EXHIBIT 10.54

ARIBA, INC.

1999 EQUITY INCENTIVE PLAN

(AS AMENDED AND RESTATED EFFECTIVE DECEMBER 1, 2011)

 

 

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Exhibit

TABLE OF CONTENTS

 

            Page  

ARTICLE 1.

     INTRODUCTION      1   

ARTICLE 2.

     ADMINISTRATION      1   

2.1

     Committee Composition      1   

2.2

     Committee Responsibilities      1   

2.3

     Non-Officer Grants      2   

ARTICLE 3.

     SHARES AVAILABLE FOR GRANTS      2   

3.1

     Basic Limitation      2   

3.2

     Shares Returned to Reserve      2   

3.3

     Dividend Equivalents      2   

ARTICLE 4.

     ELIGIBILITY      3   

4.1

     Incentive Stock Options      3   

4.2

     Other Grants      3   

ARTICLE 5.

     OPTIONS      3   

5.1

     Stock Option Agreement      3   

5.2

     Number of Shares      3   

5.3

     Exercise Price      3   

5.4

     Exercisability and Term      3   

5.5

     Effect of Change in Control      3   

5.6

     Modification or Extension of Options      4   

5.7

     Buyout Provisions      4   

ARTICLE 6.

     PAYMENT FOR OPTION SHARES      4   

6.1

     General Rule      4   

6.2

     Exercise/Sale      4   

6.3

     Other Forms of Payment      4   

ARTICLE 7.

     STOCK APPRECIATION RIGHTS      5   

7.1

     SAR Agreement      5   

7.2

     Number of Shares      5   

7.3

     Exercise Price      5   

7.4

     Exercisability and Term      5   

7.5

     Effect of Change in Control      5   

7.6

     Exercise of SARs      5   

7.7

     Modification or Extension of SARs      6   

ARTICLE 8.

     RESTRICTED SHARES      6   

8.1

     Restricted Stock Agreement      6   

8.2

     Payment for Awards      6   

8.3

     Vesting Conditions      6   

8.4

     Voting and Dividend Rights      7   

 

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ARTICLE 9.

     STOCK UNITS      7   

9.1

     Stock Unit Agreement      7   

9.2

     Payment for Awards      7   

9.3

     Vesting Conditions      7   

9.4

     Voting and Dividend Rights      8   

9.5

     Form and Time of Settlement of Stock Units      8   

9.6

     Creditors’ Rights      8   

ARTICLE 10.

     PROTECTION AGAINST DILUTION      8   

10.1

     Adjustments      8   

10.2

     Dissolution or Liquidation      9   

10.3

     Reorganizations      9   

ARTICLE 11.

     AWARDS UNDER OTHER PLANS      10   

ARTICLE 12.

     PAYMENT OF DIRECTOR’S FEES IN SECURITIES      11   

12.1

     Effective Date      11   

12.2

     Elections to Receive NSOs, Restricted Shares or Stock Units      11   

12.3

     Number and Terms of NSOs, Restricted Shares or Stock Units      11   

ARTICLE 13.

     LIMITATION ON RIGHTS      11   

13.1

     Retention Rights      11   

13.2

     Stockholders’ Rights      11   

13.3

     Regulatory Requirements      11   

ARTICLE 14.

     TAX MATTERS      11   

14.1

     General      11   

14.2

     Share Withholding      12   

14.3

     Section 409A Matters      12   

ARTICLE 15.

     LIMITATION ON PAYMENTS      12   

15.1

     Scope of Limitation      12   

15.2

     Basic Rule      13   

15.3

     Reduction of Payments      13   

15.4

     Overpayments and Underpayments      13   

15.5

     Related Corporations      14   

ARTICLE 16.

     FUTURE OF THE PLAN      14   

16.1

     Term of the Plan      14   

16.2

     Amendment or Termination      14   

16.3

     Stockholder Approval      14   

ARTICLE 17.

     DEFINITIONS      14   

 

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Exhibit 10.54

ARIBA, INC.

1999 EQUITY INCENTIVE PLAN

ARTICLE 1. INTRODUCTION.

The Board adopted the Plan effective June 23, 1999. The Plan was most recently
amended on December 1, 2011. The purpose of the Plan is to promote the long-term
success of the Company and the creation of stockholder value by (a) encouraging
Employees, Outside Directors and Consultants to focus on critical long-range
objectives, (b) encouraging the attraction and retention of Employees, Outside
Directors and Consultants with exceptional qualifications and (c) linking
Employees, Outside Directors and Consultants directly to stockholder interests
through increased stock ownership. The Plan seeks to achieve this purpose by
providing for Awards in the form of Restricted Shares, Stock Units, Options
(which may constitute ISOs or NSOs) or stock appreciation rights.

The Plan shall be governed by, and construed in accordance with, the laws of the
State of Delaware (except their choice-of-law provisions).

ARTICLE 2. ADMINISTRATION.

2.1 Committee Composition. The Compensation Committee of the Board shall
administer the Plan. The Committee shall consist exclusively of two or more
members of the Board, who shall be appointed by the Board. In addition, each
member of the Committee shall meet the following requirements:

(a) Any listing standards prescribed by the principal securities market on which
the Company’s equity securities are traded;

(b) Such requirements as the Internal Revenue Service may establish for outside
directors acting under plans intended to qualify for exemption under
Section 162(m)(4)(C) of the Code;

(c) Such requirements as the Securities and Exchange Commission may establish
for administrators acting under plans intended to qualify for exemption under
Rule 16b-3 (or its successor) under the Exchange Act; and

(d) Any other requirements imposed by applicable law, regulations or rules.

2.2 Committee Responsibilities. The Committee shall (a) select the Employees,
Outside Directors and Consultants who are to receive Awards under the Plan,
(b) determine the type, number, vesting requirements and other features and
conditions of such Awards, (c) interpret the Plan, (d) make all other decisions
relating to the operation of the Plan

 

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and (e) carry out any other duties delegated to it by the Board under the Plan.
The Committee may adopt such rules or guidelines as it deems appropriate to
implement the Plan. The Committee’s determinations under the Plan shall be final
and binding on all persons.

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

ARTICLE 3. SHARES AVAILABLE FOR GRANTS.

3.1 Basic Limitation. Common Shares issued pursuant to the Plan may be
authorized but unissued shares or treasury shares. The aggregate number of
Common Shares issued under the Plan shall not exceed (a) 33,041,7481 plus
(b) the additional Common Shares described in Section 3.2. The number of Common
Shares that are subject to Awards outstanding at any time under the Plan shall
not exceed the number of Common Shares that then remain available for issuance
under the Plan. All Common Shares available under the Plan may be issued upon
the exercise of ISOs. The limitation of this Section 3.1 shall be subject to
adjustment pursuant to Article 10.

3.2 Shares Returned to Reserve. To the extent that Options, SARs or Stock Units
are forfeited or expire for any other reason before being exercised or settled
in full, the Common Shares subject to such Options, SARs or Stock Units shall
again become available for issuance under the Plan. If SARs are exercised, then
only the number of Common Shares (if any) actually issued in settlement of such
SARs shall reduce the number available under Section 3.1 and the balance shall
again become available for issuance under the Plan. If Stock Units are settled,
then only the number of Common Shares (if any) actually issued in settlement of
such Stock Units shall reduce the number available under Section 3.1 and the
balance shall again become available for issuance under the Plan. If Restricted
Shares or Common Shares issued upon the exercise of Options are reacquired by
the Company pursuant to a forfeiture provision or for any other reason, then
such Common Shares shall again become available for issuance under the Plan.
Shares applied to pay the Exercise Price of Options or to satisfy tax
withholding obligations related to any Award shall again become available for
issuance under the Plan. To the extent that an Award is settled in cash rather
than Shares, the cash settlement shall not reduce the number of Shares available
for issuance under the Plan.

3.3 Dividend Equivalents. Any dividend equivalents paid or credited under the
Plan with respect to Stock Units shall not be applied against the number of
Common Shares that may be issued under the Plan, whether or not such dividend
equivalents are converted into Stock Units.

 

1  This number reflects adjustments for stock splits through December 1, 2011.
It includes the increase of 8,000,000 shares added by the Board on December 3,
2010 that were approved by the stockholders at the 2011 annual meeting.

 

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ARTICLE 4. ELIGIBILITY.

4.1 Incentive Stock Options. Only Employees who are common-law employees of the
Company, a Parent or a Subsidiary shall be eligible for the grant of ISOs. In
addition, an Employee who owns more than 10% of the total combined voting power
of all classes of outstanding stock of the Company or any of its Parents or
Subsidiaries shall not be eligible for the grant of an ISO unless the additional
requirements set forth in Section 422(c)(5) of the Code are satisfied.

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

ARTICLE 5. OPTIONS.

5.1 Stock Option Agreement. Each grant of an Option under the Plan shall be
evidenced by a Stock Option Agreement between the Optionee and the Company. Such
Option shall be subject to all applicable terms of the Plan and may be subject
to any other terms that are not inconsistent with the Plan. The Stock Option
Agreement shall specify whether the Option is an ISO or an NSO. The provisions
of the various Stock Option Agreements entered into under the Plan need not be
identical. Options may be granted in consideration of a reduction in the
Optionee’s other compensation.

5.2 Number of Shares. Each Stock Option Agreement shall specify the number of
Common Shares subject to the Option and shall provide for the adjustment of such
number in accordance with Article 10. Options granted to an Optionee in a single
fiscal year of the Company shall not cover more than 1,500,000 Common Shares,
except that Options granted to a new Employee in the fiscal year of the Company
in which his or her Service commences may cover up to 2,000,000 Common Shares.
The limitations set forth in the preceding sentence shall be subject to
adjustment in accordance with Article 10.

5.3 Exercise Price. Each Stock Option Agreement shall specify the Exercise
Price, which shall not be less than 100% of the Fair Market Value of a Common
Share on the date of grant. The preceding sentence shall not apply to Options
granted pursuant to an assumption of, or substitution for, another option in a
manner that would satisfy the requirements of Section 424(a) of the Code,
whether or not such Section is applicable.

5.4 Exercisability and Term. Each Stock Option Agreement shall specify the date
or event when all or any installment of the Option is to become exercisable. The
Stock Option Agreement shall also specify the term of the Option; provided that
the term of an ISO shall in no event exceed 10 years from the date of grant. A
Stock Option Agreement may provide for accelerated exercisability in the event
of the Optionee’s death, disability or retirement or other events and may
provide for expiration prior to the end of its term in the event of the
termination of the Optionee’s Service. Options may be awarded in combination
with SARs, and such an Award may provide that the Options will not be
exercisable unless the related SARs are forfeited.

5.5 Effect of Change in Control. The Committee may determine, at the time of
granting an Option or thereafter, that such Option shall become exercisable as
to all or part of

 

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the Common Shares subject to such Option in the event that a Change in Control
occurs with respect to the Company or in the event that the Optionee is subject
to an Involuntary Termination after a Change in Control. However, in the case of
an ISO, the acceleration of exercisability shall not occur without the
Optionee’s written consent. In addition, acceleration of exercisability may be
required under Section 10.3.

5.6 Modification or Extension of Options. Within the limitations of the Plan,
the Committee may modify or extend outstanding Options or may substitute new
Options granted under the Plan for outstanding options granted by another
issuer. Except in connection with a corporate transaction involving the Company
(including, without limitation, any stock dividend, stock split, extraordinary
cash dividend, recapitalization, reorganization, merger, consolidation,
split-up, spin-off, combination, or exchange of shares), the terms of
outstanding Options shall not be amended to reduce the Exercise Price of such
Options or cancel such Options in exchange for cash or other Awards, or for
Options with an Exercise Price that is less than the Exercise Price of the
original Options, without stockholder approval. No modification of an Option
shall, without the consent of the Optionee, alter or impair his or her rights or
obligations under such Option.

5.7 Buyout Provisions. The Committee may at any time (a) offer to buy out for a
payment in cash or cash equivalents an Option previously granted or
(b) authorize an Optionee to elect to cash out an Option previously granted, in
either case at such time and based upon such terms and conditions as the
Committee shall establish. Except in connection with a corporate transaction
involving the Company (including, without limitation, any reorganization,
merger, consolidation, split-up, spin-off, combination, or exchange of shares),
this Section 5.7 shall not apply to an Option with an Exercise Price that
exceeds the Fair Market Value of a Common Share on the date of the buyout,
unless the buyout has been approved by the Company’s stockholders.

ARTICLE 6. PAYMENT FOR OPTION SHARES.

6.1 General Rule. The entire Exercise Price of Common Shares issued upon
exercise of Options shall be payable in cash or cash equivalents at the time
when such Common Shares are purchased, except that the Committee at its sole
discretion may accept payment of the Exercise Price in any other form(s)
described in this Article 6. However, if the Optionee is an Outside Director or
executive officer of the Company, he or she may pay the Exercise Price in a form
other than cash or cash equivalents only to the extent permitted by
Section 13(k) of the Exchange Act.

6.2 Exercise/Sale. With the Committee’s consent, all or any part of the Exercise
Price and any withholding taxes may be paid by delivering (on a form prescribed
by the Company) an irrevocable direction to a securities broker approved by the
Company to sell all or part of the Common Shares being purchased under the Plan
and to deliver all or part of the sales proceeds to the Company.

6.3 Other Forms of Payment. With the Committee’s consent, all or any part of the
Exercise Price and any withholding taxes may be paid in any other form that is
consistent with applicable laws, regulations and rules.

 

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ARTICLE 7. STOCK APPRECIATION RIGHTS.

7.1 SAR Agreement. Each grant of a SAR under the Plan shall be evidenced by a
SAR Agreement between the Optionee and the Company. Such SAR shall be subject to
all applicable terms of the Plan and may be subject to any other terms that are
not inconsistent with the Plan. The provisions of the various SAR Agreements
entered into under the Plan need not be identical. SARs may be granted in
consideration of a reduction in the Optionee’s other compensation.

7.2 Number of Shares. Each SAR Agreement shall specify the number of Common
Shares to which the SAR pertains and shall provide for the adjustment of such
number in accordance with Article 10. SARs granted to an Optionee in a single
calendar year shall in no event pertain to more than 1,500,000 Common Shares,
except that SARs granted to a new Employee in the fiscal year of the Company in
which his or her Service commences may pertain to a maximum of 2,000,000 Common
Shares. The limitations set forth in the preceding sentence shall be subject to
adjustment in accordance with Article 10.

7.3 Exercise Price. Each SAR Agreement shall specify the Exercise Price, which
shall in no event be less than 100% of the Fair Market Value of a Common Share
on the date of grant. The preceding sentence shall not apply to SARs granted
pursuant to an assumption of, or substitution for, another SAR in a manner that
would satisfy the requirements of Section 424(a) of the Code if such Section
were applicable.

7.4 Exercisability and Term. Each SAR Agreement shall specify the date when all
or any installment of the SAR is to become exercisable. The SAR Agreement shall
also specify the term of the SAR. A SAR Agreement may provide for accelerated
exercisability in the event of the Optionee’s death, disability or retirement or
other events and may provide for expiration prior to the end of its term in the
event of the termination of the Optionee’s Service. SARs may be awarded in
combination with Options, and such an Award may provide that the SARs will not
be exercisable unless the related Options are forfeited. A SAR may be included
in an ISO only at the time of grant but may be included in an NSO at the time of
grant or thereafter. A SAR granted under the Plan may provide that it will be
exercisable only in the event of a Change in Control.

7.5 Effect of Change in Control. The Committee may determine, at the time of
granting a SAR or thereafter, that such SAR shall become exercisable as to all
or part of the Common Shares subject to such SAR in the event that the Company
is subject to a Change in Control or in the event that the Optionee is subject
to an Involuntary Termination after a Change in Control. In addition,
acceleration of exercisability may be required under Section 10.3.

7.6 Exercise of SARs. Upon exercise of a SAR, the Optionee (or any person having
the right to exercise the SAR after his or her death) shall receive from the
Company (a) Common Shares, (b) cash or (c) a combination of Common Shares and
cash, as the Committee shall determine. The amount of cash and/or the Fair
Market Value of Common Shares received upon exercise of SARs shall, in the
aggregate, be equal to the amount by which the Fair Market Value (on the date of
exercise) of the Common Shares subject to the SARs exceeds the Exercise Price.
If, on the date when a SAR expires, the Exercise Price is less than

 

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the Fair Market Value on such date but any portion of such SAR has not been
exercised or surrendered, then such SAR shall automatically be deemed to be
exercised as of such date with respect to such portion. A SAR Agreement may also
provide for an automatic exercise of the SAR on an earlier date.

7.7 Modification or Extension of SARs. Within the limitations of the Plan, the
Committee may modify or extend outstanding SARs or may substitute new SARs
granted under the Plan for outstanding options granted by another issuer. Except
in connection with a corporate transaction involving the Company (including,
without limitation, any stock dividend, stock split, extraordinary cash
dividend, recapitalization, reorganization, merger, consolidation, split-up,
spin-off, combination, or exchange of shares), the terms of outstanding SARs
shall not be amended to reduce the Exercise Price of such SARs or cancel such
SARs in exchange for cash or other Awards, or for SARs with an Exercise Price
that is less than the Exercise Price of the original SARs, without stockholder
approval. No modification of a SAR shall, without the consent of the Optionee,
alter or impair his or her rights or obligations under such SAR.

ARTICLE 8. RESTRICTED SHARES.

8.1 Restricted Stock Agreement. Each grant of Restricted Shares under the Plan
shall be evidenced by a Restricted Stock Agreement between the recipient and the
Company. Such Restricted Shares shall be subject to all applicable terms of the
Plan and may be subject to any other terms that are not inconsistent with the
Plan. The provisions of the various Restricted Stock Agreements entered into
under the Plan need not be identical.

8.2 Payment for Awards. Restricted Shares may be sold or awarded under the Plan
for such consideration as the Committee may determine, including (without
limitation) cash, cash equivalents, property, past services and future services.
Within the limitations of the Plan, the Committee may accept the cancellation of
outstanding options in return for the grant of Restricted Shares.

8.3 Vesting Conditions. Each Award of Restricted Shares may or may not be
subject to vesting. Vesting shall occur, in full or in installments, upon
satisfaction of the conditions specified in the Restricted Stock Agreement. A
Restricted Stock Agreement may provide for accelerated vesting in the event of
the Participant’s death, disability or retirement or other events. The Committee
may determine, at the time of granting Restricted Shares or thereafter, that all
or part of such Restricted Shares shall become vested in the event that a Change
in Control occurs with respect to the Company or in the event that the
Participant is subject to an Involuntary Termination after a Change in Control.
Notwithstanding the above, Awards of Restricted Shares made on or after
December 1, 2011 shall be subject to minimum vesting requirements as follows:
Awards subject to time-based vesting shall vest in full in not less than 36
months from the vesting commencement date contained in the Award and Awards
subject to performance-based vesting shall vest in full in not less than 12
months from the vesting commencement date contained in the Award; provided,
however, that (i) these minimum vesting requirements shall not limit any vesting
accelerations provisions that may apply to an Award upon termination of the
holder’s employment, a change of control or divestiture of a business unit of
the Company, or other similar circumstance, and (ii) 10% of the total number of
Common Shares available for grant under the Plan, measured annually, shall be
exempted from

 

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the limitations of this sentence and of the final sentence in Section 9.3 below.
The annual measurement date referred to in the preceding sentence shall occur on
the first day of each fiscal year except that, with respect to any fiscal year
in which the stockholders approve an increase in shares reserved for issuance
under the Plan, such measurement shall instead occur on the date of such
stockholder approval.

8.4 Voting and Dividend Rights. The holders of Restricted Shares awarded under
the Plan shall have the same voting, dividend and other rights as the Company’s
other stockholders. A Restricted Stock Agreement, however, may require that any
cash dividends paid on Restricted Shares (a) be accumulated and paid when such
Restricted Shares vest or (b) be invested in additional Restricted Shares. Such
additional Restricted Shares shall be subject to the same conditions and
restrictions as the Award with respect to which the dividends were paid.

ARTICLE 9. STOCK UNITS.

9.1 Stock Unit Agreement. Each grant of Stock Units under the Plan shall be
evidenced by a Stock Unit Agreement between the recipient and the Company. Such
Stock Units shall be subject to all applicable terms of the Plan and may be
subject to any other terms that are not inconsistent with the Plan. The
provisions of the various Stock Unit Agreements entered into under the Plan need
not be identical. Stock Units may be granted in consideration of a reduction in
the recipient’s other compensation.

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

9.3 Vesting Conditions. Each Award of Stock Units may or may not be subject to
vesting. Vesting shall occur, in full or in installments, upon satisfaction of
the conditions specified in the Stock Unit Agreement. A Stock Unit Agreement may
provide for accelerated vesting in the event of the Participant’s death,
disability or retirement or other events. The Committee may determine, at the
time of granting Stock Units or thereafter, that all or part of such Stock Units
shall become vested in the event that the Company is subject to a Change in
Control or in the event that the Participant is subject to an Involuntary
Termination after a Change in Control. In addition, acceleration of vesting may
be required under Section 10.3. Notwithstanding the above, Awards of Stock Units
granted on or after December 1, 2011 shall be subject to minimum vesting
requirements as follows: Awards subject to time-based vesting shall vest in full
in not less than 36 months from the vesting commencement date contained in the
Award and Awards subject to performance-based vesting shall vest in full in not
less than 12 months from the vesting commencement date contained in the Award;
provided, however, that (i) these minimum vesting requirements shall not limit
any vesting accelerations provisions that may apply to an Award upon termination
of the holder’s employment, a change of control or divestiture of a business
unit of the Company, or other similar circumstance, and (ii) 10% of the total
number of Common Shares available for grant under the Plan, measured annually,
shall be exempted from the limitations of this sentence and of the final
sentence in Section 8.3 above. The annual measurement date referred to in the
preceding sentence shall occur on the first day of each fiscal year except that,
with respect to any fiscal year in which the stockholders approve an increase in
shares reserved for issuance under the Plan, such measurement shall instead
occur on the date of such stockholder approval.

 

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

9.5 Form and Time of Settlement of Stock Units. Settlement of vested Stock Units
may be made in the form of (a) cash, (b) Common Shares or (c) any combination of
both, as determined by the Committee. The actual number of Stock Units eligible
for settlement may be larger or smaller than the number included in the original
Award, based on predetermined performance factors. Methods of converting Stock
Units into cash may include (without limitation) a method based on the average
Fair Market Value of Common Shares over a series of trading days. Vested Stock
Units may be settled in such manner and at such times as specified in the Stock
Unit Agreement. The distribution may occur or commence when all vesting
conditions applicable to the Stock Units have been satisfied or have lapsed, or
it may be deferred to any later date. The amount of a deferred distribution may
be increased by an interest factor or by dividend equivalents as specified in
the Stock Unit Agreement. Until an Award of Stock Units is settled, the number
of such Stock Units shall be subject to adjustment pursuant to Article 10.

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

ARTICLE 10. PROTECTION AGAINST DILUTION.

10.1 Adjustments. In the event of a subdivision of the outstanding Common
Shares, a declaration of a dividend payable in Common Shares or a combination or
consolidation of the outstanding Common Shares (by reclassification or
otherwise) into a lesser number of Common Shares, corresponding adjustments
shall automatically be made in each of the following:

(a) The number of Options, SARs, Restricted Shares and Stock Units available for
future Awards under Article 3;

(b) The limitations set forth in Sections 5.2 and 7.2;

(c) The number of Common Shares covered by each outstanding Option and SAR;

(d) The Exercise Price under each outstanding Option and SAR; or

 

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(e) The number of Stock Units included in any prior Award that has not yet been
settled.

In the event of a declaration of an extraordinary dividend payable in a form
other than Common Shares in an amount that has a material effect on the price of
Common Shares, a recapitalization, a spin-off or a similar occurrence, the
Committee shall make such adjustments as it, in its sole discretion, deems
appropriate in one or more of the foregoing. Except as provided in this
Article 10, a Participant shall have no rights by reason of any issuance by the
Company of stock of any class or securities convertible into stock of any class,
any subdivision or consolidation of shares of stock of any class, the payment of
any stock dividend or any other increase or decrease in the number of shares of
stock of any class.

10.2 Dissolution or Liquidation. To the extent not previously exercised or
settled, Options, SARs and Stock Units shall terminate immediately prior to the
dissolution or liquidation of the Company.

10.3 Reorganizations. In the event that the Company is a party to a merger or
consolidation, all outstanding Awards shall be subject to the agreement of
merger or consolidation. Such agreement shall provide for one or more of the
following:

(a) The continuation of such outstanding Awards by the Company (if the Company
is the surviving corporation).

(b) The assumption of such outstanding Awards by the surviving corporation or
its parent, provided that the assumption of Options or SARs shall comply with
Section 424(a) of the Code (whether or not the Options are ISOs).

(c) The substitution by the surviving corporation or its parent of new awards
for such outstanding Awards, provided that the substitution of Options or SARs
shall comply with Section 424(a) of the Code (whether or not the Options are
ISOs).

(d) Full exercisability of outstanding Options and SARs and full vesting of the
Common Shares subject to such Options and SARs, followed by the cancellation of
such Options and SARs. The full exercisability of such Options and SARs and full
vesting of such Common Shares may be contingent on the closing of such merger or
consolidation. The Optionees shall be able to exercise such Options and SARs
during a period of not less than five full business days preceding the closing
date of such merger or consolidation, unless (i) a shorter period is required to
permit a timely closing of such merger or consolidation and (ii) such shorter
period still offers the Optionees a reasonable opportunity to exercise such
Options and SARs. Any exercise of such Options and SARs during such period may
be contingent on the closing of such merger or consolidation.

(e) The cancellation of outstanding Options and SARs and a payment to the
Optionees equal to the excess of (i) the Fair Market Value of the

 

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Common Shares subject to such Options and SARs (whether or not such Options and
SARs are then exercisable or such Common Shares are then vested) as of the
closing date of such merger or consolidation over (ii) their Exercise Price.
Such payment shall be made in the form of cash, cash equivalents, or securities
of the surviving corporation or its parent with a Fair Market Value equal to the
required amount. Subject to any requirements of Section 409A of the Code
necessary to avoid application of Section 409A(a)(1) of the Code with respect to
the Awards, such payment may be made in installments and may be deferred until
the date or dates when such Options and SARs would have become exercisable or
such Common Shares would have vested. Such payment may be subject to vesting
based on the Optionee’s continuing Service, provided that the vesting schedule
shall not be less favorable to the Optionee than the schedule under which such
Options and SARs would have become exercisable or such Common Shares would have
vested. If the Exercise Price of the Common Shares subject to such Options and
SARs exceeds the Fair Market Value of such Common Shares, then such Options and
SARs may be cancelled without making a payment to the Optionees. For purposes of
this SubSection (e), the Fair Market Value of any security shall be determined
without regard to any vesting conditions that may apply to such security.

(f) The cancellation of outstanding Stock Units and a payment to the
Participants equal to the Fair Market Value of the Common Shares subject to such
Stock Units (whether or not such Stock Units are then vested) as of the closing
date of such merger or consolidation. Such payment shall be made in the form of
cash, cash equivalents, or securities of the surviving corporation or its parent
with a Fair Market Value equal to the required amount. Such payment may be made
in installments and may be deferred until the date or dates when such Stock
Units would have vested. Such payment may be subject to vesting based on the
Participant’s continuing Service, provided that the vesting schedule shall not
be less favorable to the Participant than the schedule under which such Stock
Units would have vested. Notwithstanding anything to the contrary contained
herein, if required to avoid adverse tax consequences under Section 409A(a)(1)
of the Code, the distribution date(s) applicable to Stock Units cancelled under
this SubSection (f) shall be the date(s) specified in the Stock Unit Agreement.
For purposes of this SubSection (f), the Fair Market Value of any security shall
be determined without regard to any vesting conditions that may apply to such
security.

ARTICLE 11. AWARDS UNDER OTHER PLANS.

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

 

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ARTICLE 12. PAYMENT OF DIRECTOR’S FEES IN SECURITIES.

12.1 Effective Date. No provision of this Article 12 shall be effective unless
and until the Board has determined to implement such provision.

12.2 Elections to Receive NSOs, Restricted Shares or Stock Units. An Outside
Director may elect to receive his or her annual retainer payments and/or meeting
fees from the Company in the form of cash, NSOs, Restricted Shares or Stock
Units, or a combination thereof, as determined by the Board. Such NSOs,
Restricted Shares and Stock Units shall be issued under the Plan. An election
under this Article 12 shall be filed with the Company on the prescribed form.

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

ARTICLE 13. LIMITATION ON RIGHTS.

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

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

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

ARTICLE 14. TAX MATTERS.

14.1 General. To the extent required by applicable federal, state, local or
foreign law, a Participant or his or her successor shall make arrangements
satisfactory to the

 

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Company for the satisfaction of any withholding tax obligations that arise in
connection with any Awards granted under the Plan. The Company shall not be
required to issue any Common Shares or make any cash payment under the Plan
until such obligations are satisfied.

14.2 Share Withholding. To the extent that applicable law subjects a Participant
to tax withholding obligations, the Committee may permit such Participant to
satisfy all or part of such obligations by having the Company withhold all or a
portion of any Common Shares that otherwise would be issued to him or her or by
surrendering all or a portion of any Common Shares that he or she previously
acquired. Such Common Shares shall be valued at their Fair Market Value on the
date when they are withheld or surrendered. This Section 14.2 shall apply only
to the minimum extent required by applicable tax laws.

14.3 Section 409A Matters. Except to the extent otherwise set forth in an Award
Agreement, it is intended that Awards granted under the Plan be exempt from
Section 409A of the Code, and any ambiguity in the terms of Awards and the Plan
shall be interpreted consistently with this intent. To the extent an Award is
not exempt from Section 409A of the Code, any ambiguity in the terms of such
Award and the Plan shall be interpreted in a manner that to the maximum extent
permissible supports compliance with the requirements of that statute such that
Section 409A(a)(1) of the Code shall not apply. Notwithstanding anything in the
Plan or an Award Agreement to the contrary, to the extent necessary to avoid
application of Section 409A(a)(1) of the Code with respect to a Participant who
is a “specified employee” within the meaning of Section 409A of the Code at the
time of such Service termination, if the payment of any amount under an Award
would result in the imposition of additional tax under Section 409A(a)(1) of the
Code if paid to the Participant on or within the six (6) month period following
Participant’s Service termination, then the payment of such amount will not be
made until the date six (6) months and one (1) day following the date of
Participant’s Service termination; provided that if the Participant dies
thereafter but before the date that is six (6) months and one (1) day following
Service termination, then such amount will be paid to the Participant’s estate
as soon as practicable following his or her death. In addition, unless otherwise
determined by the Committee, with respect to any Award subject to Section 409A
of the Code that settles or pays as a result of a termination of the
Participant’s Service, a Service termination shall mean a “separation of
service” as defined under final Treasury Regulations issued under Section 409A
of the Code.

ARTICLE 15. LIMITATION ON PAYMENTS.

15.1 Scope of Limitation. This Article 15 shall apply to an Award only if:

(a) The independent auditors selected for this purpose by the Committee (the
“Auditors”) determine that the after-tax value of such Award to the Participant,
taking into account the effect of all federal, state and local income taxes,
employment taxes and excise taxes applicable to the Participant (including the
excise tax under Section 4999 of the Code), will be greater after the
application of this Article 15 than it was before the application of this
Article 15; or

 

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(b) The Committee, at the time of making an Award under the Plan or at any time
thereafter, specifies in writing that such Award shall be subject to this
Article 15 (regardless of the after-tax value of such Award to the Participant).

If this Article 15 applies to an Award, it shall supersede any contrary
provision of the Plan or of any Award granted under the Plan.

15.2 Basic Rule. In the event that the Auditors determine that any payment or
transfer by the Company under the Plan to or for the benefit of a Participant (a
“Payment”) would be nondeductible by the Company for federal income tax purposes
because of the provisions concerning “excess parachute payments” in Section 280G
of the Code, then the aggregate present value of all Payments shall be reduced
(but not below zero) to the Reduced Amount. For purposes of this Article 15, the
“Reduced Amount” shall be the amount, expressed as a present value, which
maximizes the aggregate present value of the Payments without causing any
Payment to be nondeductible by the Company because of Section 280G of the Code.
For purposes of this Article 15, present value shall be determined in accordance
with Section 280G(d)(4) of the Code.

15.3 Reduction of Payments. If the Auditors determine that any Payment would be
nondeductible by the Company because of Section 280G of the Code, then the
Company shall promptly give the Participant notice to that effect and a copy of
the detailed calculation thereof and of the Reduced Amount. The Participant’s
Payments will then be reduced in a manner that (a) first reduces any Payment
subject to Code Section 409A (or if there are more than one such Payment, then
all such Payments on a pro-rata basis) and then, to the extent necessary and in
such manner as the Participant may elect, reduces any Payment(s) that is/are not
subject to Code Section 409A; provided that if the Participant does not make
such election within 10 days after receipt of the notice described above, then
the Company may elect which and how much of the Payments shall be eliminated or
reduced (as long as after such election the aggregate present value of the
Payments equals the Reduced Amount) and shall notify the Participant promptly of
such election; and (b) does not result in any Payment becoming subject to Code
Section 409A(a)(1). All determinations made by the Auditors under this
Article 15 shall be binding upon the Company and the Participant and shall be
made within 60 days of the date when a Payment becomes payable or transferable.
As promptly as practicable following such determination and the elections
hereunder, the Company shall pay or transfer to or for the benefit of the
Participant such amounts as are then due to him or her under the Plan and shall
promptly pay or transfer to or for the benefit of the Participant in the future
such amounts as become due to him or her under the Plan.

15.4 Overpayments and Underpayments. As a result of uncertainty in the
application of Section 280G of the Code at the time of an initial determination
by the Auditors hereunder, it is possible that Payments will have been made by
the Company which should not have been made (an “Overpayment”) or that
additional Payments which will not have been made by the Company could have been
made (an “Underpayment”), consistent in each case with the calculation of the
Reduced Amount hereunder. In the event that the Auditors, based upon the
assertion of a deficiency by the Internal Revenue Service against the Company or
the Participant that the Auditors believe has a high probability of success,
determine that an Overpayment has

 

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been made, such Overpayment shall be treated for all purposes as a loan to the
Participant that he or she shall repay to the Company, together with interest at
the applicable federal rate provided in Section 7872(f)(2) of the Code;
provided, however, that no amount shall be payable by the Participant to the
Company if and to the extent that such payment would not reduce the amount that
is subject to taxation under Section 4999 of the Code. In the event that the
Auditors determine that an Underpayment has occurred, such Underpayment shall
promptly be paid or transferred by the Company to or for the benefit of the
Participant, together with interest at the applicable federal rate provided in
Section 7872(f)(2) of the Code. All such payments under this Section 15.4 shall
be made by the end of the Participant’s taxable year following the Participant’s
taxable year in which the taxes that are the subject of the audit or litigation
are remitted to the taxing authorities, or where as a result of such audit or
litigation no taxes are remitted, the end of the Participant’s taxable year
following the Participant’s taxable year in which the audit is complete or there
is a final and non-appealable settlement or other resolution of the litigation.

15.5 Related Corporations. For purposes of this Article 15, the term “Company”
shall include affiliated corporations to the extent determined by the Auditors
in accordance with Section 280G(d)(5) of the Code.

ARTICLE 16. FUTURE OF THE PLAN.

16.1 Term of the Plan. The Plan shall remain in effect until the earlier of
(a) the date when the Plan is terminated under Section 16.2, or (b) January 14,
2019.

16.2 Amendment or Termination. The Board may, at any time and for any reason,
amend or terminate the Plan. No Awards shall be granted under the Plan after the
termination thereof. The termination of the Plan, or any amendment thereof,
shall not affect any Award previously granted under the Plan.

16.3 Stockholder Approval. An amendment of the Plan shall be subject to the
approval of the Company’s stockholders only to the extent required by applicable
laws, regulations or rules.

ARTICLE 17. DEFINITIONS.

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

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

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

17.4 “Change in Control” means:

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

 

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reorganization, if immediately after such transaction the Ownership Percentage
(as defined below) of persons who were not stockholders of the Company
immediately before such transaction is more than 50% of the Company after such
transaction;

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

(c) A change in the composition of the Board over a period of 12 months such
that individuals who are members of the Board at the beginning of such 12 month
period (the “Incumbent Board”) cease to constitute at least a majority of the
members of the Board; provided, however, that if the appointment or election (or
nomination for election) of any new Board member was approved or recommended by
a majority vote of the members of the Incumbent Board then still in office, such
new member shall be considered as a member of the Incumbent Board; or

(d) Any transaction or transactions occurring within a 12-month period as a
result of which any person is the “beneficial owner” (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of the Company
representing at least 30% of the total voting power represented by the Company’s
then outstanding voting securities.

For purposes of this Section 17.4, the term “person” shall have the same meaning
as when used in Sections 13(d) and 14(d) of the Exchange Act but shall exclude
(i) a trustee or other fiduciary holding securities under an employee benefit
plan of the Company or of a Parent or Subsidiary and (ii) a corporation owned
directly or indirectly by the stockholders of the Company in substantially the
same proportions as their ownership of the Common Shares.

For purposes of SubSection (a) above, the term “Ownership Percentage” means the
percentage of the voting power of the outstanding securities of (i) the
continuing or surviving entity and (ii) any direct or indirect parent
corporation of such continuing or surviving entity.

A transaction shall not constitute a Change in Control if its sole purpose is to
change the state of the Company’s incorporation or to create a holding company
that will be owned in substantially the same proportions by the persons who held
the Company’s securities immediately before such transaction. In addition, a
transaction shall not constitute a Change in Control unless such transaction
also qualifies as an event under Treasury Regulation Section 1.409A-3(i)(5)(v)
(change in the ownership of a corporation), Treasury Regulation
Section 1.409A-3(i)(5)(vi) (change in the effective control of a corporation),
or Treasury Regulation Section 1.409A-3(i)(5)(vii) (change in the ownership of a
substantial portion of a corporation’s assets).

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

17.6 “Committee” means the Compensation Committee of the Board, as further
described in Article 2.

 

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17.7 “Common Share” means one share of the common stock of the Company.

17.8 “Company” means Ariba, Inc., a Delaware corporation.

17.9 “Consultant” means a consultant or adviser who provides bona fide services
to the Company, a Parent, a Subsidiary or an Affiliate as an independent
contractor.

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

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

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

17.13 “Fair Market Value” means the closing sales price (or the closing bid, if
no sales were reported) of the Common Shares on the principal U.S. market for
Common Shares on the applicable date or, if the applicable date was not a
trading day, on the last trading day prior to the applicable date. If Common
Shares are no longer traded on a public U.S. securities market, the Fair Market
Value shall be determined by the Committee in good faith on such basis as it
deems appropriate. The Committee’s determination shall be conclusive and binding
on all persons.

17.14 “Involuntary Termination” shall have the meaning given such term in the
agreement applicable to the Award or in any other agreement between the Company
and the Participant.

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

17.16 “NSO” means a stock option not described in Sections 422 or 423 of the
Code.

17.17 “Option” means an ISO or NSO granted under the Plan and entitling the
holder to purchase Common Shares.

17.18 “Optionee” means an individual or estate holding an Option or SAR.

17.19 “Outside Director” means a member of the Board who is not an Employee.

17.20 “Parent” means any corporation (other than the Company) in an unbroken
chain of corporations ending with the Company, if each of the corporations other
than the Company owns stock possessing 50% or more of the total combined voting
power of all classes

 

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of stock in one of the other corporations in such chain. A corporation that
attains the status of a Parent on a date after the adoption of the Plan shall be
considered a Parent commencing as of such date.

17.21 “Participant” means an individual or estate holding an Award.

17.22 “Plan” means this Ariba, Inc. 1999 Equity Incentive Plan, as amended from
time to time.

17.23 “Restricted Share” means a Common Share awarded under the Plan.

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

17.25 “SAR” means a stock appreciation right granted under the Plan.

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

17.27 “Service” means service as an Employee, Outside Director or Consultant.

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

17.29 “Stock Unit” means a bookkeeping entry representing the equivalent of one
Common Share, as awarded under the Plan.

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

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

 

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