Document:

Exhibit 10.20

 

RIGHTNOW TECHNOLOGIES, INC. 

FORM OF INCENTIVE STOCK OPTION AGREEMENT

 

RIGHTNOW
TECHNOLOGIES, INC., a Delaware corporation (the “Company”), acting pursuant to
the 2004 Equity Incentive Plan (the “Plan”), hereby grants to                                        
(the “Option Holder”) options to purchase shares of common stock, $0.001 par
value (“Common Stock”), of the Company upon the following terms and conditions
and in all respects subject to the provisions of the Plan, the terms of which
are incorporated by reference.

 

1.                                       Grant
of Option.  The Company hereby grants
the 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 per
share (the “Option Exercise Price”) equal to $             
(being at least equal to the fair market value of the Common Stock on the date
of grant), in the amounts, during the periods, and upon the terms and
conditions as set forth in this Agreement and in the Plan.  The issuance of the shares of Common Stock
upon the exercise of the Option shall be subject to the provisions set forth in
Section 9 hereof.  This Option is
intended to be an incentive stock option within the meaning of Section 422
of 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 the
grant of this Option, or at 5:00 p.m. on the date five years from the
grant 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.                                       Vesting
and Time of Exercise.

 

(a)                                  The
vested portion of the Option is exercisable in whole or in part (but not as to
any fractional shares) at any time prior to the termination of the Option.  Except as otherwise provided in this
Agreement, 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

  	
   

  

 

 

	
  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 Option
shall be cumulative, and shares not purchased in any year may be purchased in
subsequent years, subject to the termination provisions contained elsewhere
herein.

 

(b)                                 The
Option Holder understands that to the extent that the aggregate fair market
value (determined at the time the Option was granted) of the shares of Common
Stock with respect to which all incentive stock options within the meaning of Section 422
of the Code are exercisable for the first time by the Option Holder during any
calendar year exceed $100,000, in accordance with Section 422(d) of
the Code, such options shall be treated as options that do not qualify as
incentive stock options.

 

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

 

(a)                                  If
Option Holder’s employment shall be terminated for any reason, voluntary or
involuntary, 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 Holder
may at any time before 5:00 p.m. on the date 3 months following such
termination exercise the Option to the extent the Option was exercisable by
Option Holder on the date of the termination of Option Holder’s employment.

 

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

 

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

 

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

 

2

 

(e)                                  “Cause” shall mean (i) the willful and
continued failure by Option Holder substantially to perform his or her duties
and obligations (other than any such failure resulting from his or her
incapacity due to physical or mental illness), (ii) Option Holder’s
conviction or plea bargain of any felony or gross misdemeanor involving moral
turpitude, fraud or misappropriation of funds or (iii) the willful
engaging by Option Holder in misconduct which causes substantial injury to the
Company or its affiliates, its other employees or the employees of its
affiliates or its clients or the clients of its affiliates, whether monetarily
or otherwise.  For purposes of this
paragraph, no action or failure to act on Option Holder’s part shall be
considered “willful” unless done or omitted to be done, by Option Holder in bad
faith and without reasonable belief that his or her action or omission was in
the best interests of the Company.

 

4.                                       Manner
of Exercise.

 

(a)                                  Subject
to the foregoing, the Option may be exercised in whole or in part from time to
time by serving written notice of exercise on the Company at its principal
office within the Option period.  The
notice shall state the number of Shares as to which the Option is being
exercised and shall be accompanied by payment in full of the Option Exercise
Price for all shares designated in the notice. 
Payment of the exercise price shall be made (i) in cash (including
bank check, personal check or money order payable to the Company), (ii) with
the approval of the Company (which may be given in its sole discretion), by
delivering to the Company for cancellation shares of the Company’s Common Stock
already owned by the Option Holder having a Fair Market Value (as defined in
the Plan) as of the date of exercise equal to the full Option Exercise Price
for all of the Shares being acquired or the portion thereof being paid by
tendering such shares, (iii) with the approval of the Company (which may
be given in its sole discretion) and subject to Section 402 of the
Sarbanes-Oxley Act of 2002 and any rules and regulations promulgated
thereunder, by delivering to the Company the full Option Exercise Price for all
of the Shares being acquired in a combination of cash and Option Holder’s full
recourse liability promissory note with a principal amount not to exceed eighty
percent (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 thereof
which at all times is not less than the minimum rate required to avoid the
imputation of income, original issue discount or a below-market rate loan
pursuant to Sections 483, 1274 or 7872 of the Code or any successor provisions
thereto or (iv) with the approval of the Company (which may be given in
its sole discretion) and subject to Section 402 of the Sarbanes-Oxley Act
of 2002 and any rules and regulations promulgated thereunder, by
delivering to the Company a combination of cash, the Option Holder’s promissory
note and shares of Common Stock with an aggregate Fair Market Value and a
principal amount equal to the Option Exercise Price for all of the Shares being
acquired.

 

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

 

3

 

5.                                       Assignability.  During the lifetime of the Option Holder, the
Option shall be exercisable only by the Option Holder and shall not be
assignable or transferable by the Option Holder except by will or by the laws
of descent or distribution.  Subject to
the foregoing sentence, the Option shall inure to the benefit of and be binding
upon the successors and assigns of the Option Holder.

 

6.                                       No
Right to Continued Employment; No Rights as a Shareholder.  This Agreement shall not confer on the Option
Holder any right with respect to continuance of employment by the Company, nor
will it interfere in any way with the right of the Company to terminate such
employment at any time.  The Option
Holder will have no rights as a shareholder with respect to any shares covered
by the Option until the issuance of a certificate or certificates to the Option
Holder for the shares.  Except as
otherwise provided in Section 7 hereof, no adjustment shall be made for
dividends or other rights for which the record date is prior to the date of
full payment of the Option Exercise Price for all of the Shares being acquired.

 

7.                                       Capital
Adjustments and Reorganization.  The
number of shares of Common Stock covered by the Option, and the Option Exercise
Price thereof, shall be subject to appropriate proportionate adjustment to
reflect any stock dividend, stock split, share combination, separation,
reorganization, liquidation or the like, of or by the Company.

 

8.                                       Subject
to Plan.  This Option and the grant
and exercise thereof are subject to the terms and conditions of the Plan, but
the terms of the Plan shall not be considered an enlargement of any benefits
under this Agreement.  In addition, this
Option is subject to the rules and regulations promulgated pursuant to the
Plan, now or hereafter in effect.  A copy
of the Plan will be furnished upon request of the Option Holder.

 

9.                                       Conditions
Precedent to Issuance of Shares. 
Shares shall not be issued pursuant to the exercise of the Option unless
such exercise and the issuance and delivery of the applicable Shares pursuant
thereto shall comply with all relevant provisions of law, including, without
limitation, the Securities Act of 1933, as amended, the Exchange Act of 1934,
as amended, the rules and regulations promulgated thereunder, the
requirements of any applicable Stock Exchange or the Nasdaq National Market and
the Delaware General Corporation Law.  As
a condition to the exercise of the purchase price relating to the Option, the
Company may require that the person exercising or paying the purchase price represent
and warrant that the Shares are being purchased only for investment and without
any present intention to sell or distribute such Shares if, in the opinion of
counsel for the Company, such a representation and warranty is required by law.

 

10.                                 Tax
Matters.

 

(a)                                  If
the Option Holder shall dispose of any of the shares of Common acquired by the
Option Holder pursuant to the exercise of the Option within two years from the
date the Option was granted or within one year after the transfer of any such
shares to the Option Holder upon exercise of the Option, in order to provide
the Company with the opportunity to claim the benefit of any income tax
deduction which may be

 

4

 

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

 

(b)                                 In
order to provide the Company with the opportunity to claim the benefit of any
income tax deduction which may be available to it upon the exercise of the
Option when the Option does not qualify as an incentive stock option within the
meaning of Section 422 of the Code and in order to comply with all
applicable federal or state income tax laws or regulations, the Company may
take such action as it deems appropriate to insure that, if necessary, all
applicable federal or state payroll, withholding, income or other taxes are
withheld or collected from the Option Holder. The Option Holder may elect to
satisfy his or her federal and state income tax withholding obligations upon exercise
of this option by (i) having the Company withhold a portion of the shares
of Common Stock otherwise to be delivered upon exercise of such option having a
fair market value equal to the amount of federal and state income tax required
to be withheld upon such exercise, in accordance with such rules as the
Company may from time to time establish, or (ii) delivering to the Company
shares of its Common Stock other than the shares issuable upon exercise of such
option with a fair market value equal to such taxes, in accordance with such
rules.

 

11.                                 Securities
Law Matters.  The Option Holder
hereby represents and agrees that any shares which he or she may acquire
pursuant to the exercise of this Option will be acquired for the Option Holder’s
own account, for long-term investment purposes and not with a view toward the
distribution or sale thereof.  The Option
Holder acknowledges that under the terms of the Plan to which this Agreement is
subject, effectiveness of any exercise herein and the issuance of shares to the
Option Holder upon any such exercise of this option may be delayed in order to
permit the Company to comply at such time with relevant federal and state
securities laws in connection with such issuance.  The Option Holder acknowledges that the Company
is not, and will at no time be, under any obligation to the Option Holder to
register any shares issued upon exercise herein under any federal or state
securities laws and that, consequently: (a) at the time of acquisition
such shares may not be registered under either federal or applicable state
securities laws, (b) the Company will be relying upon the foregoing
investment representation of the Option Holder in agreeing to issue such shares
to the Option Holder, (c) the transferability of such shares may be
subject to the restrictions imposed by all applicable federal and state
securities laws on unregistered shares, and (d) the certificates
evidencing such shares may be imprinted with an appropriate legend setting
forth such restrictions on transferability.

 

5

 

12.                                 Miscellaneous.

 

(a)                                  Governing
Law.  The validity, construction and
effect of the Agreement, and any rules and regulations relating to the
Agreement, shall be determined in accordance with the internal laws, and not
the law of conflicts, of the State of Delaware.

 

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

 

(c)                                  No
Trust or Fund Created.  Neither the
Plan nor the Agreement shall create or be construed to create a trust or
separate fund of any kind or a fiduciary relationship between the Company or
its affiliates and Option Holder or any other person.

 

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

 

	
   

  	
  RIGHTNOW TECHNOLOGIES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Greg Gianforte

  	
   

  
	
   

  	
   

  	
  Chief Executive Officer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  OPTION HOLDER

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Print name:

  	
   

  	
   

  
					

 

6

 

RIGHTNOW
TECHNOLOGIES, INC.

FORM OFADDENDUM
TO EXECUTIVE OFFICER STOCK OPTION AGREEMENT

 

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

 

Acceleration
of Exercisability

After Change in Control

 

(i)                                     Notwithstanding
any installment or delayed exercise provision contained in the Option Agreement
that would result in the Option becoming exercisable in full or in part at a
later date, upon the occurrence of a “Change in Control” (as defined below):

 

i.                                          If in
connection with the Change in Control, the Acquiring Person (as defined below)
elects to continue the Option in effect and to replace the shares of Common
Stock issuable upon exercise of the Option with other equity securities that
are registered under the Securities Act of 1933 and are freely transferable
under all applicable federal and state securities laws and regulations, the
Option shall become exercisable in full if within twelve months of the date of
the Change in Control, (i) Option Holder’s employment with the Company (or
any successor company or affiliated entity with which Option Holder is then
employed) is terminated by the Company or such other employer without Cause (as
defined below), (ii) Option Holder’s employment with the Company (or any
successor company or affiliated entity with which Option Holder is then
employed) is terminated by the Option Holder for “Good Reason” (as defined
below), or (iii) any earlier date provided under the Option
Agreement.  In the event of any such
Change in Control, the number of shares issuable upon exercise of the Option
shall be determined by using the exchange ratio used for other outstanding
shares 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

 

7

 

the Acquiring Person and the Continuing Directors (as defined below),
and the exercise price per share shall be adjusted accordingly so as to
preserve the same economic value in the Option as existed prior to the Change
in Control.  Also in the event of any
such Change in Control, all references in the Option Agreement to the Common
Stock shall thereafter be deemed to refer to the replacement equity securities
issuable upon exercise of the Option, references to the Company shall
thereafter be deemed to refer to the issuer of such replacement securities, and
all other terms of the Option shall continue in effect except as and to the
extent modified by this subparagraph.

 

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

 

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

 

(iii)                               If a Change in Control
shall occur, the Continuing Directors in their sole discretion, and without the
consent of Option Holder, may determine that Option Holder shall receive, in
lieu of some or all of the shares of Common Stock subject to this Option, as of
the effective date of any such Change in Control, cash in an amount equal to
the excess of the Fair Market Value of such shares on the effective date of
such 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 this
Addendum, the following terms shall have the definitions set forth below:

 

i.                                          “Change in
Control” shall mean a change in ownership or control of the Company effected
through any of the following transactions:

 

8

 

(i)                                     a merger,
consolidation or other reorganization unless securities representing more than
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 Company’s outstanding voting securities immediately
prior to such transaction;

 

(ii)                                  the sale, transfer or
other 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 than
the Company or a person that directly or indirectly controls, is controlled by,
or is under common control with, the Company), of beneficial ownership (within
the meaning of Rule 13d-3 of the Exchange Act) of securities possessing
more than 50% of the total combined voting power of the Company’s outstanding
securities pursuant to a tender or exchange offer made directly to the Company’s
stockholders; or

 

(iv)                              a change in the
composition of the Board of Directors over a period of 36 consecutive months or
less such that a majority of the directors ceases, by reason of one or more
contested 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 such
period by at least a majority of the directors described in clause (i) who
were still in office at the time the Board of Directors approved such election
or nomination.

 

Following a
Change in Control, “Company” shall refer to the successor corporation in the
transaction.

 

ii.                                       “Continuing
Director” shall mean any person who is a member of the Board of Directors of
the Company, while such a person is a member of the Board of Directors, who is
not an Acquiring Person (as hereinafter defined) or an Affiliate or Associate
(as hereinafter defined) of an Acquiring Person, or a representative of an
Acquiring

 

9

 

Person or of any such Affiliate or Associate, and who (A) was a
member of the Board of Directors on the date of this Agreement or (B) subsequently
becomes a member of the Board of Directors, if such person’s initial nomination
for election or initial election to the Board of Directors is recommended or
approved by a majority of the Continuing Directors.

 

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

 

iv.                                   Termination of
employment for “Cause” shall mean termination by the Company of Option Holder’s
employment based upon (i) the willful and continued failure by Option
Holder substantially to perform his or her duties and obligations (other than
any such failure resulting from his or her incapacity due to physical or mental
illness or any such actual or anticipated failure resulting from Option Holder’s
termination for “Good Reason” as defined below), (ii) the Option Holder’s
conviction or plea bargain in connection with the commission or alleged
commission of any felony or gross misdemeanor involving moral turpitude, fraud
or misappropriation of funds, or (iii) the willful engaging by Option
Holder in misconduct which causes substantial injury to the Company, its other
employees or its clients, whether monetarily or otherwise.  For purposes of this paragraph, no action or
failure to act on Option Holder’s part shall be considered “willful” unless
done, or omitted to be done, by Option Holder in bad faith and without
reasonable belief that his or her action or omission was in the best interests
of the Company.

 

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

 

10

 

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

 

(i)                                     the assignment to
Option Holder of employment duties or responsibilities which are not
substantially comparable in responsibility and status to the employment duties
and responsibilities held by Option Holder immediately prior to the Change in
Control;

 

(ii)                                  a reduction in Option
Holder’s base salary as in effect immediately prior to the Change in Control or
as the same may be increased from time to time during the term of this
Agreement; or

 

(iii)                               requiring Option Holder
to work in a location more than 50 miles from Option Holder’s office location
immediately prior to the Change in Control, except for requirements of
temporary travel on the Company’s business to an extent substantially consistent
with Option Holder’s business travel obligations immediately prior to the
Change in Control.

 

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

 

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

 

 

Effective Date:                                   ,

 

 

	
   

  	
  RIGHTNOW TECHNOLOGIES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Greg
  Gianforte

  
	
   

  	
  Chief
  Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  OPTION HOLDER

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Print Name:

  	
   

  
					

 

11Exhibit 10.21

 

RIGHTNOW TECHNOLOGIES, INC. 

FORM OF NON-INCENTIVE STOCK OPTION AGREEMENT

 

RIGHTNOW
TECHNOLOGIES, INC., a Delaware corporation (the “Company”), acting pursuant to
the 2004 Equity Incentive Plan (the “Plan”), hereby grants to                                  
(the “Option Holder”) options to purchase shares of common stock, $0.001 par
value (“Common Stock”), of the Company upon the following terms and conditions
and in all respects subject to the provisions of the Plan, the terms of which
are incorporated by reference.

 

1.             Grant
of Option.  The Company hereby grants
the 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 per share
(the “Option Exercise Price”) equal to $                  
(being at least equal to the fair market value of the Common Stock on the date
of grant), in the amounts, during the periods, and upon the terms and
conditions as set forth in this Agreement and in the Plan.  The issuance of the shares of Common Stock
upon the exercise of the Option shall be subject to the provisions set forth in
Section 9 hereof.  This Option is
not intended to be an incentive stock option within the meaning of Section 422
of 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 the
grant of this Option.

 

2.             Vesting
and Time of Exercise.  The vested
portion of the Option is exercisable in whole or in part (but not as to any
fractional shares) at any time prior to the termination of the Option.  Except as otherwise provided in this
Agreement, the Option shall vest in the following manner:

 

	
  If Option Holder remains in the

  service 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

  
	
  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 Option
shall be cumulative, and shares not purchased in any year may be purchased in
subsequent years, subject to the termination provisions contained elsewhere
herein.

 

 

3.             Exercise
of Option after Death or Termination of Service.  The Option shall terminate and may no longer
be exercised if the Option Holder ceases to perform services for the Company or
its affiliates, except that:

 

(a)           If
Option Holder’s service to the Company shall be terminated for any reason,
voluntary or involuntary, 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 Holder
may at any time before 5:00 p.m. on the date 3 months following such
termination exercise the Option to the extent the Option was exercisable by
Option Holder on the date of the termination of Option Holder’s service.

 

(b)           If
Option Holder’s service to the Company is terminated for Cause, Option Holder
may at any time before 5:00 p.m. on the date 30 days following such
termination exercise the Option to the extent the Option was exercisable by
Option Holder on the date of the termination of Option Holder’s service.

 

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

 

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

 

(e)           “Cause” shall mean (i) the willful and
continued failure by Option Holder substantially to perform his or her duties
and obligations (other than any such failure resulting from his or her
incapacity due to physical or mental illness), (ii) Option Holder’s
conviction or plea bargain of any felony or gross misdemeanor involving moral
turpitude, fraud or misappropriation of funds or (iii) the willful
engaging by Option Holder in misconduct which causes substantial injury to the
Company or its affiliates, its other employees or the employees of its
affiliates or its clients or the clients of its affiliates, whether monetarily
or otherwise.  For purposes of this paragraph,
no action or failure to act on Option Holder’s part shall be considered “willful”
unless done or omitted to be done, by Option Holder in bad faith and without
reasonable belief that his or her action or omission was in the best interests
of the Company.

 

4.             Manner
of Exercise.

 

(a)           Subject
to the foregoing, the Option may be exercised in whole or in part from time to
time by serving written notice of exercise on the Company at its principal
office within the Option period.  The
notice shall state the number of Shares as to which the Option is being
exercised and shall be accompanied by payment in full of the Option Exercise
Price for all shares designated in the notice. 
Payment of the exercise price shall be made (i) in cash (including
bank check, personal check or money order payable to the Company), (ii) with
the approval of the Company (which may be given in its sole discretion), by
delivering to the Company for cancellation shares of the Company’s Common Stock
already owned by the Option Holder

 

2

 

having a Fair Market Value (as defined in the Plan) as of the date of
exercise equal to the full Option Exercise Price for all of the Shares being
acquired or the portion thereof being paid by tendering such shares, (iii) with
the approval of the Company (which may be given in its sole discretion) and
subject to Section 402 of the Sarbanes-Oxley Act of 2002 and any rules and
regulations promulgated thereunder, by delivering to the Company the full Option
Exercise Price for all of the Shares being acquired in a combination of cash
and Option Holder’s full recourse liability promissory note with a principal
amount not to exceed eighty percent (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 thereof which at all times is not less than the minimum
rate required to avoid the imputation of income, original issue discount or a
below-market rate loan pursuant to Sections 483, 1274 or 7872 of the Code or
any successor provisions thereto or (iv) with the approval of the Company
(which may be given in its sole discretion) and subject to Section 402 of
the Sarbanes-Oxley Act of 2002 and any rules and regulations promulgated
thereunder, by delivering to the Company a combination of cash, the Option
Holder’s promissory note and shares of Common Stock with an aggregate Fair
Market Value and a principal amount equal to the Option Exercise Price for all
of the Shares being acquired.

 

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

 

5.             Assignability.  During the lifetime of the Option Holder, the
Option shall be exercisable only by the Option Holder and shall not be
assignable or transferable by the Option Holder except by will or by the laws
of descent or distribution.  The
foregoing notwithstanding, the Option Holder may transfer the Option to any
Family Member (as such term is defined in the General Instructions to Form S-8
(or successor to such Instructions or such Form)), provided, however, that (i) the
Option Holder may not receive any consideration for such transfer, (ii) the
Family Member must agree in writing not to make any subsequent transfers of the
Option except by will or by the laws of the descent or distribution and (iii) the
Company receives prior written notice of such transfer.  Subject to the foregoing, the Option shall
inure to the benefit of and be binding upon the successors and assigns of the
Option Holder.

 

6.             No
Right to Continued Service; No Rights as a Shareholder.  This Agreement shall not confer on the Option
Holder any right with respect to continuance of service to the Company, nor
will it interfere in any way with the right of the Company to terminate such
service at any time.  The Option Holder
will have no rights as a shareholder with respect to any shares covered by the
Option until the issuance of a certificate or certificates to the Option Holder
for the shares.  Except as otherwise
provided in Section 7 hereof, no adjustment shall be made for dividends or
other rights for which the record date is prior to the date of full payment of
the Option Exercise Price for all of the Shares being acquired.

 

7.             Capital
Adjustments and Reorganization.  The
number of shares of Common Stock covered by the Option, and the Option Exercise
Price thereof, shall be subject to appropriate proportionate adjustment to
reflect any stock dividend, stock split, share combination, separation,
reorganization, liquidation or the like, of or by the Company.

 

8.             Subject
to Plan.  This Option and the grant
and exercise thereof are subject to the terms and conditions of the Plan, but
the terms of the Plan shall not be considered an enlargement

 

3

 

of any benefits under this Agreement.  In addition, this Option is subject to the rules and
regulations promulgated pursuant to the Plan, now or hereafter in effect.  A copy of the Plan will be furnished upon
request of the Option Holder.

 

9.             Conditions
Precedent to Issuance of Shares. 
Shares shall not be issued pursuant to the exercise of the Option unless
such exercise and the issuance and delivery of the applicable Shares pursuant
thereto shall comply with all relevant provisions of law, including, without
limitation, the Securities Act of 1933, as amended, the Exchange Act of 1934,
as amended, the rules and regulations promulgated thereunder, the
requirements of any applicable Stock Exchange or the Nasdaq National Market and
the Delaware General Corporation Law.  As
a condition to the exercise of the purchase price relating to the Option, the
Company may require that the person exercising or paying the purchase price
represent and warrant that the Shares are being purchased only for investment
and without any present intention to sell or distribute such Shares if, in the
opinion of counsel for the Company, such a representation and warranty is
required by law.

 

10.           Tax
Matters.  In order to provide the
Company with the opportunity to claim the benefit of any income tax deduction
which may be available to it upon the exercise of the Option and in order to
comply with all applicable federal or state income tax laws or regulations, the
Company may take such action as it deems appropriate to insure that, if
necessary, all applicable federal or state payroll, withholding, income or
other taxes are withheld or collected from the Option Holder.  The Option Holder may elect to satisfy his or
her federal and state income tax withholding obligations upon exercise of this
option by (i) having the Company withhold a portion of the shares of
Common Stock otherwise to be delivered upon exercise of such option having a
fair market value equal to the amount of federal and state income tax required
to be withheld upon such exercise, in accordance with such rules as the
Company may from time to time establish, or (ii) delivering to the Company
shares of its Common Stock other than the shares issuable upon exercise of such
option with a fair market value equal to such taxes, in accordance with such
rules.

 

11.           Securities
Law Matters.  The Option Holder
hereby represents and agrees that any shares which he or she may acquire
pursuant to the exercise of this Option will be acquired for the Option Holder’s
own account, for long-term investment purposes and not with a view toward the
distribution or sale thereof.  The Option
Holder acknowledges that under the terms of the Plan to which this Agreement is
subject, effectiveness of any exercise herein and the issuance of shares to the
Option Holder upon any such exercise of this option may be delayed in order to
permit the Company to comply at such time with relevant federal and state
securities laws in connection with such issuance.  The Option Holder acknowledges that the
Company is not, and will at no time be, under any obligation to the Option
Holder to register any shares issued upon exercise herein under any federal or
state securities laws and that, consequently: (a) at the time of
acquisition such shares may not be registered under either federal or
applicable state securities laws, (b) the Company will be relying upon the
foregoing investment representation of the Option Holder in agreeing to issue
such shares to the Option Holder, (c) the transferability of such shares
may be subject to the restrictions imposed by all applicable federal and state
securities laws on unregistered shares, and (d) the certificates
evidencing such shares may be imprinted with an appropriate legend setting
forth such restrictions on transferability.

 

12.           Miscellaneous.

 

(a)           Governing
Law.  The validity, construction and
effect of the Agreement, and any rules and regulations relating to the
Agreement, shall be determined in accordance with the internal laws, and not
the law of conflicts, of the State of Delaware.

 

4

 

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

 

(c)           No
Trust or Fund Created.  Neither the
Plan nor the Agreement shall create or be construed to create a trust or
separate fund of any kind or a fiduciary relationship between the Company or
its affiliates and Option Holder or any other person.

 

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

 

	
   

  	
  RIGHTNOW TECHNOLOGIES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Greg Gianforte

  
	
   

  	
   

  	
  Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  OPTION HOLDER

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Print name:

  	
   

  
				

 

5

 

RIGHTNOW
TECHNOLOGIES, INC.

FORM OFADDENDUM
TO EXECUTIVE OFFICER STOCK OPTION AGREEMENT

 

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

 

Acceleration
of Exercisability

After Change in Control

 

(i)            Notwithstanding
any installment or delayed exercise provision contained in the Option Agreement
that would result in the Option becoming exercisable in full or in part at a
later date, upon the occurrence of a “Change in Control” (as defined below):

 

i.              If
in connection with the Change in Control, the Acquiring Person (as defined
below) elects to continue the Option in effect and to replace the shares of
Common Stock issuable upon exercise of the Option with other equity securities
that are registered under the Securities Act of 1933 and are freely
transferable under all applicable federal and state securities laws and
regulations, the Option shall become exercisable in full if within twelve
months of the date of the Change in Control, (i) Option Holder’s
employment with the Company (or any successor company or affiliated entity with
which Option Holder is then employed) is terminated by the Company or such
other employer without Cause (as defined below), (ii) Option Holder’s
employment with the Company (or any successor company or affiliated entity with
which Option Holder is then employed) is terminated by the Option Holder for “Good
Reason” (as defined below), or (iii) any earlier date provided under the
Option Agreement.  In the event of any
such Change in Control, the number of shares issuable upon exercise of the
Option shall be determined by using the exchange ratio used for other
outstanding shares 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

 

6

 

the Acquiring Person and the Continuing Directors (as defined below),
and the exercise price per share shall be adjusted accordingly so as to
preserve the same economic value in the Option as existed prior to the Change
in Control.  Also in the event of any
such Change in Control, all references in the Option Agreement to the Common
Stock shall thereafter be deemed to refer to the replacement equity securities
issuable upon exercise of the Option, references to the Company shall
thereafter be deemed to refer to the issuer of such replacement securities, and
all other terms of the Option shall continue in effect except as and to the
extent modified by this subparagraph.

 

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

 

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

 

(iii)          If
a Change in Control shall occur, the Continuing Directors in their sole
discretion, and without the consent of Option Holder, may determine that Option
Holder shall receive, in lieu of some or all of the shares of Common Stock
subject to this Option, as of the effective date of any such Change in Control,
cash in an amount equal to the excess of the Fair Market Value of such shares
on the effective date of such 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 this Addendum, the following terms shall have the definitions set
forth below:

 

i.              “Change
in Control” shall mean a change in ownership or control of the Company effected
through any of the following transactions:

 

7

 

(i)            a
merger, consolidation or other reorganization unless securities representing
more than 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 Company’s outstanding voting securities immediately
prior to such transaction;

 

(ii)           the
sale, transfer or other 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 than the Company or a person that directly or indirectly controls, is
controlled by, or is under common control with, the Company), of beneficial
ownership (within the meaning of Rule 13d-3 of the Exchange Act) of
securities possessing more than 50% of the total combined voting power of the
Company’s outstanding securities pursuant to a tender or exchange offer made
directly to the Company’s stockholders; or

 

(iv)          a
change in the composition of the Board of Directors over a period of 36
consecutive months or less such that a majority of the directors ceases, by
reason of one or more contested 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 such period by at least a majority of the
directors described in clause (i) who were still in office at the time the
Board of Directors approved such election or nomination.

 

Following a
Change in Control, “Company” shall refer to the successor corporation in the
transaction.

 

ii.             “Continuing
Director” shall mean any person who is a member of the Board of Directors of
the Company, while such a person is a member of the Board of Directors, who is
not an Acquiring Person (as hereinafter defined) or an Affiliate or Associate
(as hereinafter defined) of an Acquiring Person, or a representative of an
Acquiring

 

8

 

Person or of any such Affiliate or Associate, and who (A) was a
member of the Board of Directors on the date of this Agreement or (B) subsequently
becomes a member of the Board of Directors, if such person’s initial nomination
for election or initial election to the Board of Directors is recommended or
approved by a majority of the Continuing Directors.

 

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

 

iv.            Termination
of employment for “Cause” shall mean termination by the Company of Option
Holder’s employment based upon (i) the willful and continued failure by
Option Holder substantially to perform his or her duties and obligations (other
than any such failure resulting from his or her incapacity due to physical or
mental illness or any such actual or anticipated failure resulting from Option
Holder’s termination for “Good Reason” as defined below), (ii) the Option
Holder’s conviction or plea bargain in connection with the commission or
alleged commission of any felony or gross misdemeanor involving moral
turpitude, fraud or misappropriation of funds, or (iii) the willful
engaging by Option Holder in misconduct which causes substantial injury to the
Company, its other employees or its clients, whether monetarily or otherwise.  For purposes of this paragraph, no action or
failure to act on Option Holder’s part shall be considered “willful” unless
done, or omitted to be done, by Option Holder in bad faith and without
reasonable belief that his or her action or omission was in the best interests
of the Company.

 

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

 

9

 

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

 

(i)            the
assignment to Option Holder of employment duties or responsibilities which are
not substantially comparable in responsibility and status to the employment
duties and responsibilities held by Option Holder immediately prior to the
Change in Control;

 

(ii)           a
reduction in Option Holder’s base salary as in effect immediately prior to the Change
in Control or as the same may be increased from time to time during the term of
this Agreement; or

 

(iii)          requiring
Option Holder to work in a location more than 50 miles from Option Holder’s
office location immediately prior to the Change in Control, except for
requirements of temporary travel on the Company’s business to an extent
substantially consistent with Option Holder’s business travel obligations
immediately prior to the Change in Control.

 

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

 

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

 

 

Effective Date:                                 ,

 

 

	
   

  	
  RIGHTNOW TECHNOLOGIES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Greg
  Gianforte

  
	
   

  	
   

  	
  Chief
  Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  OPTION HOLDER

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Print Name:

  	
   

  
				

 

10

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