**EXHIBIT 10.17**
**PLUMTREE SOFTWARE, INC.**
**2004 OUTSIDE DIRECTOR STOCK IN LIEU OF FEES PLAN**
     1. Purposes of the Plan. The purpose of this 2004 Outside Director StockIn Lieu of Fees Plan is to help align the interests of Outside Directors of theCompany with the interests of the Company’s stockholders by providingadditional means for Outside Directors to increase their ownership of CompanyCommon Stock.
     2. Definitions. As used herein, the following definitions shall apply:
          (a) “Board” means the Board of Directors of the Company.
          (b) “Code” means the Internal Revenue Code of 1986, as amended.
          (c) “Common Stock” means the common stock of the Company.
          (d) “Company”means Plumtree Software, Inc., a Delaware corporation.
          (e) “Director” means a member of the Board.
          (f) “Employee” means any person employed by the Companyor any Parent or Subsidiary of the Company.
          (g) “Exchange Act” means the Securities Exchange Act of 1934, as amended.
          (h) “Fair Market Value” means, as of any date, thevalue of Common Stock determined as follows:
                         (i) If the Common Stock is listed on any established stock exchange or anational market system, including without limitation the Nasdaq National Marketor The Nasdaq SmallCap Market of The Nasdaq Stock Market, its Fair Market Valueshall be the closing sales price for such stock (or the closing bid, if nosales were reported) as quoted on such exchange or system for the markettrading day on the time of determination (or if that is not a trading day, themost recently concluded trading day) as reported in *The Wall Street Journal*orsuch other source as the Administrator deems reliable;
                         (ii) If the Common Stock is regularly quoted by a recognized securitiesdealer but selling prices are not reported, the Fair Market Value of a Share ofCommon Stock shall be the mean between the high bid and low asked prices forthe Common Stock for the market trading day on the time of determination (or ifthat is not a trading day, the most recently concluded trading day), asreported in *The Wall Street Journal*or such other source as the Board deemsreliable; or
 (iii) In the absence of an establishedmarket for the Common Stock, the Fair Market Valuethereof shall be determined in good faith by theBoard.
          (i) “Outside Director” means a Director who is not an Employee.
          (j) “Parent” means a “parent corporation,” whether nowor hereafter existing, as defined in Section 424(e) of theCode.
 

 

          (k) “Plan” means this 2004 Outside Director Stock In Lieu of Fees Plan.
          (l) “Share” means a share of the Common Stock, asadjusted in accordance with Section 8 of the Plan.
          (m) “Subsidiary” means a “subsidiary corporation,” whether now orhereafter existing, as defined in Section 424(f) of the Internal Revenue Codeof 1986.
     3. Stock Subject to the Plan. Subject to the provisions of Section 8 ofthe Plan, the maximum aggregate number of Shares which may be sold under thePlan is 250,000 Shares (the “Pool”). The Shares may be authorized, butunissued, or reacquired Common Stock.
     4. Eligibility. Only Outside Directors may participate in the Plan. ThePlan shall not confer upon any Outside Director any right with respect tocontinuation of service as a Director or nomination to serve as a Director, norshall it interfere in any way with any rights which the Director, the Companyor the Company’s stockholders may have to terminate the Director’s relationshipwith the Company.
     5. Elections to Receive Stock In Lieu of Cash.
          (a) Election Procedure. Each Outside Director may elect to forego receiptof all or a portion of the annual retainer, committee fees and meeting feesotherwise due to the Outside Director in a specific calendar quarter inexchange for Common Stock under this Plan. The number of Shares received byany Outside Director shall equal the amount of foregone cash compensationdivided by the Fair Market Value of a Share on the last market trading day ofthe calendar quarter in respect of which the cash compensation otherwise wouldhave been paid to the Outside Director, rounded down to the nearest wholeShare, with the dollar amount of any fractional shares to be credited to theOutside Director’s next purchase under the Plan. Outside Directors mayparticipate by submitting a written or electronic election to the ChiefFinancial Officer of the Company, in such form as the Company determines, atleast three months prior to the beginning of the calendar quarter to which theelection relates.
          (b) Standing Elections; Modification or Termination. Outside Directorsmay submit standing written or electronic elections to apply to subsequentcalendar quarters (following the calendar quarter to which their initialelection relates), of up to two years’ duration. These standing elections mayonly be modified or terminated by means of submitting a written or electronicelection to the Chief Financial Officer, in such form as the Companydetermines, at least three months prior to the beginning of the calendarquarter to which the modification or termination relates.
          (c) Insider Information. Any elections made by an Outside Directorhereunder shall be made (i) during an open trading window when the OutsideDirector is not in possession of material non-public information, and (ii) inaccordance with the Company’s Insider Trading Policy.
          (d) Share Shortfalls. In the event that any election under the Plan wouldcause the number of Shares required to be issued under the Plan to exceed thePool, then Outside Directors’ outstanding irrevocable elections shall bedisregarded, as determined by the Company in an equitable manner, to avoidexceeding the Pool. No further elections shall be made or shall be valid untilsuch time, if any, as additional Shares become available for purchase under thePlan.
     6. Term of Plan. The Plan shall become effective upon its adoption by theBoard. It shall continue in effect for a term of ten (10) years unless soonerterminated under Section 9 of the Plan.
     7. Share Ownership. Until the issuance (as evidenced by the appropriateentry on the books of the Company or of a duly authorized transfer agent of theCompany) of the stock certificate or authorization of a brokerage entryevidencing such Shares, no right to vote or receive dividends or any otherrights as a shareholder shall exist with respect to Shares purchased hereunder.A share certificate or authorized brokerage account entry for the number of
 

 

Shares so acquired shall be issued or made to the Optionee or to his orher designated brokerage account as soon as practicable after the purchasedate. No adjustment shall be made for a dividend or other right for which therecord date is prior to the date the stock certificate is issued or authorizedbrokerage account entry made.
     8. Adjustments Upon Changes in Capitalization. The number of shares ofCommon Stock which have been authorized for issuance under the Plan shall beproportionately adjusted for any increase or decrease in the number of issuedshares of Common Stock resulting from a stock split, reverse stock split, stockdividend, combination or reclassification of the Common Stock, or any otherincrease or decrease in the number of issued shares of Common Stock effectedwithout receipt of consideration by the Company; provided, however, thatconversion of any convertible securities of the Company shall not be deemed tohave been “effected without receipt of consideration.”
     9. Amendment and Termination of the Plan. The Board may at any time amend,alter, suspend, or discontinue the Plan.
     10. Conditions Upon Issuance of Shares. Shares shall not be issuedhereunder unless the issuance and delivery of Shares pursuant hereto shallcomply with all relevant provisions of law, including, without limitation, theSecurities Act of 1933, as amended, the Exchange Act, the rules and regulationspromulgated thereunder, state securities laws, and the requirements of anystock exchange upon which the Shares may then be listed, and shall be furthersubject to the approval of counsel for the Company with respect to suchcompliance.
     As a condition to a purchase hereunder, the Company may require theOutside Director to represent and warrant at the time of any such purchase thatthe Shares are being purchased only for investment and without any presentintention to sell or distribute such Shares, if, in the opinion of counsel forthe Company, such a representation is required by any of the aforementionedrelevant provisions of law.
     Inability of the Company to obtain authority from any regulatory bodyhaving jurisdiction, which authority is deemed by the Company’s counsel to benecessary to the lawful issuance and sale of any Shares hereunder, shallrelieve the Company of any liability in respect of the failure to issue or sellsuch Shares as to which such requisite authority shall not have been obtained.