Document:

Exhibit 10.1

SECOND AMENDED AND RESTATED

EMPLOYMENT AGREEMENT

This Second Amended and Restated Employment Agreement (this “Agreement”) is made this 12th day of June, 2007 (the “Effective Date”), by and between MISSION COMMUNITY
BANK (the “Bank”), having a principal
place of business at 581 Higuera Street, San Luis Obispo, California  93406, and ANITA M. ROBINSON (“Executive”), whose residence address is 8570
Corriente Road, Atascadero, California  93422,
with reference to the following:

R E C I T A L S

WHEREAS, the Bank is a banking corporation duly organized, validly existing,
and in good standing under the laws of the State of California, with power to
own property and carry on its business as it is now being conducted;

WHEREAS, the Bank desires to continue to avail itself of the skill, knowledge,
and experience of Executive in order to insure the successful management of its
business;

WHEREAS, the Bank and Executive entered into that certain Employment Agreement
effective January 1, 2002, as amended by an Amended and Restated Employment
Agreement dated as of August 28, 2006 (collectively, the “Original Agreement”), which Original
Agreement has been amended by mutual agreement of the parties through the
Effective Date;

WHEREAS, the parties hereto desire to specify the terms of Executive’s continued
employment by the Bank as controlling Executive’s continued employment with the
Bank; and

WHEREAS, the parties wish to enter into this Agreement to reflect the Original
Agreement as amended by the parties through the Effective Date and to supersede
the Original Agreement;

NOW, THEREFORE, in consideration of the mutual covenants
hereinafter set forth, and intending to be legally bound, it is agreed that
from and after the Effective Date, the following terms and conditions shall
apply to Executive’s said employment:

A G R E E M E N T

A.                                   TERM OF EMPLOYMENT

1.             Term.  The Bank hereby employs
Executive and Executive hereby accepts employment with the Bank for the period
commencing on January 1, 2007 and terminating on December 31, 2012, unless
terminated earlier as provided for in this Agreement (the “Term”). 
Where used herein, “Term” shall refer to the entire period of employment
of Executive by Bank hereunder, whether for the period provided above,
including any extensions thereof, or whether terminated earlier as hereinafter
provided.

B.                                     DUTIES OF EXECUTIVE

1.             Duties.  Executive shall perform the
duties of Chief Executive Officer of the Bank, subject to the powers by law
vested in the Board of Directors of the Bank and in the Bank’s
shareholders.  The duties of Executive
may be changed from time to time by the mutual consent of Executive and Bank
without resulting in a rescission of this Agreement, Executive agrees to also
hold the office of President of the Bank at the request of the Board of
Directors of the Bank.  Notwithstanding
any such change from the duties originally assigned and specified above, or
hereafter assigned, the employment of Executive shall be construed as
continuing under this Agreement as modified; provided, however, any material
changes in Executive’s duties, without Executive’s consent, shall be construed
as a termination of Executive without cause. 
Without limiting the foregoing, Executive agrees to hold such positions
with Mission Community Bancorp (the “Company”) as
the Company may direct without payment of additional compensation.  During the Term, Executive shall perform
exclusively the services herein contemplated to be performed by Executive
faithfully, diligently, and to the best of Executive’s ability, consistent with
the highest and best standards of the banking industry and in compliance with
all applicable laws and the Bank’s Articles of Incorporation, Bylaws, and
internal written policies.  Executive
shall also be nominated by the Boards of Directors of the Company and the Bank
to serve as a director of the Company and the Bank during the Term.  

2.             Conflicts of Interest. 
Except as permitted by the prior written consent of the Board of
Directors of the Bank, Executive shall devote Executive’s entire productive
time, ability, and attention to the business of the Bank during the Term, and
Executive shall not directly or indirectly render any services of a business,
commercial, or professional nature, to any other person, firm, or corporation,
whether for compensation or otherwise, which are in conflict with the Bank’s
interest.  

C.            COMPENSATION

1.             Base Salary.  For Executive’s services
hereunder, commencing January 1, 2007, the Bank shall pay or cause to be paid
as annual base salary to Executive the sum of not less than One Hundred Seventy-Five
Thousand Dollars ($175,000) for each year (i.e., 12-month period) of the Term
(the “Base Salary”).  Said salary shall be payable in equal
installments in conformity with Bank’s normal payroll periods.  Annual increases, if any, commencing January
1, 2008, may be made in the sole discretion of the Board of Directors.

2.             Bonuses.  During the first year of the Term,
Executive shall be entitled to receive as an incentive, a bonus as determined
and payable in accordance with the Bank’s Officers’ Incentive Compensation
Program as set forth on Exhibit “A” hereto, as it may be amended from time to
time by mutual agreement of the Board of Directors and Executive, together with
such other bonus as the Board of Directors shall determine from time to time in
its sole and absolute discretion (collectively, the “Incentive
Bonus”).  Thereafter,
Executive’s Incentive Bonus shall be reviewed and determined annually.  

D.            EXECUTIVE BENEFITS

1.             Vacation and Sick Pay.  Executive
shall be entitled to four (4) weeks vacation during each year of the Term;
provided, however, that for each year of the Term, Executive is required to and
shall take at least two (2) weeks of said vacation (the

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“Mandatory Vacation”), which shall be taken
consecutively.  Any vacation time not
used in excess of the Mandatory Vacation may be accumulated in accordance with
Bank’s Personnel Policy.  Executive shall
also be entitled to sick pay in accordance with Bank’s Personnel Policy.

2.             Automobile Allowance. 
During the Term, the Bank shall provide Executive with a $1,000.00 per
month automobile allowance.  Provided the
Bank pays the foregoing automobile allowance, the Bank shall have no other
duty, responsibility or liability on account of Executive’s automobile and at
all times during the Term, Executive shall maintain such insurance on the
automobile including, without limitation, liability for personal injury and
property damage as the Bank shall from time to time reasonably require to
protect Bank against any loss which may arise from Executive’s use of the
automobile while working for the Bank.

3.             Group Medical and Life Insurance Benefits.  The
Bank shall provide for Executive, at Bank’s expense, participation in the Bank’s
existing medical, dental, vision, accident, health and life insurance benefits
in accordance with benefits provided to Bank employees generally, but at a
level commensurate with other officers of the Bank; provided however, that,
subject to satisfying the requirements of the insurer(s), Executive shall be
provided $750,000 in life insurance benefits (collectively, the “Insurance Coverage”). 
Said Insurance Coverage shall be in existence as of the Effective Date
hereof and shall continue throughout the Term. 
The Bank’s liability to Executive for any breach of this Paragraph D.3 shall
be limited to the amount of premiums required hereunder to be payable by the
Bank to obtain or maintain, as applicable, the coverages contemplated herein.

4.             Stock Options.  All
options to purchase shares of the authorized but unissued Common Stock of the
Company heretofore granted to Executive shall remain in full force and effect
subject to the terms and conditions of those options as so granted.  The Bank and Executive acknowledge and agree
that as of the Effective Date Executive has been granted options which remain
unexercised to purchase those shares of the Company’s Common Stock as listed on
Exhibit “B” hereto.  By separate stock
option agreement Executive shall also be given a new option to purchase a
number of shares of the Company common stock equal to the lesser of (a) 25,000
shares or (b) 5.0% of the number of shares issued in the first public offering
of Company shares occurring after the Effective Date and prior to December 31,
2007, which option shall be granted as of the date of the final closing of such
offering.  The exercise price per share
shall be equal to the greater of the fair market value per share of the common
stock of the Company on the date of grant or the offering price in such
offering.  In the event the offering is
not completed, no options will be issued. 
The term of the option shall be ten years and shall vest in five (5)
annual installments of 20% per year over a period of five (5) years, with the
first such installment to vest one year after the Effective Date and with
subsequent installments vesting on the second, third, fourth and fifth
anniversaries of the Effective Date.  The
option shall be a non-qualified option for purposes of the Internal Revenue
Code of 1986.  The shares to be issued
upon the exercise of the option will be restricted securities, will not be
required to be registered under the Securities Act of 1933, and may not be sold
by Executive except pursuant to an effective registration statement or applicable
exemption therefrom.  The stock option
agreement shall set forth additional terms for such option.

5.             Additional Benefits. 
Executive shall be entitled to participate in all programs, rights and
benefits for which Executive is otherwise entitled under any 401(k)

 3
 

plan,
bonus plan, incentive plan, participation plan, extra compensation plan,
pension plan, profit sharing plan, savings plan, life, medical, dental, other
health care, disability or other insurance plan or policy or other plan or
benefit Bank may provide for senior executives or for employees of Bank
generally, from time to time, in effect during the Term.  

E.                                      REIMBURSEMENT FOR BUSINESS EXPENSES

1.             Business Expenses.  Executive
shall be entitled to reimbursement by the Bank for any ordinary and necessary
business expenses incurred by Executive in the performance of Executive’s
duties and in acting for the Bank during the Term, which types of expenditures
shall be determined by the Board of Directors, provided that:

(a)           Each
such expenditure is of a nature qualifying it as a proper deduction on the
federal and state income tax returns of the Bank as a business expense and not
as a deductible compensation to Executive; and

(b)           Executive  furnishes 
to  the  Bank 
adequate records and other documentary evidence required by federal and
state statutes and regulations issued by the appropriate taxing
authorities  for  the 
substantiation  of  such 
expenditures  as deductible
business expenses of the Bank and not as deductible compensation to Executive.

2.             Reimbursement. 
Executive agrees that, if at any time payment made to Executive by Bank
for business expense reimbursement shall be disallowed in whole or in part as
deductible business expense by the appropriate taxing authorities, the amount
so disallowed shall be treated as taxable compensation to Executive.

F.                                      TERMINATION

1.             Termination for Cause.  The
Bank may terminate Executive’s employment at any time by action of the Board of
Directors for “cause” if:

(a)           Executive
fails to perform or habitually neglects the duties which Executive is required
to perform hereunder;

(b)           if
Executive engages in illegal activity which materially adversely affects the
Bank’s reputation in the community or which evidences the lack of Executive’s
fitness or ability to perform Executive’s duties as reasonably determined by
the Board of Directors, in good faith;

(c)           Executive
commits any act which would cause termination of coverage under the Bank’s
Bankers’ Blanket Bond as to Executive or as to the Bank as a whole;

(d)           any
regulatory authority having supervisory authority over Bank exercises its cease
and desist powers to remove Executive from office or advises Bank that
Executive should be removed from office;

(e)           if
the Bank is closed by or taken over by the California Commissioner of Financial
Institutions or other supervisory authority, including the Federal Deposit
Insurance Corporation;

 4
 

(f)            in
the event of Executive’s death, or if Executive is found to be physically or
mentally incapable of performing Executive’s duties for a period of ninety (90)
days or greater by the Board of Directors, in good faith; or

(g)           any
other act or omission which would constitute “cause” under California law
occurs.  Such termination shall not
prejudice any remedy which the Bank may have at law, in equity, or under this
Agreement.

Termination pursuant to this Paragraph F.1 shall become effective two
(2) days after written notice of termination.

2.             Change in Control Event.  In
the event of a “Change of Control” Executive’s employment with the Bank may not
be terminated by Bank, the surviving or resulting entity or the transferee of
the Bank’s assets.  In the event of a “Change
of Control” Executive may terminate Executive’s employment under this Agreement
for “Good Cause.”

(a)                                              A Change of Control shall be deemed to have
occurred if:

(i)            
there shall be consummated (A) any consolidation or merger of the Company,
other than a merger of the Company in which the holders of the Company’s Common
Stock immediately prior to the merger have substantially the same proportionate
ownership of common stock of the surviving corporation immediately after the
merger, in which the Company is not the continuing or surviving corporation, or
pursuant to which shares of the Company’s Common Stock would be converted in
whole or in part into cash, securities or other property, if as a result of the
consolidation or merger, the continuing or surviving corporation acquired more
than 50% of the total fair market value or total voting power of the Company’s
Common Stock, or (B) any sale, lease, exchange or transfer (in one transaction
or a series of related transactions) of all or substantially all the assets
(which shall be defined as more than 50% of the total gross fair market value
of all of the assets) of the Company, or

(ii)           the
shareholders of the Company shall approve any plan or proposal for the
liquidation or dissolution of the Company, or

(iii)          any “person”
(as such term is used in Sections 13(d)(3) and 14(d)(2) of the Securities
Exchange Act of 1934 (the “Exchange Act”)), other than the Company or a
subsidiary thereof or a corporation owned, directly or indirectly, by the
shareholder of the Company, shall become the beneficial owner (within the
meaning of Rule 13(d)(3) under the Exchange Act) of securities of the Company
representing 35% or more of the combined voting power of the Company’s then
outstanding securities ordinarily (and apart from rights accruing in special
circumstances) having the right to vote in the election of directors, as a
result of a tender or exchange offer, open market purchases, privately
negotiated purchases or otherwise, or

(iv)          at
any time during a twelve-month period, individuals who, at the beginning of
such period, constituted the Board of Directors of the Company shall cease for any
reason to constitute at least a majority thereof, unless the election or the
nomination for election by the Company’s shareholders of each new director
during such twelve-month period was approved by a vote of at least two-thirds
of the directors then still in office who

 5
 

were
directors at the beginning of such twelve-month period, or

(v)           any “person”
(as such term is used in Sections 13(d)(3) and 14(d)(2) of the Securities
Exchange Act of 1934 (the “Exchange Act”)), other than the Company, Bank or a
subsidiary thereof or a corporation owned, directly or indirectly, by the
shareholder of the Company or Bank, shall become the beneficial owner (within
the meaning of Rule 13(d)(3) under the Exchange Act) of securities of the Bank
representing 35% or more of the combined voting power of the Bank’s then
outstanding securities ordinarily (and apart from rights accruing in special
circumstances) having the right to vote in the election of directors, as a
result of a tender or exchange offer, open market purchases, privately
negotiated purchases or otherwise.

(b)           The
following shall constitute “Good Cause”:

(i)            subsequent
to a Change of Control, and without Executive’s express written consent, the
assignment to Executive of any duties substantially inconsistent with Executive’s
positions, duties, responsibilities and status with Bank immediately prior to
the Change of Control, or a substantial change in Executive’s reporting
responsibilities, titles or offices as in effect immediately prior to the
Change of Control, or any removal of Executive from or any failure to re-elect
Executive to any of such positions, except in connection with the termination
of Executive’s employment pursuant to Paragraph F.1 hereof, or as a result of
Executive’s retirement, or by Executive other than for Good Cause;

(ii)           subsequent
to a Change of Control a 10% or greater reduction by Bank in Executive’s Base Salary
and benefits as in effect on the Effective Date or as the same may be increased
from time to time;

(iii)          subsequent
to a Change of Control and without Executive’s express written consent, Bank’s
requiring Executive to be based anywhere other than within 15 miles of Bank’s
main office location immediately prior to the Change of Control, exclusive of
required travel on Bank business; or

(iv)          subsequent
to a Change of Control, the failure by Bank to obtain the assumption of the agreement
to perform this Agreement by any successor as contemplated in Paragraph G.5
hereof.

3.             Termination Without Cause. 
Notwithstanding anything to the contrary contained herein, it is agreed
by the parties hereto that either the Bank or Executive may at any time elect
to terminate Executive’s employment by the Bank for any reason.  Such termination shall be effective upon the
giving of not less than five (5) days prior written notice where the Bank is
terminating Executive’s employment and upon the giving of not less than sixty
(60) days’ prior written notice where Executive is terminating her employment
hereunder.

4.             Expiration of Term Without Renewal.  If
the Bank is unwilling, for any reason whatsoever, to enter into a new
employment agreement with Executive at the expiration of the full Term, or the
Executive and Bank are unable to reach a mutually agreeable contract prior to
the expiration of a full Term, or Executive decides to retire or to take
employment elsewhere at the expiration of the full Term, then Executive=s employment

 6
 

with
Bank shall terminate at the end of the full Term.

5.             Effect of Termination.

(a)           In
the event Executive=s employment with Bank is terminated for any
of the reasons specified in Paragraphs F.1 or F.3 (as a result of Executive’s
election to terminate) of this Agreement, Executive shall be entitled to (i)
the Base Salary and Incentive Bonus earned by Executive prior to the date of
termination, computed pro rata up to and including that date, and (ii) accrued
but unused vacation time, but Executive shall be entitled to no further
compensation or benefits otherwise provided for or contemplated under this
Agreement.

(b)           In
the event Executive=s employment with Bank is terminated pursuant
to Paragraph F.3 of this Agreement (as a result of Bank’s election to terminate
and no Change of Control has occurred), Executive shall be entitled to (i) the
Base Salary and Incentive Bonus earned by Executive prior to the date of
termination, computed up to and including that date, (ii) accrued but unused
vacation time, and (iii) an amount equal to twelve (12) months of Executive’s
Base Salary in effect immediately prior to the date of termination, payable in
equal installments over twelve (12) months in accordance with the Bank’s normal
payroll periods.

(c)           In
the event Executive=s employment with Bank is terminated pursuant
to Paragraph F.2 of this Agreement (as a result of Executive’s election to
terminate for Good Cause), or by Bank or the resulting or surviving entity
pursuant to Paragraph F.3 after a Change of Control has occurred, Executive
shall be entitled to (i) the Base Salary and Incentive Bonus earned by
Executive prior to the date of termination, computed pro rata up to and
including that date, (ii) accrued but unused vacation time, (iii) the
continuation of the Insurance Coverage as provided in Paragraph D.3 hereof and
the automobile allowance as provided in Paragraph D.2 hereof for a period of twenty
four (24) months from and after the date of termination, (iv) an amount equal
to twenty four (24) months of Executive’s Base Salary in effect immediately prior
to the date of termination in a lump sum payment, and (v) a lump sum amount equal
to the Incentive Bonus paid to Executive for each of the two years preceding
the year in which the termination occurs.

(d)           The
payment of such benefits shall discharge Bank from any further liability to
Executive under this Agreement.

(e)           In
the event Executive=s employment with Bank and the Term are
terminated pursuant to Paragraph F of this Agreement, the provisions of
Paragraph G hereof shall survive said termination and shall inure to the
benefit of and be binding upon the parties hereto and their respective
executors, administrators, successors and assigns.

(f)            In
the event Executive=s employment with Bank is terminated in
accordance with this Paragraph F of this Agreement (whether by Executive or
Bank) and at such time Executive is a member of the Board of Directors of
Company, Bank or any subsidiary thereof, or holds any other office thereof,
Executive shall, and hereby agrees to, tender Executive=s resignation from the Board of Directors of
the Company, Bank and all subsidiaries thereof and any committees thereof and
all other offices of the Company, Bank and all subsidiaries thereof then held
by Executive effective on the date of termination.  If such resignation is not received by the
Bank within three (3) days after the date of

 7
 

termination,
Executive hereby authorizes and directs the Board of Directors of all such
entities to consider the failure to so act as Executive’s resignation from all
said positions effective as of the date of termination.

G.            GENERAL PROVISIONS

1.             Trade Secrets.  During
the Term, Executive will have access to and become acquainted with what
Executive and Bank acknowledge are trade secrets; to wit, knowledge or data concerning
the Bank, including its operations and methods of doing business, and the
identity of customers of the Bank, including knowledge of their financial
condition and their financial needs. 
Executive shall not disclose any of the aforesaid trade secrets,
directly or indirectly, or use them in any way, either during the Term or for a
period of five (5) years after the termination of this Agreement, except as
required in the course of Executive’s employment with the Bank.

2.             Covenant Not to Interfere.  Executive
hereby covenants and agrees that Executive will not during the Term, or for the
period during which Executive receives any compensation from Bank, whether
pursuant to this Agreement or otherwise, plus an additional period of one (1) year,
disrupt, damage, impair or interfere with the business of Bank, whether by way
of interfering with or raiding its employees, disrupting its relationships with
customers or their agents, representatives or vendors, or otherwise.  After termination of employment, Executive is
not, however, restricted from being employed by or engaging in a competing
business.

3.             Return of Documents. 
Executive expressly agrees that all manuals, documents, files, reports,
studies, instruments, or other materials used and/or developed by Executive
during the Term are solely the property of the Bank, and that Executive has no
right, title, or interest therein.   Upon
termination of this Agreement, Executive or Executive’s representative shall
promptly deliver possession of all of said property to the Bank in good condition.

4.             Notices.  All notices, demands, or other communications
hereunder shall be in writing and shall be delivered in person (professional
courier acceptable); or by United States mail, certified or registered, postage
prepaid, with return receipt requested; or by facsimile transmission; or
otherwise actually delivered, to the addresses for the parties appearing at the
inception of this Agreement.  The persons
or addresses to which mailings or deliveries shall be made may change from time
to time by notice given pursuant to the provisions of this Paragraph G.4.  Any notice, demand, or other communication
given pursuant to this Agreement shall be deemed to have been given on the date
actually delivered, if delivered in person, three (3) days following the date
mailed, if delivered by U.S. mail, or upon written confirmation of transmission,
if delivered by facsimile.

5.             Benefit of Agreement.  This
Agreement shall inure to the benefit of and be binding upon the parties hereto
and their respective executors, administrators, successors and assigns.

6.             Review by Counsel. 
Executive represents and warrants to the Bank that she has had this
Agreement reviewed by independent legal counsel of her choice, or if she has
not, that she has had the opportunity to do so, and hereby waives any claim, objection,
or defense on the grounds that this Agreement has not been reviewed by legal

 8
 

counsel
of her choice.

7.             California Law.  This
Agreement is to be governed by and construed in accordance with the laws of the
State of California.

8.             Captions and Paragraph Headings. 
Captions and paragraph headings used herein are for convenience only and
are not a part of this Agreement and shall not be used in construing this
Agreement.

9.             Invalid Provisions. 
Should any provision of the Agreement 
for  any  reason 
by  declared  invalid, 
void, unenforceable by a court of competent jurisdiction, the validity
and binding effect of any remaining portion shall not be affected, and the
remaining portions of this Agreement shall remain in full force and effect as
if this Agreement had been executed with said provisions eliminated.

10.           Entire
Agreement.  This Agreement and the other agreements,
plans or documents specifically referred to herein, including Stock Option
Agreements,  contain the entire agreement
of the parties.  This Agreement
supersedes any and all other agreements, either oral or in writing, between the
parties with respect to the employment of Executive by the Bank, including the
Original Agreement and any Salary Protection Agreement.   Each party to this Agreement acknowledges
that no representation inducements, promises, or agreements, oral or otherwise,
have be made by any party, or anyone acting on behalf of any party, which are
not embodied herein, and that no other agreement, statement, premise not
contained in this Agreement shall be valid or binding.  This Agreement may not be modified or amended
by oral agreement but only by an agreement in writing signed by both the Bank and
Executive.

 9
 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and
year first above written.

	
  

  	
  MISSION COMMUNITY BANK

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ William B. Coy

  	
   

  
	
   

  	
   

  	
  William B. Coy

  
	
   

  	
  Its:

  	
  Chairman of the Board of Directors

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Roxanne Carr

  	
   

  
	
   

  	
  Its:

  	
  Vice Chairman of the Board of Directors

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  EXECUTIVE

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/ Anita M. Robinson

  	
   

  
	
   

  	
  ANITA M. ROBINSON

  
						

 

 10
 

Exhibit A

CEO INCENTIVE COMPENSATION PROGRAM

PURPOSE

The
purpose of the CEO Incentive Compensation Plan (“Plan”) is to provide an
incentive to the CEO to improve the Bank’s financial performance, and to
provide a vehicle for awarding exceptional performance.  Incentives are based on the achievement of
annual financial objectives consistent with the Bank’s long-term goals.

TERMS

For January 1, 2007 the CEO’s
benefit has been determined based on the performance set forth below against
the Bank’s approved budget.

	
  Achievement of

  Budget

  	
   

  	
  Bonus Amount

  	
   

  
	
  80%

  	
   

  	
  $

  	
  25,000

  	
   

  
	
  90%

  	
   

  	
  $

  	
  50,000

  	
   

  
	
  100%

  	
   

  	
  $

  	
  75,000

  	
   

  
	
  110%

  	
   

  	
  $

  	
  100,000

  	
   

  
	
  120%

  	
   

  	
  $

  	
  125,000

  	
   

  
	
  130%

  	
   

  	
  $

  	
  150,000

  	
   

  
	
  140%

  	
   

  	
  $

  	
  175,000

  	
   

  
	
  150%

  	
   

  	
  $

  	
  200,000

  	
   

  

 

 11
 

Exhibit B

STOCK OPTIONS

	
  Date 

  of Grant

  	
   

  	
  Option 

  Shares Granted

  	
   

  	
  Option

  Shares Unexercised

  	
   

  	
  Price

  Per Share

  	
   

  
	
  1/20/98

  	
   

  	
  2,000

  	
   

  	
  2,000

  	
   

  	
  $

  	
  10.00

  	
   

  
	
  1/20/98

  	
   

  	
  18,000

  	
   

  	
  18,000

  	
   

  	
  $

  	
  10.00

  	
   

  
	
  2/27/01

  	
   

  	
  5,000

  	
   

  	
  5,000

  	
   

  	
  $

  	
  8.25

  	
   

  

 

 12Exhibit 10.26

RIGHTNOW TECHNOLOGIES, INC.

2004
EQUITY INCENTIVE PLAN

(As Amended and Restated through June 7, 2007)

Section 1.               Purpose.  The purpose of the RightNow Technologies,
Inc. 2004 Equity Incentive Plan (the “Plan”) is to promote the interests of RightNow
Technologies, Inc. (the “Company”) and its stockholders by aiding the Company
in attracting, retaining, and providing incentives to employees, officers,
directors who are not also employees (“Non-Employee Directors”), consultants,
and independent contractors.

Section
2.               Definitions.  As used in the Plan, the following terms
shall have the meanings set forth below:

“Affiliate” shall mean (i) any entity that, directly
or indirectly through one or more intermediaries, is controlled by the Company,
and (ii) any entity in which the Company has a significant equity interest, as
determined by the Committee.

“Award” shall mean any Option, Stock Appreciation
Right, Restricted Stock, Restricted Stock Unit, Performance Award or other
Stock-Based Award granted under the Plan.

“Award
Agreement” shall mean any written agreement, contract or other instrument or
document evidencing any Award granted under the Plan.

“Code” shall mean the Internal Revenue Code of 1986,
as amended from time to time, and any regulations promulgated thereunder.

“Committee” shall mean either the Board of Directors
of the Company (the “Board”) or a committee of the Board appointed by the Board
(the “Compensation Committee”) to administer the Plan and composed of not less
than two directors, each of whom is a “Non-Employee Director” within the
meaning of Rule 16b-3 (which term “Non-Employee Director” is defined in this
paragraph for purposes of the definition of “Committee” only and is not
intended to define such term as used elsewhere in the Plan) and each of whom is
an “outside director” within the meaning of Section 162(m) of the Code.

“Eligible Person” shall mean any employee, officer,
director (including any Non-Employee Director), consultant or independent
contractor providing services or other benefits to the Company or any Affiliate
who the Committee determines to be an Eligible Person.

“Fair Market Value” shall mean, with respect to any
property (including, without limitation, any Shares or other securities), the
fair market value of such property determined by such methods or procedures as
shall be established from time to time by the Committee.  Notwithstanding the foregoing, unless
otherwise determined by the Committee, the Fair Market Value of Shares on a
given date for purposes of the Plan shall not be less than:  (i) the closing price as reported for
composite transactions, if the Shares are then listed on a national securities
exchange; (ii) the last sale price, if the Shares are then quoted on the Nasdaq
National Market; or (iii) in all other cases, the average of the closing
representative bid and asked prices of the Shares, all on the date as of which
Fair Market Value is being determined. 
If on a given date the Shares are not traded in an established
securities market, the Committee shall make a good faith attempt to satisfy the
requirements of this clause and in connection therewith shall take such action
as it deems necessary or advisable.

“Incentive Stock Option” shall mean an option granted
under Section 6(a) of the Plan that is intended to meet the requirements of
Section 422 of the Code or any successor provision.

“Non-Qualified Stock
Option” shall mean an option granted under Section 6(a) of the Plan that is not
intended to be an Incentive Stock Option.

“Option” shall mean an
Incentive Stock Option or a Non-Qualified Stock Option.

“Other Stock-Based Award”
shall mean any right granted under Section 6(e) of the Plan.

“Participant” shall mean
an Eligible Person designated to be granted an Award under the Plan.

“Performance Award” shall
mean any right granted under Section 6(d) of the Plan.

“Person” shall mean any
individual, corporation, partnership, association or trust.

“Restricted Stock” shall
mean any Share granted under Section 6(c) of the Plan.

“Restricted Stock Unit” shall mean any unit granted
under Section 6(c) of the Plan evidencing the right to receive a Share (or a
cash payment equal to the Fair Market Value of a Share) at some future date.

“Rule 16b-3” shall mean Rule 16b-3 promulgated by the
Securities and Exchange Commission under the Securities Exchange Act of 1934,
as amended.

“Shares” shall mean shares of Common Stock, $0.001 par
value, of the Company, or such other securities or property as may become
subject to Awards pursuant to an adjustment made under Section 4(c) of the
Plan.

“Stock Appreciation Right”
shall mean any right granted under Section 6(b) of the Plan.

Section
3.               Administration.

(a)           Power and Authority
of the Committee.  The Plan shall be
administered by the Compensation Committee with respect to grants to the
officers and directors of the Company and by the Board with respect to grants
to all other Eligible Persons.  The
Compensation Committee may from time to time assist the Board in administering
the Plan with respect to Eligible Persons who are not officers or directors of
the Company, or the Board may delegate such administration function entirely to
the Compensation Committee.  Subject to
the terms of the Plan and applicable law, the Committee shall have full power
and authority to:  (i) designate
Participants; (ii) determine the type or types of Awards to be granted to each
Participant under the Plan; (iii) determine the number of Shares to be covered
by (or with respect to which payments, rights or other matters are to be
calculated in connection with) each Award; (iv) determine the terms and
conditions of any Award or Award Agreement; (v) amend the terms and conditions
of any Award or Award Agreement and accelerate the exercisability of any Award
or the lapse of restrictions relating to any Award; (vi) determine whether, to
what extent and under what circumstances Awards may be exercised in cash,
Shares, other securities, other Awards or other property, or canceled,
forfeited or suspended; (vii) determine whether, to what extent and under what
circumstances cash, Shares, other securities, other Awards, other property and
other amounts payable with respect to an Award under the Plan shall be deferred
either automatically or at the election of the holder thereof or the Committee;
(viii) interpret and administer the Plan and any Award made under or instrument
or agreement, including an Award Agreement, relating to the Plan; (ix)
establish, amend, suspend or waive such rules and regulations and appoint such
agents as it shall deem appropriate for the proper administration of the Plan;
and (x) make any other determination and take any other action that the
Committee deems necessary or desirable for the administration of the Plan.  Unless otherwise expressly provided in the
Plan, all designations, determinations, interpretations and other decisions
under or with respect to the Plan or any Award shall be within the sole
discretion of the Committee, may be made at any time and shall be final,
conclusive and binding upon any Participant, any holder or beneficiary of any
Award and any employee of the Company or any Affiliate.

Section
4.               Shares
Available for Awards.

(a)           Shares
Available.  Subject to adjustment as
provided in Section 4(c), the total number of Shares available for granting
Awards and/or Incentive Stock Options under the Plan shall be 3,500,000, plus
an automatic annual increase in the total number of Shares available for
granting Awards and/or Incentive Stock Options, on the first day of each of the
Company’s fiscal years beginning in 2005 and ending in 2014, equal to the
lesser of (i) 

 2
 

1,000,000 shares of Common Stock or (ii) four percent of the number of
shares of Common Stock outstanding on the last day of the immediately preceding
fiscal year or (iii) such lesser number as determined by the Board.  Shares to be issued under the Plan may be
either authorized but unissued Shares or Shares acquired in the open market or
otherwise.  Any Shares that are used by a
Participant as full or partial payment to the Company of the purchase price
relating to an Award, or in connection with the satisfaction of tax obligations
relating to an Award, shall again be available for granting Awards under the
Plan.  If any Shares covered by an Award
or to which an Award relates are not purchased or are forfeited, or if an Award
otherwise terminates without delivery of any Shares, then the number of Shares
counted against the aggregate number of Shares available under the Plan with
respect to such Award, to the extent of any such forfeiture or termination,
shall again be available for granting Awards under the Plan.

(b)           Accounting
for Awards.  For purposes of this
Section 4, if an Award entitles the holder thereof to receive or purchase
Shares, the number of Shares covered by such Award or to which such Award
relates shall be counted on the date of grant of such Award against the
aggregate number of Shares available for granting Awards under the Plan.  Such Shares may again become available for
granting Awards under the Plan pursuant to the provisions of Section 4(a) of
the Plan, subject to the limitations set forth in Section 4(c) of the Plan.

(c)           Adjustments.  In the event that the Committee shall
determine that any dividend or other distribution (whether in the form of cash,
Shares, other securities or other property), recapitalization, stock split,
reverse stock split, reorganization, merger, consolidation, split-up, spin-off,
combination, repurchase or exchange of Shares or other securities of the
Company, issuance of warrants or other rights to purchase Shares or other
securities of the Company, or other similar corporate transaction or event
affects the Shares such that an adjustment is determined by the Committee to be
appropriate in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan, then the
Committee shall, in such manner as it may deem equitable, adjust any or all of
(i) the number and type of Shares (or other securities or other property) that
thereafter may be made the subject of Awards, (ii) the number and type of
Shares (or other securities or other property) subject to outstanding Awards,
and (iii) the purchase or exercise price with respect to any Award; provided,
however, that the number of Shares covered by any Award or to which such
Award relates shall always be a whole number.

(d)           Award
Limitations Under the Plan.  No
Eligible Person may be granted any Award or Awards, the value of which is based
solely on an increase in the value of the Shares after the date of grant of
such Awards, for more than 1,000,000 Shares, subject to adjustment as provided
in the Plan, in the aggregate in any calendar year.  The foregoing annual limitation specifically
includes the grant of any “performance-based” Awards within the meaning of
Section 162(m) of the Code.

Section
5.               Eligibility.  Any Eligible Person of the Company or any
Affiliate shall be eligible to be designated a Participant.  In determining which Eligible Persons shall
receive an Award and the terms of any Award, the Committee may take into
account the nature of the services rendered by the respective Eligible Persons,
their present and potential contributions to the success of the Company or such
other factors as the Committee, in its discretion, shall deem relevant.  Notwithstanding the foregoing, an Incentive
Stock Option may be granted only to full-time or part-time employees (which
term as used herein includes, without limitation, officers and directors who
are also employees), and an Incentive Stock Option shall not be granted to an employee
of an Affiliate unless such Affiliate is also a “subsidiary corporation” of the
Company within the meaning of Section 424(f) of the Code or any successor
provision.

Section
6.               Awards.

(a)          Options.  The Committee is hereby authorized to grant
Options to Participants with the following terms and conditions and with such
additional terms and conditions not inconsistent with the provisions of the
Plan as the Committee shall determine:

(i)             Exercise Price.  The purchase price per Share purchasable
under an Option shall be determined by the Committee; provided, however,
that the purchase price for Shares underlying Incentive Stock Options shall not
be less than 100% of the Fair Market Value of a Share on the date of grant of
such Incentive Stock Option, or 110% of the Fair Market Value of a Share on the
date of grant of such Incentive Stock Option if the 

 3
 

Participant owns directly
or indirectly greater than 10% of the Company’s outstanding capital stock.

(ii)            Option Term.  The term of each Option shall be fixed by the
Committee; provided, however, that the term shall not exceed 10
years, or, in the case of Incentive Stock Options, 5 years if the Participant
owns directly or indirectly greater than 10% of the Company’s outstanding
capital stock.

(iii)           Time and Method of
Exercise.  The Committee shall
determine the time or times at which an Option may be exercised in whole or in
part and the method or methods by which, and the form or forms (including,
without limitation, cash, Shares, other securities, other Awards or other
property, or any combination thereof, having a Fair Market Value on the
exercise date equal to the relevant exercise price) in which, payment of the
exercise price with respect thereto may be made or deemed to have been made.

(b)           Stock
Appreciation Rights.  The Committee
is hereby authorized to grant Stock Appreciation Rights to Participants subject
to the terms of the Plan and any applicable Award Agreement.  A Stock Appreciation Right granted under the
Plan shall confer on the holder thereof a right to receive upon exercise
thereof the excess of (i) the Fair Market Value of one Share on the date of
exercise (or, if the Committee shall so determine, at any time during a
specified period before or after the date of exercise) over (ii) the grant
price of the Stock Appreciation Right as specified by the Committee, which
price shall not be less than 100% of the Fair Market Value of one Share on the
date of grant of the Stock Appreciation Right. 
Subject to the terms of the Plan and any applicable Award Agreement, the
grant price, term, methods of exercise, dates of exercise, methods of
settlement and any other terms and conditions of any Stock Appreciation Right
shall be as determined by the Committee. 
The Committee may impose such conditions or restrictions on the exercise
of any Stock Appreciation Right as it may deem appropriate.

(c)           Restricted
Stock and Restricted Stock Units. 
The Committee is hereby authorized to grant Restricted Stock and
Restricted Stock Units to Participants with the following terms and conditions
and with such additional terms and conditions not inconsistent with the
provisions of the Plan as the Committee shall determine:

(i)             Restrictions.  Shares of Restricted Stock and Restricted
Stock Units shall be subject to such restrictions as the Committee may impose
(including, without limitation, any limitation on the right to vote a Share of
Restricted Stock or the right to receive any dividend or other right or
property with respect thereto), which restrictions may lapse separately or in
combination at such time or times, in such installments or otherwise as the
Committee may deem appropriate.

(ii)            Stock Certificates;
Delivery of Shares.  Any Restricted
Stock granted under the Plan shall be evidenced by issuance of a stock certificate
or certificates, which certificate or certificates shall be held by the
Company.  Such certificate or
certificates shall be registered in the name of the Participant and shall bear
an appropriate legend referring to the restrictions applicable to such
Restricted Stock.  Promptly upon the
lapse or waiver of applicable restrictions, Shares representing Restricted
Stock that is no longer subject to restrictions shall be delivered to the
holder thereof.  In the case of
Restricted Stock Units, no Shares shall be issued at the time such Awards are
granted.  Upon the lapse or waiver of
restrictions and the restricted period relating to Restricted Stock Units
evidencing the right to receive Shares, such Shares shall be issued and
delivered to the holders of the Restricted Stock Units.

(iii)           Forfeiture.  Except as otherwise determined by the
Committee, upon a Participant’s termination of employment (as determined under
criteria established by the Committee) during the applicable restriction
period, all Shares of Restricted Stock and all Restricted Stock Units held by
the Participant at such time shall be forfeited and reacquired by the Company; provided,
however, that the Committee may, when it finds that a waiver would be in
the best interest of the Company, waive in whole or in part any or all
remaining restrictions with respect to Shares of Restricted Stock or Restricted
Stock Units.

 4
 

(d)           Performance
Awards.  The Committee is hereby
authorized to grant Performance Awards to Participants subject to the terms of
the Plan and any applicable Award Agreement. 
A Performance Award granted under the Plan (i) may be denominated or
payable in cash, Shares (including, without limitation, Restricted Stock and
Restricted Stock Units), other securities, other Awards or other property and
(ii) shall confer on the holder thereof the right to receive payments, in whole
or in part, upon the achievement of such performance goals during such
performance periods as the Committee shall establish.  Subject to the terms of the Plan and any
applicable Award Agreement, the performance goals to be achieved during any
performance period, the length of any performance period, the amount of any
Performance Award granted, the amount of any payment or transfer to be made
pursuant to any Performance Award and any other terms and conditions of any
Performance Award shall be determined by the Committee.

(e)           Other
Stock-Based Awards.  The Committee is
hereby authorized to grant to Participants such other Awards that are
denominated or payable in, valued in whole or in part by reference to, or
otherwise based on or related to, Shares (including, without limitation,
securities convertible into Shares), as are deemed by the Committee to be
consistent with the purpose of the Plan; provided, however, that
such grants must comply with applicable law. 
Subject to the terms of the Plan and any applicable Award Agreement, the
Committee shall determine the terms and conditions of such Awards. Shares or
other securities delivered pursuant to a purchase right granted under this
Section 6(e) shall be purchased for such consideration, which may be paid by
such method or methods and in such form or forms (including, without
limitation, cash, Shares, other securities, other Awards or other property or
any combination thereof), as the Committee shall determine.

(f)            General.

(i)             No Cash
Consideration for Awards.  Awards
shall be granted for no cash consideration or for such minimal cash
consideration as may be required by applicable law.

(ii)            Awards May Be
Granted Separately or Together. 
Awards may, in the discretion of the Committee, be granted either alone
or in addition to, in tandem with or in substitution for any other Award or any
award granted under any plan of the Company or any Affiliate other than the
Plan.  Awards granted in addition to or
in tandem with other Awards or in addition to or in tandem with awards granted
under any such other plan of the Company or any Affiliate may be granted either
at the same time as or at a different time from the grant of such other Awards
or awards.

(iii)           Forms of Payment
under Awards.  Subject to the terms
of the Plan and of any applicable Award Agreement, payments or transfers to be
made by the Company or an Affiliate upon the grant, exercise or payment of an
Award may be made in such form or forms as the Committee shall determine
(including, without limitation, cash, Shares, other securities, other Awards or
other property or any combination thereof), and may be made in a single payment
or transfer, in installments or on a deferred basis, in each case in accordance
with rules and procedures established by the Committee.  Such rules and procedures may include,
without limitation, provisions for the payment or crediting of reasonable interest
on installment or deferred payments.

(iv)           Limits on Transfer
of Awards.  No Award and no right
under any such Award shall be transferable by a Participant otherwise than by
will or by the laws of descent and distribution; provided, however,
that, if so determined by the Committee, a Participant may, in the manner
established by the Committee, transfer Options (other than Incentive Stock
Options) or designate a beneficiary or beneficiaries to exercise the rights of
the Participant and receive any property distributable with respect to any Award
upon the death of the Participant. 
Except as otherwise provided in any applicable Award Agreement or
amendment thereto (other than an Award Agreement relating to an Incentive Stock
Option), pursuant to terms determined by the Committee, each Award or right
under any Award shall be exercisable during the Participant’s lifetime only by
the Participant or, if permissible under applicable law, by the Participant’s
guardian or legal representative.  

 5
 

Except as otherwise
provided in any applicable Award Agreement or amendment thereto (other than an
Award Agreement or amendment thereto relating to an Incentive Stock Option), no
Award or right under any such Award may be pledged, alienated, attached or
otherwise encumbered, and any purported pledge, alienation, attachment or
encumbrance thereof shall be void and unenforceable against the Company or any
Affiliate.

(v)            Term of Awards.  The term of each Award shall be for such
period as may be determined by the Committee.

(vi)           Restrictions;
Securities Exchange Listing.  All
certificates for Shares or other securities delivered under the Plan pursuant
to any Award or the exercise thereof shall be subject to such stop transfer
orders and other restrictions as the Committee may deem advisable under the
Plan or the rules, regulations and other requirements of the Securities and
Exchange Commission and any applicable federal or state securities laws, and
the Committee may cause appropriate entries to be made or legend or legends to
be affixed on any such certificates to reflect such restrictions.  If the Shares or other securities are listed
on a securities exchange, the Company shall not be required to deliver any
Shares or other securities covered by an Award unless and until such Shares or
other securities have been listed on such securities exchange.

(g)           Directors’ Options.

(i)                    Annual Grant. 
Each Non-Employee Director shall receive annually on the date of each
annual stockholders’ meeting Non-Qualified Options to purchase 15,000 Shares, provided
that such Non-Employee Director has not received an initial grant as described
in Section 6(g)(ii) below during the same calendar year.  Each chair of each committee of the Board
shall receive annually on the date of each annual stockholders’ meeting
additional Non-Qualified Options to purchase 5,000 Shares, provided that
such committee chair has not received an initial grant as described in Section
6(g)(ii) below during the same calendar year. 
The lead independent director of the Board shall receive annually on the
date of each annual stockholders’ meeting additional Non-Qualified Options to
purchase 1,000 Shares, provided that such lead independent director has
not received an initial grant as described in Section 6(g)(ii) below during the
same calendar year.  The exercise prices
for the Shares shall be the Fair Market Value of the Shares on the date of the
grants.  Each Option shall become
exercisable immediately upon grant, shall be exercisable for 10 years following
the date of grant and shall be generally subject to the terms and conditions
set forth in the Plan.

(ii)                   Initial Grant. 
Upon appointment or initial election to the Board, each Non-Employee
Director shall receive an Option to purchase 30,000 Shares.  The exercise price for the Shares shall be the
Fair Market Value of the Shares on the date of grant.  Each Option shall become exercisable in
twelve installments of 2,500 Shares every three months from the date of grant,
shall be exercisable for 10 years following the date of grant and shall be
generally subject to the terms and conditions set forth in the Plan.

(iii)                  No Limitation on Other Awards. 
The provisions of this Section 6(g) shall not prevent the Committee from
granting other and additional Awards to Non-Employee Directors, subject only to
the terms and conditions set forth in the Plan.

Section
7.               Amendment
and Termination; Adjustments.  Except
to the extent prohibited by applicable law and unless otherwise expressly
provided in an Award Agreement or in the Plan:

(a)           Amendments
to the Plan.  The Board may amend,
alter, suspend, discontinue or terminate the Plan; provided, however,
that, notwithstanding any other provision of the Plan or any Award Agreement,
without the approval of the stockholders of the Company, no such amendment,
alteration, suspension, discontinuation or termination shall be made that,
absent such stockholder approval:

 6
 

(i)             would cause Rule
16b-3 or Section 162(m) of the Code to become unavailable with respect to the
Plan;

(ii)            would violate the
rules or regulations of the Nasdaq National Market, any other securities
exchange or the National Association of Securities Dealers, Inc. that are
applicable to the Company; or

(iii)           would cause the Company
to be unable, under the Code, to grant Incentive Stock Options under the Plan.

(b)           Amendments
to Awards.  The Committee may waive
any conditions of or rights of the Company under any outstanding Award,
prospectively or retroactively.  The
Committee may not amend, alter, suspend, discontinue or terminate any
outstanding Award, prospectively or retroactively, without the consent of the
Participant or holder or beneficiary thereof, except as otherwise herein
provided or in the Award Agreement.

(c)           Correction
of Defects, Omissions and Inconsistencies. 
The Committee may correct any defect, supply any omission or reconcile
any inconsistency in the Plan or any Award in the manner and to the extent it
shall deem desirable to carry the Plan into effect.

Section 8.               Income Tax Withholding; Tax Bonuses.

(a)           Withholding.  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 ensure that all applicable federal or state payroll,
withholding, income or other taxes that are the sole and absolute
responsibility of a Participant are withheld or collected from such
Participant.  In order to assist a
Participant in paying all or a portion of the federal and state taxes to be
withheld or collected upon exercise or receipt of (or the lapse of restrictions
relating to) an Award, the Committee, in its discretion and subject to such
additional terms and conditions as it may adopt, may permit the Participant to
satisfy such tax obligation by (i) electing to have the Company withhold a
portion of the Shares otherwise to be delivered upon exercise or receipt of (or
the lapse of restrictions relating to) such Award with a Fair Market Value
equal to the amount of such taxes or (ii) delivering to the Company Shares
other than Shares issuable upon exercise or receipt of (or the lapse of restrictions
relating to) such Award with a Fair Market Value equal to the amount of such
taxes.  The election, if any, must be
made on or before the date that the amount of tax to be withheld is determined.

(b)           Tax
Bonuses.  The Committee, in its
discretion, shall have the authority, at the time of grant of any Award under
this Plan or at any time thereafter, to approve cash bonuses to designated
Participants to be paid upon their exercise or receipt of (or the lapse of
restrictions relating to) Awards in order to provide funds to pay all or a
portion of federal and state taxes due as a result of such exercise or receipt
(or the lapse of restrictions relating to) Awards in order to provide funds to
pay all or a portion of federal and state taxes due as a result of such
exercise or receipt (or the lapse of such restrictions).  The Committee shall have full authority in
its discretion to determine the amount of any such tax bonus.

Section
9.               General
Provisions.

(a)           No
Rights to Awards.  No Eligible
Person, Participant or other Person shall have any claim to be granted any
Award under the Plan, and there is no obligation for uniformity of treatment of
Eligible Persons, Participants or holders or beneficiaries of Awards under the
Plan.  The terms and conditions of Awards
need not be the same with respect to different Participants.

(b)           Award
Agreements.  No Participant will have
rights under an Award granted to such Participant unless and until an Award
Agreement shall have been duly executed on behalf of the Company.

(c)           No Rights of
Stockholders.  Except with respect to
Restricted Stock and other grants of Common Stock of the Company, neither a
Participant nor the Participant’s legal representative shall be, or shall have
any of 

 7
 

the rights and
privileges of, a stockholder of the Company in respect of any Shares issuable
upon the exercise or payment of any Award, in whole or in part, unless and
until the Shares have been issued.

(d)           No
Limit on Other Compensation Arrangements. 
Nothing contained in the Plan shall prevent the Company or any Affiliate
from adopting or continuing in effect other or additional compensation
arrangements, and such arrangements may be either generally applicable or
applicable only in specific cases.

(e)           No
Right to Employment.  The grant of an
Award shall not be construed as giving a Participant the right to be retained
in the employ, or as giving a Non-Employee Director the right to continue as a
director, of the Company or any Affiliate, nor will it affect in any way the
right of the Company or an Affiliate to terminate such employment or the term
of a Non-Employee Director at any time, with or without cause.  In addition, the Company or an Affiliate may
at any time dismiss a Participant from employment or terminate the term of a
Non-Employee Director free from any liability or any claim under the Plan,
unless otherwise expressly provided in the Plan or in any Award Agreement.

(f)            Governing
Law.  The validity, construction and
effect of the Plan and any rules and regulations relating to the Plan shall be
determined in accordance with the laws of the State of Delaware.

(g)           Severability.  If any provision of the Plan or any Award is
or becomes or is deemed to be invalid, illegal or unenforceable in any
jurisdiction or would disqualify the Plan or any Award under any law deemed
applicable by the Committee, 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 Award, such provision shall be
stricken as to such jurisdiction or Award, and the remainder of the Plan or any
such Award shall remain in full force and effect.

(h)           No
Trust or Fund Created.  Neither the
Plan nor any Award shall create or be construed to create a trust or separate
fund of any kind or a fiduciary relationship between the Company or any
Affiliate and a Participant or any other Person.  To the extent that any Person acquires a
right to receive payments from the Company or any Affiliate pursuant to an
Award, such right shall be no greater than the right of any unsecured general
creditor of the Company or any Affiliate.

(i)            No
Fractional Shares.  No fractional
Shares shall be issued or delivered pursuant to the Plan or any Award, and the
Committee shall determine whether cash shall be paid in lieu of any fractional
Share or whether such fractional Share or any rights thereto shall be canceled,
terminated or otherwise eliminated.

(j)            Headings.  Headings are given to the Sections and
subsections of the Plan 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 Plan or any
provision thereof.

(k)           Section
16 Compliance.  The Plan is intended
to comply in all respects with Rule 16b-3 or any successor provision, as in
effect from time to time, and in all events the Plan shall be construed in
accordance with the requirements of Rule 16b-3. 
If any Plan provision does not comply with Rule 16b-3 as hereafter
amended or interpreted, the provision shall be deemed inoperative.  The Board, in its absolute discretion, may
bifurcate the Plan so as to restrict, limit or condition the use of any
provision of the Plan with respect to persons who are officers or directors
subject to Section 16 of the Securities and Exchange Act of 1934, as amended,
without so restricting, limiting or conditioning the Plan with respect to other
Participants.

Section 10.             Effective Date of
the Plan.  The Plan shall be
effective as of the date (the “Effective Date”) immediately prior to the date
on which the Company’s registration statement relating to its initial public
offering of Common Stock is declared effective by the Securities and Exchange
Commission, subject to approval by the Company’s stockholders in accordance
with applicable law.

Section
11.             Term
of the Plan.  Awards shall be granted
under the Plan only during a 10-year period beginning on the Effective Date of
the Plan.  However, unless otherwise
expressly provided in the Plan or in an applicable Award Agreement, any Award
theretofore granted may extend beyond the end of such 10-year period, 

 8
 

and the authority
of the Committee provided for hereunder with respect to the Plan and any
Awards, and the authority of the Board to amend the Plan, shall extend beyond
the end of such period.

 9

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