SELECTICA , I NC. COMPENSATION PROGRAM FOR NON -E MPLOYEE DIRECTORS

A.

Cash Compensation

1.

Board retainer : $45,000 per year, paid in quarterly installments.

2.

Audit Committee chair retainer : $10,000 per year, paid in quarterly installments.

B.

Equity Compensation

1.

Triennial stock option grants: Options to purchase 100,000 shares . The options become exercisable in equal installments on the first three anniversaries of the grant, with immediate full vesting in the event of a change in control. The options will be granted by the Compensation Committee under the 1999 Equity Incentive Plan (the “EIP”) in conjunction with the director’s initial appointment or election to the Board and at three-year intervals thereafter (provided that the director’s service continues). A director who was in office on August 1, 2006, will commence receiving these option grants on the next three-year anniversary of his or her initial appointment or election. A director who took office after August 1, 2006, but before