Document:

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                                                                    EXHIBIT 10.4

                            PLUMTREE SOFTWARE, INC.

                       2002 EMPLOYEE STOCK PURCHASE PLAN

     The following constitutes the provisions of the 2002 Employee Stock
Purchase Plan of Plumtree Software, Inc.

     1.  Purpose.  The purpose of the Plan is to provide Employees with an
         -------
opportunity to purchase Common Stock through accumulated payroll deductions.  It
is the intention of the Company to have the Plan qualify as an "Employee Stock
Purchase Plan" under Section 423 of the Code.  The provisions of the Plan,
accordingly, shall be construed so as to extend and limit Plan participation in
a manner that is consistent with the requirements of that section of the Code.

     2.  Definitions.
         -----------

         (a)  "Administrator" means the Board or any committee thereof
               -------------
designated by the Board in accordance with Section 14.

         (b)  "Board" means the Board of Directors of the Company.
               -----

         (c)  "Change of Control" means the occurrence of any of the following
               -----------------
events:

               (i)  Any "person" (as such term is used in Sections 13(d) and
14(d) of the Exchange Act) becomes the "beneficial owner" (as defined in Rule
13d-3 of the Exchange Act), directly or indirectly, of securities of the Company
representing fifty percent (50%) or more of the total voting power represented
by the Company's then outstanding voting securities; or

              (ii)  The consummation of the sale or disposition by the Company
of all or substantially all of the Company's assets; or

             (iii)  The consummation of a merger or consolidation of the
Company, with any other corporation, other than a merger or consolidation which
would result in the voting securities of the Company outstanding immediately
prior thereto continuing to represent (either by remaining outstanding or by
being converted into voting securities of the surviving entity or its parent) at
least fifty percent (50%) of the total voting power represented by the voting
securities of the Company, or such surviving entity or its parent outstanding
immediately after such merger or consolidation.

              (iv)  A change in the composition of the Board, as a result of
which fewer than a majority of the Directors are Incumbent Directors. "Incumbent
Directors" means Directors who either (A) are Directors as of the effective date
of the Plan (pursuant to Section 23), or (B) are elected, or nominated for
election, to the Board with the affirmative votes of at least a majority of
those Directors whose election or nomination was not in connection with any
transaction described
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in subsections (i), (ii) or (iii) or in connection with an actual or threatened
proxy contest relating to the election of Directors of the Company.

         (d)  "Code" means the Internal Revenue Code of 1986, as amended. Any
               ----
reference to a section of the Code herein shall be a reference to any successor
or amended section of the Code.

         (e)  "Common Stock" means the common stock of the Company.
               ------------

         (f)  "Company" means Plumtree Software, Inc., a Delaware corporation.
               -------

         (g)  "Compensation" means an Employee's base straight time gross
               ------------
earnings and bonuses, but exclusive of payments for commissions, overtime, shift
premium and other compensation.

         (h)  "Designated Subsidiary" means any Subsidiary that has been
               ---------------------
designated by the Administrator from time to time in its sole discretion as
eligible to participate in the Plan.

         (i)  "Director" means a member of the Board.
               --------

         (j)  "Employee" means any individual who is a common law employee of an
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Employer and is customarily employed for at least twenty (20) hours per week and
more than five (5) months in any calendar year by the Employer. For purposes of
the Plan, the employment relationship shall be treated as continuing intact
while the individual is on sick leave or other leave of absence approved by the
Employer. Where the period of leave exceeds ninety (90) days and the
individual's right to reemployment is not guaranteed either by statute or by
contract, the employment relationship shall be deemed to have terminated on the
91st day of such leave.

         (k)  "Employer" means any one or all of the Company and its Designated
               --------
Subsidiaries.

         (l)  "Enrollment Date" means the first Trading Day of each Offering
               ---------------
Period.

         (m)  "Exchange Act" means the Securities Exchange Act of 1934, as
               ------------
amended, including the rules and regulations promulgated thereunder.

         (n)  "Exercise Date" means the first Trading Day on or after February 1
               -------------
and August 1 of each year. The first Exercise Date under the Plan shall be
August 1, 2002.

         (o)  "Fair Market Value" means, as of any date, the value of Common
               -----------------
Stock determined as follows:

               (i)   If the Common Stock is listed on any established stock
exchange or a national market system, including without limitation the Nasdaq
National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its
Fair Market Value shall be the closing sales price for the Common Stock (or the
closing bid, if no sales were reported) as quoted on such exchange or system on
the date of determination, as reported in The Wall Street Journal or such other
source as the Administrator deems reliable, or;

                                      -2-
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              (ii)   If the Common Stock is regularly quoted by a recognized
securities dealer but selling prices are not reported, its Fair Market Value
shall be the mean of the closing bid and asked prices for the Common Stock on
the date of determination, as reported in The Wall Street Journal or such other
source as the Administrator deems reliable, or;

              (iii)  In the absence of an established market for the Common
Stock, its Fair Market Value shall be determined in good faith by the
Administrator, or;

              (iv)   For purposes of the Enrollment Date of the first Offering
Period under the Plan, the Fair Market Value shall be the initial price to the
public as set forth in the final prospectus deemed to be included within the
registration statement on Form S-1 filed with the Securities and Exchange
Commission for the initial public offering of the Common Stock (the
"Registration Statement").

         (p)  "Offering Periods" means the periods of approximately twenty-four
               ----------------
(24) months during which an option granted pursuant to the Plan may be
exercised, commencing on the first Trading Day on or after February 1 and August
1 of each year and terminating on the first Trading Day on or after the February
1 and August 1 Offering Period commencement date approximately twenty-four
months later; provided, however, that the first Offering Period under the Plan
shall commence with the first Trading Day on or after the date on which the
Securities and Exchange Commission declares the Company's Registration Statement
effective and ending on the first Trading Day on or after the earlier of (i)
February 1, 2004 or (ii) twenty-seven (27) months from the beginning of the
first Offering Period; and provided, further, that the second Offering Period
under the Plan shall commence on August 1, 2002. The duration and timing of
Offering Periods may be changed pursuant to Section 4 of this Plan.

         (q)  "Parent" means a "parent corporation," whether now or hereafter
               ------
existing, as defined in Section 424(e) of the Code.

         (r)  "Plan" means this 2002 Employee Stock Purchase Plan.
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         (s)  "Purchase Period" means the approximately six (6) month period
               ---------------
commencing on one Exercise Date and ending with the next Exercise Date, except
that the first Purchase Period of any Offering Period shall commence on the
Enrollment Date and end with the next Exercise Date.

         (t)  "Purchase Price" means an amount equal to eighty-five percent
               --------------
(85%) of the Fair Market Value of a share of Common Stock on the Enrollment Date
or on the Exercise Date, whichever is lower; provided however, that the Purchase
Price may be adjusted by the Administrator pursuant to Section 20.

         (u)  "Subsidiary" means a "subsidiary corporation," whether now or
               ----------
hereafter existing, as defined in Section 424(f) of the Code.

         (v)  "Trading Day" means a day on which the U.S. national stock
               -----------
exchanges and the Nasdaq System are open for trading.

                                      -3-
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     3.  Eligibility.
         -----------

         (a)  First Offering Period.  Any individual who is an Employee
              ----------------------
immediately prior to the first Offering Period under the Plan shall be
automatically enrolled in the first Offering Period.

         (b)  Subsequent Offering Periods.  Any individual who is an Employee as
              ---------------------------
of the Enrollment Date of any future Offering Period shall be eligible to
participate in such Offering Period, subject to the requirements of Section 5.

         (c)  Limitations.  Any provisions of the Plan to the contrary
              -----------
notwithstanding, no Employee shall be granted an option under the Plan (i) to
the extent that, immediately after the grant, such Employee (or any other person
whose stock would be attributed to such Employee pursuant to Section 424(d) of
the Code) would own capital stock of the Company or any Parent or Subsidiary of
the Company and/or hold outstanding options to purchase such stock possessing
five percent (5%) or more of the total combined voting power or value of all
classes of the capital stock of the Company or of any Parent or Subsidiary of
the Company, or (ii) to the extent that his or her rights to purchase stock
under all employee stock purchase plans (as defined in Section 423 of the Code)
of the Company or any Parent or Subsidiary of the Company accrues at a rate
which exceeds twenty-five thousand dollars ($25,000) worth of stock (determined
at the Fair Market Value of the stock at the time such option is granted) for
each calendar year in which such option is outstanding at any time.

     4.  Offering Periods.  The Plan shall be implemented by consecutive,
         ----------------
overlapping Offering Periods with a new Offering Period commencing on the first
Trading Day on or after February 1 and August 1 of each year, or on such other
date as the Administrator shall determine, and continuing thereafter until
terminated in accordance with Section 20; provided, however, that the first
Offering Period under the Plan shall commence with the first Trading Day on or
after the date on which the Securities and Exchange Commission declares the
Company's Registration Statement effective and ending on the first Trading Day
on or after the earlier of (i) February 1, 2004 or (ii) twenty-seven (27) months
from the beginning of the first Offering Period; and provided, further, that the
second Offering Period under the Plan shall commence on August 1, 2002. The
Administrator shall have the power to change the duration of Offering Periods
(including the commencement dates thereof) with respect to future offerings
without stockholder approval if such change is announced prior to the scheduled
beginning of the first Offering Period to be affected thereafter.

     5.  Participation.
         -------------

         (a)  First Offering Period.  An Employee who has become a participant
              ----------------------
in the first Offering Period under the Plan pursuant to Section 3(a) shall be
entitled to continue his or her participation in such Offering Period only if he
or she submits to the Company's payroll office (or its designee) a properly
completed subscription agreement authorizing payroll deductions in the form
provided by the Administrator for such purpose (i) no earlier than the effective
date of the filing of the Company's Registration Statement on Form S-8 with
respect to the shares of Common Stock issuable under the Plan (the "Effective
Date") and (ii) no later than five (5) business days from the Effective Date
(the "Enrollment Window"). A participant's failure to submit the subscription
agreement during the Enrollment Window pursuant to this Section 5(a) shall
result in the automatic termination of his or her participation in the first
Offering Period under the Plan.

                                      -4-
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         (b)  Subsequent Offering Periods.  An Employee who is eligible to
              ---------------------------
participate in the Plan pursuant to Section 3(b) may become a participant by (i)
submitting to the Company's payroll office (or its designee), on or before a
date prescribed by the Administrator prior to an applicable Enrollment Date, a
properly completed subscription agreement authorizing payroll deductions in the
form provided by the Administrator for such purpose, or (ii) following an
electronic or other enrollment procedure prescribed by the Administrator.

     6.  Payroll Deductions.
         ------------------

         (a)  At the time a participant enrolls in the Plan pursuant to Section
5, he or she shall elect to have payroll deductions made on each payday during
the Offering Period in an amount not exceeding 15% of the Compensation which he
or she receives on each such payday; provided, that should a payday occur on an
Exercise Date, a participant shall have the payroll deductions made on such
payday applied to his or her account under the new Offering Period or Purchase
Period, as the case may be.

         (b)  Payroll deductions authorized by a participant shall commence on
the first payday following the Enrollment Date and shall end on the last payday
in the Offering Period to which such authorization is applicable, unless sooner
terminated by the participant as provided in Section 10; provided, however, that
for the first Offering Period under the Plan, payroll deductions shall commence
on the first payday on or following the end of the Enrollment Window.

         (c)  All payroll deductions made for a participant shall be credited to
his or her account under the Plan and shall be withheld in whole percentages
only. A participant may not make any additional payments into such account.

         (d)  A participant may discontinue his or her participation in the Plan
as provided in Section 10, or may change the rate of his or her payroll
deductions during the Offering Period by (i) properly completing and submitting
to the Company's payroll office (or its designee), on or before a date
prescribed by the Administrator prior to an applicable Exercise Date, a new
subscription agreement authorizing the change in payroll deduction rate in the
form provided by the Administrator for such purpose, or (ii) following an
electronic or other procedure prescribed by the Administrator. If a participant
has not followed such procedures to change the rate of payroll deductions, the
rate of his or her payroll deductions shall continue at the originally elected
rate throughout the Offering Period and future Offering Periods (unless
terminated as provided in Section 10). The Administrator may, in its sole
discretion, limit the nature and/or number of payroll deduction rate changes
that may be made by participants during any Offering Period. Any change in
payroll deduction rate made pursuant to this Section 6(d) shall be effective as
of the first full payroll period following five (5) business days after the date
on which the change is made by the participant (unless the Administrator, in its
sole discretion, elects to process a given change in payroll deduction rate more
quickly).

         (e)  Notwithstanding the foregoing, to the extent necessary to comply
with Section 423(b)(8) of the Code and Section 3(c), a participant's payroll
deductions may be decreased to zero percent (0%) at any time during a Purchase
Period. Payroll deductions shall recommence at the rate originally elected by
the participant effective as of the beginning of the first Purchase Period

                                      -5-
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which is scheduled to end in the following calendar year, unless terminated by
the participant as provided in Section 10.

         (f)  At the time the option is exercised, in whole or in part, or at
the time some or all of the Company's Common Stock issued under the Plan is
disposed of, the participant must make adequate provision for the Company's
federal, state, or other tax withholding obligations, if any, which arise upon
the exercise of the option or the disposition of the Common Stock. At any time,
the Company may, but shall not be obligated to, withhold from the participant's
compensation the amount necessary for the Company to meet applicable withholding
obligations, including any withholding required to make available to the Company
any tax deductions or benefits attributable to the sale or early disposition of
Common Stock by the Employee.

     7.  Grant of Option.  On the Enrollment Date of each Offering Period, each
         ---------------
Employee participating in such Offering Period shall be granted an option to
purchase on each Exercise Date during such Offering Period (at the applicable
Purchase Price) up to a number of shares of Common Stock determined by dividing
such participant's payroll deductions accumulated prior to such Exercise Date
and retained in the participant's account as of the Exercise Date by the
applicable Purchase Price; provided that in no event shall a participant be
permitted to purchase during each Purchase Period more than 10,000 shares of
Common Stock (subject to any adjustment pursuant to Section 19), and provided
further that such purchase shall be subject to the limitations set forth in
Sections 3(c) and 13.  The Employee may accept the grant of such option (i) with
respect to the first Offering Period under the Plan, by submitting a properly
completed subscription agreement in accordance with the requirements of Section
5(a) on or before the last day of the Enrollment Window, and (ii) with respect
to any future Offering Period under the Plan, by electing to participate in the
Plan in accordance with the requirements of Section 5(b).  The Administrator
may, for future Offering Periods, increase or decrease, in its absolute
discretion, the maximum number of shares of Common Stock that a participant may
purchase during each Purchase Period of such Offering Period.  Exercise of the
option shall occur as provided in Section 8, unless the participant has
withdrawn pursuant to Section 10.  The option shall expire on the last day of
the Offering Period.

     8.  Exercise of Option.
         ------------------

         (a)  Unless a participant withdraws from the Plan as provided in
Section 10, his or her option for the purchase of shares of Common Stock shall
be exercised automatically on the Exercise Date, and the maximum number of full
shares subject to option shall be purchased for such participant at the
applicable Purchase Price with the accumulated payroll deductions in his or her
account. No fractional shares of Common Stock shall be purchased; any payroll
deductions accumulated in a participant's account which are not sufficient to
purchase a full share shall be retained in the participant's account for the
subsequent Purchase Period or Offering Period, subject to earlier withdrawal by
the participant as provided in Section 10. Any other monies left over in a
participant's account after the Exercise Date shall be returned to the
participant. During a participant's lifetime, a participant's option to purchase
shares hereunder is exercisable only by him or her.

         (b)  Notwithstanding any contrary Plan provision, if the Administrator
determines that, on a given Exercise Date, the number of shares of Common Stock
with respect to which options are to be exercised may exceed (i) the number of
shares of Common Stock that were available for

                                      -6-
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sale under the Plan on the Enrollment Date of the applicable Offering Period, or
(ii) the number of shares of Common Stock available for sale under the Plan on
such Exercise Date, the Administrator may in its sole discretion (x) provide
that the Company shall make a pro rata allocation of the shares of Common Stock
available for purchase on such Enrollment Date or Exercise Date, as applicable,
in as uniform a manner as shall be practicable and as it shall determine in its
sole discretion to be equitable among all participants exercising options to
purchase Common Stock on such Exercise Date, and continue all Offering Periods
then in effect, or (y) provide that the Company shall make a pro rata allocation
of the shares of Common Stock available for purchase on such Enrollment Date or
Exercise Date, as applicable, in as uniform a manner as shall be practicable and
as it shall determine in its sole discretion to be equitable among all
participants exercising options to purchase Common Stock on such Exercise Date,
and terminate any or all Offering Periods then in effect pursuant to Section 20.
The Company may make pro rata allocation of the shares of Common Stock available
on the Enrollment Date of any applicable Offering Period pursuant to the
preceding sentence, notwithstanding any authorization of additional shares of
Common Stock for issuance under the Plan by the Company's shareholders
subsequent to such Enrollment Date.

     9.  Delivery.  As soon as administratively practicable after each Exercise
         --------
Date on which a purchase of shares of Common Stock occurs, the Company shall
arrange the delivery to each participant, as appropriate, the shares purchased
upon exercise of his or her option in a form determined by the Administrator (in
its sole discretion). No participant shall have any voting, dividend, or other
shareholder rights with respect to shares of Common Stock subject to any option
granted under the Plan until such shares have been purchased and delivered to
the participant as provided in this Section 9.

     10.  Withdrawal.
          ----------

          (a)  Under procedures established by the Administrator, a participant
may withdraw all but not less than all the payroll deductions credited to his or
her account and not yet used to exercise his or her option under the Plan at any
time by (i) submitting to the Company's payroll office (or its designee) a
written notice of withdrawal in the form prescribed by the Administrator for
such purpose, or (ii) following an electronic or other withdrawal procedure
prescribed by the Administrator. All of the participant's payroll deductions
credited to his or her account shall be paid to such participant as promptly as
practicable after the effective date of his or her withdrawal and such
participant's option for the Offering Period shall be automatically terminated,
and no further payroll deductions for the purchase of shares shall be made for
such Offering Period. If a participant withdraws from an Offering Period,
payroll deductions shall not resume at the beginning of the succeeding Offering
Period unless the participant re-enrolls in the Plan in accordance with the
provisions of Section 5.

         (b)  A participant's withdrawal from an Offering Period shall not have
any effect upon his or her eligibility to participate in any similar plan which
may hereafter be adopted by the Company or in succeeding Offering Periods which
commence after the termination of the Offering Period from which the participant
withdraws.

     11. Termination of Employment.  In the event a participant ceases to be an
         -------------------------
Employee of an Employer, his or her option shall remain exercisable for a period
of three (3) months from the date of such Employee's termination.  Upon the
expiration of such three (3) month period or a date

                                      -7-
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prior to the expiration of such three (3) month period if requested by the
participant, any payroll deductions credited to such participant's account
during the Offering Period but not yet used to purchase shares of Common Stock
under the Plan shall be returned to such participant or, in the case of his or
her death, to the person or persons entitled thereto under Section 15, and such
participant's option shall be automatically terminated.

     12. Interest.  No interest shall accrue on the payroll deductions of a
         --------
participant in the Plan.

     13. Stock.
         -----

         (a)  Subject to adjustment upon changes in capitalization of the
Company as provided in Section 19, the maximum number of shares of Common Stock
which shall be made available for sale under the Plan shall be 2,000,000 shares
plus an annual increase to be added on the first day of the Company's fiscal
year beginning in fiscal year 2003, equal to the lesser of (i) 1,500,000 shares,
(ii) 2% of the outstanding shares on such date or (iii) an amount determined by
the Board.

         (b)  Shares of Common Stock to be delivered to a participant under the
Plan shall be registered in the name of the participant or in the name of the
participant and his or her spouse.

     14. Administration.  The Plan shall be administered by the Board or a
         --------------
committee of members of the Board who shall be appointed from time to time by,
and shall serve at the pleasure of, the Board. The Administrator shall have full
and exclusive discretionary authority to construe, interpret and apply the terms
of the Plan, to determine eligibility and to adjudicate all disputed claims
filed under the Plan. The Administrator, in its sole discretion and on such
terms and conditions as it may provide, may delegate to one or more individuals
all or any part of its authority and powers under the Plan. Every finding,
decision and determination made by the Administrator (or its designee) shall, to
the full extent permitted by law, be final and binding upon all parties.

     15. Designation of Beneficiary.
         --------------------------

         (a)  A participant may designate a beneficiary who is to receive any
shares of Common Stock and cash, if any, from the participant's account under
the Plan in the event of such participant's death subsequent to an Exercise Date
on which the option is exercised but prior to delivery to such participant of
such shares and cash. In addition, a participant may designate a beneficiary who
is to receive any cash from the participant's account under the Plan in the
event of such participant's death prior to exercise of the option. If a
participant is married and the designated beneficiary is not the spouse, spousal
consent shall be required for such designation to be effective.

         (b)  Such designation of beneficiary may be changed by the participant
at any time. In the event of the death of a participant and in the absence of a
beneficiary validly designated under the Plan who is living at the time of such
participant's death, the Company shall deliver such shares and/or cash to the
executor or administrator of the estate of the participant, or if no such
executor or administrator has been appointed (to the knowledge of the Company),
the Company, in its discretion, may deliver such shares and/or cash to the
spouse or to any one or more dependents or relatives of the participant, or if
no spouse, dependent or relative is known to the Company, then to such other
person as the Company may designate.

                                      -8-
<PAGE>

         (c)  All beneficiary designations under this Section 15 shall be made
in such form and manner as the Administrator may prescribe from time to time.

     16. Transferability.  Neither payroll deductions credited to a
         ---------------
participant's account nor any rights with regard to the exercise of an option or
to receive shares of Common Stock under the Plan may be assigned, transferred,
pledged or otherwise disposed of in any way (other than by will, the laws of
descent and distribution or as provided in Section 15) by the participant. Any
such attempt at assignment, transfer, pledge or other disposition shall be
without effect, except that the Company may treat such act as an election to
withdraw from an Offering Period in accordance with Section 10.

     17. Use of Funds.  All payroll deductions received or held by the Company
         ------------
under the Plan may be used by the Company for any corporate purpose, and the
Company shall not be obligated to segregate such payroll deductions. Until
shares of Common Stock are issued under the Plan (as evidenced by the
appropriate entry on the books of the Company or of a duly authorized transfer
agent of the Company), a participant shall only have the rights of an unsecured
creditor with respect to such shares.

     18. Reports.  Individual accounts shall be maintained for each participant
         -------
in the Plan. Statements of account shall be given to participating Employees at
least annually, which statements shall set forth the amounts of payroll
deductions, the Purchase Price, the number of shares of Common Stock purchased
and the remaining cash balance, if any.

     19. Adjustments, Dissolution, Liquidation, Merger or Change of Control.
         ------------------------------------------------------------------

         (a)  Adjustments.  In the event that any dividend or other
              -----------
distribution (whether in the form of cash, Common Stock, other securities, or
other property), recapitalization, stock split, reverse stock split,
reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase, or exchange of Common Stock or other securities of the Company, or
other change in the corporate structure of the Company affecting the Common
Stock such that an adjustment is determined by the Administrator (in its sole
discretion) 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 Administrator shall, in such manner as it may deem equitable, adjust
the number and class of Common Stock which may be delivered under the Plan, the
Purchase Price per share and the number of shares of Common Stock covered by
each option under the Plan which has not yet been exercised, and the numerical
limits of Sections 7 and 13.

         (b)  Dissolution or Liquidation.  In the event of the proposed
              --------------------------
dissolution or liquidation of the Company, the Offering Period then in progress
shall be shortened by setting a new Exercise Date (the "New Exercise Date"), and
shall terminate immediately prior to the consummation of such proposed
dissolution or liquidation, unless provided otherwise by the Board. The New
Exercise Date shall be before the date of the Company's proposed dissolution or
liquidation. The Board shall notify each participant in writing, at least ten
(10) business days prior to the New Exercise Date, that the Exercise Date for
the participant's option has been changed to the New Exercise Date and that the
participant's option shall be exercised automatically on the New Exercise Date,
unless prior to such date the participant has withdrawn from the Offering Period
as provided in Section 10.

                                      -9-
<PAGE>

         (c)  Merger or Change of Control.  In the event of a merger of the
              ---------------------------
Company with or into another corporation or a Change of Control, each
outstanding option shall be assumed or an equivalent option 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
option, any Purchase Periods then in progress shall be shortened by setting a
new Exercise Date (the "New Exercise Date") and any Offering Periods then in
progress shall end on the New Exercise Date. The New Exercise Date shall be
before the date of the Company's proposed merger or Change of Control. The Board
shall notify each participant in writing, at least ten (10) business days prior
to the New Exercise Date, that the Exercise Date for the participant's option
has been changed to the New Exercise Date and that the participant's option
shall be exercised automatically on the New Exercise Date, unless prior to such
date the participant has withdrawn from the Offering Period as provided in
Section 10.

     20. Amendment or Termination.
         ------------------------

         (a)  The Administrator may at any time and for any reason terminate or
amend the Plan. Except as provided in Section 19, no such termination can affect
options previously granted under the Plan, provided that an Offering Period may
be terminated by the Administrator on any Exercise Date if the Administrator
determines that the termination of the Plan is in the best interests of the
Company and its stockholders. Except as provided in Section 19 and this Section
20, no amendment may make any change in any option theretofore granted which
adversely affects the rights of any participant. To the extent necessary to
comply with Section 423 of the Code (or any successor rule or provision or any
other applicable law, regulation or stock exchange rule), the Company shall
obtain stockholder approval in such a manner and to such a degree as required.

         (b)  Without stockholder consent and without regard to whether any
participant rights may be considered to have been "adversely affected," the
Administrator shall be entitled to change the Offering Periods, limit the
frequency and/or number of changes in the amount withheld during an Offering
Period, establish the exchange ratio applicable to amounts withheld in a
currency other than U.S. dollars, permit payroll withholding in excess of the
amount designated by a participant in order to adjust for delays or mistakes in
the Company's processing of properly completed withholding elections, establish
reasonable waiting and adjustment periods and/or accounting and crediting
procedures to ensure that amounts applied toward the purchase of Common Stock
for each participant properly correspond with amounts withheld from the
participant's Compensation, and establish such other limitations or procedures
as the Administrator determines in its sole discretion advisable which are
consistent with the Plan.

         (c)  In the event the Administrator determines that the ongoing
operation of the Plan may result in unfavorable financial accounting
consequences, the Board may, in its discretion and, to the extent necessary or
desirable, modify or amend the Plan to reduce or eliminate such accounting
consequence including, but not limited to:

              (i)  altering the Purchase Price for any Offering Period
including an Offering Period underway at the time of the change in Purchase
Price;

             (ii)  shortening any Offering Period so that Offering Period ends
on a new Exercise Date, including an Offering Period underway at the time of the
Board action; and

                                      -10-
<PAGE>

            (iii) allocating shares.

Such modifications or amendments shall not require stockholder approval or the
consent of any Plan participants.

     21.  Notices.  All notices or other communications by a participant to the
          -------
Company under or in connection with the Plan shall be deemed to have been duly
given when received in the form specified by the Company at the location, or by
the person, designated by the Company for the receipt thereof.

     22.  Conditions Upon Issuance of Shares.  Shares of Common Stock shall not
          ----------------------------------
be issued with respect to an option under the Plan unless the exercise of such
option and the issuance and delivery of such shares pursuant thereto shall
comply with all applicable provisions of law, domestic or foreign, including,
without limitation, the Securities Act of 1933, as amended, including the rules
and regulations promulgated thereunder, the Exchange Act and the requirements of
any stock exchange upon which the shares may then be listed, and shall be
further subject to the approval of counsel for the Company with respect to such
compliance.

          As a condition to the exercise of an option, the Company may require
the person exercising such option to represent and warrant at the time of any
such exercise that the shares are being purchased only for investment and
without any present intention to sell or distribute such shares if, in the
opinion of counsel for the Company, such a representation is required by any of
the aforementioned applicable provisions of law.

     23.  Term of Plan.  The Plan shall become effective upon the earlier to
          ------------
occur of its adoption by the Board or its approval by the stockholders of the
Company. It shall continue in effect until terminated under Section 20.

     24.  Automatic Transfer to Low Price Offering Period.  To the extent
          -----------------------------------------------
permitted by any applicable laws, regulations, or stock exchange rules if the
Fair Market Value of the Common Stock on any Exercise Date in an Offering Period
is lower than the Fair Market Value of the Common Stock on the Enrollment Date
of such Offering Period, then all participants in such Offering Period shall be
automatically withdrawn from such Offering Period immediately after the exercise
of their option on such Exercise Date and automatically re-enrolled in the
immediately following Offering Period.

                                      -11-
<PAGE>

                         SAMPLE SUBSCRIPTION AGREEMENT
                         -----------------------------

                            PLUMTREE SOFTWARE, INC.

                       2002 EMPLOYEE STOCK PURCHASE PLAN

                             SUBSCRIPTION AGREEMENT

_____ Original Application                             Offering Date:___________
_____ Change in Payroll Deduction Rate
_____ Change of Beneficiary(ies)

1.   ____________________ hereby elects to participate in the Plumtree Software,
     Inc. 2002 Employee Stock Purchase Plan (the "Plan") and subscribes to
     purchase shares of the Company's Common Stock in accordance with this
     Subscription Agreement and the Plan.

2.   I hereby authorize payroll deductions from each paycheck in the amount of
     ____% of my Compensation on each payday (from 1 to 15%) during the Offering
     Period in accordance with the Plan.  (Please note that no fractional
     percentages are permitted.)

3.   I understand that said payroll deductions shall be accumulated for the
     purchase of shares of Common Stock at the applicable Purchase Price
     determined in accordance with the Plan.  I understand that if I do not
     withdraw from an Offering Period, any accumulated payroll deductions will
     be used to automatically exercise my option.

4.   I have received a copy of the complete Plan.  I understand that my
     participation in the Plan is in all respects subject to the terms of the
     Plan.  I understand that my ability to exercise the option under this
     Subscription Agreement is subject to shareholder approval of the Plan.

5.   Shares of Common Stock purchased for me under the Plan should be issued in
     the name(s) of Employee or Employee and Spouse only.

6.   I understand that if I dispose of any shares received by me pursuant to the
     Plan within 2 years after the Offering Date (the first day of the Offering
     Period during which I purchased such shares) or one year after the Exercise
     Date, I will be treated for federal income tax purposes as having received
     ordinary income at the time of such disposition in an amount equal to the
     excess of the fair market value of the shares at the time such shares were
     purchased by me over the price which I paid for the shares.  I hereby agree
                                                                  --------------
     to notify the Company in writing within 30 days after the date of any
     ---------------------------------------------------------------------
     disposition of my shares and I will make adequate provision for Federal,
     ------------------------------------------------------------------------
     state or other tax withholding obligations, if any, which arise upon the
     ------------------------------------------------------------------------
     disposition of the Common Stock.  The Company may, but will not be
     -------------------------------
     obligated to, withhold from my compensation the amount necessary to meet
     any applicable withholding obligation including any withholding necessary
     to make available to the Company any tax deductions or
<PAGE>

     benefits attributable to sale or early disposition of Common Stock by me.
     If I dispose of such shares at any time after the expiration of the 2-year
     and 1-year holding periods, I understand that I will be treated for federal
     income tax purposes as having received income only at the time of such
     disposition, and that such income will be taxed as ordinary income only to
     the extent of an amount equal to the lesser of (1) the excess of the fair
     market value of the shares at the time of such disposition over the
     purchase price which I paid for the shares, or (2) 15% of the fair market
     value of the shares on the first day of the Offering Period. The remainder
     of the gain, if any, recognized on such disposition will be taxed as
     capital gain.

7.   I hereby agree to be bound by the terms of the Plan.  The effectiveness of
     this Subscription Agreement is dependent upon my eligibility to participate
     in the Plan.

8.   In the event of my death, I hereby designate the following as my
     beneficiary(ies) to receive all payments and/or shares due me under the
     Plan:

     NAME:  (Please print)_____________________________________________________
                             (First)          (Middle)          (Last)

     _________________________           ______________________________________
     Relationship

     _________________________           ______________________________________
     Percentage Benefit                  (Address)

     NAME: (please print)
     __________________________________________________________________________
                             (First)          (Middle)          (Last)

     _________________________           ______________________________________
     Relationship

     _________________________           ______________________________________
     Percentage of Benefit               (Address)

                                      -2-
<PAGE>

     Employee's Social
     Security Number:         ____________________________________

     Employee's Address:      ____________________________________

                              ____________________________________

                              ____________________________________

I UNDERSTAND THAT THIS SUBSCRIPTION AGREEMENT SHALL REMAIN IN EFFECT THROUGHOUT
SUCCESSIVE OFFERING PERIODS UNLESS TERMINATED BY ME.

Dated:______________       _____________________________________________________
                           Signature of Employee

                           _____________________________________________________
                           Spouse's Signature (If beneficiary other than spouse)

                                      -3-
<PAGE>

                            SAMPLE WITHDRAWAL NOTICE
                            ------------------------

                            PLUMTREE SOFTWARE, INC.

                       2002 EMPLOYEE STOCK PURCHASE PLAN

                              NOTICE OF WITHDRAWAL

     The undersigned participant in the Offering Period of the Plumtree
Software, Inc. 2002 Employee Stock Purchase Plan which began on ____________,
______ (the "Offering Date") hereby notifies the Company that he or she hereby
withdraws from the Offering Period.  He or she hereby directs the Company to pay
to the undersigned as promptly as practicable all the payroll deductions
credited to his or her account with respect to such Offering Period.  The
undersigned understands and agrees that his or her option for such Offering
Period will be automatically terminated.  The undersigned understands further
that no further payroll deductions will be made for the purchase of shares in
the current Offering Period and the undersigned shall be eligible to participate
in succeeding Offering Periods only by delivering to the Company a new
Subscription Agreement.

                                    Name and Address of Participant:

                                    ________________________________

                                    ________________________________

                                    ________________________________

                                    Signature:

                                    ________________________________

                                    Date:____________________________<PAGE>

                                                                    EXHIBIT 10.5

                            PLUMTREE SOFTWARE, INC.

                           2002 DIRECTOR OPTION PLAN

      1.  Purposes of the Plan. The purposes of this 2002 Director Option Plan
          --------------------
are to attract and retain the best available personnel for service as Outside
Directors (as defined herein) of the Company, to provide additional incentive to
the Outside Directors of the Company to serve as Directors, and to encourage
their continued service on the Board.

          All options granted hereunder shall be nonstatutory stock options.

      2.  Definitions.  As used herein, the following definitions shall apply:
          -----------

          (a)  "Board" means the Board of Directors of the Company.
                -----

          (b)  "Change of Control" means the occurrence of any of the following
                -----------------
events:

               (i)     Any "person" (as such term is used in Sections 13(d) and
14(d) of the Exchange Act) becomes the "beneficial owner" (as defined in Rule
13d-3 of the Exchange Act), directly or indirectly, of securities of the Company
representing fifty percent (50%) or more of the total voting power represented
by the Company's then outstanding voting securities; or

               (ii)    The consummation of the sale or disposition by the
Company of all or substantially all of the Company's assets;

               (iii)   A change in the composition of the Board occurring within
a two-year period, as a result of which fewer than a majority of the directors
are Incumbent Directors. "Incumbent Directors" means directors who either (A)
are Directors as of the date hereof, or (B) are elected, or nominated for
election, to the Board with the affirmative votes of at least a majority of the
Incumbent Directors at the time of such election or nomination (but will not
include an individual whose election or nomination is in connection with an
actual or threatened proxy contest relating to the election of directors to the
Company); or

               (iv)    The consummation of a merger or consolidation of the
Company with any other corporation, other than a merger or consolidation which
would result in the voting securities of the Company outstanding immediately
prior thereto continuing to represent (either by remaining outstanding or by
being converted into voting securities of the surviving entity or its parent) at
least fifty percent (50%) of the total voting power represented by the voting
securities of the Company or such surviving entity or its parent outstanding
immediately after such merger or consolidation.

          (c)  "Code" means the Internal Revenue Code of 1986, as amended.
                ----
<PAGE>

          (d)  "Common Stock" means the common stock of the Company.
                ------------

          (e)  "Company" means Plumtree Software, Inc., a Deleware corporation.
                -------

          (f)  "Director" means a member of the Board.
                --------

          (g)  "Disability" means total and permanent disability as defined in
                ----------
section 22(e)(3) of the Code.

          (h)  "Employee" means any person, including officers and Directors,
                --------
employed by the Company or any Parent or Subsidiary of the Company. The payment
of a Director's fee by the Company shall not be sufficient in and of itself to
constitute "employment" by the Company.

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

          (j)  "Fair Market Value" means, as of any date, the value of Common
                -----------------
Stock determined as follows:

               (i)     If the Common Stock is listed on any established stock
exchange or a national market system, including without limitation the Nasdaq
National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its
Fair Market Value shall be the closing sales price for such stock (or the
closing bid, if no sales were reported) as quoted on such exchange or system for
the last market trading day prior to the time of determination as reported in
The Wall Street Journal or such other source as the Administrator deems
reliable;

               (ii)    If the Common Stock is regularly quoted by a recognized
securities dealer but selling prices are not reported, the Fair Market Value of
a Share of Common Stock shall be the mean between the high bid and low asked
prices for the Common Stock for the last market trading day prior to the time of
determination, as reported in The Wall Street Journal or such other source as
the Board deems reliable; or

               (iii)   In the absence of an established market for the Common
Stock, the Fair Market Value thereof shall be determined in good faith by the
Board.

          (k)  "Inside Director" means a Director who is an Employee.
                ---------------

          (l)  "Option" means a stock option granted pursuant to the Plan.
                ------

          (m)  "Optioned Stock" means the Common Stock subject to an Option.
                --------------

          (n)  "Optionee" means a Director who holds an Option.
                --------

          (o)  "Outside Director" means a Director who is not an Employee.
                ----------------

          (p)  "Parent" means a "parent corporation," whether now or hereafter
                ------
existing, as defined in Section 424(e) of the Code.

                                      -2-
<PAGE>

          (q)  "Plan" means this 2002 Director Option Plan.
                ----

          (r)  "Share" means a share of the Common Stock, as adjusted in
                -----
accordance with Section 10 of the Plan.

          (s)  "Subsidiary" means a "subsidiary corporation," whether now or
                ----------
hereafter existing, as defined in Section 424(f) of the Internal Revenue Code of
1986.

      3.  Stock Subject to the Plan. Subject to the provisions of Section 10 of
          -------------------------
the Plan, the maximum aggregate number of Shares which may be optioned and sold
under the Plan is 400,000 Shares, plus an annual increase to be added on the
first day of the Company's fiscal year (beginning in 2003) equal to the lesser
of (i) the number of Shares needed to restore the maximum number of shares of
the Company's Common Stock which may be available for grant under the Plan to
400,000 Shares or (ii) an amount determined by the Board (the "Pool"). The
Shares may be authorized, but unissued, or reacquired Common Stock.

          If an Option expires or becomes unexercisable without having been
exercised in full, the unpurchased Shares which were subject thereto shall
become available for future grant or sale under the Plan (unless the Plan has
terminated).  Shares that have actually been issued under the Plan shall not be
returned to the Plan and shall not become available for future distribution
under the Plan.

      4.  Administration and Grants of Options under the Plan.
          ---------------------------------------------------

          (a)  Procedure for Grants. All grants of Options to Outside Directors
               --------------------
under this Plan shall be automatic and nondiscretionary and shall be made
strictly in accordance with the following provisions:

               (i)     No person shall have any discretion to select which
Outside Directors shall be granted Options or to determine the number of Shares
to be covered by Options.

               (ii)    Each Outside Director shall be automatically granted an
Option to purchase 50,000 Shares (the "First Option") on the date on which such
person first becomes an Outside Director, whether through election by the
shareholders of the Company or appointment by the Board to fill a vacancy;
provided, however, that an Inside Director who ceases to be an Inside Director
but who remains a Director shall not receive a First Option.

               (iii)   Each Outside Director shall be automatically granted an
Option to purchase 20,000 Shares (a "Subsequent Option") on the date of the
Company's annual stockholder meeting of each year provided he or she is then an
Outside Director and if as of such date, he or she shall have served on the
Board for at least the preceding six (6) months.

               (iv)    Notwithstanding the provisions of subsections (ii) and
(iii) hereof, any exercise of an Option granted before the Company has obtained
shareholder approval of the Plan shall be conditioned upon obtaining such
shareholder approval of the Plan.

               (v)     The terms of a First Option granted hereunder shall be as
follows:

                                      -3-
<PAGE>

                       (A)  the term of the First Option shall be ten (10)
years.

                       (B)  the First Option shall be exercisable only while the
Outside Director remains a Director of the Company, except as set forth in
Sections 8 and 10 hereof.

                       (C)  the exercise price per Share shall be 100% of the
Fair Market Value per Share on the date of grant of the First Option.

                       (D)  subject to Section 10 hereof, the First Option shall
become exercisable as to 1/3rd of the Shares subject to the First Option on each
anniversary of its date of grant, provided that the Optionee continues to serve
as a Director on such dates.

               (vi)    The terms of a Subsequent Option granted hereunder shall
be as follows:

                       (A)  the term of the Subsequent Option shall be ten (10)
years.

                       (B)  the Subsequent Option shall be exercisable only
while the Outside Director remains a Director of the Company, except as set
forth in Sections 8 and 10 hereof.

                       (C)  the exercise price per Share shall be 100% of the
Fair Market Value per Share on the date of grant of the Subsequent Option.

                       (D)  subject to Section 10 hereof, the Subsequent Option
shall become exercisable as to 1/12th of the Shares subject to the Subsequent
Option each month after the date of grant, provided that the Optionee continues
to serve as a Director on such dates.

               (vii)   In the event that any Option granted under the Plan would
cause the number of Shares subject to outstanding Options plus the number of
Shares previously purchased under Options to exceed the Pool, then the remaining
Shares available for Option grant shall be granted under Options to the Outside
Directors on a pro rata basis. No further grants shall be made until such time,
if any, as additional Shares become available for grant under the Plan through
action of the Board or the shareholders to increase the number of Shares which
may be issued under the Plan or through cancellation or expiration of Options
previously granted hereunder.

     5.   Eligibility. Options may be granted only to Outside Directors. All
          -----------
Options shall be automatically granted in accordance with the terms set forth in
Section 4 hereof.

          The Plan shall not confer upon any Optionee any right with respect to
continuation of service as a Director or nomination to serve as a Director, nor
shall it interfere in any way with any rights which the Director or the Company
may have to terminate the Director's relationship with the Company at any time.

     6.   Term of Plan. The Plan shall become effective upon the earlier to
          ------------
occur of its adoption by the Board or its approval by the shareholders of the
Company. It shall continue in effect for a term of ten (10) years unless sooner
terminated under Section 11 of the Plan.

                                      -4-
<PAGE>

     7.   Form of Consideration. The consideration to be paid for the Shares to
          ---------------------
be issued upon exercise of an Option, including the method of payment, shall
consist of (i) cash, (ii) check, (iii) other shares which (x) in the case of
Shares acquired upon exercise of an option, have been owned by the Optionee for
more than six (6) months on the date of surrender, and (y) have a Fair Market
Value on the date of surrender equal to the aggregate exercise price of the
Shares as to which said Option shall be exercised, (iv) consideration received
by the Company under a cashless exercise program implemented by the Company in
connection with the Plan, or (v) any combination of the foregoing methods of
payment.

     8.   Exercise of Option.
          ------------------

          (a)  Procedure for Exercise; Rights as a Shareholder. Any Option
               -----------------------------------------------
granted hereunder shall be exercisable at such times as are set forth in Section
4 hereof; provided, however, that no Options shall be exercisable until
shareholder approval of the Plan has been obtained.

               An Option may not be exercised for a fraction of a Share.

               An Option shall be deemed to be exercised when written notice of
such exercise has been given to the Company in accordance with the terms of the
Option by the person entitled to exercise the Option and full payment for the
Shares with respect to which the Option is exercised has been received by the
Company. Full payment may consist of any consideration and method of payment
allowable under Section 7 of the Plan. Until the issuance (as evidenced by the
appropriate entry on the books of the Company or of a duly authorized transfer
agent of the Company) of the stock certificate evidencing such Shares, no right
to vote or receive dividends or any other rights as a shareholder shall exist
with respect to the Optioned Stock, notwithstanding the exercise of the Option.
A share certificate for the number of Shares so acquired shall be issued to the
Optionee as soon as practicable after exercise of the Option. No adjustment
shall be made for a dividend or other right for which the record date is prior
to the date the stock certificate is issued, except as provided in Section 10 of
the Plan.

               Exercise of an Option in any manner shall result in a decrease in
the number of Shares which thereafter may be available, both for purposes of the
Plan and for sale under the Option, by the number of Shares as to which the
Option is exercised.

          (b)  Termination of Continuous Status as a Director. Subject to
               ----------------------------------------------
Section 10 hereof, in the event an Optionee's status as a Director terminates
(other than upon the Optionee's death or Disability), the Optionee may exercise
his or her Option, but only within three (3) months following the date of such
termination, and only to the extent that the Optionee was entitled to exercise
it on the date of such termination (but in no event later than the expiration of
its ten (10) year term). To the extent that the Optionee was not vested as to
his or her entire Option on the date of such termination, the Shares covered by
the unvested portion of the Option shall revert to the Plan. If, after
termination, the Optionee does not exercise his or her Option within the time
specified herein, the Option shall terminate, and the Shares covered by such
Option shall revert to the Plan.

                                      -5-
<PAGE>

          (c)  Disability of Optionee. In the event Optionee's status as a
               ----------------------
Director terminates as a result of Disability, the Optionee may exercise his or
her Option, but only within twelve (12) months following the date of such
termination, and only to the extent that the Optionee was entitled to exercise
it on the date of such termination (but in no event later than the expiration of
its ten (10) year term). To the extent that the Optionee was not vested as to
his or her entire Option on the date of termination, the Shares covered by the
unvested portion of the Option shall revert to the Plan. If, after termination,
the Optionee does not exercise his or her Option within the time specified
herein, the Option shall terminate, and the Shares covered by such Option shall
revert to the Plan.

          (d)  Death of Optionee. In the event of an Optionee's death, the
               -----------------
Optionee's estate or a person who acquired the right to exercise the Option by
bequest or inheritance may exercise the Option, but only within twelve (12)
months following the date of death, and only to the extent that the Optionee was
entitled to exercise it on the date of death (but in no event later than the
expiration of its ten (10) year term). To the extent that the Optionee was not
vested as to his or her entire an Option on the date of death, the Shares
covered by the unvested portion of the Option shall revert to the Plan. To the
extent that the Optionee's estate or a person who acquired the right to exercise
such Option does not exercise such Option (to the extent otherwise so entitled)
within the time specified herein, the Option shall terminate, and the Shares
covered by such Option shall revert to the Plan.

     9.   Non-Transferability of Options.  The Option may not be sold, pledged,
          ------------------------------
assigned, hypothecated, transferred, or disposed of in any manner other than by
will or by the laws of descent or distribution and may be exercised, during the
lifetime of the Optionee, only by the Optionee.

     10.  Adjustments Upon Changes in Capitalization, Dissolution, Merger or
          ------------------------------------------------------------------
Change of Control.
------------------

          (a)  Adjustments. In the event 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, or other change in the corporate
structure of the Company affecting the Shares such that an adjustment is
determined by the Administrator (in its sole discretion) 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 Administrator shall, in
such manner as it may deem equitable, adjust the number and class of Shares
which may be delivered under the Plan, the number, class, and price of Shares
covered by each outstanding Option and Stock Purchase Right, and the numerical
Share limits of Section 3.

          (b)  Dissolution or Liquidation. In the event of the proposed
               --------------------------
dissolution or liquidation of the Company, to the extent that an Option has not
been previously exercised, it shall terminate immediately prior to the
consummation of such proposed action.

          (c)  Merger or Change of Control. In the event of a merger of the
               ---------------------------
Company with or into another corporation or a Change of Control of the Company,
outstanding Options may be assumed or equivalent options may be substituted by
the successor corporation or a Parent or Subsidiary thereof (the "Successor
Corporation"). If an option is assumed or substituted for, the

                                      -6-
<PAGE>

Option or equivalent option shall continue to be exercisable as provided in
Section 4 hereof for so long as the Optionee serves as a Director or a director
of the Successor Corporation. Following such assumption or substitution, if the
Optionee's status as a Director or director of Successor Corporation, as
applicable, is terminated other than upon a voluntary resignation by the
Optionee, the Option or option shall become fully exercisable, including as to
Shares for which it would not otherwise be exercisable. Thereafter, the Option
or option shall remain exercisable in accordance with Section 8(b) through (d)
above.

      If the Successor Corporation does not assume an outstanding Option or
substitute for it an equivalent option, the Option shall become fully vested and
exercisable, including as to Shares for which it would not otherwise be
exercisable. In such event the Board shall notify the Optionee that the Option
shall be fully exercisable for a period of fifteen (15) days from the date of
such notice, and upon the expiration of such period the Option shall terminate.

      For the purposes of this Section 10(c), an Option shall be considered
assumed if, following the merger or Change of Control, the Option confers the
right to purchase or receive, for each Share of Optioned Stock subject to the
Option immediately prior to the merger or Change of Control, the consideration
(whether stock, cash, or other securities or property) received in the merger or
Change of Control by holders of Common Stock for each 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). If such consideration received in the merger or Change
of Control is not solely common stock of the successor corporation or its
Parent, the Administrator may, with the consent of the successor corporation,
provide for the consideration to be received upon the exercise of the Option,
for each Share of Optioned Stock subject to the Option, 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 Stock in the merger or
Change of Control.

      11.  Amendment and Termination of the Plan.
           -------------------------------------

           (a)  Amendment and Termination. The Board may at any time amend,
                -------------------------
alter, suspend, or discontinue the Plan, but no amendment, alteration,
suspension, or discontinuation shall be made which would impair the rights of
any Optionee under any grant theretofore made, without his or her consent. In
addition, to the extent necessary and desirable to comply with any applicable
law, regulation or stock exchange rule, the Company shall obtain shareholder
approval of any Plan amendment in such a manner and to such a degree as
required.

           (b)  Effect of Amendment or Termination. Any such amendment or
                ----------------------------------
termination of the Plan shall not affect Options already granted and such
Options shall remain in full force and effect as if this Plan had not been
amended or terminated.

      12.  Time of Granting Options. The date of grant of an Option shall, for
           ------------------------
all purposes, be the date determined in accordance with Section 4 hereof.

      13.  Conditions Upon Issuance of Shares. Shares shall not be issued
           ----------------------------------
pursuant to the exercise of an Option unless the exercise of such Option and the
issuance and delivery of such

                                      -7-
<PAGE>

Shares pursuant thereto shall comply with all relevant provisions of law,
including, without limitation, the Securities Act of 1933, as amended, the
Exchange Act, the rules and regulations promulgated thereunder, state securities
laws, and the requirements of any stock exchange upon which the Shares may then
be listed, and shall be further subject to the approval of counsel for the
Company with respect to such compliance.

           As a condition to the exercise of an Option, the Company may require
the person exercising such Option to represent and warrant at the time of any
such exercise that the Shares are being purchased only for investment and
without any present intention to sell or distribute such Shares, if, in the
opinion of counsel for the Company, such a representation is required by any of
the aforementioned relevant provisions of law.

           Inability of the Company to obtain authority from any regulatory body
having jurisdiction, which authority is deemed by the Company's counsel to be
necessary to the lawful issuance and sale of any Shares hereunder, shall relieve
the Company of any liability in respect of the failure to issue or sell such
Shares as to which such requisite authority shall not have been obtained.

      14.  Reservation of Shares. The Company, during the term of this Plan,
           ---------------------
will at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.

      15.  Option Agreement. Options shall be evidenced by written option
           ----------------
agreements in such form as the Board shall approve.

                                      -8-
<PAGE>

                            PLUMTREE SOFTWARE, INC.

                           2002 DIRECTOR OPTION PLAN

                           DIRECTOR OPTION AGREEMENT

     Unless otherwise defined herein, the terms defined in the Plan shall have
the same defined meanings in this Option Agreement.

I.   NOTICE OF STOCK OPTION GRANT
     ----------------------------

     [Optionee's Name and Address]

     You have been granted an option to purchase Common Stock of the Company,
subject to the terms and conditions of the Plan and this Option Agreement, as
follows:

     Grant Number                          _______________________________

     Date of Grant                         _______________________________

     Vesting Commencement Date             _______________________________

     Exercise Price per Share              $______________________________

     Total Number of Shares Granted        _______________________________

     Total Exercise Price                  $______________________________

     Term/Expiration Date:                 _______________________________

     Nature of the Option:
     --------------------

     This Option is a nonstatutory stock option and is not intended to qualify
for any special tax benefits to the Optionee.

     Vesting Schedule:
     ----------------

     This Option may be exercised, in whole or in part, in accordance with the
following schedule:

     [1/3rd of the Shares subject to the Option shall vest on each anniversary
of the Vesting Commencement Date, provided that the Optionee continues to serve
as a Director on such dates].

     [1/12th of the Shares subject to the Option shall vest each month following
the Vesting Commencement Date, provided that the Optionee continues to serve as
a Director on such dates].
<PAGE>

     Termination Period:
     ------------------

     This Option may be exercised for three months after Optionee ceases to be a
Director.  Upon the death or Disability of the Optionee, this Option may be
exercised for twelve months after Optionee ceases to be a Director.  In no event
shall this Option be exercised later than the Term/Expiration Date as provided
above.

II.  AGREEMENT
     ---------

     A.  Grant of Option.
         ------------------

         The Plan Administrator of the Company hereby grants to the Optionee
named in the Notice of Grant attached as Part I of this Agreement (the
"Optionee") an option (the "Option") to purchase the number of Shares, as set
forth in the Notice of Grant, at the exercise price per share set forth in the
Notice of Grant (the "Exercise Price"), subject to the terms and conditions of
the Plan, which is incorporated herein by reference. Subject to Section 11(b) of
the Plan, in the event of a conflict between the terms and conditions of the
Plan and the terms and conditions of this Option Agreement, the terms and
conditions of the Plan shall prevail.

     B.  Exercise of Option.
         -------------------

         (a)  Right to Exercise.  This Option is exercisable during its term in
              -----------------
accordance with the Vesting Schedule set out in the Notice of Grant and the
applicable provisions of the Plan and this Option Agreement.

         (b)  Method of Exercise.  This Option is exercisable by delivery of an
              ------------------
exercise notice, in the form attached as Exhibit A (the "Exercise Notice"),
which shall state the election to exercise the Option, the number of Shares in
respect of which the Option is being exercised (the "Exercised Shares"), and
such other representations and agreements as may be required by the Company
pursuant to the provisions of the Plan. The Exercise Notice shall be completed
by the Optionee and delivered to [title] of the Company. The Exercise Notice
shall be accompanied by payment of the aggregate Exercise Price as to all
Exercised Shares. This Option shall be deemed to be exercised upon receipt by
the Company of such fully executed Exercise Notice accompanied by such aggregate
Exercise Price.

              No Shares shall be issued pursuant to the exercise of this Option
unless such issuance and exercise complies with Applicable Laws. Assuming such
compliance, for income tax purposes the Exercised Shares shall be considered
transferred to the Optionee on the date the Option is exercised with respect to
such Exercised Shares.

         (c)  Restrictions on Exercise.  This Option may not be exercised if the
              ------------------------
issuance of such Shares upon such exercise or the method of payment of
consideration for such shares would constitute a violation of any applicable
federal or state securities or other law or regulations, or if such issuance
would not comply with the requirements of any stock exchange upon which the
Shares may then be listed. As a condition to the exercise of this Option, the
Company may require Optionee to make any representation and warranty to the
Company as may be required by any applicable law or regulation.

                                      -2-
<PAGE>

      C.  Method of Payment.
          ------------------

          Payment of the aggregate Exercise Price shall be by any of the
following, or a combination thereof, at the election of the Optionee:

          1.  cash; or

          2.  check; or

          3.  consideration received by the Company under a cashless exercise
              program implemented by the Company in connection with the Plan; or

          4.  surrender of other Shares which (i) in the case of Shares acquired
              upon exercise of an option, have been owned by the Optionee for
              more than six (6) months on the date of surrender, and (ii) have a
              Fair Market Value on the date of surrender equal to the aggregate
              Exercise Price of the Exercised Shares.

     D.  Non-Transferability of Option.
         ------------------------------

         This Option may not be transferred in any manner otherwise than by will
or by the laws of descent or distribution and may be exercised during the
lifetime of Optionee only by the Optionee. The terms of the Plan and this Option
Agreement shall be binding upon the executors, administrators, heirs, successors
and assigns of the Optionee.

     E.  Term of Option.
         ---------------

         This Option may be exercised only within the term set out in the Notice
of Grant, and may be exercised during such term only in accordance with the Plan
and the terms of this Option Agreement.

     F.  Tax Consequences.
         -----------------

         Some of the federal tax consequences relating to this Option, as of the
date of this Option, are set forth below. THIS SUMMARY IS NECESSARILY
INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. THE OPTIONEE
SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE
SHARES.

     G.  Exercising the Option.
         ----------------------

         1.  Nonstatutory Stock Option.  The Optionee may incur regular federal
             -------------------------
income tax liability upon exercise of the Option. The Optionee will be treated
as having received compensation income (taxable at ordinary income tax rates)
equal to the excess, if any, of the Fair Market Value of the Exercised Shares on
the date of exercise over their aggregate Exercise Price. If the Optionee is an
Employee or a former Employee, the Company will be required to withhold from his
or her compensation or collect from Optionee and pay to the applicable taxing
authorities an amount in cash equal to a percentage of this compensation income
at the time of exercise, and may refuse to honor the exercise and refuse to
deliver Shares if such withholding amounts are not delivered at the time of
exercise.

                                      -3-
<PAGE>

         2.  Disposition of Shares.   If the Optionee holds the Shares for at
             ---------------------
least one year, any gain realized on disposition of the Shares will be treated
as long-term capital gain for federal income tax purposes.

     H.  Entire Agreement; Governing Law.
         --------------------------------

         The Plan is incorporated herein by reference.  The Plan and this Option
Agreement constitute the entire agreement of the parties with respect to the
subject matter hereof and supersede in their entirety all prior undertakings and
agreements of the Company and Optionee with respect to the subject matter
hereof, and may not be modified adversely to the Optionee's interest except by
means of a writing signed by the Company and Optionee.  This agreement is
governed by the internal substantive laws, but not the choice of law rules, of
California.

     I.  NO GUARANTEE OF CONTINUED SERVICE.
         ----------------------------------

         OPTIONEE ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO
THE VESTING SCHEDULE HEREOF IS EARNED ONLY BY CONTINUING AS A DIRECTOR AT THE
WILL OF THE COMPANY (AND NOT THROUGH THE ACT OF BEING ELECTED, BEING GRANTED AN
OPTION OR PURCHASING SHARES HEREUNDER). OPTIONEE FURTHER ACKNOWLEDGES AND AGREES
THAT THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING
SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF
CONTINUED ENGAGEMENT AS A DIRECTOR FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT
ALL, AND SHALL NOT INTERFERE WITH OPTIONEE'S RIGHT OR THE COMPANY'S RIGHT TO
TERMINATE OPTIONEE'S RELATIONSHIP AS A DIRECTOR AT ANY TIME, WITH OR WITHOUT
CAUSE.

     By your signature and the signature of the Company's representative below,
you and the Company agree that this Option is granted under and governed by the
terms and conditions of the Plan and this Option Agreement.  Optionee has
reviewed the Plan and this Option Agreement in their entirety, has had an
opportunity to obtain the advice of counsel prior to executing this Option
Agreement and fully understands all provisions of the Plan and Option Agreement.
Optionee hereby agrees to accept as binding, conclusive and final all decisions
or interpretations of the Administrator upon any questions relating to the Plan
and Option Agreement.  Optionee further agrees to notify the Company upon any
change in the residence address indicated below.

OPTIONEE:                                     PLUMTREE SOFTWARE, INC.

_________________________________             _________________________________
Signature                                     By

_________________________________             _________________________________
Print Name                                    Title

_________________________________

_________________________________
Residence Address

                                      -4-
<PAGE>

                                   EXHIBIT A
                                   ---------

                            PLUMTREE SOFTWARE, INC.

                           2002 DIRECTOR OPTION PLAN

                                EXERCISE NOTICE

Plumtree Software, Inc.
500 Sansome Street
San Francisco, CA 94111

Attention:  [Title]

     1.  Exercise of Option.  Effective as of today, ________________, _____,
         ------------------
the undersigned ("Purchaser") hereby elects to purchase ______________ shares
(the "Shares") of the Common Stock of Plumtree Software, Inc. (the "Company")
under and pursuant to the 2002 Director Option Plan (the "Plan") and the
Director Option Agreement dated, _____ (the "Option Agreement"). The purchase
price for the Shares shall be $_____, as required by the Option Agreement.

     2.  Delivery of Payment.  Purchaser herewith delivers to the Company the
         -------------------
full purchase price for the Shares.

     3.  Representations of Purchaser.  Purchaser acknowledges that Purchaser
         ----------------------------
has received, read and understood the Plan and the Option Agreement and agrees
to abide by and be bound by their terms and conditions.

     4.  Rights as Shareholder.  Until the issuance (as evidenced by the
         ---------------------
appropriate entry on the books of the Company or of a duly authorized transfer
agent of the Company) of the Shares, no right to vote or receive dividends or
any other rights as a shareholder shall exist with respect to the Optioned
Stock, notwithstanding the exercise of the Option. The Shares so acquired shall
be issued to the Optionee as soon as practicable after exercise of the Option.
No adjustment will be made for a dividend or other right for which the record
date is prior to the date of issuance, except as provided in Section 10 of the
Plan.

     5.  Tax Consultation.  Purchaser understands that Purchaser may suffer
         ----------------
adverse tax consequences as a result of Purchaser's purchase or disposition of
the Shares. Purchaser represents that Purchaser has consulted with any tax
consultants Purchaser deems advisable in connection with the purchase or
disposition of the Shares and that Purchaser is not relying on the Company for
any tax advice.
<PAGE>

     6.  Entire Agreement; Governing Law.  The Plan and Option Agreement are
         -------------------------------
incorporated herein by reference.  This Agreement, the Plan and the Option
Agreement constitute the entire agreement of the parties with respect to the
subject matter hereof and supersede in their entirety all prior undertakings and
agreements of the Company and Purchaser with respect to the subject matter
hereof, and may not be modified adversely to the Purchaser's interest except by
means of a writing signed by the Company and Purchaser.  This agreement is
governed by the internal substantive laws, but not the choice of law rules, of
California.

Submitted by:                                 Accepted by:

PURCHASER:                                    PLUMTREE SOFTWARE, INC.

__________________________________            __________________________________
Signature                                     By

__________________________________            __________________________________
Print Name                                    Its

Address:                                      Address:
-------                                       -------

__________________________________            PLUMTREE SOFTWARE, INC.

__________________________________            500 Sansome Street
                                              San Francisco, CA 94111

                                              __________________________________
                                              Date Received

                                      -2-

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