{"id":40212,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/offer-to-exchange-all-outstanding-options-to-purchase-common.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"offer-to-exchange-all-outstanding-options-to-purchase-common","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/compensation\/offer-to-exchange-all-outstanding-options-to-purchase-common.html","title":{"rendered":"Offer to Exchange All Outstanding Options to Purchase Common Stock Under Eligible Option Plans &#8211; Ariba Inc."},"content":{"rendered":"<pre>\n\n                                   ARIBA, INC.\n\n    OFFER TO EXCHANGE ALL OUTSTANDING OPTIONS TO PURCHASE COMMON STOCK UNDER\n                              ELIGIBLE OPTION PLANS\n\n                     THE OFFER AND WITHDRAWAL RIGHTS EXPIRE\n                  AT 9:00 P.M., PACIFIC TIME, ON MARCH 9, 2001,\n                          UNLESS THE OFFER IS EXTENDED.\n\nAriba, Inc. is offering to exchange all outstanding options to purchase shares\nof our common stock granted under the Ariba, Inc. 1999 Equity Incentive Plan\n(the \"1999 option plan\"), Ariba, Inc. 1996 Stock Plan, TradingDynamics, Inc.\n1998 Stock Plan, TradingDynamics, Inc. 1999 Stock Plan, Tradex Technologies,\nInc. 1997 Employee Stock Option Plan, Tradex Technologies, Inc. 1999 Employee\nStock Option\/Stock Issuance Plan and SupplierMarket.com, Inc. 1999 Stock Option\nPlan (collectively, the \"eligible option plans\") for new options that we will\ngrant under an eligible option plan. We are making this offer upon the terms and\nsubject to the conditions set forth in this offer to exchange and in the related\nElection Concerning Exchange of Stock Options form (which together, as they may\nbe amended from time to time, constitute the \"offer\"). The number of shares of\ncommon stock subject to new options to be granted to each option holder will be\nequal to the number of shares subject to the options elected to be exchanged by\nsuch option holder and accepted for exchange. We will grant the new options on\nthe date of the first meeting of the compensation committee of the Ariba board\nof directors held more than six months after the date we cancel the options\naccepted for exchange (the \"replacement grant date\"). If you choose to\nparticipate, you must elect to exchange all options granted on or after\nSeptember 11, 2000 for all of the shares of common stock subject to those\noptions and you may elect to exchange any or all options granted prior to\nSeptember 11, 2000 for all shares of common stock subject to those options.\n\nThis offer is not conditioned upon a minimum number of options being elected for\nexchange. This offer is subject to conditions, which we describe in Schedule A\nof this offer to exchange.\n\nIf you elect to exchange options as described in the offer and if your offer is\naccepted, we will grant you new options under an eligible option plan pursuant\nto a new option agreement between us and you. The exercise price of the new\noptions will be equal to the last reported sale price of our common stock on the\nNasdaq National Market on the replacement grant date, as reported in the print\nedition of The Wall Street Journal. The new options will vest on the same\nschedule as the options you elect for exchange and have other terms and\nconditions that are substantially the same as those of the cancelled options.\n\nALTHOUGH OUR BOARD OF DIRECTORS HAS APPROVED THIS OFFER, NEITHER WE NOR OUR\nBOARD OF DIRECTORS MAKES ANY RECOMMENDATION AS TO WHETHER YOU SHOULD ELECT TO\nEXCHANGE OR REFRAIN FROM ELECTING TO EXCHANGE YOUR OPTIONS. YOU MUST MAKE YOUR\nOWN DECISION WHETHER TO ELECT TO EXCHANGE YOUR OPTIONS.\n\nShares of our common stock are quoted on the Nasdaq National Market under the\nsymbol \"ARBA.\" On February 7, 2001, the last reported sale price of the common\nstock on the Nasdaq National Market was $29.00 per share. WE RECOMMEND THAT YOU\nOBTAIN CURRENT MARKET QUOTATIONS FOR OUR COMMON STOCK BEFORE DECIDING WHETHER TO\nELECT TO EXCHANGE YOUR OPTIONS.\n\nYou should direct questions about this offer or requests for assistance or for\nadditional copies of the offer to exchange or the Election Concerning Exchange\nof Stock Options form to Monica Volta, Ariba Stock Programs, by email at\nmvolta@ariba.com or by telephone at (650) 930-8790 or Donna Hammer, Ariba Stock\nPrograms, by email at dhammer@ariba.com or by telephone at (650) 930-8606.\n\n\n                                       1\n\n \n                                    IMPORTANT\n\n\nIf you wish to elect to exchange your options, you must complete and sign the\nElection Concerning Exchange of Stock Options form in accordance with its\ninstructions, and send it and any other required documents to us by fax at (650)\n930-6852 or (650) 930-6300 or email at mvolta@ariba.com or by post to Monica\nVolta, Ariba, Inc. 1565 Charleston Road, Mountain View, California 94043.\n\nWe are not making this offer to, nor will we accept any election to exchange\noptions from or on behalf of, option holders in any jurisdiction in which the\noffer or the acceptance of any election to exchange options would not be in\ncompliance with the laws of such jurisdiction. However, we may, at our\ndiscretion, take any actions necessary for us to make this offer to option\nholders in any such jurisdiction.\n\nWE HAVE NOT AUTHORIZED ANY PERSON TO MAKE ANY RECOMMENDATION ON OUR BEHALF AS TO\nWHETHER YOU SHOULD ELECT TO EXCHANGE OR REFRAIN FROM ELECTING TO EXCHANGE YOUR\nOPTIONS PURSUANT TO THE OFFER. YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED\nIN THIS DOCUMENT OR TO WHICH WE HAVE REFERRED YOU. WE HAVE NOT AUTHORIZED ANYONE\nTO GIVE YOU ANY INFORMATION OR TO MAKE ANY REPRESENTATION IN CONNECTION WITH\nTHIS OFFER OTHER THAN THE INFORMATION AND REPRESENTATIONS CONTAINED IN THIS\nDOCUMENT OR IN THE RELATED ELECTION CONCERNING EXCHANGE OF STOCK OPTIONS FORM.\nIF ANYONE MAKES ANY RECOMMENDATION OR REPRESENTATION TO YOU OR GIVES YOU ANY\nINFORMATION, YOU MUST NOT RELY UPON THAT RECOMMENDATION, REPRESENTATION OR\nINFORMATION AS HAVING BEEN AUTHORIZED BY US.\n\n\n                                       2\n\n \n                                TABLE OF CONTENTS\n\n\n\n                                                                            Page\n\n\nSUMMARY TERM SHEET...........................................................1\n\nINTRODUCTION.................................................................9\n\nTHE OFFER   ................................................................10\n\n      1.  Number Of Options; Expiration Date................................10\n      2.  Purpose Of The Offer..............................................10\n      3.  Procedures For Electing To Exchange Options.......................11\n      4.  Withdrawal Rights.................................................12\n      5.  Acceptance Of Options For Exchange And Issuance Of New Options....13\n      6.  Price Range Of Common Stock Underlying The Options................13\n      7.  Source And Amount Of Consideration; Terms Of New Options..........14\n      8.  Information Concerning Ariba......................................15\n      9.  Interests Of Directors And Officers; Transactions And\n            Arrangements Concerning The Options.............................16\n      10.  Status Of Options Acquired By Us In The Offer; Accounting\n            Consequences Of The Offer.......................................16\n      11.  Legal Matters; Regulatory Approvals..............................17\n      12.  Material Federal Income Tax Consequences.........................17\n      13.  Extension Of Offer; Termination; Amendment.......................18\n      14.  Fees And Expenses................................................19\n      15.  Additional Information...........................................19\n      16.  Miscellaneous....................................................20\n\n\nSCHEDULE A  Conditions of Offer\n\nSCHEDULE B  Information Concerning the Directors and Executive Officers of \n            Ariba, Inc.\n\n\n                                       i\n\n \n                               SUMMARY TERM SHEET\n\n\nThe following are answers to some of the questions that you may have about this\noffer. We urge you to read carefully the remainder of this offer to exchange and\nthe accompanying Election Concerning Exchange of Stock Options form because the\ninformation in this summary is not complete, and additional important\ninformation is contained in the remainder of this offer to exchange and the\nElection Concerning Exchange of Stock Options form. We have included page\nreferences to the remainder of this offer to exchange where you can find a more\ncomplete description of the topics in this summary.\n\nGENERAL QUESTIONS ABOUT THE PROGRAM\n\n     1.  What securities are we offering to exchange?\n\nWe are offering to exchange all stock options to purchase shares of Ariba common\nstock, which are outstanding under the eligible option plans for new options\nunder an eligible option plan. (Page 9)\n\n     2.  Why are we making the offer to exchange?\n\nWe implemented the offer to exchange because a considerable number of employees\nhave stock options, whether or not they are currently exercisable, that are\npriced significantly above our current and recent trading prices. We believe\nthese options are unlikely to be exercised in the foreseeable future. This\nprogram is voluntary and will allow employees to choose whether to keep their\ncurrent stock options at their current exercise price, or to rescind those\noptions in exchange for a new option for the same number of shares to be granted\non the date of the first meeting of the compensation committee of the board of\ndirectors held at least six months and one day from the date we cancel the\noptions accepted for exchange (the \"replacement grant date\"). It is hoped that\nthis program will ameliorate the current underwater options issue, but this\ncannot be guaranteed considering the ever-present risks associated with a\nvolatile and unpredictable stock market. By making this offer to exchange\noutstanding options for new options that will have an exercise price equal to\nthe market value of our common stock on the grant date, we intend to provide our\nemployees with the benefit of owning options that over time may have a greater\npotential to increase in value, create better performance incentives for\nemployees and thereby maximize stockholder value. (Page 10)\n\n     3.  Who is eligible?\n\nWith the exception of any Ariba senior vice president or above and any member of\nthe Ariba board of directors, any current employee of Ariba with a current stock\noption at any price is eligible. (Page 10)\n\n     4.  Will all the overseas employees be eligible to participate?\n\nExcept as noted above, all employees with a current stock option are eligible.\nSpecial considerations apply to employees located in Belgium, the Netherlands,\nSwitzerland, Italy and the United Kingdom. In some of these countries, the\napplication of local taxation rules may have an impact upon the re-grant. Mark\nHesher and Pascale Viret are planning a series of communication forums for those\ncountries so affected. (Page 10)\n\n     5.  How does the exchange work?\n\nThe offer to exchange will require an employee to make a voluntary, irrevocable\nelection to cancel outstanding stock options on March 9, 2001, in exchange for a\none-for-one grant of a new option to be issued on the replacement grant date,\nand priced at Ariba's closing market price on that date. Such new options would\nretain the original vesting schedule of the cancelled options and have other\nterms and conditions that are substantially the same as those of the cancelled\noptions. To participate, employees must cancel any and all Ariba options granted\nfrom September 11, 2000 to March 9, 2001; but may choose to cancel some, all, or\nnone of their options if granted prior to September 11, 2000. (Page 11, 12)\n\n     6.  What do I need to do to participate in the offer to exchange?\n\n\n                                       1\n\n \nTo participate, you must complete the Election Concerning Exchange of Stock\nOptions form, sign it, and ensure that Ariba Stock Programs receives it no later\nthan 9:00 P.M. Pacific Time on March 9, 2001. You can return your form either by\nfax to (650) 930-6852 or (650) 930-6300, or by email to mvolta@ariba.com, or by\nmail to Monica Volta, Ariba, Inc. 1565 Charleston Road, Mountain View,\nCalifornia 94043, USA. (Page 11)\n\n     7.  Is this a repricing?\n\nThis is not a stock option repricing in the traditional sense. Under a\ntraditional stock option repricing, an employee's current options would be\nimmediately repriced and Ariba would have a variable accounting charge against\nearnings. (Page 16)\n\n     8.  Why can't Ariba just reprice my options, as I have seen done at other\n         companies?\n\nIn 1998, the Financial Accounting Standards Board adopted unfavorable accounting\ncharge consequences for companies that reprice options. If we were to simply\nreprice options, the company's potential for continued profitability would be in\nserious jeopardy, as we would be required to take a charge against earnings on\nany future appreciation of the repriced options. (Page 16)\n\n     9.  Why can't I just be granted additional options?\n\nBecause of the large number of underwater options currently outstanding at\nAriba, a total re-grant of new options would have severe negative impact on\nAriba's dilution, outstanding shares and earnings per share. Additionally, Ariba\nhas a limited pool of options that it is allowed to grant per calendar year,\nwithout stockholder approval, and therefore our current reserves must be\nconserved for new hires and ongoing grants. (Page 14)\n\n     10.  Wouldn't it be easier to just quit Ariba and then get rehired?\n\nThis is not an alternative for us because this would be treated the same as a\nrepricing if the rehire and resulting re-grant are within six months of the\noption cancellation date. Again, such a repricing would cause Ariba to incur a\nvariable accounting charge against earnings. In addition, by leaving Ariba and\nthen later rehiring, an employee would not receive credit for prior service for\nvesting purposes. (Page 16)\n\n     11.  If I participate, what will happen to my current options?\n\nOptions designated to be exchanged under this program will be cancelled on March\n12, 2001, and will no longer be seen in your options summary at optionslink.com.\n(Page 13)\n\n     12. What is the deadline to elect to exchange and how do I elect to\n         exchange?\n\nThe deadline to participate in this program is 9 P.M. Pacific Time on March 9,\n2001 unless it is extended by us. This means that Ariba Stock Programs must have\nyour form in their hands before that time. We may, in our discretion, extend the\noffer at any time, but we cannot assure you that the offer will be extended or,\nif extended, for how long. If the offer is extended, we will make a public\nannouncement of the extension no later than 9:00 A.M. on the next business day\nfollowing the previously scheduled expiration of the offer period. If the offer\nis extended by us beyond that time, you must deliver these documents before the\nextended expiration of the offer.\n\nWe reserve the right to reject any or all options elected for exchange that we\ndetermine are not in appropriate form or that we determine are unlawful to\naccept. Otherwise, we will accept properly and timely elected options that are\nnot validly withdrawn. Subject to our rights to extend, terminate and amend the\noffer, we currently expect that we will accept all such properly elected options\npromptly after the expiration of the offer. (Page 11)\n\n     13.  What will happen if I do not turn in my form by the deadline?\n\nIf you do not turn in your election form by the deadline, then you will not\nparticipate in the option exchange, and all stock options currently held by you\nwill remain intact at their original price and original terms. (Page 11)\n\n\n                                       2\n\n \n     14.  During what period of time may I withdraw previously elected options?\n\nYou may withdraw your options elected for exchange at any time before 9:00 P.M.,\nPacific Time, on March 9, 2001. If the offer is extended by us beyond that time,\nyou may withdraw your options elected for exchange at any time until the\nextended expiration of the offer. To withdraw options elected for exchange, you\nmust deliver to us a written notice of withdrawal, or a facsimile thereof, with\nthe required information while you still have the right to withdraw the options\nelected for exchange. Once you have withdrawn options, you may re-elect to\nexchange options only by again following the delivery procedures described\nabove. (Page 13)\n\n     15. Am I eligible to receive future grants if I participate in this\n         exchange?\n\nBecause of the accounting limitations, participants in this program are\nineligible for any additional stock option grants until after the replacement\ngrant date. (Page 13)\n\n     16.  Is there any tax consequence to my participation in this exchange?\n\nWe know of no adverse tax consequence that will impact any employee in the\nUnited States with respect to options exchanged and re-granted under this\nprogram. If you exchange your current options for new options, you will not be\nrequired under current law to recognize income for federal income tax purposes\nat the time of the exchange. We believe that the exchange will be treated as a\nnon-taxable exchange. Further, at the date of grant of the new options, you will\nnot be required under current law to recognize income for federal income tax\npurposes. The grant of options is not recognized as taxable income. Again,\nspecial considerations apply to employees located in Belgium, Italy, the\nNetherlands, Switzerland and the United Kingdom. In some of these countries, the\napplication of local taxation rules may have an impact upon the re-grant. We\nrecommend that you consult with your own tax advisor to determine the tax\nconsequences of electing to exchange options pursuant to the offer. (Page 18)\n\n     17.  How should I decide whether or not to participate?\n\nWe understand that this will be a challenging decision for all employees. The\nprogram does carry considerable risk, and there are no guarantees of our future\nstock performance. So, the decision to participate must be each individual\nemployee's personal decision, and it will depend largely on each employee's\nassumptions about the future overall economic environment, the performance of\nthe Nasdaq National Market and our own stock price, and our business. (Page 10)\n\n     18.  What do we and our board of directors think of the offer?\n\nAlthough our board of directors has approved this offer, neither we nor our\nboard of directors make any recommendation as to whether you should elect to\nexchange or refrain from exchanging your options. Our executive officers and\ndirectors are not eligible to participate in the offer. (Page 10)\n\n     19. What if I leave Ariba between the date my options are cancelled and the\n         re-grant date?\n\nThe Election Concerning Exchange of Stock Options form will not be revocable\nafter 9:00 P.M. Pacific Time on March 9, 2001. Therefore, if you leave Ariba or\none of its subsidiaries voluntarily, involuntarily, or for any other reason,\nbefore your new option is re-granted, you will not have a right to any stock\noptions that were previously cancelled, and you will not have a right to the\nre-grant that would have been issued on the replacement grant date. THEREFORE,\nIF YOU ARE NOT AN EMPLOYEE OF ARIBA OR ONE OF OUR SUBSIDIARIES FROM THE DATE YOU\nELECT TO EXCHANGE OPTIONS THROUGH THE REPLACEMENT GRANT DATE, YOU WILL NOT\nRECEIVE ANY NEW OPTIONS IN EXCHANGE FOR YOUR OPTIONS THAT HAVE BEEN ACCEPTED FOR\nEXCHANGE. YOU ALSO WILL NOT RECEIVE ANY OTHER CONSIDERATION FOR THE OPTIONS\nELECTED TO BE EXCHANGED IF YOU ARE NOT AN EMPLOYEE FROM THE DATE YOU ELECT TO\nEXCHANGE OPTIONS THROUGH THE REPLACEMENT GRANT DATE. (Page 13)\n\n\n                                       3\n\n \n     20. What are the conditions to the offer?\n\nThe offer is not conditioned upon a minimum number of options being elected for\nexchange. The offer is subject to a number of conditions, including the\nconditions described in Schedule A. (Page A-1)\n\nSPECIFIC QUESTIONS ABOUT THE CANCELLED OPTIONS\n\n     21. Which options can be cancelled?\n\nIf an employee elects to participate in this offer, all options granted under\nthe eligible option plans to such employee from September 11, 2000 to March 9,\n2001 will be cancelled. In addition, the employee can optionally elect to cancel\none or more options granted under the eligible option plans prior to September\n11, 2000. (Page 9)\n\n     22. Can I choose which options I want to cancel, if I have multiple\n         options?\n\nYou may choose to cancel one or more options, if granted prior to September 11,\n2000. Inclusion of such grants is entirely discretionary. However, if you wish\nto participate in this program, you are required to cancel all options granted\nto you on or after September 11, 2000. (Page 9)\n\n     23. Can I cancel the remaining portion of an option that I have already\n         partially exercised?\n\nYes, any remaining outstanding, unexercised options can be cancelled. The\nre-grant will be one-for-one but only in replacement of cancelled options.\n\n     24. Can I select which portion of an option to cancel?\n\nNo, we cannot partially cancel an outstanding option.\n\n     25. If I choose to participate, what will happen to my options that will be\n         cancelled?\n\nIf you elect to participate in this program, then on March 12, 2001, we will\ncancel all of your outstanding options that were granted from September 11, 2000\nto March 9, 2001, plus any others that you elected to cancel. You will\nthereafter not have a right to be granted further options until the replacement\ngrant date, when your re-grant will be issued. (Page 13)\n\nSPECIFIC QUESTIONS ABOUT THE REPLACEMENT OPTIONS\n\n     26.  What will be my new option share amount?\n\nEmployees who participate in this program will receive a new replacement stock\noption on the replacement grant date. The new stock option will be equal to the\nnumber of shares cancelled under the old stock option. Each new option will be\ngranted under an eligible option plan pursuant to a new option agreement between\nyou and us. The new option will have substantially the same terms and conditions\nas the cancelled option. (Page 14)\n\n     27.  What will be my new option exercise price?\n\nThe exercise price for the new options, which will be granted on the replacement\ngrant date, will be the last reported sales price of our common stock on the\nNasdaq National Market on that date, as reported in the print edition of The\nWall Street Journal. BECAUSE WE WILL NOT GRANT NEW OPTIONS UNTIL AT LEAST SIX\nMONTHS AND ONE DAY AFTER THE DATE WE CANCEL THE OPTIONS ACCEPTED FOR EXCHANGE,\nTHE NEW OPTIONS MAY HAVE A HIGHER EXERCISE PRICE THAN SOME OR ALL OF YOUR\nCURRENT OPTIONS. WE RECOMMEND THAT YOU OBTAIN CURRENT MARKET QUOTATIONS FOR OUR\nCOMMON STOCK BEFORE DECIDING WHETHER TO ELECT TO EXCHANGE YOUR OPTIONS. (PAGE 9,\n13)\n\n     28. What will my new option type be, incentive stock option or nonstatutory\n         stock option?\n\n\n                                       4\n\n \nFor United States employees, the replacement options will be incentive stock\noptions to the extent they qualify under the Internal Revenue Code Section 422,\nbut only if your original stock option was an incentive stock option. For\noptions to qualify as incentive stock options, the value of shares subject to\noptions that first become exercisable by the option holder in any calendar year\ncannot exceed $100,000, as determined using the option exercise price. The\nexcess value does not qualify for incentive stock option treatment. To the\nextent the replacement option exceeds the incentive stock options limitation,\nthe remainder of the option will be treated for tax purposes as nonstatutory\nstock options. THEREFORE, IF THE NEW OPTIONS HAVE A HIGHER EXERCISE PRICE THAN\nSOME OR ALL OF YOUR CURRENT OPTIONS, A PORTION OF THE NEW OPTIONS MAY EXCEED THE\nLIMITS FOR INCENTIVE STOCK OPTIONS. Non-United States employees will receive\nnonstatutory stock options, as will United States employees whose cancelled\noptions were entirely granted as nonstatutory stock options. (Page 14)\n\n     29. My options are split between incentive stock options and nonstatutory\n         stock options because my original grant exceeded the IRS $100,000 limit\n         on incentive stock options. Can I cancel one part but not the other?\n\nNo. An option that has been bifurcated into a partial incentive stock option and\na partial nonstatutory stock option is still considered a single option, and\ncannot be separated for purposes of this offer to exchange.\n\n     30. I was previously employed by SupplierMarket.com, and my options were\n         originally nonstatutory. If I choose to participate, will my new\n         options be nonstatutory, too?\n\nYes, if your cancelled option was originally granted as a nonstatutory stock\noption, then the replacement option will also be granted as a nonstatutory stock\noption..\n\n     31. When will I receive my replacement options?\n\nWe will grant the new options on the replacement grant date. If we cancel\noptions elected for exchange on March 12, 2001, the first business day after the\nscheduled expiration date of the offer, the replacement grant date of the new\noptions will be on or after September 13, 2001. (Page 13)\n\n     32. Why won't I receive my new options immediately after the expiration\n         date of the offer?\n\nIf we were to grant the new options on any date which is earlier than six months\nand one day after the date we cancel the options accepted for exchange, we would\nbe required for financial reporting purposes to record compensation expense\nagainst our earnings. By deferring the grant of the new options for at least six\nmonths and one day, we believe we will not have to record such a compensation\nexpense. (Page 16)\n\n     33. When will I see the new options at optionslink.com, and when will I\n         receive my new option notice?\n\nYou will see your new options at optionslink.com within three weeks after the\nreplacement grant date; and your new option notice and agreement will be sent to\nyou within four weeks after the replacement grant date. (Page 13)\n\n     34. How can I view a summary of my options?\n\nAll employees can view their stock options at http:\/\/www.optionslink.com, the\nutility that we use to afford employees an ability to view their stock options\nonline, 24 hours a day. We opened an E*TRADE OptionsLink account for you soon\nafter your hire date, and a welcome kit containing your account password should\nhave been mailed to you within three to four weeks thereafter. If you do not\nhave your account password, you can obtain it by calling OptionsLink customer\nservice at (650) 599-0125 or (800) 838-0908.\n\nIf you encounter any difficulty using optionslink, you may either contact\nOptionsLink customer service, or contact Donna Hammer in Ariba Stock Programs.\n\n     35. What will be the vesting schedule of my replacement options?\n\n\n                                       5\n\n \nThe vesting schedule for all replacement options granted in this program will be\nexactly the same as the vesting schedule for the cancelled options. Therefore,\nno employee will lose nor gain vesting in the replacement option, but rather the\nnew option will vest on the same schedule as the prior option. (Page 14)\n\n     36. What will be the terms and conditions of my replacement options?\n\nExcept for the new option exercise price, the terms and conditions of your\nreplacement options will be substantially the same as the cancelled options. As\nnoted above, the vesting schedule for the replacement option will be exactly the\nsame as the cancelled option. (Page 14)\n\n     37. Can I have some examples of an offer to exchange?\n\nExample 1\nAssumptions:\nYour Hire Date:  September 10, 2000\nYour Original Stock Option:  1,000 shares\nYour Original Stock Option Price:  $160.00\nYour Original Vesting Schedule:  250 shares vest September 10, 2001,\n                                   then monthly thereafter.\nHypothetical Stock Price on New Options Grant Date, \n  on or about September 13, 2001:  $70\n\nUsing the above assumptions for the sake of illustrating the offer to exchange,\nwe would cancel your original stock option on March 12, 2001. On the replacement\ngrant date, which would be on or after September 13, 2001, we would grant you a\nnew option for 1,000 shares, and in this example using a purely hypothetical\nstock price of $70, your new exercise price would be $70. The vesting schedule\nfor this new option will be the same as for the prior option, and therefore will\nhave vested 250 shares on September 10, 2001, then will vest monthly thereafter.\n\nExample 2\nAssumptions:\nYour Hire Date:  November 6, 1999\nYour Original Stock Option:  1,000 shares\nYour Original Stock Option Price:  $70.00\nYour Original Vesting Schedule:  250 shares vested November 6, 2000, \n                                    then monthly thereafter.\nHypothetical Stock Price on New Options Grant Date, \n  on or about September 13, 2001:  $75\n\nUsing the above assumptions for the sake of illustrating the offer to exchange,\nwe would cancel your original stock option on March 12, 2001. On the replacement\ngrant date, we would grant you a new option for 1,000 shares, and in this\nexample using a purely hypothetical stock price of $75, your new exercise price\nwould be $75. Because the original option would have vested a total of 22\nmonths' worth as of September 13, 2001, the new option will also be vested 22\nmonths' worth as of September 13, 2001.\n\n     38. What happens if Ariba is subject to a change in control after the\n         replacement options are granted?\n\nThe replacement options will include the same vesting acceleration provisions,\nif any, as the cancelled options. Therefore, your replacement options would\naccelerate under the same conditions and to the same extent as your current\noptions. (Page 14)\n\n     39. What happens if Ariba is subject to a change in control before the\n         replacement options are granted?\n\nIf we are a party to a change of control transaction before the replacement\noptions are granted, we would require the surviving corporation to inherit our\nobligation to grant replacement options. The replacement options would still be\ngranted on the new grant date, but they would be options to purchase the shares\nof the surviving corporation. The exercise price would be equal to the market\nprice of the surviving company's stock on the date of grant. For example, if we\nwere acquired by means of a merger, the number of shares would be equal to the\nnumber of our shares that you would have received, multiplied by the exchange\nratio that was used in the merger. The vesting schedule of the replacement\noptions would give you the benefit of any acceleration provisions you may have\nunder your existing Ariba options. (Page 13, 14)\n\n\n                                       6\n\n \nFor example, please assume the following facts (which are entirely fictitious):\n\n You elect to cancel your Ariba options.\n\n You have six months of service when your old options are cancelled.\n\n Your old options have the benefit of acceleration provisions.\n\n On May 15, 2001, XYZ Corporation acquires Ariba.\n\n  In the merger, the Ariba stockholders receive two shares of XYZ Corporation\n  stock for each share of Ariba stock that they own.\n\nOn or about September 13, 2001, you would receive options to purchase 2,000\nshares of XYZ Corporation stock. The exercise price per share would be equal to\nthe market price of XYZ Corporation stock on the date of grant. You would\nimmediately be vested in 24\/48th of the replacement options. This number was\ncalculated as follows:\n\nRegular vesting after 12 months of service:            12\/48ths\n\nAdditional single-trigger vesting = 12 months\nwhenever change in control occurs during your first\n12 months of service:                                  12\/48ths\n\nTotal:                                                 24\/48ths\n\nAs a second example, please make the same assumptions as above, except that you\nhave 12 months of service when your old options are cancelled. In this case, you\nwould immediately be vested in 33\/48th of the replacement options. This number\nwas calculated as follows:\n\nRegular vesting after 18 months of service:            18\/48ths\n\nAdditional single-trigger vesting = smaller of\n(a) 50% of remaining unvested shares or (b) 75% of\ntotal shares minus vested shares (in this case, (a)\nis the smaller number):                                15\/48ths\n\nTotal:                                                 33\/48ths\n\nIf you are subject to an involuntary termination (as defined in the 1999 option\nplan) within 18 months after the change in control, then you would become vested\nin all of the replacement options.\n\nPlease note that some outstanding options do not contain any vesting\nacceleration provisions.\n\n     40. After the re-grant, what happens if I again end up underwater?\n\nWe are conducting this offer only at this time, considering the unusual stock\nmarket conditions that have affected many companies throughout the country. This\nis therefore considered a one-time offer and is not expected to be offered again\nin the future. As your stock options are valid for ten years (or, in some cases,\nfive years) from the date of initial grant, subject to continued employment, the\nprice of our common stock may appreciate over the long term even if your options\nare underwater for some period of time after the grant date of the new options.\nHOWEVER, WE CAN PROVIDE NO ASSURANCE AS TO THE PRICE OF OUR COMMON STOCK AT ANY\nTIME IN THE FUTURE.\n\n     41. What do I need to do to participate in the offer to exchange program?\n\nTo participate, you must complete the Election Concerning Exchange of Stock\nOptions form, sign it, and ensure that Ariba Stock Programs receives it no later\nthan 9 P.M. Pacific Time on Friday, March 9, 2001. You can return your\n\n\n                                       7\n\n \nform either by fax to (650) 930-6852 or (650) 930-6300, or by email to\nmvolta@ariba.com, or by mail to Monica Volta, Ariba, Inc. 1565 Charleston Road,\nMountain View, California 94043, USA. (Page 11)\n\n\n                                       8\n\n \n                                  INTRODUCTION\n\n\n\nAriba, Inc. is offering to exchange all outstanding options to purchase shares\nof our common stock that were granted under the Ariba, Inc. 1999 Equity\nIncentive Plan (\"1999 option plan\"), Ariba, Inc. 1996 Stock Plan,\nTradingDynamics, Inc. 1998 Stock Plan, TradingDynamics, Inc. 1999 Stock Plan,\nTradex Technologies, Inc. 1997 Employee Stock Option Plan, Tradex Technologies,\nInc. 1999 Employee Stock Option\/Stock Issuance Plan and SupplierMarket.com, Inc.\n1999 Stock Option Plan (collectively, the \"eligible option plans\") for new\noptions we will grant under an eligible option plan. We are making this offer\nupon the terms and subject to the conditions set forth in this offer to exchange\nand in the related Election Concerning Exchange of Stock Options form (which\ntogether, as they may be amended from time to time, constitute the \"offer\"). The\nnumber of shares of common stock subject to new options to be granted to each\noption holder will be equal to the number of shares subject to the options\nelected for exchange by such option holder and accepted for exchange. We will\ngrant the new options on the date of the first meeting of the compensation\ncommittee of the board of directors held more than six months after the date we\ncancel the options accepted for exchange (the \"replacement grant date\"). If you\nchoose to participate, you must elect to exchange all options granted on or\nafter September 11, 2000 for all shares of common stock subject to those\noptions, and you may elect to exchange any or all options granted prior to\nSeptember 11, 2000 for all shares of common stock subject to those options.\n\nThis offer is not conditioned upon a minimum number of options being elected for\nexchange. This offer is subject to conditions which we describe in Schedule A of\nthis offer to exchange.\n\nIf you elect to exchange options, we will grant you new options under an\neligible option plan pursuant to a new option agreement between us and you. The\nexercise price of the new options will be equal to the last reported sale price\nof our common stock on the Nasdaq National Market on the date of grant, as\nreported in the print edition of The Wall Street Journal. The vesting schedule\nfor the new options granted will be exactly the same as the vesting schedule for\nthe cancelled options, and the other terms and conditions of the new options\nwill be substantially the same as the cancelled options. Therefore, no employees\nwill lose nor gain vesting in the new options, but rather the new options will\nvest on the same schedule as the prior options.\n\nAs of January 31, 2001, options to purchase 44,573,992 shares of our common\nstock were issued and outstanding under the eligible option plans. Of these\noptions, options to purchase 15,387,944 shares of our common stock had an\nexercise price of $35.00 or more. The shares of common stock issuable upon\nexercise of options we are offering to exchange represent approximately 6% of\nthe total shares of our common stock outstanding as of January 31, 2001.\n\nAll options accepted by us pursuant to this offer will be cancelled.\n\n\n                                       9\n\n \n                                    THE OFFER\n\n\n\n1.    NUMBER OF OPTIONS; EXPIRATION DATE.\n\nUpon the terms and subject to the conditions of the offer, we will exchange for\nnew options to purchase common stock under an eligible option plan all eligible\noutstanding options under the eligible option plans that are properly elected\nfor exchange and not validly withdrawn in accordance with section 4 before the\n\"expiration date,\" as defined below. Eligible outstanding options are all\noptions that have been granted from September 11, 2000 to March 9, 2001, and, at\nyour election, any options granted prior to September 11, 2000.\n\nIf your options are properly elected for exchange and accepted for exchange, you\nwill be entitled to receive new options to purchase the number of shares of our\ncommon stock which is equal to the number of shares subject to the options that\nyou elected to exchange, subject to adjustments for any stock splits, stock\ndividends and similar events. All new options will be subject to the terms of an\neligible option plan pursuant to a new option agreement between us and you. IF\nYOU ARE NOT AN EMPLOYEE OF ARIBA OR ONE OF OUR SUBSIDIARIES FROM THE DATE YOU\nELECT TO EXCHANGE OPTIONS THROUGH THE DATE WE GRANT THE NEW OPTIONS, YOU WILL\nNOT RECEIVE ANY NEW OPTIONS IN EXCHANGE FOR YOUR ELECTED OPTIONS THAT HAVE BEEN\nACCEPTED FOR EXCHANGE. YOU ALSO WILL NOT RECEIVE ANY OTHER CONSIDERATION FOR\nYOUR ELECTED OPTIONS IF YOU ARE NOT AN EMPLOYEE FROM THE DATE YOU ELECT TO\nEXCHANGE OPTIONS THROUGH THE DATE WE GRANT THE NEW OPTIONS.\n\nSpecial considerations apply to employees located in Belgium, Italy, the\nNetherlands, Switzerland, and the United Kingdom. In some of these countries,\nthe application of local taxation rules may have an impact upon the re-grant.\nMark Hesher and Pascale Viret are planning a series of communication forums for\nthose countries so affected.\n\nThe term \"expiration date\" means 9:00 P.M., Pacific Time, on March 9, 2001,\nunless and until we, in our discretion, have extended the period of time during\nwhich the offer will remain open, in which event the term \"expiration date\"\nrefers to the latest time and date at which the offer, as so extended, expires.\nSee section 13 for a description of our rights to extend, delay, terminate and\namend the offer.\n\nIf we decide to take any of the following actions, we will notify you of such\naction and extend the offer for a period of ten business days after the date of\nsuch notice:\n\n(a)   we increase or decrease the amount of consideration offered for the\n      options;\n\n(b)   we decrease the number of options eligible to be elected for exchange in\n      the offer; or we increase the number of options eligible to be elected for\n      exchange in the offer by an amount that exceeds 2% of the shares of common\n      stock issuable upon exercise of the options that are subject to the offer\n      immediately prior to the increase; and the offer is scheduled to expire at\n      any time earlier than the expiration of a period ending on the tenth\n      business day from, and including, the date that notice of such increase or\n      decrease is first published, sent or given in the manner specified in\n      section 13.\n\nFor purposes of the offer, a \"business day\" means any day other than a Saturday,\nSunday or federal holiday and consists of the time period from 12:01 a.m.\nthrough 12:00 midnight, Eastern Time.\n\n2.    PURPOSE OF THE OFFER.\n\nWe issued the options outstanding under the eligible option plans for the\nfollowing purposes:\n\n   to provide our employees an opportunity to acquire or increase a proprietary\n   interest in Ariba, thereby creating a stronger incentive to expend maximum\n   effort for our growth and success; and\n\n   to encourage our employees to continue their employment by us.\n\n\n                                       10\n\n \nMany of our outstanding options, whether or not they are currently exercisable,\nhave exercise prices that are significantly higher than the current market price\nof our common stock. We believe these options are unlikely to be exercised in\nthe foreseeable future. By making this offer to exchange outstanding options for\nnew options that will have an exercise price equal to the market value of our\ncommon stock on the grant date, we intend to provide our employees with the\nbenefit of owning options that over time may have a greater potential to\nincrease in value, create better performance incentives for employees and\nthereby maximize stockholder value. IT IS HOPED THAT THIS PROGRAM WILL\nAMELIORATE THE CURRENT UNDERWATER OPTIONS ISSUE, BUT IT IS NOT GUARANTEED\nCONSIDERING THE EVER-PRESENT RISKS ASSOCIATED WITH A VOLATILE AND UNPREDICTABLE\nSTOCK MARKET.\n\nSubject to the foregoing, and except as otherwise disclosed in this offer to\nexchange or in our filings with the Securities and Exchange Commission (the\n\"SEC\"), we presently have no plans or proposals that relate to or would result\nin:\n\n(a)   an extraordinary corporate transaction, such as a merger, reorganization\n      or liquidation, involving us or any of our subsidiaries, except for our\n      proposed merger with Agile Software Corporation which we announced on\n      January 29, 2001 (for more information please see the Form 425 we filed\n      with the SEC on that date). Since our inception, we have acquired three\n      companies--TradingDynamics, Tradex Technologies, and\n      SupplierMarket.com--and have entered into an agreement to acquire Agile\n      Software Corporation. See Recent Events on page 16. We expect to consider\n      additional acquisitions from time to time.\n\n(b)   any purchase, sale or transfer of a material amount of our assets or the\n      assets of any of our subsidiaries;\n\n(c)   any material change in our present dividend rate or policy, or our\n      indebtedness or capitalization;\n\n(d)   any change in our present board of directors or management, including a\n      change in the number or term of directors or to fill any existing board\n      vacancies or to change any executive officer's material terms of\n      employment;\n\n(e)   any other material change in our corporate structure or business;\n\n(f)   our common stock not being authorized for quotation in an automated\n      quotation system operated by a national securities association;\n\n(g)   our common stock becoming eligible for termination of registration\n      pursuant to Section 12(g)(4) of the Securities Exchange Act;\n\n(h)   the suspension of our obligation to file reports pursuant to Section 15(d)\n      of the Securities Exchange Act;\n\n(i)   the acquisition by any person of any of our securities or the disposition\n      of any of our securities; or\n\n(j)   any change in our certificate of incorporation or bylaws, or any actions\n      which may impede the acquisition of control of us by any person.\n\nNeither we nor our board of directors makes any recommendation as to whether you\nshould elect to exchange your options, nor have we authorized any person to make\nany such recommendation. You are urged to evaluate carefully all of the\ninformation in this offer to exchange and to consult your own investment and tax\nadvisors. You must make your own decision whether to elect to exchange your\noptions.\n\n3.    PROCEDURES FOR ELECTING TO EXCHANGE OPTIONS.\n\nProper Exchange of Options. To validly elect to exchange your options pursuant\nto the offer, you must, in accordance with the terms of the Election Concerning\nExchange of Stock Options form, properly complete, duly execute and deliver to\nus the Election Concerning Exchange of Stock Options form, or a facsimile\nthereof, along with any other required documents. We must receive all of the\nrequired documents by fax at (650) 930-6852 or \n\n\n                                       11\n\n \n(650) 930-6300 or by email at mvolta@ariba.com, or by post to Monica Volta,\nAriba, Inc., 1565 Charleston Road, Mountain View, California 94043 before the\nexpiration date.\n\nIf you do not turn in your election form by the deadline, then you will not\nparticipate in the option exchange, and all stock options currently held by you\nwill remain intact at their original price and original terms.\n\nTHE METHOD OF DELIVERY OF ALL DOCUMENTS, INCLUDING ELECTION CONCERNING EXCHANGE\nOF STOCK OPTIONS FORMS AND ANY OTHER REQUIRED DOCUMENTS, IS AT THE ELECTION AND\nRISK OF THE ELECTING OPTION HOLDER. YOU SHOULD ALLOW SUFFICIENT TIME TO ENSURE\nTIMELY DELIVERY.\n\nDetermination of Validity; Rejection of Options; Waiver of Defects; No\nObligation to Give Notice of Defects. We will determine, in our discretion, all\nquestions as to form of documents and the validity, form, eligibility, including\ntime of receipt, and acceptance of any exchange of options. Our determination of\nthese matters will be final and binding on all parties. We reserve the right to\nreject any or all elections to exchange options that we determine are not in\nappropriate form or that we determine are unlawful to accept. Otherwise, we will\naccept properly and timely elected options which are not validly withdrawn. We\nalso reserve the right to waive any of the conditions of the offer or any defect\nor irregularity in any election with respect to any particular options or any\nparticular option holder. No election to exchange options will be deemed to have\nbeen properly made until all defects or irregularities have been cured by the\nelecting option holder or waived by us. Neither we nor any other person is\nobligated to give notice of any defects or irregularities in elections, nor will\nanyone incur any liability for failure to give any such notice.\n\nOur Acceptance Constitutes an Agreement. Your election to exchange options\npursuant to the procedures described above constitutes your acceptance of the\nterms and conditions of the offer. OUR ACCEPTANCE FOR EXCHANGE OF YOUR OPTIONS\nELECTED BY YOU PURSUANT TO THE OFFER WILL CONSTITUTE A BINDING AGREEMENT BETWEEN\nUS AND YOU UPON THE TERMS AND SUBJECT TO THE CONDITIONS OF THE OFFER.\n\nSubject to our rights to extend, terminate and amend the offer, we currently\nexpect that we will accept promptly after the expiration of the offer all\nproperly elected options that have not been validly withdrawn.\n\n4.    WITHDRAWAL RIGHTS.\n\nYou may only withdraw your elected options in accordance with the provisions of\nthis section 4.\n\nYou may withdraw your elected options at any time before 9:00 P.M., Pacific\nTime, on March 9, 2001. If the offer is extended by us beyond that time, you may\nwithdraw your elected options at any time until the extended expiration of the\noffer. In addition, unless we accept your elected options for exchange before\n9:00 P.M., Pacific Time, on April 6, 2001, you may withdraw your options elected\nfor exchange at any time after 9:00 P.M., Pacific Time, on April 6, 2001.\n\nTo validly withdraw elected options, an option holder must deliver to us a\nwritten notice of withdrawal, or a facsimile thereof, with the required\ninformation, while the option holder still has the right to withdraw the elected\nto exchange options. The notice of withdrawal must specify the name of the\noption holder who elected to have the options be withdrawn, the grant date,\nexercise price and total number of option shares subject to each option to be\nwithdrawn, and the number of option shares to be withdrawn. Except as described\nin the following sentence, the notice of withdrawal must be executed by the\noption holder who elected to exchange the options to be withdrawn exactly as\nsuch option holder's name appears on the option agreement or agreements\nevidencing such options. If the signature is by a trustee, executor,\nadministrator, guardian, attorney-in-fact, officer of a corporation or another\nperson acting in a fiduciary or representative capacity, the signer's full title\nand proper evidence of the authority of such person to act in such capacity must\nbe indicated on the notice of withdrawal.\n\nYou may not rescind any withdrawal, and any options you withdraw will thereafter\nbe deemed not properly elected for exchange for purposes of the offer, unless\nyou properly re-elect those options before the expiration date by following the\nprocedures described in section 3.\n\n\n                                       12\n\n \nNeither Ariba nor any other person is obligated to give notice of any defects or\nirregularities in any notice of withdrawal, nor will anyone incur any liability\nfor failure to give any such notice. We will determine, in our discretion, all\nquestions as to the form and validity, including time of receipt, of notices of\nwithdrawal. Our determination of these matters will be final and binding.\n\n5.    ACCEPTANCE OF OPTIONS FOR EXCHANGE AND ISSUANCE OF NEW OPTIONS.\n\nUpon the terms and subject to the conditions of this offer and as promptly as\npracticable following the expiration date, we will accept for exchange and\ncancel options properly elected for exchange and not validly withdrawn before\nthe expiration date. If your options are properly elected for exchange and\naccepted for exchange on March 12, 2001, the first business day following the\nscheduled expiration date of the offer, you will be granted new options on the\nreplacement grant date, which will be on or after September 13, 2001. If we\nextend the date by which we must accept and cancel options properly elected for\nexchange, you will be granted new options on the date of a meeting of the\ncompensation committee of the board of directors held at least six months and\none day after the extended date.\n\nIf we accept options you elect to exchange in the offer, you will be ineligible\nuntil after the replacement grant date for any additional stock option grants\nfor which you may have otherwise been eligible before the replacement grant date\nin order for us to avoid incurring compensation expense against our earnings\nbecause of accounting rules that could apply to these interim option grants as a\nresult of the offer.\n\nYour new options will entitle you to purchase a number of shares of our common\nstock which is equal to the number of shares subject to the options or portion\nthereof you elect to exchange, subject to adjustments for any stock splits,\nstock dividends and similar events. IF YOU ARE NOT AN EMPLOYEE OF ARIBA OR ONE\nOF OUR SUBSIDIARIES FROM THE DATE YOU ELECT TO EXCHANGE OPTIONS THROUGH THE DATE\nWE GRANT THE NEW OPTIONS, YOU WILL NOT RECEIVE ANY NEW OPTIONS IN EXCHANGE FOR\nYOUR ELECTED OPTIONS THAT HAVE BEEN ACCEPTED FOR EXCHANGE. YOU ALSO WILL NOT\nRECEIVE ANY OTHER CONSIDERATION FOR YOUR ELECTED OPTIONS IF YOU ARE NOT AN\nEMPLOYEE FROM THE DATE YOU ELECT TO EXCHANGE OPTIONS THROUGH THE DATE WE GRANT\nTHE NEW OPTIONS. Therefore, if you leave Ariba or one of its subsidiaries\nvoluntarily, involuntarily, or for any other reason, before your new option is\nre-granted, you will not have a right to any stock options that were previously\ncancelled, and you will not have a right to the re-grant that would have been\nissued on the replacement grant date.\n\nIf we are a party to a change of control transaction before the replacement\noptions are granted, we would require the surviving corporation to inherit our\nobligation to grant replacement options. The replacement options would still be\ngranted on the replacement grant date, but they would be options to purchase the\nshares of the surviving corporation. The exercise price would be equal to the\nmarket price of the surviving company's stock on the date of grant. For example,\nif we were acquired by means of a merger, the number of shares would be equal to\nthe number of our shares that you would have received, multiplied by the\nexchange ratio that was used in the merger. The vesting schedule of the\nreplacement options would give you the benefit of the acceleration provisions of\nyour existing Ariba options. For examples of change of control effects on\nvesting schedules, please see page 6 of the Summary of Terms.\n\nFor purposes of the offer, we will be deemed to have accepted for exchange\noptions that are validly elected for exchange and not properly withdrawn as, if\nand when we give oral or written notice to the option holders of our acceptance\nfor exchange of such options, which may be by press release. Subject to our\nrights to extend, terminate and amend the offer, we currently expect that you\nwill see your new options at www.optionslink.com within three weeks of the new\noption grant date and that we will mail your new option notice and agreement\nwithin four weeks after the new option grant date. For more information on\nOptionsLink, please see page 5 of the Summary of Terms.\n\n6.    PRICE RANGE OF COMMON STOCK UNDERLYING THE OPTIONS.\n\nOur common stock is quoted on the Nasdaq National Market under the symbol\n\"ARBA.\" The following table shows, for the periods indicated, the high and low\nsales prices per share of our common stock as reported by the Nasdaq National\nMarket. All share prices have been retroactively adjusted to reflect the\ntwo-for-one splits of our common stock effected in December 1999 and March 2000.\n\n\n                                       13\n\n \n        QUARTER ENDED                                  HIGH       LOW\n                                                       ----       ---\n\n        March 31, 2001 (through February 7, 2001)   $54.50000   $29.00000\n\n        December 31, 2000                           141.50000   43.56250\n        September 30, 2000                          173.50000   88.87500\n        June 30, 2000                               115.12500   49.00000\n        March 31, 2000                              183.34375   75.00000\n\n        December 31, 1999                           129.96875   36.50000\n        September 30, 1999                          49.65625    16.56250\n\n\nWE RECOMMEND THAT YOU OBTAIN CURRENT MARKET QUOTATIONS FOR OUR COMMON STOCK\nBEFORE DECIDING WHETHER TO ELECT TO EXCHANGE YOUR OPTIONS.\n\n7.    SOURCE AND AMOUNT OF CONSIDERATION; TERMS OF NEW OPTIONS.\n\nConsideration. We will issue new options to purchase common stock under an\neligible option plan in exchange for outstanding eligible options properly\nelected and accepted for exchange by us. The number of shares of common stock\nsubject to new options to be granted to each option holder will be equal to the\nnumber of shares subject to the options elected by such option holder.\n\nTerms of New Options. The new options will be issued under an eligible option\nplan. We will issue a new option agreement to each option holder who has elected\nto exchange options in the offer. Except for the exercise price, the terms and\nconditions of the new options will be substantially the same as the terms and\nconditions of the options elected for exchange. This includes the vesting\nschedule and the vesting commencement date, which will both remain unchanged.\nThe vesting acceleration provisions that apply in the event of a change in\ncontrol will also remain unchanged.\n\nThe terms and conditions of your current option are set forth in the eligible\noption plan under which it was granted and the stock option agreement you\nentered into in connection with the grant. In addition, if your current option\nwas granted by a company previously acquired by us (i.e., TradingDynamics,\nTradex Technologies or SupplierMarket.com), the terms and conditions of your\noption may have been supplemented or modified by the option assumption agreement\nwe entered into in connection with the acquisition and any other applicable\nagreements entered into in connection with the acquisition.\n\nThe terms and conditions of the eligible option plans are summarized in the\nprospectus prepared by us and previously distributed to you as follows:\n\nEligible Option Plan                                 Date of Prospectus\n--------------------                                 ------------------\nAriba, Inc. 1999 Equity Incentive Plan               June 29, 1999\nAriba, Inc. 1996 Stock Plan                          Plan Date November 15, 1996\nTradingDynamics, Inc. 1998 Stock Plan                January 28, 2000\nTradingDynamics, Inc. 1999 Stock Plan                January 28, 2000\nTradex Technologies, Inc. 1997 Employee Stock\n  Option Plan                                        March 29, 2000\nTradex Technologies, Inc. 1999 Employee Stock\n  Option\/Issuance Plan                               March 29, 2000\n\n\n                                       14\n\n \nSupplierMarket.com, Inc. 1999 Stock Option Plan      September 28, 2000\n\nYOU MAY OBTAIN COPIES OF THESE PROSPECTUSES AND THE ELIGIBLE OPTION PLANS AS\nINDICATED BELOW.\n\nFederal Income Tax Consequences of Options. Options granted under an eligible\noption plan may be either incentive stock options that satisfy the requirements\nof Section 422 of the Internal Revenue Code or nonstatutory stock options that\nare not intended to meet these requirements. The federal income tax treatment\nfor the two types of options differs as follows:\n\nIncentive Stock Options. The optionee recognizes no taxable income at the time\nof the option grant, and he or she generally recognizes no taxable income at the\ntime the option is exercised. However, the excess of the fair market value of\nthe purchased shares on the exercise date over the exercise price paid for the\nshares generally is includable in alternative minimum taxable income. The\noptionee will recognize taxable income in the year in which the purchased shares\nare sold or otherwise made subject to disposition.\n\nFor federal tax purposes, dispositions are divided into two categories:\nqualifying and disqualifying. The optionee will make a qualifying disposition of\nthe purchased shares if the sale or other disposition of the shares is made\nafter the optionee has held the shares for more than two years after the grant\ndate of the option and more than one year after the exercise date. If the\noptionee fails to satisfy either of these two holding periods prior to the sale\nor other disposition of the purchased shares, then a disqualifying disposition\nwill result.\n\nUpon a qualifying disposition of the shares, the optionee will recognize\nlong-term capital gain in an amount equal to the excess of (a) the amount\nrealized upon the sale or other disposition of the purchased shares over (b) the\nexercise price paid for the shares. If there is a disqualifying disposition of\nthe shares, then the excess of (a) the fair market value of those shares on the\ndate the option was exercised over (b) the exercise price paid for the shares\nwill be taxable as ordinary income. Any additional gain recognized upon the\ndisposition will be a capital gain.\n\nIf the optionee makes a disqualifying disposition of the purchased shares, then\nwe will be entitled to an income tax deduction for the taxable year in which the\ndisposition occurs equal to the excess of (a) the fair market value of the\nshares on the date the option was exercised over (b) the exercise price paid for\nthe shares. In no other instance will we be allowed a deduction with respect to\nthe optionee's disposition of the purchased shares.\n\nNonstatutory Stock Options. No taxable income is recognized by an optionee upon\nthe grant of a nonstatutory option. The optionee will, in general, recognize\nordinary income in the year in which the option is exercised. The amount of\nordinary income is equal to the excess of the fair market value of the purchased\nshares on the exercise date over the exercise price paid for the shares. The\noptionee will be required to satisfy the tax withholding requirements applicable\nto such income.\n\nWe will be entitled to a business expense deduction equal to the amount of\nordinary income recognized by the optionee with respect to the exercised\nnonstatutory option. The deduction will in general be allowed for the taxable\nyear of Ariba in which the ordinary income is recognized by the optionee.\n\nIMPORTANT NOTE. THE STATEMENTS IN THIS OFFER CONCERNING AN ELIGIBLE OPTION PLAN\nAND THE NEW OPTIONS ARE MERELY SUMMARIES AND DO NOT PURPORT TO BE COMPLETE. THE\nSTATEMENTS ARE SUBJECT TO, AND ARE QUALIFIED IN THEIR ENTIRETY BY REFERENCE TO,\nALL PROVISIONS OF THE ELIGIBLE OPTION PLANS AND THE FORM OF STOCK OPTION\nAGREEMENT UNDER SUCH ELIGIBLE OPTION PLANS. PLEASE CONTACT US AT 1565 CHARLESTON\nROAD, MOUNTAIN VIEW, CALIFORNIA 94043, (650) 930-8790, TO RECEIVE A COPY OF AN\nELIGIBLE OPTION PLAN, PROSPECTUS OR FORM OF STOCK OPTION AGREEMENT. WE WILL\nPROMPTLY FURNISH YOU COPIES OF THESE DOCUMENTS AT OUR EXPENSE.\n\n8.    INFORMATION CONCERNING ARIBA.\n\n\n                                       15\n\n \nGeneral. We are a leading business-to-business electronic commerce software and\nnetwork services platform provider. We provide software, network access and\ncommerce services that enable corporations to electronically automate and\noptimize business with their buyers and suppliers. Customers can do this by both\nautomating their existing relationships with their buyers and suppliers and by\nbuilding a marketplace that brings buyers and suppliers together to buy and sell\nelectronically. In addition, we offer commerce services such as content\nmanagement, electronic payment, electronic sourcing, and electronic logistics,\namong others.\n\nOur Ariba B2B Commerce Platform consists of three primary components, including\nAriba Buyer, our Internet-based procurement application, Ariba Marketplace and\nAriba Dynamic Trade, our Internet-based marketmaker applications and Ariba\nCommerce Services Network, our Internet-based commerce services. We plan to\ncontinue to add applications and network-based services to our platform in the\nfuture to provide an increasing amount of commerce services to customers and\npartners. In March 1997, we began selling our products and related services and\ncurrently market them in 25 countries including the United States, Latin\nAmerica, Europe, Canada, Australia and Asia, primarily through our direct sales\nforce and indirect sales channels.\n\nWe were incorporated in Delaware in September 1996 and from that date through\nMarch 1997 were in the development stage, conducting research and developing our\ninitial products. Our principal executive offices are located at 1565 Charleston\nRoad, Mountain View, California 94043.\n\nSee \"Additional Information\" beginning on page 20 for instructions on how you\ncan obtain copies of our SEC reports that contain the audited financial\nstatements and unaudited financial data we have summarized above.\n\nRecent Events. In December 2000, Nihon Ariba K.K. (\"Ariba Japan\"), a wholly\nowned subsidiary, issued and sold 40% of its common stock for approximately $40\nmillion cash to a third party. We expect that the proceeds will be reflected as\na capital contribution on our consolidated financial statements.\n\nOn January 29, 2001, we signed a definitive agreement to acquire Agile Software\nCorporation (Nasdaq: AGIL), the leading provider of collaborative commerce\nsolutions, in a stock for stock merger. Under the terms of the agreement, each\nshare of Agile common stock will be converted into 1.35 shares of Ariba common\nstock, resulting in a net aggregate purchase price of approximately $2.55\nbillion based on the closing price of Ariba common stock of $40 dollars on\nJanuary 26, 2001. The acquisition will be accounted for as a purchase and is\nexpected to be completed in the third quarter of Ariba's fiscal year 2001. The\nacquisition has been approved by the boards of directors of each company and is\nsubject to governmental approvals, Ariba and Agile stockholder approvals and\ncustomary closing conditions.\n\n9.    INTERESTS OF DIRECTORS AND OFFICERS; TRANSACTIONS AND ARRANGEMENTS\n      CONCERNING THE OPTIONS.\n\nA list of our directors and executive officers is attached to this offer to\nexchange as Schedule B. Please see our definitive proxy statement for our 2001\nannual meeting of stockholders, filed with the SEC on January 17, 2001 for\ninformation regarding the amount of our securities beneficial owned by our\nexecutive officers and directors as of December 31, 2000.\n\nOn January 20, 2001, Eileen J. Basho, one of our executive officers, received an\nescrow release which gave her an option to purchase 11,016 shares of our common\nstock at an exercise price of $21.25 per share under the TradingDynamics, Inc.\n1999 Stock Plan. Ms. Basho was formerly an employee of TradingDynamics.\n\nSeveral of our directors and executive officers made common stock purchases\nunder our Employee Stock Purchase Plan on January 31, 2001 in the ordinary\ncourse pursuant to the terms of such plan.\n\nExcept as otherwise described above, there have been no transactions in options\nto purchase our common stock or in our common stock which were effected during\nthe past 60 days by Ariba, or to our knowledge, by any executive officer,\ndirector, affiliate or subsidiary of Ariba.\n\n10.   STATUS OF OPTIONS ACQUIRED BY US IN THE OFFER; ACCOUNTING CONSEQUENCES OF\n      THE OFFER.\n\n\n                                       16\n\n \nOptions we acquire pursuant to the offer will be cancelled and the shares of\ncommon stock subject to those options will be returned to the pool of shares\navailable for grants of new options under eligible option plans and for issuance\nupon the exercise of such new options. To the extent such shares are not fully\nreserved for issuance upon exercise of the new options to be granted in\nconnection with the offer, the shares will be available for future awards to\nemployees and other eligible plan participants without further stockholder\naction, except as required by applicable law or the rules of the Nasdaq National\nMarket or any other securities quotation system or any stock exchange on which\nour common stock is then quoted or listed.\n\nWe believe that Ariba will not incur any compensation expense solely as a result\nof the transactions contemplated by the offer because:\n\n   we will not grant any new options until a business day that is at least six\n   months and one day after the date that we accept and cancel options elected\n   for exchange; and\n\n   the exercise price of all new options will equal the market value of the\n   common stock on the date we grant the new options.\n\nIf we were to grant any options to any option holder before the scheduled\nreplacement grant date, our grant of those options to the electing option holder\nwould be treated for financial reporting purposes as a variable award to the\nextent that the number of shares subject to the newly granted options is equal\nto or less than the number of the option holder's option shares elected for\nexchange. In this event, we would be required to record as compensation expense\nthe amount by which the market value of the shares subject to the newly granted\noptions exceeds the exercise price of those shares. This compensation expense\nwould accrue as a variable accounting charge to our earnings over the period\nwhen the newly granted options are outstanding. We would have to adjust this\ncompensation expense periodically during the option term based on increases or\ndecreases in the market value of the shares subject to the newly granted\noptions.\n\n11.   LEGAL MATTERS; REGULATORY APPROVALS.\n\nWe are not aware of any license or regulatory permit that appears to be material\nto our business that might be adversely affected by our exchange of options and\nissuance of new options as contemplated by the offer, or of any approval or\nother action by any government or governmental, administrative or regulatory\nauthority or agency, domestic or foreign, that would be required for the\nacquisition or ownership of our options as contemplated herein. Should any such\napproval or other action be required, we presently contemplate that we will seek\nsuch approval or take such other action. We are unable to predict whether we may\ndetermine that we are required to delay the acceptance of options for exchange\npending the outcome of any such matter. We cannot assure you that any such\napproval or other action, if needed, would be obtained or would be obtained\nwithout substantial conditions or that the failure to obtain any such approval\nor other action might not result in adverse consequences to our business. Our\nobligation under the offer to accept options elected for exchange and to issue\nnew options for options elected for exchange is subject to conditions, including\nthe conditions described in Schedule A.\n\n12.   MATERIAL FEDERAL INCOME TAX CONSEQUENCES.\n\nThe following is a general summary of the material federal income tax\nconsequences of the exchange of options pursuant to the offer. This discussion\nis based on the Internal Revenue Code, its legislative history, Treasury\nRegulations thereunder and administrative and judicial interpretations thereof\nas of the date of the offer, all of which are subject to change, possibly on a\nretroactive basis. This summary does not discuss all of the tax consequences\nthat may be relevant to you in light of your particular circumstances, nor is it\nintended to be applicable in all respects to all categories of option holders.\n\nThe option holders who exchange outstanding options for new options will not be\nrequired to recognize income for federal income tax purposes at the time of the\nexchange. We believe that the exchange will be treated as a non-taxable\nexchange.\n\nAt the date of grant of the new options, the option holders will not be required\nto recognize additional income for federal income tax purposes. The grant of\noptions is not recognized as taxable income.\n\n\n                                       17\n\n \nIf an option holder elects to exchange incentive stock options and those options\nare accepted for exchange, the new options will be granted as incentive stock\noptions to the extent they qualify. For options to qualify as incentive stock\noptions, the value of shares subject to options that first become exercisable by\nthe option holder in any calendar year cannot exceed $100,000, as determined\nusing the option exercise price. The excess value is deemed to be a nonstatutory\nstock option. If the exercise price of the new options is equal to or less than\nthe exercise price of the options elected for exchange, the new options should\nqualify as incentive stock options at least to the extent that the options\nelected for exchange qualified as incentive stock options before being elected\nfor exchange.\n\nWE RECOMMEND THAT YOU CONSULT YOUR OWN TAX ADVISOR WITH RESPECT TO THE FEDERAL,\nSTATE AND LOCAL TAX CONSEQUENCES OF PARTICIPATING IN THE OFFER.\n\n13.   EXTENSION OF OFFER; TERMINATION; AMENDMENT.\n\nWe expressly reserve the right, in our discretion, at any time and from time to\ntime, and regardless of whether or not any event set forth in Schedule A has\noccurred or is deemed by us to have occurred, to extend the period of time\nduring which the offer is open and thereby delay the acceptance for exchange of\nany options by giving oral or written notice of such extension to the option\nholders and making a public announcement thereof.\n\nWe also expressly reserve the right, in our reasonable judgment, prior to the\nexpiration date to terminate or amend the offer and to postpone our acceptance\nand cancellation of any options elected for exchange upon the occurrence of any\nof the conditions specified in Schedule A, by giving oral or written notice of\nsuch termination or postponement to the option holders and making a public\nannouncement thereof. Notwithstanding the foregoing, we will pay the\nconsideration offered or return the options elected for exchange promptly after\ntermination or withdrawal of an offer to exchange.\n\nSubject to compliance with applicable law, we further reserve the right, in our\ndiscretion, and regardless of whether any event set forth in Schedule A has\noccurred or is deemed by us to have occurred, to amend the offer in any respect,\nincluding, without limitation, by decreasing or increasing the consideration\noffered in the offer to option holders or by decreasing or increasing the number\nof options being sought in the offer.\n\nAmendments to the offer may be made at any time and from time to time by public\nannouncement of the amendment. In the case of an extension, the amendment must\nbe issued no later than 9:00 a.m., Eastern Time, on the next business day after\nthe last previously scheduled or announced expiration date. Any public\nannouncement made pursuant to the offer will be disseminated promptly to option\nholders in a manner reasonably designated to inform option holders of such\nchange. Without limiting the manner in which we may choose to make a public\nannouncement, except as required by applicable law, we have no obligation to\npublish, advertise or otherwise communicate any such public announcement other\nthan by making a press release to the Dow Jones News Service.\n\nIf we materially change the terms of the offer or the information concerning the\noffer, or if we waive a material condition of the offer, we will extend the\noffer. Except for a change in price or a change in percentage of securities\nsought, the amount of time by which we will extend the offer following a\nmaterial change in the term of the offer or information concerning the offer\nwill depend on the facts and circumstances, including the relative materiality\nof such terms or information. If we decide to take any of the following actions,\nwe will notify you of such action and extend the offer for a period of ten\nbusiness days after the date of such notice:\n\n(a)   (i)   we increase or decrease the amount of consideration offered for the\n            options;\n\n      (ii)  we decrease the number of options eligible to be elected for\n            exchange in the offer; or\n\n      (iii) we increase the number of options eligible to be elected for\n            exchange in the offer by an amount that exceeds 2% of the shares of\n            common stock issuable upon exercise of the options that are subject\n            to the offer immediately prior to the increase; and\n\n(b)   the offer is scheduled to expire at any time earlier than the expiration\n      of a period ending on the tenth business day from, and including, the date\n      that notice of such increase or decrease is first published, sent or given\n      in the manner specified in this section 13.\n\n\n                                       18\n\n \n14.   FEES AND EXPENSES.\n\nWe will not pay any fees or commissions to any broker, dealer or other person\nfor soliciting elections to exchange options pursuant to this offer to exchange.\n\n15.   ADDITIONAL INFORMATION.\n\nWe recommend that, in addition to this offer to exchange and Election Concerning\nExchange of Stock Options form, you review the following materials which we have\nfiled with the SEC before making a decision on whether to elect to exchange your\noptions:\n\n(a)   our annual report on Form 10-K for our fiscal year ended September 30,\n      2000, filed with the SEC on December 29, 2000.\n\n(b)   our definitive proxy statement for our 2001 annual meeting of\n      stockholders, filed with the SEC on January 17, 2001;\n\n(c)   our Form S-4 that we expect to be on file with the SEC on or about\n      February 8, 2001;\n\n(d)   our Form S-8 (registering shares to be issued under the Ariba, Inc. 1999\n      Equity Incentive Plan) filed with the SEC on June 29, 1999;\n\n(e)   our Form S-8 (registering shares to be issued under the TradingDynamics,\n      Inc. 1998 Stock Plan and the TradingDynamics, Inc. 1999 Stock Plan) filed\n      with the SEC on January 28, 2000;\n\n(f)   our Form S-8 (registering shares to be issued under the Tradex\n      Technologies, Inc. 1997 Employee Stock Option Plan and the Tradex\n      Technologies, Inc. 1999 Employee Stock Option\/Issuance Plan) filed with\n      the SEC on March 29, 2000;\n\n(g)   our Form S-8 (registering shares to be issued under the\n      SupplierMarket.com, Inc. 1999 Stock Option Plan) filed with the SEC on\n      September 28, 2000; and\n\n(h)   the description of our common stock included in our registration statement\n      on Form 8-A, which was filed with the SEC on June 8, 1999, including any\n      amendments or reports we file for the purpose of updating that\n      description.\n\nThe SEC file number for these filings is 0-26299. These filings, our other\nannual, quarterly and current reports, our proxy statements and our other SEC\nfilings may be examined, and copies may be obtained, at the following SEC public\nreference rooms:\n\n   450 Fifth Street, N.W       7 World Trade Center     500 West Madison Street\n         Room 1024                  Suite 1300                Suite 1400\n  Washington, D.C. 20549     New York, New York 10048   Chicago, Illinois 60661\n\nYou may obtain information on the operation of the public reference rooms by\ncalling the SEC at 1-800-SEC-0330.\n\nOur SEC filings are also available to the public on the SEC's Internet site at\nhttp:\/\/www.sec.gov.\n\nOur common stock is quoted on the Nasdaq National Market under the symbol\n\"ARBA,\" and our SEC filings can be read at the following Nasdaq address:\n\n                                Nasdaq Operations\n                               1735 K Street, N.W.\n                             Washington, D.C. 20006\n\n\n                                       19\n\n \nWe will also provide without charge to each person to whom a copy of this offer\nto exchange is delivered, upon the written or oral request of any such person, a\ncopy of any or all of the documents to which we have referred you, other than\nexhibits to such documents (unless such exhibits are specifically incorporated\nby reference into such documents). Requests should be directed to:\n\n                                   Ariba, Inc.\n                          Attention: Investor Relations\n                              1565 Charleston Road\n                             Mountain View, CA 94043\n\nor by telephoning us at (650) 930-6200 between the hours of 9:00 a.m. and 5:00\np.m., Mountain View, California local time.\n\nAs you read the foregoing documents, you may find some inconsistencies in\ninformation from one document to another. If you find inconsistencies between\nthe documents, or between a document and this offer to exchange, you should rely\non the statements made in the most recent document.\n\nThe information contained in this offer to exchange about Ariba should be read\ntogether with the information contained in the documents to which we have\nreferred you.\n\n16.   MISCELLANEOUS.\n\nThis offer to exchange and our SEC reports referred to above include\n\"forward-looking statements\" within the meaning of Section 27A of the Securities\nAct and Section 21E of the Securities Exchange Act. When used in this offer to\nexchange, the words \"anticipate,\" \"believe,\" \"estimate,\" expect,\" \"intend\" and\n\"plan\" as they relate to Ariba, Inc. or our management are intended to identify\nthese forward-looking statements. All statements by us regarding our expected\nfuture financial position and operating results, our business strategy, our\nfinancing plans and expected capital requirements, forecasted trends relating to\nour services or the markets in which we operate and similar matters are\nforward-looking statements. The documents filed by us with the SEC, including\nour annual report on Form 10-K filed on December 29, 2000, discuss some of the\nrisks that could cause our actual results to differ from those contained or\nimplied in the forward-looking statements. These risks include dependence on\nlimited operating history, history of losses, and risks related to future growth\nand rapid expansion. Other important risks include delays or difficulties in\ndeployment and implementation of our products, failure to achieve market\nacceptance of our products, dependence on certain products for substantial\nportions of our revenues, competition, adverse regulatory or legislative\nchanges, and other factors beyond our control. We undertake no obligation to\nupdate or revise publicly any forward-looking statements, whether as a result of\nnew information, future events or otherwise.\n\nWe are not aware of any jurisdiction where the making of the offer is not in\ncompliance with applicable law. If we become aware of any jurisdiction where the\nmaking of the offer is not in compliance with any valid applicable law, we will\nmake a good faith effort to comply with such law. If, after such good faith\neffort, we cannot comply with such law, the offer will not be made to, nor will\nelections to exchange options be accepted from or on behalf of, the option\nholders residing in such jurisdiction.\n\nWE HAVE NOT AUTHORIZED ANY PERSON TO MAKE ANY RECOMMENDATION ON OUR BEHALF AS TO\nWHETHER YOU SHOULD ELECT TO EXCHANGE OR REFRAIN FROM EXCHANGING YOUR OPTIONS\nPURSUANT TO THE OFFER. YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS\nDOCUMENT OR TO WHICH WE HAVE REFERRED YOU. WE HAVE NOT AUTHORIZED ANYONE TO GIVE\nYOU ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH THE OFFER\nOTHER THAN THE INFORMATION AND REPRESENTATIONS CONTAINED IN THIS DOCUMENT OR IN\nTHE RELATED ELECTION CONCERNING EXCHANGE OF STOCK OPTIONS FORM. IF ANYONE MAKES\nANY RECOMMENDATION OR REPRESENTATION TO YOU OR GIVES YOU ANY INFORMATION, YOU\nMUST NOT RELY UPON THAT RECOMMENDATION, REPRESENTATION OR INFORMATION AS HAVING\nBEEN AUTHORIZED BY US.\n\nAriba, Inc. February 8, 2001\n\n\n                                       20\n\n \n                                   SCHEDULE A\n\n\n\nCONDITIONS OF THE OFFER.\n\nNotwithstanding any other provision of the offer, we will not be required to\naccept any options elected for exchange, and we may terminate or amend the\noffer, or postpone our acceptance and cancellation of any options elected for\nexchange, in each case, subject to certain limitations, if at any time on or\nafter February 8, 2001 and prior to the expiration date any of the following\nevents has occurred, or has been determined by us to have occurred, and, in our\nreasonable judgment in any such case and regardless of the circumstances giving\nrise thereto, including any action or omission to act by us, the occurrence of\nsuch event or events makes it inadvisable for us to proceed with the offer or\nwith such acceptance and cancellation of options elected for exchange:\n\n(a)   there shall have been threatened or instituted or be pending any action or\n      proceeding by any government or governmental, regulatory or administrative\n      agency, authority or tribunal or any other person, domestic or foreign,\n      before any court, authority, agency or tribunal that directly or\n      indirectly challenges the making of the offer, the acquisition of some or\n      all of the options elected for exchange pursuant to the offer, the\n      issuance of new options, or otherwise relates in any manner to the offer\n      or that, in our reasonable judgment, could materially and adversely affect\n      the business, condition (financial or other), income, operations or\n      prospects of Ariba or our subsidiaries, or otherwise materially impair in\n      any way the contemplated future conduct of our business or the business of\n      any of our subsidiaries or materially impair the contemplated benefits of\n      the offer to us;\n\n(b)   there shall have been any action threatened, pending or taken, or approval\n      withheld, or any statute, rule, regulation, judgment, order or injunction\n      threatened, proposed, sought, promulgated, enacted, entered, amended,\n      enforced or deemed to be applicable to the offer or us or any of our\n      subsidiaries, by any court or any authority, agency or tribunal that, in\n      our reasonable judgment, would or might directly or indirectly:\n\n      (i)   make the acceptance for exchange of, or issuance of new options for,\n            some or all of the options elected for exchange illegal or otherwise\n            restrict or prohibit consummation of the offer or otherwise relates\n            in any manner to the offer;\n\n      (ii)  delay or restrict our ability, or render us unable, to accept for\n            exchange, or issue new options for, some or all of the options\n            elected for exchange;\n\n      (iii) materially impair the contemplated benefits of the offer to us; or\n\n      (iv)  materially and adversely affect the business, condition (financial\n            or other), income, operations or prospects of Ariba or our\n            subsidiaries, or otherwise materially impair in any way the\n            contemplated future conduct of our business or the business of any\n            of our subsidiaries or materially impair the contemplated benefits\n            of the offer to us;\n\n(c)   there shall have occurred:\n\n      (i)   any general suspension of trading in, or limitation on prices for,\n            securities on any national securities exchange or in the\n            over-the-counter market;\n\n      (ii)  the declaration of a banking moratorium or any suspension of\n            payments in respect of banks in the United States, whether or not\n            mandatory;\n\n      (iii) the commencement of a war, armed hostilities or other international\n            or national crisis directly or indirectly involving the United\n            States;\n\n      (iv)  any limitation, whether or not mandatory, by any governmental,\n            regulatory or administrative agency or authority on, or any event\n            that in our reasonable judgment might affect, the extension of\n            credit by banks or other lending institutions in the United States;\n\n\n                                       A-1\n\n \n      (v)   any significant decrease in the market price of the shares of our\n            common stock or any change in the general political, market,\n            economic or financial conditions in the United States or abroad that\n            could, in our reasonable judgment, have a material adverse effect on\n            the business, condition (financial or other), operations or\n            prospects of Ariba or our subsidiaries or on the trading in our\n            common stock;\n\n      (vi)  any change in the general political, market, economic or financial\n            conditions in the United States or abroad that could have a material\n            adverse effect on the business, condition (financial or other),\n            operations or prospects of Ariba or our subsidiaries or that, in our\n            reasonable judgment, makes it inadvisable to proceed with the offer;\n\n      (vii) in the case of any of the foregoing existing at the time of the\n            commencement of the offer, a material acceleration or worsening\n            thereof; or\n\n     (viii) any decline in either the Dow Jones Industrial Average or the\n            Standard and Poor's Index of 500 Companies by an amount in excess of\n            10% measured during any time period after the close of business on\n            February 8, 2001;\n\n(d)   there shall have occurred any change in generally accepted accounting\n      standards which could or would require us for financial reporting purposes\n      to record compensation expense against our earnings in connection with the\n      offer;\n\n(e)   a tender or exchange offer with respect to some or all of our common\n      stock, or a merger or acquisition proposal for us, shall have been\n      proposed, announced or made by another person or entity or shall have been\n      publicly disclosed, or we shall have learned that:\n\n      (i)   any person, entity or \"group,\" within the meaning of Section\n            13(d)(3) of the Securities Exchange Act, shall have acquired or\n            proposed to acquire beneficial ownership of more than 5% of the\n            outstanding shares of our common stock, or any new group shall have\n            been formed that beneficially owns more than 5% of the outstanding\n            shares of our common stock, other than any such person, entity or\n            group that has filed a Schedule 13D or Schedule 13G with the SEC on\n            or before February 8, 2001;\n\n      (ii)  any such person, entity or group that has filed a Schedule 13D or\n            Schedule 13G with the SEC on or before February 8, 2001 shall have\n            acquired or proposed to acquire beneficial ownership of an\n            additional 2% or more of the outstanding shares of our common stock;\n            or\n\n      (iii) any person, entity or group shall have filed a Notification and\n            Report Form under the Hart-Scott-Rodino Antitrust Improvements Act\n            of 1976, as amended, or made a public announcement reflecting an\n            intent to acquire us or any of our subsidiaries or any of the assets\n            or securities of us or any of our subsidiaries; or\n\n(f)   any change or changes shall have occurred in the business, condition\n      (financial or other), assets, income, operations, prospects or stock\n      ownership of Ariba or our subsidiaries that, in our reasonable judgment,\n      is or may be material to Ariba or our subsidiaries.\n\nThe conditions to the offer are for our benefit. We may assert them in our\ndiscretion regardless of the circumstances giving rise to them prior to the\nexpiration date. We may waive them, in whole or in part, at any time and from\ntime to time prior to the expiration date, in our discretion, whether or not we\nwaive any other condition to the offer. Our failure at any time to exercise any\nof these rights will not be deemed a waiver of any such rights. The waiver of\nany of these rights with respect to particular facts and circumstances will not\nbe deemed a waiver with respect to any other facts and circumstances. Any\ndetermination we make concerning the events described in this Schedule A will be\nfinal and binding upon all persons.\n\n\n                                      A-2\n\n \n                                   SCHEDULE B\n\n\n\n         INFORMATION CONCERNING THE DIRECTORS AND EXECUTIVE OFFICERS OF\n                                   ARIBA, INC.\n\n\n\nThe directors and executive officers of Ariba, Inc. and their positions and\noffices as of February 8, 2001, are set forth in the following table:\n\nNAME                         POSITIONS AND OFFICES HELD\n                             \nKeith J. Krach               Chief Executive Officer and Chairman of the Board\n                             of Directors                                     \n\nLawrence A. Mueller          President and Chief Operating Officer\n\nRobert M. Calderoni          Executive Vice President and Chief Financial\n                             Officer                                     \n\nEileen J. Basho              Senior Vice President - Global Solutions Delivery\n\nKarl C. Kleissner            Senior Vice President - Product Solutions\n\nPaul Hegarty                 Director\n\nRobert C. Kagle              Director\n\nJohn B. Mumford              Director\n\nHatim A. Tyabji              Director\n\nRobert E. Knowling, Jr.      Director\n\nThe address of each director and executive officer is: c\/o Ariba, Inc., 1565\nCharleston Road, Mountain View, California 94043.\n\n\n                                      B-1\n\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[6749],"corporate_contracts_industries":[9513],"corporate_contracts_types":[9539,9545],"class_list":["post-40212","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-ariba-inc","corporate_contracts_industries-technology__software","corporate_contracts_types-compensation","corporate_contracts_types-compensation__esp"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/40212","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=40212"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=40212"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=40212"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=40212"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}