Our non-employee directors receive the following cash compensation:

For Board Membership:

• Each non-employee director receives an annual retainer of $5,000.
• Each non-employee Board member receives a $500 fee per Board meeting, but no more than a total of $4,000 in Board meeting fees per Intraware fiscal year.

For Audit Committee Membership:

• The Audit Committee Chairman receives an annual retainer of $6,000 and each other Audit Committee member receives an annual retainer of $4,000.
• Each Audit Committee member receives a $500 fee per Audit Committee meeting, but no more than a total of $3,000 in Audit Committee meeting fees per Intraware fiscal year.

For Membership on Other Standing Board Committees
(Excluding Special or Temporary Committees)

• The committee chairman receives an annual retainer of $4,500 and each other committee member receives an annual retainer of $3,000.
• Each committee member receives $500 per committee meeting, but no more than a total of $2,000 in committee meeting fees per Intraware fiscal year.

In addition, we reimburse non-employee directors for their reasonable out-of-pocket expenses incurred in attending Board and committee meetings. Directors who serve on the Board because of a contractual right to do so are not eligible for compensation under this program.

Non-employee directors receive automatic, nondiscretionary stock option grants at the time they become directors and annually thereafter, under our 1998 Director Option Plan. Under this plan, a director receives an option grant for 15,000 shares on the date of election to the Board, and receives an option grant for 7,500 shares each year thereafter on the date of the annual meeting of stockholders if the director has served on the Board for six months before the annual meeting. The initial grant vests over four years, 12.5% of the shares vesting six months after the grant date and the balance vesting monthly in equal installments thereafter. Each subsequent grant vests over two years, 25% of the shares vesting six months after the grant date and the balance vesting monthly in equal installments thereafter. The exercise price of each grant is the fair market value of the stock on the date of the grant. A copy of this plan is attached as an exhibit to our Registration Statement on Form S-8 filed with the SEC on January 18, 2001.

Our employee directors receive no compensation for their service as directors.