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                                                               EXIBIT 10.3







                                 SELECTICA, INC.

                        1999 EMPLOYEE STOCK PURCHASE PLAN



                         (AS ADOPTED NOVEMBER 18, 1999)







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                                TABLE OF CONTENTS
                                -----------------

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                                                                              Page
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<S>                                                                          <C>
SECTION 1.  PURPOSE OF THE PLAN................................................1

SECTION 2.  ADMINISTRATION OF THE PLAN.........................................1
   (a)  Committee Composition..................................................1
   (b)  Committee Responsibilities.............................................1

SECTION 3.  ENROLLMENT AND PARTICIPATION.......................................1
   (a)  Offering Periods.......................................................1
   (b)  Accumulation Periods...................................................1
   (c)  Enrollment.............................................................1
   (d)  Duration of Participation..............................................1
   (e)  Applicable Offering Period.............................................2

SECTION 4.  EMPLOYEE CONTRIBUTIONS.............................................2
   (a)  Frequency of Payroll Deductions........................................2
   (b)  Amount of Payroll Deductions...........................................2
   (c)  Changing Withholding Rate..............................................2
   (d)  Discontinuing Payroll Deductions.......................................3
   (e)  Limit on Number of Elections...........................................3

SECTION 5.  WITHDRAWAL FROM THE PLAN........................ ..................3
   (a)  Withdrawal.............................................................3
   (b)  Re-Enrollment After Withdrawal.........................................3

SECTION 6.  CHANGE IN EMPLOYMENT STATUS........................................3
   (a)  Termination of Employment..............................................3
   (b)  Leave of Absence.......................................................3
   (c)  Death..................................................................3

SECTION 7.  PLAN ACCOUNTS AND PURCHASE OF SHARES...............................4
   (a)  Plan Accounts..........................................................4
   (b)  Purchase Price.........................................................4
   (c)  Number of Shares Purchased.............................................4
   (d)  Available Shares Insufficient..........................................4
   (e)  Issuance of Stock......................................................4
   (f)  Unused Cash Balances...................................................5
   (g)  Stockholder Approval...................................................5

SECTION 8.  LIMITATIONS ON STOCK OWNERSHIP.....................................5
   (a)  Five Percent Limit.....................................................5
   (b)  Dollar Limit...........................................................5
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<TABLE>
<S>                                                                          <C>
SECTION 9.  RIGHTS NOT TRANSFERABLE............................................6

SECTION 10.  NO RIGHTS AS AN EMPLOYEE..........................................6

SECTION 11.  NO RIGHTS AS A STOCKHOLDER...................................... .6

SECTION 12.  SECURITIES LAW REQUIREMENTS.......................................6

SECTION 13.  STOCK OFFERED UNDER THE PLAN......................................7
    (a)  Authorized Shares.....................................................7
    (b)  Anti-Dilution Adjustments.............................................7
    (c)  Reorganizations.......................................................7

SECTION 14.  AMENDMENT OR DISCONTINUANCE.......................................7

SECTION 15.  DEFINITIONS.......................................................7
    (a)  Accumulation Period...................................................7
    (b)  Board.................................................................7
    (c)  Code 7
    (d)  Committee.............................................................7
    (e)  Company...............................................................8
    (f)  Compensation..........................................................8
    (g)  Corporate Reorganization..............................................8
    (h)  Eligible Employee.....................................................8
    (i)  Exchange Act..........................................................8
    (j)  Fair Market Value.....................................................8
    (k)  IPO  9
    (l)  Offering Period.......................................................9
    (m)  Participant...........................................................9
    (n)  Participating Company.................................................9
    (o)  Plan 9
    (p)  Plan Account..........................................................9
    (q)  Purchase Price........................................................9
    (r)  Stock.................................................................9
    (s)  Subsidiary............................................................9
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                                 SELECTICA, INC.
                        1999 EMPLOYEE STOCK PURCHASE PLAN


SECTION 1.        PURPOSE OF THE PLAN.

        The Plan was adopted by the Board effective as of the date of the IPO.
The purpose of the Plan is to provide Eligible Employees with an opportunity to
increase their proprietary interest in the success of the Company by purchasing
Stock from the Company on favorable terms and to pay for such purchases through
payroll deductions. The Plan is intended to qualify under section 423 of the
Code.

SECTION 2.        ADMINISTRATION OF THE PLAN.

     (a)    COMMITTEE COMPOSITION. The Plan shall be administered by the
Committee. The Committee shall consist exclusively of one or more directors of
the Company, who shall be appointed by the Board.

     (b)    COMMITTEE RESPONSIBILITIES. The Committee shall interpret the Plan
and make all other policy decisions relating to the operation of the Plan. The
Committee may adopt such rules, guidelines and forms as it deems appropriate to
implement the Plan. The Committee's determinations under the Plan shall be final
and binding on all persons.

SECTION 3.  ENROLLMENT AND PARTICIPATION.

     (a)    OFFERING PERIODS. While the Plan is in effect, two overlapping
Offering Periods shall commence in each calendar year. The Offering Periods
shall consist of the 24-month periods commencing on each May 1 and November 1,
except that the first Offering Period shall commence on the date of the IPO and
end on April 30, 2002.

     (b)    ACCUMULATION PERIODS. While the Plan is in effect, two Accumulation
Periods shall commence in each calendar year. The Accumulation Periods shall
consist of the six-month periods commencing on each May 1 and November 1, except
that the first Accumulation Period shall commence on the date of the IPO and end
on October 31, 2000.

     (c)    ENROLLMENT. Any individual who, on the day preceding the first day
of an Offering Period, qualifies as an Eligible Employee may elect to become a
Participant in the Plan for such Offering Period by executing the enrollment
form prescribed for this purpose by the Committee. The enrollment form shall
generally be filed with the Company at the prescribed location not later than 15
days prior to the commencement of such Offering Period.

     (d)    DURATION OF PARTICIPATION. Once enrolled in the Plan, a Participant
shall continue to participate in the Plan until he or she ceases to be an
Eligible Employee, withdraws from the Plan under Section 5(a) or reaches the end
of the Accumulation Period in which his or her employee contributions were
discontinued under Section 4(d) or 8(b). A Participant who

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discontinued employee contributions under Section 4(d) or withdrew from the Plan
under Section 5(a) may again become a Participant, if he or she then is an
Eligible Employee, by following the procedure described in Subsection (c) above.
A Participant whose employee contributions were discontinued automatically under
Section 8(b) shall automatically resume participation at the beginning of the
earliest Accumulation Period ending in the next calendar year, if he or she then
is an Eligible Employee.



   (e)      APPLICABLE OFFERING PERIOD. For purposes of calculating the Purchase
Price under Section 7(b), the applicable Offering Period shall be determined as
follows:

            (i)     Once a Participant is enrolled in the Plan for an Offering
Period, such Offering Period shall continue to apply to him or her until the
earliest of (A) the end of such Offering Period, (B) the end of his or her
participation under Subsection (d) above or (C) re-enrollment for a subsequent
Offering Period under Paragraph (ii) or (iii) below.

            (ii)    In the event that the Fair Market Value of Stock on the last
trading day before the commencement of the Offering Period for which the
Participant is enrolled is higher than on the last trading day before the
commencement of any subsequent Offering Period, the Participant shall
automatically be re-enrolled for such subsequent Offering Period.

            (iii)   Any other provision of the Plan notwithstanding, the Company
(at its sole discretion) may determine prior to the commencement of any new
Offering Period that all Participants shall be re-enrolled for such new Offering
Period.

            (iv)    When a Participant reaches the end of an Offering Period but
his or her participation is to continue, then such Participant shall
automatically be re-enrolled for the Offering Period that commences immediately
after the end of the prior Offering Period.

SECTION 4.  EMPLOYEE CONTRIBUTIONS.

    (a)   FREQUENCY OF PAYROLL DEDUCTIONS. A Participant may purchase shares
of Stock under the Plan solely by means of payroll deductions. Payroll
deductions, as designated by the Participant pursuant to Subsection (b) below,
shall occur on each payday during participation in the Plan.

    (b)   AMOUNT OF PAYROLL DEDUCTIONS. An Eligible Employee shall designate
on the enrollment form the portion of his or her Compensation that he or she
elects to have withheld for the purchase of Stock. Such portion shall be a whole
percentage of the Eligible Employee's Compensation, but not less than 1% nor
more than 15%.

    (c)   CHANGING WITHHOLDING RATE. If a Participant wishes to change the
rate of payroll withholding, he or she may do so by filing a new enrollment form
with the Company at the prescribed location at any time. The new withholding
rate shall be effective as soon as


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reasonably practicable after such form has been received by the Company.
The new withholding rate shall be a whole percentage of the Eligible Employee's
Compensation, but not less than 1% nor more than 15%.

    (d)   DISCONTINUING PAYROLL DEDUCTIONS. If a Participant wishes to
discontinue employee contributions entirely, he or she may do so by filing a new
enrollment form with the Company at the prescribed location at any time. Payroll
withholding shall cease as soon as reasonably practicable after such form has
been received by the Company. (In addition, employee contributions may be
discontinued automatically pursuant to Section 8(b).) A Participant who has
discontinued employee contributions may resume such contributions by filing a
new enrollment form with the Company at the prescribed location. Payroll
withholding shall resume as soon as reasonably practicable after such form has
been received by the Company.

    (e)   LIMIT ON NUMBER OF ELECTIONS. No Participant shall make more than
two elections under Subsection (c) or (d) above during any Accumulation Period.

SECTION 5.  WITHDRAWAL FROM THE PLAN.

    (a)   WITHDRAWAL. A Participant may elect to withdraw from the Plan by
filing the prescribed form with the Company at the prescribed location at any
time before the last day of an Accumulation Period. As soon as reasonably
practicable thereafter, payroll deductions shall cease and the entire amount
credited to the Participant's Plan Account shall be refunded to him or her in
cash, without interest. No partial withdrawals shall be permitted.

    (b)   RE-ENROLLMENT AFTER WITHDRAWAL. A former Participant who has
withdrawn from the Plan shall not be a Participant until he or she re-enrolls in
the Plan under Section 3(c). Re-enrollment may be effective only at the
commencement of an Offering Period.

SECTION 6.  CHANGE IN EMPLOYMENT STATUS.

    (a)   TERMINATION OF EMPLOYMENT. Termination of employment as an Eligible
Employee for any reason, including death, shall be treated as an automatic
withdrawal from the Plan under Section 5(a). (A transfer from one Participating
Company to another shall not be treated as a termination of employment.)

    (b)   LEAVE OF ABSENCE. For purposes of the Plan, employment shall not be
deemed to terminate when the Participant goes on a military leave, a sick leave
or another bona fide leave of absence, if the leave was approved by the Company
in writing. Employment, however, shall be deemed to terminate 90 days after the
Participant goes on a leave, unless a contract or statute guarantees his or her
right to return to work. Employment shall be deemed to terminate in any event
when the approved leave ends, unless the Participant immediately returns to
work.

    (c)   DEATH. In the event of the Participant's death, the amount credited
to his or her Plan Account shall be paid to a beneficiary designated by him or
her for this purpose on the prescribed form or, if none, to the Participant's
estate. Such form shall be valid only if it was filed with the Company at the
prescribed location before the Participant's death.



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SECTION 7.  PLAN ACCOUNTS AND PURCHASE OF SHARES.

    (a)   PLAN ACCOUNTS. The Company shall maintain a Plan Account on its
books in the name of each Participant. Whenever an amount is deducted from the
Participant's Compensation under the Plan, such amount shall be credited to the
Participant's Plan Account. Amounts credited to Plan Accounts shall not be trust
funds and may be commingled with the Company's general assets and applied to
general corporate purposes. No interest shall be credited to Plan Accounts.

    (b)   PURCHASE PRICE. The Purchase Price for each share of Stock purchased
at the close of an Accumulation Period shall be the lower of:

    (i)       85% of the Fair Market Value of such share on the last
trading day in such Accumulation Period; or

    (ii)      85% of the Fair Market Value of such share on the last trading day
before the commencement of the applicable Offering Period (as determined under
Section 3(e)) or, in the case of the first Offering Period under the Plan, 85%
of the price at which one share of Stock is offered to the public in the IPO.

    (c)   NUMBER OF SHARES PURCHASED. As of the last day of each Accumulation
Period, each Participant shall be deemed to have elected to purchase the number
of shares of Stock calculated in accordance with this Subsection (c), unless the
Participant has previously elected to withdraw from the Plan in accordance with
Section 5(a). The amount then in the Participant's Plan Account shall be divided
by the Purchase Price, and the number of shares that results shall be purchased
from the Company with the funds in the Participant's Plan Account. The foregoing
notwithstanding, no Participant shall purchase more than 750 shares of Stock
with respect to any Accumulation Period nor more than the amounts of Stock set
forth in Sections 8(b) and 13(a). The Committee may determine with respect to
all Participants that any fractional share, as calculated under this Subsection
(c), shall be (i) rounded down to the next lower whole share or (ii) credited as
a fractional share.

    (d)   AVAILABLE SHARES INSUFFICIENT. In the event that the aggregate
number of shares that all Participants elect to purchase during an Accumulation
Period exceeds the maximum number of shares remaining available for issuance
under Section 13(a), then the number of shares to which each Participant is
entitled shall be determined by multiplying the number of shares available for
issuance by a fraction, the numerator of which is the number of shares that such
Participant has elected to purchase and the denominator of which is the number
of shares that all Participants have elected to purchase.

    (e)   ISSUANCE OF STOCK. Certificates representing the shares of Stock
purchased by a Participant under the Plan shall be issued to him or her as soon
as reasonably practicable after the close of the applicable Accumulation Period,
except that the Committee may determine that such shares shall be held for each
Participant's benefit by a broker designated by the Committee (unless the
Participant has elected that certificates be issued to him or her). Shares may
be registered in the name of the Participant or jointly in the name of the
Participant and his or her spouse as joint tenants with right of survivorship or
as community property.



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    (f)   UNUSED CASH BALANCES. An amount remaining in the Participant's Plan
Account that represents the Purchase Price for any fractional share shall be
carried over in the Participant's Plan Account to the next Accumulation Period.
Any amount remaining in the Participant's Plan Account that represents the
Purchase Price for whole shares that could not be purchased by reason of
Subsection (c) above, Section 8(b) or Section 13(a) shall be refunded to the
Participant in cash, without interest.

    (g)   STOCKHOLDER APPROVAL. Any other provision of the Plan
notwithstanding, no shares of Stock shall be purchased under the Plan unless and
until the Company's stockholders have approved the adoption of the Plan.

SECTION 8.   LIMITATIONS ON STOCK OWNERSHIP.

    (a)   FIVE PERCENT LIMIT. Any other provision of the Plan notwithstanding,
no Participant shall be granted a right to purchase Stock under the Plan if such
Participant, immediately after his or her election to purchase such Stock, would
own stock pos sessing more than 5% of the total combined voting power or value
of all classes of stock of the Company or any parent or Subsidiary of the
Company. For purposes of this Subsection (a), the following rules shall apply:

          (i)   Ownership of stock shall be determined after applying the
attribution rules of section 424(d) of the Code;

          (ii)  Each Participant shall be deemed to own any stock that he or she
has a right or option to purchase under this or any other plan; and

          (iii) Each Participant shall be deemed to have the right to
purchase 750 shares of Stock under this Plan with respect to each Accumulation
Period.

    (b) DOLLAR LIMIT. Any other provision of the Plan notwithstanding, no
Participant shall purchase Stock with a Fair Market Value in excess of the
following limit:

          (i) In the case of Stock purchased during an Offering Period that
commenced in the current calendar year, the limit shall be equal to (A) $25,000
minus (B) the Fair Market Value of the Stock that the Participant previously
purchased in the current calendar year (under this Plan and all other employee
stock purchase plans of the Company or any parent or Subsidiary of the Company).

          (ii) In the case of Stock purchased during an Offering Period that
commenced in the immediately preceding calendar year, the limit shall be equal
to (A) $50,000 minus (B) the Fair Market Value of the Stock that the Participant
previously purchased (under this Plan and all other employee stock purchase
plans of the Company or any parent or Subsidiary of the Company) in the current
calendar year and in the immediately preceding calendar year.



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          (iii) In the case of Stock purchased during an Offering Period that
commenced in the second preceding calendar year, the limit shall be equal to (A)
$75,000 minus (B) the Fair Market Value of the Stock that the Participant
previously purchased (under this Plan and all other employee stock purchase
plans of the Company or any parent or Subsidiary of the Company) in the current
calendar year and in the two preceding calendar years.

For purposes of this Subsection (b), the Fair Market Value of Stock shall be
determined in each case as of the beginning of the Offering Period in which such
Stock is purchased. Employee stock purchase plans not described in section 423
of the Code shall be disregarded. If a Participant is precluded by this
Subsection (b) from purchasing additional Stock under the Plan, then his or her
employee contributions shall automatically be discontinued and shall resume at
the beginning of the earliest Accumulation Period ending in the next calendar
year (if he or she then is an Eligible Employee).

SECTION 9.    RIGHTS NOT TRANSFERABLE.

    The rights of any Participant under the Plan, or any Participant's
interest in any Stock or moneys to which he or she may be entitled under the
Plan, shall not be transferable by voluntary or involuntary assignment or by
operation of law, or in any other manner other than by beneficiary designation
or the laws of descent and distribution. If a Participant in any manner attempts
to transfer, assign or otherwise encumber his or her rights or interest under
the Plan, other than by beneficiary designation or the laws of descent and
distribution, then such act shall be treated as an election by the Participant
to withdraw from the Plan under Section 5(a).

SECTION 10.   NO RIGHTS AS AN EMPLOYEE.

    Nothing in the Plan or in any right granted under the Plan shall confer
upon the Participant any right to continue in the employ of a Participating
Company for any period of specific duration or interfere with or otherwise
restrict in any way the rights of the Participating Companies or of the
Participant, which rights are hereby expressly reserved by each, to terminate
his or her employment at any time and for any reason, with or without cause.

SECTION 11.   NO RIGHTS AS A STOCKHOLDER.

    A Participant shall have no rights as a stockholder with respect to any
shares of Stock that he or she may have a right to purchase under the Plan until
such shares have been purchased on the last day of the applicable Accumulation
Period.

SECTION 12.   SECURITIES LAW REQUIREMENTS.

    Shares of Stock shall not be issued under the Plan unless the issuance
and delivery of such shares comply with (or are exempt from) all applicable
requirements of law, including (without limitation) the Securities Act of 1933,
as amended, the rules and regulations promulgated thereunder, state securities
laws and regulations, and the regulations of any stock exchange or other
securities market on which the Company's securities may then be traded.



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SECTION 13.   STOCK OFFERED UNDER THE PLAN.

    (a)    AUTHORIZED SHARES. The number of shares of Stock available for
purchase under the Plan shall be 1,000,000 (subject to adjustment pursuant to
this Section 13). On May 1 of each year, commencing with May 1, 2001, the
aggregate number of shares of Stock available for purchase during the life of
the Plan shall automatically be increased by a number equal to the lesser of (a)
2% of the number of shares of Stock then outstanding or (b) 1,000,000 shares
(subject to adjustment pursuant to this Section 13).

    (b)    ANTI-DILUTION ADJUSTMENTS. The aggregate number of shares of Stock
offered under the Plan, the 750-share limitation described in Section 7(c) and
the price of shares that any Participant has elected to purchase shall be
adjusted proportionately by the Committee for any increase or decrease in the
number of outstanding shares of Stock resulting from a subdivision or
consolidation of shares or the payment of a stock dividend, any other increase
or decrease in such shares effected without receipt or payment of consideration
by the Company, the distribution of the shares of a Subsidiary to the Company's
stockholders or a similar event.

    (c)    REORGANIZATIONS. Any other provision of the Plan notwithstanding,
immediately prior to the effective time of a Corporate Reorganization, the
Offering Period and Accumulation Period then in progress shall terminate and
shares shall be purchased pursuant to Section 7, unless the Plan is continued or
assumed by the surviving corporation or its parent corporation. The Plan shall
in no event be construed to restrict in any way the Company's right to undertake
a dissolution, liquidation, merger, consolidation or other reorganization.

SECTION 14.   AMENDMENT OR DISCONTINUANCE.

         The Board shall have the right to amend, suspend or terminate the Plan
at any time and without notice. Except as provided in Section 13, any increase
in the aggregate number of shares of Stock to be issued under the Plan shall be
subject to approval by a vote of the stockholders of the Company. In addition,
any other amendment of the Plan shall be subject to approval by a vote of the
stockholders of the Company to the extent required by an applicable law or
regulation. The Plan shall terminate automatically 20 years after its adoption
by the Board, unless (a) the Plan is extended by the Board and (b) the extension
is approved within 12 months by a vote of the stockholders of the Company.

SECTION 15.   DEFINITIONS.

    (a)   "ACCUMULATION PERIOD" means a six-month period during which
contributions may be made toward the purchase of Stock under the Plan, as
determined pursuant to Section 3(b).

    (b)   "BOARD" means the Board of Directors of the Company, as constituted
from time to time.

    (c)   "CODE" means the Internal Revenue Code of 1986, as amended.

    (d)   "COMMITTEE" means a committee of the Board, as described in Section 2.


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    (e)   "COMPANY" means Selectica, Inc., a Delaware corporation.

    (f)   "COMPENSATION" means (i) the total compensation paid in cash to a
Participant by a Participating Company, including salaries, wages, bonuses,
incentive compensation, commissions, overtime pay and shift premiums, plus (ii)
any pre-tax contributions made by the Participant under section 401(k) or 125 of
the Code. "Compensation" shall exclude all non-cash items, moving or relocation
allowances, cost-of-living equalization payments, car allowances, tuition
reimbursements, imputed income attributable to cars or life insurance, severance
pay, fringe benefits, contributions or benefits received under employee benefit
plans, income attributable to the exercise of stock options, and similar items.
The Committee shall determine whether a particular item is included in
Compensation.

    (g)   "CORPORATE REORGANIZATION" means:

         (i)  The consummation of a merger or consolidation of the Company with
or into another entity or any other corporate reorganization; or

        (ii)  The sale, transfer or other disposition of all or substantially
all of the Company's assets or the complete liquidation or dissolution of the
Company.

    (h)   "ELIGIBLE EMPLOYEE" means any employee of a Participating Company
whose customary employment is for more than five months per calendar year and
for more than 20 hours per week. The foregoing notwithstanding, an individual
shall not be considered an Eligible Employee if his or her participation in the
Plan is prohibited by the law of any country which has jurisdiction over him or
her or if he or she is subject to a collective bargaining agreement that does
not provide for participation in the Plan.

    (i)   "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.

    (j)   "FAIR MARKET VALUE" means the market price of Stock, determined by
the Committee as follows:

         (i)  If the Stock was traded on The Nasdaq National Market on the date
in question, then the Fair Market Value shall be equal to the last-transaction
price quoted for such date by The Nasdaq National Market;

         (ii) If the Stock was traded on a stock exchange on the date in
question, then the Fair Market Value shall be equal to the closing price
reported by the applicable composite transactions report for such date; or

        (iii) If none of the foregoing provisions is applicable, then the Fair
Market Value shall be 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 Nasdaq or a stock exchange. Such determination shall
be conclusive and binding on all persons.



                                       8
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                (k) "IPO" means the initial offering of Stock to the public
        pursuant to a registration statement filed by the Company with the
        Securities and Exchange Commission.

                (l) "OFFERING PERIOD" means a 24-month period with respect to
        which the right to purchase Stock may be granted under the Plan, as
        determined pursuant to Section 3(a).

                (m) "PARTICIPANT" means an Eligible Employee who elects to
        participate in the Plan, as provided in Section 3(c).

                (n) "PARTICIPATING COMPANY" means (i) the Company and (ii) each
        present or future Subsidiary designated by the Committee as a
        Participating Company.

                (o) "PLAN" means this Selectica, Inc. 1999 Employee Stock
        Purchase Plan, as it may be amended from time to time.

                (p) "PLAN ACCOUNT" means the account established for each
        Participant pursuant to Section 7(a).

                (q) "PURCHASE PRICE" means the price at which Participants may
        purchase Stock under the Plan, as determined pursuant to Section 7(b).

                (r) "STOCK" means the common stock of the Company.

                (s) "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.



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