SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/X/ Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section240.14a-11(c) or
Section240.14a-12
ARIBA, INC.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
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[LOGO]
ARIBA, INC.
1565 CHARLESTON ROAD
MOUNTAIN VIEW, CALIFORNIA 94043
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders of
Ariba, Inc., which will be held at Ariba's Worldwide Headquarters, 1565
Charleston Road, Mountain View, California, on Monday, February 28, 2000, at
1:00 p.m.
Details of the business to be conducted at the Annual Meeting are given in
the attached Proxy Statement and Notice of Annual Meeting of Stockholders.
It is important that your shares be represented and voted at the meeting.
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE COMPLETE, SIGN,
DATE AND PROMPTLY RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED POSTAGE-PAID
ENVELOPE. Returning the proxy does NOT deprive you of your right to attend the
Annual Meeting. If you decide to attend the Annual Meeting and wish to change
your proxy vote, you may do so automatically by voting in person at the meeting.
On behalf of the Board of Directors, I would like to express our
appreciation for your continued interest in the affairs of Ariba. We look
forward to seeing you at the Annual Meeting.
Sincerely,
KEITH J. KRACH
CHAIRMAN OF THE BOARD, PRESIDENT AND
CHIEF EXECUTIVE OFFICER
Mountain View, California
January 28, 2000
ARIBA, INC.
1565 CHARLESTON ROAD
MOUNTAIN VIEW, CALIFORNIA 94043
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
---------------------
TO BE HELD FEBRUARY 28, 2000
To The Stockholders:
The Annual Meeting of Stockholders (the "Annual Meeting") of Ariba, Inc.
(the "Company") will be held at the Company's worldwide headquarters, 1565
Charleston Road, Mountain View, California, on Monday, February 28, 2000, at
1:00 p.m. for the following purposes:
1. To elect two (2) directors of the Board of Directors to serve until the
2003 Annual Meeting or until their successors have been duly elected and
qualified;
2. To approve an amendment to the Company's Certificate of Incorporation to
increase the number of shares of Common Stock that the Company is
authorized to issue from 200,000,000 to 400,000,000;
3. To ratify the appointment of KPMG LLP as the Company's independent
public accountants for the fiscal year ending September 30, 2000; and
4. To transact such other business as may properly come before the meeting
or any adjournments or postponements thereof.
The foregoing items of business are more fully described in the attached
Proxy Statement. Only stockholders of record at the close of business on
January 14, 2000, the record date, are entitled to notice of, and to vote at,
the Annual Meeting and at any adjournments or postponements thereof. A list of
such stockholders will be available for inspection at the Company's headquarters
located at 1565 Charleston Road, Mountain View, California, during ordinary
business hours for the ten-day period prior to the Annual Meeting.
By Order Of The Board Of Directors
Edward P. Kinsey
SECRETARY
Mountain View, California
January 28, 2000
IMPORTANT
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE COMPLETE, SIGN,
DATE AND PROMPTLY RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED POSTAGE-PAID
ENVELOPE. YOU MAY REVOKE YOUR PROXY AT ANY TIME PRIOR TO THE ANNUAL MEETING. IF
YOU DECIDE TO ATTEND THE ANNUAL MEETING AND WISH TO CHANGE YOUR PROXY VOTE, YOU
MAY DO SO AUTOMATICALLY BY VOTING IN PERSON AT THE MEETING.
ARIBA, INC.
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PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS
------------------------
TO BE HELD FEBRUARY 28, 2000
These proxy materials are furnished in connection with the solicitation of
proxies by the Board of Directors of Ariba, Inc., a Delaware corporation (the
"Company"), for the Annual Meeting of Stockholders (the "Annual Meeting") to be
held at the Company's worldwide headquarters, 1565 Charleston Road, Mountain
View, California, on Monday, February 28, 2000, at 1:00 p.m., and at any
adjournment or postponement of the Annual Meeting. These proxy materials were
first mailed to stockholders on or about January 28, 2000.
PURPOSE OF MEETING
The specific proposals to be considered and acted upon at the Annual Meeting
are summarized in the accompanying Notice of Annual Meeting of Stockholders.
Each proposal is described in more detail in this Proxy Statement.
VOTING RIGHTS AND SOLICITATION OF PROXIES
The Company's Common Stock is the only type of security entitled to vote at
the Annual Meeting. On January 14, 2000, the record date for determination of
stockholders entitled to vote at the Annual Meeting, there were shares
of Common Stock outstanding. Each stockholder of record on January 14, 2000 is
entitled to one vote for each share of Common Stock held by such stockholder on
January 14, 2000. Shares of Common Stock may not be voted cumulatively. All
votes will be tabulated by the inspector of election appointed for the meeting,
who will separately tabulate affirmative and negative votes, abstentions and
broker non-votes.
QUORUM REQUIRED
The Company's bylaws provide that the holders of a majority of the Company's
Common Stock issued and outstanding and entitled to vote at the Annual Meeting,
present in person or represented by proxy, shall constitute a quorum for the
transaction of business at the Annual Meeting. Abstentions and broker non-votes
will be counted as present for the purpose of determining the presence of a
quorum.
VOTES REQUIRED
PROPOSAL 1. Directors are elected by a plurality of the affirmative votes
cast by those shares present in person, or represented by proxy, and entitled to
vote at the Annual Meeting. The two (2) nominees for director receiving the
highest number of affirmative votes will be elected. Abstentions and broker
non-votes will not be counted toward a nominee's total. Stockholders may not
cumulate votes in the election of directors.
PROPOSAL 2. Approval of the adoption of the amendment to the Company's
Certificate of Incorporation requires the affirmative vote of a majority of the
Company's Common Stock issued and outstanding and entitled to vote at the Annual
Meeting. Abstentions and broker non-votes are not affirmative votes and,
therefore, will have the same effect as votes against the proposal.
PROPOSAL 3. Ratification of the appointment of KPMG LLP as the Company's
independent public accountants for the fiscal year ending September 30, 2000
requires the affirmative vote of a majority of those shares present in person,
or represented by proxy, and cast either affirmatively or negatively at the
Annual Meeting. Abstentions and broker non-votes will not be counted as having
been voted on the proposal.
PROXIES
Whether or not you are able to attend the Company's Annual Meeting, you are
urged to complete and return the enclosed proxy, which is solicited by the
Company's Board of Directors and which will be voted as you direct on your proxy
when properly completed. In the event no directions are specified, such proxies
will be voted FOR the Nominees of the Board of Directors (as set forth in
Proposal No. 1), FOR Proposal Nos. 2 and 3 and in the discretion of the proxy
holders as to other matters that may properly come before the Annual Meeting.
You may also revoke or change your proxy at any time before the Annual Meeting.
To do this, send a written notice of revocation or another signed proxy with a
later date to the Secretary of the Company at the Company's principal executive
offices before the beginning of the Annual Meeting. You may also automatically
revoke your proxy by attending the Annual Meeting and voting in person. All
shares represented by a valid proxy received prior to the Annual Meeting will be
voted.
SOLICITATION OF PROXIES
The Company will bear the entire cost of solicitation, including the
preparation, assembly, printing, and mailing of this Proxy Statement, the proxy,
and any additional soliciting material furnished to stockholders. Copies of
solicitation material will be furnished to brokerage houses, fiduciaries, and
custodians holding shares in their names that are beneficially owned by others
so that they may forward this solicitation material to such beneficial owners.
In addition, the Company may reimburse such persons for their costs of
forwarding the solicitation material to such beneficial owners. The original
solicitation of proxies by mail may be supplemented by solicitation by
telephone, telegram, or other means by directors, officers, employees or agents
of the Company. No additional compensation will be paid to these individuals for
any such services.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
The Company's Certificate of Incorporation provides for a classified Board
of Directors, with the terms of office of each class of directors ending in
successive years. The Company currently has authorized five directors with each
class of directors consisting of either one or two directors. At the Annual
Meeting, two directors are to be elected to serve until the Company's 2003
Annual Meeting or until their successors are elected and qualified. The
directors who are being nominated for election to the Board of Directors (the
"Nominees"), their ages as of December 31, 1999, their positions and offices
held with the Company and certain biographical information are set forth below.
The proxy holders intend to vote all proxies received by them in the
accompanying form FOR the Nominees listed below unless otherwise instructed. In
the event any Nominee is unable or declines to serve as a director at the time
of the Annual Meeting, the proxies will be voted for any nominee who may be
designated by the present Board of Directors to fill the vacancy. As of the date
of this Proxy Statement, the Board of Directors is not aware of any Nominee who
is unable or will decline to serve as a director. The two (2) Nominees receiving
the highest number of affirmative votes of the shares entitled to vote at the
Annual Meeting will be elected directors of the Company.
YEAR TERM
NOMINEES AGE EXPIRES POSITIONS AND OFFICES HELD WITH THE COMPANY
- -------- -------- --------- -------------------------------------------
Keith J. Krach(1)..................... 42 2000 Chairman of the Board, President and
Chief Executive Officer
Robert C. Kagle(2)(3)................. 44 2000 Director
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(1) Member of Stock Option Committee
(2) Member of Audit Committee
(3) Member of Compensation Committee
2
KEITH J. KRACH, a co-founder of Ariba, has served as Chairman of the Board
of Directors, Chief Executive Officer and President since our inception in
September 1996. From March 1996 to September 1996, Mr. Krach served as an
Entrepreneur in Residence at Benchmark Capital. From October 1988 to
August 1995, Mr. Krach served as Chief Operating Officer of Rasna Corporation, a
mechanical computer-aided design automation software company. Prior to joining
Rasna, Mr. Krach held various positions with General Motors, including General
Manager and Vice President of GMF Robotics. Mr. Krach holds a Bachelor of
Science degree in Industrial Engineering from Purdue University and a Master of
Business Administration from Harvard Business School.
ROBERT C. KAGLE has served as a director of Ariba since our inception in
September 1996. Mr. Kagle has been a Managing Member of Benchmark Capital
Management Co., L.L.C., the General Partner of Benchmark Capital Partners, L.P.
and Benchmark Founders' Fund, L.P., since its founding in May 1995. Mr. Kagle
also has been a General Partner of Technology Venture Investors since
January 1984. Mr. Kagle currently serves as a director of publicly held
companies eBay Inc. and E-Loan, and is currently a director of the National
Association of Venture Capitalists and a Trustee of Kettering University,
formerly known as the General Motors Institute. Mr. Kagle holds a Bachelor of
Science degree in Electrical and Mechanical Engineering from the General Motors
Institute and a Master of Business Administration from the Stanford Graduate
School of Business.
Set forth below is information regarding the continuing directors of the
Company, including their age as of December 31, 1999, the period during which
they have served as a director, and information furnished by him as to principal
occupations and directorships held by him in corporations whose shares are
publicly registered.
CONTINUING DIRECTORS--TERM ENDING IN 2001
PAUL HEGARTY, age 35, a co-founder of Ariba, has served as Vice President of
Engineering from our inception in September 1996 to August 1997, as Chief
Technical Officer from our inception to October 1998 and as a director since
October 1998. From June 1996 to September 1996, Mr. Hegarty served as an
Entrepreneur in Residence at Benchmark Capital. From February 1988 to May 1996,
Mr. Hegarty served in various engineering capacities at NeXT Software, Inc.,
including Vice President of Engineering. Mr. Hegarty holds Bachelor of Science
and Master of Science degrees in Electrical Engineering from Stanford
University.
JOHN B. MUMFORD, age 56, has served as a director of Ariba since our
inception in September 1996. Mr. Mumford has served as Managing Partner of
Crosspoint Venture Partners since 1970. Mr. Mumford currently serves as a
director of a number of private companies primarily in the information
technology area. Mr. Mumford is a co-founder and director of Hello
Direct, Inc., a public company, and served as a director of Office Depot, a
public company, from its formation in 1986 to April 1997. Mr. Mumford was also a
founding director of Inmac Corp., a public company, and served in this capacity
until its merger with Micro Warehouse in 1996. Mr. Mumford holds a Bachelor of
Science degree in Accounting from Arizona State University and a Master of
Business Administration degree in Operations Research from the Stanford Graduate
School of Business.
CONTINUING DIRECTOR--TERM ENDING IN 2002
HATIM A. TYABJI, age 54, has served as a director of Ariba since
January 1998. Mr. Tyabji has served as Chairman and Chief Executive Officer of
Saraide.com, a privately held company, since September 1998. Prior to joining
Saraide, he served as President and Chief Executive Officer from 1986 to 1998
and as Chairman of the Board from 1992 to 1998 of VeriFone, Inc., a wholly-owned
subsidiary of Hewlett-Packard. Prior to joining VeriFone, Mr. Tyabji served as
President of the Information Systems Products and Technologies Group of Unisys
Corporation, formerly known as Sperry Corporation. Mr. Tyabji holds a Bachelor
of Science degree in Electrical Engineering from the College of Engineering in
Poona, India and a Master of Science degree in Electrical Engineering from the
State University of New York, Buffalo. He
3
also has a Master of Business Administration in International Business from
Syracuse University and is a graduate of the Stanford University Executive
Program.
BOARD OF DIRECTORS MEETINGS AND COMMITTEES
During the fiscal year ended September 30, 1999, the Board of Directors held
nine (9) meetings and acted by written consent in lieu of a meeting on
twenty-six (26) occasions. For the fiscal year, each of the directors during the
term of their tenure attended or participated in at least 75% of the aggregate
of (i) the total number of meetings or actions by written consent of the Board
of Directors and (ii) the total number of meetings held by all committees of the
Board of Directors on which each such director served. The Board of Directors
has three (3) standing committees: the Audit Committee, the Compensation
Committee and the Stock Option Committee.
AUDIT COMMITTEE. During the fiscal year ended September 30, 1999, the Audit
Committee of the Board of Directors held two (2) meetings and acted by written
consent in lieu of a meeting on no occasion. The Audit Committee reviews, acts
on and reports to the Board of Directors with respect to various auditing and
accounting matters, including the selection of the Company's accountants, the
scope of the annual audits, fees to be paid to the Company's accountants, the
performance of the Company's accountants and the accounting practices of the
Company. The members of the Audit Committee are Messrs. Kagle and Mumford.
COMPENSATION COMMITTEE. During the fiscal year ended September 30, 1999,
the Compensation Committee of the Board of Directors held no meetings and acted
by written consent in lieu of a meeting on two (2) occasions. The Compensation
Committee reviews the performance of the executive officers of the Company,
establishes compensation programs for the officers, and reviews the compensation
programs for other key employees, including salary and cash bonus levels and
option grants under the 1999 Equity Incentive Plan. The members of the
Compensation Committee are Messrs. Kagle and Tyabji.
STOCK OPTION COMMITTEE. The Stock Option Committee, which was established
in June 1999, has the right to administer Ariba's 1999 Equity Incentive Plan
with respect to persons other than directors and officers of Ariba, and with
respect to options to purchase no greater than 60,000 shares. Options to
purchase greater than 60,000 shares, or options to directors or executive
officers, must be approved by the Compensation Committee. The Stock Option
Committee's authority is in addition to, and not in lieu of, the authority
granted to the Compensation Committee. In the event of conflict with respect to
the actions of the Stock Option Committee and the Compensation Committee, the
actions of the Compensation Committee are the actions of Ariba unless determined
otherwise by the full Board of Directors. The Stock Option Committee acted by
written consent in lieu of a meeting on ten (10) occasions to authorize grants
of stock options in the fiscal year ended September 30, 1999. The sole member of
the Stock Option Committee is Mr. Krach.
DIRECTOR COMPENSATION
Except for grants of stock options, directors of the Company generally do
not receive compensation for services provided as a director. The Company also
does not pay compensation for committee participation or special assignments of
the Board of Directors.
Non-employee directors are eligible for option grants pursuant to the
provisions of the 1999 Directors' Stock Option Plan. Under the 1999 Directors'
Stock Option Plan, each individual who first becomes a non-employee director
after the date of the Company's initial public offering will be granted an
option to purchase 20,000 shares on the date such individual joins the Board,
provided such individual has not been in the prior employ of the Company. In
addition, at each Annual Meeting, each individual who has served as a
non-employee director for at least six months prior to such Annual Meeting will
receive an additional option grant to purchase 5,000 shares of Common Stock,
whether or not such individual has been in the prior employ of the Company. The
option price for each option grant under the 1999 Directors' Stock
4
Option Plan will be equal to the fair market value per share of Common Stock on
the automatic grant date. Each initial grant will become exercisable for fifty
percent (50%) of the shares at the automatic grant date and the remaining fifty
percent (50%) of the shares after twelve (12) months of Board service. Each
annual option grant is fully exercisable at grant. On January 21, 1998, in
connection with his appointment to the board of directors, Mr. Tyabji was
granted an option to purchase 400,000 shares of common stock at an exercise
price of $0.1875 per share, subject to a four-year vesting schedule. On
January 27, 1999, in connection with his appointment to the board of directors,
Mr. Hegarty was granted an option to purchase 40,000 shares of common stock at
an exercise price of $1.1875 per share, subject to a four-year vesting schedule.
Pursuant to the 1999 Directors' Stock Option Plan, each of Messrs. Hegarty,
Kagle, Mumford and Tyabji will be granted options to purchase 5,000 shares of
Common Stock on the date of the Annual Meeting.
Directors are eligible to receive options and be issued shares of Common
Stock directly under the 1999 Equity Incentive Plan and directors who are also
employees of the Company are also eligible to participate in the Company's
Employee Stock Purchase Plan (unless such employee owns 5% or more of the
Company's outstanding shares) and, if an executive officer of the Company, the
1999 Executive Bonus Program.
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE NOMINEES LISTED HEREIN.
PROPOSAL NO. 2
AMENDMENT TO THE COMPANY'S CERTIFICATE
OF INCORPORATION
The Board of Directors has determined that it is in the best interests of
the Company and its stockholders to amend the Company's Certificate of
Incorporation to increase the number of authorized shares of Common Stock of the
Company from 200,000,000 to 400,000,000 shares. Accordingly, the Board of
Directors has unanimously approved the proposed Certificate of Amendment to the
Amended and Restated Certificate of Incorporation of the Company, in the form
attached hereto as Exhibit A (the "Certificate of Amendment"), and hereby
solicits the approval of the Company's stockholders of the Certificate of
Amendment. If the stockholders approve the Certificate of Amendment, the Board
of Directors currently intends to file the Certificate of Amendment with the
Secretary of State of the State of Delaware as soon as practicable following
such stockholder approval. If the Certificate of Amendment is not approved by
the stockholders, the existing Certificate of Incorporation will continue in
effect.
The objectives of the increase in the authorized number of shares of Common
Stock are to ensure that the Company has sufficient shares available for future
issuances. The Board of Directors believes that it is prudent to increase the
authorized number of shares of Common Stock to the proposed levels in order to
provide a reserve of shares available for issuance to meet business needs as
they arise. Such future activities may include, without limitation, financings,
establishing strategic relationships with corporate partners, providing equity
incentives to employees, officers or directors, or effecting stock splits or
dividends. The additional shares of Common Stock authorized may also be used to
acquire or invest in complementary businesses or products or to obtain the right
to use complementary technologies. Currently, the Company has plans to issue
additional shares of Common Stock for pending acquisitions.
On November 15, 1999, the Company signed a definitive agreement to acquire
TradingDynamics, Inc., a leading provider of business-to-business Internet
trading applications. The agreement is structured as a tax-free stock-for-stock
merger, and will be accounted for as a purchase transaction. The Company will
issue 4,148,302 shares of stock worth approximately $600 million, based on
current trading ranges, to TradingDynamics shareholders. The Company expects
that the transaction will close in the quarter ending March 31, 2000.
5
On December 16, 1999, the Company also signed a definitive agreement to
acquire TRADEX Technologies, Inc., a leading provider of solutions for net
markets. The agreement is structured as a stock-for-stock merger and will be
accounted for as a purchase transaction. The Company will issue approximately
18,000,000 shares of stock worth approximately $2.7 billion, based on current
trading ranges, to TRADEX stockholders. The Company expects that the transaction
will close in the quarter ending June 30, 2000.
The Company may continue to evaluate potential acquisitions of or
investments with third parties.
POSSIBLE EFFECTS OF THE PROPOSED AMENDMENT TO THE CERTIFICATE OF INCORPORATION
If the stockholders approve the proposed Certificate of Amendment, the Board
of Directors may cause the issuance of additional shares of Common Stock without
further vote of the stockholders of the Company, except as provided under
Delaware corporate law or under the rules of any securities exchange on which
shares of Common Stock of the Company are then listed. Current holders of Common
Stock have no preemptive or similar rights, which means that current
stockholders do not have a prior right to purchase any new issue of Common Stock
of the Company in order to maintain their appropriate ownership thereof. The
issuance of additional shares of Common Stock would decrease the proportionate
equity interest of the Company's current stockholders and, depending upon the
price paid for such additional shares, could result in dilution to the Company's
current stockholders.
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE APPROVAL OF THE AMENDMENT
TO THE COMPANY'S CERTIFICATE OF INCORPORATION.
PROPOSAL NO. 3
RATIFICATION OF INDEPENDENT ACCOUNTANTS
The Company is asking the stockholders to ratify the appointment of KPMG LLP
as the Company's independent public accountants for the fiscal year ending
September 30, 2000. The affirmative vote of the holders of a majority of shares
present or represented by proxy and voting at the Annual Meeting will be
required to ratify the appointment of KPMG LLP.
In the event the stockholders fail to ratify the appointment, the Board of
Directors will reconsider its selection. Even if the appointment is ratified,
the Board of Directors, in its discretion, may direct the appointment of a
different independent accounting firm at any time during the year if the Board
of Directors feels that such a change would be in the Company's and its
stockholders' best interests.
KPMG LLP has audited the Company's financial statements since 1997. Its
representatives are expected to be present at the Annual Meeting, will have the
opportunity to make a statement if they desire to do so, and will be available
to respond to appropriate questions.
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE RATIFICATION OF THE
SELECTION OF KPMG LLP TO SERVE AS THE COMPANY'S INDEPENDENT PUBLIC ACCOUNTANTS
FOR THE FISCAL YEAR ENDING SEPTEMBER 30, 2000.
6
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of December 31, 1999, certain information
with respect to shares beneficially owned by (i) each person who is known by the
Company to be the beneficial owner of more than five percent (5%) of the
Company's outstanding shares of Common Stock, (ii) each of the Company's
directors and the executive officers named in the Summary Compensation Table and
(iii) all current directors and executive officers as a group. Beneficial
ownership has been determined in accordance with Rule 13d-3 under the Exchange
Act. Under this rule, certain shares may be deemed to be beneficially owned by
more than one person (if, for example, persons share the power to vote or the
power to dispose of the shares). As of December 31, 1999, the Company had
91,948,638 outstanding shares of Common Stock.
In addition, shares are deemed to be beneficially owned by a person if the
person has the right to acquire shares (for example, upon exercise of an option
or warrant) within sixty (60) days of the date as of which the information is
provided. In computing the percentage ownership of any person, the amount of
shares is deemed to include the amount of shares beneficially owned by such
person (and only such person) by reason of such acquisition rights. As a result,
the percentage of outstanding shares of any person as shown in the following
table does not necessarily reflect the person's actual voting power at any
particular date.
To our knowledge, except as indicated in the footnotes to this table and
pursuant to applicable community property laws, the persons named in the table
have sole voting and investment power with respect to all shares of Common Stock
shown as beneficially owned by them.
SHARES BENEFICIALLY OWNED
AS OF DECEMBER 31, 1999(1)
--------------------------------------
BENEFICIAL OWNER NUMBER OF SHARES PERCENTAGE OF CLASS
- ---------------- ---------------- -------------------
Crosspoint Venture Partners 1996(2) ........................ 5,000,000 5.4%
2925 Woodside Road
Woodside, California 94062
Amerindo Investment Advisors, Inc. ......................... 5,200,200 5.7%
399 Park Avenue, 22(nd) Floor
New York, New York 10022
John B. Mumford**(2)........................................ 5,039,135 5.5%
Robert C. Kagle(3).......................................... 698,316 *
Keith J. Krach**(4)......................................... 10,215,582 11.1%
Robert J. DeSantis(5)....................................... 3,517,808 3.8%
Paul Hegarty(6)............................................. 1,840,000 2.0%
Rune C. Eliasen(7).......................................... 1,361,800 1.5%
K. Charly Kleissner(8)...................................... 1,128,416 1.2%
Paul L. Melchiorre(9)....................................... 620,000 *
Paul C. M. Touw(10)......................................... 1,472,416 1.6%
Hatim A. Tyabji(11)......................................... 491,182 *
All current directors and executive officers as a group
(14 persons)(12).......................................... 31,119,071 33.3%
- ------------------------
* Less than 1% of the outstanding shares of Common Stock.
** Mr. Mumford can be reached at the address given above for Crosspoint
Venture Partners. Mr. Krach can be reached at Ariba, Inc., 1565 Charleston
Road, Mountain View, California 94043.
7
(1) The number of shares of Common Stock deemed outstanding includes shares
issuable pursuant to stock options that may be exercised within sixty
(60) days after December 31, 1999.
(2) Includes 5,000,000 shares held by Crosspoint Venture Partners 1996.
Mr. Mumford, a director of Ariba, is a Managing Member of Crosspoint
Associates 1996, which is the general partner of Crosspoint Venture
Partners 1996. Mr. Mumford disclaims beneficial ownership of the shares
held by Crosspoint Venture Partners 1996, except to the extent of his
pecuniary interest therein arising from his partnership interests.
(3) Includes 6,030 shares held in trusts for Mr. Kagle's children.
(4) Includes 2,520,200 shares subject to a repurchase right in favor of the
Company, as of December 31, 1999, upon cessation of Mr. Krach's service to
the Company.
(5) Includes options exercisable into 334,208 shares of common stock within
60 days of December 31, 1999. Also includes 648,600 shares subject to a
repurchase right in favor of the Company, as of December 31, 1999, upon
cessation of Mr. DeSantis's service to the Company.
(6) Includes options exercisable for 40,000 shares of common stock within
60 days of December 31, 1999.
(7) Includes options exercisable into 80,000 shares of common stock within
60 days of December 31, 1999. Also includes 400,000 shares subject to a
repurchase right in favor of the Company, as of December 31, 1999, upon
cessation of Mr. Eliasen's service to the Company.
(8) Includes options exercisable into 328,416 shares of common stock within
60 days of December 31, 1999. Also includes 443,334 shares subject to a
repurchase right in favor of the Company, as of December 31, 1999, upon
cessation of Dr. Kleissner's service to the Company.
(9) Includes options exercisable into 200,000 shares of common stock within
60 days of December 31, 1999. Also includes 260,000 shares subject to a
repurchase right in favor of the Company, as of December 31, 1999, upon
cessation of Mr. Melchiorre's service to the Company.
(10) Includes options exercisable into 168,416 shares of common stock within
60 days of December 31, 1999. Also includes 282,000 shares subject to a
repurchase right in favor of the Company, as of December 31, 1999, upon
cessation of Mr. Touw's service to the Company.
(11) Includes 208,334 shares subject to a repurchase right in favor of the
Company, as of December 31, 1999, upon cessation of Mr. Tyabji's service
to the Company.
(12) Includes options exercisable into 1,579,456 shares of common stock within
60 days of December 31, 1999. Also includes an aggregate of 5,927,633
shares subject to a repurchase right in favor of the Company, as of
December 31, 1999.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
The members of the Board of Directors, the executive officers of the Company
and persons who hold more than 10% of the Company's outstanding Common Stock are
subject to the reporting requirements of Section 16(a) of the Securities
Exchange Act of 1934, as amended, which require them to file reports with
respect to their ownership of the Company's Common Stock and their transactions
in such Common Stock. Based upon (i) the copies of Section 16(a) reports that
the Company received from such persons for their 1999 fiscal year transactions
in the Common Stock and their Common Stock holdings and (ii) the written
representations received from one or more of such persons that no annual Form 5
reports were required to be filed by them for the 1999 fiscal year, the Company
believes that all reporting requirements under Section 16(a) for such fiscal
year were met in a timely manner by its executive officers, Board members and
greater than ten-percent stockholders, except that Paul Hegarty filed an Amended
Form 3 to report a stock option grant not previously reported.
8
EXECUTIVE COMPENSATION AND RELATED INFORMATION
SUMMARY COMPENSATION TABLE
The following Summary Compensation Table sets forth the compensation earned
by the Company's Chief Executive Officer and the five other most highly
compensated executive officers who were serving as such as of September 30, 1999
(collectively, the "Named Officers"), each of whose aggregate compensation for
fiscal 1999 exceeded $100,000 for services rendered in all capacities to the
Company and its subsidiaries for that fiscal year.
LONG-TERM
COMPENSATION
AWARDS/
ANNUAL COMPENSATION SECURITIES
FISCAL -------------------- UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY(1) BONUS OPTIONS COMPENSATION
- --------------------------- -------- --------- -------- ------------ ------------
Keith J. Krach........................... 1999 $119,583 $ 47,400 800,000 --
Chairman of the Board, President 1998 106,667 33,000 -- --
and Chief Executive Officer
Robert J. DeSantis....................... 1999 129,167 488,427(2) 160,000 $15,975(4)
Vice President, Network Commerce 1998 106,667 76,605(2) 400,000 6,250(4)
Rune C. Eliasen.......................... 1999 119,583 47,400 80,000 --
Vice President, Customer Services 1998 106,667 33,000 -- --
K. Charly Kleissner...................... 1999 119,583 47,400 320,000 --
Vice President, Engineering 1998 106,667 33,000 160,000 --
Paul L. Melchiorre....................... 1999 140,417 212,500(3) 320,000 5,000(5)
Vice President, North American 1998 32,083 21,773(3) 1,280,000 50,500(5)
Operations
Paul C. M. Touw.......................... 1999 119,583 47,400 400,000 --
Vice President, Corporate Strategy 1998 106,667 27,375 -- --
- ------------------------
(1) Salary includes amounts deferred under the Company's 401(k) Plan.
(2) Includes commissions earned by Mr. DeSantis of $475,914 and $36,605 in 1999
and 1998, respectively.
(3) Includes commissions earned by Mr. Melchiorre of $212,500 and $8,441 in 1999
and 1998, respectively.
(4) Includes expatriate remuneration of $9,975 paid to Mr. DeSantis in 1999, and
car allowances of $6,000 and $6,250 paid to Mr. DeSantis in 1999 and 1998,
respectively.
(5) Includes car allowances of $5,000 and $500 paid to Mr. Melchiorre in 1999
and 1998, respectively, and relocation remuneration of $50,000 paid to
Mr. Melchiorre in 1998.
9
OPTION GRANTS IN LAST FISCAL YEAR
The following table contains information concerning the stock option grants
made to each of the Named Officers for the fiscal year ended September 30, 1999.
No stock appreciation rights were granted during such year.
INDIVIDUAL GRANTS(1) POTENTIAL REALIZABLE
------------------------------------------------ VALUE AT ASSUMED
NUMBER OF % OF TOTAL ANNUAL RATES OF STOCK
SECURITIES OPTIONS PRICE APPRECIATION
UNDERLYING GRANTED TO EXERCISE FOR OPTION TERM(3)
OPTIONS EMPLOYEES PRICE EXPIRATION ---------------------
NAME GRANTED IN 1999(2) PER SHARE DATE 5% 10%
- ---- ---------- ---------- --------- ---------- -------- ----------
Keith J. Krach................. 800,000 4.73% $1.3065 1/26/09 $502,450 $1,419,055
Robert J. DeSantis............. 84,208 0.50% 1.1875 1/26/09 62,888 159,369
75,792 0.45% 1.1875 1/26/09 56,602 143,442
Rune C. Eliasen................ 80,000 0.47% 1.1875 1/26/09 59,745 151,406
K. Charly Kleissner............ 84,208 0.50% 1.1875 1/26/09 159,369 831,298
67,376 0.40% 1.1875 1/26/09 127,514 665,133
84,208 0.50% 1.1875 1/26/09 159,369 831,298
84,208 0.50% 1.1875 1/26/09 159,369 831,298
Paul L. Melchiorre............. 193,272 1.15% 1.1875 1/26/09 144,637 366,538
126,328 0.75% 1.1875 1/26/09 94,343 239,084
Paul C. M. Touw................ 84,208 0.50% 1.1875 1/26/09 159,369 831,298
84,208 0.50% 1.1875 1/26/09 159,369 831,298
84,208 0.50% 1.1875 1/26/09 159,369 831,298
84,208 0.50% 1.1875 1/26/09 159,369 831,298
63,168 0.37% 1.1875 1/26/09 47,175 119,550
- ------------------------
(1) The options disclosed in the table were granted on January 27, 1999. The
exercise price for each option may be paid in cash, in shares of Common
Stock valued at fair market value on the exercise date or through a cashless
exercise procedure involving a same-day sale of the purchased shares. The
Company may also finance the option exercise by loaning the optionee
sufficient funds to pay the exercise price for the purchased shares,
together with any federal and state income tax liability incurred by the
optionee in connection with such exercise. The plan administrator has the
discretionary authority to reprice the options through the cancellation of
those options and the grant of replacement options with an exercise price
based on the fair market value of the option shares on the regrant date. The
options have a maximum term of 10 years measured from the option grant date,
subject to earlier termination in the event of the optionee's cessation of
service with the Company. The options listed in the table are exercisable
immediately as of the dates of grant, not to exceed the Incentive Stock
Option $100,000 limitation rule, and subject to a right of repurchase in
favor of the Company. Incentive Stock Options exceeding the $100,000
limitation rule have deferred exercisability to subsequent calendar year(s).
The rights of repurchase under the options listed in the table lapse with
respect to 10% of the shares after one year of service from the grant date,
20% of the shares after two years of service from the grant date, 30% of the
shares after three years of service from the grant date; and 40% of the
shares after four years of service from the grant date. Under each of the
options, the option shares will vest upon an acquisition of the Company by
merger or asset sale, unless the acquiring company assumes the options. If a
change in control occurs within 12 months after the optionee's vesting start
date, then the option shall vest as to an additional number of shares as if
the optionee had been in service 12 additional months. In addition, if a
change in control occurs more than 12 months after the optionee's vesting
start date, then the option shall vest as to the lesser of: 50% of the then
remaining unvested portion of the option; or the excess of (a) 75% of the
total
10
number of shares originally subject to the option over (b) the number of
shares that had already vested. Each option shall fully vest after a change
in control if the optionee's employment or service is terminated without his
consent and without cause; or the optionee resigns after he is subject to a
reduction in authority or responsibility or a reduction in compensation or
benefits.
(2) Based on an aggregate of 16,915,400 options granted in the fiscal year.
(3) The 5% and 10% assumed annual rates of compounded stock price appreciation
are mandated by rules of the Securities and Exchange Commission. There can
be no assurance provided to any executive officer or any other holder of the
Company's securities that the actual stock price appreciation over the
10-year option term will be at the assumed 5% and 10% levels or at any other
defined level. Unless the market price of the Common Stock appreciates over
the option term, no value will be realized from the option grants made to
the executive officers.
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
The following table sets forth information concerning option exercises in
fiscal year 1999 and option holdings as of September 30, 1999 with respect to
each of the Named Officers. No stock appreciation rights were outstanding at the
end of such year.
NUMBER OF
SECURITIES UNDERLYING VALUE OF UNEXERCISED
VALUE REALIZED UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
SHARES (MARKET PRICE AT AT FY-END AT FY-END(1)
ACQUIRED ON EXERCISE LESS --------------------------- ---------------------------
NAME EXERCISE EXERCISE PRICE) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- ---------------- ----------- ------------- ----------- -------------
Keith J. Krach............ 800,000 -- -- -- -- --
Robert J. DeSantis........ 150,000 $825,000 250,000 160,000 $17,937,500 $11,370,000
Rune C. Eliasen........... -- -- 80,000 -- 5,685,000 --
K. Charly Kleissner....... -- -- 244,208 235,792 17,464,031 16,755,969
Paul L. Melchiorre........ 740,000 832,500 -- 860,000 -- 61,485,000
Paul C. M. Touw........... -- -- 84,208 315,792 5,984,031 22,440,969
- ------------------------
(1) Based on the fair market value of the Company's Common Stock at
September 30, 1999 ($72.25) per share less the exercise price payable for
such shares.
BONUS PLAN. In 1999, the Company instituted an executive bonus program
pursuant to which bonuses will be paid to executive officers based on Company
performance targets. In addition, certain non-executive employees will receive
quarterly and annual bonuses if the Company meets its performance targets. The
Company's performance targets are based on meeting revenue and income levels on
a quarterly and annual basis.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company's Certificate of Incorporation limits the liability of its
directors for monetary damages arising from a breach of their fiduciary duty as
directors, except to the extent otherwise required by the Delaware General
Corporation Law. Such limitation of liability does not affect the availability
of equitable remedies such as injunctive relief or rescission.
The Company's bylaws provide that the Company shall indemnify its directors
and officers to the fullest extent permitted by Delaware law, including in
circumstances in which indemnification is otherwise discretionary under Delaware
law. The Company expects to enter with its officers and directors into
indemnification agreements containing provisions that may require the Company,
among other things, to indemnify such officers and directors against certain
liabilities that may arise by reason of their status or
11
service as directors or officers and to advance their expenses incurred as a
result of any proceeding against them as to which they could be indemnified.
EMPLOYMENT CONTRACTS AND CHANGE IN CONTROL ARRANGEMENTS
The Compensation Committee, as administrator of the 1999 Equity Incentive
Plan, can provide for accelerated vesting of the shares of Common Stock subject
to outstanding options held by any executive officer or director of the Company
in connection with certain changes in control of the Company. The accelerated
vesting may be conditioned on the termination of the individual's employment
following the change in control event. None of the Company's executive officers
have employment agreements with the Company, and they may resign and their
employment may be terminated at any time.
12
COMPENSATION COMMITTEE REPORT
The Compensation Committee of the Company's Board of Directors (the
"Compensation Committee" or the "Committee") has the exclusive authority to
establish the level of base salary payable to the Chief Executive Officer
("CEO") and certain other executive officers of the Company and to administer
the Company's 1999 Equity Incentive Plan and Employee Stock Purchase Plan. In
addition, the Committee has the responsibility for approving the individual
bonus programs to be in effect for the CEO and certain other executive officers.
The Committee is composed of non-employee directors and meets on a scheduled
basis to evaluate the effectiveness of the compensation program in linking
Company performance and executive pay. Additionally, the Committee is routinely
consulted to approve the compensation package of a newly hired executive or of
an executive whose scope of responsibility has changed significantly.
For the fiscal year ended September 30, 1999, the process utilized by the
Committee in determining executive officer compensation levels was based on the
subjective judgment of the Committee. Among the factors considered by the
Committee were the recommendations of the CEO with respect to the compensation
of the Company's key executive officers. However, the Committee made the final
compensation decisions concerning such officers.
GENERAL COMPENSATION POLICY. The objective of the Company's executive
compensation program is to align executive compensation with the Company's long
and short-term business objectives and performance. Additionally, it is
imperative that executive compensation enables the Company to attract, retain,
and motivate qualified executives who are able to contribute to the long-term
success of the Company. The following specific strategies are utilized to guide
the Company's executive compensation decisions:
- Risk and Reward. A significant portion of an executive's compensation
should be tied to their performance and contributions to the success of
the Company.
- Pay for Performance. If an executive performs at a higher level, then the
executive should be rewarded with a higher level of compensation.
Similarly, if performance is below minimum expectations, then there should
be a lower level of compensation or there may be no variable compensation.
- Compensate Competitively. The Company compares its compensation programs
to those of other companies of comparable size and in similar industries
and establishes compensation programs that are substantially at market.
During 1999, the Company's executive compensation program included these key
elements:
- Base Salary. The Company establishes the base salaries of its executives
based on competitive market practices derived from comparisons with
companies of similar size and in similar industries. Additionally, each
executive's base pay is positioned relative to the total compensation
package, including cash incentives and equity-based incentives.
- Cash-based Incentives. During 1999, ten executives of the Company
participated in a cash incentive program under which payment was based
upon the achievement of specific goals pertaining to revenue performance,
bookings, and customer satisfaction. This incentive program is designed to
award no payment when the Company does not achieve threshold levels of
performance. Specifically, a target incentive was established at the
beginning of the year based on Company performance in the areas of
bookings, revenues, and customer satisfaction. During the 1999 fiscal
year, the Company far exceeded the goals set for bookings and revenues and
was close to target in achieving the customer satisfaction performance
metrics. The bonus paid to the Chief Executive Officer and other
executives was 95% of target. Each year, the annual incentive plan is
reevaluated and new performance targets are established reflecting the
Company's business plan and financial goals.
- Equity-based Incentives. Stock options are designed to align the interests
of each executive with those of the stockholders. Each year, the Committee
considers the grant to executives of stock
13
option awards. The Committee believes that stock options provide added
incentive for executives to influence the strategic direction of the
Company and to create and grow value for customers, stockholders and
employees. Options are granted at fair market value and typically have
four-year vesting periods, contingent upon the executives continued
employment with the Company. The number of stock option shares that are
granted to individual executives is based on demonstrated performance and
independent survey data reflecting competitive market practice.
CEO COMPENSATION. The annual base salary for Mr. Krach, the Company's
President and Chief Executive Officer, was substantially flat from 1998.
The remaining components of the Chief Executive Officer's 1999 fiscal year
incentive compensation were entirely dependent upon the Company's performance
and provided no dollar guarantees. The bonus paid to the Chief Executive Officer
for the fiscal year was based on the same incentive plan as the other
executives.
TAX LIMITATION. Under the Federal tax laws, a publicly-held company such as
the Company will not be allowed a federal income tax deduction for compensation
paid to certain executive officers to the extent that compensation exceeds
$1 million per officer in any year. To qualify for an exemption from the
$1 million deduction limitation, the stockholders were asked to approve a
limitation under the Company's 1999 Equity Incentive Plan on the maximum number
of shares of Common Stock for which any one participant may be granted stock
options per calendar year. Because this limitation was adopted, any compensation
deemed paid to an executive officer when he exercises an outstanding option
under the 1999 Equity Incentive Plan with an exercise price equal to the fair
market value of the option shares on the grant date will qualify as
performance-based compensation that will not be subject to the $1 million
limitation. Since it is not expected that the cash compensation to be paid to
the Company's executive officers for the fiscal year ended September 30, 1999
will exceed the $1 million limit per officer, the Committee will defer any
decision on whether to limit the dollar amount of all other compensation payable
to the Company's executive officers to the $1 million cap.
Compensation Committee
Robert C. Kagle
Hatim A. Tyabji
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee of the Company's Board of Directors was formed in
April 1999, and the members of the Compensation Committee are Messrs. Kagle and
Tyabji. Neither of these individuals was at any time during fiscal 1999, or at
any other time, an officer or employee of the Company. No executive officer of
the Company serves as a member of the board of directors or compensation
committee of any entity that has one or more executive officers serving as a
member of the Company's Board of Directors or Compensation Committee.
14
STOCK PERFORMANCE GRAPH
The graph set forth below compares the cumulative total stockholder return
on the Company's Common Stock between June 23, 1999 (the date the Company's
Common Stock commenced public trading) and September 30, 1999 with the
cumulative total return of (i) the Morgan Stanley High Tech Index (the "MSH
Index") and (ii) the Standard and Poor's 500 Index (the "S&P Index"), over the
same period. This graph assumes the investment of $100.00 on June 23, 1999 in
the Company's Common Stock, the MSH Index and the S&P Index, and assumes the
reinvestment of dividends, if any.
The comparisons shown in the graph below are based upon historical data. The
Company cautions that the stock price performance shown in the graph below is
not indicative of, nor intended to forecast, the potential future performance of
the Company's Common Stock. Information used in the graph was obtained from
Bloomberg, a source believed to be reliable, but the Company is not responsible
for any errors or omissions in such information.
COMPARISON OF CUMULATIVE TOTAL RETURN AMONG ARIBA, INC.,
THE MORGAN STANLEY HIGH TECH INDEX AND THE S&P INDEX
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
IN HUNDREDS OF DOLLARS.
ARBA MSH SPX
6/23/1999 001.000 001.000 001.000
6/24/1999 001.000 000.974 000.987
6/25/1999 000.937 000.974 000.987
6/28/1999 000.947 000.994 000.999
6/29/1999 001.098 001.018 001.014
6/30/1999 001.249 001.038 001.030
7/1/1999 001.348 001.047 001.036
7/2/1999 001.528 001.058 001.044
7/5/1999 001.528 001.058 001.044
7/6/1999 001.480 001.058 001.041
7/7/1999 001.393 001.061 001.047
7/8/1999 001.335 001.076 001.046
7/9/1999 001.281 001.089 001.053
7/12/1999 001.446 001.085 001.050
7/13/1999 001.471 001.081 001.045
7/14/1999 001.629 001.103 001.049
7/15/1999 001.768 001.110 001.057
7/16/1999 001.605 001.114 001.064
7/19/1999 001.555 001.090 001.056
7/20/1999 001.413 001.037 001.033
7/21/1999 001.554 001.051 001.035
7/22/1999 001.442 001.005 001.021
7/23/1999 001.352 001.023 001.018
7/26/1999 001.226 000.995 001.011
7/27/1999 001.258 001.022 001.022
7/28/1999 001.292 001.046 001.024
7/29/1999 001.220 001.017 001.006
7/30/1999 001.150 001.013 000.997
8/2/1999 001.079 001.009 000.996
8/3/1999 001.021 000.999 000.992
8/4/1999 000.925 000.984 000.979
8/5/1999 001.040 001.000 000.985
8/6/1999 001.110 000.993 000.975
8/9/1999 001.104 000.993 000.974
8/10/1999 001.156 000.976 000.961
8/11/1999 001.385 001.016 000.977
8/12/1999 001.482 001.000 000.974
8/13/1999 001.624 001.042 000.996
8/16/1999 001.533 001.044 000.998
8/17/1999 001.475 001.046 001.008
8/18/1999 001.418 001.037 001.000
8/19/1999 001.361 001.022 000.993
8/20/1999 001.430 001.038 001.003
8/23/1999 001.626 001.059 001.020
8/24/1999 001.798 001.074 001.023
8/25/1999 001.766 001.092 001.037
8/26/1999 001.727 001.072 001.022
8/27/1999 001.689 001.073 001.011
8/30/1999 001.717 001.054 000.993
8/31/1999 001.785 001.069 000.991
9/1/1999 001.721 001.068 000.999
9/2/1999 001.682 001.068 000.990
9/3/1999 001.761 001.118 001.018
9/6/1999 001.761 001.118 001.018
9/7/1999 001.875 001.121 001.013
9/8/1999 001.848 001.108 001.008
9/9/1999 001.838 001.130 001.011
9/10/1999 001.810 001.148 001.014
9/13/1999 001.692 001.123 001.008
9/14/1999 001.714 001.140 001.002
9/15/1999 001.620 001.108 000.989
9/16/1999 001.584 001.111 000.989
9/17/1999 001.687 001.130 001.002
9/20/1999 001.727 001.138 001.002
9/21/1999 001.710 001.110 000.981
9/22/1999 001.920 001.127 000.983
9/23/1999 001.943 001.082 000.961
9/24/1999 002.273 001.090 000.958
9/27/1999 002.252 001.102 000.963
9/28/1999 002.154 001.111 000.962
9/29/1999 002.032 001.104 000.951
Note: S&P performance does not include reinvested dividends.
The Company effected its initial public offering of Common Stock on
June 23, 1999 at a price of $11.50 per share (as adjusted to reflect the 1999
Stock Splits). The graph above, however, commences with the closing price of
$45.00 per share (as adjusted to reflect the 1999 Stock Splits) on June 23,
1999--the date the Company's Common Stock commenced public trading.
Notwithstanding anything to the contrary set forth in any of the Company's
previous or future filings under the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended, that might incorporate this Proxy
Statement or future filings made by the Company under those statutes, the
Compensation Committee Report and Stock Performance Graph shall not be deemed
filed with the Securities and Exchange Commission and shall not be deemed
incorporated by reference into any of those prior filings or into any future
filings made by the Company under those statutes.
15
FORM 10-K
THE COMPANY WILL MAIL WITHOUT CHARGE, UPON WRITTEN REQUEST, A COPY OF THE
COMPANY'S FORM 10-K REPORT FOR FISCAL YEAR ENDED SEPTEMBER 30, 1999, INCLUDING
THE FINANCIAL STATEMENTS. REQUESTS SHOULD BE SENT TO ARIBA, INC., 1565
CHARLESTON ROAD, MOUNTAIN VIEW, CALIFORNIA 94043, ATTN: INVESTOR RELATIONS.
STOCKHOLDER PROPOSALS FOR 2001 ANNUAL MEETING
Stockholders who intend to have a proposal considered for inclusion in the
Company's proxy materials for presentation at the 2001 Annual Meeting must
submit the proposal to the Company at its offices at 1565 Charleston Road,
Mountain View, California 94043, Attn: Edward P. Kinsey, not later than
September 30, 2000. Stockholders who intend to present a proposal at the 2001
Annual Meeting without inclusion of such proposal in the Company's proxy
materials are required to provide advance notice of such proposal to the Company
at the aforementioned address not earlier than November 14, 2000 and not later
than December 14, 2000. The Company reserves the right to reject, rule out of
order, or take other appropriate action with respect to any proposal that does
not comply with these and other applicable requirements, including conditions
established by the Securities and Exchange Commission.
OTHER MATTERS
The Board knows of no other matters to be presented for stockholder action
at the Annual Meeting. However, if other matters do properly come before the
Annual Meeting or any adjournments or postponements thereof, the Board intends
that the persons named in the proxies will vote upon such matters in accordance
with their best judgment.
By Order Of The Board Of Directors
Edward P. Kinsey
SECRETARY
Mountain View, California
January 28, 2000
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE COMPLETE, SIGN,
DATE AND PROMPTLY RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED POSTAGE-PAID
ENVELOPE. YOU MAY REVOKE YOUR PROXY AT ANY TIME PRIOR TO THE ANNUAL MEETING. IF
YOU DECIDE TO ATTEND THE ANNUAL MEETING AND WISH TO CHANGE YOUR PROXY VOTE, YOU
MAY DO SO AUTOMATICALLY BY VOTING IN PERSON AT THE MEETING.
THANK YOU FOR YOUR ATTENTION TO THIS MATTER. YOUR PROMPT RESPONSE WILL GREATLY
FACILITATE ARRANGEMENTS FOR THE ANNUAL MEETING.
16
EXHIBIT A
CERTIFICATE OF AMENDMENT OF THE
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF
ARIBA, INC.
Ariba, Inc., a corporation organized and existing under and by virtue of the
General Corporation Law of the State of Delaware (the "Corporation"),
DOES HEREBY CERTIFY:
FIRST: That the Board of Directors adopted a resolution setting forth a
proposed amendment to the Amended and Restated Certificate of Incorporation of
said Corporation and declaring said amendment advisable and directing that said
amendment be submitted to the stockholders of said Corporation entitled to vote
in respect thereof for their approval. The resolution setting forth said
amendment is as follows:
RESOLVED, that the Amended and Restated Certificate of Incorporation of
the Corporation be amended by replacing the first paragraph of Article IV
thereof so that such paragraph shall be and read as follows:
"This corporation is authorized to issue two classes of stock to be
designated common stock ("Common Stock") and preferred stock ("Preferred
Stock"). The number of shares of Common Stock authorized to be issued is
Four Hundred Million (400,000,000), par value $0.002 per share, and the
number of shares of Preferred Stock authorized to be issued is Twenty
Million (20,000,000), par value $0.002 per share."
SECOND: That thereafter said amendment was duly adopted in accordance with
the provisions of Section 242 of the General Corporation Law by obtaining a
majority vote of the Common Stock in favor of said amendment in the manner set
forth in Section 222 of the General Corporation Law.
IN WITNESS WHEREOF, this Certificate of Amendment of the Amended and
Restated Certificate of Incorporation has been signed by the President and the
Secretary of the Corporation this day of , 2000.
ARIBA, INC.
By:
----------------------------------------------------------------------
Keith J. Krach, PRESIDENT
ATTEST:
By:
- ----------------------------
Edward P. Kinsey, SECRETARY
17
PROXY ARIBA, INC. PROXY
1565 CHARLESTON ROAD, MOUNTAIN VIEW, CA 94043
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF ARIBA, INC.
FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD FEBRUARY 28, 2000
The undersigned holder of Common Stock, par value $.002, of Ariba, Inc.
(the "Company") hereby appoints Keith J. Krach and Edward P. Kinsey, or either
of them, proxies for the undersigned, each with full power of substitution, to
represent and to vote as specified in this Proxy all Common Stock of the Company
that the undersigned stockholder would be entitled to vote if personally present
at the Annual Meeting of Stockholders (the "Annual Meeting") to be held on
Monday, February 28, 2000 at 1:00 p.m. local time, at Ariba's Worldwide
Headquarters, 1565 Charleston Road, Mountain View, California, and at any
adjournments or postponements of the Annual Meeting. The undersigned stockholder
hereby revokes any proxy or proxies heretofore executed for such matters.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER AS
DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS
PROXY WILL BE VOTED FOR THE ELECTION OF THE DIRECTORS, FOR PROPOSALS 2 AND 3,
AND IN THE DISCRETION OF THE PROXIES AS TO ANY OTHER MATTERS THAT MAY
PROPERLY COME BEFORE THE MEETING. THE UNDERSIGNED STOCKHOLDER MAY REVOKE THIS
PROXY AT ANY TIME BEFORE IT IS VOTED BY DELIVERING TO THE CORPORATE SECRETARY
OF THE COMPANY EITHER A WRITTEN REVOCATION OF THE PROXY OR A DULY EXECUTED
PROXY BEARING A LATER DATE, OR BY APPEARING AT THE ANNUAL MEETING AND VOTING
IN PERSON.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF THE
DIRECTORS AND "FOR" PROPOSALS 2 AND 3.
PLEASE MARK, SIGN, DATE AND RETURN THIS CARD PROMPTLY USING THE ENCLOSED
RETURN ENVELOPE. IF YOU RECEIVE MORE THAN ONE PROXY CARD, PLEASE SIGN AND RETURN
ALL CARDS IN THE ENCLOSED ENVELOPE.
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE)
(Reverse)
ARIBA, INC.
/X/ PLEASE MARK VOTES
AS IN THIS EXAMPLE
1. To elect the following directors to 3. To ratify the appointment of KPMG FOR AGAINST ABSTAIN
serve for a term ending upon the LLP as the Company's independent / / / / / /
2003 Annual Meeting of Stockholders accountants for the fiscal year
or until their successors are ending September 30, 2000.
elected and qualified:
NOMINEES: Keith J. Krach and Robert C. Kagle.
FOR WITHHELD For all nominees, except for
nominees written below.
/ / / / / /
-----------------------
Nominee exception(s).
2. To approve the amendment to the
Company's Certificate of
Incorporation as set forth in the
accompanying Proxy Statement.
FOR AGAINST ABSTAIN
/ / / / / /
In their discretion, the proxies are authorized to vote upon such other business
as may properly come before the Annual Meeting.
The undersigned acknowledges receipt of the accompanying Notice of Annual
Meeting of Stockholders and Proxy Statement.
Signature: Signature (if held jointly):
---------------------- ------------------
Date: , 2000
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Please date and sign exactly as your name(s) is (are) shown on the share
certificate(s) to which the Proxy applies. When shares are held as
joint-tenants, both should sign. When signing as an executor, administrator,
trustee, guardian, attorney-in fact or other fiduciary, please give full title
as such. When signing as a corporation, please sign in full corporate name by
President or other authorized officer. When signing as a partnership, please
sign in partnership name by an authorized person.