**Exhibit 10.36**

 

**SEVERANCE AGREEMENT**

 

THIS AGREEMENT is entered into as of August 26, 2004, by and between **TAYLOE STANSBURY** (the “Employee”) and**ARIBA, INC.**, a Delaware corporation (including any successor that becomes bound by this Agreement, the “Company”). 

 

 

(a) **Qualifying Terminations**. This Section 1 shall apply if: 

 

(i) The Company terminates the Employee’s employment with the Company for a reason other than Cause orPermanent Disability within 12 months after a Change in Control (as such terms are defined below); or 

 

(ii) The Employee resigns for Good Reason (as defined below) within 12 months after a Change in Control. 

 

(b) **Severance Payment**. If this Section 1 applies, then the Employeeshall be entitled to receive a severance payment from the Company. The amount of such payment shall be equal to 150% of the sum of (i) the Employee’s base salary at the annual rate in effect when his employment terminates plus (ii) theEmployee’s annual target bonus for the fiscal year in which his employment terminates. Such payment shall be made in a lump sum in cash on the date the Employee’s employment terminates under Subsection (a)(i) above or not later than thedate three business days after his employment terminates under Subsection (a)(ii) above. 

 

(c) **Acceleration of Vesting**. If this Section 1 applies, then all of the Equity held by the Employee at the time of the termination of his employment shall become fully and unconditionally vested, fullyexercisable and fully transferable (except for transfer restrictions imposed by law). 

 

(d) **Extension of Option Exercise Period**. If this Section 1 applies, then all of the Options held by the Employee at the time of the termination of his employment shall remain exercisable until the earlier of(i) the date 18 months after the termination of the Employee’s employment or (ii) the date such Options would have expired if the Employee’s employment had not terminated. 

 

(e) **Definition of “Board**.” For purposes of this Agreement, “Board” shall mean the Board ofDirectors of the Company. 

 

(f) **Definition of“Cause**.**”** For purposes of this Section 1 only, “Cause” shall mean any intentional misconduct that materially injures the Company and its subsidiaries, taken as a whole, or has a material adverse effect on the businessor affairs of the Company and its subsidiaries, taken as a whole. 

(g) **Definition of “Change in Control**.” For purposes of this Section 1 only, a“Change in Control” shall be determined as follows: 

 

(i) The consummation of a merger or consolidation of the Company, or any subsidiary of the Company, with or into another entity or any other corporate reorganization, if immediately after such transaction theOwnership Percentage (as defined below) of persons who were not stockholders of the Company immediately before such transaction is 30% or more; provided, however, that if such percentage is less than 50%, a majority of the Incumbent Directors maydetermine prior to the consummation of such transaction that a Change of Control has not occurred after considering all relevant factors; 

 

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

 

(iii) A change in the composition of the Board, as a resultof which fewer than two-thirds of the incumbent directors are directors who either (A) had been directors of the Company on the date hereof (the “original directors”) or (B) were elected, or nominated for election, to the Board with theapproval of at least a majority of the sum of (I) the original directors who were still in office at the time of the election or nomination and (II) the directors whose election or nomination was previously so approved (collectively, the“Incumbent Directors”); or 

 

(iv) Anytransaction as a result of which any person is the “beneficial owner” (as defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), directly or indirectly, of securities of the Companyrepresenting at least 25% of the total voting power represented by the Company’s then outstanding voting securities. 

 

For purposes of this Subsection (g), the term “person” shall have the same meaning as when used in sections 13(d) and 14(d) of the Exchange Act but shallexclude (A) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or of a parent or subsidiary of the Company and (B) a corporation owned directly or indirectly by the stockholders of the Company insubstantially the same proportions as their ownership of the common stock of the Company. 

 

For purposes of Paragraph (i) above, the term “Ownership Percentage” means the percentage of the voting power of the outstanding securities of (A) the continuing or surviving entity and (B) any direct orindirect parent corporation of such continuing or surviving entity. 

 

Forpurposes of the *proviso* in Paragraph (i) above, the factors to be considered by the Board in determining that a Change in Control has not occurred shall include, without limitation: 

 

(A) The Ownership Percentage; 

 

(B) Whether there is a change in the composition of the Boardof Directors of the Company or the continuing or surviving entity; 

 

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(C) Whether there is a change in the management of the Company or the continuing orsurviving entity; 

 

(D) The extent of theanticipated change in the business, operations or assets of the Company or the continuing or surviving entity; 

 

(E) The level of severance benefits available to comparable management at any entity other than the Company resulting from any transactionspecified in Paragraphs (i) through (iv) above; and 

 

(F) Whether treating the transaction as a Change in Control for purposes of this Agreement is necessary or desirable for purposes of achieving the business objectives of the transaction specified in Paragraphs (i) through (iv) above.

 

A transaction shall not constitute a Change in Control if its sole purpose isto 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. 

 

(h) **Definition of “Equity**.**”** For purposes of thisAgreement, “Equity” shall mean (i) all shares of the capital stock of the Company (“Stock”), (ii) all options and other rights to purchase shares of Stock, (iii) all stock units, performance units or phantom shares whose value ismeasured by the value of shares of Stock and (iv) all stock appreciation rights whose value is measured by increases in the value of shares of Stock. 

 

(i) **Definition of “Good Reason**.**”** For purposes of this Section 1 only, “Good Reason” shall mean (i) a reduction in theEmployee’s level of compensation (including base salary, fringe benefits and participation in bonus or incentive programs) or (ii) a relocation of his place of employment by more than 50 miles, provided and only if such reduction or relocationis effected by the Company without his consent. 

 

(j)**Definition of “Options**.**”** For purposes of this Agreement, “Options” shall mean (i) all options and other rights to purchase shares of Stock and (ii) all stock appreciation rights whose value is measured by increasesin the value of shares of Stock. 

 

(k) **Definition of“Permanent Disability**.**”** For purposes of this Agreement, “Permanent Disability” shall mean that the Employee, at the time notice is given, has failed to perform the duties of his position with the Company for a periodof not less than 180 consecutive days (or such longer period as may be required by law) as the result of his incapacity due to physical or mental injury, disability or illness. 

 
 2. **TERMINATION BENEFITS BEFORE, OR MORE THAN 12 MONTHS AFTER, A CHANGE IN CONTROL.**
 

(a) **Qualifying Terminations**. This Section 2 shall only apply if: 

 

(i) Section 1 does not apply; 

 

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(ii) The Company terminates the Employee’s employment with the Company for a reasonother than Cause or Permanent Disability; and 

 

(iii) Either (A) the Employee and the Company have executed a reciprocal general release, in the form attached hereto as Exhibit A, of all known and unknown claims that they may then have against each other (the “Release”)and have agreed not to prosecute any legal action or other proceeding based on such claims or (B) the Company (at its sole discretion) has determined to waive the requirement of a reciprocal general release. 

 

The foregoing notwithstanding, the Employee and the Company shall not be required to releaseany claims that they may have against each other arising under (i) the Indemnification Agreement dated April 30, 2003, between the Employee and the Company or (ii) any rights to indemnification, advancement of expenses or repayment arising under theCompany’s Amended and Restated Certificate of Incorporation, the Company’s Amended and Restated Bylaws or the indemnification provisions of applicable State statutes, in each case as currently in effect or as subsequently amended.

 

(b) **Severance Pay**. If this Section 2 applies, then theEmployee shall be entitled to receive severance payments from the Company for a period of 12 months following the termination of his employment (the “Continuation Period”). Such severance payments shall be made in accordance with theCompany’s standard payroll procedures. The annual rate of such severance payments shall be equal to the sum of (i) the Employee’s base salary at the annual rate in effect when his employment terminates plus (ii) the Employee’s annualtarget bonus for the fiscal year in which his employment terminates. In addition to any other remedies that may be available to the Company, severance payments shall cease immediately if the Employee fails to comply with the covenants set forth inSection 3 below. 

 

(c) **Acceleration of Vesting**. If thisSection 2 applies, then: 

 

(i) The vestedportion of all restricted shares of Stock held by the Employee at the time of the termination of his employment shall at all times thereafter be determined by adding 12 months to his actual period of service with the Company. 

 

(ii) The Employee shall continue to vest in the Equity heldby him at the time of the termination of his employment (other than restricted shares of Stock) during the Continuation Period, subject to his compliance with the covenants set forth in Section 3 below. The monthly rate of vesting during theContinuation Period shall be the same as prior to the termination of the Employee’s employment. 

 

(d) **Extension of Option Exercise Period**. If this Section 2 applies, and if the termination of the Employee’s employment is effective afterDecember 31, 2005, then all of the Options held by the Employee at the time of the termination of his employment shall remain exercisable until the earlier of: 

 

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(i) The later of (A) the date 12 months after the termination of the Employee’semployment or (B) with respect to any increment of such Options that becomes exercisable later than nine months after the termination of the Employee’s employment, the date three months after such increment becomes exercisable; or 

 

(ii) The date such Options would have expired if theEmployee’s employment had not terminated. 

 

(e)**Definition of “Cause**.**”** For purposes of this Section 2 only, “Cause” shall mean: 

 

(i) Any gross negligence or intentional misconduct that materially injures the Company and its subsidiaries, taken as a whole, or has amaterial adverse effect on the business or affairs of the Company and its subsidiaries, taken as a whole; 

 

(ii) Any unauthorized use or disclosure by the Employee of the Company’s confidential information or trade secrets resulting fromgross negligence that materially injures the Company and its subsidiaries, taken as a whole, or has a material adverse effect on the business or affairs of the Company and its subsidiaries, taken as a whole; 

 

(iii) A failure by the Employee to comply with theCompany’s written policies or rules that materially injures the Company and its subsidiaries, taken as a whole, or has a material adverse affect on the business or affairs of the Company and its subsidiaries, taken as a whole, provided that theBoard shall have given the Employee notice of such failure and an opportunity to cure such failure, if curable; or 

 

(iv) The Employee’s conviction of, or plea “guilty” or “no contest” to, a felony under the laws of the UnitedStates or any State thereof. 

 

With respect to acts or omissionsdescribed in Paragraphs (i) and (iii) above, “Cause” shall only be deemed to exist following written notice to the Employee from the Company and his failure to cure such acts or omissions within 30 days of receipt of such written notice.

 
 3. **COVENANTS.**
 

(a) **Non-Solicitation**. During his employment with the Company and, if Section 2 applies, during the Continuation Period, the Employee shall notdirectly or indirectly, personally or through others, solicit or attempt to solicit the employment of any employee of the Company or any of the Company’s affiliates, whether on the Employee’s own behalf or on behalf of any other person orentity. The term “employment” for purposes of this Subsection (a) means to enter into an arrangement for services as a full-time or part-time employee, independent contractor, agent or otherwise. The Employee and the Company agree thatthis provision is reasonably enforced as to any geographic area in which the Company conducts its business. 

 

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(b) **Non-Competition**. The Employee agrees that, during his employment with the Company and duringthe Continuation Period (if any), he shall not: 

 

(i) Directly or indirectly, individually or in conjunction with others, engage in activities that compete with the Company or work for any entity that is part of the Company’s Market; 

 

(ii) Solicit, serve, contract with or otherwise engage anyexisting or prospective customer, client or account of the Company on behalf of any entity that is part of the Company’s Market; or 

 

(iii) Cause or attempt to cause any existing or prospective customer, client or account of the Company to divert from, terminate, limit orin any manner modify, or fail to enter into, any actual or potential business relationship with the Company. The Employee and the Company agree that this provision is reasonably enforced with reference to any geographic area in which the Companymaintains any such relationship. 

 

For purposes of this Subsection (b), theCompany’s “Market” shall mean (i) all companies that derive their revenue primarily from e-procurement and/or spend management software sales or sales of software or services aiding companies in sourcing and/or spend managementactivities and (ii) those companies set forth on Exhibit B attached hereto. The Employee and the Company agree that the Company’s Market is global in scope. 

 

(c) **Cooperation and Non-Disparagement**. The Employee agrees that, during the Continuation Period, he shall cooperatewith and assist the Company in every reasonable respect in facilitating the transition of his duties to his successor; provided that the Employee shall not be required to devote more than 20 hours per month to providing such assistance andcooperation. The Employee further agrees that, during the Continuation Period, he shall not in any way or by any means disparage the Company, the members of the Board or the Company’s officers and employees. 

 

(d) **Disclosure**. The Employee agrees that, during the ContinuationPeriod, he shall inform any new employer or other person or entity with whom the Employee enters into a business relationship, before accepting employment or entering into a business relationship, of the existence of this Section 3. 

 

(e) **Construction**. If any provision set forth in this Section 3 is notenforceable under the laws of the State in which the Employee is employed following the termination of his employment with the Company, nothing in this Agreement shall prohibit the Employee from engaging in such lawful conduct; provided, however,that if the Employee elects to do so, his rights to any of the benefits set forth in Section 2 shall terminate immediately. 

 
 4. **PARACHUTE PAYMENTS.**
 

(a) **Parachute Gross-Up Payment**. If it is determined that any cash payment of any type to the Employee or for his benefit by the Company, any of itsaffiliates, any person who acquires ownership or effective control of the Company or ownership of a substantial portion of the Company’s assets (within the meaning of section 280G of the Internal Revenue 

 

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Code of 1986, as amended (the “Code”), and the regulations thereunder) or any affiliate of such person, whetherpaid or payable pursuant to the terms of this Agreement or otherwise (the “Total Payments”), would be subject to the excise tax imposed by section 4999 of the Code or any interest or penalties with respect to such excise tax (such excisetax and any such interest or penalties are collectively referred to as the “Excise Tax”), then the Employee shall be entitled to receive an additional payment (a “Gross-Up Payment”) in an amount calculated to ensure that afterthe Employee pays all taxes (and any interest or penalties imposed with respect to such taxes), including any Excise Tax, imposed upon the Gross-Up Payment, the Employee retains an amount of the Gross-Up Payment equal to the Excise Tax imposed uponthe Total Payments. For purposes of this Section 4, the Excise Tax and any related gross-up benefits shall be determined based on cash compensation, before consideration of the taxable compensation (if any) related to the Employee’s Equity andarising from this Agreement. 

 

(b) **Determination byAccountant**. All determinations and calculations required to be made under this Section 4 shall be made by an independent accounting firm selected by the Employee from among the largest five accounting firms in the United States (the“Accounting Firm”). The Accounting Firm shall provide its determination (the “Determination”), together with detailed supporting calculations regarding the amount of any Gross-Up Payment and any other relevant matter, to theEmployee and the Company within five business days after the Employee or the Company made a request (if the Employee reasonably believes that any of the Total Payments may be subject to the Excise Tax). If the Accounting Firm determines that noExcise Tax is payable by the Employee, it shall furnish the Employee with a written statement that it has concluded that no Excise Tax is payable (including the reasons therefor) and that the Employee has substantial authority not to report anyExcise Tax on his federal income tax return. If a Gross-Up Payment is determined to be payable, it shall be paid to the Employee within five business days after the Determination has been delivered to him or the Company. Any determination by theAccounting Firm shall be binding upon the Company and the Employee, absent manifest error. 

 

(c) **Over- and Underpayments**. As a result of uncertainty in the application of section 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-UpPayments not made by the Company should have been made (“Underpayment”) or that Gross-Up Payments will have been made by the Company that should not have been made (“Overpayment”). In either event, the Accounting Firm shalldetermine the amount of the Underpayment or Overpayment that has occurred. In the case of an Underpayment, the Company shall promptly pay the amount of such Underpayment to the Employee or for his benefit. In the case of an Overpayment, the Employeeshall, at the direction and expense of the Company, take such steps as are reasonably necessary (including the filing of returns and claims for refund), follow reasonable instructions from, and procedures established by, the Company, and otherwisereasonably cooperate with the Company to correct such Overpayment, provided, however, that (i) the Employee shall in no event be obligated to return to the Company an amount greater than the net after-tax portion of the Overpayment that the Employeehas retained or has recovered as a refund from the applicable taxing authorities and (ii) this provision shall be interpreted in a manner consistent with the intent of Subsection (a) above, which is to make the Employee whole, on an after-tax basis,from the application of the Excise Tax, it being understood that the correction of an Overpayment may result in the Employee’s repaying to the Company an amount that is less than the Overpayment. 

 

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(d) **Limitation on Parachute Payments**. Any other provision of this Section 4 notwithstanding, ifthe Excise Tax could be avoided by reducing the Total Payments by $25,000 or less, then the Total Payments shall be reduced to the extent necessary to avoid the Excise Tax and no Gross-Up Payment shall be made. If the Accounting Firm determines thatthe Total Payments are to be reduced under the preceding sentence, then the Company shall promptly give the Employee notice to that effect and a copy of the detailed calculation thereof. The Employee may then elect, in his sole discretion, which andhow much of the Total Payments are to be eliminated or reduced (as long as after such election no Excise Tax shall be payable), and the Employee shall advise the Company in writing of his election within 10 days of receipt of notice. If the Employeemakes no such election within such 10-day period, then the Company may elect which and how much of the Total Payments are to be eliminated or reduced (as long as after such election no Excise Tax shall be payable), and it shall notify the Employeepromptly of such election. 

 
 5. **EMPLOYMENT AT WILL.**
 

The Employee’s employment with the Company shall be “at will,” meaning that either the Employee or the Company shall be entitled toterminate the Employee’s employment at any time and for any reason, with or without Cause. Any contrary representations that may have been made to the Employee shall be superseded by this Agreement. This Agreement shall constitute the full andcomplete agreement between the Employee and the Company on the “at will” nature of the Employee’s employment, which may only be changed in an express written agreement signed by the Employee and a duly authorized officer of theCompany. 

 
 6. **SUCCESSORS.**
 

(a) **Company’s Successors**. This Agreement shall be binding upon any successor (whether direct or indirect and whether by purchase, lease,merger, consolidation, reorganization, liquidation or otherwise) to all or substantially all of the Company’s business and/or assets. For all purposes under this Agreement, the term “Company” shall include any successor to theCompany’s business and/or assets that becomes bound by this Agreement. 

 

(b) **Employee’s Successors**. This Agreement and all rights of the Employee hereunder shall inure to the benefit of, and be enforceable by, the Employee’s personal or legal representatives, executors,administrators, successors, heirs, distributees, devisees and legatees. 

 
 7. **ARBITRATION.**
 

(a) **Scope of Arbitration Requirement**. The parties hereby waive their rights to a trial before a judge or jury and agree to arbitrate before aneutral arbitrator any and all claims or disputes arising out of this Agreement or the Release and any and all claims arising from or relating to the Employee’s employment with the Company, including (but not limited to) claims against anycurrent or former employee, director or agent of the Company, claims of wrongful termination, retaliation, discrimination, harassment, breach of contract, breach of the covenant of good faith and fair dealing, defamation, invasion of privacy, fraud,misrepresentation, constructive discharge or failure to provide a leave of absence, claims regarding commissions, stock options or bonuses, infliction of emotional distress or unfair business practices, or any tort or tort-like causes of action.

 

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(b) **Exceptions**. The foregoing notwithstanding, the following are the only claims that may beresolved in any appropriate forum (including courts of law) as required by applicable laws then in effect: (i) claims concerning workers’ compensation benefits; and (ii) claims concerning unemployment insurance. 

 

(c) **Procedure**. The arbitrator’s decision shall be written andshall include the findings of fact and law that support the decision. The arbitrator’s decision shall be final and binding on both parties, except to the extent applicable law allows for judicial review of arbitration awards. The arbitrator mayaward any remedies that would otherwise be available to the parties if they were to bring the dispute in court. The arbitration shall be conducted in accordance with the National Rules for the Resolution of Employment Disputes of the AmericanArbitration Association; provided, however, that the arbitrator shall allow the discovery authorized by the California Arbitration Act or the discovery that the arbitrator deems necessary for the parties to vindicate their respective claims ordefenses. The arbitration shall take place in Santa Clara County or, at the Employee’s option, the county in which the Employee primarily worked with the Company at the time when the arbitrable dispute or claim first arose. 

 

(d) **Costs**. The parties shall share the costs of arbitration equally,except that the Company shall bear the cost of the arbitrator’s fee and any other type of expense or cost that the Employee would not be required to bear if he were to bring the dispute or claim in court. Both the Company and the Employee shallbe responsible for their own attorneys’ fees, and the arbitrator may not award attorneys’ fees unless a statute or contract at issue specifically authorizes such an award. 

 
 8. **MISCELLANEOUS PROVISIONS.**
 

(a) **Notice**. Notices and all other communications contemplated by this Agreement shall be in writing and shall be deemed to have been duly givenwhen personally delivered or when mailed by U.S. registered or certified mail, return receipt requested and postage prepaid. In the case of the Employee, mailed notices shall be addressed to him at the home address that he most recently communicatedto the Company in writing. In the case of the Company, mailed notices shall be addressed to its corporate headquarters, and all notices shall be directed to the attention of its Secretary. 

 

(b) **Entire Agreement**. This Agreement supersedes and replaces any prioragreements, representations or understandings, whether written, oral or implied, between the Employee and the Company with respect to the subject matter hereof. 

 

(c) **Modifications and Waivers**. No provision of this Agreement shall be modified, waived or discharged unless the modification, waiver ordischarge is agreed to in writing and signed by the Employee and by an authorized officer of the Company (other than the Employee). No waiver by either party of any breach of, or of compliance with, any condition or provision of this Agreement bythe other party shall be considered a waiver of any other condition or provision or of the same condition or provision at another time. 

 

(d) **Withholding Taxes**. All payments made under this Agreement shall be subject to reduction to reflect taxes or other charges required to bewithheld by law. 

 

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(e) **Choice of Law and Severability**. This Agreement is executed by the parties in the State ofCalifornia and shall be interpreted in accordance with the laws of such State (except their provisions governing the choice of law). If any provision of this Agreement becomes or is deemed invalid, illegal or unenforceable in any jurisdiction byreason of the scope, extent or duration of its coverage, then such provision shall be deemed amended to the extent necessary to conform to applicable law so as to be valid and enforceable or, if such provision cannot be so amended without materiallyaltering the intention of the parties, then such provision shall be stricken and the remainder of this Agreement shall continue in full force and effect. Should there ever occur any conflict between any provision contained in this Agreement and anypresent or future statute, law, ordinance or regulation contrary to which the parties have no legal right to contract, then the latter shall prevail, but the provision of this Agreement affected thereby shall be curtailed and limited only to theextent necessary to bring it into compliance with applicable law. All the other terms and provisions of this Agreement shall continue in full force and effect without impairment or limitation. 

 

(f) **No Assignment**. This Agreement and all rights and obligations ofthe Employee hereunder are personal to the Employee and may not be transferred or assigned by the Employee at any time; provided that Employee may assign his rights hereunder pursuant to any property settlement resulting from the dissolution of hismarriage on the condition that such rights shall be conditioned upon Employee’s performance of his obligations hereunder as if no such assignment had occurred. The Company may assign its rights under this Agreement to any entity that assumesthe Company’s obligations hereunder in connection with any sale or transfer of all or a substantial portion of the Company’s assets to such entity. 

 

(g) **Counterparts**. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which togethershall constitute one and the same instrument. 

 

**IN WITNESSWHEREOF**, each of the parties has executed this Agreement, in the case of the Company by its duly authorized officer, as of the day and year first above written. 

 
/s/    H. Tayloe Stansbury         ARIBA, INC.By /s/    Robert M. Calderoni        Title: CEO
 

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**EXHIBIT A**

**FORM OF RELEASE**

 

**ARIBA, INC.**

807 11th Avenue 

Sunnyvale, CA 94089 

 

                         , 20    

 

Mr. Tayloe Stansbury 

 

Dear Tayloe: 

 

This letter (the “Agreement”) confirms the agreement between you and Ariba, Inc. (the “Company”) regarding the termination of youremployment with the Company. 

 

1. **Termination Date.**Youremployment with the Company will terminate on                          , 20     (the“Termination Date”). 

 

2. **Effective Date andRescission.** You have up to 21 days after you received this Agreement to review it. You are advised to consult an attorney of your own choosing (at your own expense) before signing this Agreement. Furthermore, you have up to seven days after yousigned this Agreement to revoke it. If you wish to revoke this Agreement after signing it, you may do so by delivering a letter of revocation to me. If you do not revoke this Agreement, the eighth day after the date you signed it will be the“Effective Date.” Because of the seven-day revocation period, no part of this Agreement will become effective or enforceable until the Effective Date. 

 

3. **Salary and Vacation Pay.**On the Termination Date, the Company will pay you$             (less all applicable withholding taxes and other deductions). This amount represents all of your salary earned through the Termination Date and all of your accrued butunused vacation time or PTO. You acknowledge that, if you did not execute this Agreement, you would not be entitled to receive any additional money from the Company. The only payments and benefits that you are entitled to receive from the Company inthe future are those specified in this Agreement. 

 

4.**Severance Benefits.**In consideration of executing this Agreement, you will receive from the Company the severance payments and other benefits described in Section 2 of the Severance Agreement dated August 26, 2004, between you and the Company(the “Severance Agreement”). As described in Section 2 of the Severance Agreement, the continuation of such severance benefits is subject to your compliance with the covenants described in Section 3 of the Severance Agreement. 

 

5. **Release of Your Claims.** In consideration of receiving theseverance payments and other benefits described in Section 2 of the Severance Agreement, you waive, 

 

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release and promise never to assert any claims or causes of action, whether or not now known, against the Company or itspredecessors, successors or past or present subsidiaries, stockholders, directors, officers, employees, consultants, attorneys, agents, assigns and employee benefit plans with respect to any matter, including (without limitation) any matter relatedto your employment with the Company or the termination of that employment, including (without limitation) claims to attorneys’ fees or costs, claims of wrongful discharge, constructive discharge, emotional distress, defamation, invasion ofprivacy, fraud, breach of contract or breach of the covenant of good faith and fair dealing and any claims of discrimination or harassment based on sex, age, race, national origin, disability or any other basis under Title VII of the Civil RightsAct of 1964, the California Fair Employment and Housing Act, the Age Discrimination in Employment Act of 1967, the Americans with Disabilities Act and all other laws and regulations relating to employment. However, this release bars only thoseclaims that arose prior to the execution of this Agreement. Execution of this Agreement does not bar: 

 

(a) Any claim that arises hereafter; 

 

(b) Any claim arising under the Indemnification Agreement dated April 30, 2003, between you and the Company, as amended (the“Indemnification Agreement”); 

 

(c)Any claim to indemnification or advancement of expenses arising under the Company’s Amended and Restated Certificate of Incorporation, as amended (the “Certificate”), or the Company’s Amended and Restated Bylaws, as amended (the“Bylaws”); or 

 

(d) Any claim toindemnification or advancement of expenses arising under applicable State statutes. 

 

6. **Release of the Company’s Claims.**The Company waives, releases and promises never to assert any claims or causes of action, whether or not now known, against you or your successors, agents or assignswith respect to any matter, including (without limitation) any matter related to your employment with the Company or the termination of that employment, including (without limitation) claims to attorneys’ fees or costs and claims of defamation,fraud, breach of contract or breach of the covenant of good faith and fair dealing. However, this release bars only those claims that arose prior to the execution of this Agreement. Execution of this Agreement does not bar: 

 

(a) Any claim that arises hereafter; 

 

(b) Any claim arising under the Indemnification Agreement;

 

(c) Any claim to repayment of indemnificationpayments arising under the Certificate or the Bylaws; or 

 

(d) Any claim to repayment of indemnification payments arising under applicable State statutes. 

 

7. **Waiver.**You and the Company expressly waive and release any and all rights and benefits under Section 1542 of the California Civil Code (or anyanalogous law of any 

 

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other State), which reads as follows: “A general release does not extend to claims which the creditor does not knowor suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor.” 

 

8. **Promise Not To Sue.**You agree that you will never, individually or with any other person, commence, aid in any way (except as required bylegal process) or prosecute, or cause or permit to be commenced or prosecuted, any action or other proceeding based on any claim that has been released pursuant to Section 5 above. The Company agrees that it will never, individually or with anyother person, commence, aid in any way (except as required by legal process) or prosecute, or cause or permit to be commenced or prosecuted, any action or other proceeding based on any claim that has been released pursuant to Section 6 above.

 

9. **No Admission.**Nothing contained in this Agreementwill constitute or be treated as an admission by you or the Company of liability, any wrongdoing or any violation of law. 

 

10. **Employee Agreement.** At all times in the future, you will remain bound by your Employee Agreement with the Company. 

 

11. **Company Property.** You represent that you have returned to theCompany all property that belongs to the Company, including (without limitation) copies of documents that belong to the Company and files stored on your computer(s) that contain information belonging to the Company. 

 

12. **Severability; Modifications.**If any term of this Agreement is heldto be invalid, void or unenforceable, the remainder of this Agreement will remain in full force and effect and will in no way be affected, and the parties will use their best efforts to find an alternate way to achieve the same result. ThisAgreement may be modified only in a written document signed by you and a duly authorized officer of the Company. 

 

13. **Choice of Law; Arbitration.** This Agreement will be construed and interpreted in accordance with the laws of the State of California (other thantheir choice-of-law provisions). The arbitration requirement described in Section 7 of the Severance Agreement shall also apply to this Agreement. 

 

14. **Execution.**This Agreement may be executed in counterparts, each of which will be considered an original, but all of which together willconstitute one agreement. Execution of a facsimile copy will have the same force and effect as execution of an original, and a facsimile signature will be deemed an original and valid signature. 

 

Please indicate your agreement with the above terms by signingbelow. 

 

Very truly yours, 

 

ARIBA, INC. 

 

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By:                                                      

 

Title:                                                  

 

I agree to theterms of this Agreement, and I am voluntarily signing this release of all claims. I acknowledge that I have read and understand this Agreement, and I understand that I cannot pursue any of the claims and rights that I have waived in this Agreementat any time in the future. 

 

 

                                Signature of Tayloe Stansbury 

 

Dated:                                                                                  

 

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**EXHIBIT B**

 

**LIST OF COMPANIES**

 

Agile 

Atlas Commerce 

B2E Markets 

Broadvision 

C1 

Clarus 

Concur 

diCarta 

Emptoris

First Index 

FreeMarkets 

Frictionless Commerce 

Healy Hudson 

i2 

iMany 

ICG Commerce 

Manugistics 

Matrix One 

Oracle 

PeopleSoft 

Peregrine 

PurchasePro 

Siebel 

ShareMax 

Webango 

Zeborg 

 

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