**YP
CORP.**
 **2003
STOCK PLAN**
 **RESTRICTED
STOCK AGREEMENT**
  This
Restricted Stock Agreement (the “ Agreement ”) is
entered into between YP Corp., a Nevada corporation (the “ Company ”), and
_____________, an individual (the “ Grantee ”), as of
_______ __, 200__ (“ Date
of Grant ”).
  **RECITALS**
  A.          The
Company has adopted the YP Corp. 2003 Stock Plan (“ Plan ”) to
provide an incentive to employees, non-employee service providers and directors
of the Company (or a Subsidiary) to attract and retain employees, non-employee
service providers and directors whose services are considered unusually valuable
by providing those individuals an opportunity to have a proprietary interest in
the success of the Company.
  B.           The
Company believes that entering into this Restricted Stock Agreement with the
Grantee is consistent with the above stated purposes. Any capitalized term not
otherwise defined will have the meaning ascribed to it in the Plan.
  NOW,
THEREFORE, in consideration of the mutual covenants and conditions in this
Agreement and for other good and valuable consideration, the Company and the
Grantee agree as follows:
  **1.** **GRANT
OF STOCK** .
  Subject
to the terms of this Agreement, the Company hereby grants ________ shares of the
Company’s common stock, $.001 par value (the “ Stock ”) to the
Grantee. The delivery of any documents evidencing the Stock granted pursuant to
this Agreement shall be subject to the provisions of Section 5 below.
  **2.** **RIGHTS
OF GRANTEE** .
  Upon the
execution of this Agreement, the Grantee will become a shareholder with respect
to all of the Stock granted to him pursuant to Section
1 and will
have all of the rights of a shareholder in the Company with respect to all such
Stock including the right to vote and receive dividends; provided , however , that
such Stock will be subject to the restrictions set forth in this
Agreement.
  **3.** **RESTRICTIONS
ON STOCK SUBJECT TO THIS AGREEMENT** .
  **A.** **General** .
  Except as
set forth in this Agreement, the Grantee will transfer those shares of Stock for
which the restrictions have not lapsed under Section
4 to the
Company immediately and without any payment to the Grantee if the Grantee’s
employment or status as a non-employee service provider or director with the
Company (or its Subsidiary) is terminated for any reason. Notwithstanding the
foregoing, in the event that Grantee’s employment or status as a non-employee
service provider or director with the Company (or its Subsidiary) is terminated
six months or more after the Date of Grant as a result of Grantee’s death or
Disability (as defined in the Plan), Grantee or Grantee’s beneficiaries, as
applicable, will be permitted to retain the Stock subject to the continuing
restrictions set forth in this Agreement.
  
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 **B.** **Limitations
on Transfer** .
  Unless
approved by the Committee or the Board, the Grantee agrees not to sell,
transfer, pledge, exchange, hypothecate, or otherwise dispose of any shares of
Stock under this Agreement (“Transfer”) before the date on which the
restrictions on those shares of Stock lapse in accordance with Section
4 . Any
attempted disposition of the Stock in violation of the preceding sentence will
be null and void, and the Company will not recognize or give effect to such
transfer on its books and records or recognize the person or persons to whom
such proposed transfer has been made as the legal or beneficial owner of the
shares of Stock. In the event that a Transfer is approved by the Committee or
the Board, the Grantee must, prior to consummating or effecting a Transfer,
first obtain the written agreement of the transferee to be bound by the terms of
this Agreement as if such transferee were deemed the original
“Grantee.”
  **4.** **LAPSE
OF RESTRICTIONS** .
  **A.** **Schedule** .
  Subject
to the other conditions in this Section 4 , the
restrictions on the Stock set forth in Section 3 will
lapse in accordance with the following schedule, subject to and as adjusted for,
in the case of closing prices of the Company’s common stock, stock splits,
reverse stock splits, combinations, reclassifications and the like:
  **Date
      Restriction Lapses**
      (*earlier
      to occur of the following*)
    **Percentage
      of Stock Becomes Unrestricted**
  Notwithstanding
the above, if the Grantee’s employment or service is terminated for Cause (as
defined in the Plan), the Grantee will be required to transfer all shares of
Stock set forth in Section
1 (whether
or not subject to restrictions set forth in Section
3 ) back to
the Company for no consideration.
  **B.** **Condition
That Must be Satisfied Before Restrictions Lapse** .
  The
restrictions on the Stock subject to this Agreement will not lapse unless the
Grantee is employed by, or is providing services to, the Company (or a
Subsidiary) as of the date the restrictions lapse in accordance with the above
schedule.
  **5.** **SECURITIES
ACT** .
  **A.** **Registration** .
  The
Company will have the right, but not the obligation, to cause the Stock issuable
hereunder to be registered under the appropriate rules and regulations of the
Securities and Exchange Commission.
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 **B.** **Condition
on Delivery of Stock** .
  The
Company will not be required to deliver any shares of Stock if, in the opinion
of counsel for the Company, the issuance would violate the Securities Act of
1933 or any other applicable federal or state securities laws or regulations.
The Company may require the Grantee, prior to or after the issuance of any such
Stock, to sign and deliver to the Company a written statement (“ Investment
Letter ”) in
form and content acceptable to the Company in its sole discretion. Grantee
agrees (i) that the Grantee is acquiring the Stock for investment and not with a
view to the sale or distribution thereof, (ii) that the Grantee will not sell
any Stock received hereunder that remains subject to restrictions except with
the prior written approval of the Company, and (iii) that Grantee will comply
with the Securities Act of 1933 or other applicable federal or state securities
laws and regulations.
  **C.** **Legend** .
  If the
Stock has not been registered under the Securities Act of 1933 or other
applicable federal or state securities laws or regulations, such shares will
bear a legend restricting the transferability. The legend will be substantially
in the following form:
  “The
Stock represented by this certificate have not been registered or qualified
under federal or state securities laws. The Stock may not be offered for sale,
sold, pledged, or otherwise disposed of unless so registered or qualified,
unless an exemption exists or unless such disposition is not subject to the
federal or state securities laws, and the availability of any exemption or the
inapplicability of such securities laws must be established by an opinion of
counsel, which opinion of counsel will be reasonably satisfactory to the
Company.”
  **6.** **REPRESENTATIONS
OF GRANTEE** . ****
  In
connection with Grantee’s receipt of the Stock, Grantee hereby represents and
warrants to the Company as follows:
  **A.** **Further
Limitations on Disposition** .
  Grantee
understands and acknowledges that he may not make any disposition, sale, or
transfer (including transfer by gift or operation of law) of all or any portion
of the Stock except as provided in this Agreement. Moreover, Grantee agrees to
make no disposition of all or any portion of the Stock unless and until: (i)
there is then in effect a registration statement under the Securities Act of
1933 covering such proposed disposition and such disposition is made in
accordance with said Registration Statement; (ii) the resale provisions of
Rule 701 or Rule 144 are available in the opinion of counsel to the Company; or
(iii)(A) Grantee notifies the Company of the proposed disposition and has
furnished the Company with a detailed statement of the circumstances surrounding
the proposed disposition, (B) Grantee furnishes the Company with an opinion of
Grantee’s counsel to the effect that such disposition will not require
registration of such Stock under the Securities Act, and (C) such opinion
of Grantee’s counsel shall have been concurred with by counsel for the Company
and the Company shall have advised Grantee of such concurrence.
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 **B.** **Determination
of Fair Market Value** .
  Grantee
understands Fair Market Value of the Stock shall be determined in accordance
with Section 3.1(k) of the Plan.
  **C.** **Section
83(b) Election** .
  Grantee
understands that Section 83 of the Internal Revenue Code of 1986 (the
“Code”) taxes as ordinary income the difference between the amount paid for the
Stock and the fair market value of the Stock as of the date any restrictions on
the Stock lapse. In this context, “restriction” means the restrictions set forth
in Section
3 . The
Grantee understands that he may elect to be taxed at the time the Stock is
granted rather than when and as the Stock vests by filing an election under
Section 83(b) of the Code with the Internal Revenue Service within 30 days
from the Date of Grant. The Grantee understands that failure to make this filing
timely will result in the recognition of ordinary income by the Grantee, as the
Stock vests, on the Fair Market Value of the Stock at the time such restrictions
lapse.
  THE
GRANTEE ACKNOWLEDGES THAT IT IS THE GRANTEE’S SOLE RESPONSIBILITY AND NOT THE
COMPANY’S TO FILE TIMELY THE ELECTION UNDER SECTION 83(b), EVEN IF THE
GRANTEE REQUESTS THE COMPANY OR ITS REPRESENTATIVES TO MAKE THIS FILING ON THE
GRANTEE’S BEHALF.
 **7.** **NONTRANSFERABILITY
OF AGREEMENT** .
  Unless
approved by the Committee or the Board, this Agreement will not be transferable
by the Grantee during his life other than by will or pursuant to applicable laws
of descent and distribution. Unless approved by the Committee or the Board, any
rights and privileges of the Grantee will not be transferred, assigned, pledged,
or hypothecated by the Grantee, or by any other person or persons, in any way,
whether by operation of law, or otherwise, and will not be subject to execution,
attachment, garnishment or similar process. In the event of any such occurrence,
this Agreement will automatically be terminated and will thereafter be null and
void.
  **8.** **FEDERAL
AND STATE TAXES** .
  The
Grantee may incur certain liabilities for federal, state, or local taxes and the
Company may be required by law to withhold taxes. Upon determination of the year
in which such taxes are due and the determination by the Company of the amount
of taxes required to be withheld, the Grantee shall pay an amount equal to the
amount of federal, state, or local taxes required to be withheld to the
Company.
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 **9.** **ADJUSTMENT
OF SHARES** .
  The
number of shares of Stock granted to the Grantee pursuant to this Agreement will
be proportionately adjusted in the event of any recapitalization, forward or
reverse split, reorganization, merger, consolidation, spin-off, combination,
repurchase, or share exchange, or other similar corporate transaction or event
affecting the Stock all as set forth in Article
11 of the
Plan.
  **10.** **AMENDMENT
OF THIS AGREEMENT** .
  This
Agreement may only be amended with the written approval of the Grantee and the
Company.
  **11.** **GOVERNING
LAW** .
  This
Agreement shall be governed in all respects, whether as to validity,
construction, capacity, performance, or otherwise, by the laws of the State of
Arizona.
  **12.** **SEVERABILITY** .
  In the
event that a court of competent jurisdiction determines that any portion of this
Agreement is in violation of any statute or public policy, then only the
portions of this Agreement which violate such statute or public policy shall be
stricken. All portions of this Agreement which do not violate any statute or
public policy shall continue in full force and effect. Further, any court order
striking any portion of this Agreement shall modify the stricken terms as
narrowly as possible to give as much effect as possible to the intentions of the
parties under this Agreement.
  
  IN
WITNESS WHEREOF, the Company has caused this Agreement to be executed by its
duly authorized representative and Grantee has signed this Agreement as of the
day and year first written above.
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