BROADCAST INTERNATIONAL, INC.
                  2004 LONG TERM INCENTIVE PLAN

I. GENERAL

     1.   Purpose.  The Broadcast International, Inc. 2004 Long Term Incentive
Plan (the "Plan") has been established by Broadcast International, Inc. (the
"Company") to:

          (a)  attract and retain key executive and managerial employees of
the Company;

          (b)  attract and retain directors, independent contractors and
consultants;

          (c)  motivate Participants by means of appropriate incentives to
achieve long-range goals;

          (d)  provide incentive compensation opportunities that are
competitive with those of comparable corporations; and

          (e)  further identify Participants' interests with those of the
Company's other shareholders through compensation alternatives based on the
Company's common stock;

and thereby promote the long-term financial interest of the Company and its
Subsidiaries (if any), including the growth in value of the Company's equity
and enhancement of long-term shareholder return.

     2.   Effective Date.  The Plan shall be effective as of  December 31,
2003.  The Plan shall terminate on December 31, 2013, the tenth anniversary of
the Plan's effective date.

     3.   Definitions.  The following definitions are applicable to the Plan.

          (a)  "Option Grant Certificate" means a written agreement between
the Company and a Participant documenting an award under this Plan.

          (b)  "Board" means the Board of Directors of the Company.

          (c)  "Change of Control" has the meaning ascribed to it in Section
1.11.

          (d)  "Code" means the Internal Revenue Code of 1986, as amended.

          (e)  "Committee" means the Compensation Committee of the Board.

          (f)  "Disabled" means the inability of a Participant, by reason of a
physical or mental impairment, to engage in any substantial gainful activity,
of which the Board shall be the sole judge.

          (g)  "Fair Market Value" of any share of Stock means (i) if the
Stock is listed on a national securities exchange, the closing price on the
Stock on a given date; (ii) if the Stock is traded on an exchange or market in
which

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prices are reported on a bid and asked price, the average of the mean between
the bid and asked price for the Stock on a given date; and (iii) if the Stock
is not listed on a national securities exchange nor traded on the
over-the-counter market, such value as the Committee, in good faith, shall
determine.

          (h)  "1934 Act" means the Securities Exchange Act of 1934, as
amended, or any successor statute.

          (i)  "Option Date" means, with respect to any Stock Option, the date
on which the Stock Option is awarded under the Plan.

          (j)  "Participant" means (i) any  employee of the Company or any
Subsidiary (meaning an employee who works twenty (20) hours or more per week)
who is selected by the Committee to participate in the Plan, or (ii) any
consultant, independent contractor or director of the Company or any
Subsidiary.

          (k)  "Performance Award" has the meaning ascribed to it in Article
VI.

          (l)  "Performance Period" has the meaning ascribed to it in Article
VI.

          (m)  "Related Company" means any corporation during any period in
which it is a Subsidiary, or during any period in which it directly or
indirectly owns fifty percent (50%) or more of the total combined voting power
of all classes of securities that are entitled to vote.

          (n)  "Restricted Period" has the meaning ascribed to it in Article
V.

          (o)  "Restricted Stock" has the meaning ascribed to it in Article V.

          (p)  "Retirement" means (i) termination of employment in accordance
with the retirement procedures set by the Company from time to time; (ii)
termination of employment because a participant becomes Disabled; or (iii)
termination of employment voluntarily with the consent of the Company (of
which the Board shall be the sole judge).

          (q)  "Stock" means the common stock, $.05 par value per share, of
Broadcast International, Inc.

          (r)  "Stock Appreciation Right" means the right of a holder of a
Stock Option to receive Stock or cash as described in Article IV.

          (s)  "Stock Option" means the right of a Participant to purchase
Stock pursuant to an Incentive Stock Option, a Non-Qualified Option or a
Reload Option awarded pursuant to the provisions of the Plan.


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          (t)  "Subsidiary" means any corporation during any period of which
fifty percent (50%) or more of the total combined voting power of all classes
of securities entitled to vote is owned, directly or indirectly, by the
Company.

     4.   Administration.  The authority to manage and control the operation
and administration of the Plan shall be vested in the Board.  Subject to the
provisions of the Plan, the Board will have authority to select employees to
receive awards of Stock Options, with or without tandem Stock Appreciation
Rights, Performance Awards and/or Restricted Stock, to determine the time or
times of receipt, to determine the types of awards and the number of shares
covered by the awards, to establish the terms, conditions, performance
criteria, restrictions, and other provisions of such awards, and to amend,
modify or suspend awards.  In making such award determinations, the Board may
take into account the nature of services rendered by the respective employee,
his or her present and potential contribution to the Company's success and
such other factors as the Board deems relevant.

     The Board is authorized to interpret the Plan, to establish, amend, and
rescind any rules and regulations relating to the Plan, to determine the terms
and provisions of any agreements made pursuant to the Plan, to modify such
agreements, and to make all other determinations that may be necessary or
advisable for the administration of the Plan.  With respect to persons subject
to Section 16 of the 1934 Act, transactions under the Plan are intended to
comply with all applicable conditions of Rule 16b-3 or its successor rule or
statute under the 1934 Act.  To the extent any provision of the Plan or action
by the Board of Directors or the Committee fails to so comply, it shall be
deemed null and void, to the extent permitted by law.

     The Board, in its discretion, may delegate any or all of its authority,
powers and discretion under this Plan to the Committee, and the Board in its
discretion may revest any or all such authority, powers and discretion in
itself at any time.  If any or all of the authority, powers and discretion
under this Plan are delegated to the Committee and the Company has registered
any of its equity securities under Section 12 of the 1934 Act, the Committee
shall consist solely of two or more non-employee directors (as defined in Rule
16b-3 under the 1934 Act) until such time as such other requirements are
imposed by applicable law.  If appointed, the Committee shall function as
follows:  A majority of the Committee shall constitute a quorum, and the acts
of a majority of the members present at any meeting at which a quorum is
present, or acts approved in writing by all members of the Committee, shall be
the acts of the Committee, unless provisions to the contrary are embodied in
the Company's Bylaws or resolutions duly adopted by the Board.  All actions
taken and decisions and determinations made by the Board or the Committee
pursuant to the Plan shall be binding and conclusive on all persons interested
in the Plan.  No member of the Board or the Committee shall be liable for any
action or determination taken or made in good faith with respect to the Plan.

     5.   Participation.  Subject to the terms and conditions of the Plan, the
Board shall determine and designate, from time to time, (i) the full-time
employees of the Company and/or its Subsidiaries who will participate in the
Plan, and (ii) any consultants, independent contractors or directors of the
Company and/or its Subsidiaries who will participate in the Plan.  In the
discretion of the Board, a Participant may be awarded Stock Options with or
without tandem Stock

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Appreciation Rights, Performance Units or Restricted Stock or any combination
thereof, and more than one award may be granted to a Participant; provided,
however, that Incentive Stock Options shall not be awarded to Participants who
are not employees of the Company.  Except as otherwise agreed to by the
Company and the Participant, any award under the Plan shall not affect any
previous award to the Participant under the Plan or any other plan maintained
by the Company or its Subsidiaries.

     6.   Shares Subject to the Plan.  The shares of Stock with respect to
which awards may be made under the Plan shall be either authorized and
unissued shares or issued and outstanding shares (including, in the discretion
of the Board, shares purchased in the market).  Subject to the provisions of
Section 1.10, the number of shares of Stock available under the Plan for the
grant of Stock Options with or without tandem Stock Appreciation Rights,
Performance Units and Restricted Stock shall not exceed 6,000,000 shares in
the aggregate.  If, for any reason, any award under the Plan or any portion of
the award, shall expire, terminate or be forfeited or canceled, or be settled
in cash pursuant to the terms of the Plan and, therefore, any such shares are
no longer distributable under the award, such shares of Stock shall again be
available for award under the Plan.

     7.   Compliance With Applicable Laws and Withholding of Taxes.

          (a)  Notwithstanding any other provision of the Plan, the Company
shall have no liability to issue any shares of Stock under the Plan unless
such issuance would comply with all applicable laws and the applicable
requirements of any securities exchange or similar entity.  Prior to the
issuance of any shares of Stock under the Plan, the Company may require a
written statement that the recipient is acquiring the shares for investment
and not for the purpose or with the intention of distributing the shares.

          (b)  All awards and payments under the Plan are subject to
withholding of all applicable taxes, which withholding obligations may be
satisfied, with the consent of the Board, through the surrender of shares of
Stock that the Participant already owns, or to which a Participant is
otherwise entitled under the Plan.  The Company shall have the right to deduct
from all amounts paid in cash in consequence of the exercise of a Stock
Option, Performance Unit or Stock Appreciation Right or in connection with an
award of Restricted Stock under the Plan any taxes required by law to be
withheld with respect to such cash payments.  Where an employee or other
person is entitled to receive shares of Stock pursuant to the exercise of a
Stock Option, a Performance Unit or a Stock Appreciation Right pursuant to the
Plan, the Company shall have the right to require the employee or such other
person to pay to the Company the amount of any taxes that the Company is
required to withhold with respect to such shares, or, in lieu thereof, to
retain, or sell without notice, a sufficient number of such shares to cover
the amount required to be withheld.

          (c)  Upon the disposition (within the meaning of Code Section
424(c)) of shares of Stock acquired pursuant to the exercise of an Incentive
Stock Option prior to the expiration of the holding period requirements of
Code Section 422(a)(1), the employee shall be required to give notice to the
Company of such disposition and the Company shall have


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the right to require the employee to pay to the Company the amount of any
taxes that are required by law to be withheld with respect to such
disposition.

          (d)  Upon termination of the Restricted Period with respect to an
award of Restricted Stock (or such earlier time, if any, as an election is
made by the employee under Code Section 83(b), or any successor provisions
thereto, to include the value of such shares in taxable income), the Company
shall have the right to require the employee or other person receiving shares
of Stock in respect of such Restricted Stock award to pay to the Company the
amount of taxes that the Company is required to withhold with respect to such
shares of Stock or, in lieu thereof, to retain or sell without notice a
sufficient number of shares of Stock held by it to cover the amount required
to be withheld.  The Company shall have the right to deduct from all dividends
paid with respect to Restricted Stock the amount of taxes that the Company is
required to withhold with respect to such dividend payments.

     8.   Transferability.  Performance Awards, Incentive Stock Options with
or without tandem Stock Appreciation Rights, and, during the period of
restriction, Restricted Stock awarded under the Plan are not assignable or
transferable except as designated by the Participant by will or by the laws of
descent and distribution.  Incentive Stock Options may be exercised during the
lifetime of the Participant only by the Participant or his guardian or legal
representative.

     9.   Employee and Stockholder Status.  The Plan does not constitute a
contract of employment, and selection as a Participant will not give any
employee the right to be retained in the employ of the Company or any
Subsidiary or any director or consultant the right to continue to provide
services to the Company or any Subsidiary.  No award under the Plan shall
confer upon the holder thereof any right as a stockholder of the Company prior
to the date on which he fulfills all service requirements and other conditions
for receipt of shares of Stock.  If the redistribution of shares is restricted
pursuant to Section 1.7, certificates representing such shares may bear a
legend referring to such restrictions.

     10.   Adjustments to Number of Shares Subject to the Plan.  In the event
of any change in the outstanding shares of Stock of the Company by reason of
any stock dividend, split, spinoff, recapitalization, merger, consolidation,
combination, extraordinary dividend, exchange of shares or other similar
change, the aggregate number of shares of Stock with respect to which awards
may be made under the Plan, the terms and the number of shares of any
outstanding Stock Options, Stock Appreciation Rights, Performance Units and
Restricted Stock, and the purchase price of a share of Stock under Stock
Options, may be equitably adjusted by the Board in its sole discretion.

     11.   Business Combinations.  In addition to the rights and obligations
of the Committee to modify, adjust or accelerate exercisability of outstanding
options, in the event that, while any Stock Options, Stock Appreciation
Rights, Performance Units or Restricted Shares are outstanding under the Plan,
there shall occur (i) a merger or consolidation of the Company with or into
another corporation in which the Company shall not be the surviving
corporation (for purposes of this Section 1.11, the Company shall not be
deemed the surviving corporation in any such transaction if, as the result
thereof, the existing shareholders of the Company hold less than 51% of the
outstanding stock of the Company), (ii) a dissolution of the Company, or (iii)
a transfer of all or


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substantially all of the assets or shares of stock of the Company in one
transaction or a series of related transactions to one or more other persons
or entities (any of the foregoing events as described in (i)-(iii) above, a
"Change of Control"), then, with respect to each Stock Option, Stock
Appreciation Right, Performance Unit and share of Restricted Stock outstanding
immediately prior to the consummation of such transaction and without the
necessity of any action by the Committee:

          (a) If provision is made in writing in connection with such
transaction for the continuance and/or assumption of the Stock Options, Stock
Appreciation Rights, Performance Units and Restricted Shares granted under the
Plan, or the substitution for such Stock Options, Stock Appreciation Rights,
Performance Units and Restricted Shares of new Stock Options, Stock
Appreciation Rights, Performance Units and Restricted Shares, with appropriate
adjustment as to the number and kind of shares or other securities deliverable
with respect thereto, the Stock Options, Stock Appreciation Rights,
Performance Units and Restricted Shares granted under the Plan, or the new
Stock Options, Stock Appreciation Rights, Performance Units and Restricted
Shares substituted therefor, shall continue, subject to such adjustment, in
the manner and under the terms provided in the respective agreements.

          (b)  In the event provision is not made in connection with such
transaction for the continuance and/or assumption of the Stock Options, Stock
Appreciation Rights, Performance Units and Restricted Shares granted under the
Plan, or for the substitution of equivalent options, rights, units and awards,
then (i) each holder of an outstanding option shall be entitled, immediately
prior to the effective date of such transaction, to purchase the full number
of shares that he or she would otherwise have been entitled to purchase during
the entire remaining term of the option; (ii) the holder of any right or unit
shall be entitled, immediately prior to the effective date of such
transaction, to exercise such right to the extent the related option is or
becomes exercisable at such time in accordance with its terms; (iii) all
restrictions on any award of Restricted Shares shall lapse, and (iv) any
restriction or risk of forfeiture imposed under the Plan shall lapse
immediately prior to the effective date of such transaction.  The unexercised
portion of any option or right shall be deemed canceled and terminated as of
the effective date of such transaction.

     12.  Agreement With Company.  At the time of any awards under the Plan,
the Board will require a Participant to enter into an agreement with the
Company in a form specified by the Board (the "Option Grant Certificate"),
agreeing to the terms and conditions of the Plan and to such additional terms
and conditions, not inconsistent with the Plan, as the Board may, in its sole
discretion, prescribe.

     13.  Amendment and Termination of Plan.  Subject to the following
provisions of this Section 13, the Board may at any time and in any way amend,
suspend or terminate the Plan.  No amendment of the Plan and, except as
provided in Section 1.10, no action by the Board shall, without further
approval of the stockholders of the Company, increase the total number of
shares of Stock with respect to which awards may be made under the Plan,
materially increase the benefits accruing to Participants under the Plan or
materially modify the requirements as to eligibility for participation in the
Plan, if stockholder approval of such amendment is a condition of Securities
and Exchange Commission Rule 16b-3 or its successor rule or statute, the Code
or any exchange or


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market system on which the Stock is listed at the time such amendment is
adopted.  No amendment, suspension or termination of the Plan shall alter or
impair any Stock Option with or without tandem Stock Appreciation Right,
Performance Award or share of Restricted Stock previously awarded under the
Plan without the consent of the holder thereof.

                   II. INCENTIVE STOCK OPTIONS

     1.  Definition.  The award of an Incentive Stock Option under the Plan
entitles the Participant to purchase shares of Stock at a price fixed at the
time the option is awarded, subject to the following terms of this Article II.

     2.  Eligibility.  The Board shall designate the Participants to whom
Incentive Stock Options, as described in Code Section 422(b) or any successor
section thereto, are to be awarded under the Plan and shall determine the
number of option shares to be offered to each of them.  Incentive Stock
Options may be awarded only to employees. .

     3.  Price.  The purchase price of a share of Stock under each Incentive
Stock Option shall be determined by the Board, provided, however, that in no
event shall such price be less than the greater of (i) 100% of the Fair Market
Value of a share of Stock as of the Option Date (or 110% of such Fair Market
Value if the holder of the option owns stock possessing more than 10% of the
combined voting power of all classes of stock of the Company or any
Subsidiary) or (ii) the par value of a share of Stock on such date.  To the
extent provided by the Board, the full purchase price of each share of Stock
purchased upon the exercise of any Incentive Stock Option shall be paid in
cash or in shares of Stock (valued at Fair Market Value as of the day of
exercise), or in any combination thereof, at the time of such exercise and, as
soon as practicable thereafter, a certificate representing the shares so
purchased shall be delivered to the person entitled thereto.

     4.  Exercise.  Each Option shall become and be exercisable at such time
or times and during such period or periods, in full or in such installments as
may be determined by the Board at the Option Date.  In addition, if permitted
by the Board or the terms of the Option Grant Certificate evidencing such
Stock Option, Participants may elect to pay the purchase price of shares of
Stock purchased upon the exercise of Incentive Stock Options in cash or
through delivery at the time of such exercise of shares of Stock (valued at
Fair Market Value as of the date of exercise) already owned by the
Participant, or any combination thereof, equivalent to the purchase price of
such Incentive Stock Options.  A Participant's payment of the purchase price
in connection with the exercise of an Incentive Stock Option through delivery
of share of Stock ("ISO Stock") that were acquired through the exercise of an
Incentive Stock Option and that have not been held for more than one year will
be considered a disposition (within the meaning of Code Section 422(c)) of ISO
Stock, resulting in the disqualification of the ISO Stock from treatment as an
Incentive Stock Option under Code Section 422, and the Participant's
recognition of ordinary income.  Participants should consult with their tax
advisors prior to electing to exercise an Incentive Stock Option by this
method.

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     5.   Option Expiration Date.  Unless otherwise provided by the Option
Grant Certificate , the "Expiration Date" with respect to an Incentive Stock
Option or any portion thereof awarded to a Participant under the Plan means
the earliest of:

          (a)  the date that is ten (10) years after the date on which the
Incentive Stock Option is awarded (or, if the Participant owns stock
possessing more than ten percent (10%) of the combined voting power of all
classes of stock of the Company or any Subsidiary, the date that is five (5)
years after the date on which the Incentive Stock Option is awarded);

          (b)  the date that is one year after the Participant's employment
with the Company and all Related Companies is terminated by reason of the
Participant becoming Disabled or by reason of the Participant's death; or

          (c)  thirty (30) days following the date that the Participant's
employment with the Company and all Related Companies is terminated by reasons
other than death or becoming Disabled.  All rights to purchase shares of Stock
pursuant to an Incentive Stock Option shall cease as of such option's
Expiration Date.

All rights to purchase shares of Stock pursuant to an Incentive Stock Option
shall cease as of such option's Expiration Date.

     6.   Reload Options.  The Committee may, in its discretion, provide in
the terms of any Option Grant Certificate that if the Participant delivers
shares of Stock already owned or to be received upon exercise of the Option in
full or partial payment of the option price, or in full or partial payment of
the tax withholding obligations incurred on account of the exercise of the
Option, the Optionee shall automatically and immediately upon such exercise be
granted an additional option (a "Reload Option") to purchase the number of
shares of Stock delivered by the Optionee to the Company, on such terms and
conditions as the Committee may determine under the terms of the Plan.
Notwithstanding the preceding, the purchase price of shares of Stock acquired
under a Reload Option shall be not less than the Fair Market Value of a share
of Stock on the date the Reload Option is issued.

                III.  NON-QUALIFIED STOCK OPTIONS

     1.   Definition.  The award of a Non-Qualified Stock Option under the
Plan entitles the Participant to purchase shares of Stock at a price fixed at
the time the option is awarded, subject to the following terms of this Article
III.

     2.   Eligibility.  The Board shall designate the Participants to whom
Non-Qualified Stock Options are to be awarded under the Plan and shall
determine the number of option shares to be offered to each of them.

     3.   Price.  The purchase price of a share of Stock under each
Non-Qualified Stock Option shall be determined by the Board; provided,
however, that in no event shall such price be less than the Fair Market Value
of a share of Stock as of the Option Date.

     4.   Exercise.  Each Option shall become and be exercisable at such time
or times and during such period or periods, in full or in such installments as
may be determined by the Board at the Option Date.  To the extent provided by
the Board, the full purchase price of each share of Stock purchased upon the
exercise of any Non-Qualified Stock Option shall be paid in cash or in shares
of Stock (valued at Fair Market Value as of the day of exercise), or in any
combination thereof, at the time of such exercise and, as soon as practicable
thereafter, a certificate representing the shares so purchased shall be
delivered to the person entitled thereto.  In addition, unless restricted by
the Board, Participants may elect to pay the purchase price of shares of Stock
purchased upon the exercise of Non-Qualified Stock Options in cash or through
the constructive delivery at the time of such exercise of shares of Stock
(valued at Fair Market Value as of the day of exercise) already owned by the
Participant, or any combination thereof, equivalent to the purchase price of
such Non-Qualified Stock Options, and, as soon as practicable thereafter, a
certificate representing the net number of shares so purchased shall be
delivered to the person entitled thereto.  Participants also may elect to pay,
unless restricted by the Board, the purchase price, in whole or in part, of
shares of Stock purchased upon the exercise of Non-Qualified Options through
the Company's withholding of shares of Stock (valued at Fair Market Value as
of the day of exercise) that would otherwise by issuable upon exercise of such
options equivalent to the purchase price of such Non-Qualified Stock Options
and, as soon as practicable thereafter, a certificate representing the net
number of shares so purchased shall be delivered to the person entitled
thereto.

     5.  Option Expiration Date.  Unless otherwise provided in a Participant's
Option Grant Certificate, the "Expiration Date" with respect to a
Non-Qualified Stock Option or any portion thereof awarded to a Participant
under the Plan means the earliest of:

          (a)  the date that is one (1) year after the Participant's
employment with the Company and all Related Companies is terminated by reason
of the Participant becoming Disabled or by reason of the Participant's death;
or

          (b)  thirty (30) days following the date that the Participant's
employment with the Company and all Related Companies is terminated by reasons
other than death or becoming Disabled.

All rights to purchase shares of Stock pursuant to a Non-Qualified Stock
Option shall cease as of such option's Expiration Date.

     6.   Reload Options.  The Committee may, in its discretion, provide in
the terms of any Option Grant Certificate that if the Participant delivers
shares of Stock already owned or to be received upon exercise of the Option in
full or partial payment of the option price, or in full or partial payment of
the tax withholding obligations incurred on account of the exercise of the
Option, the Optionee shall automatically and immediately upon such exercise be
granted a Reload Option to purchase the number of shares of Stock delivered by
the Optionee to the Company, on such terms and conditions as the Committee may
determine under the terms of the Plan. Notwithstanding the preceding, the
purchase price of shares of Stock acquired under a Reload Option shall be not
less than the Fair Market Value of a share of Stock on the date the Reload
Option is issued.

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                  IV.  STOCK APPRECIATION RIGHTS

     1.   Definition.  A Stock Appreciation Right is an award that may or may
not be granted in tandem with a Non-Qualified Stock Option or Incentive Stock
Option, and entitles the holder to receive an amount equal to the difference
between the Fair Market Value of the shares of option Stock at the time of
exercise of the Stock Appreciation Right and the option price, subject to the
applicable terms and conditions of the tandem options and the following
provisions of this Article IV.

     2.   Eligibility.  The Board may, in its discretion, award Stock
Appreciation Right under this Article IV concurrent with, or subsequent to,
the award of the option.

     3.   Exercise.  A Stock Appreciation Right shall entitle the holder of a
Stock Option to receive, upon the exercise of the Stock Appreciation Right,
shares of Stock (valued at their Fair Market Value at the time of exercise),
cash or a combination thereof, in the discretion of the Board, in an amount
equal in value to the excess of the Fair Market Value of the shares of Stock
subject to the Stock Appreciation Right as of the date of such exercise over
the purchase price of the Stock Appreciation Right, as shall be prescribed by
the Board in its sole discretion and as shall be contained in the
Participant's Award Agreement.  If granted in tandem with an option, the
exercise of a Stock Appreciation Right will result in the surrender of the
related Incentive Stock Option or Non-Qualified Stock Option and, unless
otherwise provided by the Board in its sole discretion, the exercise of a
Stock Option will result in the surrender of a related Stock Appreciation
Right, if any.

     4.   Expiration Date.  The "Expiration Date" with respect to a Stock
Appreciation Right shall be determined by the Board and documented in the
Participant's Option Grant Certificate, and if granted in tandem with an
option, shall be not later than the Expiration Date for the related Stock
Option.  If neither the right nor the related Stock Option is exercised before
the end of the day on which the right ceases to be exercisable, such right
shall be deemed exercised as of such date and payment shall be made to the
holder in cash.

                       V.  RESTRICTED STOCK

     1.   Definition.  Restricted Stock awards are grants of Stock to
Participants, the vesting of which is subject to a required period of
employment and any other conditions established by the Board.

     2.   Eligibility.  The Board shall designate the Participants to whom
Restricted Stock is to be awarded and the number of shares of Stock that are
subject to the award.

     3.   Terms and Conditions of Awards.  All shares of Restricted Stock
awarded to Participants under the Plan shall be subject to the following terms
and conditions and to such other terms and conditions, not inconsistent with
the Plan, as shall be prescribed by the Board in its sole discretion and as
shall be contained in the Participant's Option Grant Certificate.


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<PAGE>

          (a)  Restricted Stock awarded to Participants may not be sold,
assigned, transferred, pledged or otherwise encumbered, except as hereinafter
provided, for a period of ten (10) years or such shorter period as the Board
may determine, but not less than one (1) year, after the time of the award of
such stock (the "Restricted Period"). Except for such restrictions, the
Participant as owner of such shares shall have all the rights of a
shareholder, including but not limited to the right to vote such shares and,
except as otherwise provided by the Board, the right to receive all dividends
paid on such shares.

          (b)  The Board may in its discretion, at any time after the date of
the award of Restricted Stock, adjust the length of the Restricted Period to
account for individual circumstances of a Participant or group of
Participants, but in no case shall the length of the Restricted Period be less
than one (1) year.

          (c)  Except as otherwise determined by the Board in its sole
discretion, a Participant whose employment with the Company and all Related
Companies terminates prior to the end of the Restricted Period for any reason
shall forfeit all shares of Restricted Stock remaining subject to any
outstanding Restricted Stock Award.

          (d)  Each certificate issued in respect of shares of Restricted
Stock awarded under the Plan shall be registered in the name of the
Participant and, at the discretion of the Board, each such certificate may be
deposited in a bank designated by the Board.  Each such certificate shall bear
the following (or a similar) legend:

          "The transferability of this certificate and the
          shares of stock represented hereby are subject to
          the terms and conditions (including forfeiture)
          contained in the Broadcast International, Inc. 2004
          Long Term Incentive Plan and an agreement entered
          into between the registered owner and Broadcast
          International, Inc.  A copy of such plan and agreement
          is on file in the office of the Secretary of Broadcast
          International,  Inc. in Salt Lake City, Utah.

          (e)  At the end of the Restricted Period for Restricted Stock, such
Restricted Stock will be transferred free of all restrictions to a Participant
(or his or her legal representative, beneficiary or heir).

                      VI.  PERFORMANCE UNITS

     1.   Definition.  Performance Units are awards to Participants who may
receive value for the units at the end of a Performance Period.  The number of
units earned, and value received for them, will be contingent on the degree to
which the performance measures established at the time of the initial award
are met.

     2.   Eligibility.  The Board shall designate the Participants to whom
Performance Units are to be awarded, and the number of units to be the subject
of such awards.


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     3.   Terms and Conditions of Awards.  For each Participant, the Board
will determine the timing of awards; the number of units awarded; the value of
units, which may be stated either in cash or in shares of Stock; the
performance measures used for determining whether the Performance Units are
earned; the performance period during which the performance measures will
apply; the relationship between the level of achievement of the performance
measures and the degree to which Performance Units are earned; whether, during
or after the performance period, any revision to the performance measures or
performance period should be made to reflect significant events or changes
that occur during the performance period; and the number of earned Performance
Units that will be paid in cash and/or shares of Stock, as shall be prescribed
by the Board in its sole discretion and as shall be contained in the
Participant's Option Grant Certificate.

     4.   Payment.  The Board will compare the actual performance to the
performance measures established for the performance period and determine the
number of units to be paid and their value.  Payment for units earned shall be
wholly in cash, wholly in Stock or in a combination of the two, in a lump sum
or installments, and subject to vesting requirements and such other conditions
as the Board shall provide.  The Board will determine the number of earned
units to be paid in cash and the number to be paid in Stock.  For Performance
Units valued when awarded in shares of Stock, one share of Stock will be paid
for each unit earned, or cash will be paid for each unit earned equal to
either (i) the Fair Market Value of a share of Stock at the end of the
Performance Period or (ii) the Fair Market Value of the Stock averaged for a
number of days determined by the Board.  For Performance Units valued when
awarded in cash, the value of each unit earned will be paid in its initial
cash value, or shares of Stock will be distributed based on the cash value of
the units earned divided by (i) the Fair Market Value of a share of Stock at
the end of the Performance Period or (ii) the Fair Market Value of a share of
Stock averaged for a number of days determined by the Board.

      5.   Retirement, Death or Termination.  A Participant whose employment
with the Company and Related Companies terminates during a performance period
because of Retirement or death shall be entitled to the prorated value of
earned Performance Units, issued with respect to that performance period, at
the conclusion of the performance period based on the ratio of the months
employed during the period to the total months of the performance period.  If
the Participant's employment with the Company and Related Companies terminates
during a performance period for any reason other than Retirement or death, the
Performance Units issued with respect to that performance period will be
forfeited on the date his employment with the Company and Related Companies
terminates.  Notwithstanding the foregoing provisions of this Part VI, if a
Participant's employment with the Company and Related Companies terminates
before the end of the Performance Period with respect to any Performance Units
awarded to him, the Board may determine that the Participant will be entitled
to receive all or any portion of the units that he or she would otherwise
receive, and may accelerate the determination and payment of the value of such
units or make such other adjustments as the Board, in its sole discretion,
deems desirable.




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