**Exhibit 10.28**

 

 

 

 

**Ariba, Inc.**

**807 11th Avenue**

**Sunnyvale, CA 94089**

 

**September 6, 2002**

 

Michael Schmitt 

807 11th Avenue 

Sunnyvale, CA 94089 

 

 

Dear Michael: 

 

For good and valuable consideration, Ariba, Inc. (the“Company”) is pleased to offer you the following severance arrangement: 

 

1.    **Severance Pay**.    If the Company terminates your employment for any reason other than Cause or Permanent Disability, then the Company will continue to pay your cashcompensation for a period of 12 months following the termination of your employment (the “Continuation Period”). For this purpose, your “cash compensation” will be deemed to be the sum of: 

 

(a)    Your base salaryat the rate in effect at the time of the termination of your employment; plus 

 

(b)    The lesser of (i) the sum of your actual bonuses for the last four completed fiscal quarters preceding the termination of your employment or (ii) your target bonuses forthose four completed fiscal quarters. 

 

Your cash compensationwill be paid in accordance with the Company’s standard payroll procedures. 

 

However, this Paragraph 1 will not apply unless you (a) sign a general release of claims (in a form prescribed by the Company) of all known and unknown claims that you may then have against the Companyor persons affiliated with the Company and (b) have returned all Company property. In addition, all payments under this Paragraph 1 will be discontinued immediately if you fail to comply with Paragraph 2, 3, 4 or 5 below. 

 

“Cause” means (a) an unauthorized use or disclosureof the Company’s confidential information or trade secrets, which use or disclosure causes material harm to the Company, (b) a material breach of any agreement between you and the Company, (c) a material failure to comply with theCompany’s written policies or rules, (d) a conviction of, or plea of “guilty” or “no contest” to, a felony under the laws of the United States or any State, (e) gross negligence or willful misconduct or (f) a continuedfailure to perform assigned duties after receiving written notification of the failure from the Company’s Chief Executive Officer. The 

Michael Schmitt 

September 6, 2002 

Page 2 

 

foregoing is not an exclusive list of all acts or omissions that the Company may consider as grounds for your termination without Cause.

 

“Permanent Disability” means that youare unable to perform the essential functions of your position, with or without reasonable accommodation, for a period of at least 120 consecutive days because of a physical or mental impairment. 

 

2.    **Non-Solicitation**.    While you render services to the Company and during the Continuation Period (if any), you agree that you will not directly or indirectly, personally or throughothers, solicit or attempt to solicit the employment of any employee of the Company or any of the Company’s affiliates, whether on your own behalf or on behalf of any other person or entity. The term “employment” for purposes of thisParagraph 2 means to enter into an arrangement for services as a full-time or part-time employee, independent contractor, agent or otherwise. You and the Company agree that this provision is reasonably enforced as to any geographic area in which theCompany conducts its business. 

 

3.    **Non-Competition**.    While you render services to the Company and during the Continuation Period (if any), you agree that you will not: 

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

 

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

 

(c)    Cause or attempt to cause any existing or prospective customer, client or account of theCompany to divert from, terminate, limit or in any manner modify, or fail to enter into, any actual or potential business relationship with the Company. 

 

You and the Company agree that this provision is reasonably enforced with reference to any geographic area in which the Company maintains any suchrelationship. For purposes of this Paragraph 3, the Company’s “Market” means (i) all companies that derive their revenue primarily from e-procurement software sales or sales of software or services aiding companies in sourcingactivities; and (ii) those companies set forth on Exhibit A hereto. You and the Company agree that the Company’s Market is global in scope. 

 

You and the Company further agree that if any provision set forth in this paragraph is not enforceable under the laws of the state in which you areemployed following the termination of your employment with the Company, nothing in this Agreement shall prohibit you from engaging in such lawful conduct; provided however, that if you elect to do so your rights to any of the severance pay set forthin section 1 above shall be discontinued immediately. 

Michael Schmitt 

September 6, 2002 

Page 3 

 

 

4.    **Cooperation and Non-Disparagement**.    You agree that, during the Continuation Period, you will cooperate with the Company in every reasonable respect and will use your best effortsto assist the Company with the transition of your duties to your successor. You further agree that, during the Continuation Period, you will not in any way or by any means disparage the Company, the members of the Company’s Board of Directorsor the Company’s officers and employees. 

 

5.    **Disclosure**.    You agree that, during the Continuation Period, you will inform any new employer or other person or entity with whom you enter into a business relationship, beforeaccepting employment or entering into a business relationship, of the existence of Paragraphs 2, 3 and 4 above. 

 

6.    **Employment Relationship**.    Notwithstanding the foregoing, employment with the Company is for no specific period of time. Your employment with theCompany is “at will,” meaning that either you or the Company may terminate your employment at any time and for any reason, with or without cause. Any contrary representations that may have been made to you are superseded by this offer.This is the full and complete agreement between you and the Company on this term. Although your job duties, title, compensation and benefits, as well as the Company’s personnel policies and procedures, may change from time to time, the “atwill” nature of your employment may only be changed in an express written agreement signed by you and the Chief Executive Officer of the Company. 

 

7.    **Withholding Taxes**.    All forms of compensation referred to in this letter agreement are subject toreduction to reflect applicable withholding and payroll taxes and other deductions required by law. 

 

8.    **Entire Agreement**.    This letter agreement supersedes and replaces any prior agreements, representations or understandings, whether written, oral orimplied, between you and the Company with respect to the subject matter hereof. 

 

9.    **Severability**.    If any provision of this letter agreement becomes or is deemed invalid, illegal or unenforceable in any applicable jurisdiction by reason of the scope, extent orduration of its coverage, then that provision will be deemed amended to the minimum extent necessary to conform to applicable law so as to be valid and enforceable or, if the provision cannot be so amended without materially altering the intentionof the parties, then the provision will be stricken and the remainder of this letter agreement will continue in full force and effect. If any provision of this letter agreement is rendered illegal by any present or future statute, law, ordinance orregulation (collectively, the “Law”), then that provision will be curtailed or limited only to the minimum extent necessary to bring the provision into compliance with the Law. All the other terms and provisions of this letter agreementwill continue in full force and effect without impairment or limitation. 

 

10.    **Arbitration**.    You and the Company agree to waive any rights to a trial before a judge or jury and agree to arbitrate before a neutral arbitrator any and all claims or disputesarising out of 

Michael Schmitt 

September 6, 2002 

Page 4 

 

this letter agreement and any and all claims arising from or relating to your employment with the Company, including (but not limited to)claims against any current 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, invasionof privacy, fraud, misrepresentation, constructive discharge or failure to provide a leave of absence, or claims regarding commissions, stock options or bonuses, infliction of emotional distress or unfair business practices. 

 

The arbitrator’s decision must be written and mustinclude the findings of fact and law that support the decision. The arbitrator’s decision will be final and binding on both parties, except to the extent applicable law allows for judicial review of arbitration awards. The arbitrator may awardany remedies that would otherwise be available to the parties if they were to bring the dispute in court. The arbitration will be conducted in accordance with the National Rules for the Resolution of Employment Disputes of the American ArbitrationAssociation; provided, however that the arbitrator must 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 or defenses. Thearbitration will take place in Santa Clara County or, at your option, the county in which you primarily worked with the Company at the time when the arbitrable dispute or claim first arose. 

 

You and the Company will share the costs of arbitrationequally, except that the Company will bear the cost of the arbitrator’s fee and any other type of expense or cost that you would not be required to bear if you were to bring the dispute or claim in court. Both the Company and you will beresponsible 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. 

 

This arbitration provision does not apply to (a) workers’ compensation or unemployment insurance claimsor (b) claims concerning the validity, infringement or enforceability of any trade secret, patent right, copyright or any other trade secret or intellectual property held or sought by either you or the Company (whether or not arising under theProprietary Information and Inventions Agreement between you and the Company). 

 

If an arbitrator or court of competent jurisdiction (the “Neutral”) determines that any provision of this arbitration provision is illegal or unenforceable, then the Neutral shall modify orreplace the language of this arbitration provision with a valid and enforceable provision, but only to the minimum extent necessary to render this arbitration provision legal and enforceable. 

 

* * * * * 

 

You may indicate your agreement with these terms and acceptthis offer by signing and dating both the enclosed duplicate original of this letter agreement and returning them to me. This offer, if not accepted, will expire at the close of business on                                         ,2002. 

Michael Schmitt 

September 6, 2002 

Page 5 

 

 

Very truly yours,

Ariba, Inc.

By:
 
/s/    ROBERT M.CALDERONI

Title:
 
Chief Executive Officer

 

 

I have read and accept this employment offer: 

 

/s/    MICHAELSCHMITT

Signature of Michael Schmitt

Dated:
 
September 6, 2002

Michael Schmitt 

September 6, 2002 

Page 6 

 

 

**Exhibit A**

 

 

[*] 

 
* Represents confidential information for which Ariba, Inc. is seeking confidential treatment with the Securities and Exchange Commission.