Document:

Exhibit 10.1

PHASE
FORWARD INCORPORATED

2004
STOCK OPTION AND INCENTIVE PLAN

As
Amended and Restated March 2006

1.             Purpose and Eligibility

The purpose of
this 2004 Stock Option and Incentive Plan (the “Plan”) of Phase Forward
Incorporated (the “Company”) is to provide stock options and other
equity interests in the Company (each an “Award”) to employees,
officers, directors, consultants and advisors of the Company and its
Subsidiaries, all of whom are eligible to receive Awards under the Plan. Any
person to whom an Award has been granted under the Plan is called a “Participant.” 
Additional definitions are contained in Section 8.

2.             Administration

The Plan will be
administered by the Compensation Committee (the “Committee”) of the
Board of Directors of the Company (the “Board”). The Committee shall,
subject to the provisions of the Plan, have the power to construe this Plan, to
determine all questions hereunder, and to adopt and amend such rules and
regulations for the administration of this Plan as it may deem desirable. No
member of the Board or the Committee shall be liable for any action or
determination made in good faith with respect to this Plan or any option
granted under it.

3.             Stock Available for Awards

a.             Number of Shares. Subject to
adjustment under Section 3(c), the aggregate number of shares of Common
Stock of the Company (the “Common Stock”) that may be issued pursuant to
the Plan is 1,500,000 shares. Subject to stockholder approval, the number of
reserved shares of Common Stock under the Plan shall be increased from
1,500,000 shares to 3,500,000 shares. If any Award expires, or is terminated,
surrendered, cancelled or forfeited, in whole or in part, the unissued Common
Stock covered by such Award shall again be available for the grant of Awards under
the Plan. If shares of Common Stock issued pursuant to the Plan are surrendered
or forfeited to the Company, including shares held back to cover tax
withholding, such shares of Common Stock shall again be available for the grant
of Awards under the Plan. Shares issued under the Plan may consist in whole or
in part of authorized but unissued shares or treasury shares.

b.             Per-Participant Limit. Subject
to adjustment under Section 3(c), no Participant may be granted Awards
during any one fiscal year to purchase more than 750,000 shares of Common
Stock.

c.             Adjustment to Common Stock. In
the event of any stock split, stock dividend, extraordinary cash dividend,
recapitalization, reorganization, merger, consolidation, combination, exchange
of shares, liquidation, spin-off, split-up, or other similar change in
capitalization or event, (i) the number and class of securities available
for Awards under the Plan and the per-Participant share limit, (ii) the
number and class of securities, vesting schedule and exercise price per share
subject to each outstanding Option, (iii) the repurchase price per
security subject to repurchase, and (iv) the terms of each other
outstanding stock-based Award shall be adjusted by the Company (or substituted
Awards may be made) to the extent the Committee shall determine, in good faith,
that such an adjustment (or substitution) is appropriate. If Section 7(e)(i) applies
for any event, this Section 3(c) shall not be applicable.

4.                 Stock Options

a.             General. The Committee may
grant options to purchase Common Stock (each, an “Option”) and determine
the number of shares of Common Stock to be covered by each Option, the exercise
price of each Option and the conditions and limitations applicable to the
exercise of each Option and the Common Stock issued upon the exercise of each
Option, including vesting provisions and restrictions relating to applicable
federal or state securities laws, as it considers advisable.

b.             Incentive Stock Options. An
Option that the Committee intends to be an “incentive stock option” as defined
in Section 422 of the Code (an “Incentive Stock Option”) shall be
granted only to employees of the Company and shall be subject to and shall be
construed consistently with the requirements of Section 422 of the Code.
The Committee and the Company shall have no liability if an Option or any part
thereof that is intended to be an Incentive Stock Option does not qualify as
such. An Option or any part thereof that does not qualify as an Incentive Stock
Option is referred to herein as a “Nonstatutory Stock Option.”

c.             Exercise Price. The
Committee shall establish the exercise price (or determine the method by which
the exercise price shall be determined) at the time each Option is granted and
specify it in the applicable option agreement. The exercise price of each
Option shall not be less than 100 percent of the per share fair market value of
the Common Stock on the date of grant. Fair market value 

 

shall be determined by reference to market quotations
on the Nasdaq National Market System.

d.             Duration of Options. Each
Option shall be exercisable at such times and subject to such terms and
conditions as the Committee may specify in the applicable option agreement.
Unless the Committee provides otherwise, each Option shall expire ten years
after the date of grant.

e.             Exercise of Option. Options
may be exercised only by delivery to the Company of a written notice of
exercise signed by the proper person together with payment in full as specified
in Section 4(f) for the number of shares for which the Option is
exercised.

f.              Payment Upon Exercise.
Common Stock purchased upon the exercise of an Option shall be paid for by one
or any combination of the following forms of payment:

(i)   by check payable to the order of the Company;

              (ii)  except as otherwise explicitly
provided in the applicable option agreement, and only if the Common Stock is
then publicly traded, delivery of an irrevocable and unconditional undertaking
by a creditworthy broker to deliver promptly to the Company sufficient funds to
pay the exercise price, or delivery by the Participant to the Company of a copy
of irrevocable and unconditional instructions to a creditworthy broker to
deliver promptly to the Company cash or a check sufficient to pay the exercise
price; or

              (iii) to the extent
explicitly provided in the applicable option agreement, by (x) delivery of
shares of Common Stock owned by the Participant valued at fair market value and
which have been held by the Participant for at least six months (as determined
by the Committee or as determined pursuant to the applicable option agreement),
or (y) payment of such other lawful consideration as the Committee may
determine.

5.             Restricted Stock

a.             Grants. The Committee may
grant a Restricted Stock Award to a Participant. A Restricted Stock Award is an
award entitling the recipient to acquire, at such purchase price (which may be
zero) as determined by the Committee, shares of Common Stock subject to such
restrictions and conditions as the Committee may determine (each, a “Restricted
Stock Award”). If a Participant’s employment (or other service
relationship) with the Company or its Subsidiary is terminated prior to
satisfaction of such restrictions and conditions, any Restricted Stock that has
not vested shall automatically and without requirement of notice to the
Participant from the Company be deemed to be forfeited to the Company, subject
to the payment by the Company of the original purchase price for such
Restricted Stock, if any.

b.             Terms and Conditions. The
Committee shall determine the terms and conditions of any such Restricted Stock
Award. Conditions may be based on continuing employment (or other service
relationship) and/or achievement of pre-established performance goals and
objectives. Any stock certificates issued in respect of a Restricted Stock
Award shall be registered in the name of the Participant and, unless otherwise
determined by the Committee, deposited by the Participant, together with a
stock power endorsed in blank, with the Company (or its designee). After the
expiration of the applicable restrictions and conditions, the Company (or such
designee) shall deliver the certificates no longer subject to such restrictions
to the Participant or, if the Participant has died, to the beneficiary
designated by a Participant, in a manner determined by the Committee, to
receive amounts due or exercise rights of the Participant in the event of the
Participant’s death (the “Designated Beneficiary”). In the absence of an
effective designation by a Participant, Designated Beneficiary shall mean the
Participant’s estate.

6.             Other Stock-Based Awards

The Committee
shall have the right to grant other Awards based upon the Common Stock having
such terms and conditions as the Committee may determine, including, without
limitation, the grant of shares based upon certain conditions, the grant of
securities convertible into Common Stock and the grant of stock appreciation
rights, phantom stock awards or stock units.

7.             General Provisions Applicable to Awards

a.             Transferability of Awards. Except
as the Committee may otherwise determine or provide in an Award, Awards shall
not be sold, assigned, transferred, pledged or otherwise encumbered by the
person to whom they are granted, either voluntarily or by operation of law,
except by will or the laws of descent and distribution, and, during the life of
the Participant, shall be exercisable only by the Participant. References to a
Participant, to the extent relevant in the context, shall include references to
authorized transferees.

b.             Documentation. Each Award
under the Plan shall be evidenced by a written instrument in such form as the
Committee shall determine or as executed by an officer of the Company pursuant
to authority delegated by the Committee. Each Award may contain terms and conditions
in addition to those set forth in the Plan;
provided, that such
terms and conditions do not contravene the provisions 

 

of the Plan.

c.             Committee Discretion. The
terms of each type of Award need not be identical, and the Committee need not
treat Participants uniformly.

d.             Termination of Status. In
the event a Participant dies prior to the vesting of the first tranche of
shares subject to an Award, such Award will automatically accelerate to provide
that the first tranche of shares shall be exercisable for the remainder of the
term of the Award. The Committee shall otherwise determine the effect on an
Award of the disability, death, retirement, authorized leave of absence or
other change in the employment or other status of a Participant and the extent
to which, and the period during which, the Participant, or the Participant’s
legal representative, conservator, guardian or Designated Beneficiary, may
exercise rights under the Award.

e.             Acquisition of the Company.

                       (i)            Consequences of an Acquisition.
Upon the consummation of an Acquisition, the Board or the board of directors of
the surviving or acquiring entity (as used in this Section 7(e)(i), also
the “Board”), shall, as to outstanding Awards (on the same basis or on
different bases as the Board shall specify), make appropriate provision
for the continuation of such Awards by the Company or the assumption of such
Awards by the surviving or acquiring entity and by substituting on an equitable
basis for the shares then subject to such Awards either (a) the
consideration payable with respect to the outstanding shares of Common Stock in
connection with the Acquisition, (b) shares of stock of the surviving or
acquiring corporation or (c) such other securities or other consideration
as the Board deems appropriate, the fair market value of which (as determined
by the Board in its sole discretion) shall not materially differ from the fair
market value of the shares of Common Stock subject to such Awards immediately
preceding the Acquisition; provided, however, that, notwithstanding the
foregoing, the form of instruments evidencing Options granted pursuant to this
Plan shall provide that in the event of an Acquisition, then twenty-five
percent (25%) of the shares underlying the Options issued pursuant to such instruments
shall immediately vest and become exercisable (in addition to any portion of
the Options already vested and exercisable). In addition to or in lieu of the
foregoing, with respect to outstanding Options, the Board may, on the same
basis or on different bases as the Board shall specify, upon written notice to
the affected optionees, provide that one or more Options then outstanding must
be exercised, in whole or in part, within a specified number of days of the
date of such notice, but in no event less than five (5) business days, at
the end of which period such Options shall terminate, or provide that one or
more Options then outstanding, in whole or in part, shall be terminated in
exchange for a cash payment equal to the excess of the fair market value (as
determined by the Board in its sole discretion) for the shares subject to such
Options over the exercise price thereof;
provided, however, that before terminating any portion of an Option
that is not vested or exercisable (other than in exchange for a cash payment),
the Board must first accelerate in full the exercisability of the portion that
is to be terminated. Unless otherwise determined by the Board (on the same
basis or on different bases as the Board shall specify), any repurchase rights
or other rights of the Company that relate to an Option or other Award shall
continue to apply to consideration, including cash, that has been substituted,
assumed or amended for an Option or other Award pursuant to this paragraph. The
Company may hold in escrow all or any portion of any such consideration in
order to effectuate any continuing restrictions.

              (ii)           Acquisition Defined. An “Acquisition” shall
mean:

              (a)           a merger or consolidation of the
Company with or into any other corporation or other business entity in which
the Company is the surviving corporation (except one in which the holders of
capital stock of the Company immediately prior to such merger or consolidation
continue to hold at least a majority of the outstanding securities having the
right to vote in an election of the Board (“Voting Stock”) of the
Company); or any such merger or consolidation in which the Company is not the
surviving corporation;

              (b)           a sale, lease, exchange or other
transfer (in one transaction or a related series of transactions) of all or
substantially all of the Company’s assets;

              (c)           the acquisition by any person or any
group of persons (other than the Company, any of its direct or indirect
subsidiaries, or any trustee, fiduciary or other person or entity holding securities
under any employee benefit plan or trust of the Company or any of its direct or
indirect subsidiaries) acting together in any transaction or related series of
transactions, of such number of shares of the Company’s Voting Stock as causes
such person, or group of persons, to own beneficially, directly or indirectly,
as of the time immediately after such transaction or series of transactions,
50% or more of the combined voting power of the Voting Stock of the Company
other than as a result of an acquisition of securities directly from the
Company, or solely as a result of an acquisition of securities by the Company
which by reducing the number of shares of the Voting Stock outstanding
increases the proportionate voting power represented by the Voting Stock owned
by any such person to 50% or more of the combined voting power of such Voting
Stock; and

              (d)           change in the composition of the
Board following a tender offer or proxy contest, as a result of which persons
who, immediately prior to a tender offer or proxy contest, constituted the
Company’s Board shall cease to 

 

constitute at least a majority of the members of the
Board.

                       (iii)          Assumption of Options Upon Certain
Events. In connection with a merger or consolidation of an entity with the
Company or the acquisition by the Company of property or stock of an entity,
the Board may grant Awards under the Plan in substitution for stock and
stock-based awards issued by such entity or an affiliate thereof. The
substitute Awards shall be granted on such terms and conditions as the Board
considers appropriate in the circumstances.

                       (iv)          Parachute Awards. If, in
connection with an Acquisition described therein, a tax under Section 4999
of the Code would be imposed on the Participant (after taking into account the
exceptions set forth in Sections 280G(b)(4) and 280G(b)(5) of the
Code), then the number of Awards which shall become exercisable, realizable or
vested shall be reduced (or delayed), to the minimum extent necessary, so that
no such tax would be imposed on the Participant (the Awards not becoming so
accelerated, realizable or vested, the “Parachute Awards”); provided, however, that if the “aggregate
present value” of the Parachute Awards would exceed the tax that, but for this
sentence, would be imposed on the Participant under Section 4999 of the
Code in connection with the Acquisition, then the Awards shall become
immediately exercisable, realizable and vested without regard to the provisions
of this sentence. For purposes of the preceding sentence, the “aggregate
present value” of an Award shall be calculated on an after-tax basis (other
than taxes imposed by Section 4999 of the Code) and shall be based on
economic principles rather than the principles set forth under Section 280G
of the Code and the regulations promulgated thereunder. All determinations
required to be made under this Section 7(e)(iv) shall be made by the
Company.

f.              Withholding. Each
Participant shall pay to the Company, or make provisions satisfactory to the
Company for payment of, any taxes required by law to be withheld in connection
with Awards to such Participant no later than the date of the event creating
the tax liability. The Committee may allow Participants to satisfy the minimum
tax withholding obligation in whole or in part by transferring shares of Common
Stock, including shares retained from the Award creating the tax obligation,
valued at their fair market value (as determined by the Committee or as
determined pursuant to the applicable option agreement). The Company may, to the
extent permitted by law, deduct any such tax obligations from any payment of
any kind otherwise due to a Participant.

g.             Amendment of Awards. The
Committee may amend, modify or terminate any outstanding Award including, but
not limited to, substituting therefor another Award of the same or a different
type, changing the date of exercise or realization, and converting an Incentive
Stock Option to a Nonstatutory Stock Option,
provided that the
Participant’s consent to such action shall be required unless the Committee
determines that the action, taking into account any related action, would not
materially and adversely affect the Participant. Except as provided in Section 3(c) or
7(e), the Committee shall obtain stockholder approval prior to taking any action
to reduce the exercise price of outstanding Options and stock appreciation
right or effect repricing through cancellation and regrants.

h.             Conditions on Delivery of Stock.
The Company will not be obligated to deliver any shares of Common Stock
pursuant to the Plan or to remove restrictions from shares previously delivered
under the Plan until (i) all conditions of the Award have been met or
removed to the satisfaction of the Company, (ii) in the opinion of the
Company’s counsel, all other legal matters in connection with the issuance and
delivery of such shares have been satisfied, including any applicable
securities laws and any applicable stock exchange or stock market rules and
regulations, and (iii) the Participant has executed and delivered to the Company
such representations or agreements as the Company may consider appropriate to
satisfy the requirements of any applicable laws, rules or regulations
including any applicable withholding tax.

i.              Acceleration. The Committee
may at any time provide that any Options shall become immediately exercisable
in full or in part, that any Restricted Stock Awards shall be free of some or
all restrictions, or that any other stock-based Awards may become exercisable
in full or in part or free of some or all restrictions or conditions, or
otherwise realizable in full or in part, as the case may be, despite the fact
that the foregoing actions may (i) cause the application of Sections 280G
and 4999 of the Code if a change in control of the Company occurs, or (ii) disqualify
all or part of the Option as an Incentive Stock Option.

8.             Miscellaneous

a.             Definitions.

                       (i)            “Company,” for purposes of
eligibility under the Plan, shall include any present or future subsidiary
corporations of Phase Forward Incorporated, as defined in Section 424(f) of
the Code (a “Subsidiary”), and any present or future parent corporation
of Phase Forward Incorporated, as defined in Section 424(e) of the
Code. For purposes of Awards other than Incentive Stock Options, the term “Company”
shall include any other business venture in which the Company has a direct or
indirect significant interest, as determined by the Committee in its sole
discretion.

              (ii)           “Code” means the Internal Revenue Code of 1986, as
amended, and any regulations promulgated thereunder.

 

              (iii)          “employee”
for purposes of eligibility under the Plan (but not for purposes of Section 4(b))
shall include a person to whom an offer of employment has been extended by the
Company.

b.             No Right To Employment or Other
Status. No person shall have any claim or right to be granted an Award, and
the grant of an Award shall not be construed as giving a Participant the right
to continued employment or any other relationship with the Company. The Company
expressly reserves the right at any time to dismiss or otherwise terminate its
relationship with a Participant free from any liability or claim under the
Plan.

c.             No Rights As Stockholder.
Subject to the provisions of the applicable Award, no Participant or Designated
Beneficiary shall have any rights as a stockholder with respect to any shares
of Common Stock to be distributed with respect to an Award until becoming the
record holder thereof.

d.             Effective Date and Term of Plan.
The Plan shall become effective on the date on which it is adopted by the Board.
No Awards shall be granted under the Plan after the completion of ten years
from the date on which the Plan was adopted by the Board, but Awards previously
granted may extend beyond that date.

e.             Amendment of Plan. The Board
may amend, suspend or terminate the Plan or any portion thereof at any time; provided, however, that any material Plan
amendments (other than amendments that curtail the scope of the Plan) shall be
subject to approval by the Company stockholders entitled to vote at a meeting
of stockholders, including any Plan amendments that (i) increase the
number of shares reserved for issuance under the Plan, (ii) expand the
type of Awards available under, materially expand the class of individuals
eligible to participate in, or materially extend the term of, the Plan, or (iii) require
stockholder approval under the rules of the Nasdaq National Market or
under any other applicable law, rule or regulation. In addition, to the
extent determined by the Committee to be required by the Code to ensure that
Incentive Stock Options granted under the Plan are qualified under Section 422
of the Code or to ensure that compensation earned under Awards qualifies as
performance-based compensation under Section 162(m) of the Code, Plan
amendments shall be subject to approval by the Company stockholders entitled to
vote at a meeting of stockholders.

f.              Governing Law. The
provisions of the Plan and all Awards made hereunder shall be governed by and
interpreted in accordance with the laws of the State of Delaware, without
regard to any applicable conflicts of law.

Original Plan

Adopted by the Board of Directors on

March 11, 2004

Approved by the stockholders on

April 20, 2004

Amendment and Restatement

Adopted by the Board of Directors on

March 28, 2006

Approved by the stockholders on

May 3, 2006Exhibit 10.1

 

Executive compensation package approved on
May 2, 2006

 

On May
2, 2006, the Compensation Committee of the Board of Directors of Pacific Energy
Management LLC (“PEM”), the general partner of the general partner of Pacific
Energy Partners, L.P. (“Pacific”) approved the base salaries, effective April
1, 2006 for the Chief Executive Officer and four most highly compensated
executive officers of PEM, listed below.

 

2006
base salaries:

 

Irvin
Toole, Jr.

President,
Chief Executive Officer and Director – $310,000

 

Forrest
E. Wylie

Vice
Chairman of the Board of Directors – $265,000

 

David
E. Wright

Executive
Vice President, Corporate Development – $232,500

 

Gerald
A. Tywoniuk

Senior
Vice President and Chief Financial Officer – $224,000

 

Lynn
T. Wood

Senior
Vice President, General Counsel and Secretary – $195,000

 

Further,
the Compensation Committee approved the cash award payout criteria for 2006
under PEM’s annual incentive compensation plan and a cash bonus program for Mr.
Wright. The annual incentive compensation plan is designed to enhance the
performance of all employees of PEM and its affiliates by rewarding them with
cash awards for certain individual achievements and Pacific achieving certain
annual financial and operational performance objectives. If financial and
operational performance objectives are met for the year ending December 31,
2006, the maximum cumulative payments to the named executive officers under the
incentive compensation plan, expressed as a percentage of base salaries, are as
follows:  Mr. Toole and Mr. Wylie, 150%
of base salary; Mr. Wright, 80% of base salary; and Messrs. Tywoniuk and Wood,
60% of base salary. Under the cash bonus program for Mr. Wright, if certain
operating goals and objectives are met, Mr. Wright is eligible for up to an
additional $200,000 over the next three years.

 

Further,
the Board of Directors approved the award of restricted units under PEM’s long
term incentive plan to key employees, including the named executive officers,
that vest over a three year period beginning on March 1, 2007 and that are also
subject to meeting annual financial performance objectives. The financial
measure used is Pacific’s distributable cash flow per unit, as determined by
the Compensation Committee, for the calendar year preceding each of the three
annual vesting dates. The number of units to be delivered in any year, if any,
will be a portion of the number vested on March 1 of that year based on
accomplishment of performance targets for the previous calendar year. Depending
on Pacific’s actual results of distributable cash flow per unit for each of the
2006 through 2008 fiscal years, compared to pre-established targets, each
participant will receive an amount of units between the threshold number (which
is 50% of the target number) and maximum number (which is 150% of the target
number). If the threshold distributable cash flow target is not met for a
particular year, no units will vest that year, subject to the authority of the
Compensation Committee to adjust the number of units vested. The target grants
to the named executive officers were as follows: Mr. Toole, 4,750 units; Mr.
Wylie, 3,220 units; Mr. Wright, 2,160 units; Mr. Tywoniuk, 1,720 units; and Mr.
Wood, 1,460 units.

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