**Exhibit 10.20**

 

**RIGHTNOW TECHNOLOGIES, INC. FORM OF INCENTIVE STOCK OPTION AGREEMENT**

** **

RIGHTNOWTECHNOLOGIES, INC., a Delaware corporation (the “Company”), acting pursuant tothe 2004 Equity Incentive Plan (the “Plan”), hereby grants to                                        (the “Option Holder”) options to purchase shares of common stock, $0.001 parvalue (“Common Stock”), of the Company upon the following terms and conditionsand in all respects subject to the provisions of the Plan, the terms of whichare incorporated by reference.

 

1.                                       Grantof Option.  The Company hereby grantsthe Option Holder, as of                          ,                  ,an option (the “Option”) to purchase from the Company up to                     shares (the “Shares”) of Common Stock of the Company at an exercise price pershare (the “Option Exercise Price”) equal to $             (being at least equal to the fair market value of the Common Stock on the dateof grant), in the amounts, during the periods, and upon the terms andconditions as set forth in this Agreement and in the Plan.  The issuance of the shares of Common Stockupon the exercise of the Option shall be subject to the provisions set forth inSection 9 hereof.  This Option isintended to be an incentive stock option within the meaning of Section 422of the Internal Revenue Code of 1986, as amended (the “Code”).  Unless earlier terminated pursuant to Section 3,the Option shall terminate at 5:00 p.m. on the date ten years from thegrant of this Option, or at 5:00 p.m. on the date five years from thegrant of this Option if the Option Holder holds greater than ten percent (10%)of the total combined voting power of all classes of the Company’s stock.

 

2.                                       Vestingand Time of Exercise.

 

## (a)                                  Thevested portion of the Option is exercisable in whole or in part (but not as toany fractional shares) at any time prior to the termination of the Option.  Except as otherwise provided in thisAgreement, the Option shall vest in the following manner:

 
| **If Option Holder remains in the  employ of the Company through the date:** | ** ** | **Vested Number of Shares** | ** ** |
|------------------------------------------------------------------------------|------------|-----------------------------|------------|
| Six (6) months from the date of grant                                   |       | 12.5% of shares             |       |
| Twelve (12) months from the date of grant                                    |       | 25% of  shares              |       |
| Eighteen (18) months from the date of grant                                  |       | 37.5% of  shares            |       |
| Twenty-four (24) months from the date of  grant                              |       | 50% of  shares              |       |
| Thirty (30) months from the date of grant                                    |       | 62.5% of  shares            |       |
| Thirty-six (36) months from the date of  grant                               |       | 75% of  shares              |       |

 

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| Forty-two (42) months from the date of  grant   |   | 87.5% of  shares |   |
|-------------------------------------------------|--------|------------------|--------|
| Forty-eight (48) months from the date of  grant |   | 100% of  shares  |   |

 

The right to purchase shares under the Optionshall be cumulative, and shares not purchased in any year may be purchased insubsequent years, subject to the termination provisions contained elsewhereherein.

 

## (b)                                 TheOption Holder understands that to the extent that the aggregate fair marketvalue (determined at the time the Option was granted) of the shares of CommonStock with respect to which all incentive stock options within the meaning of Section 422of the Code are exercisable for the first time by the Option Holder during anycalendar year exceed $100,000, in accordance with Section 422(d) ofthe Code, such options shall be treated as options that do not qualify asincentive stock options.

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3.                                       Exerciseof Option after Death or Termination of Employment.  The Option shall terminate and may no longerbe exercised if the Option Holder ceases to be employed by the Company or itsaffiliates, except that:

 

## (a)                                  IfOption Holder’s employment shall be terminated for any reason, voluntary orinvoluntary, other than for “*Cause*”(as defined in Section 3(e)) or Option Holder’s death or disability(within the meaning of Section 22(e)(3) of the Code), Option Holdermay at any time before 5:00 p.m. on the date 3 months following suchtermination exercise the Option to the extent the Option was exercisable byOption Holder on the date of the termination of Option Holder’s employment.

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## (b)                                 IfOption Holder’s employment is terminated for Cause, Option Holder may at anytime before 5:00 p.m. on the date 30 days following such terminationexercise the Option to the extent the Option was exercisable by Option Holderon the date of the termination of Option Holder’s employment.

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## (c)                                  IfOption Holder shall die while the Option is still exercisable according to itsterms or if employment is terminated because Option Holder has become disabled(within the meaning of Section 22(e)(3) of the Code) while in theemploy of the Company and Option Holder shall not have fully exercised theOption, such Option may be exercised at any time before 5:00 p.m. on thedate 6 months following Option Holder’s death or date of termination ofemployment for disability by Option Holder, personal representatives oradministrators or guardians of Option Holder, as applicable or by any person orpersons to whom the Option is transferred by will or the applicable laws ofdescent and distribution, to the extent of the full number of Shares OptionHolder was entitled to purchase under the Option on (i) the earlier of thedate of death or termination of employment or (ii) the date of terminationfor such disability, as applicable.

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## (d)                                 Notwithstandingthe above, in no case may the Option be exercised to any extent by anyone afterthe termination date of the Option.

 

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## (e)                                  “*Cause*” shall mean (i) the willful andcontinued failure by Option Holder substantially to perform his or her dutiesand obligations (other than any such failure resulting from his or herincapacity due to physical or mental illness), (ii) Option Holder’sconviction or plea bargain of any felony or gross misdemeanor involving moralturpitude, fraud or misappropriation of funds or (iii) the willfulengaging by Option Holder in misconduct which causes substantial injury to theCompany or its affiliates, its other employees or the employees of itsaffiliates or its clients or the clients of its affiliates, whether monetarilyor otherwise.  For purposes of thisparagraph, no action or failure to act on Option Holder’s part shall beconsidered “willful” unless done or omitted to be done, by Option Holder in badfaith and without reasonable belief that his or her action or omission was inthe best interests of the Company.

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4.                                       Mannerof Exercise.

 

## (a)                                  Subjectto the foregoing, the Option may be exercised in whole or in part from time totime by serving written notice of exercise on the Company at its principaloffice within the Option period.  Thenotice shall state the number of Shares as to which the Option is beingexercised and shall be accompanied by payment in full of the Option ExercisePrice for all shares designated in the notice. Payment of the exercise price shall be made (i) in cash (includingbank check, personal check or money order payable to the Company), (ii) withthe approval of the Company (which may be given in its sole discretion), bydelivering to the Company for cancellation shares of the Company’s Common Stockalready owned by the Option Holder having a Fair Market Value (as defined inthe Plan) as of the date of exercise equal to the full Option Exercise Pricefor all of the Shares being acquired or the portion thereof being paid bytendering such shares, (iii) with the approval of the Company (which maybe given in its sole discretion) and subject to Section 402 of theSarbanes-Oxley Act of 2002 and any rules and regulations promulgatedthereunder, by delivering to the Company the full Option Exercise Price for allof the Shares being acquired in a combination of cash and Option Holder’s fullrecourse liability promissory note with a principal amount not to exceed eightypercent (80%) of the exercise price and a term not to exceed five (5) years,which promissory note shall provide for interest on the unpaid balance thereofwhich at all times is not less than the minimum rate required to avoid theimputation of income, original issue discount or a below-market rate loanpursuant to Sections 483, 1274 or 7872 of the Code or any successor provisionsthereto or (iv) with the approval of the Company (which may be given inits sole discretion) and subject to Section 402 of the Sarbanes-Oxley Actof 2002 and any rules and regulations promulgated thereunder, bydelivering to the Company a combination of cash, the Option Holder’s promissorynote and shares of Common Stock with an aggregate Fair Market Value and aprincipal amount equal to the Option Exercise Price for all of the Shares beingacquired.

##  

## (b)                                 Uponreceipt of payment for the shares being purchased and such documents referencedin the preceding sentence, the Company shall, as expeditiously as possible,deliver to the Option Holder a certificate or certificates for such shares outof authorized but theretofore unissued shares of its Common Stock or issuedshares which have been reacquired by the Company.  This Option may be exercised only withrespect to full shares and no fractional share of stock shall be issued.

 

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5.                                       Assignability.  During the lifetime of the Option Holder, theOption shall be exercisable only by the Option Holder and shall not beassignable or transferable by the Option Holder except by will or by the lawsof descent or distribution.  Subject tothe foregoing sentence, the Option shall inure to the benefit of and be bindingupon the successors and assigns of the Option Holder.

 

6.                                       NoRight to Continued Employment; No Rights as a Shareholder.  This Agreement shall not confer on the OptionHolder any right with respect to continuance of employment by the Company, norwill it interfere in any way with the right of the Company to terminate suchemployment at any time.  The OptionHolder will have no rights as a shareholder with respect to any shares coveredby the Option until the issuance of a certificate or certificates to the OptionHolder for the shares.  Except asotherwise provided in Section 7 hereof, no adjustment shall be made fordividends or other rights for which the record date is prior to the date offull payment of the Option Exercise Price for all of the Shares being acquired.

 

7.                                       CapitalAdjustments and Reorganization.  Thenumber of shares of Common Stock covered by the Option, and the Option ExercisePrice thereof, shall be subject to appropriate proportionate adjustment toreflect any stock dividend, stock split, share combination, separation,reorganization, liquidation or the like, of or by the Company.

 

8.                                       Subjectto Plan.  This Option and the grantand exercise thereof are subject to the terms and conditions of the Plan, butthe terms of the Plan shall not be considered an enlargement of any benefitsunder this Agreement.  In addition, thisOption is subject to the rules and regulations promulgated pursuant to thePlan, now or hereafter in effect.  A copyof the Plan will be furnished upon request of the Option Holder.

 

9.                                       ConditionsPrecedent to Issuance of Shares. Shares shall not be issued pursuant to the exercise of the Option unlesssuch exercise and the issuance and delivery of the applicable Shares pursuantthereto shall comply with all relevant provisions of law, including, withoutlimitation, the Securities Act of 1933, as amended, the Exchange Act of 1934,as amended, the rules and regulations promulgated thereunder, therequirements of any applicable Stock Exchange or the Nasdaq National Market andthe Delaware General Corporation Law.  Asa condition to the exercise of the purchase price relating to the Option, theCompany may require that the person exercising or paying the purchase price representand warrant that the Shares are being purchased only for investment and withoutany present intention to sell or distribute such Shares if, in the opinion ofcounsel for the Company, such a representation and warranty is required by law.

 

10.                                 TaxMatters.

 

## (a)                                  Ifthe Option Holder shall dispose of any of the shares of Common acquired by theOption Holder pursuant to the exercise of the Option within two years from thedate the Option was granted or within one year after the transfer of any suchshares to the Option Holder upon exercise of the Option, in order to providethe Company with the opportunity to claim the benefit of any income taxdeduction which may be

 

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## available to it under the circumstances, the Option Holder shallpromptly notify the Company of the dates of acquisition and disposition of suchshares, the number of shares so disposed of and the consideration, if any,received for such shares. In order to comply with all applicable federal orstate income tax laws or regulations, the Company may take such action as itdeems appropriate to insure (i) notice to the Company of any dispositionof the Common Stock within the time periods described above and (ii) that,if necessary, all applicable federal or state payroll, withholding, income orother taxes are withheld or collected from the Option Holder.

##  

## (b)                                 Inorder to provide the Company with the opportunity to claim the benefit of anyincome tax deduction which may be available to it upon the exercise of theOption when the Option does not qualify as an incentive stock option within themeaning of Section 422 of the Code and in order to comply with allapplicable federal or state income tax laws or regulations, the Company maytake such action as it deems appropriate to insure that, if necessary, allapplicable federal or state payroll, withholding, income or other taxes arewithheld or collected from the Option Holder. The Option Holder may elect tosatisfy his or her federal and state income tax withholding obligations upon exerciseof this option by (i) having the Company withhold a portion of the sharesof Common Stock otherwise to be delivered upon exercise of such option having afair market value equal to the amount of federal and state income tax requiredto be withheld upon such exercise, in accordance with such rules as theCompany may from time to time establish, or (ii) delivering to the Companyshares of its Common Stock other than the shares issuable upon exercise of suchoption with a fair market value equal to such taxes, in accordance with suchrules.

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11.                                 SecuritiesLaw Matters.  The Option Holderhereby represents and agrees that any shares which he or she may acquirepursuant to the exercise of this Option will be acquired for the Option Holder’sown account, for long-term investment purposes and not with a view toward thedistribution or sale thereof.  The OptionHolder acknowledges that under the terms of the Plan to which this Agreement issubject, effectiveness of any exercise herein and the issuance of shares to theOption Holder upon any such exercise of this option may be delayed in order topermit the Company to comply at such time with relevant federal and statesecurities laws in connection with such issuance.  The Option Holder acknowledges that the Companyis not, and will at no time be, under any obligation to the Option Holder toregister any shares issued upon exercise herein under any federal or statesecurities laws and that, consequently: (a) at the time of acquisitionsuch shares may not be registered under either federal or applicable statesecurities laws, (b) the Company will be relying upon the foregoinginvestment representation of the Option Holder in agreeing to issue such sharesto the Option Holder, (c) the transferability of such shares may besubject to the restrictions imposed by all applicable federal and statesecurities laws on unregistered shares, and (d) the certificatesevidencing such shares may be imprinted with an appropriate legend settingforth such restrictions on transferability.

 

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12.                                 Miscellaneous.

 

## (a)                                  GoverningLaw.  The validity, construction andeffect of the Agreement, and any rules and regulations relating to theAgreement, shall be determined in accordance with the internal laws, and notthe law of conflicts, of the State of Delaware.

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## (b)                                 Severability.  If any provision of the Agreement is orbecomes or is deemed to be invalid, illegal or unenforceable in anyjurisdiction or would disqualify the Agreement under any law deemed applicableby the Committee (as defined in the Plan), such provision shall be construed ordeemed amended to conform to applicable laws, or if it cannot be so construedor deemed amended without, in the determination of the Committee, materially alteringthe purpose or intent of the Plan or the Agreement, such provision shall bestricken as to such jurisdiction or the Agreement, and the remainder of theAgreement shall remain in full force and effect.

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## (c)                                  NoTrust or Fund Created.  Neither thePlan nor the Agreement shall create or be construed to create a trust orseparate fund of any kind or a fiduciary relationship between the Company orits affiliates and Option Holder or any other person.

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## (d)                                 Headings.  Headings are given to the Sections and subsectionsof the Agreement solely as a convenience to facilitate reference.  Such headings shall not be deemed in any waymaterial or relevant to the construction or interpretation of the Agreement orany provision thereof.

 
| ** ** | **RIGHTNOW TECHNOLOGIES, INC.** |
|------------|---------------------------------|
| ** ** | ** **                      |
| ** ** | ** **                      |
|       | By:                             |   |   |
|       |                            | Greg Gianforte |   |
|       |                            | Chief Executive Officer |   |
| ** ** | ** **                      | ** ** |
| ** ** | ** **                      | ** ** |
| ** ** | **OPTION HOLDER**               |   |
| ** ** | ** **                      |   |
| ** ** | ** **                      |   |
| ** ** | ** **                      |   |
| ** ** | ** **                      | ** ** |
| ** ** |                            |   | ** ** |
| ** ** | **Print name:**                 |   | ** ** |
|            |                                 |  |  |  |

 

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**RIGHTNOWTECHNOLOGIES, INC.**

**FORM OFADDENDUMTO EXECUTIVE OFFICER STOCK OPTION AGREEMENT**

 

The following provisions are herebyincorporated into, and are hereby made a part of, that certain Stock OptionAgreement (the “Option Agreement”) by and between the Company and                                        (“OptionHolder”) evidencing the stock option (the “Option”) granted to Option Holderunder the terms of the Company’s 2004 Equity Incentive Plan, and suchprovisions shall be effective immediately. All capitalized terms in this Addendum, to the extent not otherwisedefined herein, shall have the meanings assigned to such terms in the OptionAgreement.

 

**Accelerationof ExercisabilityAfter Change in Control**

 

### (i)                                     Notwithstandingany installment or delayed exercise provision contained in the Option Agreementthat would result in the Option becoming exercisable in full or in part at alater date, upon the occurrence of a “Change in Control” (as defined below):

###  

#### i.                                          If inconnection with the Change in Control, the Acquiring Person (as defined below)elects to continue the Option in effect and to replace the shares of CommonStock issuable upon exercise of the Option with other equity securities thatare registered under the Securities Act of 1933 and are freely transferableunder all applicable federal and state securities laws and regulations, theOption shall become exercisable in full if within twelve months of the date ofthe Change in Control, (i) Option Holder’s employment with the Company (orany successor company or affiliated entity with which Option Holder is thenemployed) is terminated by the Company or such other employer without Cause (asdefined below), (ii) Option Holder’s employment with the Company (or anysuccessor company or affiliated entity with which Option Holder is thenemployed) is terminated by the Option Holder for “Good Reason” (as definedbelow), or (iii) any earlier date provided under the OptionAgreement.  In the event of any suchChange in Control, the number of shares issuable upon exercise of the Optionshall be determined by using the exchange ratio used for other outstandingshares of the Company’s Common Stock in connection with the Change in Control,or if there is no such ratio, an exchange ratio to be mutually agreed upon by

 

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#### the Acquiring Person and the Continuing Directors (as defined below),and the exercise price per share shall be adjusted accordingly so as topreserve the same economic value in the Option as existed prior to the Changein Control.  Also in the event of anysuch Change in Control, all references in the Option Agreement to the CommonStock shall thereafter be deemed to refer to the replacement equity securitiesissuable upon exercise of the Option, references to the Company shallthereafter be deemed to refer to the issuer of such replacement securities, andall other terms of the Option shall continue in effect except as and to theextent modified by this subparagraph.

####  

#### ii.                                       If the Change inControl does not meet the criteria specified in paragraph (1)(a) above,the Option shall become exercisable in full immediately upon the Change inControl.

####  

### (ii)                                  To the extent that,in connection with a Change in Control, the Acquiring Person replaces theOption with a cash incentive program, Option Holder’s right to receive cashpayments for the Shares will be paid out in accordance with the vesting schedule setforth in the Option Agreement.  However,if within twelve months of the date of the Change in Control, (i) OptionHolder’s employment with the Company (or any successor company or affiliated entitywith which Option Holder is then employed) is terminated by the Company or suchother employer without Cause or (ii) Option Holder’s employment with theCompany (or any successor company or affiliated entity with which Option Holderis then employed) is terminated by the Option Holder for Good Reason, thenOption Holder’s right to receive the unvested cash payments shall beaccelerated in full and shall no longer be subject to the vesting schedule setforth in the Option Agreement.

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### (iii)                               If a Change in Controlshall occur, the Continuing Directors in their sole discretion, and without theconsent of Option Holder, may determine that Option Holder shall receive, inlieu of some or all of the shares of Common Stock subject to this Option, as ofthe effective date of any such Change in Control, cash in an amount equal tothe excess of the Fair Market Value of such shares on the effective date ofsuch Change in Control over the exercise price per share of this Option,subject to any applicable withholding for income or payroll taxes.

###  

### (iv)                              For purposes of thisAddendum, the following terms shall have the definitions set forth below:

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#### i.                                          “Change inControl” shall mean a change in ownership or control of the Company effectedthrough any of the following transactions:

 

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##### (i)                                     a merger,consolidation or other reorganization unless securities representing more than50% of the total combined voting power of the voting securities of thesuccessor corporation are immediately thereafter beneficially owned, directlyor indirectly and in substantially the same proportion, by the persons whobeneficially owned the Company’s outstanding voting securities immediatelyprior to such transaction;

#####  

##### (ii)                                  the sale, transfer orother disposition of all or substantially all of the Company’s assets;

#####  

##### (iii)                               the acquisition,directly or indirectly by any person or related group of persons (other thanthe Company or a person that directly or indirectly controls, is controlled by,or is under common control with, the Company), of beneficial ownership (withinthe meaning of Rule 13d-3 of the Exchange Act) of securities possessingmore than 50% of the total combined voting power of the Company’s outstandingsecurities pursuant to a tender or exchange offer made directly to the Company’sstockholders; or

#####  

##### (iv)                              a change in thecomposition of the Board of Directors over a period of 36 consecutive months orless such that a majority of the directors ceases, by reason of one or morecontested elections for directorship, to be comprised of individuals who either(i) have been directors continuously since the beginning of such period or(ii) have been elected or nominated for election as directors during suchperiod by at least a majority of the directors described in clause (i) whowere still in office at the time the Board of Directors approved such electionor nomination.

#####  

Following aChange in Control, “Company” shall refer to the successor corporation in thetransaction.

 

#### ii.                                       “ContinuingDirector” shall mean any person who is a member of the Board of Directors ofthe Company, while such a person is a member of the Board of Directors, who isnot an Acquiring Person (as hereinafter defined) or an Affiliate or Associate(as hereinafter defined) of an Acquiring Person, or a representative of anAcquiring

 

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#### Person or of any such Affiliate or Associate, and who (A) was amember of the Board of Directors on the date of this Agreement or (B) subsequentlybecomes a member of the Board of Directors, if such person’s initial nominationfor election or initial election to the Board of Directors is recommended orapproved by a majority of the Continuing Directors.

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#### iii.                                    “Acquiring Person”shall mean any “person” (as such term is used in Sections 13(d) and 14(d) ofthe Exchange Act) who or which, together with all Affiliates and Associates ofsuch person, is the “beneficial owner” (as defined in Rule 13d-3promulgated under the Exchange Act), directly or indirectly, of securities ofthe Company representing 50% or more of the combined voting power of theCompany’s then outstanding securities, but shall not include the Company, anysubsidiary of the Company; and “Affiliate” and “Associate” shall have therespective meanings ascribed to such terms in Rule 12b-2 promulgated underthe Exchange Act.

####  

#### iv.                                   Termination ofemployment for “Cause” shall mean termination by the Company of Option Holder’semployment based upon (i) the willful and continued failure by OptionHolder substantially to perform his or her duties and obligations (other thanany such failure resulting from his or her incapacity due to physical or mentalillness or any such actual or anticipated failure resulting from Option Holder’stermination for “Good Reason” as defined below), (ii) the Option Holder’sconviction or plea bargain in connection with the commission or allegedcommission of any felony or gross misdemeanor involving moral turpitude, fraudor misappropriation of funds, or (iii) the willful engaging by OptionHolder in misconduct which causes substantial injury to the Company, its otheremployees or its clients, whether monetarily or otherwise.  For purposes of this paragraph, no action orfailure to act on Option Holder’s part shall be considered “willful” unlessdone, or omitted to be done, by Option Holder in bad faith and withoutreasonable belief that his or her action or omission was in the best interestsof the Company.

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#### v.                                      “Good Reason”shall mean the occurrence of any of the following events following a Change inControl, except for the occurrence of such an event in connection with thetermination of Option Holder’s employment by the Company (or any successorcompany or affiliated entity

 

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#### then employing Option Holder) for Cause, Disability or death:

####  

##### (i)                                     the assignment toOption Holder of employment duties or responsibilities which are notsubstantially comparable in responsibility and status to the employment dutiesand responsibilities held by Option Holder immediately prior to the Change inControl;

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##### (ii)                                  a reduction in OptionHolder’s base salary as in effect immediately prior to the Change in Control oras the same may be increased from time to time during the term of thisAgreement; or

#####  

##### (iii)                               requiring Option Holderto work in a location more than 50 miles from Option Holder’s office locationimmediately prior to the Change in Control, except for requirements oftemporary travel on the Company’s business to an extent substantially consistentwith Option Holder’s business travel obligations immediately prior to theChange in Control.

#####  

The provisions of this Addendum shallsupersede any provisions to the contrary in the Option Agreement.

 

**IN WITNESS WHEREOF**,the Company has caused this Addendum to be executed by its duly-authorizedofficer effective as of the Effective Date specified below.

 

 

Effective Date:                                   ,

 

 
| ** ** | **RIGHTNOW TECHNOLOGIES, INC.** |
|------------|---------------------------------|
|       |                            |
|       |                            |
|       | By:                             |   |
|       | Greg  Gianforte                 |
|       | Chief  Executive Officer        |
|       |                            |
|       |                            |
| ** ** | **OPTION HOLDER**               |
| ** ** | ** **                      |
| ** ** | ** **                      | ** ** |
| ** ** | ** **                      |
|       |                            |   |
|       | Print Name:                     |   |
|            |                                 |  |  |  |

 

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