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Background
The parties submitted this case fully stipulated pursuant to
Rule 122. The parties’ stipulations of facts, with attached
exhibits, are incorporated herein by this reference. At the time
the petition was filed, petitioner resided in San Francisco,
California.
A. Ariba Technologies, Inc., Incentive Stock Options
From April 24, 1997, through April 4, 2001, petitioner was
employed as a sales assistant with Ariba Technologies, Inc.
(Ariba) at an annual salary of $38,000.
1. Grants and Exercise of Stock Options
In addition to his salary, on July 21, 1997, Ariba issued to
petitioner option No. 34 under its 1996 Stock Option Agreement
(agreement) and 1996 Stock Option Plan (plan). Option No. 34,
which qualified as an incentive stock option (ISO), granted
petitioner the option to acquire 2,000 shares of Ariba common
stock.2
On March 2, 1998, Ariba issued option No. 117 to petitioner
under its agreement and plan. Option No. 117, which qualified as
an ISO, granted petitioner the option to acquire 2,000 shares of
2 The stock granted under option No. 34 will not be
discussed in this Opinion. When the ISOs granted under option
No. 34 were exercised, both the stock’s purchase price and FMV
were 20 cents per share. As a result, no AMTI gain or loss was
generated upon the exercise of these shares or their subsequent
sale.
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Last modified: May 25, 2011