Document:

Ariba Bonus Plan

 Exhibit 10.2 
  
 ARIBA BONUS PLAN 
  
 NORTH AMERICA 
  
 1. Effective Date and Term. This Plan was adopted by the Compensation
Committee (the “Committee”) of the Board of Directors of Ariba, Inc. (the “Company”) effective October 1, 2004, and will continue to apply until it is amended or terminated by the Committee. 
  
 2. Administration. The Committee administers the Plan and adopts rules
and regulations to implement the Plan. The decisions of the Committee are final and binding on all parties who have an interest in the Plan. 
  
 3. Eligibility. Participation in the Plan is limited to non-commercial employees in good standing who are located in North America. Participation
in this Plan is effective on the day the participant starts in the bonus-eligible job. Participants must be employed in a bonus-eligible position before the first day of the last month of the quarter to be eligible to participate in the Plan for
that quarter. Bonus payments will be pro-rated for participants who become eligible after the start of a quarter or for employees on a leave of absence or sabbatical for all or part of the quarter. A participant may be removed from the Plan at any
time and for any reason, at the Company’s discretion. 
  
 4.
Determination of Amounts. The Plan may provide a quarterly cash bonus that is paid based on the achievement of pre-determined Company performance objectives and individual management objectives. The amount of each participant’s quarterly
bonus is determined as follows: 
  
 (a) An annual
target bonus amount is assigned to the participant at the time of his or her hiring. The annual target bonus amount may be modified from time to time thereafter. The quarterly target bonus amount is equal to 25% of the annual target bonus amount.

  
 (b) In the case of most participants, 50% of
the actual quarterly bonus is determined on the basis of the Company’s quarterly revenue score and 50% is determined on the basis of the Company’s quarterly operating profit score. (The exception is described below.) 
  
 (c) “Operating profit” means after-tax income
excluding (i) integration-related expense, (ii) amortization of acquired core technology and in-process R&D, (iii) amortization of goodwill and intangibles and (iv) amortization of stock-based compensation. 
  
 (d) As soon as reasonably practicable after the beginning of
a fiscal year, the Committee determines for each quarter in that year the amounts of revenue and operating profit that will be required for revenue and operating profit 

  

 
scores of 0.50, 1.00 and 1.50. If the amount of revenue or operating profit is less than the amount required for a 0.50 score, the score will be zero. If the
amount of revenue or operating profit is greater than the amount required for a 1.50 score, the score will be 1.50. If the amount of revenue or operating profit falls between the amounts required for a 0.50 score and a 1.00 score, or between the
amounts required for a 1.00 score and a 1.50 score, then straight-line interpolation will be used. 
  
 (e) When the actual amount of revenue for a quarter has been determined, the revenue score is calculated. Likewise, when the actual amount
of operating profit for a quarter has been determined, the operating profit score is calculated. Then the two scores are averaged. 
  
 (f) The average score for the first two quarters of the fiscal year will in no event exceed 1.20. 
  
 (g) The average of the two scores is multiplied by each
participant’s quarterly target bonus amount. The result is the participant’s actual quarterly bonus. 
  
 (h) All calculations for the second and subsequent quarters of a fiscal year are performed on a cumulative year-to-date basis. The
quarterly bonus calculated on that basis is then reduced by the quarterly bonus or bonuses already paid for the same fiscal year. 
  
 (i) A participant’s bonus for each quarter is multiplied by an individual-performance factor that may be 0% or range from 50% to
150%. However, in the case of an executive officer, as defined for purposes of section 16 of the Securities Exchange Act of 1934 (an “Executive Officer”), only the bonus for the fourth quarter (calculated on a cumulative year-to-date
basis) is multiplied by the individual-performance factor. The individual-performance factor is based on the attainment of predetermined management objectives and may include subjective elements. Each participant’s individual-performance factor
is determined by management, except that the individual-performance factor of an Executive Officer is determined by the Committee. If an Executive Officer’s cumulative bonus amount for a fiscal year (as adjusted by his or her
individual-performance factor) is less than the sum of the quarterly bonuses already paid to him or her for the same fiscal year, the participant will not be required to refund the quarterly bonuses already paid. 
  
 (j) In the case of certain Executive Officers, the
Company’s quarterly bookings score replaces all or part of the quarterly revenue score. These Executive Officers will be designated by the Committee as soon as reasonably practicable after the beginning of the fiscal year. At that time, the
Committee also determines for each quarter in that year the amount of bookings that will be required for bookings scores of 0.50, 1.00, 1.50 and 2.00. If the amount of bookings is less than the amount required for a 0.50 score, the score will be
zero. 

  

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If the amount of bookings is greater than the amount required for a 2.00 score, the score will be 2.00. If the amount of bookings falls between the amounts
required for one of the foregoing scores, then straight-line interpolation will be used. 
  
 (k) The Committee may adjust the amount of the Company’s quarterly revenue or quarterly operating profit, or both, to exclude
extraordinary expenses or benefits. 
  
 (l) If
the average score applicable to a participant for a fiscal year is less than 0.50, then the Committee (in the case of Executive Officers) or the Company’s Chief Executive Officer (in the case of all other participants) may approve a bonus
payment for the fourth quarter of that year (calculated on a cumulative year-to-date basis) of up to 50% of the participant’s target bonus amount for that year, based on an assessment of the participant’s individual performance.

  
 5. Payment of Bonuses. Payment of the quarterly cash
bonus (if any) is targeted for the end of the third semi-monthly pay period following the end of a given quarter. Adjustments to this payment schedule may be made as business conditions require. 
  
 6. Employment Requirement. Unless a Severance Agreement between a
participant and the Company provides otherwise, the participant must be employed by the Company at the time of the bonus payment to receive the quarterly cash bonus. 
  
 7. Modification or Termination of the Plan. The Committee reserves the right to modify, suspend or terminate this
Plan at any time. Should an acquisition or significant business initiative change the operating plan, this Plan may be modified and a new plan will go into effect at the start of the quarter following this event. 
  
 8. Benefits Unfunded. No amounts awarded or accrued under this Plan
will be funded, set aside or otherwise segregated prior to payment. The obligation to pay the bonuses awarded hereunder will at all times be an unfunded and unsecured obligation of the Company. Plan participants will have the status of general
creditors and must look solely to the general assets of the Company for the payment of their bonus awards. 
  
 9. Benefits Nontransferable. No Plan participant will have the right to alienate, pledge or encumber his or her interest in this Plan, and such
interest will not (to the extent permitted by law) be subject in any way to the claims of the participant’s creditors or to attachment, execution or other process of law. 
  
 10. No Employment Rights. No action of the Company in establishing the Plan, no action taken under the Plan by the
Committee and no provision of the Plan itself will be construed to grant any person the right to remain in the employ of the Company or its subsidiaries for any period of specific duration. Rather, each employee is employed “at will,”
which means that either the employee or the Company may terminate the employment relationship at any time and for any reason, with or without cause. 
  

 3Notice of Stock Option Grant and Agreement

  
 Exhibit 10.3

  
 ARIBA, INC.

  
 1999 DIRECTOR’S
STOCK OPTION PLAN 
  
 NOTICE OF STOCK OPTION GRANT 
  
 You have been granted the following option to purchase Common Stock of Ariba, Inc. (the “Corporation”): 
  

			
	Name of Optionee:	  	Robert Johnson
		
	Total Number of Shares Granted:	  	12,500
		
	Type of Option:	  	Nonstatutory Stock Option
		
	Exercise Price Per Share:	  	$12.58
		
	Date of Grant:	  	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

  
 By your signature below, you agree
that this option is granted under and governed by the terms and conditions of the Stock Option Agreement, which is attached to and made a part of this document and the Corporation’s 1999 Directors’ Stock Option Plan (the “Plan”).

  

	
	OPTIONEE:
	
	  
	
	  
	 Print Name

  

 1 

  
 ARIBA,
INC. 
  
 1999 DIRECTORS’
STOCK OPTION PLAN 
  
 STOCK OPTION AGREEMENT 
  

			
	Grant of Option	  	You have been granted an option as of the Grant Date to purchase up to the number of Shares of Common Stock specified in the Notice of Stock Option Grant.
		
	Tax Treatment	  	This option is intended to be a nonstatutory option, not qualified under section 422 of the Internal Revenue Code.
		
	Vesting	  	This option becomes exercisable in installments, as shown in the Notice of Stock Option Grant. No additional shares become exercisable after your service as an outside director of the
Corporation (“Board Service”) has terminated for any reason.
		
	Term	  	This option expires in any event 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 Board Service
terminates, as described below.)
		
	 Regular
 Termination
	  	If your Board Service terminates for any reason, then this option will expire on the date 12 months after your termination date. The Corporation determines when your Board Service terminates
for this purpose. This option shall immediately terminate and cease to be outstanding, at the time of your cessation of Board Service, with respect to any option shares for which the option is not otherwise at that time exercisable.
		
	Death	  	If you die while in Board Service or within twelve (12) months after cessation of Board Service, then the option will expire on the date 12 months after the date of your cessation of Board
Service. This option may be exercised to the extent then exercisable by your beneficiary, if you have designated one, the personal representative of your estate or by the person to whom the option is transferred pursuant to your will or by the laws
of descent and distribution.

  

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	Change in Control	  	In the event of a Change in Control, then the vesting of this option will automatically accelerate so that this option will, immediately before the effective date of the Change in Control,
become fully exercisable for all of the shares of Common Stock at the time subject to this option. This option will terminate if not assumed by the successor corporation (or its parent) in connection with the Change in Control.
		
	 	  	Change in Control is defined in the Corporation’s 1999 Director’s Stock Option Plan.
		
	Restrictions on Exercise	  	The Corporation 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 Corporation 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 (in your name only or in your and your spouse’s names as community property or as joint tenants with right of survivorship). The notice will be
effective when it is received by the Corporation or its representative.
		
	 	  	If someone else wants to exercise this option after your death, that person must prove to the Corporation’s satisfaction that he or she is entitled to do so.
		
	Form of Payment	  	 When you submit your notice of exercise, you must include payment of the option exercise price for the shares 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 Common Stock that you own, along with any forms needed to
effect a transfer of those shares to the Corporation. 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 Common Stock, you may attest
to the ownership of those shares on a form provided by the Corporation 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 Common Stock in
payment of the exercise price if your action would cause the Corporation to recognize compensation expense (or additional compensation expense) with respect to this option for financial reporting purposes.

  

 3 

			
	 	  	 •      Irrevocable directions to a securities broker approved by the Corporation to sell all or part of
your option shares and to deliver to the Corporation 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 Corporation.

		
	Withholding Taxes	  	You will not be allowed to exercise this option unless you make arrangements acceptable to the Corporation to pay any withholding taxes that may be due as a result of the option
exercise.
		
	Restrictions on Resale	  	By signing this Agreement, you agree not to sell any option shares at a time when applicable laws, Corporation policies or an agreement between the Corporation and its underwriters prohibit a
sale. This restriction will apply as long as you are in Board Service and for such period of time following your cessation of Board Service as the Corporation may specify.
		
	Market Stand-off	  	In connection with any underwritten public offering by the Corporation of its equity securities pursuant to an effective registration statement filed under the Securities Act of 1933, you
agree that you will not directly or indirectly sell, make any short sale of, loan, hypothecate, pledge, offer, grant or sell any option or other contract for the purchase of, purchase any option or other contract for the sale of, or otherwise
dispose of or transfer, or agree to engage in any of the foregoing transactions with respect to, any shares acquired under this option without the prior written consent of the Corporation or its underwriters. This market stand-off restriction shall
be in effect for such period of time following the offering as may be requested by the Corporation or its underwriters up to a maximum of 120 days for an initial underwritten public offering and 180 days for any other underwritten public offering,
but shall terminate two years after the date of the Corporation’s initial public offering. The Corporation may impose stop-transfer instructions with respect to the shares acquired under this option.
		
	Transfer of Option	  	Before 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 by a beneficiary designation.
		
	 	  	Regardless of any marital property settlement agreement, the Corporation is not obligated to honor a notice of exercise from your former spouse, nor is the Corporation obligated to recognize
your former spouse’s interest in your option in any other way.

  

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	No Impairment of Rights	  	Nothing in this option or in the Plan shall interfere with or otherwise restrict in any way the rights of the Corporation and the Corporation’s stockholders to remove you from the Board
at any time in accordance with the provisions of applicable law.
		
	Stockholder Rights	  	You, or your estate or heirs or beneficiaries, have no rights as a stockholder of the Corporation until you have exercised this option by giving the required notice to the Corporation 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 Corporation’s 1999 Directors’ Stock Option
Plan.
		
	Adjustments	  	In the event of a stock split, a stock dividend or a similar change in Common Stock, the number of shares covered by this option and the exercise price per share may be adjusted pursuant to
the Corporation’s 1999 Directors’ Stock Option 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 Corporation’s 1999 Directors’ Stock Option Plan is incorporated in this Agreement by reference.
		
	 	  	This Agreement and the Corporation’s 1999 Directors’ Stock Option Plan constitute the entire understanding between you and the Corporation regarding this option. Any prior
agreements, commitments or negotiations concerning this option are superseded. This Agreement may be amended only by another written agreement, signed by both parties.

  
 BY
SIGNING THE NOTICE OF STOCK OPTION GRANT, YOU AGREE TO ALL OF
THE 
 TERMS AND CONDITIONS DESCRIBED ABOVE
AND IN THE CORPORATION’S 1999 
 DIRECTORS’ STOCK OPTION PLAN. 
  

 5

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