ITEX CORPORATION

 

EXECUTIVE RESTRICTED STOCK AGREEMENT

 

This Agreement is made as of the Grant Date (as defined in section 1.0), by and
between the Participant (as defined in section 1.0) and ITEX Corporation, a
Nevada corporation (the “Company”).

 

Whereas, the Company maintains the ITEX Corporation 2014 Equity Incentive Plan
(the “Plan”), which is incorporated into and forms a part of this Agreement, and
the Participant has been selected by the Compensation Committee administering
the Plan (the “Committee”) to receive a Restricted Stock award under the Plan;

 

NOW, THEREFORE, IT IS AGREED, by and between the Company and the Participant, as
follows:

 

1.0Terms of Award

 

1.1           The following terms used in this Agreement shall have the meanings
set forth in this paragraph 1.0:

 

(a)The “Participant” is _____________.

 

(b)The “Grant Date” is _____________.

 

(c)The “Restricted Period” is the period beginning on the Grant Date and ending
on ____________, subject to the vesting schedule in Section 5.0 below.

 

(d)The number of shares of “Restricted Stock” awarded under this Agreement shall
be ___________ shares. Shares of “Restricted Stock” are shares of Stock granted
under this Agreement and are subject to the terms of this Agreement and the
Plan.

 

Other terms used in this Agreement are defined pursuant to paragraph 6 or
elsewhere in this Agreement. Unless otherwise defined in this Agreement, the
terms defined in the Plan shall have the same defined meanings in this
Agreement.

 

2.0Award

 

2.1           The Participant is hereby granted the number of shares of
Restricted Stock set forth in paragraph 1.0.

 

3.0Dividends and Voting Rights

 

3.1           The Participant shall be entitled to receive any dividends paid
with respect to shares of Restricted Stock that become payable during the
Restricted Period; provided, however, that no dividends shall be payable to or
for the benefit of the Participant for shares of Restricted Stock with respect
to record dates occurring prior to the Grant Date, or with respect to record
dates occurring on or after the date, if any, on which the Participant has
forfeited those shares of Restricted Stock. The Participant shall be entitled to
vote the shares of Restricted Stock during the Restricted Period to the same
extent as would have been applicable to the Participant if the Participant was
then vested in the shares; provided, however, that the Participant shall not be
entitled to vote the shares with respect to record dates for such voting rights
arising prior to the Grant Date, or with respect to record dates occurring on or
after the date, if any, on which the Participant has forfeited the shares of
Restricted Stock.

 

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4.0Deposit of Shares of Restricted Stock

 

4.1           Each certificate issued in respect of shares of Restricted Stock
granted under this Agreement shall be registered in the name of the Participant
and shall be deposited in escrow with the Secretary of the Company or with
outside counsel for the Company. The grant of Restricted Stock is conditioned
upon the Participant endorsing in blank an Assignment Separate from Certificate
for the Restricted Stock in the form of Exhibit A. The deposited certificates,
together with any other assets or securities from time to time deposited with
the Company pursuant to the requirements of this Agreement, shall remain in
escrow until such time or times as the certificates (or other assets and
securities) are to be released or otherwise surrendered for cancellation in
accordance with Section 5. Upon delivery of the certificates (or other assets
and securities) to the Company, the Owner shall be issued an instrument of
deposit acknowledging the number of shares of Restricted Stock (or other assets
and securities) delivered in escrow to the Secretary of the Company.

 

5.0Vesting; Transfer and Forfeiture of Shares

 

5.1           If the Participant’s Date of Termination (as defined below) does
not occur during the Restricted Period with respect to any shares of Restricted
Stock, then, at the end of the Restricted Period for such shares, the
Participant shall become fully vested in those shares of Restricted Stock, and
shall own the shares free of all restrictions otherwise imposed by this
Agreement. Provided the Participant continues to be an Eligible Recipient,
Participant shall become vested in the shares of Restricted Stock, and become
owner of the shares free of all restrictions otherwise imposed by this
Agreement, prior to the end of the Restricted Period, in accordance with the
following provisions:

 

(a)The Participant shall not acquire any vested interest in any shares of
Restricted Stock during the initial _______ month period measured from the Grant
Date.

 

(b)Upon the expiration of the initial ______ month period measured from the
Grant Date (“Initial Vesting Date”), the Participant shall acquire a vested
interest in that number of shares of Restricted Stock equal to ____ percent
(__%) of the Restricted Stock.

 

(c)From and after the Initial Vesting Date, the Participant shall acquire a
vested interest in ____ percent (__%) of the remaining shares of Restricted
Stock on each anniversary of the Initial Vesting Date. The table below sets
forth the vesting dates for the Restricted Stock:

 

Number of Shares
of Common Stock  Vesting Date                                       
                              

 

(d)The Participant shall become vested in the shares of Restricted Stock prior
to the date the Restricted Stock would otherwise become vested as of the
Participant’s Date of Termination, if the Participant’s Date of Termination
occurs by reason of the Participant’s death or Disability, or if the
Participant’s Date of Termination occurs by reason of the Participant’s
termination by the Company other than for Good Cause (as defined below).

 

(c)The Participant shall become vested in the shares of Restricted Stock as of
the date of a Change in Control (as defined below), if the Change in Control
occurs prior to the end of the Restricted Period, and the Participant’s Date of
Termination does not occur before the Change in Control date.

 

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5.2           Shares of Restricted Stock may not be sold, assigned, transferred,
pledged or otherwise encumbered until the expiration of the Restricted Period
or, if earlier, until the Participant is vested in the shares. Except as
otherwise provided in this paragraph 5, if the Participant’s Date of Termination
occurs during the Restricted Period, the Participant shall forfeit the
Restricted Stock as of the Participant’s Date of Termination.

 

6.0Definitions

 

6.1           For purposes of this Agreement, the terms used in this Agreement
shall be subject to the following:

 

(a)          Change in Control. The term “Change in Control” means an event
involving one transaction or a related series of transactions in which one of
the following occurs: (i) the Company issues securities equal to 50% or more of
the Company’s issued and outstanding voting securities, determined as a single
class, to any individual, firm, partnership or other entity, including a “group”
within the meaning of section 13(d)(3) of the Securities Exchange Act of 1934;
(ii) the Company issues securities equal to 50% or more of the issued and
outstanding common stock of the Company in connection with a merger,
consolidation or other business combination; (iii) the Company is acquired in a
merger or other business combination transaction in which the Company is not the
surviving company; (iv) all or substantially all of the Company’s assets are
sold or transferred; or (v) there is a change in the majority of the members of
the Board of Directors as a result of one or more contested elections for board
membership.

 

(b)          Date of Termination. The Participant’s “Date of Termination” shall
be the first day occurring on or after the Grant Date on which the Participant
is either: (a) not employed by the Company or any Subsidiary, or (b) is no
longer an Eligible Person under the Plan who, in the opinion of the Committee,
is rendering valuable services to the Company or any Subsidiary, regardless of
the reason for the termination of employment or services; provided that a
termination of employment shall not be deemed to occur (i) if the Participant
voluntarily left the Company for any reason other than retirement, disability or
“Good Reason,” or (ii) by reason of a transfer of the Participant between the
Company and a Subsidiary or between two Subsidiaries; and further provided that
the Participant’s employment shall not be considered terminated while the
Participant is on a leave of absence from the Company or a Subsidiary approved
by the Participant’s employer. If, as a result of a sale or other transaction,
the Participant’s employer ceases to be a Subsidiary (and the Participant’s
employer is or becomes an entity that is separate from the Company), and the
Participant is not, at the end of the 30-day period following the transaction,
employed by the Company or an entity that is then a Subsidiary, then the
occurrence of such transaction shall be treated as the Participant’s Date of
Termination caused by the Participant being discharged by the employer.

 

(c)          Disability. Except as otherwise provided by the Committee, the
Participant shall be considered to have a “Disability” during the period in
which the Participant is unable, by reason of a medically determinable physical
or mental impairment, to engage in any substantial gainful activity, which
condition, in the opinion of a physician selected by the Committee, is expected
to have a duration of not less than 120 days.

 

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(d)          Good Cause. The term “Good Cause” means that the Participant is
terminated by majority vote of (excluding Participant) the Board of Directors as
a result of (1) the occurrence of one of the following: (i) serious misconduct,
dishonesty or disloyalty, directly related to the performance of duties for the
Company, which results from a willful act or omission or from gross negligence,
and which is materially or potentially materially injurious to the operations,
financial condition or business reputation of the Company or any significant
subsidiary thereof; (ii) Participant being convicted (or entering into a plea
bargain admitting criminal guilt) in any criminal proceeding that may have a
material adverse impact on the Company’s reputation and standing in the
community; (iii) drug or alcohol abuse, but only to the extent that such abuse
has an obvious and material effect on the Company’s reputation and/or on the
performance of Participant’s duties and responsibilities; or (iv) willful and
continued failure to substantially perform Participant’s duties; and (2) such
event, conduct or condition that may result in termination for Good Cause is not
cured within thirty days after written notice is delivered to Participant from
the Company. For these purposes, no act or failure to act shall be considered
“willful” unless it is done, or omitted to be done, in bad faith without
reasonable belief that the action or omission was in the best interest of the
Company.

 

(e)          Good Reason. The term “Good Reason” means that the Participant,
without Participant’s consent has either:

 

·incurred a material reduction in Participant’s title, status, authority or
responsibility as CEO at the Company; or

 

·failed to be re-elected to the Board and continue as the CEO/Chairman and been
able to nominate one officer to the Board; or

 

·incurred a reduction in the Participant’s base compensation from the Company;
or

 

·been notified that Participant’s principal place of work will be relocated by a
distance of fifty (50) miles or more; or

 

·been required to work more than ten (10) days per month outside of
Participant’s principal offices for a six (6) month continuous period.

 

(f)          Plan Definitions. Except where the context clearly implies or
indicates the contrary, a word, term, or phrase used in the Plan is similarly
used in this Agreement.

 

7.0Heirs and Successors

 

7.1           This Agreement shall be binding upon, and inure to the benefit of,
the Company and its successors and assigns, and upon any person acquiring,
whether by merger, consolidation, purchase of assets or otherwise, all or
substantially all of the Company’s assets and business. If any rights of the
Participant or benefits distributable to the Participant under this Agreement
have not been exercised or distributed, respectively, at the time of the
Participant’s death, such rights shall be exercisable by the Designated
Beneficiary, and such benefits shall be distributed to the Designated
Beneficiary, in accordance with the provisions of this Agreement and the Plan.
The “Designated Beneficiary” shall be the beneficiary or beneficiaries
designated by the Participant in a writing filed with the Committee in such form
and at such time as the Committee shall require. If a deceased Participant fails
to designate a beneficiary, or if the Designated Beneficiary does not survive
the Participant, any rights that would have been exercisable by the Participant
and any benefits distributable to the Participant shall be exercised by or
distributed to the legal representative of the estate of the Participant. If a
deceased Participant designates a beneficiary and the Designated Beneficiary
survives the Participant but dies before the Designated Beneficiary’s exercise
of all rights under this Agreement or before the complete distribution of
benefits to the Designated Beneficiary under this Agreement, then any rights
that would have been exercisable by the Designated Beneficiary shall be
exercised by the legal representative of the estate of the Designated
Beneficiary, and any benefits distributable to the Designated Beneficiary shall
be distributed to the legal representative of the estate of the Designated
Beneficiary.

 

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8.0Administration

 

8.1           The authority to manage and control the operation and
administration of this Agreement shall be vested in the Committee, and the
Committee shall have all powers with respect to this Agreement as it has with
respect to the Plan. Any interpretation of the Agreement by the Committee and
any decision made by it with respect to the Agreement is final and binding.

 

9.0Plan Governs

 

9.1           Notwithstanding anything in this Agreement to the contrary, the
terms of this Agreement shall be subject to the terms of the Plan, a copy of
which may be obtained by the Participant from the office of the Secretary of the
Company.

 

10.0Amendment

 

10.1         This Agreement may be amended by written agreement of the
Participant and the Company, without the consent of any other person.

 

IN WITNESS WHEREOF, the Participant has executed this Agreement, and the Company
has caused this Agreement to be executed in its name and on its behalf, all as
of the Grant Date.

 

ITEX Corporation   PARTICIPANT             By:               Printed Name      
    Address:                              

 

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EXHIBIT A

 

Assignment Separate from Certificate

 

FOR VALUE RECEIVED and pursuant to that certain Restricted Stock Agreement (the
“Agreement”), _____________ hereby sells, assigns and transfers unto ITEX
Corporation, a Nevada corporation (“Assignee”), _______________ (___) shares of
the Common Stock of the Assignee, standing in the undersigned’s name on the
books of said corporation represented by Certificate No. herewith and does
hereby irrevocably constitute and appoint the Secretary and/or the transfer
agent of the Assignee as attorney-in-fact to transfer the said stock on the
books of the within named company with full power of substitution in the
premises. This Assignment may be used only in accordance with and subject to the
terms and conditions of the Agreement, in connection with the forfeiture of
shares of Common Stock of said corporation issued to the undersigned pursuant to
the Agreement, and only to the extent that such shares remain unvested and
subject to forfeiture under the Agreement.

 

Dated:                          Signature                             Signature