Document:

exv10w2

Exhibit 10.2

PURCHASE MONEY SECURITY AGREEMENT

     This Purchase Money Security Agreement (this “Agreement”) dated March 17, 2011 is made and
entered into by and among KiOR Columbus, LLC, a Delaware limited liability company, (“Debtor”) and
The Mississippi Development Authority acting for and on behalf of the State of Mississippi
(“Secured Party”).

RECITALS:

     A. Secured Party and Debtor have entered into a Loan Agreement dated the date hereof (the
“Loan Agreement”) which sets forth the terms and conditions under which Secured Party has agreed to
make the Loan (as defined in the Loan Agreement) to Debtor, which Loan is evidenced by the Note
which is dated the date hereof.

     B. As provided in the Loan Agreement, the proceeds of the Loan are to be used, among other
things, to enable Debtor to acquire rights in specific equipment to be used by Debtor in the
manufacturing of renewable crude oil from Mississippi-grown biomass which equipment comprise the
Collateral subject to this Agreement.

     C. This Agreement evidences the purchase of equipment on credit extended by Secured Party with
the granting of a purchase money security interest in the equipment so purchased.

AGREEMENTS:

     NOW, THEREFORE, in consideration of the premises set forth therein, and to induce Secured
Party to make the loan to Debtor and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:

     1. Definitions. All capitalized terms not otherwise defined herein shall have the
meaning assigned to them in the Loan Agreement. The following terms shall have the following
meanings:

          “Collateral” shall mean the equipment, land and buildings (some of which may be
affixed and qualify as a fixture) listed on Exhibit “A” attached hereto, as amended from time to
time. Any and all other assets of Borrower not listed on Exhibit “A,” as amended from time to
time, are specifically excluded from the definition of Collateral.

          “Default” shall mean an Event of Default under the Loan Agreement.

          “Proceeds” shall mean “proceeds,” as such term is defined in the Uniform Commercial
Code and shall include, without limitation, (a) any and all proceeds of any insurance, indemnity,
warranty or guaranty payable with respect to any of the Collateral, (b) any and all payments, in
any form whatsoever, made or due and payable from time to time in

 

 

connection with any confiscation, condemnation, seizure or forfeiture of all or any part of
the Collateral by any governmental authority, and (c) any and all other amounts from time to time
paid or payable under, in respect of or in connection with any of the Collateral.

          “Uniform Commercial Code” shall mean the Uniform Commercial Code as in effect from
time to time in the State of Mississippi; provided, however, if, by reason of mandatory provisions
of law, the attachment, perfection or priority of Secured Party’s security interest in any
Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the
State of Mississippi, the term “Uniform Commercial Code” shall mean the Uniform Commercial Code as
in effect in such other jurisdiction for purposes of the provisions hereof relating to such
attachment, perfection or priority and for purposes of definitions related to such provisions.

     2. Grant of Security Interest. As collateral security for the prompt payment in full
when due of any amounts due and owing under the Note and/or the Loan Agreement from time to time,
Debtor hereby pledges and grants to Secured Party a lien on and security interest in and to the
Collateral.

     3. Representations. Warranties and Covenants of Debtor. Debtor represents and
warrants to, and covenants with Secured Party as follows:

          (a) Any and all advances made in connection with this Agreement shall be applied exclusively
to Debtor’s acquisition of the Collateral and any soft costs incurred by Debtor in connection
therewith, including without limitation tenant improvements and buildout costs, tooling, equipment
especially manufactured for Borrower, freight, installation, sales taxes and other soft costs, all
as approved by Secured Party acting in its reasonable discretion;

          (b) Debtor is and will be the owner of the Collateral and no lien exists or will exist upon
such Collateral at any time other than (i) liens in favor of the Secured Party (ii) statutory liens
for taxes not yet due; (iii) statutory liens of landlords, liens of carriers, warehousemen,
artisans, repairmen, mechanics and material men incurred in the ordinary course of business for
sums not yet due; and (iv) minor irregularities of title which do not in the aggregate materially
detract from the value or use of the Collateral (collectively “Permitted Liens”);

          (c) This Agreement is effective to create in favor of Secured Party a valid security interest
in and lien upon all of Debtor’s right, title and interest in and to the Collateral and, upon the
filing of appropriate Uniform Commercial Code financing statements, such security interest will be
duly perfected in all of the Collateral; and

          (d) All information heretofore, herein or hereafter furnished to Secured Party by or on behalf
of Debtor with respect to the Collateral is and will be accurate and complete in all material
respects.

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     4. Agreements of Debtor. Debtor hereby agrees with Secured Party as follows:

          (a) Other Documents and Actions. Debtor shall give, execute, deliver, file or record
any financing statement, notice, instrument, agreement or other document that may be necessary or
desirable in the reasonable judgment of Secured Party to create, preserve, perfect or validate the
security interest granted pursuant hereto or to enable Secured Party to exercise and enforce the
rights of Secured Party hereunder with respect to such security interest.

          (b) Further Identification of Collateral. Debtor shall, when and as often as
reasonably requested by Secured Party, furnish to Secured Party, statements and schedules further
identifying and describing the Collateral and such other reports in connection with the Collateral
as Secured Party may reasonably request, all in reasonable detail.

          (c) Other Liens. Debtor shall not create, permit or suffer to exist, and shall defend
the Collateral against and take such other action as is necessary to remove, any lien on the
Collateral except Permitted Liens, and shall defend the right, title and interest of Secured Party
in and to the Collateral and in and to all Proceeds thereof against the claims and demands of all
persons whatsoever except Permitted Liens.

          (d) Preservation of Rights. Whether or not any Event of Default has occurred or is
continuing, Secured Party may, but shall not be required to, take any actions Secured Party
reasonably deems necessary or appropriate to preserve any Collateral or any rights against third
parties to any of the Collateral, including obtaining insurance on the Collateral at any time when
Debtor has failed to do so, and Debtor shall promptly pay, or reimburse Secured Party for, all
expenses incurred in connection therewith.

     5. Remedies. Whenever any Default shall have occurred and be continuing, any one or
more of the following remedial steps may be taken; provided that written notice of the Default has
been given to Debtor by Secured Party, and the Default has not theretofore been cured:

          (a) Secured Party shall have, in addition to other rights and remedies provided for herein or
otherwise available to it, all of the rights and remedies of a secured party upon a default under
the Uniform Commercial Code (whether or not the Uniform Commercial Code applies to the affected
Collateral) and Secured Party may, without notice, demand or legal process of any kind except as
may be required by law, at any time or times (i) enter Debtor’s premises and take physical
possession of the Collateral and maintain such possession on Debtor’s premises, at no cost to
Secured Party, or remove the Collateral or any part thereof to such other place or places as
Secured Party may desire, (ii) require Debtor to, and Debtor hereby agrees to, assemble the
Collateral as directed by Secured Party and make it available to Secured Party at a place to be
designated by Secured Party which is reasonably convenient to Secured Party and Debtor and (iii)
without notice except as specified below, sell, lease, assign, grant an option or options to
purchase or otherwise dispose of the Collateral or any part thereof at public or private sale, at
any exchange, broker’s board or at any of the offices of Secured Party or elsewhere, for cash, on
credit or for future delivery, and upon such other terms as Secured Party may deem commercially
reasonable. Debtor agrees that, to the extent notice of sale shall be required by law, at least ten
(10) days’ notice to Debtor of the time and place of any public sale or the time

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after which any private sale is to be made shall constitute reasonable notification. Secured Party
shall not be obligated to make any sale of Collateral regardless of notice of sale having been
given. Secured Party may adjourn any public or private sale from time to time by announcement at
the time and place fixed therefor and such sale may, without further notice, be made at the time
and place to which it was so adjourned;

          (b) Secured Party may make any reasonable compromise or settlement deemed desirable with
respect to any of the Collateral and may extend the time of payment, arrange for payment in
installments or otherwise modify the terms of, any of the Collateral; and

          (c) Secured Party may, in the name of Secured Party or in the name of Debtor or otherwise,
demand, sue for, collect or receive any money or property at any time payable or receivable on
account of or in exchange for any of the Collateral, but shall be under no obligation to do so.

     6. Deficiency: Application of Proceeds. If the Proceeds of sale, collection or other
realization of or upon the Collateral are insufficient to cover the costs and expenses of such
realization and the payment in full of the amounts owed under the Note, Debtor shall remain liable
for any deficiency. The Proceeds of any collection, sale or other realization of all or any part of
the Collateral shall be applied as follows: first, to payment of all expenses payable or
reimbursable by Debtor under the Note; second, to payment of principal of the Note; and last, any
remainder shall be for the account of and paid to Debtor.

     7. Power of Attorney. Debtor hereby irrevocably constitutes and appoints Secured
Party, with full power of substitution, as its true and lawful attorney-in-fact with full
irrevocable power and authority in the place and stead of Debtor and in the name of Debtor or in
its own name, from time to time in the discretion of Secured Party, after the occurrence and during
the continuance of an Event of Default, for the purpose of carrying out the terms of this
Agreement, to take any and all appropriate action and to execute and deliver any and all documents
and instruments which may be necessary to accomplish the purposes of this Agreement.

     8. Termination. This Agreement and the liens and security interests granted hereunder
shall not terminate until the full and complete payment of all amounts owed under the Note
(regardless of whether the Note shall have earlier terminated).

     9. Further Assurances. At any time and from time to time, upon the request of Secured
Party, and at the sole expense of Debtor, Debtor shall promptly and duly execute and deliver any
and all such further instruments, documents and agreements and take such further actions as Secured
Party may reasonably require in order for Secured Party to obtain the full benefits of this
Agreement, including, without limitation, using Debtor’s commercially reasonable efforts to secure
all consents and approvals necessary or appropriate for the assignment to Secured Party of any
Collateral held by Debtor or in which Debtor has any rights not heretofore assigned, the filing of
any financing or continuation statements under the Uniform Commercial Code with respect to the
security interests granted hereby, transferring Collateral to Secured Party’s possession if a
security interest in such Collateral can be perfected by possession, placing the interest of
Secured Party as lien holder on the certificate of title of any

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motor vehicle and obtaining waivers of liens from landlords and mortgagees. Debtor further hereby authorizes
Secured Party to file any such financing or continuation statement without the signature of Debtor
to the extent permitted by law.

     10. Limitation on Duty of Secured Party. The powers conferred on Secured Party under
this Agreement are solely to protect Secured Party’s interest in the Collateral and shall not
impose any duty upon it to exercise any such powers. Except for the safe custody of any Collateral
in its possession and the accounting for moneys actually received by it hereunder, Secured Party
shall have no duty as to any of the Collateral. Secured Party shall be accountable only for amounts
that it actually receives as a result of the exercise of such powers and neither Secured Party nor
any of its officers, directors, employees or agents shall be responsible to Debtor for any act or
failure to act, except for gross negligence or willful misconduct. Without limiting the foregoing,
Secured Party shall be deemed to have exercised reasonable care in the custody and preservation of
the Collateral in its possession if such Collateral is accorded treatment substantially equivalent
to that which Secured Party accords its own property consisting of the type of Collateral involved,
it being understood and agreed that Secured Party shall have no responsibility for taking any
necessary steps, other than steps taken in accordance with the standard of care set forth above, to
preserve rights against any person with respect to any Collateral.

     11. Miscellaneous.

          (a) No Waiver. No failure on the part of Secured Party to exercise, and no course of
dealing with respect to, and no delay in exercising, any right, power or remedy hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise by Secured Party of any
right, power or remedy hereunder preclude any other or further exercise thereof or the exercise of
any other right, power or remedy. The rights and remedies hereunder provided are cumulative and may
be exercised singly or concurrently, and are not exclusive of any rights and remedies provided by
law.

          (b) Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of Mississippi, without giving effect to the choice of law principles
thereof.

          (c) Notices. All notices required or permitted to be given hereunder shall be in
writing and may be delivered by hand, by nationally recognized private courier, or by United States
mail. Notices delivered by mail shall be deemed given three (3) business days after being deposited
in the United States mail, postage prepaid, registered or certified mail, return receipt requested.
Notices delivered by hand or by nationally recognized private carrier shall be deemed given on the
first business day following receipt. All notices shall be addressed to each of the parties hereto
at the addresses specified in the Loan Agreement.

          (d) Amendments. The terms of this Agreement may be waived, altered or amended only by
an instrument in writing duly executed by Debtor and Secured Party. Provided, however, the
addition of specific equipment to Exhibit “A” may be accomplished by the execution of an amended
Exhibit “A” by a duly authorized representative of Debtor.

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          (e) Successors and Assigns. This Agreement shall be binding upon and inure to the
benefit of the respective successors and assigns of each of the parties hereto, provided, that
Debtor shall not assign or transfer its rights hereunder except in connection with a transfer
allowed under Section 6.1 of the Loan Agreement without the prior written consent of Secured Party.

          (f) Counterparts: Headings. This Agreement may be executed in any number of
counterparts, all of which together shall constitute one and the same instrument. The headings in
this Agreement are for convenience of reference only and shall not alter or otherwise affect the
meaning hereof.

          (g) Severability. If any provision hereof is invalid or unenforceable in any
jurisdiction, then, to the fullest extent permitted by law, the other provisions hereof shall
remain in full force and effect in such jurisdiction and shall be liberally construed in favor of
Secured Party in order to carry out the intentions of the parties hereto as nearly as may be
possible, and the invalidity or unenforceability of any provision in any jurisdiction shall not
affect the validity or enforceability of such provision in any other jurisdiction.

     IN WITNESS WHEREOF, the parties have caused this Security Agreement to be duly executed and
delivered on the day and year first above written.

	 	 	 	 	 	 	 

	 	 	DEBTOR:	 	 
	 
	 	 	 	 	 	 
	 	 	KiOR COLUMBUS, LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Fred Cannon	 	 
	 

	 	Title:
	 	 

Chief Executive Officer
	 	 
	 
	 	 	 	 	 	 
	 	 	SECURED PARTY:	 	 
	 
	 	 	 	 	 	 
	 	 	THE MISSISSIPPI DEVELOPMENT	 	 
	 	 	AUTHORITY acting for and on behalf of the State of Mississippi	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Gary Swoope	 	 
	 

	 	Title:
	 	 

Executive Director
	 	 

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EXHIBIT “A”

Collateral

2exv10w3

Exhibit 10.3

KIOR, INC.

AMENDED AND RESTATED 2007 STOCK OPTION/STOCK ISSUANCE PLAN

ARTICLE ONE

GENERAL PROVISIONS

     I. PURPOSE OF THE PLAN

          This Amended and Restated 2007 Stock Option/Stock Issuance Plan is intended to promote the
interests of Kior, Inc., a Delaware corporation, by providing eligible persons in the Corporation’s
employ or service with the opportunity to acquire a proprietary interest, or otherwise increase
their proprietary interest, in the Corporation as an incentive for them to continue in such employ
or service.

          Capitalized terms herein shall have the meanings assigned to such terms in the attached
Appendix.

     II. STRUCTURE OF THE PLAN

          A. The Plan shall be divided into two (2) separate equity programs:

          (1) the Option Grant Program under which eligible persons may, at the
discretion of the Plan Administrator, be granted options to purchase shares of
Common Stock or Class A Common Stock, and

          (2) the Stock Issuance Program under which eligible persons may, at the
discretion of the Plan Administrator, be issued shares of Common Stock or Class A
Common Stock directly, either through the immediate purchase of such shares or as a
bonus for services rendered the Corporation (or any Parent or Subsidiary).

          B. The provisions of Articles One and Four shall apply to both equity programs under the Plan
and shall accordingly govern the interests of all persons under the Plan.

     III. ADMINISTRATION OF THE PLAN

          A. The Plan shall be administered by the Board. However, any or all administrative
functions otherwise exercisable by the Board may be delegated to the Committee. Members of the
Committee shall serve for such period of time as the Board may determine and shall be subject to
removal by the Board at any time. The Board may also at any time terminate the functions of the
Committee and reassume all powers and authority previously delegated to the Committee.

 

 

          B. The Plan Administrator shall have full power and authority (subject to the provisions of
the Plan) to establish such rules and regulations as it may deem appropriate for proper
administration of the Plan and to make such determinations under, and issue such interpretations
of, the Plan and any outstanding options or stock issuances thereunder as it may deem necessary or
advisable. Decisions of the Plan Administrator shall be final and binding on all parties who have
an interest in the Plan or any option grant or stock issuance thereunder.

     IV. ELIGIBILITY

          A. The persons eligible to participate in the Plan are as follows:

          (1) Employees,

          (2) non-employee members of the Board or the non-employee members of the board
of directors of any Parent or Subsidiary, and

          (3) consultants and other independent advisors who provide services to the
Corporation (or any Parent or Subsidiary).

          B. The Plan Administrator shall have full authority to determine, (i) with respect to the
grants made under the Option Grant Program, which eligible persons are to receive such grants, the
time or times when those grants are to be made, the number of shares to be covered by each such
grant, the status of the granted option as either an Incentive Option or a Non-Statutory Option,
the time or times when each option is to become exercisable, the vesting schedule (if any)
applicable to the option shares and the maximum term for which the option is to remain outstanding,
and (ii) with respect to stock issuances made under the Stock Issuance Program, which eligible
persons are to receive such issuances, the time or times when those issuances are to be made, the
number of shares to be issued to each Participant, the vesting schedule (if any) applicable to the
issued shares and the consideration to be paid by the Participant for such shares.

          C. The Plan Administrator shall have the absolute discretion either to grant options in
accordance with the Option Grant Program or to effect stock issuances in accordance with the Stock
Issuance Program.

     V. STOCK SUBJECT TO THE PLAN

          A. The stock issuable under the Plan shall be shares of authorized but unissued or reacquired
Common Stock or Class A Common Stock. The maximum number of shares of Common Stock or Class A
Common Stock which may be issued over the term of the Plan shall not exceed Ten Million Nine
Hundred Sixty-Eight Thousand Three Hundred Twenty Eight (10,968,328) shares, of which Five Million
One Hundred Fifty Thousand Nine Hundred Eight (5,150,908) shares shall be Class A Common Stock,
subject to increase upon the expiration, termination or cancellation of outstanding options for
shares of Common Stock under the terms of the Plan.

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          B. Any shares of Common Stock subject to outstanding options shall be available for subsequent
issuance only as shares of Class A Common Stock under the Plan to the extent (i) the options expire
or terminate for any reason prior to exercise in full or (ii) the options are cancelled in
accordance with the cancellation-regrant provisions of Article Two. Shares of Class A Common Stock
subject to outstanding options shall be available for subsequent issuance under the Plan to the
extent (i) the options expire or terminate for any reason prior to exercise in full or (ii) the
options are cancelled in accordance with the cancellation-regrant provisions of Article Two.
Unvested shares of Common Stock or Class A Common Stock issued under the Plan and subsequently
repurchased by the Corporation, at a price per share not greater than the option exercise or direct
issue price paid per share, pursuant to the Corporation’s repurchase rights under the Plan shall be
added back to the number of shares of Class A Common Stock reserved for issuance under the Plan and
shall accordingly be available for reissuance through one or more subsequent option grants or
direct stock issuances under the Plan.

          C. Should any change be made to the Common Stock or Class A Common Stock by reason of any
stock split, reverse stock split, stock dividend, recapitalization, combination of shares,
reclassification of shares, exchange of shares or other change affecting the outstanding Common
Stock or Class A Common Stock as a class without the Corporation’s receipt of consideration,
appropriate adjustments shall be made to (i) the maximum number and/or class of securities issuable
under the Plan and (ii) the number and/or class of securities and the exercise price per share in
effect under each outstanding option in order to prevent the dilution or enlargement of benefits
thereunder. The adjustments determined by the Plan Administrator shall be final, binding and
conclusive. In no event shall any such adjustments be made in connection with the conversion of
one or more outstanding shares of the Corporation’s preferred stock into shares of Common Stock.

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ARTICLE TWO

OPTION GRANT PROGRAM

     I. OPTION TERMS

          Each option shall be evidenced by one or more documents in the form approved by the Plan
Administrator; provided, however, that each such document shall comply with the
terms specified below. Each document evidencing an Incentive Option shall, in addition, be subject
to the provisions of the Plan applicable to such options.

          A. Exercise Price.

               (i) The exercise price per share shall be fixed by the Plan Administrator, but shall not be
less than one hundred percent (100%) of the Fair Market Value per share of Common Stock on the
option grant date.

               (ii) The exercise price shall become immediately due upon exercise of the option and shall,
subject to the provisions of Section I of Article Four and the documents evidencing the option, be
payable in cash or check made payable to the Corporation. Should the Common Stock or Class A
Common Stock be registered under Section 12 of the 1934 Act at the time the option is exercised,
then the exercise price may also be paid as follows:

               (1) in shares of Common Stock or Class A Common Stock held for the requisite
period necessary to avoid a charge to the Corporation’s earnings for financial
reporting purposes and valued at Fair Market Value on the Exercise Date, or

               (2) to the extent the option is exercised for vested shares, pursuant to a
program developed under Regulation T as promulgated by the Federal Reserve Board
that, prior to the issuance of the shares, results in the receipt of cash (or check)
by the Corporation.

          Except to the extent such sale and remittance procedure is utilized, payment of the exercise
price for the purchased shares must be made on the Exercise Date.

          B. Exercise and Term of Options. Each option shall be exercisable at such time or
times, during such period and for such number of shares as shall be determined by the Plan
Administrator and set forth in the documents evidencing the option grant. However, no option shall
have a term in excess of ten (10) years measured from the option grant date.

          C. Effect of Termination of Service.

               (i) The following provisions shall govern the exercise of any options held by the Optionee at
the time of cessation of Service or death:

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               (1) Should the Optionee cease to remain in Service for any reason other than
death, Disability or Misconduct, then the Optionee shall have a period of three (3)
months following the date of such cessation of Service during which to exercise each
outstanding option held by such Optionee.

               (2) Should Optionee’s Service terminate by reason of Disability, then the
Optionee shall have a period of twelve (12) months following the date of such
cessation of Service during which to exercise each outstanding option held by such
Optionee.

               (3) If the Optionee dies while holding an outstanding option, then the personal
representative of his or her estate or the person or persons to whom the option is
transferred pursuant to the Optionee’s will or the laws of inheritance or the
Optionee’s designated beneficiary or beneficiaries of that option shall have a
twelve (12)-month period following the date of the Optionee’s death to exercise such
option.

               (4) Under no circumstances, however, shall any such option be exercisable after
the specified expiration of the option term.

               (5) During the applicable post-Service exercise period, the option may not be
exercised in the aggregate for more than the number of vested shares for which the
option is exercisable on the date of the Optionee’s cessation of Service. No
additional shares shall vest under the option following the Optionee’s cessation of
Service, except to the extent (if any) specifically authorized by the Plan
Administrator in its sole discretion pursuant to an express written agreement with
Optionee. Upon the expiration of the applicable exercise period or (if earlier)
upon the expiration of the option term, the option shall terminate and cease to be
outstanding for any vested shares for which the option has not been exercised.

               (ii) The Plan Administrator shall have the discretion, exercisable either at the time an
option is granted or at any time while the option remains outstanding, to:

               (1) extend the period of time for which the option is to remain exercisable
following Optionee’s cessation of Service or death from the limited period otherwise
in effect for that option to such greater period of time as the Plan Administrator
shall deem appropriate, but in no event beyond the expiration of the option term,
and/or

               (2) permit the option to be exercised, during the applicable post-Service
exercise period, not only with respect to the number of vested shares of Common
Stock or Class A Common Stock for which such option is exercisable at the time of
the Optionee’s cessation of Service but also with respect to one or more additional
installments in which the Optionee would have vested under the option had the
Optionee continued in Service.

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          D. Stockholder Rights. The holder of an option shall have no stockholder rights with
respect to the shares subject to the option until such person shall have exercised the option, paid
the exercise price and become the recordholder of the purchased shares.

          E. Unvested Shares. The Plan Administrator shall have the discretion to grant options
which are exercisable for unvested shares of Common Stock or Class A Common Stock. Should the
Optionee cease Service while holding such unvested shares, the Corporation shall have the right to
repurchase any or all of those unvested shares at a price per share equal to the lower of (i) the
exercise price paid per share or (ii) the Fair Market Value per share of Common Stock or Class A
Common Stock at the time of Optionee’s cessation of Service; provided, however that the repurchase
at Fair Market Value shall terminate upon the effective date of the initial public offering of the
Common Stock or Class A Common Stock of the Corporation. The terms upon which such repurchase
right shall be exercisable (including the period and procedure for exercise and the appropriate
vesting schedule for the purchased shares) shall be established by the Plan Administrator and set
forth in the document evidencing such repurchase right.

          F. First Refusal Rights. Until such time as the Common Stock or Class A Common Stock
is first registered under Section 12 of the 1934 Act, the Corporation shall have the right of first
refusal with respect to any proposed disposition by the Optionee (or any successor in interest) of
any shares of Common Stock or Class A Common Stock issued under the Plan. Such right of first
refusal shall be exercisable in accordance with the terms established by the Plan Administrator and
set forth in the document evidencing such right.

          G. Limited Transferability of Options. An Incentive Stock Option shall be exercisable
only by the Optionee during his or her lifetime and shall not be assignable or transferable other
than by will or by the laws of inheritance following the Optionee’s death. A Non-Statutory Option
may be assigned in whole or in part during the Optionee’s lifetime to one or more members of the
Optionee’s “immediate family” (as such term is defined in Rule 16a-1(e) promulgated under the 1934
Act) or to an intervivos or grantor trust established exclusively for one or more such immediate
family members. The assigned portion may only be exercised by the person or persons who acquire a
proprietary interest in the Non-Statutory Option pursuant to the assignment. The terms applicable
to the assigned portion shall be the same as those in effect for the option immediately prior to
such assignment and shall be set forth in such documents issued to the assignee as the Plan
Administrator may deem appropriate. Notwithstanding the foregoing, the Optionee may also designate
one or more persons as the beneficiary or beneficiaries of his or her outstanding options under the
Plan, and those options shall, in accordance with such designation, automatically be transferred to
such beneficiary or beneficiaries upon the Optionee’s death while holding those options. Such
beneficiary or beneficiaries shall take the transferred options subject to all the terms and
conditions of the applicable agreement evidencing each such transferred option, including (without
limitation) the limited time period during which the option may be exercised following the
Optionee’s death.

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     II. INCENTIVE OPTIONS

          The terms specified below shall be applicable to all Incentive Options. Except as modified by
the provisions of this Section II, all the provisions of Articles One, Two and Four shall be
applicable to Incentive Options. Options which are specifically designated as Non-Statutory
Options shall not be subject to the terms of this Section II.

          A. Eligibility. Incentive Options may only be granted to Employees.

          B. Exercise Price. The exercise price per share shall not be less than one hundred
percent (100%) of the Fair Market Value per share of Common Stock or Class A Common Stock on the
option grant date.

          C. Dollar Limitation. The aggregate Fair Market Value of the shares of Common Stock
or Class A Common Stock (determined as of the respective date or dates of grant) for which one or
more options granted to any Employee under the Plan (or any other option plan of the Corporation or
any Parent or Subsidiary) may for the first time become exercisable as Incentive Options during any
one (1) calendar year shall not exceed the sum of One Hundred Thousand Dollars ($100,000). To the
extent the Employee holds two (2) or more such options which become exercisable for the first time
in the same calendar year, the foregoing limitation on the exercisability of such options as
Incentive Options shall be applied on the basis of the order in which such options are granted. To
the extent an Option designated as an Incentive Stock Option would become exercisable for the first
time for an amount in excess of One Hundred Thousand Dollars, the excess amount shall be
exercisable as a Non-Statutory Stock Option.

          D. 10% Stockholder. If any Employee to whom an Incentive Option is granted is a 10%
Stockholder, then the option term shall not exceed five (5) years measured from the option grant
date.

     III. CHANGE IN CONTROL

          A. None of the outstanding options under the Plan shall vest in whole or in part on an
accelerated basis upon the occurrence of a Change in Control, and those options shall be assumable
by any successor corporation in the Change in Control. However, the Plan Administrator shall have
the discretionary authority to structure one or more options grants under the Plan so that each of
those particular options shall automatically accelerate in whole or in part, immediately prior to
the effective date of that Change in Control, and become exercisable for all the shares of Common
Stock or Class A Common Stock at the time subject to the accelerated portion of such option and may
be exercised for any or all of those accelerated shares as fully vested shares of Common Stock or
Class A Common Stock.

          B. None of the outstanding repurchase rights under the Plan shall terminate on an accelerated
basis upon the occurrence of a Change in Control, and those rights shall be assignable to any
successor corporation in the Change in Control. However, the Plan Administrator shall have the
discretionary authority to structure one or more repurchase rights

7

 

under the Plan so that those particular rights shall automatically terminate in whole or in
part, and the shares of Common Stock or Class A Common Stock subject to those terminated rights
shall immediately vest, in the event of a Change in Control.

          C. Immediately following the consummation of the Change in Control, all outstanding options
under the Plan shall terminate and cease to be outstanding, except to the extent assumed by the
successor corporation (or parent thereof) or otherwise continued in full force and effect pursuant
to the terms of the Change in Control transaction.

          D. Each option which is assumed in connection with a Change in Control or otherwise continued
in effect shall be appropriately adjusted, immediately after such Change in Control, to apply to
the number and class of securities or cash or other property which would have been issuable to the
Optionee in consummation of such Change in Control had the option been exercised immediately prior
to such Change in Control. Appropriate adjustments to reflect such Change in Control shall also be
made to the exercise price payable per share under each outstanding option, provided the
aggregate exercise price payable for such securities shall remain the same. To the extent the
actual holders of the Corporation’s outstanding Common Stock or Class A Common Stock receive cash
consideration for their Common Stock or Class A Common Stock in consummation of the Change in
Control, the successor corporation may, in connection with the assumption of the outstanding
options under the Plan, substitute one or more shares of its own common stock with a fair market
value equivalent to the cash or other property consideration paid per share of Common Stock or
Class A Common Stock in such Change in Control transaction.

          E. The Plan Administrator shall have full power and authority to structure one or more
outstanding options under the Plan so that those options shall vest and become exercisable on an
accelerated basis for all or a portion of the shares of Common Stock or Class A Common Stock at the
time subject to those options, should the Optionee’s Service subsequently terminate by reason of an
Involuntary Termination within a designated period following the effective date of a Change in
Control transaction. In addition, the Plan Administrator may structure one or more of the
Corporation’s repurchase rights so that those rights shall immediately terminate on an accelerated
basis with respect to all or a portion of the shares held by the Optionee at the time of such
Involuntary Termination, and the shares subject to those terminated repurchase rights shall
accordingly vest at that time.

          F. The portion of any Incentive Option accelerated in connection with a Change in Control or
subsequent Involuntary Termination of the Optionee’s Service shall remain exercisable as an
Incentive Option only to the extent the applicable One Hundred Thousand Dollar ($100,000)
limitation is not exceeded. To the extent such dollar limitation is exceeded, the accelerated
portion of such option shall be exercisable as a Nonstatutory Option under the Federal tax laws.

          G. The outstanding options shall in no way affect the right of the Corporation to adjust,
reclassify, reorganize or otherwise change its capital or business structure or to merge,
consolidate, dissolve, liquidate or sell or transfer all or any part of its business or assets.

8

 

     IV. CANCELLATION AND REGRANT OF OPTIONS

          The Plan Administrator shall have the authority to effect, at any time and from time to time,
with the consent of the affected option holders, the cancellation of any or all outstanding options
under the Plan and to grant in substitution therefor new options covering the same or different
number of shares of Common Stock or Class A Common Stock but such substitute options (i) shall only
be exercisable for shares of Class A Common Stock, and (ii) shall have an exercise price per share
based on the Fair Market Value per share of Class A Common Stock on the new option grant date.

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ARTICLE THREE

STOCK ISSUANCE PROGRAM

     I. STOCK ISSUANCE TERMS

          Shares of Common Stock or Class A Common Stock may be issued under the Stock Issuance Program
through direct and immediate issuances without any intervening option grants. Each such stock
issuance shall be evidenced by a Stock Issuance Agreement which complies with the terms specified
below.

          A. Purchase Price.

               (i) The purchase price per share shall be fixed by the Plan Administrator.

               (ii) Subject to the provisions of Section I of Article Four, shares of Common Stock or Class A
Common Stock may be issued under the Stock Issuance Program for any of the following items of
consideration which the Plan Administrator may deem appropriate in each individual instance:

               (1) cash or check made payable to the Corporation, or

               (2) past services rendered to the Corporation (or any Parent or Subsidiary).

          B. Vesting Provisions.

               (i) Shares of Common Stock or Class A Common Stock issued under the Stock Issuance Program
may, in the discretion of the Plan Administrator, be fully and immediately vested upon issuance or
may vest in one or more installments over the Participant’s period of Service or upon attainment of
specified performance objectives.

               (ii) Any new, substituted or additional securities or other property (including money paid
other than as a regular cash dividend) which the Participant may have the right to receive with
respect to the Participant’s unvested shares of Common Stock or Class A Common Stock by reason of
any stock split, reverse stock split, stock dividend, recapitalization, combination of shares,
reclassification of shares, exchange of shares or other change affecting the outstanding Common
Stock or Class A Common Stock as a class without the Corporation’s receipt of consideration shall
be issued subject to (i) the same vesting requirements applicable to the Participant’s unvested
shares of Common Stock or Class A Common Stock and (ii) such escrow arrangements as the Plan
Administrator shall deem appropriate.

               (iii) The Participant shall have full stockholder rights with respect to any shares of Common
Stock or Class A Common Stock issued to the Participant under the

10

 

Stock Issuance Program, whether or not the Participant’s interest in those shares is vested.
Accordingly, the Participant shall have the right to vote such shares and to receive any regular
cash dividends paid on such shares.

               (iv) Should the Participant cease to remain in Service while holding one or more unvested
shares of Common Stock or Class A Common Stock issued under the Stock Issuance Program or should
the performance objectives not be attained with respect to one or more such unvested shares of
Common Stock or Class A Common Stock, then those shares shall be immediately surrendered to the
Corporation for cancellation, and the Participant shall have no further stockholder rights with
respect to those shares. To the extent the surrendered shares were previously issued to the
Participant for consideration paid in cash or cash equivalent (including the Participant’s
purchase-money indebtedness), the Corporation shall repay to the Participant the lower of (i) the
cash consideration paid for the surrendered shares or (ii) the Fair Market Value of those shares at
the time of Participant’s cessation of Service and shall cancel the unpaid principal balance of any
outstanding purchase-money note of the Participant attributable to such surrendered shares by the
applicable clause (i) or (ii) amount. Notwithstanding the foregoing, if this Section would cause
adverse accounting treatment for the Corporation’s equity compensation program, the Plan
Administrator may, in its sole discretion, waive or delay the surrender and/or repurchase of the
unvested shares to minimize or eliminate such adverse accounting treatment.

               (v) The Plan Administrator may in its discretion waive the surrender and cancellation of one
or more unvested shares of Common Stock or Class A Common Stock (or other assets attributable
thereto) which would otherwise occur upon the non-completion of the vesting schedule applicable to
those shares. Such waiver shall result in the immediate vesting of the Participant’s interest in
the shares of Common Stock or Class A Common Stock as to which the waiver applies. Such waiver may
be effected at any time, whether before or after the Participant’s cessation of Service or the
attainment or non-attainment of the applicable performance objectives.

          C. First Refusal Rights. Until such time as the Common Stock or Class A Common Stock
is first registered under Section 12 of the 1934 Act, the Corporation shall have the right of first
refusal with respect to any proposed disposition by the Participant (or any successor in interest)
of any shares of Common Stock or Class A Common Stock issued under the Stock Issuance Program.
Such right of first refusal shall be exercisable in accordance with the terms established by the
Plan Administrator and set forth in the document evidencing such right.

     II. CHANGE IN CONTROL

          Upon the occurrence of a Change in Control, all outstanding repurchase rights under the Stock
Issuance Program shall continue in full force and effect and shall be assigned to the successor
corporation (or parent thereof), and none of the shares subject to those repurchase rights shall
vest on an accelerated basis. However, the Plan Administrator shall have the discretionary
authority, exercisable either at the time the unvested shares are issued or any time while the
Corporation’s repurchase rights with respect to those shares remain outstanding, to

11

 

provide that those repurchase rights shall automatically terminate in whole or in part on an
accelerated basis, and the shares of Common Stock or Class A Common Stock subject to those
terminated rights shall immediately vest, in the event the Participant’s Service should
subsequently terminate by reason of an Involuntary Termination within a designated period following
the effective date of the Change in Control transaction.

     III. SHARE ESCROW/LEGENDS

          Unvested shares may, in the Plan Administrator’s discretion, be held in escrow by the
Corporation until the Participant’s interest in such shares vests or may be issued directly to the
Participant with restrictive legends on the certificates evidencing those unvested shares.

12

 

ARTICLE FOUR

MISCELLANEOUS

     I. FINANCING

          The Plan Administrator may permit any Optionee or Participant to pay the option exercise price
under the Option Grant Program or the purchase price for shares issued under the Stock Issuance
Program by delivering a full-recourse promissory note payable in one or more installments which
bears interest at a market rate and is secured by the purchased shares. In no event, however, may
the maximum credit available to the Optionee or Participant exceed the sum of (i) the aggregate
option exercise price or purchase price payable for the purchased shares (less the par value of
those shares) plus (ii) any applicable income and employment tax liability incurred by the Optionee
or the Participant in connection with the option exercise or share purchase. With respect to
promissory notes issued to officers pursuant to this Section, such notes shall become due and
payable immediately prior to the filing of a Registration Statement on Form S-1 (or any successor
form).

     II. EFFECTIVE DATE AND TERM OF PLAN

          A. The Plan shall become effective when adopted by the Board, but no option granted under the
Plan may be exercised, and no shares shall be issued under the Plan, until the Plan is approved by
the Corporation’s stockholders. If such stockholder approval is not obtained within twelve (12)
months after the date of the Board’s adoption of the Plan, then all options previously granted
under the Plan shall terminate and cease to be outstanding, and no further options shall be granted
and no shares shall be issued under the Plan. Subject to such limitation, the Plan Administrator
may grant options and issue shares under the Plan at any time after the effective date of the Plan
and before the date fixed herein for termination of the Plan.

          B. The Plan shall terminate upon the earliest of (i) the expiration of the ten
(10)-year period measured from the date the Plan is adopted by the Board, (ii) the date on which
all shares available for issuance under the Plan shall have been issued as vested shares or (iii)
the termination of all outstanding options in connection with a Change in Control. All options and
unvested stock issuances outstanding at the time of a clause (i) termination event shall continue
to have full force and effect in accordance with the provisions of the documents evidencing those
options or issuances.

     III. AMENDMENT OF THE PLAN

          A. The Board shall have complete and exclusive power and authority to amend or modify the Plan
in any or all respects. However, no such amendment or modification shall adversely affect the
rights and obligations with respect to options or unvested stock issuances at the time outstanding
under the Plan unless the Optionee or the Participant consents to such amendment or modification.
In addition, certain amendments may require stockholder approval pursuant to applicable laws and
regulations.

13

 

          B. Options may be granted under the Option Grant Program and shares may be issued under the
Stock Issuance Program which are in each instance in excess of the number of shares of Common Stock
or Class A Common Stock then available for issuance under the Plan, provided any excess shares
actually issued under those programs shall be held in escrow until there is obtained stockholder
approval of an amendment sufficiently increasing the number of shares of Common Stock or Class A
Common Stock available for issuance under the Plan. If such stockholder approval is not obtained
within twelve (12) months after the date the first such excess grants or issuances are made, then
(i) any unexercised options granted on the basis of such excess shares shall terminate and cease to
be outstanding and (ii) the Corporation shall promptly refund to the Optionees and the Participants
the exercise or purchase price paid for any excess shares issued under the Plan and held in escrow,
together with interest (at the applicable Short Term Federal Rate) for the period the shares were
held in escrow, and such shares shall thereupon be automatically cancelled and cease to be
outstanding.

     IV. USE OF PROCEEDS

          Any cash proceeds received by the Corporation from the sale of shares of Common Stock or Class
A Common Stock under the Plan shall be used for general corporate purposes.

     V. WITHHOLDING

          The Corporation’s obligation to deliver shares of Common Stock or Class A Common Stock upon
the exercise of any options granted under the Plan or upon the issuance or vesting of any shares
issued under the Plan shall be subject to the satisfaction of all applicable income and employment
tax withholding requirements.

     VI. REGULATORY APPROVALS

          The implementation of the Plan, the granting of any options under the Plan and the issuance of
any shares of Common Stock or Class A Common Stock (i) upon the exercise of any option or (ii)
under the Stock Issuance Program shall be subject to the Corporation’s procurement of all approvals
and permits required by regulatory authorities having jurisdiction over the Plan, the options
granted under it and the shares of Common Stock or Class A Common Stock issued pursuant to it.

     VII. NO EMPLOYMENT OR SERVICE RIGHTS

          Nothing in the Plan shall confer upon the Optionee or the Participant any right to continue in
Service for any period of specific duration or interfere with or otherwise restrict in any way the
rights of the Corporation (or any Parent or Subsidiary employing or retaining such person) or of
the Optionee or the Participant, which rights are hereby expressly reserved by each, to terminate
such person’s Service at any time for any reason, with or without cause.

14

 

     VIII. FINANCIAL REPORTS

          The Corporation shall deliver to each Optionee and Participant such financial and other
information as required pursuant to Rule 701 promulgated under the Securities Act of 1933, as
amended.

15

 

APPENDIX

          The following definitions shall be in effect under the Plan:

          A. Board shall mean the Corporation’s Board of Directors.

          B. Change in Control shall mean a change in ownership or control of the Corporation
effected through any of the following transactions:

               (i) a merger, consolidation or other reorganization approved by the Corporation’s
stockholders, unless securities representing more than fifty percent (50%) of the total
combined voting power of the voting securities of the successor corporation are immediately
thereafter beneficially owned, directly or indirectly and in substantially the same proportion, by
the persons who beneficially owned the Corporation’s outstanding voting securities immediately
prior to such transaction, or

               (ii) a stockholder-approved sale, transfer or other disposition of all or substantially all of
the Corporation’s assets in complete liquidation or dissolution of the Corporation, or

               (iii) the acquisition, directly or indirectly by any person or related group of persons (other
than the Corporation or a person that directly or indirectly controls, is controlled by, or is
under common control with, the Corporation), of beneficial ownership (within the meaning of Rule
13d-3 of the 1934 Act) of securities possessing more than fifty percent (50%) of the total combined
voting power of the Corporation’s outstanding securities pursuant to a tender or exchange offer
made directly to the Corporation’s stockholders.

          In no event shall any public offering of the Corporation’s securities be deemed to constitute
a Change in Control.

          C. Code shall mean the Internal Revenue Code of 1986, as amended.

          D. Committee shall mean a committee of one (1) or more Board members appointed by the
Board to exercise one or more administrative functions under the Plan.

          E. Common Stock shall mean the Corporation’s common stock.

          F. Class A Common Stock shall mean the Corporation’s class A common stock.

          G. Corporation shall mean Kior, Inc., a Delaware corporation, and any successor
corporation to all or substantially all of the assets or voting stock of Kior, Inc. which shall by
appropriate action adopt the Plan.

          H. Disability shall mean the inability of the Optionee or the Participant to engage in
any substantial gainful activity by reason of any medically determinable physical or

A-1

 

mental impairment and shall be determined by the Plan Administrator on the basis of such
medical evidence as the Plan Administrator deems warranted under the circumstances.

          I. Employee shall mean an individual who is in the employ of the Corporation (or any
Parent or Subsidiary), subject to the control and direction of the employer entity as to both the
work to be performed and the manner and method of performance.

          J. Exercise Date shall mean the date on which the Corporation shall have received
written notice of the option exercise.

          K. Fair Market Value per share of Common Stock or Class A Common Stock on any relevant
date shall be determined in accordance with the following provisions:

               (i) If the Common Stock or Class A Common Stock is at the time listed on any Stock Exchange,
then the Fair Market Value shall be the closing selling price per share of Common Stock or Class A
Common Stock on the date in question on the Stock Exchange determined by the Plan Administrator to
be the primary market for the Common Stock or Class A Common Stock, as such price is officially
quoted in the composite tape of transactions on such exchange and published in The Wall Street
Journal. If there is no closing selling price for the Common Stock on the date in question,
then the Fair Market Value shall be the closing selling price on the last preceding date for which
such quotation exists.

               (ii) If the Common Stock or Class A Common Stock is at the time not listed on any Stock
Exchange, then the Fair Market Value shall be determined by the Plan Administrator after taking
into account such factors as the Plan Administrator shall deem appropriate.

          L. Incentive Option shall mean an option which satisfies the requirements of Code
Section 422.

          M. Involuntary Termination shall mean the termination of the Service of any individual
which occurs by reason of:

               (i) such individual’s involuntary dismissal or discharge by the Corporation for reasons other
than Misconduct, or

               (ii) such individual’s voluntary resignation following (A) a change in his or her position
with the Corporation which materially reduces his or her duties and responsibilities or the level
of management to which he or she reports, (B) a reduction in his or her level of compensation
(including base salary, fringe benefits and target bonus under any corporate-performance based
bonus or incentive programs) by more than fifteen percent (15%) or (C) a relocation of such
individual’s place of employment by more than fifty (50) miles, provided and only if such change,
reduction or relocation is effected without the individual’s consent.

A-2

 

          N. Misconduct shall mean the commission of any act of fraud, embezzlement or
dishonesty by the Optionee or Participant, any unauthorized use or disclosure by such person of
confidential information or trade secrets of the Corporation (or any Parent or Subsidiary), or any
other intentional misconduct by such person adversely affecting the business or affairs of the
Corporation (or any Parent or Subsidiary) in a material manner. The foregoing definition shall not
in any way preclude or restrict the right of the Corporation (or any Parent or Subsidiary) to
discharge or dismiss any Optionee, Participant or other person in the Service of the Corporation
(or any Parent or Subsidiary) for any other acts or omissions, but such other acts or omissions
shall not be deemed, for purposes of the Plan, to constitute grounds for termination for
Misconduct.

          O. 1934 Act shall mean the Securities Exchange Act of 1934, as amended.

          P. Non-Statutory Option shall mean an option not intended to satisfy the requirements
of Code Section 422.

          Q. Option Grant Program shall mean the option grant program in effect under the Plan.

          R. Optionee shall mean any person to whom an option is granted under the Plan.

          S. Parent shall mean any corporation (other than the Corporation) in an unbroken chain
of corporations ending with the Corporation, provided each corporation in the unbroken chain (other
than the Corporation) owns, at the time of the determination, stock possessing fifty percent (50%)
or more of the total combined voting power of all classes of stock in one of the other corporations
in such chain.

          T. Participant shall mean any person who is issued shares of Common Stock or Class A
Common Stock under the Stock Issuance Program.

          U. Plan shall mean the Corporation’s 2007 Stock Option/Stock Issuance Plan, as set
forth in this document.

          V. Plan Administrator shall mean either the Board or the Committee acting in its
capacity as administrator of the Plan.

          W. Service shall mean the provision of services to the Corporation (or any Parent or
Subsidiary) by a person in the capacity of an Employee, a non-employee member of the board of
directors or a consultant or independent advisor, except to the extent otherwise specifically
provided in the documents evidencing the option grant.

          X. Stock Exchange shall mean the American Stock Exchange, the NASDAQ Global Market,
the NASDAQ Global Select Market or the New York Stock Exchange.

A-3

 

          Y. Stock Issuance Agreement shall mean the agreement entered into by the Corporation
and the Participant at the time of issuance of shares of Common Stock or Class A Common Stock under
the Stock Issuance Program.

          Z. Stock Issuance Program shall mean the stock issuance program in effect under the
Plan.

          AA. Subsidiary shall mean any corporation (other than the Corporation) in an unbroken
chain of corporations beginning with the Corporation, provided each corporation (other than the
last corporation) in the unbroken chain owns, at the time of the determination, stock possessing
fifty percent (50%) or more of the total combined voting power of all classes of stock in one of
the other corporations in such chain.

          BB. 10% Stockholder shall mean the owner of stock (as determined under Code Section
424(d)) possessing more than ten percent (10%) of the total combined voting power of all classes of
stock of the Corporation (or any Parent or Subsidiary).

A-4

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