interest in the Option pursuant to the assignment.  The terms
applicable to the assigned portion shall be the same as those in effect for the
Option immediately prior to such assignment and shall be set forth in such
documents issued to the assignee as the Administrator may deem appropriate.  A
request to assign an Option may be made only by delivery to Company of a written
stock option assignment request  (the “Assignment Request”) in a form approved
by the Administrator, stating the number of Options and Shares underlying
Options requested for assignment, that no consideration is being paid for the
assignment, identifying the proposed transferee, and containing such other
representations and agreements regarding the Participant’s investment intent and
access to information and other matters, if any, as may be required or desirable
by Company to comply with applicable securities laws.
 
 
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6.2.6.                      Exercise After Certain Events.

(a)           Termination of Employment or Directorship -
Employee/Officer/Director

 
(1)
Unless otherwise provided in an applicable Award Agreement, in the event that
the employment or directorship of a Participant with the Company shall terminate
for any reason other than cause, Disability or death,  (i) Options granted to
such Participant, to the extent that they were exercisable at the time of such
termination, shall remain exercisable until the expiration of 90 days after
such termination, on which date they shall expire.  However, if an employee or
director continues service to the Company after termination of employment, the
employee or director need not exercise his or her Options within 90 days of
termination of employment, but may exercise within 90 days of termination of his
or her continuing service as a consultant, advisor, or work performed in a
similar capacity.  If the options held are Incentive Stock Options and the
employee exercises after 90 days of termination of employment, the Options will
be treated as nonqualified stock options; and (ii) Options granted to such
Participant, to the extent that they were not exercisable at the time of such
termination, shall expire at the close of business on the date of such
termination; provided, however, that no Option shall be exercisable after the
expiration of its term.

 
(2)
Unless otherwise provided in an applicable Award Agreement, in the event that
the employment or directorship of a Participant with the Company shall terminate
on account of the death or Disability of the Participant, all Options granted to
such Participant, to the extent that they were exercisable at the time of
such termination, shall remain exercisable until the expiration of one
year after such termination, on which date they shall expire.

 
(3)
In the event of the termination of a Participant’s employment or directorship
for cause or for Detrimental Activity (as defined in Section 21 hereof), all
outstanding Options granted to such Participant shall expire at the commencement
of business on the effective date of such termination.

(b)           Effect of Change in Control.  Upon the occurrence of a Change in
Control (as defined in Section 24 hereof), all vested Options at such time shall
become fully and immediately exercisable at the date of termination.

6.3.           Limitations on Grant of Incentive Stock Options.

6.3.1.                        To the extent that the aggregate Fair Market Value
(determined as of the time the option is granted) of any stock with respect to
which Incentive Stock Options granted under this Plan and all other plans of the
Company (and any plans of any “Subsidiary Corporation” or “parent corporation”
of the Company within the meaning of Section 424 of the Code) are first
exercisable by any employee during any calendar year shall exceed the maximum
limit, if any, imposed from time to time under section 422 of the Code, such
Options in excess of such limit shall be treated as Non-Qualified Stock
Options.  In such an event, the determination of which Options shall remain
Incentive Stock Options and which shall be treated as Non-Qualified Stock
Options shall be based on the order in which such Options were granted. All
other terms and provisions of such Options that are deemed to be Non-Qualified
Stock Options shall remain unchanged.
 
 
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6.3.2           No Incentive Stock Option may be granted to an individual if, at
the time of the proposed grant, such individual owns stock possessing more than
ten percent (10%) of the total combined voting power of all classes of stock of
the Company or any of its “Subsidiary Corporations” (within the meaning of
Section 424 of the Code), unless (i) the exercise price of such Incentive Stock
Option is at least one hundred ten percent (110%) of the Fair Market Value of a
share of Company Stock at the time such Incentive Stock Option is granted and
(ii) such Incentive Stock Option is not exercisable after the expiration of five
years from the date such Incentive Stock Option is granted.

7.           RESTRICTED STOCK

The Administrator may grant shares of Restricted Stock pursuant to the Plan,
and a portion of a Participant’s earned bonus may be granted in the form of
Restricted Stock. Each grant of shares of Restricted Stock shall be evidenced by
an Award Agreement in such form and containing such terms and conditions and
subject to such agreements or understandings as the Administrator shall from
time to time approve. Each grant of shares of Restricted Stock shall comply with
and be subject to the following terms and conditions:

7.1           Issue Date and Vesting Date

 At the time of the grant of shares of Restricted Stock, the Administrator shall
establish an issue date or issue dates and a Vesting Date or Vesting Dates with
respect to such shares.  The Administrator may divide such shares into classes
and assign a different issue date and/or Vesting Date for each class. Except as
provided in Sections 7.3 and 7.6 hereof, upon the occurrence of the issue date
with respect to a share of Restricted Stock, a share of Restricted Stock shall
be issued in accordance with the provisions of Section 7.4 hereof.  Provided
that all conditions to the vesting of a share of Restricted Stock imposed
pursuant to Section 7.2 hereof are satisfied, and except as provided in Sections
7.3 and 7.6 hereof, upon the occurrence of the Vesting Date with respect to a
share of Restricted Stock, such share shall vest and the restrictions of Section
7.3 hereof shall cease to apply to such share.

7.2           Conditions to Vesting

At the time of the grant of shares of Restricted Stock, the Administrator may
impose such restrictions or conditions, not inconsistent with the provisions
hereof, to the vesting of such shares, as it, in its absolute discretion, deems
appropriate.  By way of example and not by way of limitation, the Administrator
may require, as a condition to the vesting of any class or classes of shares of
Restricted Stock, that the Participant or the Company achieve such performance
criteria including, but not limited to the period of active service as the
Administrator may specify at the time of the grant of such shares.

7.3           Restrictions on Transfer Prior to Vesting

Prior to the vesting of a share of Restricted Stock, no transfer of a
Participant’s rights with respect to such share, whether voluntary or
involuntary, by operation of law or otherwise, shall vest the transferee with
any interest or right in or with respect to such share, but immediately upon any
attempt to transfer such rights, such share, and all of the rights related
thereto, shall be forfeited by the Participant and the transfer shall be of no
force or effect.

 
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7.4           Issuance of Certificates

 
(a)
Except as provided in Sections 7.3 or 7.6 hereof, reasonably promptly after the
issue date with respect to shares of Restricted Stock, the Company shall cause
to be issued a stock certificate, registered in the name of the Participant to
whom such shares were granted, evidencing such shares; provided, that the
Company shall not cause to be issued such a stock certificate unless it
has received a stock power duly endorsed in blank with respect to such shares.
 Each such stock certificate shall bear the following legend:

The transferability of this certificate and the shares of stock
represented hereby are subject to the restrictions, terms and conditions
(including forfeiture provisions and restrictions against transfer) contained in
the ITEX 2004 Equity Incentive Plan and an Agreement entered into between
the registered owner of such shares and ITEX. A copy of the Plan and Agreement
is on file in the office of the Secretary of ITEX Corporation.

Such legend shall not be removed from the certificate evidencing such shares
until such shares vest pursuant to the terms hereof.

 
(b)
Each certificate issued pursuant to Section 7.4(a) hereof, together with the
stock powers relating to the shares of Restricted Stock evidenced by such
certificate, shall be deposited by the Company with a custodian designated by
the Company (which custodian may be the Company).  The Company shall cause such
custodian to issue to the Participant a receipt evidencing the certificates held
by it which are registered in the name of the Participant.

7.5           Consequences Upon Vesting

Upon the vesting of a share of Restricted Stock pursuant to the terms hereof,
the restrictions of Section 7.3 hereof shall cease to apply to such share.
 Reasonably promptly after a share of Restricted Stock vests pursuant to the
terms hereof, the Company shall cause to be issued and delivered to the
Participant to whom such shares were granted, a certificate evidencing such
share, free of the legend set forth in Section 7.4(a) hereof, together with any
other property of the Participant held by the custodian pursuant to Section 17
hereof.

7.6           Effect of Termination of Employment

 
(a)
In the event that the employment of a Participant with the Company shall
terminate for any reason (other than a termination that is, or is deemed to have
been, for cause) prior to the vesting of shares of Restricted Stock granted to
such Participant, a proportion of such shares, to the extent not forfeited or
canceled on or prior to such termination pursuant to any provision hereof, shall
vest on the date of such termination.  The proportion referred to in the
preceding sentence shall initially be determined by the Administrator at the
time of the grant of such shares of Restricted Stock and may be based on the
achievement of any conditions imposed by the Administrator with respect to such
shares pursuant to Section 7.2.  Such proportion may be equal to zero.  In the
absence of any such provision in an agreement evidencing an Award of Restricted
Stock, the termination of a Participant’s employment with the Company for any
reason (including death or Disability) shall cause the immediate forfeiture of
all shares of Restricted Stock that have not vested as of the date of such
termination.

 
(b)
In the event a Participant’s employment is or is deemed to have been terminated
for cause, all shares of Restricted Stock granted to such Participant that have
not vested as of the effective date of such termination immediately shall be
forfeited.

 
 
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7.7           Effect of Change in Control

Upon the occurrence of a Change in Control (as defined in Section 24), all
shares of Restricted Stock which have not theretofore vested (including those
with respect to which the Issue Date has not yet occurred), or been canceled or
forfeited pursuant to any provision hereof, immediately shall vest.

7.8           Voting Rights and Dividends

 
(a)
The Participant shall have the right to vote all shares of Restricted Stock
during the period the restriction is enforced.  Whenever such voting rights are
to be exercised, the Company shall provide the Participant with the same notices
and other materials as are provided to other holders of the Stock, and the
Participant shall be provided adequate opportunity to review the notices and
material and vote the Restricted Stock allocated to him or her.

 
(b)
Dividends will be authorized by the Company to be paid to the Participant during
the period the restriction is enforced, subject to the same restrictions as the
underlying shares upon which the restriction is declared.

8.           STOCK AND CASH BONUSES

8.1           The Administrator may grant Stock Bonuses in such amounts as it
shall determine from time to time. A Stock Bonus shall be paid at such time
(including a future date selected by the Administrator at the time of grant) and
subject to such conditions as the Administrator shall determine at the time of
the grant of such Stock Bonus.  By way of example and not by way of limitation,
the Administrator may require, as a condition to the payment of a Stock Bonus,
that the Participant or the Company achieve such performance criteria as the
Administrator may specify at the time of the grant.  Certificates for shares of
Company Stock granted as a Stock Bonus shall be issued in the name of the
Participant to whom such grant was made and delivered to such Participant as
soon as practicable after the date on which such Stock Bonus is required to be
paid.  Prior to the date on which a Stock Bonus awarded hereunder is required to
be paid, such Award shall constitute an unfunded, unsecured promise by the
Company to distribute Company Stock in the future.

8.2           The Administrator may, in its absolute discretion, in connection
with any grant of Restricted Stock or Stock Bonus or at any time thereafter,
grant a cash bonus, payable promptly after the date on which the Participant is
required to recognize income for federal income tax purposes in connection with
such grant of Restricted Stock or Stock Bonus, in such amounts as the
Administrator shall determine from time to time; provided, however, that in no
event shall the amount of a Cash Bonus exceed the Fair Market Value of the
related shares of Restricted Stock or Stock Bonus on such date. A cash bonus
shall be subject to such conditions as the Administrator shall determine at the
time of the grant of such cash bonus.

9.           EMPLOYEE STOCK PURCHASE PLAN

The Administrator may grant Awards pursuant to the Plan to all employees, which
Awards shall be evidenced by Award Agreements in such form as the Administrator
shall from time to time approve. Awards shall comply with and be subject to the
following terms and conditions:
 
 
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9.1           Company Stock Available for Awards

The aggregate number of shares of Company Stock that may be granted as Options
under the Employee Stock Purchase Plan shall be determined on an annual basis by
the Administrator.  Shares shall be deemed to have been granted under the Plan
only to the extent actually issued and delivered pursuant to the Award. To the
extent that an Award lapses or the rights of the Participant terminate, any
shares of Company Stock subject to such Award shall again be available for the
grant of future Awards.

9.2           Eligibility

An Award made pursuant to the Employee Stock Purchase Plan may be granted to an
individual who, at the time of grant, is an employee of the Company or a
Subsidiary and has been determined to be eligible for participation.  An
Award made pursuant to the Plan may be granted on more than one occasion to the
same person; each Award shall be evidenced by a written instrument duly executed
by or on behalf of the Company.  Notwithstanding the foregoing, no employee of
the Company or a Subsidiary shall be granted an Option if such employee,
immediately after the Option is granted, owns stock possessing five percent (5%)
or more of the total combined voting power or five percent (5%) or more of the
value of all classes of stock of the Company or any Subsidiary.  For the purpose
of determining stock ownership, the rules of Section 424(d) of the Code shall
apply.  In addition, the Company Stock which the Participant may purchase under
any outstanding Options shall be treated as stock owned by the Participant. The
Administrator may exclude the following employees from receiving Options under
the Plan:

 
(a)
Employees who have been employed by the Company or a Subsidiary less than two
(2) years;

 
(b)
Employees whose customary employment with the Company or a Subsidiary is twenty
(20) hours or less per week;

 
(c)
Employees whose customary employment with the Company or a Subsidiary is not for
more than five (5) months in any calendar year; and

 
(d)
Highly compensated employees within the meaning of Section 414(q) of the Code.

9.3           Employee Stock Purchase Plan Stock Option Agreement

Each Option shall be evidenced by an Option Agreement between the Company and
the Participant which shall contain such terms and conditions as may be approved
by the Administrator and are consistent with Section 423 of the Code.  The terms
and conditions of the respective Option Agreements need not be identical.  Each
Option Agreement shall specify the effect of termination of employment, total
and permanent Disability, retirement or death on the exercisability of the
Option. Under each Option Agreement, a Participant shall have the right to
appoint any individual or legal entity in writing as his or her Beneficiary in
the event of his or her death.  Such designation may be revoked in writing by
the Participant at any time and a new Beneficiary may be appointed in writing on
the form provided by the Administrator for such purpose.  In the absence of
such appointment, the Beneficiary shall be the legal representative of the
Participant’s estate.

9.4           Option Period

The term of each Option shall be as specified by the Administrator at the date
of grant and shall be stated in the Option Agreement; provided, however, that an
Option may not be exercised after the expiration of:
 
 
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(a)
Five (5) years from the date such Option is granted if the Employee Stock
Purchase Plan requires that the Option price must be not less than eighty-five
percent (85%) of the Fair Market Value of the Company Stock at the time the
Option is exercised; or

 
(b)
Twenty-Seven (27) months from the date such Option is granted if the Option
provides for an Option Price in some other permissible manner under Section 423
of the Code (such as a flat dollar amount).

9.5           Limitation on Exercise of Option

An Option may be exercisable in whole or in such installments and at such times
as determined by the Administrator and the applicable term relating to the
exercise of the option shall be stated in the Option Agreement and must be
uniform for all employees with the following exceptions: (1) the Administrator
may limit the maximum number of Options that can be exercised under the Employee
Stock Purchase Plan, and (2) the Administrator may limit the amount of Options
that all employees may be granted to a specified relationship to total
compensation or the base or regular rate of compensation; and provided,
however, that an Option may be exercised at the rate of at least twenty percent
(20%) per year over five (5) years from the date it is granted.

9.6           Special Limitation Regarding Exercise of Option

No employee may be granted an Option which permits his or her rights to exercise
Options under the Employee Stock Purchase Plan of the Company and subsidiaries
to accrue at a rate that exceeds $25,000 of the Fair Market Value of such
stock (determined at the time of grant) for each calendar year in which such
Option is outstanding at any time. For the purpose of this rule:

 
(a)
The right to purchase Company Stock under an Option accrues when the Option (or
any portion thereof) first becomes exercisable during the calendar year;

 
(b)
The right to purchase Company Stock under an Option accrues at the rate provided
in the Option, but in no case shall such rate exceed $25,000 of Fair Market
Value of such stock (determined at the time of grant) for any one calendar year;
and

 
(c)
A right to purchase Company Stock which has accrued under one Option granted
pursuant to the Plan may not be carried over to any other Option.

The Administrator shall determine, in accordance with applicable provisions of
the Code, Treasury Regulations, and other administrative pronouncements which
Options will not constitute Options under Section 423 of the Code because of
such limitation and shall notify the Participant of such determination as soon
as practicable after such determination.

9.7           Option Price

The purchase price of Company Stock issued under each Option shall be determined
by the Administrator and shall be stated in the Option Agreement, but such
purchase price shall not be less than the lesser of:

 
(1)
An amount equal to eighty-five percent (85%) of the Fair Market Value of the
Company Stock at the time the Option is granted; or

 
 
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(2)
An amount which under the terms of the Option may not be less than eight-five
percent (85%) of the Fair Market Value of such Company Stock at the time of the
exercise of the Option.

9.8           Options and Rights in Substitution for Stock Options Granted by
Other Companies

Options may be granted under the Plan from time to time in substitution for
stock options held by employees of companies who become, or who became prior to
the effective date of the Plan, employees of the Company or of any Subsidiary as
a result of a merger or consolidation of the employing company with the Company,
or such Subsidiary, or the acquisition by the Company or a Subsidiary of all or
a portion of the assets of the employing company with the result that such
employing company becomes a subsidiary.

9.9           Awards

The size of Awards to individual Participants shall be determined by the
Administrator in consultation with the Chief Executive Officer.

9.10        Adjustments to Stock

In the event of any change in the outstanding Company Stock of the Company for
the reason of a stock dividend, recapitalization, reorganization, merger,
consolidation, split-up, combination or any similar transaction, the number of
shares of Company Stock which may be or have been awarded under the Employee
Stock Purchase Plan may be adjusted to prevent dilution or enlargement of the
rights to the Participants under this Plan, at the sole determination of the
Administrator.

10.           OTHER EQUITY-BASED AWARDS

The Administrator may grant other types of equity-based Awards in such amounts
and subject to such terms and conditions, as the Administrator in its sole
discretion may determine, subject to the provisions of the Plan.  Awards may
entail the transfer of actual shares of Company Stock to Participants, or
payment in cash or otherwise of amounts based on the value of shares of Company
Stock.

11.           RIGHT OF RECAPTURE

If at any time within one year after the date on which a Participant exercises
an Option, or Stock Appreciation Right or on which Restricted Stock vests or on
which a Stock Bonus or a cash bonus was granted to a Participant, or on
which income is realized by a Participant in connection with any other
stock-based award (each of which events shall be a “realization event”), if the
Administrator determines in its discretion that the Company has been materially
harmed by the Participant, whether such harm (a) results in the Participant’s
termination or deemed termination of employment for cause, (b) results from
any activity of the Participant determined by the Administrator to be in
competition with any activity of the Company, or otherwise prejudicial, contrary
or harmful to the interests of the Company (including, but not limited to,
accepting employment with or serving as a consultant, adviser or in any other
capacity to an entity that is in competition with or acting against the
interests of the Company), or (c) results from the Participant engaging in any
“Detrimental Activity as defined in Section 21 below, then any gain realized by
the Participant from the realization event shall be paid by the Participant to
the Company upon notice from the Company.  Such gain shall be determined as of
the date of the realization event, without regard to any subsequent change in
the Fair Market Value of a share of Company Stock.  The Company shall have the
right to offset such gain against any amounts otherwise owed to the Participant
by the Company (whether as wages, vacation pay, or pursuant to any benefit plan
or other compensatory arrangement).
 
 
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12.           PAYMENT FOR SHARE PURCHASES

12.1.           Payment.  Payment for Shares purchased pursuant to this Plan may
be made in cash, by certified check, bank cashier’s check or wire transfer, or,
where expressly approved for the Participant at the discretion of the
Administrator and where permitted by law:

(a)           by cancellation of indebtedness of the Company to the Participant;

(b)           unless provided otherwise in the applicable Award Agreement, in
shares of Company Stock owned by the Participant (which, if acquired pursuant to
the exercise of a stock option, were acquired at least six months prior to the
option exercise date) and valued at their Fair Market Value on the effective
date of such exercise, or partly in shares of Company Stock with the balance in
cash, by certified check, bank cashier’s check or wire transfer; or

(c)           at the discretion of the Administrator and to the extent permitted
by law, by such other provision as the Administrator may from time to time
prescribe.

Any payment in shares of Company Stock shall be effected by the delivery of such
shares to the Secretary of the Company, duly endorsed in blank or accompanied by
stock powers duly executed in blank, together with any other documents and
evidences as the Secretary of the Company shall require from time to time.

12.2.           No Loans.  The Company shall not lend money to any Participant
to finance a transaction under this Plan.

13.           WITHHOLDING TAXES

13.1.           Cash Remittance

Whenever shares of Company Stock are to be issued upon the exercise of an
Option, the Company shall have the right to require the Participant to remit to
the Company, in cash, an amount sufficient to satisfy the federal, state and
local withholding tax requirements, if any, attributable to such exercise,
occurrence or payment prior to the delivery of any certificate or certificates
for such shares.  In addition, upon the grant of a cash bonus, the Company shall
have the right to withhold from any cash payment required to be made pursuant
thereto an amount sufficient to satisfy the federal, state and local withholding
tax requirements, if any, attributable to such exercise or grant.

13.2           Stock Remittance

At the election of the Participant, subject to the approval of the
Administrator, when shares of Company Stock are to be issued upon the exercise
of an Option, the occurrence of the issue date or the Vesting Date with respect
to a share of Restricted Stock or the grant of a Stock Bonus in lieu of the
remittance required by Section 13.1 hereof, the Participant may tender to the
Company a number of shares of Company Stock, the Fair Market Value of which at
the tender date the Administrator determines to be sufficient to satisfy the
federal, state and local withholding tax requirements, if any, attributable to
such exercise, occurrence, grant or payment and not greater than the
Participant’s estimated total federal, state and local tax obligations
associated with such exercise, occurrence, grant or payment.
 
 
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13.3           Stock Withholding

The Administrator, at its sole discretion, shall have the right, when shares of
Company Stock are to be issued upon the exercise of an Option, the occurrence of
the issue date or the Vesting Date with respect to a share of Restricted Stock
or the grant of a Stock Bonus in lieu of requiring the remittance required by
Section 13.1 hereof, to withhold a number of such shares, the Fair Market Value
of which at the exercise date the Administrator determines to be sufficient to
satisfy the federal, state and local withholding tax requirements, if any,
attributable to such exercise, occurrence, grant or payment and is not greater
than the Participant’s estimated total federal, state and local tax obligations
associated with such exercise, occurrence, grant or payment.

14.           RIGHTS AS A STOCKHOLDER

No person shall have any rights as a stockholder with respect to any shares of
Company Stock covered by or relating to any Award granted pursuant to this Plan
until the date that the Participant becomes the registered owner of such
shares.  Subject to Section 23, no adjustment to any Stock Award shall be made
for dividends or other rights for which the record date occurs prior to the date
such stock certificate is issued.

15.           TRANSFERABILITY

Unless otherwise provided, Awards granted under this Plan, and any interest
therein, will not be transferable or assignable by the Participant, and may not
be made subject to execution, attachment or similar process, otherwise than by
will or by the laws of descent and distribution or as consistent with the Award
Agreement provisions relating thereto.  Unless otherwise provided in this Plan,
during the lifetime of the Participant an Award will be exercisable only by the
Participant, and any elections with respect to an Award may be made only by the
Participant.

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
Administrator 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 or automated quotation
system upon which the Shares may be listed or quoted.

17.           ESCROW, PLEDGE OF SHARES

To enforce any restrictions on a Participant’s Shares, the Administrator may
require the Participant to deposit all certificates representing Shares,
together with stock powers or other instruments of transfer approved by the
Administrator, 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 Administrator may cause a legend or legends referencing
such restrictions to be placed on the certificates.

18.           EXCHANGE AND BUYOUT OF AWARDS

The Administrator may, at any time or from time to time, authorize the Company,
with the consent of the respective Participants, to issue new Awards in exchange
for the surrender and cancellation of any or all outstanding Awards.  The
Administrator may at any time buy from a Participant an Award previously granted
with payment in cash, Shares (including Restricted Stock) or other
consideration, based on such terms and conditions as the Administrator and the
Participant may agree.
 
 
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19.           SECURITIES LAW AND OTHER REGULATORY COMPLIANCE

19.1           The Company shall be under no obligation to effect the
registration pursuant to the Securities Act of any interests in the Plan or any
shares of Company Stock to be issued hereunder or to effect similar compliance
under any state laws. Notwithstanding anything herein to the contrary, the
Company shall not be obligated to cause to be issued or delivered any
certificates evidencing shares of Company Stock pursuant to the Plan unless and
until the Company is advised by its counsel that the issuance and delivery of
such certificates is in compliance with all applicable laws, regulations of
governmental authority and the requirements of any securities exchange on which
shares of Company Stock are traded.  The Administrator may require, as a
condition of the issuance and delivery of certificates evidencing shares of
Company Stock pursuant to the terms hereof, that the recipient of such shares
make such covenants, agreements and representations, and that such certificates
bear such legends, as the Administrator, in its sole discretion, deems necessary
or desirable.

19.2           The exercise of any Option granted hereunder shall be effective
only at such time as counsel to the Company shall have determined that the
issuance and delivery of shares of Company Stock pursuant to such exercise is in
compliance with all applicable laws, regulations of governmental authority and
the requirements of any securities exchange on which shares of Company Stock are
traded. The Administrator may, in its sole discretion, defer the effectiveness
of any exercise of an Option granted hereunder in order to allow the issuance of
shares of Company Stock pursuant thereto to be made pursuant to registration or
an exemption from registration or other methods for compliance available under
federal or state securities laws. The Administrator shall inform the Participant
in writing of its decision to defer the effectiveness of the exercise of an
Option granted hereunder.  During the period that the effectiveness of the
exercise of an Option has been deferred, the Participant may, by written notice,
withdraw such exercise and obtain a refund of any amount paid with respect
thereto.

20.           NO SPECIAL EMPLOYMENT RIGHTS; NO RIGHT TO STOCK AWARD

20.1.          Nothing contained in the Plan or any Award shall confer upon any
Participant any right with respect to the continuation of his or her employment
by the Company or interfere in any way with the right of the Company, subject to
the terms of any separate employment agreement to the contrary, at any time to
terminate such employment or to increase or decrease the compensation of the
Participant from the rate in existence at the time of the grant of a Stock
Award.

20.2           No person shall have any claim or right to receive a Award
hereunder.  The Administrator’s granting of a Stock Award to a Participant at
any time shall neither require the Administrator to grant a Stock Award to such
Participant or any other Participant or other person at any time nor preclude
the Administrator from making subsequent grants to such Participant or any other
Participant or other person.

21.           CANCELLATION AND RESCISSION OF AWARDS

21.1           Unless the Award Agreement specifies otherwise, the Administrator
may cancel, rescind, suspend, withhold or otherwise limit or restrict any
unexpired, unpaid, or deferred Awards at any time if the Participant is not in
compliance with all applicable provisions of the Award Agreement and the Plan,
or if the Participant engages in any “Detrimental Activity.”  For purposes of
this Section, “Detrimental Activity” shall include: (i) the rendering of
services for any organization or engaging directly or indirectly in any business
which is or becomes competitive with the Company, or which organization or
business, or the rendering of services to such organization or business, is or
becomes otherwise prejudicial to or in conflict with the interests of the
Company; (ii) the disclosure to anyone outside the Company, or the use in other
than the Company’s business, without prior written authorization from the
Company, of any trade secret, confidential information or material, as defined
in the Company’s Agreement Regarding Confidential Information and Intellectual
Property, relating to the business of the Company or a Subsidiary, acquired by
the Participant either during or after employment with the Company;  (iii) the
failure or refusal to disclose promptly and to assign to the Company, pursuant
to the Company’s Agreement Regarding Confidential Information and Intellectual
Property, all right, title and interest in any invention or idea, patentable or
not, made or conceived by the Participant during employment by the Company,
relating in any manner to the actual or anticipated business, research or
development work of the Company or the failure or refusal to do anything
reasonably necessary to enable the Company to secure a patent where appropriate
in the United States and in other countries; (iv) activity that results in
termination of the Participant’s employment for cause; (v) a violation of any
rules, policies, procedures or guidelines of the Company, including but not
limited to the Company’s Business Conduct Guidelines; (vi) any attempt directly
or indirectly to induce any employee of the Company to break any contract with
the Company or a Subsidiary or to be employed or perform services elsewhere or
any attempt directly or indirectly to solicit the trade or business of any
current or prospective customer, supplier or partner of the Company; (vii) the
Participant having committed an act of embezzlement, fraud, dishonesty, breach
of fiduciary duty to the Company or a Subsidiary, or being convicted of, or
entering a guilty plea with respect to, a crime, whether or not connected with
the Company; or (viii) deliberately disregarding the rules of the Company or a
Subsidiary which resulted in loss, damage or injury to Company or a Subsidiary,
or any other conduct or act determined to be injurious, detrimental or
prejudicial to any interest of the Company.  The determination of the Board
shall be final and conclusive.  In making its determination, the Board shall
give the Participant an opportunity to appear and be heard at a hearing before
the full Board and present evidence on the Participant’s behalf.  Without
limiting the generality of the foregoing, the Agreement may provide that the
Participant shall also pay to Company any gain realized by the Participant from
exercising all or any portion of the Options hereunder during a period beginning
twelve (12) months prior to such suspension or cancellation.
 
 
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21.2           Upon exercise, payment or delivery pursuant to an Award, the
Participant shall certify in a manner acceptable to the Company that he or she
is in compliance with the terms and conditions of the Plan.  In the event a
Participant fails to comply with the provisions of paragraph 21.1 prior to, or
during the twelve months after any exercise, payment or delivery pursuant to an
Award, such exercise, payment or delivery may be rescinded within two years
thereafter.  In addition, in the event of any such rescission, the Participant
shall pay to the Company the amount of any gain realized or payment received as
a result of the rescinded exercise, payment or delivery, in accordance with the
provisions of Section 13 herein, and the Company shall be entitled to set-off
against the amount of any such gain any amount owed to the Participant by the
Company.

21.3           Should any provision of this Section 21 be held to be invalid or
illegal, such illegality shall not invalidate the whole of this Section, but,
rather, this Plan shall be construed as if it did not contain the illegal part
or narrowed to permit its enforcement, and the rights and obligations of the
parties shall be construed and enforced accordingly.

22.           ADJUSTMENT FOR CHANGES IN CAPITALIZATION

The existence of outstanding Awards shall not affect the Company’s right to
effect adjustments, recapitalizations, reorganizations or other changes in its
or any other corporation’s capital structure or business, any merger or
consolidation, any issuance of bonds, debentures, preferred or prior preference
stock ahead of or affecting the Stock, the dissolution or liquidation of the
Company’s or any other corporation’s assets or business or any other corporate
act whether similar to the events described above or otherwise.  Shares shall be
adjusted pursuant to Section 23.
 
 
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23.           ADJUSTMENT UPON CHANGES IN COMPANY STOCK

23.1           Shares Available for Grants

Subject to any required action by the stockholders of the Company, in the event
of any change in the number of shares of Company Stock outstanding by reason of
any stock dividend or split, reverse stock split, recapitalization,
merger, consolidation, combination or exchange of shares or similar corporate
change, the maximum number of shares of Company Stock with respect to which the
Administrator may grant Stock Awards under Section 4 hereof shall be
appropriately adjusted by the Administrator.  In the event of any change in the
number of shares of Company Stock outstanding by reason of any other event or
transaction, the Administrator may, but need not, make such adjustments in the
number and class of shares of Company Stock with respect to which Awards may be
granted under Section 4 hereof as the Administrator may deem appropriate. Any
such adjustment pursuant to this Section 23.1 shall be made by the
Administrator, whose determination shall be final, binding and conclusive.

23.2            Outstanding Restricted Stock

Unless the Administrator in its absolute discretion otherwise determines, any
securities or other property (including dividends paid in cash) received by a
Participant with respect to a share of Restricted Stock, the issue date with
respect to which occurs prior to such event, but which has not vested as of the
date of such event, as a result of any dividend, stock split, reverse stock
split, recapitalization, merger, consolidation, combination, exchange of shares
or otherwise shall not vest until such share of Restricted Stock vests, and
shall be promptly deposited with the custodian designated pursuant to Paragraph
7.4 hereof. The Administrator may, in its absolute discretion, adjust any grant
of shares of Restricted Stock, the issue date with respect to which has not
occurred as of the date of the occurrence of any of the following events to
reflect any dividend, stock split, reverse stock split, recapitalization,
merger, consolidation, combination, exchange of shares or similar corporate
change as the Administrator may deem appropriate to prevent the enlargement or
dilution of rights of a Participant under the grant.

23.3            Outstanding Options ― Increase or Decrease in Issued Shares
Without Consideration

Subject to any required action by the stockholders of the Company, in the event
of any increase or decrease in the number of issued shares of Company Stock
resulting from a subdivision or consolidation of shares of Company Stock or
the payment of a stock dividend (but only on the shares of Company Stock), or
any other increase or decrease in the number of such shares effected without
receipt of consideration by the Company, the Administrator shall proportionally
adjust the number of shares of Company Stock subject to each outstanding Option,
and the exercise price-per-share of Company Stock of each such Option. Any such
adjustment pursuant to this Section shall be made by the Administrator,
whose determination shall be final, binding and conclusive.

23.4            Outstanding Options ― Certain Other Transactions

In the event of (1) a dissolution or liquidation of the Company, (2) a sale of
all or substantially all of the Company’s assets, (3) a merger or consolidation
involving the Company in which the Company is not the surviving corporation or
(4) a merger or consolidation involving the Company in which the Company is the
surviving corporation but the holders of shares of Company Stock receive
securities of another corporation and/or other property, including cash, the
Administrator shall, in its absolute discretion, have the power to:

 
(a)
cancel, effective immediately prior to the occurrence of such event, each Option
outstanding immediately prior to such event (whether or not then exercisable),
and, in full consideration of such cancellation, pay to the Participant to whom
such Option was granted an amount in cash, for each share of Company Stock
subject to such Option, equal to the excess of (A) the value, as determined by
the Administrator in its absolute discretion, of the property (including cash)
received by the holder of a share of Company Stock as a result of such event
over (B) the exercise price of such Option; or

 
 
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(b)
provide for the exchange of each Option outstanding immediately prior to
such event (whether or not then exercisable) for an option on or stock
appreciation right with respect to, as appropriate, some or all of the property
which a holder of the number of shares of Company Stock subject to such Option
would have received in such transaction and, incident thereto, make an equitable
adjustment as determined by the Administrator in its absolute discretion in the
exercise price of the option or stock appreciation right, or the number of
shares or amount of property subject to the option or stock appreciation right
or, if appropriate, provide for a cash payment to the Participant to whom such
Option was granted in partial consideration for the exchange of the Option.

23.5            Outstanding Options ― Other Changes

In the event of any change in the capitalization of the Company or a corporate
change other than those specifically referred to in Sections 23.2 through 23.4
hereof, the Administrator may, in its absolute discretion, make such adjustments
in the number and class of shares subject to Options outstanding on the date on
which such change occurs and in the per share exercise price of each such
Option, as the Administrator may consider appropriate to prevent dilution or
enlargement of rights.  In addition, if and to the extent the Administrator
determines it is appropriate, the Administrator may elect to cancel each Option
outstanding immediately prior to such event (whether or not then exercisable),
and, in full consideration of such cancellation, pay to the Participant to whom
such Option was granted an amount in cash, for each share of Company Stock
subject to such Option, equal to the excess of (A) the Fair Market Value of
Company Stock on the date of such cancellation over (B) the exercise price of
such Option.

23.6            Effect of Loss of Affiliate Status

If an entity ceases to be an Affiliate because the Company sells its interest in
such entity to another party or parties, such event may constitute at the sole
discretion of the Administrator, a termination of employment from the Company
and its Affiliates by Participants employed by such entity as of the date it
ceases to be an Affiliate. The Administrator may, but need not, adjust the
provisions of the Plan related to the expiration of any Stock Awards not yet
exercisable at termination of employment, as it considers appropriate in
connection with the specific event resulting in loss of Affiliate status.

23.7            No Other Rights

Except as expressly provided in the Plan, no Participant shall have any rights
by reason of any subdivision or consolidation of shares of stock of any class,
the payment of any dividend, any increase or decrease in the number of shares
of stock of any class or any dissolution, liquidation, merger or consolidation
of the Company or any other corporation. Except as expressly provided in the
Plan, no issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall affect, and no adjustment
by reason thereof shall be made with respect to, the number of shares of Company
Stock subject to an Award or the exercise price of any Option.
 
 
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24.           CHANGE OF CONTROL

24.1.           Definition.  If there is a “change of control” in the Company,
all outstanding Awards shall fully vest immediately prior to the effectiveness
of such a change.  A “change of control” shall mean the occurrence of any one of
the following:

 
(a)
any person, including a group or entity, becoming the beneficial owner of, or
acquiring the power to direct the exercise of voting power with respect to,
directly or indirectly, securities which represent fifty percent (50%) or more
of the combined voting power of the Company’s outstanding securities thereafter;
or

 
(b)
the stockholders of the Company approving 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 immediately prior to the
merger or consolidation continuing to represent (either by remaining outstanding
or by being converted into voting securities of the surviving or parent entity)
50% or more of the combined voting power of the voting securities of any new
company or surviving or parent entity outstanding immediately after such merger
or consolidation; or

 
(c)
the stockholders of the Company approving an agreement for the sale or
disposition by the Company of all or substantially all of the Company’s assets
(or any transaction having a similar effect).

24.2.           Limitation on Awards.  Notwithstanding any other provisions of
this Plan and unless provided otherwise in the Award Agreement, if the right to
receive or benefit from an Award under this Plan, either alone or together with
payments that a Participant has a right to receive from the Company, would
constitute a “parachute payment” (as defined in Code Section 280G), all such
payments shall be reduced to the largest amount that will result in no portion
being subject to the excise tax imposed by Code Section 4999.

25.           AMENDMENT OR TERMINATION OF THE PLAN

The Board and/or the Committee may, at any time, suspend or discontinue the Plan
or revise or amend it in any respect whatsoever without stockholder approval;
provided, however, that if and to the extent required under Section 422 of the
Code (if and to the extent that the Administrator deems it appropriate to comply
with Section 422) and if and to the extent required to treat some or all of the
Stock Awards as “performance-based compensation” within the meaning of Section
162(m) of the Code (if and to the extent that the Administrator deems it
appropriate to meet such requirements), no amendment shall be effective without
the approval of the stockholders of the Company, that (i) except as provided in
Section 23 hereof, increases the number of shares of Company Stock with respect
to which Stock Awards may be issued under the Plan, (ii) modifies the class of
individuals eligible to participate in the Plan or (iii) materially increases
the benefits accruing to individuals pursuant to the Plan.  Nothing herein shall
restrict the Administrator’s ability to exercise its discretionary authority
hereunder pursuant to Section 5 hereof, which discretion may be exercised
without amendment to the Plan.  No action under this Section 25 may, without the
consent of a Participant, reduce the Participant’s rights under any previously
granted and outstanding Stock Award except to the extent that the Administrator
determines that such amendment is necessary or appropriate to prevent such Stock
Awards from constituting “applicable employee remuneration” within the meaning
of Section 162(m) of the Code.
 
 
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26.           NO OBLIGATION TO EXERCISE

The grant to a Participant of an Option shall impose no obligation upon such
Participant to exercise such Option.

27.           TRANSFERS UPON DEATH

Upon the death of a Participant, outstanding Awards granted to such Participant
may be exercised only by the executors or administrators of the Participant’s
estate or by any person or persons who shall have acquired such right to
exercise by will or by the laws of descent and distribution.  No transfer by
will or the laws of descent and distribution of any Award, or the right to
exercise any Award, shall be effective to bind the Company unless the
Administrator shall have been furnished with (a) written notice thereof and with
a copy of the will and/or such evidence as the Administrator may deem necessary
to establish the validity of the transfer and (b) an agreement by the transferee
to comply with all the terms and conditions of the Award that are or would have
been applicable to the Participant and to be bound by the acknowledgments made
by the Participant in connection with the grant of the Award. In the event that
at any time any doubt exists as to the right of any person to exercise or
receive a payment under an Award, the Administrator shall be entitled, in its
discretion, to delay such exercise or payment until it is satisfied that such
right has been confirmed (which may, but need not be, by order of a court of
competent jurisdiction), or to permit such exercise or make payment only upon
receipt of a bond or similar indemnification (in such amount and in such form as
is satisfactory to the Administrator). Except as provided in this Section  or
otherwise provided in the Plan or any applicable Award Agreement with respect to
transfers to immediate family members or trusts for the benefit of immediate
family members, no Award shall be transferable, and Awards shall be exercisable
only by a Participant during the Participant’s lifetime.

28.           EXPENSES AND RECEIPTS

The expenses related to administering the Plan shall be paid by the Company.
 Any proceeds received by the Company in connection with any Award will be used
for general corporate purposes.

29.           COMPLIANCE WITH RULE 16b-3

It is intended that the Plan be applied and administered in compliance with Rule
16b-3.  If any provision of the Plan would be in violation of Rule 16b-3 if
applied as written, such provision shall not have effect as written and shall be
given effect so as to comply with Rule 16b-3, as determined be the
Administrator.  The Administrator is authorized to amend the Plan and to make
any such modifications to Award Agreements to comply with Rule 16b-3, as it may
be amended from time to time, and to make any other such amendments or
modifications deemed necessary or appropriate to better accomplish the purposes
of the Plan in light of any amendments made to Rule 16b-3.

30.           LIMITATIONS IMPOSED BY SECTION 162(m)

30.1           Notwithstanding any other provision hereunder, prior to a Change
in Control, if and to the extent that the Administrator determines the Company’s
federal tax deduction in respect of a Award may be limited as a result of
Section 162(m) of the Code, the Administrator may take the following actions:

 
(a)
With respect to Options, the Administrator may delay the payment in respect of
such Options until a date that is within 30 days after the earlier to occur of
(i) the date that compensation paid to the Participant no longer is subject to
the deduction limitation under Section 162(m) of the Code and (ii) the
occurrence of a Change in Control.  In the event that a Participant exercises an
Option at a time when the Participant is a “covered employee,” and the
Administrator determines to delay the payment in respect of such any Stock
Award, the Administrator shall credit cash or, in the case of an amount payable
in Company Stock, the Fair Market Value of the Company Stock, payable to the
Participant to an Account.  The Participant shall have no rights in respect of
such Account and the amount credited thereto shall not be transferable by the
Participant other than by will or laws of descent and distribution.  The
Administrator may credit additional amounts to such Account as it may determine
in its sole discretion.  Any Account created hereunder shall represent only an
unfunded unsecured promise by the Company to pay the amount credited thereto to
the Participant in the future.

 
 
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(b)
With respect to Restricted Stock and Stock Bonuses, the Administrator may
require the Participant to surrender to the Administrator any certificates with
respect to Restricted Stock and Stock Bonuses in order to cancel the Awards of
such Restricted Stock and Stock Bonuses (and any related Cash Bonuses).  In
exchange for such cancellation, the Administrator shall credit to an Account a
cash amount equal to the Fair Market Value of the shares of Company Stock
subject to such awards.  The amount credited to the Account shall be paid to the
Participant within 30 days after the earlier to occur of (i) the date that
compensation paid to the Participant no longer is subject to the deduction
limitation under Section 162(m) of the Code and (ii) the occurrence of a Change
in Control.  The Participant shall have no rights in respect of such Account and
the amount credited thereto shall not be transferable by the Participant other
than by will or laws of descent and distribution.  The Administrator may credit
additional amounts to such Account as it may determine in its sole discretion.
 Any Account created hereunder shall represent only an unfunded unsecured
promise by the Company to pay the amount credited thereto to the Participant in
the future.

31.           FAILURE TO COMPLY

In addition to the remedies of the Company elsewhere provided for herein, a
failure by a Participant (or Beneficiary or permitted transferee) to comply with
any of the terms and conditions of the Plan or the agreement executed by such
Participant (or Beneficiary or permitted transferee) evidencing a Stock Award,
unless such failure is remedied by such Participant (or Beneficiary or permitted
transferee) within ten days after having been notified of such failure by the
Administrator, shall be grounds for the cancellation and forfeiture of such
Stock Award, in whole or in part, as the Administrator, in its absolute
discretion, may determine.

32.           SEPARABILITY OF PROVISIONS

If any provision of this Plan is held to be invalid or unenforceable, the other
provisions of the Plan shall not be affected but shall be applied as if the
invalid or unenforceable provision had not been included in the Plan.

33.           APPLICABLE LAW

Except to the extent preempted by any applicable federal law, the Plan will be
construed and administered in accordance with the laws of the State of
Washington, without reference to the principles of conflicts of law.
 
 
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34.           DEFINITIONS.  As used in this Plan, the following terms will have
the following meanings:

34.1           “Administrator” means the Board or, with respect to any matter as
to which responsibility has been delegated to the Committee, the term
“Administrator” shall mean the Committee.

34.2           “Award” means, individually and collectively, any award under
this Plan, including any Option, Restricted Stock, or Stock Bonus.

34.3           “Award Agreement” means an agreement, in such form and including
such terms as the Administrator in its sole discretion shall determine,
evidencing an Award.

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

34.5           “Change of Control” has the meaning set forth in Section 25.

34.6           “Code” means the Internal Revenue Code of 1986, as amended from
time to time.

34.7           “Committee” means the Committee appointed by the Board to
administer this Plan, or if no such committee is appointed, the Board; provided,
however, that any Committee appointed by the Board shall at all times consist of
two or more persons, all of whom are “non-employee directors” within the meaning
of Rule 16b-3 under the Exchange Act.

34.8           “Company” means ITEX Corporation, a Nevada corporation and its
subsidiaries, or any successor corporation.

34.9           “Detrimental Activity” has the meaning set forth in Section 22.

34.10         “Disability” means a disability, whether temporary or permanent,
partial or total, within the meaning of Section 22(e)(3) of the Code  The
existence of a Disability shall be determined by the Administrator in its
absolute discretion.

34.11         “Effective Date” has the meaning set forth in Section 2.

34.12         “Eligible Person” means, in the case of the grant of an Incentive
Stock Option, all officers and salaried employees of the Company or a subsidiary
of the Company (including employees who are also directors and prospective
salaried employees conditioned on their becoming salaried employees) and, in the
case of a Non-Qualified Stock Option, Restricted Stock, and Stock Bonus, any
director, officer or employee of the Company or other person who, in the opinion
of the Board, is rendering valuable services to the Company or its subsidiary,
including without limitation, an independent contractor, outside consultant, or
advisor to the Company or its subsidiary.

34.13         “Exchange Act” means the Securities Exchange Act of 1934, as
amended from time to time.

34.14         “Exercise Price” means the price at which a holder of an Option
may purchase the Shares issuable upon exercise of the Option.

34.15         “Fair Market Value” means

 
(i)
if the principal market for the Company Stock (the “Market”) is a national
securities exchange or the National Association of Securities Dealers Automated
Quotation System (“NASDAQ”) National Market, the last sale price or, if no
reported sales take place on the applicable date, the average of the high bid
and low asked price of Company Stock as reported for such Market on such date
or, if no such quotation is made on such date, on the next preceding day on
which there were quotations, provided that such quotations shall have been made
within the ten (10) business days preceding the applicable date;

 
 
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(ii)
if the Market is the NASDAQ National List, the NASDAQ Supplemental List or
another market, the average of the high bid and low asked price for Company
Stock on the applicable date, or, if no such quotations shall have been made on
such date, on the next preceding day on which there were quotations, provided
that such quotations shall have been made within the ten (10) business days
preceding the applicable date; or

 
(iii)
if the Market is the OTC Bulletin Board, with respect to stock awards, the
average price per share during the twelve months immediately preceding the
issuance, or the closing bid price on the day of grant, whichever is higher; and
for stock options, the closing bid price on the day of the grant, provided
however, that the Fair Market Value on any day may be determined in good faith
by the Administrator in a manner consistently applied.

34.16         “Incentive Stock Option” means an option, which is an incentive
stock option within the meaning of Section 422 of the Code, and that is
identified as an Incentive Stock Option in the agreement by which it is
evidenced.

34.17         “Non-Qualified Stock Option” means an option that is not an
Incentive Stock Option within the meaning of Section 422 of the Code.

34.18         “Option” means an award of an option to purchase Shares pursuant
to this Plan.

34.19         “Optionee” means the holder of an Option.

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

34.21         “Plan” means this 2004 Equity Incentive Plan, as amended from time
to time.

34.22         “Restricted Stock Award” means an award of Shares pursuant to
Section 7.
 
34.23         “Rule 16b-3” means Rule 16b-3 under Section 16(b) of the Exchange
Act, as amended from time to time, and any successor rule.

34.24         “SEC” means the Securities and Exchange Commission.

34.25         “Securities Act” means the Securities Act of 1933, as amended from
time to time.

34.26         “Shares” means shares of the Company’s Common Stock reserved for
issuance under this Plan, as adjusted pursuant to Section 4, and any successor
security.

34.27         “Stock” means the Common Stock, $.01 par value, of the Company,
and any successor entity.

34.28         “Stock Bonus” means an award of Shares, or cash in lieu of Shares,
pursuant to Section 8.
 
 
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34.29         “Subsidiary” means a company (whether a corporation, partnership,
joint venture or other form of entity) in which the Company, or a company in
which the Company owns a majority of the shares of capital stock directly or
indirectly, owns an equity interest of fifty percent (50%) or more.

34.30         “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 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 Administrator; provided,
that such leave is for a period of not more than ninety (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 Administrator may
make such provisions respecting suspension of vesting of the Award while on
leave from the employ of the Company as it may deem appropriate, except that in
no event may an Option be exercised after the expiration of the term set forth
in the Award Agreement.  The Administrator 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”).

34.31         “Vesting Date” means the date established by the Administrator on
which a Participant has the ability to acquire all or a portion of a grant of a
Stock Option or the date upon which the restriction on a Restricted Stock grant
shall lapse.
 
 
 
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