Notice of Stock Option Grant and Agreement



  
 Exhibit 10.4

  
 ARIBA, INC. 1999
EQUITY INCENTIVE PLAN 
  
 NOTICE OF STOCK OPTION GRANT 
  
 You have been granted the following option to purchase shares of the Common Stock of Ariba, Inc. (the “Company”): 
  

			
	Name of Optionee:	  	ROBERT JOHNSON
		
	Total Number of Shares:	  	12,500
		
	Type of Option:	  	Non-Qualified Stock Option
		
	Date of Grant:	  	January 24, 2005
		
	Exercise Price Per Share:	  	$12.58
		
	Vesting Commencement Date:	  	January 24, 2005
		
	Vesting Schedule:	  	This option becomes exercisable with respect to one-third(1/3rd) of the Shares subject to this option each year on the Date of Grant, subject to the Optionee’s continuing service to the Corporation.
		
	Expiration Date:	  	January 23, 2015 (This option expires earlier if your service terminates earlier as provided in the Stock Option Agreement.)

  
 By accepting this option, you agree
as follows: 
  

	1.	This option is granted under and governed by the Ariba, Inc. 1999 Equity Incentive Plan (the “Plan”), available on the Company’s internal web site at
http://stock.ariba.com/, and the Stock Option Agreement attached hereto. 

  

	2.	The Company may deliver by email all documents relating to the Plan or this option (including, without limitation, prospectuses required by the Securities and Exchange Commission)
and all other documents that the Company is required to deliver to its security holders (including, without limitation, annual reports and proxy statements). The Company may also deliver these documents by posting them on a web site maintained by
the Company or by a third party under contract with the Company. The “Ariba, Inc. 1999 Equity Incentive Plan—Summary and Prospectus“ is available on the Company’s internal web site at http://stock.ariba.com/. If, in the future,
the Company posts documents required by law on a web site, it will notify you by email. 

  

	3.	You have read the Company’s Securities Trading Policy, and you agree to comply with that policy at all times, including but not limited to whenever you acquire or dispose of
any shares of the Company’s stock or any derivative securities whose value varies with the value of the Company’s stock (including, without limitation, put or call options, and such derivative securities being referred to as “Company
Derivative Securities”). The Company’s Securities Trading Policy is available on the Company’s internal web site at http://stock.ariba.com/. 

  

	4.	The Company may, from time to time and in its sole discretion, impose blackouts periods during which you may not trade in Company securities, including Company Derivative
Securities. Blackout periods will generally be imposed as a result of the Company believing, or having reason to believe, that such trading would be in contravention of any law or regulation or that you, or a substantial portion of the
Company’s employees or consultants, may be aware of or may have been exposed to “material nonpublic information” as described in the Company’s Securities Trading Policy. Any such blackout period will remain in effect until the
Company believes that such trading would no longer be in contravention of any law or regulation or until it believes that such information has been made public and fully absorbed by the market, as the case may be. The Company has full discretion to
determine the time period during which trading would be blacked out. 

  

	
	Agreed to by:
	Optionee:
	
	  
	ROBERT JOHNSON

  









  
 ARIBA,
INC. 1999 EQUITY INCENTIVE PLAN 
  
 STOCK OPTION AGREEMENT 
  

			
	Tax Treatment	  	This option is intended to be an incentive stock option under Section 422 of the Internal Revenue Code or a nonstatutory stock option, as provided in the Notice of Stock Option
Grant.
		
	Vesting	  	This option becomes exercisable in installments, as shown in the Notice of Stock Option Grant. However, this option will not become exercisable for additional shares after your Service has
terminated for any reason. Vesting may accelerate, as provided below.
		
	Change in Control	  	If the Company is subject to a “Change in Control” (as defined in the Plan) before your Service terminates, then this option will become exercisable in full.
		
	Term	  	This option expires in any event at the close of business at Company headquarters on the day before the 10th anniversary of the Date of Grant, as shown in the Notice of Stock Option Grant. (It
will expire earlier if your Service terminates, as described below.)
		
	Regular Termination	  	If your Service terminates for any reason except death or total and permanent disability, then this option will expire at the close of business at Company headquarters on the date twelve months
after your termination date. The Company determines when your Service terminates for this purpose.
		
	Death	  	If you die as an employee, consultant or director of the Company or a subsidiary of the Company, then this option will expire at the close of business at Company headquarters on the date 12
months after the date of death.
		
	Disability	  	 If your Service terminates because of your total and permanent disability, then this option will expire at the close of business at Company
headquarters on the date 12 months after your termination date.
  
 For all
purposes under this Agreement, “total and permanent disability” means that you are unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result
in death or which has lasted, or can be expected to last, for a continuous period of not less than one year.


  

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	 Leaves of Absence
 and Part-Time
Work
	  	 For purposes of this option, your Service does not terminate when you go on a military leave, a sick leave or another bona fide leave of
absence, if the leave was approved by the Company in writing and if continued crediting of Service is required by the terms of the leave or by applicable law. But your Service terminates when the approved leave ends, unless you immediately return to
active work.
  
 If you go on a leave of absence, then the vesting schedule
specified in the Notice of Stock Option Grant may be adjusted in accordance with the Company’s leave of absence policy or the terms of your leave. If you commence working on a part-time basis, then the vesting schedule specified in the Notice
of Stock Option Grant may be adjusted in accordance with the Company’s part-time work policy or the terms of an agreement between you and the Company pertaining to your part-time schedule.

		
	 Restrictions on
 Exercise
	  	The Company will not permit you to exercise this option if the issuance of shares at that time would violate any law or regulation.
		
	Notice of Exercise	  	 When you wish to exercise this option, you must notify the Company by filing the proper “Notice of Exercise” form at the address given on
the form. Your notice must specify how many shares you wish to purchase. Your notice must also specify how your shares should be registered. The notice will be effective when the Company receives it.
  
 If someone else wants to exercise this option after your death, that person must prove to
the Company’s satisfaction that he or she is entitled to do so.


  

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	Form of Payment	  	When you submit your notice of exercise, you must include payment of the option exercise price for the shares that you are purchasing. Payment may be made in one (or a combination of two or
more) of the following forms:
		
	 	  	 •      Your personal check, a cashier’s check or a money order.

		
	 	  	 •      Certificates for shares of Company stock that you own, along with
any forms needed to effect a transfer of those shares to the Company. The value of the shares, determined as of the effective date of the option exercise, will be applied to the option exercise price. Instead of surrendering shares of Company stock,
you may attest to the ownership of those shares on a form provided by the Company and have the same number of shares subtracted from the option shares issued to you. However, you may not surrender, or attest to the ownership of, shares of Company
stock in payment of the exercise price if your action would cause the Company to recognize compensation expense (or additional compensation expense) with respect to this option for financial reporting purposes.
  
 •      Irrevocable directions to a securities broker approved by the Company to sell all or part of your option shares and to deliver to the Company from the sale proceeds an amount sufficient to pay the
option exercise price and any withholding taxes. (The balance of the sale proceeds, if any, will be delivered to you.) The directions must be given by signing a special “Notice of Exercise” form provided by the Company.
  
 •      Irrevocable directions to a securities broker or lender approved by the Company to pledge option shares as security for a loan and to deliver to the Company from the loan proceeds an amount
sufficient to pay the option exercise price and any withholding taxes. The directions must be given by signing a special “Notice of Exercise” form provided by the Company.

		
	Withholding Taxes and Stock Withholding	  	You will not be allowed to exercise this option unless you make arrangements acceptable to the Company to pay any withholding taxes that may be due as a result of the option exercise. With the
Company’s consent, these arrangements may include withholding shares of Company stock that otherwise would be issued to you when you exercise this option. The value of these shares, determined as of the effective date of the option exercise,
will be applied to the withholding taxes.
		
	Restrictions on Resale	  	You agree not to sell any option shares at a time when applicable laws, Company policies or an agreement between the Company and its underwriters prohibit a sale. This restriction will apply as
long as you are an employee, consultant or director of the Company (or a subsidiary of the Company) and for such period of time after the termination of your Service as the Company may specify.

  

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	Transfer of Option	  	 Prior to your death, only you may exercise this option. You cannot transfer or assign this option. For instance, you may not sell this option or use
it as security for a loan. If you attempt to do any of these things, this option will immediately become invalid. You may, however, dispose of this option in your will or a beneficiary designation.
  
 Regardless of any marital property settlement agreement, the Company is not obligated to
honor a notice of exercise from your former spouse, nor is the Company obligated to recognize your former spouse’s interest in your option in any other way.

		
	Retention Rights	  	Your option or this Agreement does not give you the right to be retained by the Company or a subsidiary of the Company in any capacity. The Company and its subsidiaries reserve the right to
terminate your Service at any time, with or without cause.
		
	Stockholder Rights	  	You, or your estate or heirs, have no rights as a stockholder of the Company until you have exercised this option by giving the required notice to the Company and paying the exercise price. No
adjustments are made for dividends or other rights if the applicable record date occurs before you exercise this option, except as described in the Plan.
		
	Adjustments	  	In the event of a stock split, a stock dividend or a similar change in Company stock, the number of shares covered by this option and the exercise price per share may be adjusted pursuant to the
Plan.
		
	Applicable Law	  	This Agreement will be interpreted and enforced under the laws of the State of Delaware (without regard to their choice-of-law provisions).
		
	The Plan and Other Agreements	  	 The text of the Plan is incorporated in this Agreement by reference.
  
 This Agreement and the Plan constitute the entire understanding between you and the Company regarding this option. Any prior agreements,
commitments or negotiations concerning this option are superseded. This Agreement may be amended only by another written agreement between the parties.


  
 BY
ACCEPTING THIS OPTION, YOU AGREE TO ALL OF THE TERMS AND 
 CONDITIONS DESCRIBED ABOVE AND IN THE PLAN.

  

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