Exhibit 10.2

MOTIVE, INC.

 

AMENDED AND RESTATED EQUITY INCENTIVE PLAN

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TABLE OF CONTENTS

 

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ARTICLE 1.   INTRODUCTION.    1 ARTICLE 2.   ADMINISTRATION.    1 2.1  
Committee Composition    1 2.2   Committee Responsibilities    1 2.3   Committee
for Non-Officer Grants    1 ARTICLE 3.   COMMON SHARES RESERVED FOR ISSUANCE.   
2 3.1   Basic Limitation    2 3.2   Annual Increase in Shares    2 3.3  
Additional Shares    2 3.4   Dividend Equivalents    2 3.5   Limitation on
Common Shares Underlying Awards    2 ARTICLE 4.   ELIGIBILITY.    2 4.1  
Incentive Stock Options    2 4.2   Other Grants    2 ARTICLE 5.   OPTIONS.    2
5.1   Stock Option Agreement    2 5.2   Number of Shares    2 5.3   Exercise
Price    3 5.4   Exercisability and Term    3 5.5   Buyout Provisions    3
ARTICLE 6.   PAYMENT FOR OPTION SHARES.    3 6.1   General Rule    3 ARTICLE 7.
  AUTOMATIC OPTION GRANTS TO OUTSIDE DIRECTORS.    3 7.1   Initial Grants    3
7.2   Annual Grants    4 7.3   Accelerated Exercisability    4 7.4   Exercise
Price    4 7.5   Term    4 ARTICLE 8.   STOCK APPRECIATION RIGHTS.    4 8.1  
SAR Agreement    4 8.2   Number of Shares    4 8.3   Exercise Price    4 8.4  
Exercisability and Term    4 8.5   Exercise of SARs    4 8.6   Payment for SARs
   5

 

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ARTICLE 9.   RESTRICTED SHARES.    5 9.1   Restricted Share Agreement    5 9.2  
Payment for Awards    5 9.3   Vesting Conditions and Term    5 9.4   Voting and
Dividend Rights    5 ARTICLE 10.   STOCK UNITS.    5 10.1   Stock Unit Agreement
   5 10.2   Payment for Awards    6 10.3   Vesting and Exercisability    6 10.4
  Voting and Dividend Rights    6 10.5   Form and Time of Settlement of Stock
Units    6 10.6   Creditors’ Rights    6 ARTICLE 11.   ADJUSTMENTS, DISSOLUTION
OR LIQUIDATION    6 11.1   Adjustments    6 11.2   Dissolution or Liquidation   
6 ARTICLE 12.   EFFECT OF CHANGE IN CONTROL    6 ARTICLE 13.   DEFERRAL OF
AWARDS    7 ARTICLE 14.   AWARDS UNDER OTHER PLANS.    7 ARTICLE 15.   PAYMENT
OF DIRECTOR’S FEES IN SECURITIES.    7 15.1   Effective Date    7 15.2  
Elections to Receive NSOs, Restricted Shares or Stock Units    7 15.3   Number
and Terms of NSOs, Restricted Shares or Stock Units    8 ARTICLE 16.  
LIMITATION ON RIGHTS.    8 16.1   Retention Rights    8 16.2   Stockholders’
Rights    8 16.3   Regulatory Requirements    8 ARTICLE 17.   WITHHOLDING TAXES.
   8 17.1   General    8 17.2   Share Withholding    8 ARTICLE 18.   FUTURE OF
THE PLAN.    8 18.1   Term of the Plan    8 18.2   Amendment or Termination    9
ARTICLE 19.   TRANSFERABILITY OF AWARDS    9 ARTICLE 20.   DEFINITIONS.    9
20.1   “Affiliate”    9 20.2   “Award”    9

 

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20.3     “Award Agreement”    9 20.4     “Board”    9 20.5     “Change in
Control”    9 20.6     “Code”    10 20.7     “Committee”    10 20.8     “Common
Share”    10 20.9     “Company”    10 20.10   “Consultant”    10 20.11  
“Disability”    10 20.12   “Effective Date”    10 20.13   “Employee”    10 20.14
  “Exchange Act”    10 20.15   “Exercise Price”    10 20.16   “Fair Market
Value”    10 20.17   “ISO”    10 20.18   “NSO”    10 20.19   “Option”    10
20.20   “Optionee”    10 20.21   “Outside Director”    11 20.22   “Parent”    11
20.23   “Participant”    11 20.24   “Permissible Assignee”    11 20.25   “Plan”
   11 20.26   “Predecessor Plan”    11 20.27   “Restricted Share”    11 20.28  
“Restricted Share Agreement”    11 20.29   “SEC”    11 20.30   “Stock
Appreciation Right” or “SAR”    11 20.31   “SAR Agreement”    11 20.32   “Stock
Option Agreement”    11 20.33   “Stock Unit”    11 20.34   “Stock Unit
Agreement”    11 20.35   “Subsidiary”    11

 

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Exhibit 10.2

 

MOTIVE, INC.

 

EQUITY INCENTIVE PLAN

 

ARTICLE 1. INTRODUCTION.

 

The Plan was adopted by the Board on November 21, 2003, and will become
effective on the effective date of the Company’s registration statement on the
Form S-1 relating to the initial public offering of its Common Shares (the
“Effective Date”). The purpose of the Plan is to promote the long-term success
of the Company and the creation of stockholder value by (a) encouraging
Employees, Outside Directors and Consultants to focus on critical long-range
objectives, (b) encouraging the attraction and retention of Employees, Outside
Directors and Consultants with exceptional qualifications and (c) linking
Employees, Outside Directors and Consultants directly to stockholder interests
through increased stock ownership. The Plan seeks to achieve this purpose by
providing for Awards in the form of Restricted Shares, Stock Units, Options
(which may constitute incentive stock options or nonstatutory stock options) or
Stock Appreciation Rights.

 

The Plan shall be governed by, and construed in accordance with, the internal
substantive laws (but not the choice of law rules) of the State of Delaware.

 

ARTICLE 2. ADMINISTRATION.

 

2.1 Committee Composition. The Plan shall be administered by the Committee. The
Committee shall consist exclusively of two or more directors of the Company, who
shall be appointed by the Board. In addition:

 

(a) To the extent desirable to qualify transactions hereunder as exempt under
Rule 16b-3, the Plan shall be administered by a Committee of two or more
“non-employee directors” within the meaning of Rule 16b-3; and

 

(b) To the extent desirable to qualify Awards granted hereunder as “performance
based compensation” within the meaning of Section 162(m) of the Code, the Plan
shall be administered by a Committee of two or more “outside directors” within
the meaning of Section 162(m) of the Code.

 

2.2 Committee Responsibilities. The Committee shall (a) select the Employees,
Outside Directors and Consultants who are to receive Awards under the Plan, (b)
determine the type, number, vesting requirements and other features and
conditions of such Awards, (c) interpret the Plan, (d) prescribe, amend and
rescind rules and regulations relating the plan, (e) modify or amend each Award
(subject to the limitation in Section 18.2 of the Plan), and (f) make all other
decisions relating to the operation of the Plan. The Committee’s determinations
under the Plan shall be final and binding on all persons.

 

2.3 Committee for Non-Officer Grants. The Board may also appoint a secondary
Committee of the Board, which shall be composed of one or more directors of the
Company who need not satisfy the requirements of Section 2.1(a) or 2.1(b). Such
secondary Committee may administer the Plan with respect to Employees and
Consultants who are not considered officers or directors of the Company under
Section 16 of the Exchange Act, may grant Awards under the Plan to such
Employees and Consultants and may determine all features and conditions of such
Awards. Within the limitations of this Section 2.3, any reference in the Plan to
the Committee shall include such secondary Committee.

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ARTICLE 3. COMMON SHARES RESERVED FOR ISSUANCE.

 

3.1 Basic Limitation. Common Shares issued pursuant to the Plan may be
authorized but unissued shares or treasury shares. The aggregate number of
Common Shares underlying Awards that are reserved for issuance under the Plan
shall not exceed (a) 1,250,000 Common Shares plus (b) the number of Common
Shares that remain available for issuance on the Effective Date under the
Predecessor Plan plus (c) the additional Common Shares described in Sections 3.2
and 3.3.

 

3.2 Annual Increase in Shares. As of January 1 of each year, commencing with the
year 2005, the aggregate number of Common Shares underlying Awards reserved for
issuance under the Plan shall automatically increase by a number equal to the
lesser of (a) 4% of the total number of Common Shares then outstanding, (b)
1,250,000 Common Shares, or (c) a lesser number of Common Shares as determined
by the Board.

 

3.3 Additional Shares. If Restricted Shares are forfeited, then such Common
Shares shall again become available for Awards under the Plan. If Stock Units,
Options, or SARs are forfeited or terminate for any reason before being
exercised, then the corresponding number of Common Shares underlying such Awards
shall again become available for Awards under the Plan. If Stock Units are
settled, then only the number of Common Shares (if any) actually issued in
settlement of such Stock Units shall reduce the number available under Section
3.1 and the balance shall again become available for Awards under the Plan. If
SARs are exercised, then only the number of Common Shares (if any) actually
issued in settlement of such SARs shall reduce the number available under
Section 3.1 and the balance shall again become available for Awards under the
Plan.

 

3.4 Dividend Equivalents. Dividend equivalents paid or credited under the Plan
in the form of cash shall not be applied against the number of Common Shares
reserved for issuance under the Plan. Dividend equivalents paid or credited in
the form of Stock Units shall count against the number of Common Shares reserved
for issuance under the Plan.

 

3.5 Limitation on Common Shares Underlying Awards. The maximum number of Common
Shares underlying all Awards granted to any Participant during any single
calendar year shall be 1,250,000 Common Shares.

 

ARTICLE 4. ELIGIBILITY.

 

4.1 Incentive Stock Options. Only Employees shall be eligible for the grant of
ISOs; provided, however, that an ISO shall not be granted on or after the 10th
anniversary of the date the Board adopts this Plan. In addition, an Employee who
owns more than 10% of the total combined voting power of all classes of
outstanding stock of the Company or any of its Parents or Subsidiaries shall not
be eligible for the grant of an ISO unless the requirements set forth in Section
422(c)(5) of the Code are satisfied.

 

4.2 Other Grants. Employees, Outside Directors and Consultants shall be eligible
for the grant of Restricted Shares, Stock Units, NSOs or SARs.

 

ARTICLE 5. OPTIONS.

 

5.1 Stock Option Agreement. Each grant of an Option under the Plan shall be
evidenced by an applicable Stock Option Agreement between the Optionee and the
Company. Such Option shall be subject to all applicable terms of the Plan and
the terms of the Stock Option Agreement (which may not be inconsistent with the
terms of the Plan). The Stock Option Agreement shall specify whether the Option
is an ISO or an NSO. The provisions of the various Stock Option Agreements
entered into under the Plan need not be identical.

 

5.2 Number of Shares. Each Stock Option Agreement shall specify the number of
Common Shares subject to the Option.

 

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5.3 Exercise Price. Each Stock Option Agreement shall specify the Exercise
Price. Notwithstanding the above, the Exercise Price under: (i) an ISO or (ii)
an NSO that is intended to qualify as “performance based compensation” under
Section 162(m) of the Code, shall in no event be less than 100% of the Fair
Market Value of the Common Share on the date of grant.

 

5.4 Exercisability and Term. Each Stock Option Agreement shall specify:

 

(a) the date or event when all or any installment of the Option is to become
exercisable;

 

(b) the term during which the Option is exercisable; provided, however, that the
term of an ISO shall in no event exceed 10 years from the date of grant; and

 

(c) the term after the Optionee’s termination of employment with the Company,
Subsidiary, Parent or Affiliate, during which the Optionee or Permissible
Assignee (if applicable) may exercise the vested portion of the Option.

 

5.5 Buyout Provisions. The Committee may at any time (a) offer to buy out for a
payment in cash or cash equivalents an Option previously granted or (b)
authorize an Optionee or Permissible Assignee (if applicable) to elect to cash
out an Option previously granted, in either case at such time and based upon
such terms and conditions as the Committee shall establish.

 

ARTICLE 6. PAYMENT FOR OPTION SHARES.

 

6.1 General Rule. The entire Exercise Price of Common Shares issued upon
exercise of Options shall be payable in the form specified in the Stock Option
Agreement. Such form of payment may include any combination of the foregoing:

 

(a) cash or cash equivalent;

 

(b) the surrender or attesting to the ownership of (and authorizing the Company
to cancel), other Common Shares owned by the Optionee (or Permissible Assignee,
if applicable) that (i) have been owned by the Optionee (or Permissible
Assignee, if applicable) for more than six months from the date of such
surrender or attestation, and (ii) have a Fair Market Value on the date of such
surrender or attestation equal to the Exercise Price;

 

(c) consideration received by the Company under a “cashless exercise” program
that is determined by the Committee to comply with the requirements of
applicable law, including the requirements of the Sarbanes-Oxley Act of 2002; or

 

(d) such other consideration and method of payment for the issuance of Common
Shares to the extent permitted under applicable laws.

 

ARTICLE 7. AUTOMATIC OPTION GRANTS TO OUTSIDE DIRECTORS.

 

7.1 Initial Grants. Each individual who first becomes an Outside Director after
the Effective Date shall at that time receive a one-time grant of an NSO
covering 60,000 Common Shares. An NSO under this Section 7.1 shall be granted on
the date when such Outside Director first joins the Board as an Outside
Director. 33.3% of the NSO will become exercisable and vested upon the
completion of 12 months of service from the date of grant and 8.33% of the NSO
will become exercisable and vested upon the completion of each successive
three-month period of service thereafter.

 

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7.2 Annual Grants. Upon the conclusion of each regular annual meeting of the
Company’s stockholders held in the year 2005 and thereafter, each Outside
Director who is an Outside Director on the date of such annual meeting, shall
receive an NSO covering 20,000 Common Shares. Notwithstanding the above, an NSO
shall not be granted to an Outside Director under this Section 7.2, if in the
same calendar year the Outside Director received an NSO described in Section
7.1. 8.33% of each NSO granted under this Section 7.2 shall become exercisable
and vested upon the completion of each successive three-month period of service
after the date of grant.

 

7.3 Accelerated Exercisability. All NSOs granted to an Outside Director under
this Article 7 shall also become exercisable and vested in full in the event of:

 

(a) The termination of such Outside Director’s service because of death or
Disability; or

 

(b) A Change in Control with respect to the Company.

 

7.4 Exercise Price. The Exercise Price under all NSOs granted to an Outside
Director under this Article 7 shall be equal to 100% of the Fair Market Value of
a Common Share on the date of grant, payable in one of the forms described in
Article 6.

 

7.5 Term. All NSOs granted to an Outside Director under this Article 7 shall
terminate on the earliest of (a) the 7th anniversary of the date of grant, or
(b) the date 12 months after the termination of such Outside Director’s service
for any reason.

 

ARTICLE 8. STOCK APPRECIATION RIGHTS.

 

8.1 SAR Agreement. Each grant of an SAR under the Plan shall be evidenced by an
SAR Agreement between the Optionee and the Company. Such SAR shall be subject to
all applicable terms of the Plan and the terms of the SAR Agreement (which may
not be inconsistent with the terms of the Plan). The provisions of the various
SAR Agreements entered into under the Plan need not be identical.

 

8.2 Number of Shares. Each SAR Agreement shall specify the number of Common
Shares to which the SAR pertains.

 

8.3 Exercise Price. Each SAR Agreement shall specify the Exercise Price;
provided, however, that if an SAR is intended to qualify as “performance based
compensation” under Section 162(m) of the Code, such SAR shall have an Exercise
Price equal to the Fair Market Value of the Common Shares underlying the SAR on
the date of grant.

 

8.4 Exercisability and Term. SARs may be awarded alone or in tandem with
Options. If SARs are granted in tandem with Options, the SARs shall not be
exercisable unless the related Options are forfeited and cancelled. Each SAR
Agreement shall specify:

 

(a) the date when all or any installment of the SAR is to become exercisable;

 

(b) the term during which an SAR is exercisable; and

 

(c) the term after the Optionee’s termination of employment with the Company,
Subsidiary, Parent or Affiliate, during which the Optionee (or Permissible
Assignee, if applicable) may exercise the vested portion of his or her SAR.

 

8.5 Exercise of SARs. Upon exercise of an SAR, the Optionee (or Permissible
Assignee, if applicable) shall receive from the Company (a) Common Shares, (b)
cash or (c) a combination of Common Shares

 

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and cash, as the Committee shall determine. The amount of cash and/or the Fair
Market Value of Common Shares received upon exercise of an SAR shall, in the
aggregate, be equal to the amount by which the Fair Market Value (on the date of
exercise) of the Common Shares subject to the SAR exceed the Exercise Price. If,
on the date when an SAR expires, the Exercise Price under such SAR is less than
the Fair Market Value on such date but any portion of such SAR has not been
exercised, then such SAR shall automatically be deemed to be exercised as of
such date with respect to such portion.

 

8.6 Payment for SARs. The entire Exercise Price of an SAR shall be payable in
the form specified in the SAR Agreement. Such form of payment may include any
combination of the following:

 

(a) cash or cash equivalent;

 

(b) the surrender or attesting to the ownership of (and authorizing the Company
to cancel), other Common Shares owned by the Optionee (or Permissible Assignee,
if applicable) that (i) have been owned by the Optionee (or Permissible
Assignee, if applicable) for more than six months from the date of such
surrender or attestation, and (ii) have a Fair Market Value on the date of such
surrender or attestation equal to the Exercise Price; or

 

(c) such other consideration and method of payment for the issuance of Common
Shares to the extent permitted under applicable laws.

 

ARTICLE 9. RESTRICTED SHARES.

 

9.1 Restricted Share Agreement. Each grant of Restricted Shares under the Plan
shall be evidenced by an applicable Restricted Share Agreement between the
Participant and the Company. Such Restricted Shares shall be subject to all
terms of the Plan and the Restricted Share Agreement (which shall not be
inconsistent with the terms of the Plan). The provisions of the various
Restricted Share Agreements entered into under the Plan need not be identical.

 

9.2 Payment for Awards. Restricted Shares may be sold or awarded under the Plan
for such consideration as the Committee may determine, which consideration shall
be specified in the Restricted Share Agreement; provided however, that in all
cases, at least the par value of the Restricted Shares awarded or sold shall be
paid in cash or a cash equivalent.

 

9.3 Vesting Conditions and Term. As specified in the applicable Restricted Share
Agreement, each Award of Restricted Shares may or may not be subject to vesting.
If the Restricted Shares are subject to vesting, vesting shall occur, in full or
in installments, upon satisfaction of the conditions specified in the Restricted
Share Agreement.

 

9.4 Voting and Dividend Rights. Except as otherwise provided in the Restricted
Share Agreement, the holders of Restricted Shares awarded under the Plan shall
have the same voting, dividend and other rights as the Company’s other
stockholders. A Restricted Share Agreement may require that the holders of
Restricted Shares invest any cash dividends received in additional Restricted
Shares. Such additional Restricted Shares shall be subject to the same
conditions and restrictions as the Award with respect to which the dividends
were paid.

 

ARTICLE 10. STOCK UNITS.

 

10.1 Stock Unit Agreement. Each grant of Stock Units under the Plan shall be
evidenced by a Stock Unit Agreement between the recipient and the Company. Such
Stock Units shall be subject to all applicable terms of the Plan and the
applicable Stock Unit Agreement (which shall not be inconsistent with the terms
of the Plan). The provisions of the various Stock Unit Agreements entered into
under the Plan need not be identical.

 

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10.2 Payment for Awards. To the extent that an Award is granted in the form of
Stock Units, no cash consideration shall be required of the Award recipient.

 

10.3 Vesting and Exercisability. Each Award of Stock Units may be subject to
vesting as provided in the Stock Unit Agreement. Each Stock Unit Agreement shall
also specify the term of such Stock Unit grant, and the period that the
Participant (or Permissible Assignee, if applicable) may settle the vested
portion of the Stock Unit following the termination of the Participant’s
employment with the Company, a Parent, Subsidiary or Affiliate.

 

10.4 Voting and Dividend Rights. The holders of Stock Units shall have no voting
rights. Prior to settlement or forfeiture, any Stock Unit awarded under the Plan
may, at the Committee’s discretion, carry with it a right to dividend
equivalents. Such right entitles the holder to be credited with an amount equal
to all cash dividends paid on one Common Share while each Stock Unit is
outstanding. Dividend equivalents may be converted into additional Stock Units.
Settlement of dividend equivalents may be made in the form of cash, in the form
of Common Shares, or in a combination of both. Prior to distribution, any
dividend equivalents that are not paid shall be subject to the same conditions
and restrictions as the Stock Units to which they attach.

 

10.5 Form and Time of Settlement of Stock Units. Settlement of vested Stock
Units may be made in the form of (a) cash, (b) Common Shares or (c) any
combination of both, as determined by the Committee. The actual number of Stock
Units eligible for settlement may be larger or smaller than the number included
in the original Award, based on predetermined performance factors. Methods of
converting Stock Units into cash may include (without limitation) a method based
on the average Fair Market Value of Common Shares over a series of trading days.
Vested Stock Units may be settled in a lump sum or in installments. The
distribution may occur or commence when all vesting conditions applicable to the
Stock Units have been satisfied or have lapsed, or it may be deferred to any
later date. The amount of a deferred distribution may be increased by an
interest factor or by dividend equivalents.

 

10.6 Creditors’ Rights. A holder of Stock Units shall have no rights other than
those of a general creditor of the Company. Stock Units represent an unfunded
and unsecured obligation of the Company, subject to the terms and conditions of
the applicable Stock Unit Agreement.

 

ARTICLE 11. ADJUSTMENTS, DISSOLUTION OR LIQUIDATION

 

11.1 Adjustments. In the event that any dividend or other distribution (whether
in the form of cash, Common Shares, other securities, or other property),
recapitalization, stock-split, reverse stock split, reorganization, merger,
consolidation, split-up, spin-off, combination, repurchase, or exchange of
Common Shares or other securities of the Company, or other change in the
corporate structure of the Company affecting the Common Shares such that an
adjustment is determined by the Committee (in its sole discretion) to be
appropriate in order to prevent dilution or enlargement of benefits or potential
benefits intended to be made available under the Plan, then the Committee shall,
in such manner as it deems equitable, adjust the number and class of Common
Shares which are reserved for issuance under the Plan, the number, class, and
price of Common Shares covered by each outstanding Award, and the numerical
share limits in Sections 3.1, 3.2, 5.2, 7.1, 7.2 and 8.2.

 

11.2 Dissolution or Liquidation. In the event of the proposed dissolution or
liquidation of the Company, the Committee shall notify each recipient of an
Award as soon as practicable prior to the effective date of such proposed
transaction. To the extent it has not been previously exercised or settled,
Options, SARs and Stock Units shall terminate immediately prior to the
dissolution or liquidation of the Company.

 

ARTICLE 12. EFFECT OF CHANGE IN CONTROL. In the event of a Change in Control,
each outstanding Award shall be assumed or an equivalent Award substituted by
the successor corporation or a Parent or Subsidiary of the successor
corporation. In the event that the successor corporation refuses to assume or
substitute for the Award, the Award shall be fully vested and the recipient of
such Award shall have the right to exercise the Award as to all of the Common
Shares underlying the Award, including that portion of the Award which would not
otherwise be vested or exercisable. If an Award becomes fully vested and
exercisable in lieu of

 

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assumption or substitution in the event of a Change in Control, the Committee
shall notify the recipient of an Award in writing or electronically that the
Award shall be fully vested and exercisable (subject to the consummation of the
Change of Control) for a period of 15 days from the date of such notice, and the
Award shall terminate upon the expiration of such period. For purposes of this
Section, an Award shall be considered assumed if, following the Change in
Control, the assumed Award confers the right to purchase or receive, for each
Common Share underlying such assumed Award immediately prior to the Change in
Control, the consideration (whether stock, cash, or other securities or
property) received in the Change in Control by holders of Common Shares for each
Common Share held on the effective date of the transaction (and if holders were
offered a choice of consideration, the type of consideration chosen by the
holders of a majority of the outstanding Shares); provided, however, that if
such consideration received in the Change in Control is not solely common stock
of the successor corporation or its Parent, the Committee may, with the consent
of the successor corporation, provide for the consideration to be received upon
the exercise of an Award, to be solely common stock of the successor corporation
or its Parent equal in Fair Market Value to the per share consideration received
by holders of Common Shares the Change in Control.

 

ARTICLE 13. DEFERRAL OF AWARDS. The Committee (in its sole discretion) may
permit or require a Participant to:

 

(a) Have cash that otherwise would be paid to such Participant as a result of
the exercise of an SAR or the settlement of Stock Units credited to a deferred
compensation account established for such Participant by the Committee as an
entry on the Company’s books;

 

(b) Have Common Shares that otherwise would be delivered to such Participant as
a result of the exercise of an Option or SAR converted into an equal number of
Stock Units; or

 

(c) Have Common Shares that otherwise would be delivered to such Participant as
a result of the exercise of an Option or SAR or the settlement of Stock Units
converted into amounts credited to a deferred compensation account established
for such Participant by the Committee as an entry on the Company’s books. Such
amounts shall be determined by reference to the Fair Market Value of such Common
Shares as of the date when they otherwise would have been delivered to such
Participant.

 

A deferred compensation account established under this Article 13 may be
credited with interest or other forms of investment return, as determined by the
Committee. A Participant for whom such an account is established shall have no
rights other than those of a general creditor of the Company. Such an account
shall represent an unfunded and unsecured obligation of the Company and shall be
subject to the terms and conditions of the applicable agreement between such
Participant and the Company. If the deferral or conversion of Awards is
permitted or required, the Committee (in its sole discretion) may establish
rules, procedures and forms pertaining to such Awards, including (without
limitation) the settlement of deferred compensation accounts established under
this Article 13.

 

ARTICLE 14. AWARDS UNDER OTHER PLANS.

 

The Company may grant equity awards under other plans, agreements, or programs.
Such awards may be settled in the form of Common Shares issued under this Plan.
Such Common Shares shall be treated for all purposes under the Plan like Common
Shares issued in settlement of Stock Units and shall, when issued, reduce the
number of Common Shares available under Article 3.

 

ARTICLE 15. PAYMENT OF DIRECTOR’S FEES IN SECURITIES.

 

15.1 Effective Date. No provision of this Article 15 shall be effective unless
and until the Board has determined to implement such provision.

 

15.2 Elections to Receive NSOs, Restricted Shares or Stock Units. An Outside
Director may elect to receive his or her annual retainer payments and/or meeting
fees from the Company in the form of cash,

 

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NSOs, Restricted Shares or Stock Units, or a combination thereof, as determined
by the Board. Such NSOs, Restricted Shares and Stock Units shall be issued under
the Plan. An election under this Article 15 shall be made at the beginning of a
calendar year on a date and in a manner to be determined by the Board. Such an
election shall be irrevocable with respect to the calendar year for which the
election is made.

 

15.3 Number and Terms of NSOs, Restricted Shares or Stock Units. The number of
NSOs, Restricted Shares or Stock Units to be granted to Outside Directors in
lieu of annual retainers and meeting fees that would otherwise be paid in cash
shall be calculated in a manner determined by the Board. The terms of such NSOs,
Restricted Shares or Stock Units shall also be determined by the Board.

 

ARTICLE 16. LIMITATION ON RIGHTS.

 

16.1 Retention Rights. Neither the Plan nor any Award granted under the Plan
shall be deemed to give any individual a right to remain an Employee, Outside
Director or Consultant. The Company and its Parents, Subsidiaries and Affiliates
reserve the right to terminate the service of any Employee, Outside Director or
Consultant at any time, with or without cause, subject to applicable laws, the
Company’s certificate of incorporation and by-laws and any applicable written
employment agreement.

 

16.2 Stockholders’ Rights. A Participant shall have no dividend rights, voting
rights or other rights as a stockholder with respect to any Common Shares
covered by his or her Award prior to the time when a stock certificate for such
Common Shares is issued or, if applicable, the time when he or she becomes
entitled to receive such Common Shares by filing any required notice of exercise
and paying any required Exercise Price. No adjustment shall be made for cash
dividends or other rights for which the record date is prior to such time,
except as expressly provided in the Plan.

 

16.3 Regulatory Requirements. Any other provision of the Plan notwithstanding,
the obligation of the Company to issue Common Shares under the Plan shall be
subject to all applicable laws, rules and regulations and such approval by any
regulatory body as may be required. The Company reserves the right to restrict,
in whole or in part, the delivery of Common Shares pursuant to any Award prior
to the satisfaction of all legal requirements relating to the issuance of such
Common Shares, to their registration, qualification or listing or to an
exemption from registration, qualification or listing.

 

ARTICLE 17. WITHHOLDING TAXES.

 

17.1 General. To the extent required by applicable Federal, state, local or
foreign law, a Participant, Permissible Assignee (if applicable), or successor
shall make arrangements satisfactory to the Company for the satisfaction of any
withholding tax obligations that arise in connection with the Plan. The Company
shall not be required to issue any Common Shares or make any cash payment under
the Plan until such obligations are satisfied.

 

17.2 Share Withholding. To the extent that applicable law subjects a
Participant, Permissible Assignee (if applicable), or successor to tax
withholding obligations, the Committee may permit such Participant to satisfy
all or part of such obligations by having the Company withhold all or a portion
of any Common Shares that otherwise would be issued to him or her or by
surrendering all or a portion of any Common Shares that he or she previously
acquired; provided, however, that such withholding shall be allowed only to the
extent that it does not trigger adverse financial accounting consequences to the
Company. Such Common Shares shall be valued at their Fair Market Value on the
date when they are withheld or surrendered.

 

ARTICLE 18. FUTURE OF THE PLAN.

 

18.1 Term of the Plan. The Plan, as set forth herein, shall become effective on
the Effective Date and shall remain in existence until the 10th anniversary of
the Effective Date, unless sooner terminated by the Board as provided in Section
18.2 below.

 

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18.2 Amendment or Termination. The Board may, at any time and for any reason,
amend or terminate the Plan. An amendment of the Plan shall be subject to the
approval of the Company’s stockholders only to the extent required by applicable
laws, regulations or rules. No Awards shall be granted under the Plan after the
termination thereof. The termination of the Plan, or any amendment thereof,
shall not adversely affect any Award previously granted under the Plan without
the consent of the Participant.

 

ARTICLE 19. TRANSFERABILITY OF AWARDS. Unless explicitly provided for in the
applicable Award Agreement, an Award may not be sold, pledged, assigned,
transferred or disposed of in any manner other than by will or the laws of
descent and distribution and may be exercised, during the lifetime of the
Participant, only by the Participant. Notwithstanding the preceding sentence,
the Committee, in its sole and absolute discretion may provide for the
transferability of an Award in the specific Award Agreement, but only to the
extent that the transferee of such an Award is a Permissible Transferee.

 

ARTICLE 20. DEFINITIONS.

 

20.1 “Affiliate” means any entity other than a Subsidiary, if the Company and/or
one or more Subsidiaries own not less than 50% of the voting securities of such
entity.

 

20.2 “Award” means any award of an Option, an SAR, a Restricted Share or a Stock
Unit under the Plan.

 

20.3 “Award Agreement” means individually or collectively, a Stock Option
Agreement, a Restricted Share Agreement, a Stock Appreciation Right Agreement,
or a Stock Unit Agreement.

 

20.4 “Board” means the Company’s Board of Directors, as constituted from time to
time.

 

20.5 “Change in Control” shall mean:

 

(a) The consummation of a merger or consolidation of the Company with or into
another entity or any other corporate reorganization, if persons who were not
stockholders of the Company immediately prior to such merger, consolidation or
other reorganization beneficially own immediately after such merger,
consolidation or other reorganization 50% or more of the voting power of the
outstanding securities of each of (i) the continuing or surviving entity and
(ii) any direct or indirect parent corporation of such continuing or surviving
entity;

 

(b) The sale, transfer or other disposition of all or substantially all of the
Company’s assets;

 

(c) A change in the composition of the Board, as a result of which fewer than
50% of the incumbent directors are directors who either (i) had been directors
of the Company on the date 24 months prior to the date of the event that may
constitute a Change in Control (the “original directors”) or (ii) were elected,
or nominated for election, to the Board with the affirmative votes of at least a
majority of the aggregate of the original directors who were still in office at
the time of the election or nomination and the directors whose election or
nomination was previously so approved; or

 

(d) Any transaction as a result of which any person is the “beneficial owner”
(as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing at least 50% of the total voting power
represented by the Company’s then outstanding voting securities. For purposes of
this Paragraph (d), the term “person” shall have the same meaning as when used
in Sections 13(d) and 14(d) of the Exchange Act but shall exclude (i) a trustee
or other fiduciary holding securities under an employee benefit plan of the
Company or of a Parent or Subsidiary and (ii) a corporation owned directly or
indirectly by the stockholders of the Company in substantially the same
proportions as their ownership of the Common Shares of the Company.

 

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A transaction shall not constitute a Change in Control if its sole purpose is to
change the state of the Company’s incorporation or to create a holding company
that will be owned in substantially the same proportions by the persons who held
the Company’s securities immediately before such transaction.

 

20.6 “Code” means the Internal Revenue Code of 1986, as amended.

 

20.7 “Committee” means a committee of the Board, as described in Article 2.

 

20.8 “Common Share” means one share of the common stock of the Company, par
value $.001 per share.

 

20.9 “Company” means Motive, Inc., a Delaware corporation.

 

20.10 “Consultant” means a natural person who provides bona fide services to the
Company, a Parent, a Subsidiary or an Affiliate as an independent contractor.
Service as a Consultant shall be considered employment for all purposes of the
Plan, except as provided in Section 4.1.

 

20.11 “Disability” shall mean permanent and total disability as defined in
Section 22(e)(3) of the Code.

 

20.12 “Effective Date” has the meaning set forth in Article I of the Plan.

 

20.13 “Employee” means a common-law employee of the Company, a Parent, a
Subsidiary or an Affiliate.

 

20.14 “Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

20.15 “Exercise Price” in the case of an Option, means the amount for which one
Common Share may be purchased upon exercise of such Option, as specified in the
applicable Stock Option Agreement. “Exercise Price,” in the case of an SAR,
means an amount, as specified in the applicable SAR Agreement, which is
subtracted from the Fair Market Value of one Common Share in determining the
amount payable upon exercise of such SAR.

 

20.16 “Fair Market Value” means the market price of Common Shares, determined by
the Committee in good faith on such basis as it deems appropriate. Whenever
possible, the determination of Fair Market Value by the Committee shall be based
on the prices reported in The Wall Street Journal or as reported directly to the
Company by The NASDAQ Stock Market, or a stock exchange. Such determination
shall be conclusive and binding on all persons.

 

20.17 “ISO” means an incentive stock option described in Section 422(b) of the
Code.

 

20.18 “NSO” means a stock option not described in Sections 422 of the Code.

 

20.19 “Option” means an ISO or NSO granted under the Plan and entitling the
holder to purchase Common Shares pursuant to Articles 5 and 7 of the Plan.

 

20.20 “Optionee” means a person or estate who holds an Option or SAR.

 

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20.21 “Outside Director” shall mean a member of the Board who is not an
Employee. Service as an Outside Director shall be considered employment for all
purposes of the Plan, except as provided in Section 4.1.

 

20.22 “Parent” means any corporation (other than the Company) in an unbroken
chain of corporations ending with the Company, if each of the corporations other
than the Company owns stock possessing 50% or more of the total combined voting
power of all classes of stock in one of the other corporations in such chain. A
corporation that attains the status of a Parent on a date after the adoption of
the Plan shall be considered a Parent commencing as of such date.

 

20.23 “Participant” means an Employee, Consultant, or Outside Director, who
holds an Award under the terms of the Plan.

 

20.24 “Permissible Assignee” means an individual or entity designated in the
applicable Award Agreement, to which the Participant has properly assigned an
Award. For purposes of this Plan and applicable Award Agreements, a Permissible
Assignee must be an individual or entity as to which the underlying Common
Shares shall be eligible for registration under the Securities Act of 1933 on a
form S-8 registration statement promulgated by the SEC.

 

20.25 “Plan” means this Motive, Inc. Equity Incentive Plan, as amended from time
to time.

 

20.26 “Predecessor Plan” means the Company’s 1997 Stock Option/Stock Issuance
Plan.

 

20.27 “Restricted Share” means a Common Share awarded under the Plan pursuant to
Article 9 of the Plan.

 

20.28 “Restricted Share Agreement” means the agreement between the Company and
the recipient of a Restricted Share that contains the terms, conditions and
restrictions pertaining to such Restricted Share.

 

20.29 “SEC” means the U.S. Securities and Exchange Commission.

 

20.30 “Stock Appreciation Right” or “SAR” means a stock appreciation right
granted under the Plan pursuant to Article 8 of the Plan.

 

20.31 “SAR Agreement” means the agreement between the Company and an Optionee
that contains the terms, conditions and restrictions pertaining to his or her
SAR.

 

20.32 “Stock Option Agreement” means the agreement between the Company and an
Optionee that contains the terms, conditions and restrictions pertaining to his
or her Option.

 

20.33 “Stock Unit” means a bookkeeping entry representing the equivalent of one
Common Share, as awarded under the Plan pursuant to Article 10 of the Plan.

 

20.34 “Stock Unit Agreement” means the agreement between the Company and the
recipient of a Stock Unit that contains the terms, conditions and restrictions
pertaining to such Stock Unit.

 

20.35 “Subsidiary” means any corporation (other than the Company) in an unbroken
chain of corporations beginning with the Company, if each of the corporations
other than the last corporation in the unbroken chain owns stock possessing 50%
or more of the total combined voting power of all classes of stock in one of the
other corporations in such chain. A corporation that attains the status of a
Subsidiary on a date after the adoption of the Plan shall be considered a
Subsidiary commencing as of such date.

 

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