PREM14A 1 d802367dprem14a.htm PREM14A PREM14A
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

 

SCHEDULE 14A

(RULE 14a-101)

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 §240.14a-12

TIBCO SOFTWARE INC.

(Name of Registrant as Specified In Its Charter)

N/A

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

¨   No fee required.
x   Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
  (1)  

Title of each class of securities to which transaction applies:

 

Common stock, par value $0.001 per share, of TIBCO Software Inc.

  (2)  

Aggregate number of securities to which transaction applies:

 

As of September 25, 2014, 163,851,917 shares of common stock; 4,641,716 shares of common stock issuable upon the exercise of stock options; 3,601,289 shares of common stock underlying performance-based restricted stock units; and 2,934,638 shares of common stock underlying stock-based awards

  (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 filing fee is calculated and state how it was determined):

 

The maximum aggregate value was determined based upon the sum of: (A) 163,851,917 shares of common stock multiplied by $24.00 per share; (B) options to purchase 4,641,716 shares of common stock multiplied by $10.59 (the difference between $24.00 and the weighted average exercise price of $13.41 per share); (C) 3,601,289 shares of common stock underlying performance-based restricted stock units multiplied by $24.00 per share; and (D) 2,934,638 shares of common stock underlying stock-based awards multiplied by $24.00 per share. In accordance with Section 14(g) of the Securities Exchange Act of 1934, as amended, the filed fee was determined by multiplying the sum calculated in the preceding sentence by .0001162.

  (4)  

Proposed maximum aggregate value of transaction:

 

$4,138,464,028.44

  (5)  

Total fee paid:

 

$480,889.52

¨   Fee paid previously with preliminary materials.
¨   Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
  (1)  

Amount Previously Paid:

 

     

  (2)  

Form, Schedule or Registration Statement No.:

 

     

  (3)  

Filing Party:

 

     

  (4)  

Date Filed:

 

     

 

 

 


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PRELIMINARY PROXY STATEMENT—SUBJECT TO COMPLETION

 

LOGO

TIBCO Software Inc.

3303 Hillview Avenue

Palo Alto, CA 94304

[], 2014

Dear TIBCO Stockholder:

You are cordially invited to attend a special meeting of stockholders of TIBCO Software Inc. to be held on [], 2014, at [], at [], Pacific time.

At the special meeting, you will be asked to consider and vote on a proposal to adopt the Agreement and Plan of Merger, dated September 27, 2014, by and among TIBCO, Balboa Intermediate Holdings, LLC, referred to as Parent, and Balboa Merger Sub, Inc., referred to as Merger Sub. Parent and Merger Sub are entities that are affiliated with Vista Equity Partners, a leading private equity firm focused on investments in software, data and technology-enabled companies. Pursuant to the terms of the merger agreement, Merger Sub will merge with and into TIBCO, and TIBCO will become a wholly owned subsidiary of Parent. At the special meeting, you will also be asked to consider and vote on a non-binding, advisory proposal to approve compensation that will or may become payable by TIBCO to its named executive officers in connection with the merger.

If the merger is completed, you will be entitled to receive $24.00 in cash, without interest, for each share of common stock that you own (unless you have properly exercised your appraisal rights), which represents a premium of approximately (1) 26% to the closing price of the common stock on September 23, 2014, the last trading day prior to public reports that multiple parties were competing to acquire TIBCO; and (2) 23% to the closing price of the common stock on September 26, 2014, the last trading day prior to the date on which TIBCO entered into the merger agreement.

The Board of Directors, after considering the factors more fully described in the enclosed proxy statement, has unanimously (1) determined that the merger agreement, the merger and the other transactions contemplated by the merger agreement are fair to, advisable and in the best interests of TIBCO and its stockholders; and (2) adopted and approved the merger agreement, the merger and the other transactions contemplated by the merger agreement. The Board of Directors recommends that you vote (1) “FOR” the adoption of the merger agreement; (2) “FOR” the adjournment of the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes to adopt the merger agreement at the time of the special meeting; and (3) “FOR” the non-binding, advisory proposal to approve compensation that will or may become payable by TIBCO to its named executive officers in connection with the merger.

The enclosed proxy statement provides detailed information about the special meeting, the merger agreement and the merger. A copy of the merger agreement is attached as Annex A to the proxy statement.

The proxy statement also describes the actions and determinations of the Board of Directors in connection with its evaluation of the merger agreement and the merger. We encourage you to read the proxy statement and its annexes, including the merger agreement, carefully and in their entirety, as they contain important information.

Whether or not you plan to attend the special meeting in person, please sign, date and return, as promptly as possible, the enclosed proxy card in the accompanying prepaid reply envelope or grant your proxy electronically over the Internet or by telephone. If you attend the special meeting and vote in person by ballot, your vote will revoke any proxy that you have previously submitted.


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If you hold your shares in “street name,” you should instruct your bank, broker or other nominee how to vote your shares in accordance with the voting instruction form that you will receive from your bank, broker or other nominee. Your bank, broker or other nominee cannot vote on any of the proposals, including the proposal to adopt the merger agreement, without your instructions.

Your vote is very important, regardless of the number of shares that you own. We cannot complete the merger unless the proposal to adopt the merger agreement is approved by the affirmative vote of the holders of at least a majority of the outstanding shares of common stock.

If you have any questions or need assistance voting your shares, please contact our proxy solicitor:

Innisfree M&A Incorporated

501 Madison Avenue, 20th Floor

New York, NY 10022

Call toll-free: (877) 800-5185

On behalf of the Board of Directors, I thank you for your support and appreciate your consideration of this matter.

Sincerely,

[Signature to be inserted]

[]

[]

The accompanying proxy statement is dated [], 2014 and, together with the enclosed form of proxy card, is first being mailed on or about [], 2014.


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PRELIMINARY PROXY STATEMENT—SUBJECT TO COMPLETION

 

LOGO

TIBCO Software Inc.

3303 Hillview Avenue

Palo Alto, CA 94304

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS

TO BE HELD ON [], 2014

Notice is hereby given that a special meeting of stockholders of TIBCO Software Inc., a Delaware corporation, referred to as TIBCO, will be held on [], 2014, at [], at [], Pacific time, for the following purposes:

1. To consider and vote on the proposal to adopt the Agreement and Plan of Merger, dated September 27, 2014, as it may be amended from time to time (referred to as the merger agreement), by and among TIBCO, Balboa Intermediate Holdings, LLC, referred to as Parent, and Balboa Merger Sub, Inc., referred to as Merger Sub;

2. To consider and vote on any proposal to adjourn the special meeting to a later date or dates if necessary or appropriate to solicit additional proxies if there are insufficient votes to adopt the merger agreement at the time of the special meeting;

3. To consider and vote on the proposal to approve, by non-binding, advisory vote, compensation that will or may become payable by TIBCO to its named executive officers in connection with the merger; and

4. To transact any other business that may properly come before the special meeting or any adjournment, postponement or other delay of the special meeting.

Only stockholders of record as of the close of business on [], 2014, are entitled to notice of the special meeting and to vote at the special meeting or any adjournment, postponement or other delay thereof.

The Board of Directors unanimously recommends that you vote (1) “FOR” the adoption of the merger agreement; (2) “FOR” the adjournment of the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes to adopt the merger agreement at the time of the special meeting; and (3) “FOR” the non-binding, advisory proposal to approve compensation that will or may become payable by TIBCO to its named executive officers in connection with the merger.

Whether or not you plan to attend the special meeting in person, please sign, date and return, as promptly as possible, the enclosed proxy card in the accompanying prepaid reply envelope or grant your proxy electronically over the Internet or by telephone. If you attend the special meeting and vote in person by ballot, your vote will revoke any proxy that you have previously submitted. If you hold your shares in “street name,” you should instruct your bank, broker or other nominee how to vote your shares in accordance with the voting instruction form that you will receive from your bank, broker or other nominee. Your bank, broker or other nominee cannot vote on any of the proposals, including the proposal to adopt the merger agreement, without your instructions.

By Order of the Board of Directors,

[signature to be inserted]

[]

[]

Dated: [], 2014


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YOUR VOTE IS IMPORTANT

WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING IN PERSON, WE ENCOURAGE YOU TO SUBMIT YOUR PROXY AS PROMPTLY AS POSSIBLE (1) BY TELEPHONE; (2) THROUGH THE INTERNET; OR (3) BY SIGNING AND DATING THE ENCLOSED PROXY CARD AND RETURNING IT IN THE POSTAGE-PAID ENVELOPE PROVIDED. You may revoke your proxy or change your vote at any time before it is voted at the special meeting.

If you hold your shares in “street name,” you should instruct your bank, broker or other nominee how to vote your shares in accordance with the voting instruction form that you will receive from your bank, broker or other nominee. Your broker or other agent cannot vote on any of the proposals, including the proposal to adopt the merger agreement, without your instructions.

If you are a stockholder of record, voting in person by ballot at the special meeting will revoke any proxy that you previously submitted. If you hold your shares through a bank, broker or other nominee, you must obtain a “legal proxy” in order to vote in person at the special meeting.

If you fail to (1) return your proxy card; (2) grant your proxy electronically over the Internet or by telephone; or (3) vote by ballot in person at the special meeting, your shares will not be counted for purposes of determining whether a quorum is present at the special meeting and, if a quorum is present, will have the same effect as a vote “AGAINST” the proposal to adopt the merger agreement but will have no effect on the other two proposals.

We encourage you to read the accompanying proxy statement and its annexes, including all documents incorporated by reference into the accompanying proxy statement, carefully and in their entirety. If you have any questions concerning the merger, the special meeting or the accompanying proxy statement, would like additional copies of the accompanying proxy statement or need help voting your shares of common stock, please contact our proxy solicitor:

Innisfree M&A Incorporated

501 Madison Avenue, 20th Floor

New York, NY 10022

Call toll-free: (877) 800-5185


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TABLE OF CONTENTS

 

      Page  

SUMMARY

     1   

Parties Involved in the Merger

     1   

Effect of the Merger

     2   

Effect on TIBCO if the Merger is Not Completed

     2   

Merger Consideration

     2   

The Special Meeting

     3   

Recommendation of the Board of Directors and Reasons for the Merger

     4   

Fairness Opinion of Goldman, Sachs & Co.

     4   

Financing of the Merger

     5   

Limited Guaranty

     5   

Treatment of Options, Restricted Stock Awards and Performance-Based Restricted Stock Unit Awards

     5   

Employee Benefits

     6   

Interests of TIBCO’s Directors and Executive Officers in the Merger

     6   

Appraisal Rights

     7   

Material U.S. Federal Income Tax Consequences of the Merger

     7   

Regulatory Approvals Required for the Merger

     8   

Legal Proceedings Regarding the Merger

     8   

No Solicitation of Other Offers

     8   

Changes in the Board of Directors’ Recommendation

     9   

Conditions to the Closing of the Merger

     9   

Termination of the Merger Agreement

     10   

Termination Fee and Expense Reimbursement

     11   

Specific Performance

     11   

QUESTIONS AND ANSWERS

     12   

FORWARD-LOOKING STATEMENTS

     19   

THE SPECIAL MEETING

     21   

Date, Time and Place

     21   

Purpose of the Special Meeting

     21   

Record Date; Shares Entitled to Vote; Quorum

     21   

Vote Required; Abstentions and Broker Non-Votes

     21   

Shares Held by TIBCO’s Directors and Executive Officers

     22   

Voting of Proxies

     22   

Revocability of Proxies

     23   

Board of Directors’ Recommendation

     23   

Solicitation of Proxies

     23   

Anticipated Date of Completion of the Merger

     23   

Appraisal Rights

     24   

Other Matters

     24   

Important Notice Regarding the Availability of Proxy Materials for the Stockholder Meeting to be Held on [ ], 2014

     24   

Householding of Special Meeting Materials

     24   

Questions and Additional Information

     25   

 

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(Continued)

 

      Page  

THE MERGER

     27   

Parties Involved in the Merger

     27   

Effect of the Merger

     27   

Effect on TIBCO if the Merger is Not Completed

     28   

Merger Consideration

     28   

Background of the Merger

     28   

Recommendation of the Board of Directors and Reasons for the Merger

     38   

Fairness Opinion of Goldman, Sachs & Co.

     41   

Projections Prepared by TIBCO Management

     50   

Interests of TIBCO’s Directors and Executive Officers in the Merger

     54   

Financing of the Merger

     60   

Limited Guaranty

     61   

Closing and Effective Time of the Merger

     61   

Appraisal Rights

     61   

Accounting Treatment

     66   

Material U.S. Federal Income Tax Consequences of the Merger

     66   

Regulatory Approvals Required for the Merger

     68   

Legal Proceedings Regarding the Merger

     69   

PROPOSAL 1: ADOPTION OF THE MERGER AGREEMENT

     70   

Explanatory Note Regarding the Merger Agreement

     70   

Effects of the Merger; Directors and Officers; Certificate of Incorporation; Bylaws

     71   

Closing and Effective Time of the Merger

     71   

Marketing Period

    
71
  

Merger Consideration

     72   

Exchange and Payment Procedures

     73   

Representations and Warranties

     73   

Conduct of Business Pending the Merger

     77   

No Solicitation of Other Offers

     78   

The Board of Directors’ Recommendation; Company Board Recommendation Change

     79   

Employee Benefits

     81   

Efforts to Close the Merger

     82   

Indemnification and Insurance

     82   

Other Covenants

     82   

Conditions to the Closing of the Merger

     83   

Termination of the Merger Agreement

     84   

Termination Fee

     85   

Specific Performance

     86   

Limitations of Liability

     86   

Fees and Expenses

     86   

Amendment

     86   

Governing Law

     86   

PROPOSAL 2: ADJOURNMENT OF THE SPECIAL MEETING

     87   

PROPOSAL 3: ADVISORY, NON-BINDING VOTE ON MERGER-RELATED EXECUTIVE COMPENSATION ARRANGEMENTS

     88   

 

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(Continued)

 

      Page  

MARKET PRICES AND DIVIDEND DATA

     89   

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     90   

FUTURE STOCKHOLDER PROPOSALS

     92   

WHERE YOU CAN FIND MORE INFORMATION

     93   

MISCELLANEOUS

     94   
Annexes   

Annex A—Agreement and Plan of Merger

     A-1   

Annex B—Fairness Opinion of Goldman, Sachs & Co.

     B-1   
Annex C—Section 262 of the General Corporation Law of the State of Delaware      C-1   

 

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PRELIMINARY PROXY STATEMENT—SUBJECT TO COMPLETION

SUMMARY

This summary highlights selected information from this proxy statement related to the merger of Balboa Merger Sub, Inc. with and into TIBCO Software Inc., which we refer to as the “merger,” and may not contain all of the information that is important to you. To understand the merger more fully and for a more complete description of the legal terms of the merger, you should carefully read this entire proxy statement, the annexes to this proxy statement and the documents that we refer to in this proxy statement. You may obtain the information incorporated by reference in this proxy statement without charge by following the instructions under the caption “Where You Can Find More Information.” The merger agreement is attached as Annex A to this proxy statement. We encourage you to read the merger agreement, which is the legal document that governs the merger, carefully and in its entirety.

Except as otherwise specifically noted in this proxy statement, “TIBCO,” “we,” “our,” “us” and similar words refer to TIBCO Software Inc., including, in certain cases, our subsidiaries. Throughout this proxy statement, we refer to Balboa Intermediate Holdings, LLC as “Parent” and Balboa Merger Sub, Inc. as “Merger Sub.” In addition, throughout this proxy statement we refer to the Agreement and Plan of Merger, dated September 27, 2014, by and among TIBCO, Parent and Merger Sub, as it may be amended from time to time, as the “merger agreement.”

Parties Involved in the Merger

TIBCO Software Inc.

TIBCO is a leading independent provider of infrastructure and business intelligence software. TIBCO’s software platform enables customers to create flexible, event-driven applications and deliver real-time, actionable insights.

TIBCO’s common stock is listed on The NASDAQ Global Select Market, which we refer to as “NASDAQ,” under the symbol “TIBX.”

Balboa Intermediate Holdings, LLC

Parent was formed on September 18, 2014, solely for the purpose of engaging in the transactions contemplated by the merger agreement and has not engaged in any business activities other than in connection with the transactions contemplated by the merger agreement and arranging of the equity financing and debt financing in connection with the merger.

Balboa Merger Sub, Inc.

Merger Sub is a wholly owned direct subsidiary of Parent and was formed on September 18, 2014, solely for the purpose of engaging in the transactions contemplated by the merger agreement and has not engaged in any business activities other than in connection with the transactions contemplated by the merger agreement and arranging of the equity financing and debt financing in connection with the merger.

Parent and Merger Sub are each affiliated with Vista Equity Partners Fund V, L.P., which we refer to as “VEPFV.” In connection with the transactions contemplated by the merger agreement, (1) VEPFV has provided to Parent an equity commitment of up to $4.859 billion; and (2) Parent has obtained debt financing commitments from JPMorgan Chase Bank, N.A., Jefferies Finance LLC and certain of their respective affiliates for an aggregate amount of $2.9 billion, which will be available to fund a portion of the payments contemplated by the merger agreement (in each case, pursuant to the terms and conditions as described further under the caption “The Merger—Financing of the Merger”).

 

 

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Parent, Merger Sub and VEPFV are affiliated with Vista Equity Partners, which we refer to as “Vista.” Vista is a leading private equity firm focused on investments in software, data and technology-enabled companies.

Effect of the Merger

Upon the terms and subject to the conditions of the merger agreement, Merger Sub will merge with and into TIBCO, with TIBCO continuing as the surviving corporation and as a wholly owned subsidiary of Parent. Throughout this proxy statement, we use the term “surviving corporation” to refer to TIBCO as the surviving corporation following the merger. As a result of the merger, TIBCO will cease to be a publicly traded company. If the merger is completed, you will not own any shares of the capital stock of the surviving corporation.

The time at which the merger will become effective, which we refer to as the “effective time of the merger,” will occur upon the filing of a certificate of merger with the Secretary of State of the State of Delaware (or at such later time as we, Parent and Merger Sub may agree and specify in the certificate of merger).

Effect on TIBCO if the Merger is Not Completed

If the merger agreement is not adopted by stockholders or if the merger is not completed for any other reason, stockholders will not receive any payment for their shares of common stock. Instead, TIBCO will remain an independent public company, our common stock will continue to be listed and traded on NASDAQ and registered under the Securities Exchange Act of 1934, as amended, which we refer to as the “Exchange Act,” and we will continue to file periodic reports with the Securities and Exchange Commission, which we refer to as the “SEC.” Under specified circumstances, TIBCO will be required to pay Parent a termination fee upon the termination of the merger agreement, as further described under the caption “Proposal 1: Adoption of the Merger Agreement—Termination Fee.”

Merger Consideration

In the merger, each outstanding share of common stock (other than shares (1) held by TIBCO as treasury stock; (2) owned by Parent or Merger Sub; (3) owned by any direct or indirect wholly owned subsidiary of Parent or Merger Sub; and (4) held by stockholders who have properly and validly exercised their statutory rights of appraisal under Delaware law) will be converted into the right to receive $24.00 in cash, without interest and less any applicable withholding taxes, which amount we refer to as the “per share merger consideration.” Further, and without any action by the holders of such shares, (1) all shares of common stock will cease to be outstanding and be cancelled and cease to exist; and (2) each certificate formerly representing any of the shares of common stock will thereafter represent only the right to receive the per share merger consideration. At or immediately prior to the effective time of the merger, Parent will deposit sufficient funds to pay the aggregate per share merger consideration with a designated payment agent. Once a stockholder has provided the payment agent with his, her or its stock certificates and the other items specified by the payment agent, the payment agent will promptly pay the stockholder the per share merger consideration. For more information, see the section of this proxy statement captioned “Proposal 1: Adoption of the Merger Agreement—Exchange and Payment Procedures.”

After the merger is completed, you will have the right to receive the per share merger consideration, but you will no longer have any rights as a stockholder (except that stockholders who properly exercise their appraisal rights will have the right to receive a payment for the “fair value” of their shares as determined pursuant to an appraisal proceeding as contemplated by Delaware law, as described below under the caption “The Merger—Appraisal Rights”).

 

 

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The Special Meeting

Date, Time and Place

A special meeting of stockholders will be held on [], 2014, at [], at [], Pacific time. We refer to the special meeting and any adjournment, postponement or other delay thereof as the “special meeting.”

Record Date; Shares Entitled to Vote

You are entitled to vote at the special meeting if you owned shares of common stock at the close of business on [], 2014, which we refer to as the “record date.” You will have one vote at the special meeting for each share of common stock that you owned at the close of business on the record date.

Purpose

At the special meeting, we will ask stockholders to vote on proposals to (1) adopt the merger agreement; (2) adjourn the special meeting to a later date or dates to solicit additional proxies if there are insufficient votes to adopt the merger agreement at the time of the special meeting; and (3) approve, by non-binding, advisory vote, compensation that will or may become payable by TIBCO to our named executive officers in connection with the merger.

Quorum

As of the record date, there were [] shares of common stock outstanding and entitled vote at the special meeting. The holders of a majority in voting power of the stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, will constitute a quorum at the special meeting.

Required Vote

The affirmative vote of the holders of a majority of the outstanding shares of common stock is required to adopt the merger agreement. Approval of the proposal to adjourn the special meeting, whether or not a quorum is present, requires the affirmative vote of a majority of the stock having voting power present in person or represented by proxy at the special meeting. Approval, by non-binding, advisory vote, of compensation that will or may become payable by TIBCO to our named executive officers in connection with the merger requires the affirmative vote of a majority of the stock having voting power present in person or represented by proxy at the special meeting.

Share Ownership of Our Directors and Executive Officers

As of the record date, our directors and executive officers beneficially owned and were entitled to vote, in the aggregate, [] shares of common stock, representing approximately []% of the shares of common stock outstanding on the record date. Our directors and executive officers have informed us that they currently intend to vote all of their shares of common stock (1) “FOR” the adoption of the merger agreement; (2) “FOR” the adjournment of the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes to adopt the merger agreement at the time of the special meeting; and (3) “FOR” the non-binding, advisory proposal to approve compensation that will or may become payable by TIBCO to our named executive officers in connection with the merger.

Voting and Proxies

Any stockholder of record entitled to vote may submit a proxy by returning a signed proxy card by mail in the accompanying prepaid reply envelope or granting a proxy electronically over the Internet or by telephone, or may vote in person by appearing at the special meeting. If you are a beneficial owner and hold your shares of

 

 

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common stock in “street name” through a bank, broker or other nominee, you should instruct your bank, broker or other nominee on how you wish to vote your shares of common stock using the instructions provided by your bank, broker or other nominee. Under applicable stock exchange rules, banks, brokers or other nominees have the discretion to vote on routine matters. The proposals to be considered at the special meeting are non-routine matters, and banks, brokers and other nominees cannot vote on these proposals without your instructions. Therefore, it is important that you cast your vote or instruct your bank, broker or nominee on how you wish to vote your shares.

If you are a stockholder of record, you may change your vote or revoke your proxy at any time before it is voted at the special meeting by (1) signing another proxy card with a later date and returning it prior to the special meeting; (2) submitting a new proxy electronically over the Internet or by telephone after the date of the earlier submitted proxy; (3) delivering a written notice of revocation to our Corporate Secretary; or (4) attending the special meeting and voting in person by ballot.

If you hold your shares of common stock in “street name,” you should contact your bank, broker or other nominee for instructions regarding how to change your vote. You may also vote in person at the special meeting if you obtain a “legal proxy” from your bank, broker or other nominee.

Recommendation of the Board of Directors and Reasons for the Merger

TIBCO’s Board of Directors, which we refer to as the “Board of Directors,” after considering various factors described under the caption “The Merger—Recommendation of the Board of Directors and Reasons for the Merger,” has unanimously (1) determined that the merger agreement, the merger and the other transactions contemplated by the merger agreement are fair to, advisable and in the best interests of TIBCO and its stockholders; and (2) adopted and approved the merger agreement, the merger and the other transactions contemplated by the merger agreement. The Board of Directors unanimously recommends that you vote (1) “FOR” the adoption of the merger agreement; (2) “FOR” the adjournment of the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes to adopt the merger agreement at the time of the special meeting; and (3) “FOR” the proposal to approve, by non-binding, advisory vote, compensation that will or may become payable by TIBCO to our named executive officers in connection with the merger.

Fairness Opinion of Goldman, Sachs & Co.

Goldman, Sachs & Co., which we refer to as “Goldman Sachs,” delivered its opinion to the Board of Directors and the Special Committee of the Board of Directors, which we refer to as the “Special Committee,” that, as of September 27, 2014, and based upon and subject to the factors and assumptions set forth therein, the $24.00 in cash per share of common stock to be paid to the holders (other than Parent and its affiliates) of common stock pursuant to the merger agreement was fair from a financial point of view to such holders of common stock.

The full text of the written opinion of Goldman Sachs, dated September 27, 2014, which sets forth assumptions made, procedures followed, matters considered and limitations on the review undertaken in connection with the opinion, is attached as Annex B to this proxy statement. Goldman Sachs provided its opinion for the information and assistance of the Board of Directors and the Special Committee in connection with their consideration of the transactions contemplated by the merger agreement, and such opinion is not a recommendation as to how any holder of common stock should vote with respect to such transactions or any other matter.

For a more complete description, see the section of this proxy statement captioned “The Merger—Fairness Opinion of Goldman, Sachs & Co.”

 

 

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Financing of the Merger

We anticipate that the total amount of funds necessary to complete the merger and the related transactions will be approximately $4.8 billion. This amount includes funds needed to (1) pay stockholders and other equity holders the amounts due under the merger agreement; (2) make payments in respect of our outstanding equity-based awards pursuant to the merger agreement; (3) repay and discharge in full all amounts outstanding pursuant to the terms of our existing credit facilities; (4) repurchase our convertible notes; and (5) pay all fees and expenses payable by Parent and Merger Sub under the merger agreement.

In connection with the merger, Parent has entered into an equity commitment letter, dated as of September 27, 2014, with VEPFV. For more information, see the section of this proxy statement captioned “The Merger—Financing of the Merger.”

In connection with the merger, Parent has obtained debt financing commitments from JPMorgan Chase Bank, N.A., Jefferies Finance LLC and certain of their respective affiliates, which will be available to fund a portion of the payments contemplated by the merger agreement. For more information, see the section of this proxy statement captioned “The Merger—Financing of the Merger.”

Although the obligation of Parent and Merger Sub to consummate the merger is not subject to any financing condition, the merger agreement provides that, without Parent’s agreement, the closing of the merger will not occur earlier than the first business day after the expiration of the marketing period, which is the first period of 15 consecutive business days throughout which (1) Parent has received certain financial information from TIBCO necessary to syndicate any debt financing; (2) certain conditions to the consummation of the merger are satisfied; and (3) this proxy statement has been mailed to stockholders. For more information, see the section of this proxy statement captioned “Proposal 1: Adoption of the Merger Agreement—Marketing Period.”

Limited Guaranty

Pursuant to a limited guaranty delivered by VEPFV in favor of TIBCO, dated as of September 27, 2014, which we refer to as the “limited guaranty,” VEPFV has agreed to guarantee the due, punctual and complete payment of all of the liabilities and obligations of Parent or Merger Sub under the merger agreement, subject to an aggregate cap of $275.8 million plus certain cost reimbursement obligations specified in the merger agreement. For more information, see the section of this proxy statement captioned “The Merger—Limited Guaranty.”

Treatment of Options, Restricted Stock Awards, Restricted Stock Units and Performance-Based Restricted Stock Unit Awards

The merger agreement provides that TIBCO’s equity awards that are outstanding immediately prior to the effective time of the merger will be subject to the following treatment in the merger:

Options

Each outstanding option to purchase shares of common stock, whether or not vested, will be cancelled and converted into the right to receive an amount in cash (without interest and subject to any applicable withholding or other taxes, or other amounts as required by law) equal to the product of (1) the total number of shares of common stock subject to such option as of the effective time of the merger; and (2) the amount, if any, by which $24.00 exceeds the exercise price per share of common stock underlying such stock option. Each option with an exercise price per share equal to or greater than $24.00 per share will be cancelled without consideration.

 

 

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Restricted Stock Awards and Restricted Stock Units

The vesting conditions or restrictions applicable to each award of restricted stock and each restricted stock unit, which we refer to as an “RSU,” will lapse and each such share of restricted stock or RSU will be converted into the right to receive an amount in cash (without interest and subject to any applicable withholding or other taxes, or other amounts as required by law) equal to the product of (1) the total number of shares of restricted stock or common stock subject to such RSU, as applicable, as of the effective time of the merger; and (2) $24.00.

Performance-Based Restricted Stock Unit Awards

Each performance-based restricted stock unit award, which we refer to as a “PRSU,” will be treated in accordance with the grant documents. In addition, there will be no further acceleration or eligibility to vest triggered by, or resulting from, the merger, and each PRSU whose performance criteria has not been satisfied will be terminated without consideration immediately prior to the effective time of the merger. For those PRSUs that are terminated for consideration, the vesting conditions or restrictions applicable to each such PRSU will lapse and each such PRSU will be converted into the right to receive an amount in cash (without interest and subject to any applicable withholding or other taxes, or other amounts as required by law) equal to the product of (1) the total number of shares of common stock subject to such PRSU as of the effective time of the merger; and (2) $24.00. With respect to the outstanding PRSUs, only those granted in fiscal year (1) 2010 that are currently vested but deferred; (2) 2011 that are earned but unvested; and (3) 2014 will receive any payment in connection with the merger.

Employee Benefits

Parent has agreed to cause the surviving corporation to honor the terms of TIBCO’s benefit plans. For a period of one year following the effective time of the merger, all employees of TIBCO who remain employed following the merger, which we refer to as “continuing employees,” will be provided annual base salaries or wages, target incentive compensation opportunities and benefits (other than equity-based benefits and individual employment agreements) that are, in each case, substantially comparable in the aggregate to the employee benefits in effect at TIBCO immediately prior to the effective time of the merger. For any eligible employee whose employment is terminated on or before the first anniversary of the merger, Parent will provide severance payments and benefits that, taken as a whole, are substantially comparable in the aggregate to those that would have been provided by TIBCO before the merger (other than employees who otherwise have rights under any employment agreement or change in control plan arrangement). Parent has agreed to cause TIBCO to honor its obligations under each executive employment agreement and change in control plan arrangement following the merger in accordance with its terms as in effect immediately prior to the merger. For more information, see the section of this proxy statement captioned “Proposal 1: Adoption of the Merger Agreement—Employee Benefits.”

Interests of TIBCO’s Directors and Executive Officers in the Merger

When considering the recommendation of the Board of Directors that you vote to approve the proposal to adopt the merger agreement, you should be aware that our directors and executive officers may have interests in the merger that are different from, or in addition to, your interests as a stockholder. In (1) evaluating and negotiating the merger agreement; (2) approving the merger agreement and the merger; and (3) recommending that the merger agreement be adopted by stockholders, the Board of Directors was aware of and considered these interests to the extent that they existed at the time, among other matters. These interests include the following:

 

   

accelerated vesting of equity-based awards simultaneously with the effective time of the merger, and the termination or settlement of such awards in exchange for cash;

 

   

the entitlement of each executive officer to receive payments and benefits under his or her change in control plan arrangement or employment agreement in connection with an involuntary termination of

 

 

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employment other than for “cause,” as such term is defined in his or her change in control plan arrangement or employment agreement, or if the executive officer voluntarily terminates his or her employment for “good reason,” as such term is defined in his or her change in control agreement or plan arrangement, during the 24-month period, with respect to the change in control plan arrangements, or the 12-month period, with respect to the employment agreements, following the effective time of the merger;

 

   

payment of transaction bonuses in consideration of services provided in connection with the consummation of the merger; and

 

   

continued indemnification and directors’ and officers’ liability insurance to be provided by the surviving corporation.

If the proposal to adopt the merger agreement is approved, the shares of common stock held by our directors and executive officers will be treated in the same manner as outstanding shares of common stock held by all other stockholders. For more information, see the section of this proxy statement captioned “The Merger—Interests of TIBCO’s Directors and Executive Officers in the Merger.”

Appraisal Rights

If the merger is consummated, stockholders who do not vote in favor of the adoption of the merger agreement and who properly demand appraisal of their shares will be entitled to appraisal rights in connection with the merger under Section 262 of the General Corporation Law of the State of Delaware, which we refer to as the “DGCL.” This means that stockholders are entitled to have their shares appraised by the Delaware Court of Chancery and to receive payment in cash of the “fair value” of their shares of common stock, exclusive of any elements of value arising from the accomplishment or expectation of the merger, together with interest to be paid on the amount determined to be fair value, if any, as determined by the court. Due to the complexity of the appraisal process, stockholders who wish to seek appraisal of their shares are encouraged to seek the advice of legal counsel with respect to the exercise of appraisal rights.

Stockholders considering seeking appraisal should be aware that the fair value of their shares as determined pursuant to Section 262 of the DGCL could be more than, the same as or less than the value of the consideration that they would receive pursuant to the merger agreement if they did not seek appraisal of their shares.

To exercise your appraisal rights, you must (1) submit a written demand for appraisal to TIBCO before the vote is taken on the proposal to adopt the merger agreement; (2) not submit a proxy or otherwise vote in favor of the proposal to adopt the merger agreement; and (3) continue to hold your shares of common stock of record through the effective time of the merger. Your failure to follow exactly the procedures specified under the DGCL will result in the loss of your appraisal rights. The DGCL requirements for exercising appraisal rights are described in further detail in this proxy statement, and the relevant section of the DGCL regarding appraisal rights is reproduced in Annex C to this proxy statement. If you hold your shares of common stock through a bank, broker or other nominee and you wish to exercise appraisal rights, you should consult with your bank, broker or other nominee to determine the appropriate procedures for the making of a demand for appraisal on your behalf by your bank, broker or other nominee.

Material U.S. Federal Income Tax Consequences of the Merger

For U.S. federal income tax purposes, the receipt of cash by a U.S. Holder (as defined under the caption “The Merger—Material U.S. Federal Income Tax Consequences of the Merger”) in exchange for such U.S. Holder’s shares of common stock in the merger generally will result in the recognition of gain or loss in an amount measured by the difference, if any, between the amount of cash that such U.S. Holder receives in the merger and such U.S. Holder’s adjusted tax basis in the shares of common stock surrendered in the merger.

 

 

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A Non-U.S. Holder (as defined under the caption “The Merger—Material U.S. Federal Income Tax Consequences of the Merger”) generally will not be subject to U.S. federal income tax with respect to the exchange of common stock for cash in the merger unless such Non-U.S. Holder has certain connections to the United States.

For more information, see the section of this proxy statement captioned “The Merger—Material U.S. Federal Income Tax Consequences of the Merger.” Stockholders should consult their own tax advisors concerning the U.S. federal income tax consequences relating to the merger in light of their particular circumstances and any consequences arising under the laws of any state, local or foreign taxing jurisdiction.

Regulatory Approvals Required for the Merger

Under the merger agreement, the merger cannot be completed until (1) the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, which we refer to as the “HSR Act,” has expired or been terminated; and (2) the approval or clearance by the European Commission of the merger has been granted.

On October 10, 2014, TIBCO and VEPFV made the filings required to be made under the HSR Act.

Legal Proceedings Regarding the Merger

In connection with the merger agreement and the transactions contemplated thereby, four purported class action lawsuits have been filed. Two complaints, captioned Brian Ford, On Behalf of Himself and All Others Similarly Situated v. TIBCO Software Inc., et al., filed on October 6, 2014, and Bona Tilahun, Individually and On Behalf of All Others Similarly Situated v. TIBCO Software Inc., et al., filed on October 7, 2014, were filed in the Court of Chancery of the State of Delaware. A third complaint, captioned Jeff Cole v. TIBCO Software Inc., et al., filed on October 3, 2014, was filed in the Santa Clara Superior Court, in the State of California and a fourth complaint, captioned Dhruvian Shah, Individually and On Behalf of All Others Similarly Situated v. TIBCO Software Inc., et. al., filed on October 14, 2014, was filed in the Santa Clara Superior Court, in the State of California. In general, each of the complaints asserts that, among other things, the members of the Board of Directors breached their fiduciary duties to stockholders by initiating a process that undervalues TIBCO and by agreeing to a transaction that does not adequately reflect TIBCO’s true value, and that TIBCO, Parent, Merger Sub and VEPFV aided and abetted the Board of Directors’ breaches of fiduciary duties. The complaints generally seek to enjoin the merger or, alternatively, seek rescission of the merger in the event the defendants are able to consummate it.

No Solicitation of Other Offers

Under the merger agreement, from the date of the merger agreement until the effective time of the merger, TIBCO has agreed not to, and to cause its subsidiaries and its and their respective directors, officers, employees, consultants, agents, representatives and advisors, whom we collective refer to as “representatives,” not to, among other things: (1) solicit, initiate, propose or induce or knowingly encourage, facilitate or assist any inquiries regarding any acquisition proposal (as defined under “Proposal 1: Adoption of the Merger Agreement—No Solicitation of Other Offers”); or (2) engage in discussions or negotiations regarding, or provide any non-public information to, any person relating to, or that would reasonably be expected to lead to, an acquisition proposal.

Notwithstanding these restrictions, under certain circumstances, prior to the adoption of the merger agreement by stockholders, TIBCO may provide information to, and engage or participate in negotiations or substantive discussions with, a person regarding an acquisition proposal if the Board of Directors determines in good faith after consultation with its financial advisor and its outside legal counsel that failure to do so would be

 

 

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reasonably likely to be inconsistent with the Board of Directors’ fiduciary duties and such proposal is a superior proposal or is reasonably likely to lead to a superior proposal. For more information, see the section of this proxy statement captioned “Proposal 1: Adoption of the Merger Agreement—No Solicitation of Other Offers.”

TIBCO is not entitled to terminate the merger agreement to enter into an agreement for a superior proposal unless it complies with certain procedures in the merger agreement, including negotiating with Parent in good faith over a two business day period so that any superior proposal no longer constitutes a superior proposal. The termination of the merger agreement by TIBCO in order to accept a superior proposal will result in the payment by TIBCO of a $116.7 million termination fee to Parent. For more information, see the section of this proxy statement captioned “Proposal 1: Adoption of the Merger Agreement—The Board of Directors’ Recommendation; Company Board Recommendation Change.”

Change in the Board of Directors’ Recommendation

Prior to the adoption of the merger agreement by stockholders, the Board of Directors may under certain circumstances withdraw its recommendation that stockholders adopt the merger agreement if it determines in good faith (after consultation with its financial advisor and its outside legal counsel) that failure to do so would be reasonably likely to be inconsistent with the Board of Directors’ fiduciary duties to stockholders under applicable law.

However, the Board of Directors cannot withdraw its recommendation that stockholders adopt the merger agreement unless it complies with certain procedures in the merger agreement, including negotiating with Parent in good faith over a two business day period so that a failure make a company board recommendation change would no longer be reasonably likely to be inconsistent with the Board of Directors’ fiduciary duties. The termination of the merger agreement by Parent following the withdrawal by the Board of Directors of its recommendation that stockholders adopt the merger agreement will result in the payment by TIBCO of a $116.7 million termination fee to Parent. For more information, see the section of this proxy statement captioned “Proposal 1: Adoption of the Merger Agreement—The Board of Directors’ Recommendation; Company Board Recommendation Change.”

Conditions to the Closing of the Merger

The obligations of TIBCO, Parent and Merger Sub, as applicable, to consummate the merger are subject to the satisfaction or waiver of certain conditions, including (among other conditions), the following:

 

   

the adoption of the merger agreement by the requisite affirmative vote of stockholders;

 

   

the (1) expiration or termination of the applicable waiting period under the HSR Act; and (2) the approval or clearance of the merger by the European Commission;

 

   

the consummation of the merger not being restrained, enjoined, rendered illegal or otherwise prohibited by any law or order of any governmental authority;

 

   

the absence of any continuing change, event, violation, inaccuracy, effect or circumstance at TIBCO that, individually or in the aggregate, generally (1) is or would reasonably be expected to be materially adverse to TIBCO’s business, financial condition or results of operations, taken as a whole; or (2) would reasonably be expected to prevent or materially impair or delay the consummation of the merger;

 

   

the accuracy of the representations and warranties of TIBCO, Parent and Merger Sub in the merger agreement, subject to materiality qualifiers, as of the effective time of the merger or the date in respect of which such representation or warranty was specifically made;

 

 

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the performance in all material respects by TIBCO, Parent and Merger Sub of their respective obligations required to be performed by them under the merger agreement at or prior to the effective time of the merger; and

 

   

receipt of certificates executed by executive officers of TIBCO, on the one hand, or Parent and Merger Sub, on the other hand, to the effect that the conditions described in the preceding two bullets have been satisfied.

Termination of the Merger Agreement

The merger agreement may be terminated at any time prior to the effective time of the merger, whether before or after the adoption of the merger agreement by stockholders, in the following ways:

 

   

by mutual written agreement of TIBCO and Parent;

 

   

by either TIBCO or Parent if:

 

   

prior to the effective time of the merger, (1) any permanent injunction or other judgment or order issued by any court of competent jurisdiction or other legal or regulatory restraint or prohibition preventing the consummation of the merger is in effect, or any action has been taken by any governmental authority of competent jurisdiction, that, in each case, prohibits, makes illegal or enjoins the consummation of the merger and has become final and non-appealable; or (2) any statute, rule, regulation or order is enacted, entered, enforced or deemed applicable to the merger that prohibits, makes illegal or enjoins the consummation of the merger (except that the right to terminate will not be available to either party that has failed to use its reasonable best efforts to resist, appeal, obtain consent pursuant to, resolve or lift, as applicable, such injunction, action, statue, rule, regulation or order);

 

   

the merger has not been consummated by 11:59 p.m., Pacific time, on March 27, 2015, which we refer to as the “termination date” (except that the right to terminate the merger agreement as a result of the occurrence of the termination date will not be available to any party if the failure of such party to perform or comply with its obligations under the merger agreement has been the primary cause or primarily resulted in the failure of the closing of the merger to have occurred on or before such date); or

 

   

stockholders fail to adopt the merger agreement at the special meeting or any adjournment or postponement thereof;

 

   

by TIBCO if:

 

   

Parent or Merger Sub has breached or failed perform any of its respective representations, warranties, covenants or other agreements set forth in the merger agreement such that certain conditions set forth in the merger agreement are not satisfied, and such breach is not capable of being cured, or is not cured, before the earlier of the termination date or the date that is 45 calendar days following TIBCO’s delivery of written notice of such breach (except that TIBCO will not have the right to terminate the merger agreement if TIBCO is then in material breach of any of its representations, warranties, covenants or agreements under the merger agreement); or

 

   

prior to the adoption of the merger agreement by stockholders and so long as TIBCO is not then in material breach of its obligations related to acquisition proposals and superior proposals, in order to enter into a definitive agreement with respect to a superior proposal in accordance with the terms of the merger agreement, subject to TIBCO paying to Parent a termination fee of $116.7 million; and

 

 

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by Parent if:

 

   

TIBCO has breached or failed to perform any of its representations, warranties, covenants or other agreements set forth in the merger agreement such that certain conditions set forth in the merger agreement are not satisfied and such breach is not capable of being cured, or is not cured, before the earlier of the termination date or the date that is 45 calendar days following Parent’s delivery of written notice of such breach (except that Parent will not have the right to terminate the merger agreement if Parent or Merger Sub is then in material breach of any of its representations, warranties, covenants or agreements under the merger agreement); or

 

   

prior to the adoption of the merger agreement by the stockholders, the Board of Directors withdraws its recommendation that stockholders adopt the merger agreement (except that such right to terminate will expire at 5:00 p.m., Pacific time, on the 10th business day following such withdrawal).

Termination Fee and Expense Reimbursement

Except in specified circumstances, whether or not the merger is completed, TIBCO, on the one hand, and Parent and Merger Sub, on the other hand, are each responsible for all of their respective costs and expenses incurred in connection with the merger and the other transactions contemplated by the merger agreement.

TIBCO will be required to pay to Parent a termination fee of $116.7 million if the merger agreement is terminated under specified circumstances. For more information, see the section of this proxy statement captioned “Proposal 1: Adoption of the Merger Agreement—Termination Fee.”

Specific Performance

Parent, Merger Sub and TIBCO are entitled to an injunction, specific performance and other equitable relief to prevent breaches (or threatened breaches) of the merger agreement and to enforce the terms of the merger agreement, in addition to any other remedy to which they are entitled at law or in equity. In addition, TIBCO is also entitled to seek an injunction, specific performance or other equitable relief to cause the equity financing to be funded on the terms and subject to the conditions set forth in the equity commitment letter.

 

 

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QUESTIONS AND ANSWERS

The following questions and answers address some commonly asked questions regarding the merger, the merger agreement and the special meeting. These questions and answers may not address all questions that are important to you. We encourage you to read carefully the more detailed information contained elsewhere in this proxy statement, the annexes to this proxy statement and the documents we refer to in this proxy statement. You may obtain the information incorporated by reference in this proxy statement without charge by following the instructions under the caption “Where You Can Find More Information.”

 

Q: Why am I receiving these materials?

 

A: The Board of Directors is furnishing this proxy statement and form of proxy card to the holders of shares of common stock in connection with the solicitation of proxies to be voted at the special meeting.

 

Q: What am I being asked to vote on at the special meeting?

 

A: You are being asked to vote on the following proposals:

 

   

to adopt the merger agreement pursuant to which Merger Sub will merge with and into TIBCO, and TIBCO will become a wholly owned subsidiary of Parent;

 

   

to approve the adjournment of the special meeting to a later date or dates, if necessary or appropriate, to solicit additional proxies if there are insufficient votes to adopt the merger agreement at the time of the special meeting; and

 

   

to approve, by non-binding, advisory vote, compensation that will or may become payable by TIBCO to our named executive officers in connection with the merger.

 

Q: Why am I being asked to cast a non-binding, advisory vote regarding compensation that will or may become payable by TIBCO to its named executive officers in connection with the merger?

 

A: SEC rules require TIBCO to seek a non-binding, advisory vote regarding compensation that will or may become payable by TIBCO to its named executive officers in connection with the merger.

 

Q: What is the compensation that will or may become payable by TIBCO to its named executive officers in connection with the merger for purposes of this advisory vote?

 

A: The compensation that will or may become payable by TIBCO to its named executive officers in connection with the merger is certain compensation that is tied to or based on the merger and payable to certain of TIBCO’s named executive officers. For further detail, see the section captioned “Proposal 3: Advisory, Non-Binding Vote on Merger-Related Executive Compensation Arrangements.”

 

Q: What will happen if stockholders do not approve the compensation that will or may become payable by TIBCO to its named executive officers in connection with the merger at the special meeting?

 

A: Approval of the compensation that will or may become payable by TIBCO to its named executive officers in connection with the merger is not a condition to completion of the merger. The vote with respect to the compensation that will or may become payable by TIBCO to its named executive officers in connection with the merger is an advisory vote and will not be binding on TIBCO or Parent. If the merger agreement is adopted by the stockholders and completed, the compensation that will or may become payable by TIBCO to its named executive officers in connection with the merger may be paid to TIBCO’s named executive officers even if stockholders fail to approve such compensation.

 

Q: When and where is the special meeting?

 

A: The special meeting will take place on [], 2014, at [], at [], Pacific time.

 

Q: Who is entitled to vote at the special meeting?

 

A: Stockholders as of the record date are entitled to notice of the special meeting and to vote at the special meeting. Each holder of shares of common stock is entitled to cast one vote on each matter properly brought before the special meeting for each share of common stock owned as of the record date.

 

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Q: May I attend the special meeting and vote in person?

 

A: Yes. All stockholders as of the record date may attend the special meeting and vote in person. Seating will be limited. Stockholders will need to present proof of ownership of shares of common stock, such as a bank or brokerage account statement, and a form of personal identification to be admitted to the special meeting. No cameras, recording equipment, electronic devices, large bags, briefcases or packages will be permitted in the special meeting.

Even if you plan to attend the special meeting in person, to ensure that your shares will be represented at the special meeting we encourage you to sign, date and return the enclosed proxy card in the accompanying prepaid reply envelope or grant your proxy electronically over the Internet or by telephone. If you attend the special meeting and vote in person by ballot, your vote will revoke any proxy previously submitted.

If you hold your shares in “street name,” you should instruct your bank, broker or other nominee how to vote your shares in accordance with the voting instruction form that you will receive from your bank, broker or other nominee. Your broker or other agent cannot vote on any of the proposals, including the proposal to adopt the merger agreement, without your instructions. If you hold your shares in “street name,” you may not vote your shares in person at the special meeting unless you obtain a “legal proxy” from your bank, broker or other nominee.

 

Q: What is the proposed merger and what effects will it have on TIBCO?

 

A: The proposed merger is the acquisition of TIBCO by Parent. If the proposal to adopt the merger agreement is approved by stockholders and the other closing conditions under the merger agreement have been satisfied or waived, Merger Sub will merge with and into TIBCO, with TIBCO continuing as the surviving corporation. As a result of the merger, TIBCO will become a wholly owned subsidiary of Parent, and our common stock will no longer be publicly traded and will be delisted from NASDAQ. In addition, our common stock will be deregistered under the Exchange Act, and we will no longer file periodic reports with the SEC.

 

Q: What will I receive if the merger is completed?

 

A: Upon completion of the merger, you will be entitled to receive the per share merger consideration of $24.00 in cash, without interest and less any applicable withholding taxes, for each share of common stock that you own, unless you have properly exercised and not withdrawn your appraisal rights under the DGCL. For example, if you own 100 shares of common stock, you will receive $2,400.00 in cash in exchange for your shares of common stock, less any applicable withholding taxes.

 

Q: How does the per share merger consideration compare to the market price of the common stock (1) prior to public reports that multiple parties were competing to acquire TIBCO; and (2) prior to the date on which TIBCO entered into the merger agreement?

 

A: The per share merger consideration represents a premium of approximately (1) 26% to the closing price of the common stock on September 23, 2014, the last trading day prior to public reports that multiple parties were competing to acquire TIBCO; and (2) 23% to the closing price of the common stock on September 26, 2014, the last trading day prior to the date on which TIBCO entered into the merger agreement.

 

Q: What do I need to do now?

 

A: We encourage you to read this proxy statement, the annexes to this proxy statement and the documents that we refer to in this proxy statement carefully and consider how the merger affects you. Then sign, date and return, as promptly as possible, the enclosed proxy card in the accompanying reply envelope, or grant your proxy electronically over the Internet or by telephone, so that your shares can be voted at the special meeting, unless you wish to seek appraisal. If you hold your shares in “street name,” please refer to the voting instruction forms provided by your bank, broker or other nominee to vote your shares. Please do not send your stock certificates with your proxy card.

 

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Q: Should I send in my stock certificates now?

 

A: No. After the merger is completed, you will receive a letter of transmittal containing instructions for how to send your stock certificates to the payment agent in order to receive the appropriate cash payment for the shares of common stock represented by your stock certificates. You should use the letter of transmittal to exchange your stock certificates for the cash payment to which you are entitled. Please do not send your stock certificates with your proxy card.

 

Q: What happens if I sell or otherwise transfer my shares of common stock after the record date but before the special meeting?

 

A: The record date for the special meeting is earlier than the date of the special meeting and the date the merger is expected to be completed. If you sell or transfer your shares of common stock after the record date but before the special meeting, unless special arrangements (such as provision of a proxy) are made between you and the person to whom you sell or otherwise transfer your shares and each of you notifies TIBCO in writing of such special arrangements, you will transfer the right to receive the merger consideration, if the merger is completed, to the person to whom you sell or transfer your shares, but you will retain your right to vote those shares at the special meeting. Even if you sell or otherwise transfer your shares of common stock after the record date, we encourage you to sign, date and return the enclosed proxy card in the accompanying reply envelope or grant your proxy electronically over the Internet or by telephone.

 

Q: How does the Board of Directors recommend that I vote?

 

A: The Board of Directors, after considering the various factors described under the caption “The Merger—Recommendation of the Board of Directors and Reasons for the Merger,” has unanimously (1) determined that the merger agreement, the merger and the other transactions contemplated by the merger agreement are fair to, advisable and in the best interests of TIBCO and its stockholders; and (2) adopted and approved the merger agreement, the merger and the other transactions contemplated by the merger agreement.

The Board of Directors recommends that you vote (1) “FOR” the adoption of the merger agreement; (2) “FOR” the adjournment of the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes to adopt the merger agreement at the time of the special meeting; and (3) “FOR” the proposal to approve, by non-binding, advisory vote, compensation that will or may become payable by TIBCO to our named executive officers in connection with the merger.

 

Q: What happens if the merger is not completed?

 

A: If the merger agreement is not adopted by stockholders or if the merger is not completed for any other reason, stockholders will not receive any payment for their shares of common stock. Instead, TIBCO will remain an independent public company, our common stock will continue to be listed and traded on NASDAQ and registered under the Exchange Act, and we will continue to file periodic reports with the SEC.

Under specified circumstances, TIBCO will be required to pay Parent a termination fee upon the termination of the merger agreement, as described in the section of this proxy statement captioned “Proposal 1: Adoption of the Merger Agreement—Termination Fee.”

 

Q: What vote is required to adopt the merger agreement?

 

A: The affirmative vote of the holders of a majority of the outstanding shares of common stock is required to adopt the merger agreement.

If a quorum is present at the special meeting, the failure of any stockholder of record to (1) submit a signed proxy card; (2) grant a proxy over the Internet or by telephone; or (3) vote in person by ballot at the special meeting will have the same effect as a vote “AGAINST” the proposal to adopt the merger agreement. If you hold your shares in “street name” and a quorum is present at the special meeting, the failure to instruct your bank, broker or other nominee how to vote your shares will have the same effect as a vote “AGAINST” the proposal to adopt the merger agreement. If a quorum is present at the special meeting, abstentions will have the same effect as a vote “AGAINST” the proposal to adopt the merger agreement.

 

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Q: What vote is required to approve any proposal to adjourn the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes to adopt the merger agreement at the time of the special meeting and to approve, by non-binding, advisory vote, compensation that will or may become payable by TIBCO to our named executive officers in connection with the merger?

 

A: Approval of the proposal to adjourn the special meeting, whether or not a quorum is present, requires the affirmative vote of a majority of the stock having voting power present in person or represented by proxy at the special meeting. Approval, by non-binding, advisory vote, of compensation that will or may become payable by TIBCO to our named executive officers in connection with the merger requires the affirmative vote of a majority of the stock having voting power present in person or represented by proxy at the special meeting.

The failure of any stockholder of record to (1) submit a signed proxy card; (2) grant a proxy over the Internet or by telephone; or (3) vote in person by ballot at the special meeting will not have any effect on the adjournment proposal or the proposal to approve, by non-binding, advisory vote, compensation that will or may become payable by TIBCO to our named executive officers in connection with the merger. If you hold your shares in “street name,” the failure to instruct your bank, broker or other nominee how to vote your shares will not have any effect on the adjournment proposal and the proposal to approve, by non-binding, advisory vote, compensation that will or may become payable by TIBCO to our named executive officers in connection with the merger. Abstentions will have the same effect as a vote “AGAINST” the adjournment proposal and the proposal to approve, by non-binding, advisory vote, compensation that will or may become payable by TIBCO to our named executive officers in connection with the merger.

 

Q: What is the difference between holding shares as a stockholder of record and as a beneficial owner?

 

A: If your shares are registered directly in your name with our transfer agent, Computershare Trust Company, N.A., you are considered, with respect to those shares, to be the “stockholder of record.” In this case, this proxy statement and your proxy card have been sent directly to you by TIBCO.

If your shares are held through a bank, broker or other nominee, you are considered the “beneficial owner” of shares of common stock held in “street name.” In that case, this proxy statement has been forwarded to you by your bank, broker or other nominee who is considered, with respect to those shares, to be the stockholder of record. As the beneficial owner, you have the right to direct your bank, broker or other nominee how to vote your shares by following their instructions for voting. You are also invited to attend the special meeting. However, because you are not the stockholder of record, you may not vote your shares in person at the special meeting unless you obtain a “legal proxy” from your bank, broker or other nominee.

 

Q: How may I vote?

 

A: If you are a stockholder of record (that is, if your shares of common stock are registered in your name with Computershare Trust Company, N.A., our transfer agent), there are four ways to vote:

 

   

by signing, dating and returning the enclosed proxy card in the accompanying prepaid reply envelope;

 

   

by visiting the Internet at the address on your proxy card;

 

   

by calling toll-free (within the U.S. or Canada) at the phone number on your proxy card; or

 

   

by attending the special meeting and voting in person by ballot;

A control number, located on your proxy card, is designed to verify your identity and allow you to vote your shares of common stock, and to confirm that your voting instructions have been properly recorded when voting electronically over the Internet or by telephone. Please be aware that, although there is no charge for voting your shares, if you vote electronically over the Internet or by telephone, you may incur costs such as Internet access and telephone charges for which you will be responsible.

Even if you plan to attend the special meeting in person, you are strongly encouraged to vote your shares of common stock by proxy. If you are a record holder or if you obtain a “legal proxy” to vote shares that you

 

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beneficially own, you may still vote your shares of common stock in person by ballot at the special meeting even if you have previously voted by proxy. If you are present at the special meeting and vote in person by ballot, your previous vote by proxy will not be counted.

If your shares are held in “street name” through a bank, broker or other nominee, you may vote through your bank, broker or other nominee by completing and returning the voting form provided by your bank, broker or other nominee, or, if such a service is provided by your bank, broker or other nominee, electronically over the Internet or by telephone. To vote over the Internet or by telephone through your bank, broker or other nominee, you should follow the instructions on the voting form provided by your bank, broker or nominee.

 

Q: If my broker holds my shares in “street name,” will my broker vote my shares for me?

 

A: No. Your bank, broker or other nominee is permitted to vote your shares on any proposal currently scheduled to be considered at the special meeting only if you instruct your bank, broker or other nominee how to vote. You should follow the procedures provided by your bank, broker or other nominee to vote of your shares. Without instructions, your shares will not be voted on such proposals, which will have the same effect as if you voted against adoption of the merger agreement, but will have no effect on the adjournment proposal or the proposal to approve, by non-binding, advisory vote, compensation that will or may become payable by TIBCO to our named executive officers in connection with the merger.

 

Q: May I change my vote after I have mailed my signed and dated proxy card?

 

A: Yes. If you are a stockholder of record, you may change your vote or revoke your proxy at any time before it is voted at the special meeting by:

 

   

signing another proxy card with a later date and returning it to us prior to the special meeting;

 

   

submitting a new proxy electronically over the Internet or by telephone after the date of the earlier submitted proxy;

 

   

delivering a written notice of revocation to the Corporate Secretary; or

 

   

attending the special meeting and voting in person by ballot.

If you hold your shares of common stock in “street name,” you should contact your bank, broker or other nominee for instructions regarding how to change your vote. You may also vote in person at the special meeting if you obtain a “legal proxy” from your bank, broker or other nominee.

 

Q: What is a proxy?

 

A: A proxy is your legal designation of another person, referred to as a “proxy,” to vote your shares of common stock. The written document describing the matters to be considered and voted on at the special meeting is called a “proxy statement.” The document used to designate a proxy to vote your shares of common stock is called a “proxy card.” James Johnson, our Chief Financial Officer, and William R. Hughes, our Executive Vice President, Chief Administrative Officer and General Counsel, are the proxy holders for the special meeting.

 

Q: If a stockholder gives a proxy, how are the shares voted?

 

A: Regardless of the method you choose to vote, the individuals named on the enclosed proxy card, or your proxies, will vote your shares in the way that you indicate. When completing the Internet or telephone process or the proxy card, you may specify whether your shares should be voted for or against or to abstain from voting on all, some or none of the specific items of business to come before the special meeting.

If you properly sign your proxy card but do not mark the boxes showing how your shares should be voted on a matter, the shares represented by your properly signed proxy will be voted (1) “FOR” the adoption of the merger agreement; (2) “FOR” the adjournment of the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes to adopt the merger agreement at the time of the special meeting; and (3) “FOR” the proposal to approve, by non-binding, advisory vote, compensation that will or may become payable by TIBCO to our named executive officers in connection with the merger.

 

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Q: What should I do if I receive more than one set of voting materials?

 

A: Please sign, date and return (or grant your proxy electronically over the Internet or by telephone) each proxy card and voting instruction card that you receive.

You may receive more than one set of voting materials, including multiple copies of this proxy statement and multiple proxy cards or voting instruction cards. For example, if you hold your shares in more than one brokerage account, you will receive a separate voting instruction card for each brokerage account in which you hold shares. If you are a stockholder of record and your shares are registered in more than one name, you will receive more than one proxy card.

 

Q: Where can I find the voting results of special meeting?

 

A: If available, TIBCO may announce preliminary voting results at the conclusion of the special meeting. TIBCO intends to publish final voting results in a Current Report on Form 8-K to be filed with the SEC following the special meeting. All reports that TIBCO files with the SEC are publicly available when filed. See the section of this proxy statement captioned “Where You Can Find More Information.”

 

Q: Will I be subject to U.S. federal income tax upon the exchange of common stock for cash pursuant to the merger?

 

A: If you are a U.S. Holder (as defined under the caption “The Merger—Material U.S. Federal Income Tax Consequences of the Merger”), the exchange of common stock for cash pursuant to the merger will be a taxable transaction for U.S. federal income tax purposes, which generally will require a U.S. Holder to recognize gain or loss for U.S. federal income tax purposes in an amount equal to the difference, if any, between the amount of cash received by such U.S. Holder in the merger and such U.S. Holder’s adjusted tax basis in the shares of common stock surrendered in the merger.

A Non-U.S. Holder (as defined under the caption “The Merger—Material U.S. Federal Income Tax Consequences of the Merger”) generally will not be subject to U.S. federal income tax with respect to the exchange of common stock for cash in the merger unless such Non-U.S. Holder has certain connections to the United States.

Because particular circumstances may differ, we recommend that you consult your own tax advisor to determine the U.S. federal income tax consequences relating to the merger in light of your own particular circumstances and any consequences arising under the laws of any state, local or foreign taxing jurisdiction. A more complete description of material U.S. federal income tax consequences of the merger is provided under the caption “The Merger—Material U.S. Federal Income Tax Consequences of the Merger.”

 

Q: What will the holders of TIBCO stock options, restricted stock awards, RSUs and PRSUs receive in the merger?

 

A: At the effective time of the merger, each outstanding option to purchase shares of common stock, whether or not vested, will be cancelled and converted into the right to receive an amount in cash (without interest and subject to any applicable withholding or other taxes, or other amounts as required by law) equal to the product of (1) the total number of shares of common stock subject to such option as of the effective time of the merger; and (2) the amount, if any, by which $24.00 exceeds the exercise price per share under such option. Each option with an exercise price per share equal to or greater than $24.00 per share will be cancelled without consideration.

At the effective time of the merger, the vesting conditions or restrictions applicable to each award of restricted stock and each RSU will lapse and each share of restricted stock or RSU will be converted into the right to receive an amount in cash (subject to any applicable withholding or other taxes, or other amounts as required by law) equal to the product of (1) the total number of shares of restricted stock or shares of common stock subject to such RSU, as applicable, as of the effective time of the merger; and (2) $24.00.

Each PRSU will be treated in accordance with the grant documents. In addition, there will be no further acceleration and/or eligibility to vest triggered by, or resulting from, the merger, and each PRSU whose

 

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performance criteria has not been satisfied shall be terminated without consideration immediately prior to the effective time of the merger. As of the effective time of the merger, the vesting conditions or restrictions applicable to each PRSU that remains outstanding and has not been terminated will lapse and each such eligible PRSU will be converted into the right to receive an amount in cash (without interest and subject to any applicable withholding or other taxes, or other amounts as required by law) equal to the product of (1) the total number of shares of common stock subject to such PRSU as of the effective time of the merger; and (2) $24.00. With respect to outstanding PRSUs, only those granted in fiscal year (1) 2010 that are currently vested but deferred; (2) 2011 that are earned but unvested; and (3) 2014 will receive any payment in connection with the merger.

 

Q: When do you expect the merger to be completed?

 

A: We are working toward completing the merger as quickly as possible and currently expect to complete the merger in the fourth calendar quarter of 2014. However, the exact timing of completion of the merger cannot be predicted because the merger is subject to the closing conditions specified in the merger agreement, many of which are outside of our control, and the completion of a 15-business day marketing period that Parent may use to complete its financing for the merger.

 

Q: Am I entitled to appraisal rights under the DGCL?

 

A: If the merger is adopted by stockholders, stockholders who do not vote in favor of the adoption of the merger agreement and who properly demand appraisal of their shares will be entitled to appraisal rights in connection with the merger under Section 262 of the DGCL. This means that holders of shares of common stock are entitled to have their shares appraised by the Delaware Court of Chancery and to receive payment in cash of the “fair value” of the shares of common stock, exclusive of any elements of value arising from the accomplishment or expectation of the merger, together with interest to be paid on the amount determined to be fair value, if any, as determined by the court. Stockholders who wish to seek appraisal of their shares are in any case encouraged to seek the advice of legal counsel with respect to the exercise of appraisal rights due to the complexity of the appraisal process. The DGCL requirements for exercising appraisal rights are described in additional detail in this proxy statement, and the relevant section of the DGCL regarding appraisal rights is reproduced in Annex C to this proxy statement.

 

Q: Do any of TIBCO’s directors or officers have interests in the merger that may differ from those of TIBCO stockholders generally?

 

A: Yes. In considering the recommendation of the Board of Directors with respect to the proposal to adopt the merger agreement, you should be aware that our directors and executive officers may have interests in the merger that are different from, or in addition to, the interests of stockholders generally. In (1) evaluating and negotiating the merger agreement; (2) approving the merger agreement and the merger; and (3) recommending that the merger agreement be adopted by stockholders, the Board of Directors was aware of and considered these interests to the extent that they existed at the time, among other matters. For more information, see the section of this proxy statement captioned “The Merger—Interests of TIBCO’s Directors and Executive Officers in the Merger.”

 

Q: Who can help answer my questions?

 

A: If you have any questions concerning the merger, the special meeting or the accompanying proxy statement, would like additional copies of the accompanying proxy statement or need help voting your shares of common stock, please contact our proxy solicitor:

Innisfree M&A Incorporated

501 Madison Avenue, 20th Floor

New York, NY 10022

Call toll-free: (877) 800-5185

 

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FORWARD-LOOKING STATEMENTS

This proxy statement, the documents to which we refer you in this proxy statement and information included in oral statements or other written statements made or to be made by us or on our behalf contain “forward-looking statements” that do not directly or exclusively relate to historical facts. You can typically identify forward-looking statements by the use of forward-looking words, such as “may,” “should,” “could,” “project,” “believe,” “anticipate,” “expect,” “estimate,” “continue,” “potential,” “plan,” “forecast” and other words of similar import. Stockholders are cautioned that any forward-looking statements are not guarantees of future performance and may involve significant risks and uncertainties, and that actual results may vary materially from those in the forward-looking statements. These risks and uncertainties include, but are not limited to, the risks detailed in our filings with the SEC, including in our most recent filings on Forms 10-K and 10-Q, factors and matters described or incorporated by reference in this proxy statement, and the following factors:

 

   

the inability to complete the merger due to the failure to obtain stockholder approval or failure to satisfy the other conditions to the completion of the merger, including receipt of required regulatory approvals;

 

   

the risk that the merger agreement may be terminated in circumstances that require us to pay Parent a termination fee of $116.7 million;

 

   

the outcome of any legal proceedings that may be instituted against us and others related to the merger agreement;

 

   

risks that the proposed merger disrupts our current operations or affects our ability to retain or recruit key employees;

 

   

the fact that receipt of the all-cash merger consideration would be taxable to stockholders that are treated as U.S. holders for U.S. federal income tax purposes;

 

   

the fact that, if the merger is completed, stockholders will forgo the opportunity to realize the potential long-term value of the successful execution of TIBCO’s current strategy as an independent company;

 

   

the possibility that Parent could, at a later date, engage in unspecified transactions, including restructuring efforts, special dividends or the sale of some or all of TIBCO’s assets to one or more as yet unknown purchasers, that could conceivably produce a higher aggregate value than that available to stockholders in the merger;

 

   

the fact that under the terms of the merger agreement, TIBCO is unable to solicit other acquisition proposals during the pendency of the merger;

 

   

the effect of the announcement or pendency of the merger on our business relationships, operating results and business generally;

 

   

the amount of the costs, fees, expenses and charges related to the merger agreement or the merger;

 

   

risks related to the merger diverting management’s or employees’ attention from ongoing business operations;

 

   

risks that our stock price may decline significantly if the merger is not completed; and

 

   

risks related to obtaining the requisite consents to the merger, including the timing and receipt of regulatory approvals from various domestic and foreign governmental entities (including any conditions, limitations or restrictions placed on these approvals) and the risk that one or more governmental entities may deny approval.

Consequently, all of the forward-looking statements that we make in this proxy statement are qualified by the information contained or incorporated by reference herein, including (1) the information contained under this

 

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caption; and (2) the information contained under the caption “Risk Factors” and information in our consolidated financial statements and notes thereto included in our most recent filings on Forms 10-K and 10-Q. No assurance can be given that these are all of the factors that could cause actual results to vary materially from the forward-looking statements.

Except as required by applicable law, we undertake no obligation to publicly update forward-looking statements, whether as a result of new information, future events or otherwise. Stockholders are advised to consult any future disclosures that we make on related subjects as may be detailed in our other filings made from time to time with the SEC.

 

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THE SPECIAL MEETING

The enclosed proxy is solicited on behalf of the Board of Directors for use at the special meeting.

Date, Time and Place

We will hold the special meeting on [], 2014, at [], at [], Pacific time.

Purpose of the Special Meeting

At the special meeting, we will ask stockholders to vote on proposals to (1) adopt the merger agreement, (2) adjourn the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes to adopt the merger agreement at the time of the special meeting; and (3) approve, by non-binding, advisory vote, compensation that will or may become payable by TIBCO to our named executive officers in connection with the merger.

Record Date; Shares Entitled to Vote; Quorum

Only stockholders of record as of the record date are entitled to notice of the special meeting and to vote at the special meeting. A list of stockholders entitled to vote at the special meeting will be available at our principal executive offices located at 3303 Hillview Avenue, Palo Alto, CA 94304, during regular business hours for a period of no less than ten days before the special meeting and at the place of the special meeting during the meeting.

As of the record date, there were [] shares of common stock outstanding and entitled to vote at the special meeting.

The holders of a majority in voting power of the stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, will constitute a quorum at the special meeting. In the event that a quorum is not present at the special meeting, it is expected that the meeting will be adjourned to solicit additional proxies.

Vote Required; Abstentions and Broker Non-Votes

The affirmative vote of the holders of a majority of the outstanding shares of common stock is required to adopt the merger agreement. Adoption of the merger agreement by stockholders is a condition to the closing of the merger.

Approval of the proposal to adjourn the special meeting, whether or not a quorum is present, requires the affirmative vote of a majority of the stock having voting power present in person or represented by proxy at the special meeting. Approval, by non-binding, advisory vote, of compensation that will or may become payable by TIBCO to our named executive officers in connection with the merger requires the affirmative vote of a majority of the stock having voting power present in person or represented by proxy at the special meeting.

If a stockholder abstains from voting, that abstention will have the same effect as if the stockholder voted “AGAINST” the proposal to adopt the merger agreement. For stockholders who attend the meeting or are represented by proxy and abstain from voting, the abstention will have the same effect as if the stockholder voted “AGAINST” any proposal to adjourn the special meeting to a later date to solicit additional

proxies if there are insufficient votes to adopt the merger agreement at the time of the special meeting and “AGAINST” the proposal to approve, by non-binding, advisory vote, compensation that will or may become payable by TIBCO to our named executive officers in connection with the merger.

Each “broker non-vote” will also count as a vote “AGAINST” the proposal to adopt the merger agreement, but will have no effect on (1) any proposal to adjourn the special meeting to a later date to solicit additional proxies if there are insufficient votes to adopt the merger agreement at the time of the special meeting; or (2) the

 

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proposal to approve, by non-binding, advisory vote, compensation that will or may become payable by TIBCO to our named executive officers in connection with the merger. A “broker non-vote” generally occurs when a bank, broker or other nominee holding shares on your behalf does not vote on a proposal because the bank, broker or other nominee has not received your voting instructions and lacks discretionary power to vote the shares. “Broker non-votes,” if any, will be counted for the purpose of determining whether a quorum is present.

Shares Held by TIBCO’s Directors and Executive Officers

As of the record date, our directors and executive officers beneficially owned and were entitled to vote, in the aggregate, [] shares of common stock, representing approximately []% of the shares of common stock outstanding on the record date. Our directors and executive officers have informed us that they currently intend to vote all of their shares of common stock (1) “FOR” the adoption of the merger agreement; (2) “FOR” the adjournment of the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes to adopt the merger agreement at the time of the special meeting; and (3) “FOR” the non-binding, advisory proposal to approve compensation that will or may become payable by TIBCO to our named executive officers in connection with the merger.

Voting of Proxies

If your shares are registered in your name with our transfer agent, Computershare Trust Company, N.A., you may cause your shares to be voted by returning a signed and dated proxy card in the accompanying prepaid envelope, or you may vote in person at the special meeting. Additionally, you may grant a proxy electronically over the Internet or by telephone by following the instructions on your proxy card. You must have the enclosed proxy card available, and follow the instructions on the proxy card, in order to grant a proxy electronically over the Internet or by telephone. Based on your proxy cards or Internet and telephone proxies, the proxy holders will vote your shares according to your directions.

If you plan to attend the special meeting and wish to vote in person, you will be given a ballot at the special meeting. If your shares are registered in your name, you are encouraged to vote by proxy even if you plan to attend the special meeting in person. If you attend the special meeting and vote in person by ballot, your vote will revoke any previously submitted proxy.

Voting instructions are included on your proxy card. All shares represented by properly signed and dated proxies received in time for the special meeting will be voted at the special meeting in accordance with the instructions of the stockholder. Properly signed and dated proxies that do not contain voting instructions will be voted (1) “FOR” adoption of the merger agreement; (2) “FOR” the adjournment of the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes to adopt the merger agreement at the time of the special meeting; and (3) “FOR” the proposal to approve, by non-binding, advisory vote, compensation that will or may become payable by TIBCO to our named executive officers in connection with the merger.

If your shares are held in “street name” through a bank, broker or other nominee, you may vote through your bank, broker or other nominee by completing and returning the voting form provided by your bank, broker or other nominee or attending the special meeting and voting in person with a “legal proxy” from your bank, broker or other nominee. If such a service is provided, you may vote over the Internet or telephone through your bank, broker or other nominee by following the instructions on the voting form provided by your bank, broker or other nominee. If you do not return your bank’s, broker’s or other nominee’s voting form, do not vote via the Internet or telephone through your bank, broker or other nominee, if possible, or do not attend the special meeting and vote in person with a “legal proxy” from your bank, broker or other nominee, it will have the same effect as if you voted “AGAINST” the proposal to adopt the merger agreement but will not have any effect on the adjournment proposal or the proposal to approve, by non-binding, advisory vote, compensation that will or may become payable by TIBCO to our named executive officers in connection with the merger.

 

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Revocability of Proxies

If you are a stockholder of record, you may change your vote or revoke your proxy at any time before it is voted at the special meeting by:

 

   

signing another proxy card with a later date and returning it to us prior to the special meeting;

 

   

submitting a new proxy electronically over the Internet or by telephone after the date of the earlier submitted proxy;

 

   

delivering a written notice of revocation to our Corporate Secretary; or

 

   

attending the special meeting and voting in person by ballot.

If you have submitted a proxy, your appearance at the special meeting, in the absence of voting in person or submitting an additional proxy or revocation, will not have the effect of revoking your prior proxy.

If you hold your shares of common stock in “street name,” you should contact your bank, broker or other nominee for instructions regarding how to change your vote. You may also vote in person at the special meeting if you obtain a “legal proxy” from your bank, broker or other nominee.

Any adjournment, postponement or other delay of the special meeting, including for the purpose of soliciting additional proxies, will allow stockholders who have already sent in their proxies to revoke them at any time prior to their use at the special meeting as adjourned, postponed or delayed.

Board of Directors’ Recommendation

The Board of Directors, after considering various factors described under the caption “The Merger—Recommendation of the Board of Directors and Reasons for the Merger,” has unanimously (1) determined that the merger agreement, the merger and the other transactions contemplated by the merger agreement are fair to, advisable and in the best interests of TIBCO and stockholders; and (2) adopted and approved the merger agreement, the merger and the other transactions contemplated by the merger agreement. The Board of Directors unanimously recommends that you vote (1) “FOR” the adoption of the merger agreement; (2) “FOR” the adjournment of the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes to adopt the merger agreement at the time of the special meeting; and (3) “FOR

the proposal to approve, by non-binding, advisory vote, compensation that will or may become payable by TIBCO to our named executive officers in connection with the merger.

Solicitation of Proxies

The expense of soliciting proxies will be borne by TIBCO. We have retained Innisfree M&A Incorporated, a proxy solicitation firm, to solicit proxies in connection with the special meeting at a cost of approximately $[] plus expenses. We will also indemnify Innisfree M&A Incorporated against losses arising out of its provisions of these services on our behalf. In addition, we may reimburse banks, brokers and other nominees representing beneficial owners of shares for their expenses in forwarding soliciting materials to such beneficial owners. Proxies may also be solicited by our directors, officers and employees, personally or by telephone, email, fax, over the Internet or other means of communication. No additional compensation will be paid for such services.

Anticipated Date of Completion of the Merger

Assuming timely satisfaction of necessary closing conditions, including the approval by stockholders of the proposal to adopt the merger agreement, and the completion of a 15-business day marketing period that Parent may use to complete its financing for the merger, we anticipate that the merger will be consummated in the fourth calendar quarter of 2014.

 

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Appraisal Rights

If the merger is consummated, stockholders who do not vote in favor of the adoption of the merger agreement and who properly demand appraisal of their shares will be entitled to appraisal rights in connection with the merger under Section 262 of the DGCL. This means that holders of shares of common stock are entitled to have their shares appraised by the Delaware Court of Chancery and to receive payment in cash of the “fair value” of their shares of common stock, exclusive of any elements of value arising from the accomplishment or expectation of the merger, together with interest to be paid on the amount determined to be fair value, if any, as determined by the court, so long as they comply with the procedures established by Section 262 of the DGCL. Due to the complexity of the appraisal process, stockholders who wish to seek appraisal of their shares are encouraged to seek the advice of legal counsel with respect to the exercise of appraisal rights.

Stockholders considering seeking appraisal should be aware that the fair value of their shares as determined pursuant to Section 262 of the DGCL could be more than, the same as or less than the value of the consideration that they would receive pursuant to the merger agreement if they did not seek appraisal of their shares.

To exercise your appraisal rights, you must (1) submit a written demand for appraisal to TIBCO before the vote is taken on the adoption of the merger agreement; (2) not submit a proxy or otherwise vote in favor of the proposal to adopt the merger agreement; and (3) continue to hold your shares of common stock of record through the effective time of the merger. Your failure to follow exactly the procedures specified under the DGCL will result in the loss of your appraisal rights. The DGCL requirements for exercising appraisal rights are described in further detail in this proxy statement, and the relevant section of the DGCL regarding appraisal rights is reproduced and attached as Annex C to this proxy statement. If you hold your shares of common stock through a bank, brokerage firm or other nominee and you wish to exercise appraisal rights, you should consult with your bank, brokerage firm or other nominee to determine the appropriate procedures for the making of a demand for appraisal by such bank, brokerage firm or nominee.

Other Matters

At this time, we know of no other matters to be voted on at the special meeting. If any other matters properly come before the special meeting, your shares of common stock will be voted in accordance with the discretion of the appointed proxy holders.

Important Notice Regarding the Availability of Proxy Materials for the Stockholder Meeting to be Held on [], 2014

The proxy statement is available at www.tibco.com under “About Us—Investor Information—Proxy Information.”

Householding of Special Meeting Materials

Unless we have received contrary instructions, we may send a single copy of this proxy statement to any household at which two or more stockholders reside if we believe the stockholders are members of the same family. Each stockholder in the household will continue to receive a separate proxy card. This process, known as “householding,” reduces the volume of duplicate information received at your household and helps to reduce our expenses.

If you would like to receive your own set of our disclosure documents this year or in future years, follow the instructions described below. Similarly, if you share an address with another stockholder and together both of you would like to receive only a single set of our disclosure documents, follow these instructions.

 

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If you are a stockholder of record, you may contact us by writing to TIBCO Software Inc., Attention: Investor Relations, 3303 Hillview Avenue, Palo Alto, CA 94304 or calling our Investor Relations Department at (650) 846-1000. Eligible stockholders of record receiving multiple copies of this proxy statement can request householding by contacting us in the same manner. If a bank, broker or other nominee holds your shares, please contact your bank, broker or other nominee directly.

Questions and Additional Information

If you have any questions concerning the merger, the special meeting or the accompanying proxy statement, would like additional copies of the accompanying proxy statement or need help voting your shares of common stock, please contact our proxy solicitor:

Innisfree M&A Incorporated

501 Madison Avenue, 20th Floor

New York, NY 10022

Call toll-free: (877) 800-5185

 

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THE MERGER

This discussion of the merger is qualified in its entirety by reference to the merger agreement, which is attached to this proxy statement as Annex A and incorporated into this proxy statement by reference. You should read the entire merger agreement carefully as it is the legal document that governs the merger.

Parties Involved in the Merger

TIBCO Software Inc.

3303 Hillview Avenue

Palo Alto, CA 94304

TIBCO is a leading independent provider of infrastructure and business intelligence software. TIBCO’s software platform enables customers to create flexible, event-driven applications and deliver real-time, actionable insights.

TIBCO’s common stock is listed on NASDAQ under the symbol “TIBX.”

Balboa Intermediate Holdings, LLC

c/o Vista Equity Partners

401 Congress Avenue, Suite 3100

Austin, TX 78701

(512) 730-2400

Balboa Intermediate Holdings, LLC was formed on September 18, 2014, solely for the purpose of engaging in the transactions contemplated by the merger agreement and has not engaged in any business activities other than in connection with the transactions contemplated by the merger agreement and arranging of the equity financing and debt financing in connection with the merger.

Balboa Merger Sub, Inc.

c/o Vista Equity Partners

401 Congress Avenue, Suite 3100

Austin, TX 78701

(512) 730-2400

Balboa Merger Sub, Inc. was formed on September 18, 2014 solely for the purpose of engaging in the transactions contemplated by the merger agreement (including the merger) and has not engaged in any business activities other than in connection with the transactions contemplated by the merger agreement and arranging of the equity financing and debt financing in connection with the merger.

Parent and Merger Sub are each affiliated with VEPFV. In connection with the transactions contemplated by the merger agreement, (1) VEPFV has provided to Parent an equity commitment of up to $4.859 billion; and (2) Parent has obtained debt financing commitments from JPMorgan Chase Bank, N.A., Jefferies Finance LLC and certain of their respective affiliates for an aggregate amount of $2.9 billion, which will be available to fund a portion of the payments contemplated by the merger agreement (in each case, pursuant to the terms and conditions as described further under the caption “The Merger—Financing of the Merger”). After giving effect to the merger, TIBCO, as the surviving corporation, will be affiliated with VEPFV.

Effect of the Merger

Upon the terms and subject to the conditions of the merger agreement, Merger Sub will merge with and into TIBCO, with TIBCO continuing as the surviving corporation. As a result of the merger, TIBCO will become a wholly owned subsidiary of Parent, and our common stock will no longer be publicly traded and will be delisted from NASDAQ. In addition, our common stock will be deregistered under the Exchange Act, and we will no longer file periodic reports with the SEC. If the merger is completed, you will not own any shares of the capital stock of the surviving corporation.

 

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The effective time of the merger will occur upon the filing of a certificate of merger with the Secretary of State of the State of Delaware (or at such later time as we, Parent and Merger Sub may agree and specify in the certificate of merger).

Effect on TIBCO if the Merger is Not Completed

If the merger agreement is not adopted by stockholders or if the merger is not completed for any other reason, stockholders will not receive any payment for their shares of common stock. Instead, TIBCO will remain an independent public company, our common stock will continue to be listed and traded on NASDAQ and registered under the Exchange Act and we will continue to file periodic reports with the SEC. In addition, if the merger is not completed, we expect that management will operate the business in a manner similar to that in which it is being operated today and that stockholders will continue to be subject to the same risks and opportunities to which they are currently subject, including risks related to the highly competitive industry in which TIBCO operates and adverse economic conditions.

Furthermore, if the merger is not completed, and depending on the circumstances that caused the merger not to be completed, the price of our common stock may decline significantly. If that were to occur, it is uncertain when, if ever, the price of our common stock would return to the price at which it trades as of the date of this proxy statement.

Accordingly, if the merger is not completed, there can be no assurance as to the effect of these risks and opportunities on the future value of your shares of common stock. If the merger is not completed, the Board of Directors will continue to evaluate and review TIBCO’s business operations, strategic direction and capitalization, among other things, and will make such changes as are deemed appropriate. If the merger agreement is not adopted by stockholders or if the merger is not completed for any other reason, there can be no assurance that any other transaction acceptable to the Board of Directors will be offered or that TIBCO’s business, prospects or results of operation will not be adversely impacted.

In addition, under specified circumstances, TIBCO will be required to pay Parent a termination fee of $116.7 million upon the termination of the merger agreement, as further described under the caption “Proposal 1: Adoption of the Merger Agreement—Termination Fee.”

Merger Consideration

In the merger, each outstanding share of common stock (other than shares (1) held by TIBCO as treasury stock; (2) owned by Parent or Merger Sub; (3) owned by any direct or indirect wholly owned subsidiary of Parent or Merger Sub; and (4) held by stockholders who have properly and validly exercised their statutory rights of appraisal in respect of such shares of common stock in accordance with Section 262 of the DGCL) will be converted into the right to receive the per share merger consideration.

After the merger is completed, you will have the right to receive the per share merger consideration, but you will no longer have any rights as a stockholder (except that stockholders who properly exercise their appraisal rights will have the right to receive a payment for the “fair value” of their shares as determined pursuant to an appraisal proceeding as contemplated by Delaware law, as described below under the caption “—Appraisal Rights”).

Background of the Merger

The Board of Directors regularly evaluates TIBCO’s strategic direction and ongoing business plans with a view toward strengthening its core businesses and enhancing stockholder value. As part of this evaluation, the Board of Directors has from time to time considered a variety of strategic alternatives, including (1) the continuation of TIBCO’s current business plan; (2) significant modifications to TIBCO’s strategy, particularly

 

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around its software licensing model; (3) potential expansion opportunities into new business lines through acquisitions and combinations of TIBCO with other businesses; (4) potential divestitures of one or more product lines; and (5) a possible sale of the company.

In February 2014, TIBCO was approached by a strategic buyer, which we refer to as “Strategic A,” and the parties had initial conversations regarding a possible acquisition of TIBCO by Strategic A. Following these initial conversations, Strategic A indicated that it did not wish to proceed with additional discussions.

In early 2014, TIBCO management and the Board of Directors continued an ongoing process of evaluating TIBCO’s business with the goal of best positioning the company for growth and to deliver increased stockholder value. As part of this process, the Board of Directors reviewed TIBCO’s long-term strategic plan. The Board of Directors also continued to review TIBCO’s licensing model and the optimal license structure under which TIBCO should operate. For the past several years, many parts of the software industry generally have been, and continue to be, in a period of transition from a traditional licensing model toward a subscription-based model. TIBCO had begun to include a subscription option with some of its products while maintaining a traditional licensing model for other products. TIBCO management and the Board of Directors continually reviewed the status of TIBCO’s subscription efforts while evaluating a broader transition to a subscription-based model. The Board of Directors also reviewed and continued to evaluate the impact of a transition to a subscription-based model on TIBCO’s revenues, earnings and margins.

During this same period, TIBCO also encountered significant execution issues with respect to the sale of its products, resulting in a period of performance for the company that was below what it had experienced in the past.

Throughout early 2014, certain stockholders expressed concerns about TIBCO’s performance, management and governance.

In February 2014, as part of an ongoing effort to make additions to the Board of Directors and strengthen the management team, David J. West, the President and Chief Executive Officer, and a member of the board of directors, of Big Heart Pet Brands Inc., was appointed to the Board of Directors. In June 2014, Phillip M. Fernandez, the Chairman, President and Chief Executive Officer of Marketo, Inc., and Manuel Fernandez, managing director of SI Ventures and former Chairman, President and Chief Executive Officer of Gartner, Inc., were appointed to the Board of Directors. The Board of Directors had been looking to make changes in its composition since 2013, when it hired a national director search firm, and believed that Messrs. West, P. Fernandez and M. Fernandez brought important new skills and perspectives to the Board of Directors.

In the spring and summer of 2014, numerous financial sponsors made contact with Vivek Ranadivé, TIBCO’s Chairman and Chief Executive Officer, to indicate an interest in pursuing a broad array of strategic alternatives for the company, including an acquisition of the company or a capital injection or other transaction, with the proceeds used to undertake a significant stock repurchase. In response, Mr. Ranadivé and other members of TIBCO management held preliminary discussions with these financial sponsors in the ordinary course of business to better understand their proposals, and reported those discussions to the Board of Directors. At this point, the Board of Directors and TIBCO management decided not to pursue these inquiries further at that time because the Board of Directors and TIBCO management wanted to continue to focus on the company’s standalone plan.

On June 3, 2014, TIBCO pre-announced its fiscal second quarter results, which were below Wall Street expectations.

On June 5, 2014, the Board of Directors held a special meeting and discussed, among other things, the company’s standalone plan and growth challenges, as well as potential interest that TIBCO may expect from strategic and financial buyers. Representatives of Goldman Sachs, financial advisor to TIBCO, attended this meeting and presented on the general position of TIBCO and strategic alternatives that it could consider.

 

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On June 19, 2014, TIBCO formally announced its fiscal second quarter results. These results included revenue and earnings per share numbers that were below Wall Street expectations.

During the summer of 2014, TIBCO announced several new senior management appointments.

On June 23 and 24, 2014, TIBCO management held meetings with approximately 30 significant TIBCO stockholders as part of its ongoing investor relations efforts. At these meetings, TIBCO management discussed its recent financial performance and future strategy, and stockholders were given an opportunity to ask questions of TIBCO management.

On June 26, 2014, at a regularly-scheduled meeting of the Board of Directors, the Board of Directors discussed, among other things, the feedback that TIBCO management received during the recent meetings with stockholders. The Board of Directors also discussed the company’s standalone plan and growth challenges, as well as strategic alternatives available to TIBCO.

On July 11, 2014, at a special meeting of the Board of Directors, the Board of Directors discussed, among other things, recent stockholder communications. The Board of Directors also discussed receiving more detailed market analysis of the company from Goldman Sachs, and, accordingly, instructed Goldman Sachs to engage in a comprehensive review of the strategic alternatives available to TIBCO.

On July 29, 2014, at a special meeting of the Board of Directors, the Board of Directors discussed, among other things, TIBCO’s financial and operational performance and the possibility of undertaking a review of strategic alternatives. Following this discussion, the Board of Directors determined to explore a possible sale of the company and other strategic alternatives, and decided that it would begin this process by contacting a limited number of financial sponsors in order to understand their valuations of TIBCO after the financial sponsors received confidential due diligence information. Once that process was underway, the Board of Directors would then authorize contact with possible strategic buyers in a process designed to minimize business disruption and distraction of TIBCO management. Accordingly, the Board of Directors authorized contact with four financial sponsors to gauge their interest in pursuing an acquisition of TIBCO. Each of these financial sponsors had previously contacted Mr. Ranadivé regarding their interest in pursuing a transaction with TIBCO, and they were chosen by the Board of Directors both for their experience with the software industry and their ability to complete an acquisition of TIBCO. The Board of Directors determined not to contact two of the financial sponsors who expressed an interest in a financing transaction earlier in the summer of 2014, as those financial sponsors had been clear that they were only interested in a financing transaction with, and not an acquisition of, TIBCO. The Board of Directors further discussed the need for a detailed analysis of the company’s standalone value. Representatives of Wilson Sonsini Goodrich & Rosati, Professional Corporation, which we refer to as “WSGR,” outside legal counsel to TIBCO, attended a portion of this meeting.

On August 1, 2014, the Compensation Committee of the Board of Directors approved an amended and restated Executive Change in Control and Severance Plan that increased the severance benefits and medical benefits to be received, and the percentage of unvested equity awards that will vest, if an eligible participant experiences a qualifying termination of employment (involuntary termination other than for cause or voluntary termination with good reason) in connection with a change in control of TIBCO. The changes to the Executive Change in Control and Severance Plan were made by the Compensation Committee, after consultation with its independent compensation consultant and WSGR on current market practices, (1) in recognition that TIBCO’s recent performance did not meet expectations and possible exploration of strategic alternatives (including a sale of the company) required additional incentives to ensure that TIBCO management remained with the company and were appropriately focused on achieving TIBCO’s strategic goals; and (2) to more closely align TIBCO with current market practices.

During the weeks of August 4, 2014, and August 11, 2014, each of the four financial sponsors held a meeting with TIBCO management so that each financial sponsor could gain a better understanding of TIBCO and its strategy. Each of the financial sponsors was subsequently asked to provide a preliminary indication of its interest in an acquisition of TIBCO by August 15, 2014.

 

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On August 15, 2014, one of the financial sponsors notified TIBCO that it was not interested in pursuing an acquisition of the company but would be interested in a transaction to provide TIBCO with a capital injection, with the proceeds used to undertake a significant stock repurchase. The second financial sponsor declined to propose any transaction. The third financial sponsor, which we refer to as “Sponsor A,” provided a preliminary, non-binding indication of interest in pursuing an acquisition of TIBCO for a value of between $20.00 and $21.00 per share, and also indicated its interest in making a capital injection. The fourth financial sponsor, which we refer to as “Sponsor B,” provided a preliminary, non-binding indication of interest in pursuing an acquisition of TIBCO for a value of between $24.00 and $25.00 per share.

On August 16, 2014, the Board of Directors held a special meeting, with TIBCO management and representatives of Goldman Sachs and WSGR in attendance. During this meeting, (1) the Board of Directors reviewed the responses of the four financial sponsors previously contacted; (2) TIBCO management reviewed TIBCO’s current strategy, growth drivers and financial model, including an emerging alternative model based on an accelerated conversion to a subscription-based licensing model; (3) the representatives of Goldman Sachs reviewed their preliminary financial analysis of TIBCO; (4) the representatives of WSGR reviewed the fiduciary duties of the Board of Directors; and (5) the representatives of Goldman Sachs and WSGR reviewed with the Board of Directors possible strategic buyers of TIBCO. The Board of Directors then engaged in a discussion regarding TIBCO’s long-term strategy and the merits of undertaking a more formalized strategic review process. The Board of Directors also discussed the advisability of forming a special committee composed of independent directors to oversee and coordinate any strategic review process. Following this discussion, the Board of Directors met in executive session. At the conclusion of their meeting, the Board of Directors, acting by vote of the independent directors, determined to (1) engage in a further and thorough review of strategic alternatives ranging from a sale transaction to a financing transaction or other recapitalization to continuing to operate TIBCO as a standalone company; (2) form the Special Committee for the purpose of assisting the Board of Directors with this review; and (3) adopt the charter for the Special Committee. Nanci E. Caldwell, Eric C.W. Dunn and Mr. West were appointed as the members of the Special Committee. The Special Committee had authority to engage advisors and review all strategic alternatives available to TIBCO and to make a recommendation to the Board of Directors regarding a course of action.

On August 18, 2014, the Special Committee held its first meeting, with TIBCO management and representatives of Goldman Sachs and WSGR in attendance. The Special Committee began the meeting by reviewing the charter for the Special Committee adopted by the Board of Directors. The Special Committee reviewed the role of its financial and legal advisors and their relationship with TIBCO and TIBCO management, and determined to appoint Goldman Sachs as its financial advisor and WSGR as its legal advisor. In an executive session following the meeting, the Special Committee instructed representatives of WSGR to assist TIBCO management in preparing and negotiating an appropriate engagement letter with Goldman Sachs for the Special Committee’s review. This engagement letter was ultimately approved by the Special Committee and dated as of September 1, 2014.

Further at this meeting:

 

   

The representatives of WSGR reviewed the fiduciary duties of the Special Committee and the representatives of Goldman Sachs reviewed management’s financial models. The representatives of WSGR discussed with the Special Committee the process and considerations relating to a variety of potential transactions, including a “going private” transaction with a financial sponsor. The representatives of Goldman Sachs reviewed various strategic and financial buyers who might have an

  interest in acquiring TIBCO. Goldman Sachs initially grouped the strategic buyers into two broad categories, with the first category composed of nine companies (including Strategic A) that Goldman Sachs believed to have sufficient financial strength to acquire TIBCO and where TIBCO would appear to be a potential strategic fit. The second category was composed of various companies that might either have an interest in acquiring TIBCO but whom Goldman Sachs did not believe had adequate financial strength or were not an obvious strategic fit with TIBCO, or both. After discussion, the Special Committee authorized Goldman Sachs to contact each of the nine companies in the first category to determine their interest in an acquisition of TIBCO.

 

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The representatives of Goldman Sachs reviewed other financial sponsors with experience in the software industry and the ability to complete an acquisition of TIBCO. After discussion, the Special Committee authorized Goldman Sachs to contact three additional financial sponsors—one of which was Vista—to determine their interest in an acquisition of TIBCO. Each of these financial sponsors previously contacted Mr. Ranadivé regarding their interest in pursuing a transaction with TIBCO in the spring and summer of 2014.

 

   

The Special Committee and the representatives of Goldman Sachs and WSGR discussed the process for contacting the strategic and financial buyers approved by the Special Committee, as well as a potential timeline to negotiate and sign a transaction.

 

   

The Special Committee and the representatives of Goldman Sachs and WSGR discussed the appropriate response to the three financial sponsors who provided TIBCO with transaction proposals on August 15, 2014. Following discussion, the Special Committee instructed the representatives of Goldman Sachs to inform (1) the financial sponsor who proposed a capital injection that the Board of Directors was still considering the proposal but that there was no immediate future action required; (2) Sponsor A that, unless Sponsor A meaningfully improved its proposal, TIBCO was not interested in continuing discussions with Sponsor A; and (3) Sponsor B that it would be allowed to advance to the next round of the strategic review process and would be permitted to, among other things, conduct due diligence through an electronic data room being established by TIBCO.

 

   

The Special Committee and the representatives of Goldman Sachs and WSGR discussed, on a preliminary basis, other strategic alternatives available to TIBCO, including, among others, (1) a capital injection, with the proceeds used to undertake a significant stock repurchase or transformative acquisition; (2) the divestiture of one or more of TIBCO’s product lines; and (3) continuing to operate as a standalone company. The Special Committee instructed Goldman Sachs to undertake a comprehensive analysis of all strategic alternatives available to TIBCO (including continuing to operate the business on a standalone basis, both by pursuing its current strategy and by accelerating the transition to a subscription-based licensing model) in parallel with contacting the potential strategic and financial buyers approved by the Special Committee.

On August 21, 2014, the Special Committee held a meeting, with TIBCO management and representatives of Goldman Sachs and WSGR in attendance. The Special Committee and representatives of Goldman Sachs and WSGR discussed the appropriate financial model and type of information to provide to parties interested in pursuing an acquisition of TIBCO. Following discussion, the Special Committee determined that the Forecasts (as defined below in the section captioned “—Projections Prepared by TIBCO Management”), which were consistent with the Board of Directors’ standalone plan operating under its current strategy and not accelerating the transition to a subscription-based licensing model, would be the model presented.

At the meeting, the representatives of Goldman Sachs provided the Special Committee with an update on the outreach efforts to the potential strategic and financial buyers approved by the Special Committee. Representatives of Goldman Sachs noted that (1) one of the strategic buyers had determined not to participate in the process; (2) contacts with the other eight strategic buyers, including Strategic A, were in progress; and (3) introductory presentations with the three additional financial sponsors that had been identified at the Special Committee’s meeting on August 18, 2014, had either been completed or were being scheduled (which presentations were ultimately consistent with those provided to the four earlier financial sponsors that the Board of Directors authorized to be contacted at its meeting on July 29, 2014). The representatives of Goldman Sachs discussed with the Special Committee the possibility of contacting an additional strategic buyer who might have an interest in acquiring TIBCO and that possessed the financial strength to complete an acquisition. After discussion, the Special Committee authorized Goldman Sachs to contact this strategic buyer. In addition, the Special Committee and the representatives of Goldman Sachs and WSGR discussed whether it would be advisable for TIBCO to publicly announce that it was undertaking a review of strategic alternatives. The Special Committee made no final decisions in this regard and agreed to discuss the matter again at future meetings.

 

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On August 22, 2014, Sponsor B and its representatives were provided access to the electronic data room established by TIBCO.

On August 26, 2014, representatives of Goldman Sachs provided the Special Committee with an update on the outreach efforts to the potential strategic and financial buyers approved by the Special Committee. The representatives of Goldman Sachs noted that (1) two additional strategic buyers (for a total of three) had determined not to participate in the process; (2) introductory presentations had been scheduled at the request of two strategic buyers, including Strategic A; (3) Goldman Sachs was awaiting a response from four strategic buyers; (4) contact with the final strategic buyer was in progress; (5) introductory presentations with the three additional financial sponsors that had been identified at the Special Committee’s meeting on August 18, 2014, had either been completed or were being scheduled; and (6) Sponsor B was continuing with its due diligence.

On August 28, 2014, the Board of Directors held a special meeting, with TIBCO management and representatives of Goldman Sachs, WSGR and TIBCO’s public relations firm in attendance. During a portion of this meeting, the members of the Special Committee reviewed with the Board of Directors the current status of the process undertaken by the Special Committee. The Special Committee recommended, and the Board of Directors agreed, that Mr. Ranadivé should follow-up with personal calls to certain of the strategic buyers previously contacted by Goldman Sachs where Mr. Ranadivé had preexisting professional relationships with their senior leadership to discuss the strategic review process being conducted by the Special Committee. Prior to making these calls, Mr. Ranadivé, at the request of the Special Committee, discussed the limited scope and content of those conversations with representatives of Goldman Sachs and WSGR. After Mr. Ranadivé made these calls, representatives of Goldman Sachs made follow-up calls to these strategic buyers to further advise them of the process being conducted by the Special Committee.

In late August 2014, at the request of the Special Committee, all of the parties participating in the process were informed that TIBCO was seeking preliminary indications of interest by August 30, 2014.

On August 30, 2014, Vista provided a preliminary, non-binding indication of interest in pursuing an acquisition of TIBCO for a value of between $23.00 and $25.00 per share. Also on August 30, 2014, the two other additional financial sponsors that had been identified at the Special Committee’s meeting on August 18, 2014, determined not to participate in the process.

On August 31, 2014, Vista and its representatives were provided access to the electronic data room established by TIBCO.

On September 1, 2014, the Board of Directors held a special meeting, with TIBCO management and representatives of Goldman Sachs and WSGR in attendance. Also in attendance for a portion of this meeting were representatives of TIBCO’s public relations firm. During this meeting, the representatives of Goldman Sachs provided the Board of Directors with an update on the outreach efforts to the potential strategic and financial buyers approved by the Special Committee. The Board of Directors and the representatives of Goldman Sachs and WSGR discussed the potential timeline under consideration by the Special Committee to negotiate and sign a transaction. Management also provided the Board of Directors with preliminary fiscal third quarter results.

The Board of Directors and the representatives of Goldman Sachs, WSGR and TIBCO’s public relations firm discussed issuing a press release to publicly announce that TIBCO was undertaking a review of strategic alternatives. It was the consensus of the Board of Directors to issue this press release given certain rumors and speculation in the market, and the Board of Directors instructed TIBCO management and the representatives of Goldman Sachs, WSGR and TIBCO’s public relations advisor to proceed with finalizing this press release for issuance by TIBCO.

During the weeks of September 1, 2014, and September 8, 2014, TIBCO management participated in a number of separate diligence meetings with Sponsor B and Vista and their respective debt financing sources. The

 

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Special Committee was aware of these meetings, and TIBCO management was informed that it was not an appropriate time in the process for employment or other arrangements to be put in place following a transaction to be discussed in these or other meetings with interested parties. Representatives of Goldman Sachs and, at times, representatives of WSGR, were present for these meetings.

On September 3, 2014, TIBCO issued a press release stating that on August 16, 2014, the Board of Directors unanimously initiated a review of a variety of strategic and financial alternatives available to TIBCO through the formation of the Special Committee.

On September 4, 2014, the Special Committee held a meeting, with TIBCO management and representatives of Goldman Sachs and WSGR in attendance. The representatives of Goldman Sachs noted that (1) two additional strategic buyers (for a total of five) had determined not to participate in the process; (2) introductory presentations had been held with two strategic buyers, including Strategic A; (3) Goldman Sachs was awaiting a response from the three remaining strategic buyers; (4) two of the additional financial sponsors that had been identified at the Special Committee’s meeting on August 18, 2014, had determined not to participate in the process; and (5) Sponsor B and Vista were continuing with their due diligence.

On September 11, 2014, the Special Committee held a meeting, with TIBCO management and representatives of Goldman Sachs and WSGR in attendance. At the meeting:

 

   

The representatives of Goldman Sachs noted that (1) one additional strategic buyer (for a total of six) had determined not to participate in the process; (2) introductory presentations had been held with three strategic buyers, including Strategic A, with a follow-up meeting with one of these strategic buyers in the process of being scheduled; (3) Goldman Sachs was awaiting an initial response from the final remaining strategic buyer; and (4) Sponsor B and Vista were continuing with their due diligence.

 

   

The representatives of Goldman Sachs reviewed with the Special Committee inbound communications from five parties that expressed some desire in engaging with TIBCO following the September 3, 2014, public announcement that TIBCO was reviewing strategic alternatives. The Special Committee and the representatives of Goldman Sachs and WSGR discussed these communications, and the Special Committee ultimately determined that four of the five inbound communications did not constitute communications that were reasonably likely to result in a proposal to acquire TIBCO. However, the Special Committee instructed Goldman Sachs to continue to monitor each of these parties in case circumstances were to change. With respect to the fifth communication, which was from a financial sponsor, the Special Committee instructed Goldman Sachs to see if this sponsor was interested in participating in the process undertaken by the Special Committee. (This party ultimately determined not to participate in the process.) The representatives of Goldman Sachs also noted that two of the four financial sponsors who had previously indicated a willingness to provide a capital injection to TIBCO had recently spoken with Goldman Sachs about their continued interest in such a transaction, but, during these conversations, did not indicate any interest in an acquisition of TIBCO.

 

   

The Special Committee and the representatives of Goldman Sachs and WSGR discussed a recent communication from one of TIBCO’s major stockholders identifying four strategic buyers, in addition to the 10 already contacted by Goldman Sachs on behalf of the Special Committee, that the stockholder believed might have an interest in acquiring TIBCO. After discussion, the Special Committee instructed Goldman Sachs to contact all four of these additional strategic buyers to gauge their interest in pursuing an acquisition of TIBCO. All four of these strategic buyers subsequently declined to participate in the process.

 

   

The Special Committee and the representatives of Goldman Sachs and WSGR discussed the potential timeline to negotiate and sign a transaction, and the representatives of Goldman Sachs provided a general update to the Special Committee on the status of its financial analyses of strategic alternatives available to TIBCO.

 

   

The representatives of WSGR discussed with the Special Committee the material terms of the merger agreement to be sent to Sponsor B and Vista, including the (1) structure of the merger agreement;

 

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(2) process for negotiating with other parties who made an offer to acquire TIBCO after the merger agreement was signed; and (3) remedies available to TIBCO in the event that the counterparty to the merger agreement were to not consummate the merger.

 

   

After discussing the appropriate timing, the Special Committee instructed Goldman Sachs to request that Sponsor B and Vista each provide their final proposal for an acquisition of TIBCO by September 24, 2014, so that the Board of Directors could review any proposals at its previously-scheduled meeting on September 26, 2014. The Special Committee also instructed Goldman Sachs to continue a dialogue with the three strategic buyers, including Strategic A, who had participated in introductory presentations, and it was the consensus of the Special Committee that the timing for final proposals from Sponsor B and Vista might need to be delayed if one of these strategic buyers began to express increased interest in an acquisition of TIBCO.

On September 12, 2014, Goldman Sachs, on behalf of the Special Committee, sent a letter to Sponsor B and Vista explaining the procedures to be used in connection with the submission of final proposals and notifying them of the September 24, 2014, deadline authorized by the Special Committee.

Also on September 12, 2014, TIBCO management participated in a follow-up meeting with one of the strategic buyers.

During the week of September 15, 2014, TIBCO management participated in additional diligence meetings with Sponsor B and Vista and their respective debt financing sources. The Special Committee was aware of these meetings, and TIBCO management was informed that it was not an appropriate time in the process for employment or other arrangements to be put in place following a transaction to be discussed in these or other meetings with interested parties. Representatives of Goldman Sachs and, at times, representatives of WSGR, were present for certain of these meetings.

On September 15, 2014, Goldman Sachs, on behalf of the Special Committee, provided Sponsor B and Vista with a draft merger agreement that was consistent with the merger agreement reviewed with the Special Committee.

On September 18, 2014, TIBCO announced its fiscal third quarter results. These results included revenue and earnings per share numbers that were below Wall Street expectations. TIBCO also reduced its revenue and earnings per share guidance for the fourth quarter of 2014.

By September 22, 2014, the three possible remaining strategic buyers, including Strategic A, informed Goldman Sachs that they were not interested in proceeding in the process.

On September 22, 2014, Sponsor B provided a revised draft of the merger agreement proposed by the Special Committee and drafts of an equity commitment letter and limited guaranty. Sponsor B’s draft of the merger agreement included a substantial number of changes from the draft proposed by the Special Committee. In particular, Sponsor B’s draft of the merger agreement contemplated (1) closing conditions and regulatory approvals that were in addition to those expected by the Special Committee; and (2) a voting agreement with each of TIBCO’s directors and officers obligating them to vote in favor of an acquisition by Sponsor B in all instances.

On September 23, 2014, Sponsor B submitted a proposal to acquire TIBCO for $21.00 per share along with a signed debt commitment letter.

Early in the morning of September 24, 2014, Vista submitted a proposal to acquire TIBCO for $23.00 per share.

Later in the morning of September 24, 2014, the Special Committee held a meeting, with TIBCO management and representatives of Goldman Sachs and WSGR in attendance. The representatives of Goldman

 

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Sachs and WSGR reviewed with the Special Committee the proposals received from Sponsor B and Vista, and noted that all of the strategic buyers contacted by Goldman Sachs had determined not to participate in the process. The representatives of Goldman Sachs reviewed the market reaction to TIBCO’s fiscal third quarter earnings announcement on September 18, 2014. Following discussion of the two proposals, the Special Committee agreed to reconvene later in the afternoon for a previously-scheduled discussion regarding Goldman Sachs’ financial analysis of the strategic alternatives available to TIBCO.

Later in the morning of September 24, 2014, Vista provided a revised draft of the merger agreement proposed by the Special Committee and drafts of an equity commitment letter and limited guaranty. Vista’s draft of the merger agreement included significantly fewer changes than the draft provided by Sponsor B. Later in the morning, Vista provided a signed debt commitment letter.

During the afternoon of September 24, 2014, the Special Committee held a meeting, with TIBCO management and representatives of Goldman Sachs and WSGR in attendance. The representatives of Goldman Sachs noted that (1) all 14 strategic buyers had determined not to participate in the process; and (2) of the 10 financial sponsors approached, only Sponsor B and Vista were still actively considering an acquisition of TIBCO. The representatives of Goldman Sachs discussed with the Special Committee various conversations with Sponsor B and Vista regarding their respective proposals. The representatives of Goldman Sachs and WSGR then reviewed Goldman Sachs’ and WSGR’s analysis concerning the primary strategic alternatives available to TIBCO, including (1) a sale of the entire company; (2) a recapitalization and significant share repurchase; (3) the potential divestitures of one or more product lines; (4) a transformational acquisition of another company; and (5) continuing to operate the business on a standalone basis, both by pursuing its current strategy and by accelerating the transition to a subscription-based licensing model. At the conclusion of the meeting, the Special Committee authorized WSGR to begin negotiating the terms of the merger agreement with each of Sponsor B and Vista.

Early in the morning of September 25, 2014, WSGR provided legal counsel to Sponsor B and legal counsel to Vista with a revised draft of the merger agreement and limited guaranty. WSGR also provided comments on the equity commitment letters provided by Sponsor B and Vista and, later in the day, comments to the debt commitment letters provided by Sponsor B and Vista.

Early in the afternoon of September 25, 2014, Sponsor B (1) submitted a revised proposal to acquire TIBCO for $22.50 per share; (2) provided a revised draft of the merger agreement; and (3) accepted all of WSGR’s comments to the equity commitment letter and limited guaranty. Although the revised draft of the merger agreement contained only modest changes from the draft sent by WSGR, it (1) still contemplated a regulatory approval that was not expected by the Special Committee; and (2) required TIBCO to repatriate its offshore cash prior to the closing of the merger. Representatives of WSGR and representatives of legal counsel to Sponsor B discussed the revised draft of the merger agreement later that afternoon.

Early in the evening of September 25, 2014, Vista submitted a revised draft of the merger agreement and equity commitment letter and a new limited guaranty. Representatives of WSGR and representatives of legal counsel to Vista discussed the revised draft of the merger agreement and the limited guaranty later that evening.

Late in the evening of September 25, 2014, representatives of Goldman Sachs notified Sponsor B and Vista that the Board of Directors expected Sponsor B and Vista to provide final proposals to acquire TIBCO by early in the afternoon on September 26, 2014.

Early in the morning of September 26, 2014, WSGR provided legal counsel to Sponsor B and Vista with a revised draft of the merger agreement and provided legal counsel to Vista with a revised draft of the limited guaranty.

In the morning and into the afternoon of September 26, 2014, the Board of Directors and the Special Committee held a joint meeting, with TIBCO management and representatives of Goldman Sachs and WSGR in

 

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attendance. During the meeting, the representatives of Goldman Sachs and WSGR reviewed the proposals previously submitted by Sponsor B and Vista as well as the structure and key terms of the draft of the merger agreement submitted by each of Sponsor B and Vista, including the termination fees and the circumstances in which they would be payable. After discussion, the Board of Directors instructed Goldman Sachs and WSGR to work to increase the per share price in the proposals made by Sponsor B and Vista. The Board of Directors also discussed the financial model to be used by Goldman Sachs in the preparation of its financial analyses underlying any fairness opinion to be rendered, and ultimately instructed Goldman Sachs to use the Forecasts for such purposes.

Next, the representatives of Goldman Sachs provided the Board of Directors with a presentation on the primary strategic alternatives available to TIBCO. The representatives of WSGR reviewed the fiduciary duties of the Board of Directors.

During the meeting, the Board of Directors considered, and ultimately approved, a bonus program to incentivize key management during the period between signing the merger agreement and closing the merger. The Board of Directors based this decision in large part on the critical role that members of the management team would have in assisting with a timely completion of the transaction, including assisting with the debt financing process. The Board of Directors delegated to its Compensation Committee the authority to determine the bonus recipients and the amounts to which they would be entitled.

The Board of Directors concluded its meeting early in the afternoon of September 26, 2014, and agreed to meet again early the next morning to discuss any revisions to the proposals from Sponsor B and Vista.

During the afternoon of September 26, 2014, Sponsor B submitted a proposal to acquire TIBCO for $23.75 per share, and Vista submitted a proposal to acquire TIBCO for $23.85 per share. Aside from price, the only material differences between the two proposals were (1) the extra regulatory approval required by Sponsor B and its desire for TIBCO to repatriate its foreign cash prior to the closing of an acquisition; (2) Vista’s proposal regarding the timing of the marketing period to syndicate the debt financing necessary to consummate the acquisition (in particular, that this period not begin until after all stockholder and regulatory approvals were obtained); and (3) a larger termination fee, on a percentage basis, proposed by Vista to be payable by TIBCO if it were to, among other things, terminate the merger agreement in order to accept a superior proposal from a third party.

After reviewing the revised proposals from Sponsor B and Vista, representatives of Goldman Sachs and WSGR called representatives of Sponsor B and Vista and explained to both that their proposals were not materially differentiated. The representatives of Goldman Sachs and WSGR informed Sponsor B and Vista that each should submit a revised proposal by early in the evening of September 26, 2014, that contemplated both (1) an improved price per share; and (2) a lower termination fee, on a percentage basis, payable by TIBCO.

Early in the evening of September 26, 2014, representatives of Vista called representatives of Goldman Sachs to inform them that it was increasing its proposal to acquire TIBCO to $24.00 per share and it was proposing a lower termination fee, on a percentage basis, than it had proposed before. Approximately 30 minutes later, representatives of Goldman Sachs spoke with representatives of Sponsor B and were informed that Sponsor B would not increase the per share price of its proposal. The representatives of Goldman Sachs offered Sponsor B additional time to submit a revised proposal, but Sponsor B declined the offer.

Later in the evening of September 26, 2014, representatives of Goldman Sachs called representatives of Vista and informed them that Vista’s proposal was in the lead and that representatives of WSGR would be contacting representatives of legal counsel to Vista to try to finalize the merger agreement and related disclosure letter with the goal of signing the merger agreement, if approved by the Board of Directors, early the next morning. Representatives of WSGR subsequently contacted representatives of legal counsel to Vista and resolved the remaining open points in the merger agreement and disclosure letter.

Late in the evening of September 26, 2014, representatives of legal counsel to Vista called representatives of WSGR and stated that Vista was in the process of obtaining new debt financing but was interested in signing the

 

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merger agreement as soon as possible, rather than waiting for the new debt commitment letter to be finalized. Representatives of legal counsel to Vista stated that, as a result, Vista no longer intended to provide an executed debt commitment letter concurrently with signing the merger agreement and instead would provide an equity commitment for the full amount of the purchase price payable in the transaction. Legal counsel to Vista and WSGR worked throughout the night to negotiate and revise the merger agreement to reflect this new structure.

Early in the morning of September 27, 2014, the Special Committee and the Board of Directors held a joint meeting, with TIBCO management and representatives of Goldman Sachs and WSGR in attendance. During the meeting, representatives of Goldman Sachs and WSGR reviewed the terms of Vista’s proposal and the merger agreement. The representatives of WSGR reviewed the fiduciary duties of the Board of Directors. The representatives of Goldman Sachs reviewed the financial analysis of Goldman Sachs of the $24.00 per share consideration to be offered to TIBCO’s stockholders in the proposed merger. Following this presentation, the representatives of Goldman Sachs rendered Goldman Sachs’ opinion to the Board of Directors and the Special Committee, subsequently confirmed by delivery of a written opinion dated September 27, 2014, that, as of September 27, 2014, and based upon and subject to the factors and assumptions set forth therein, the $24.00 in cash per share of common stock to be paid to the holders (other than Parent and its affiliates) of common stock pursuant to the merger agreement was fair from a financial point of view to such holders of common stock. For more information about Goldman Sachs’ opinion, see below under the caption “—Fairness Opinion of Goldman, Sachs & Co.” Following this, the Board of Directors discussed potential reasons for and against entering into a transaction with Vista. After this discussion, the Special Committee unanimously recommended to the Board of Directors that it approve the transaction with Vista, after which the Board of Directors unanimously (1) determined that the merger agreement, the merger and the other transactions contemplated by the merger agreement are fair to, advisable and in the best interests of TIBCO and its stockholders; and (2) adopted and approved the merger agreement, the merger and the other transactions contemplated by the merger agreement and recommended that TIBCO’s stockholders vote in favor of adoption of the merger agreement at any meeting of TIBCO’s stockholders to be called for the purposes of acting on that recommendation.

Later in the morning of September 27, 2014, TIBCO and Vista signed the merger agreement and finalized the equity commitment letter and limited guaranty.

Later on September 27, 2014, and during the day on September 28, 2014, TIBCO and Vista worked to finalize the press release and related employee and customer communications concerning the merger.

On September 28, 2014, Vista delivered to TIBCO a copy of a signed debt commitment letter. This debt commitment letter did not replace or otherwise modify the equity commitment letter previously provided to TIBCO.

On September 29, 2014, prior to the opening of trading of the common stock on NASDAQ, TIBCO issued a press release announcing the entry into the merger agreement.

During the final hours of negotiating the transaction on September 26, 2014, in the process of finalizing TIBCO’s outstanding equity award and common stock numbers for inclusion in the merger agreement, Sponsor B and Vista were provided a spreadsheet containing information about TIBCO’s outstanding equity awards and common stock. Although the numbers contained in that spreadsheet accurately reflected TIBCO’s outstanding equity awards and common stock, the portion of the equity awards representing restricted stock was also included in the common stock outstanding number, as restricted stock is outstanding when issued. The spreadsheet did not specifically highlight this fact.

The proper capitalization numbers were reflected in TIBCO’s capitalization representation in drafts of the merger agreement provided to both Sponsor B and Vista and discussed with their respective legal counsel prior to the submission of any acquisition proposals on September 26, 2014, and that representation is also included in

 

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the executed version of the merger agreement. In particular, the capitalization representation specifically stated that the shares of restricted stock were included in the outstanding common stock number. In its September 27, 2014, presentation to the Board of Directors, Goldman Sachs, using the spreadsheet, used a share count that overstated TIBCO’s fully diluted common stock by the number of shares of restricted stock.

After announcement of the transaction, it was discovered that Goldman Sachs had used the overstated share count. This led Goldman Sachs to revise its analysis, on October 11, 2014, to reflect the Final Common Share Count (as defined below in the section captioned “—Fairness Opinion of Goldman, Sachs & Co.”). For additional information, see the section of this proxy statement captioned “—Fairness Opinion of Goldman, Sachs & Co.” Following the determination of the Final Common Share Count, it was determined that TIBCO’s implied enterprise value in the merger was approximately $4.2 billion and not $4.3 billion as reported in the press release issued by TIBCO on September 29, 2014.

On October 11, 2014, the Board of Directors met, with TIBCO management and representatives of Goldman Sachs and WSGR in attendance. All members of the Special Committee were present at the meeting. At this meeting, the Board of Directors reviewed and provided comments on the content of this proxy statement, and received an update on stockholder and market reaction to the announcement of the merger agreement. Representatives of Goldman Sachs also reviewed its revised analysis that reflected the Final Common Share Count, including each of the impacted calculations, and confirmed to the Board of Directors and the Special Committee that using the Final Common Share Count there would have been no change to the conclusion set forth in its fairness opinion delivered on September 27, 2014. Following this presentation, the Board of Directors met in executive session and concluded that the revised analysis provided by Goldman Sachs did not impact its recommendation in favor of the merger. The Board of Directors also received an update on the litigation that had been filed in connection with the transaction, as further described in the section captioned “—Legal Proceedings Regarding the Merger.”

Recommendation of the Board of Directors and Reasons for the Merger

Recommendation of the Board of Directors

The Board of Directors has unanimously (1) determined that the merger agreement, the merger and the other transactions contemplated by the merger agreement are fair to, advisable and in the best interests of TIBCO and its stockholders; and (2) adopted and approved the merger agreement, the merger and the other transactions contemplated by the merger agreement.

The Board of Directors unanimously recommends that you vote (1) “FOR” the adoption the merger agreement; (2) “FOR” the adjournment of the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes to adopt the merger agreement at the time of the special meeting; and (3) “FOR” the non-binding, advisory proposal to approve compensation that will or may become payable by TIBCO to its named executive officers in connection with the merger.

Reasons for the Merger

In evaluating the merger agreement, the merger and the other transactions contemplated by the merger agreement, the Board of Directors consulted with the Special Committee, TIBCO management, and its and the Special Committee’s financial advisor and outside legal counsel. In recommending that stockholders vote in favor of adoption of the merger agreement, the Board of Directors considered a number of factors, including the following (which factors are not necessarily presented in order of relative importance):

 

   

TIBCO’s business strategy, competitive position and management execution performance.

 

   

TIBCO’s business and operations, and its current and historical financial condition, results of operation and financial prospects.

 

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The relationship of the $24.00 per share merger consideration to the trading price of the common stock, including that the per share merger consideration constituted a premium of:

 

   

approximately 26% to the closing price of the common stock on September 23, 2014, the last trading day prior to public reports that multiple parties were competing to acquire TIBCO; and

 

   

approximately 24% to the closing price of the common stock on September 26, 2014, the last trading day prior to the date on which TIBCO entered into the merger agreement.

 

   

The multiples to revenues and earnings before interest, taxes, depreciation and amortization implied by the $24.00 per share merger consideration, as further described below under the caption “—Fairness Opinion of Goldman, Sachs & Co.”

 

   

The financial analysis presentation of Goldman Sachs in connection with the merger, and the opinion of Goldman Sachs delivered to the Special Committee and the Board of Directors that, as of September 27, 2014, and based upon and subject to the factors and assumptions set forth therein, the $24.00 per share in cash to be paid to holders of shares of common stock pursuant to the merger agreement was fair from a financial point of view to such holders, as more fully described below under the caption “—Fairness Opinion of Goldman, Sachs & Co.”

 

   

The fact that the all-cash merger consideration will provide certainty of value and liquidity to stockholders, while eliminating the effect of long-term business and execution risk to stockholders.

 

   

The Board of Directors’ belief that the Special Committee engaged in a thorough review of a potential sale and strategic alternatives, including that:

 

   

TIBCO issued a press release on September 3, 2014, regarding its review of strategic and financial alternatives;

 

   

Goldman Sachs, on behalf of the Special Committee, contacted a total of 24 parties, composed of 14 strategic buyers and 10 financial sponsors, in an effort to obtain the best value reasonably available to stockholders; and

 

   

Of these 24 parties, only Sponsor B and Vista made firm proposals to acquire TIBCO.

 

   

Based on its review of the process conducted by the Special Committee, the Board of Directors’ belief that $24.00 cash per share is the best price reasonably attainable for stockholders.

 

   

The Board of Directors’ view that the merger agreement was the product of arms’-length negotiation and contained customary terms and conditions.

 

   

The terms of the merger agreement and the related agreements, including:

 

   

That the equity commitment provided in favor of Parent was for an amount sufficient to cover the aggregate per share merger consideration, and that TIBCO is a named third party beneficiary of the equity commitment letter;

 

   

That the consummation of the merger is not subject to any financing condition;

 

   

TIBCO’s ability, under certain circumstances, to furnish information to and conduct negotiations with third parties regarding acquisition proposals;

 

   

TIBCO’s ability to terminate the merger agreement in order to accept a superior proposal, subject to paying Parent a termination fee of $116.7 million and other conditions of the merger agreement;

 

   

The fact that the Board of Directors believed that the termination fee of $116.7 million, which is approximately 2.8% of TIBCO’s implied enterprise value in the merger, is reasonable and not preclusive of other offers;

 

   

TIBCO’s entitlement to specific performance to prevent breaches of the merger agreement; and

 

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TIBCO’s entitlement to specific performance to cause the equity financing contemplated by the equity commitment letter to be funded.

 

   

The perceived risk of continuing as a standalone public company or pursuing other alternatives, including (1) modifications to TIBCO’s strategy, particularly around TIBCO’s software licensing model, and potential expansion opportunities into new business lines through acquisitions and combinations of TIBCO with other businesses; (2) the range of potential benefits to TIBCO’s stockholders of these alternatives; (3) the competitive landscape and the dynamics of the market for TIBCO’s products and technology; and (4) the assessment that no other alternatives were reasonably likely to create greater value for stockholders than the merger, taking into account execution risk as well as business, competitive, industry and market risk.

 

   

The Board of Directors’ view that the terms of the merger agreement would be unlikely to deter third parties from making a superior proposal, including the merger agreement’s terms and conditions as they relate to changes in the recommendation of the Board of Directors and the belief that the termination fee potentially payable to Parent is reasonable in light of the circumstances, consistent with or below fees in comparable transactions and not preclusive of other offers (see the sections captioned “Proposal 1: Adoption of the Merger Agreement—No Solicitation of Other Offers” and “Proposal 1: Adoption of the Merger Agreement—The Board of Directors’ Recommendation; Company Board Recommendation Changes”).

 

   

The fact that VEPFV provided a limited guaranty in favor of TIBCO that guarantees the payment of all of the liabilities and obligations of Parent and Merger Sub under the merger agreement, subject to an aggregate cap equal to $275.8 million plus reimbursement obligations (see the section below captioned “—Limited Guaranty”).

 

   

The fact that the Special Committee unanimously recommended the merger to the Board of Directors.

The Board of Directors also considered a number of uncertainties and risks concerning the merger, including the following (which factors are not necessarily presented in order of relative importance):

 

   

The risks and costs to TIBCO if the merger does not close, including the diversion of management and employee attention, and the potential effect on our business and relationships with customers and suppliers.

 

   

The fact that stockholders will not participate in any future earnings or growth of TIBCO and will not benefit from any appreciations in value of TIBCO, including any appreciation in value that could be realized as a result of improvements to our operations.

 

   

The vote of stockholders required to adopt the merger agreement is a majority of the total outstanding shares of common stock.

 

   

The requirement that TIBCO pay Parent a termination fee of $116.7 million under certain circumstances following termination of the merger agreement, including if the Board of Directors terminates the merger agreement to accept a superior proposal.

 

   

The restrictions on the conduct of our business prior to the consummation of the merger, including the requirement that we conduct our business in the ordinary course, subject to specific limitations, which may delay or prevent TIBCO from undertaking business opportunities that may arise before the completion of the merger and that, absent the merger agreement, TIBCO might have pursued.

 

   

The fact that an all cash transaction would be taxable to TIBCO’s stockholders that are U.S. persons for U.S. federal income tax purposes.

 

   

The fact that under the terms of the merger agreement, TIBCO is unable to solicit other acquisition proposals during the pendency of the merger.

 

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The significant costs involved in connection with entering into the merger agreement and completing the merger and the substantial time and effort of TIBCO management required to complete the merger, which may disrupt our business operations.

 

   

The fact that TIBCO’s business, sales operations and financial results could suffer in the event that the merger is not consummated.

 

   

The risk that the merger might not be completed and the effect of the resulting public announcement of termination of the merger agreement on the trading price of the common stock.

 

   

The fact that the completion of the merger will require antitrust clearance in the United States and from the European Commission.

 

   

The fact that TIBCO’s directors and officers may have interests in the merger that may be different from, or in addition to, those of TIBCO’s stockholders (see below under the caption “—Interests of TIBCO’s Directors and Executive Officers in the Merger”).

 

   

The fact that the announcement and pendency of the merger, or the failure to complete the merger, may cause substantial harm to TIBCO’s relationships with its employees (including making it more difficult to attract and retain key personnel and the possible loss of key management, technical, sales and other personnel), vendors and customers and may divert employees’ attention away from TIBCO’s day-to-day business operations.

The foregoing discussion is not meant to be exhaustive, but summarizes the material factors considered by the Board of Directors and the Special Committee in their consideration of the merger. After considering these and other factors, the Board of Directors and the Special Committee concluded that the potential benefits of the merger outweighed the uncertainties and risks. In view of the variety of factors considered by the Board of Directors and the complexity of these factors, the Board of Directors did not find it practicable to, and did not, quantify or otherwise assign relative weights to the foregoing factors in reaching its determination and recommendations. Moreover, each member of the Board of Directors applied his or her own personal business judgment to the process and may have assigned different weights to different factors. The Board of Directors unanimously adopted and approved the merger agreement, the merger and the other transactions contemplated by the merger agreement and recommends that stockholders adopt the merger agreement based upon the totality of the information presented to and considered by the Board of Directors.

Fairness Opinion of Goldman, Sachs & Co.

Goldman Sachs rendered its opinion to the Board of Directors and the Special Committee that, as of September 27, 2014, and based upon and subject to the factors and assumptions set forth therein, the $24.00 in cash per share of common stock to be paid to the holders (other than Parent and its affiliates) of common stock pursuant to the merger agreement was fair from a financial point of view to such holders of common stock.

The full text of the written opinion of Goldman Sachs, dated September 27, 2014, which sets forth assumptions made, procedures followed, matters considered and limitations on the review undertaken in connection with the opinion, is attached as Annex B to this proxy statement. Goldman Sachs provided its opinion for the information and assistance of the Board of Directors and the Special Committee in connection with their consideration of the transactions contemplated by the merger agreement, and such opinion is not a recommendation as to how any holder of common stock should vote with respect to such transactions or any other matter.

In connection with rendering the opinion described above and performing its related financial analyses, Goldman Sachs reviewed, among other things:

 

   

the merger agreement;

 

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annual reports to stockholders and Annual Reports on Form 10-K of TIBCO for the five fiscal years ended November 30, 2013;

 

   

Quarterly Reports on Form 10-Q of TIBCO;

 

   

certain other communications from TIBCO to its stockholders;

 

   

certain publicly available research analyst reports for TIBCO; and

 

   

certain internal financial analyses and forecasts for TIBCO prepared by its management, as approved for Goldman Sachs’ use by TIBCO, which are referred to collectively as the “Forecasts.”

Goldman Sachs also held discussions with members of the senior management of TIBCO regarding their assessment of the past and current business operations, financial condition and future prospects of TIBCO; reviewed the reported price and trading activity for the common stock; compared certain financial and stock market information for TIBCO with similar information for certain other companies the securities of which are publicly traded; reviewed the financial terms of certain recent business combinations in the software industry and in other industries; and performed such other studies and analyses, and considered such other factors, as it deemed appropriate.

For purposes of rendering the opinion, described above, Goldman Sachs, with the consent of the Board of Directors and the Special Committee, relied upon and assumed the accuracy and completeness of all of the financial, legal, regulatory, tax, accounting and other information provided to, discussed with or reviewed by, it, without assuming any responsibility for independent verification thereof. In that regard, Goldman Sachs assumed with the consent of the Board of Directors and the Special Committee that the Forecasts were reasonably prepared on a basis reflecting the best currently available estimates and judgments of the TIBCO management. Goldman Sachs did not make an independent evaluation or appraisal of the assets and liabilities (including any contingent, derivative or other off-balance-sheet assets and liabilities) of TIBCO or any of its subsidiaries, nor was any such evaluation or appraisal furnished to Goldman Sachs. Goldman Sachs assumed that all governmental, regulatory or other consents and approvals necessary for the consummation of the transactions contemplated by the merger agreement will be obtained without any adverse effect on the expected benefits of the transactions contemplated by the merger agreement in any way meaningful to its analysis. Goldman Sachs also assumed that the transactions contemplated by the merger agreement will be consummated on the terms set forth in the merger agreement, without the waiver or modification of any term or condition the effect of which would be in any way meaningful to its analysis.

Goldman Sachs’ opinion did not address the underlying business decision of TIBCO to engage in the transactions contemplated by the merger agreement, or the relative merits of the transactions contemplated by the merger agreement as compared to any strategic alternatives that may have been available to TIBCO; nor did it address any legal, regulatory, tax or accounting matters. Goldman Sachs’ opinion addressed only the fairness from a financial point of view to the holders (other than Parent and its affiliates) of shares of common stock, as of September 27, 2014, of the $24.00 in cash per share of common stock to be paid to such holders pursuant to the merger agreement. Goldman Sachs’ opinion did not express any view on, and its opinion did not address, any other term or aspect of the merger agreement or the transactions as contemplated thereby or any term or aspect of any other agreement or instrument contemplated by the merger agreement or entered into or amended in connection with the transaction, including, the fairness of the transactions as contemplated by the merger agreement to, or any consideration received in connection therewith by, the holders of any other class of securities, creditors, or other constituencies of TIBCO; nor as to the fairness of the amount or nature of any compensation to be paid or payable to any of the officers, directors or employees of TIBCO, or class of such persons, in connection with the transactions contemplated by the merger agreement, whether relative to the $24.00 in cash per share of common stock to be paid to the holders (other than Parent and its affiliates) of shares of common stock pursuant to the merger agreement or otherwise. In addition, Goldman Sachs’ opinion did not express any opinion as to the impact of the transactions contemplated by the merger agreement on the solvency or viability of TIBCO or Parent or the ability of TIBCO or Parent to pay their respective obligations when they

 

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come due. Goldman Sachs’ opinion was necessarily based on economic, monetary, market and other conditions as in effect on, and the information made available to it as of, September 27, 2014, and Goldman Sachs assumed no responsibility for updating, revising or reaffirming its opinion based on circumstances, developments or events occurring after September 27, 2014. Goldman Sachs’ opinion was approved by a fairness committee of Goldman Sachs.

The following is a summary of the material financial analyses delivered by Goldman Sachs to the Board of Directors and to the Special Committee on September 27, 2014 in connection with rendering the opinion described above. Following Goldman Sachs’ presentation to the Board of Directors and to the Special Committee on September 27, 2014, as described above under the caption “—Background of the Merger,” it was discovered that Goldman Sachs had used a share count that overstated TIBCO’s fully diluted common stock. Following that discovery, Goldman Sachs revised its analysis to reflect the actual common share count as of the date of the merger agreement, which we refer to as the “Final Common Share Count.” Goldman Sachs reviewed its revised analysis and confirmed to the Board of Directors and the Special Committee on October 11, 2014, that using the Final Common Share Count there would have been no change to the conclusion set forth in its fairness opinion. Goldman Sachs’ revised analysis reflected that, as a result of using the Final Common Share Count, TIBCO’s implied enterprise value in the transaction was approximately $4.2 billion rather than the approximately $4.3 billion presented in its September 27, 2014, analysis, and TIBCO’s implied equity value in the transaction was approximately $4.1 billion rather than the approximately $4.2 billion presented in its September 27, 2014, analysis.

The following summary does not purport to be a complete description of the financial analyses performed by Goldman Sachs, nor does the order of analyses described represent the relative importance or weight given to those analyses by Goldman Sachs. Some of the summaries of the financial analyses include information presented in tabular format. The tables must be read together with the full text of each summary and are alone not a complete description of Goldman Sachs’ financial analyses. Except as otherwise noted, the following quantitative information, to the extent that it is based on market data, is based on market data as it existed on or before September 25, 2014, and is not necessarily indicative of current market conditions.

Historical Trading Analysis

Goldman Sachs analyzed the $24.00 in cash per share of common stock to be paid to the holders of common stock pursuant to the merger agreement in relation to (1) the closing price of the common stock on September 25, 2014, the second to last trading date prior to the public announcement of the transactions contemplated by the merger agreement; (2) the closing price of the common stock on September 23, 2014, which we refer to as the “Undisturbed Date,” one day prior to September 24, 2014, the date on which there were public reports that multiple parties were competing to acquire TIBCO, which may have affected the common stock price; and (3) the thirty-day trading average price as of September 25, 2014, the second to last trading date prior to the public announcement of the transactions contemplated by the merger agreement.

This analysis indicated that the price per share to be paid to the holders of shares of common stock pursuant to the merger agreement represented:

 

   

a premium of 23.8% based on the closing market price of $19.38 per share on September 25, 2014, the second to last trading date prior to the public announcement of the transactions contemplated by the merger agreement;

 

   

a premium of 26.3% based on the closing market price of $19.00 per share on September 23, 2014, the Undisturbed Date; and

 

   

a premium of 15.2% based on the thirty-day trading average price of $20.84 as of September 25, 2014, the second to last trading date prior to the public announcement of the transactions contemplated by the merger agreement.

 

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Selected Companies Analysis

Goldman Sachs reviewed and compared certain financial information, ratios and public market multiples for TIBCO to corresponding financial information, ratios and public market multiples for the following publicly traded corporations in the software industry:

Service Oriented Architecture and Business Process Management:

 

   

Pegasystems Inc.

 

   

Progress Software Corporation

 

   

Software AG

Data Management and Infrastructure:

 

   

Informatica Corporation

 

   

Qlik Technologies Inc.

 

   

Teradata Corporation

Other Infrastructure Software:

 

   

Compuware Corporation

 

   

Citrix Systems, Inc.

 

   

Fortinet, Inc.

 

   

Red Hat, Inc.

Large Cap Software:

 

   

CA, Inc.

 

   

Check Point Software Technologies Ltd.

 

   

EMC Corporation

 

   

Hewlett-Packard Company

 

   

Oracle Corporation

 

   

Symantec Corporation

 

   

VMware, Inc.

Although none of the selected companies is directly comparable to TIBCO, the companies included were chosen because they are publicly traded companies with operations that for purposes of analysis may be considered similar to certain operations of TIBCO.

 

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Goldman Sachs calculated and compared various financial multiples and ratios based on estimates from the Institutional Brokers’ Estimate System, which we refer to as “IBES,” and Bloomberg, the Forecasts and market information, in each case as of September 25, 2014. With respect to each of the selected companies, Goldman Sachs calculated such company’s enterprise value, which we refer to as “EV,” which is the market capitalization of such company that Goldman Sachs derived based on the closing price of the shares of the applicable company’s common stock and the number of shares of common stock outstanding on a fully diluted basis as of September 25, 2014, plus the book value of debt less cash and cash equivalents and less investments in associates, as a multiple of revenue and a multiple of estimated earnings before interest, taxes, depreciation and amortization (adjusted for certain non-recurring charges), which we refer to as “EBITDA,” respectively, for calendar year 2014 and 2015, as provided by IBES and Bloomberg. With respect to TIBCO, Goldman Sachs calculated EV as a multiple of estimated EBITDA of TIBCO for calendar year 2014 and 2015 as provided by IBES and Bloomberg and the Forecasts. The results of these analyses are summarized as follows (all estimates calendarized to December 31):

 

Selected Companies

 
    Overall
range
    Median
SOA

&
BPM
    SOA
&
BPM
range
    Median data
management
and
infrastructure
    Data
management
and
infrastructure
range
    Median other
infrastructure
software
    Other
infrastructure
software
range
    Median
large
cap
software
    Large
cap
software
range
    TIBCO
(per IBES/
Bloomberg)
    TIBCO
(per
Forecasts)
 

CY2014E

  

                 

EV as a multiple of estimated revenue

   
 
0.6x-
8.4x
 
  
    2.1x       
 
1.9x-
3.0x
 
  
    2.7x        2.1x-4.1x        4.5x        3.0x-5.8x        2.6x       
 
0.6x-
8.4x
 
  
    3.2x        3.2x (1) 

EV as a multiple of estimated EBITDA

   
 
5.4x-
51.5x
 
  
    8.0x       
 
7.0x-
11.3x
 
  
    10.7x        7.4x-51.5x        16.7x        11.4x-26.3x        7.7x       
 
5.4x-
16.4x
 
  
    14.0x (2)      15.6x (3) 

CY2015E

                     

EV as a multiple of estimated revenue

   
 
0.6x-
7.9x
 
  
    1.9x       
 
1.8x-
2.9x
 
  
    2.5x        2.0x-3.5x        4.1x        3.1x-5.1x        2.6       
 
0.6x-
7.9x
 
  
    3.1x        2.9x (4) 

EV as a multiple of estimated EBITDA

   
 
5.3x-
37.0x
 
  
    7.8x       
 
6.8x-
9.7x
 
  
    9.3x        7.0x-37.0x        14.8x        9.8x-22.1x        7.1x       
 
5.3x-
13.9x
 
  
    14.7 (5)      13.3x (6) 

 

(1) Using the Final Common Share Count, referenced multiple would have been 3.1x.
(2) Using the Final Common Share Count, referenced multiple would have been 13.9x.
(3) Using the Final Common Share Count, referenced multiple would have been 15.3x.
(4) Using the Final Common Share Count, referenced multiple would have been 2.8x.
(5) Using the Final Common Share Count, referenced multiple would have been 14.6x.
(6) Using the Final Common Share Count, referenced multiple would have been 13.1x.

Goldman Sachs also analyzed the selected companies’ estimated price-to-earnings, which we refer to as “P/E,” ratios, calculated as the closing price of shares of each selected company’s common stock as of September 25, 2014 divided by its estimated earnings per share, which we refer to as “EPS,” for calendar year 2014 and 2015 as provided by IBES and Bloomberg, and compared those to the estimated P/E ratio of TIBCO for fiscal year 2014 and 2015 as provided by IBES and Bloomberg and the Forecasts. The results of these analyses are summarized as follows (all estimates calendarized to December 31):

 

Selected Companies

 

P/E Ratio

  Overall
range
    Median
SOA &
BPM
    SOA
&
BPM
range
    Median data
management
and
infrastructure
    Data
management
and
infrastructure
range
    Median other
infrastructure
software
    Other
infrastructure
software
range
    Median
large
cap
software
    Large
cap
software
range
    TIBCO
(per IBES/
Bloomberg)
    TIBCO
(per
Forecasts)
 

CY2014E

   
 
9.4x-
52.2x
 
  
    16.3x       
 
10.0x-
24.8x
 
  
    17.5x       
 
14.7-
20.4
 
  
    30.2x       
 
21.7x-
52.2x
 
  
    13.0x       
 
9.4x-
26.4x
 
  
    26.2x        28.3x   

CY2015E

   
 
8.9x-
70.0x
 
  
    15.7x       
 
10.1x-
20.4x
 
  
    18.1x       
 
13.3x-
70.0x
 
  
    25.6x       
 
18.9x-
43.2x
 
  
    12.1x       
 
8.9x-
22.2x
 
  
    26.4x        20.8x   

 

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Goldman Sachs also considered the selected companies’ estimated revenue growth rates and EBITDA growth rates, in each case, from calendar year 2014 to calendar year 2016 and the estimated EBITDA margin for calendar year 2015, as provided by IBES and Bloomberg, and compared those to the same estimated metrics of TIBCO as provided by IBES and Bloomberg and the Forecasts. The results of these analyses are summarized as follows (all estimates calendarized to December 31):

 

Selected Companies

 
    Overall
range
    Median
SOA &
BPM
    SOA &
BPM
range
    Median data
management
and
infrastructure
    Data
management
and
infrastructure
range
    Median other
infrastructure
software
    Other
infrastructure
software
range
    Median
large
cap
software
    Large
cap
software
range
    TIBCO
(per IBES/
Bloomberg)
    TIBCO
(per
Forecasts)
 

CY2014E -CY2016E revenue growth rate

   
 
(0.3)%-
16.1%
 
  
    2.3%       
 
1.5%-
3.1%
 
  
    11.3%       
 
6.3%-
16.1%
 
  
    13.4%       
 
9.5%-
14.0%
 
  
    4.2%       
 
(0.3)%-
15.4%
 
  
    2.9%        15.5%   

CY2014E -CY2016E EBITDA growth rate

   
 
0.1%-
40.9%
 
  
    4.2%       
 
3.8%-
4.6%
 
  
    13.9%       
 
4.4%-
40.9%
 
  
    15.3%       
 
5.5%-
17.6%
 
  
    5.8%       
 
0.1%-
17.5%
 
  
    (3.0)%        9.4%   

CY2015E EBITDA margin

   
 
9.5%-
58.4%
 
  
    27.5%       
 
19.0%-
36.9%
 
  
    26.6%       
 
9.5%-
28.8%
 
  
    29.5%       
 
20.5%-
31.8%
 
  
    37.4%       
 
12.2%-
58.4%
 
  
    21.2%        21.7%   

Selected Precedent Transactions Analysis

In addition, Goldman Sachs reviewed and analyzed the acquisition premia for certain publicly disclosed sale transactions involving sales to a strategic buyer, which we refer to as “Selected Strategic Transactions,” and sales to a private equity buyer, which we refer to as “Selected Private Equity Transactions,” in each case involving selected public software company targets that were announced from January 22, 2009 to September 18, 2014, with a transaction equity value of greater than $500 million, based on information obtained from Thomson SDC, Capital IQ and public filings:

Selected Strategic Transactions:

 

Date of Announcement

    

Acquirer

  

Target

January 2009

     Autonomy Corp. plc    Interwoven Inc.
July 2009      IBM    SPSS Inc.
September 2009      Adobe Systems Inc.    Omniture
May 2010      SAP America, Inc.    Sybase
August 2010      Intel Corporation    McAfee
September 2010      Hewlett-Packard Company    ArcSight
November 2010      Oracle Corporation    Art Technology Group
July 2011      NCR Corp.    Radiant Systems
August 2011      Hewlett-Packard Company    Autonomy Corp. plc
October 2011      Oracle Corporation    Rightnow Technologies
December 2011      SAP America, Inc.    SuccessFactors
February 2012      Oracle Corporation    Taleo Corp.
June 2012      Dell Inc.    Quest Software Inc.
August 2012      IBM    Kenexa Corp.
October 2012      Riverbed Technology, Inc.    OPNET Technologies
December 2012      Oracle Corporation    Eloqua
June 2013      Salesforce.com, Inc.    ExactTarget
July 2013      Cisco Systems, Inc.    Sourcefire
December 2013      Oracle Corporation    Responsys
January 2014      Dassault Systemes SA    Accelrys Inc.
June 2014      Oracle Corporation    MICROS Systems

September 2014

     SAP America, Inc.    Concur Technologies

 

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Selected Private Equity Transactions:

 

Date of Announcement

  

Acquirer

  

Target

November 2010    Attachmate Corporation    Novell
March 2011    Golden Gate Capital    Lawson Software
April 2011    Apax Partners LLP    Epicor Software Corporation
July 2011    Providence Equity Partners LLC    Blackboard Inc.
February 2012    Vista Equity Partners    Misys plc
August 2012    Thoma Bravo Fund IX L.P.    Deltek
November 2012    RedPrairie Corporation    JDA Software Group Inc.
May 2013    Bain, Golden Gate Capital, Insight    BMC Software
May 2013    Vista Equity Partners    Websense
September 2013    Vista Equity Partners    The Active Network
November 2013    Advent International Corporation    Unit 4 N.V.
September 2014    Thoma Bravo, LLC    Compuware Corporation

We refer to the Selected Strategic Transactions and the Selected Private Equity Transactions as the “Selected Transactions.” Although none of the Selected Transactions is directly comparable to the transactions contemplated by the merger agreement, the target companies in the Selected Transactions are companies with operations that, for the purposes of this analysis, may be considered similar to certain operations of TIBCO, such that the Selected Transactions may be considered similar to the transactions contemplated by the merger agreement. Using the information obtained from Thomson SDC, Capital IQ and public filings, the median premia for the Selected Transactions was calculated relative to the target’s closing share price one day prior to announcement, one week prior to announcement and one month prior to announcement, and Goldman Sachs calculated the median premia (1) for these Selected Transactions as 26.8%, 27.5% and 37.8%, respectively; and (2) for the Selected Private Equity Transactions as 10.8%, 11.9% and 12.8%, respectively.

Additionally, using the same information obtained from Thomson SDC, Capital IQ and public filings, the mean premia for the Selected Transactions was calculated relative to the target’s closing share price one day prior to announcement, one week prior to announcement and one month prior to announcement, and Goldman Sachs calculated the mean premia (1) for these Selected Transactions as 26.0%, 27.6% and 35.6%, respectively; and (2) for the Selected Private Equity Transactions as 10.4%, 14.8% and 20.0%, respectively.

For each of the Selected Private Equity Transactions, Goldman Sachs also calculated and compared the EV and the equity value of the target company based on the announced transaction price, as a multiple of the target company’s LTM EBITDA. The results of this analysis are summarized as follows:

 

     Range  

EV/LTM EBITDA

     12.0x –18.0x   

Goldman Sachs noted that TIBCO’s EV implied by the $24.00 in cash per share of common stock to be paid pursuant to the terms of the merger agreement as a multiple of TIBCO’s LTM Adjusted EBITDA was 18.0x. This analysis resulted in an illustrative range of implied equity values per share of $15.89 to $23.95. Using the Final Common Share Count, TIBCO’s EV implied by the $24.00 in cash per share of common stock to be paid pursuant to the terms of the merger agreement as a multiple of TIBCO’s LTM Adjusted EBITDA would have resulted in an LTM Adjusted EBITDA multiple of 17.6x, and this analysis would have resulted in an illustrative range of implied equity values per share of $16.27 to $24.53.

Illustrative Discounted Cash Flow Analysis

Goldman Sachs performed an illustrative discounted cash flow analysis based on the Forecasts to determine a range of illustrative present values per share. Using discount rates ranging from 11.0% to 13.0%, reflecting an estimate of TIBCO’s weighted average cost of capital, Goldman Sachs derived an illustrative range of implied enterprise values for TIBCO by calculating the present value, as of August 31, 2014, of Unlevered Free Cash Flows (calculated as shown under the caption “Projections Prepared by TIBCO Management—Forecasts”)

 

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expected to be generated by TIBCO during the last quarter of 2014 and from fiscal years 2015 through 2025 as reflected in the Forecasts and calculated the present value of a range of illustrative terminal values for TIBCO as of December 31, 2025, derived by applying perpetuity growth rates ranging from 4.0% to 6.0% to the terminal year estimate. Goldman Sachs took the implied enterprise values it derived from this analysis, adjusted for debt, cash and cash equivalents and short-term investments as presented on TIBCO’s balance sheet as of August 31, 2014, and divided the results by the number of fully diluted shares outstanding, which resulted in an illustrative range of implied equity values per share of $16.72 to $27.42. Using the Final Common Share Count, the illustrative discounted cash flow analysis would have resulted in an illustrative range of implied equity values per share of $17.11 to $28.07.

Illustrative Present Value of Future Share Price Analysis

Goldman Sachs performed an illustrative analysis of the implied present value of the future price per share of common stock, using the Forecasts. This analysis is designed to provide an indication of the implied present value of a theoretical future value of a company’s equity on a per share basis as a function of such company’s estimated future earnings and its assumed future price/earnings multiples. For this analysis Goldman Sachs calculated the implied present values per share of common stock as of fiscal years 2016 through 2020 by applying P/E multiples ranging from 18.0x to 24.0x to non-GAAP earnings per common share estimates for each of the fiscal years from 2016 through 2020, using the Forecasts and then discounted these theoretical future values of TIBCO’s equity on a per share basis to present values as of August 31, 2014 using an illustrative discount rate of 12.9%, reflecting Goldman Sachs’ estimate of the cost of equity for TIBCO. These analyses resulted in the following implied present values per share of common stock:

 

Fiscal Year

   Implied values per share based on
forward P/E multiples of 18.0x – 24.0x
 

2016

   $ 17.46 - $23.29   

2017

   $ 18.51 - $24.68   

2018

   $ 18.83 - $25.10   

2019

   $ 19.19 - $25.59   

2020

   $ 19.52 - $26.03   

This analysis resulted in an illustrative range of implied equity values per share of $17.46 to $26.03

Premia Analysis

Goldman Sachs reviewed and analyzed the acquisition premia for certain publicly disclosed sale transactions involving information technology or consumer electronics targets since 2003 with a transaction value of greater than $500 million in which a majority stake was acquired, excluding any transactions with premiums in excess of 150% or less than (50)%, calculated relative to the target’s closing share price one day prior to announcement, based on information obtained from Capital IQ. Using such data for these 335 selected transactions, for each year for the years 2003 to 2014 (through September 25, 2014), Goldman Sachs calculated the annual average acquisition premia for these transactions for the applicable years. The results of this analysis are summarized as follows:

 

Year

   Average Acquisition  Premia
One Day Prior to Announcement
 

2003

     25

2004

     22

2005

     19

2006

     18

2007

     18

2008

     21

2009

     30

2010

     30

2011

     30

2012

     28

2013

     24

2014 (through September 25, 2014)

     28

 

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Based on these results, Goldman Sachs calculated the median premia of these annual averages as 24% for the years 2003 through 2013.

Based on analyzing the same 335 transactions described above, Goldman Sachs also calculated the median premia for the transactions analyzed above, calculated relative to the target’s closing share price one day prior to announcement. The results of this analysis are summarized as follows:

 

Premium One Day

Prior to Announcement

        Number of Deals  

< 0%

       24   

0-10%

       74   

10-20%

       67   

20-30%

       61   

30-40%

       42   

> 40%

       67   

Based on these results, Goldman Sachs calculated the median premia of these individual transactions as 21% for the years 2003 to 2014 (through September 25, 2014). This analysis resulted in an illustrative range of implied equity values per share of $20.90 to $26.60.

The preparation of a fairness opinion is a complex process and is not necessarily susceptible to partial analysis or summary description. Selecting portions of the analyses or of the summary set forth above, without considering the analyses as a whole, could create an incomplete view of the processes underlying Goldman Sachs’ opinion. In arriving at its fairness determination, Goldman Sachs considered the results of all of its analyses and did not attribute any particular weight to any factor or analysis considered by it. Rather, Goldman Sachs made its determination as to fairness on the basis of its experience and professional judgment after considering the results of all of its analyses. No company or transaction used in the above analyses as a comparison is directly comparable to TIBCO or the transactions contemplated by the merger agreement.

Goldman Sachs prepared these analyses for purposes of Goldman Sachs providing its opinion to the Board of Directors and the Special Committee of the Board of Directors as to the fairness from a financial point of view to the holders (other than Parent and its affiliates) of common stock, as of the date of the opinion, of the $24.00 in cash per share of common stock to be paid pursuant to the merger agreement. These analyses do not purport to be appraisals nor do they necessarily reflect the prices at which businesses or securities actually may be sold. Analyses based upon forecasts of future results are not necessarily indicative of actual future results, which may be significantly more or less favorable than suggested by these analyses. Because these analyses are inherently subject to uncertainty, being based upon numerous factors or events beyond the control of the parties or their respective advisors, none of TIBCO, Goldman Sachs or any other person assumes responsibility if future results are materially different from those forecast.

The consideration to be paid pursuant to the merger agreement was determined through arm’s-length negotiations between TIBCO and Parent and was approved by the Board of Directors. Goldman Sachs provided advice to the Board of Directors and the Special Committee during these negotiations. Goldman Sachs did not, however, recommend any specific amount of consideration to TIBCO, the Board of Directors or the Special Committee or that any specific amount of consideration constituted the only appropriate consideration for the transactions contemplated by the merger agreement.

As described above, Goldman Sachs’ opinion to the Board of Directors and to the Special Committee was one of many factors taken into consideration by the Board of Directors and the Special Committee in making their determination to adopt the merger agreement. The foregoing summary does not purport to be a complete description of the analyses performed by Goldman Sachs in connection with the fairness opinion and is qualified in its entirety by reference to the written opinion of Goldman Sachs attached as Annex B.

 

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Goldman Sachs and its affiliates are engaged in advisory, underwriting and financing, principal investing, sales and trading, research, investment management and other financial and non-financial activities and services for various persons and entities. Goldman Sachs and its affiliates and employees, and funds or other entities they manage or in which they invest or have other economic interests or with which they co-invest, may at any time purchase, sell, hold or vote long or short positions and investments in securities, derivatives, loans, commodities, currencies, credit default swaps and other financial instruments of TIBCO, Parent, any of their respective affiliates and third parties, including Vista Equity Partners III, LLC, an affiliate of Parent, which we refer to as “VEPIII,” and its affiliates and portfolio companies, or any currency or commodity that may be involved in the transactions contemplated by the merger agreement. Goldman Sachs acted as financial advisor to the Board of Directors and the Special Committee in connection with, and has participated in certain of the negotiations leading to, the transactions contemplated by the merger agreement. In connection with its services as financial advisor to the Board of Directors and the Special Committee, Goldman Sachs has received and expects to receive additional fees in connection with the transactions contemplated by the merger agreement, the principal portion of which are contingent upon consummation of the transactions contemplated by the merger agreement, and TIBCO has agreed to reimburse certain of Goldman Sachs’ expenses arising, and indemnify it against certain liabilities that may arise, out of its engagement. Goldman Sachs has provided certain financial advisory and/or underwriting services to TIBCO and/or its affiliates from time to time for which its Investment Banking Division has received, and may receive, compensation. During the two year period ended September 27, 2014, the Investment Banking Division of Goldman Sachs received compensation for financial advisory and/or underwriting services provided directly to VEPIII and/or to its affiliates and portfolio companies (which may include companies that are not controlled by VEPIII) of approximately $7.5 million. Goldman Sachs may also in the future provide financial advisory and/or underwriting services to TIBCO and its affiliates and to VEPIII and its affiliates and portfolio companies for which its Investment Banking Division may receive compensation. Affiliates of Goldman Sachs also may have co-invested with VEPIII and its affiliates from time to time and may have invested in limited partnership units of affiliates of VEPIII from time to time and may do so in the future.

The Special Committee selected Goldman Sachs as their financial advisor because it is an internationally recognized investment banking firm that has substantial experience in transactions similar to the transactions contemplated by the merger agreement. Pursuant to a letter agreement dated September 1, 2014, the Board of Directors engaged Goldman Sachs to act as financial advisor to the Board of Directors and the Special Committee in connection with the transactions contemplated by the merger agreement and certain other transactions. Pursuant to the terms of this engagement letter, TIBCO has agreed to pay Goldman Sachs a transaction fee of approximately $47.4 million, of which $500,000 became due prior to the announcement of the transactions contemplated by the merger agreement and the remainder of which is contingent upon consummation of such transactions, and TIBCO has agreed to reimburse certain of Goldman Sachs’ expenses arising, and indemnify Goldman Sachs against certain liabilities that may arise, out of its engagement.

Projections Prepared by TIBCO Management

TIBCO does not, as a matter of course, publicly disclose projections as to its future financial performance. However, in September 2014, we provided Sponsor B and Vista, in connection with their due diligence review, copies of the Forecasts. TIBCO management also prepared, and reviewed with the Board of Directors, an alternate set of financial forecasts that reflected a more aggressive transition to a subscription-based licensing model, which we refer to as the “Accelerated Subscription Case.” The Accelerated Subscription Case was not shared with Sponsor B or Vista. We refer to the Forecasts and the Accelerated Subscription Case together as the “Projections.”

Copies of the Forecasts and the Accelerated Subscription Case were also provided to Goldman Sachs and, at the instruction of the Board of Directors, Goldman Sachs relied on the Forecasts in performing its financial analysis summarized under the caption “—Fairness Opinion of Goldman, Sachs & Co.” The Forecasts were the only financial forecasts with respect to TIBCO used by Goldman Sachs in performing such financial analysis.

 

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The Projections were not prepared with a view to public disclosure and are included in this proxy statement only because the Forecasts (in respect of fiscal year 2014 and fiscal year 2015 only) were made available, in whole or in part, to Sponsor B and Vista in connection with their due diligence review of TIBCO, and the Forecasts were made available to Goldman Sachs for use in connection with its financial analysis summarized under the caption “—Fairness Opinion of Goldman, Sachs & Co.” The Projections were not prepared with a view to compliance with (1) generally accepted accounting principles as applied in the United States, which we refer to as “GAAP;” (2) the published guidelines of the SEC regarding projections and forward-looking statements; or (3) the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of prospective financial information. Furthermore, PricewaterhouseCoopers LLP, our independent registered public accountant, has not examined, reviewed, compiled or otherwise applied procedures to the Projections and, accordingly, assumes no responsibility for, and expresses no opinion on, them. The Projections included in this proxy statement have been prepared by, and are the responsibility of, TIBCO management. The Projections were prepared solely for internal use by TIBCO and are subjective in many respects.

Readers of this proxy statement are cautioned not to place undue reliance on the specific portions of the Projections set forth below. Although a summary of the Projections is presented with numerical specificity, they reflect numerous assumptions and estimates as to future events made by TIBCO management that they believed were reasonable at the time the Projections were prepared, taking into account the relevant information available to TIBCO management at the time. However, this information is not fact and should not be relied upon as being necessarily indicative of actual future results. Important factors that may affect actual results and cause the Projections not to be achieved include general economic conditions, accuracy of certain accounting assumptions, changes in actual or projected cash flows, competitive pressures, changes in tax laws and integration risks associated with recent acquisitions. In addition, the Projections do not take into account any circumstances or events occurring after the date that they were prepared and do not give effect to the merger. As a result, there can be no assurance that the Projections will be realized, and actual results may be materially better or worse than those contained in the Projections. The inclusion of this information should not be regarded as an indication that the Board of Directors, TIBCO, Goldman Sachs or any other recipient of this information considered, or now considers, the Projections to be predictive of actual future results. In addition, the Board of Directors and TIBCO management have not to date made a decision to pursue the Accelerated Subscription Case. The summary of the Projections is not included in this proxy statement in order to induce any stockholder to vote in favor of the proposal to adopt the merger agreement or any of the other proposals to be voted on at the special meeting. We do not intend to update or otherwise revise the Projections to reflect circumstances existing after the date when made or to reflect the occurrence of future events, even in the event that any or all of the assumptions underlying the Forecasts are shown to be in error or no longer appropriate.

As referred to below, EBITDA is a financial measure commonly used in the software industry but is not defined under GAAP. EBITDA represents income before interest, income taxes, depreciation and amortization. We believe that EBITDA is a performance measure that provides securities analysts, investors and other interested parties with a measure of operating results unaffected by differences in capital structures, capital investment cycles and ages of related assets among otherwise comparable companies in our industry. We further believe that EBITDA is frequently used by securities analysts, investors and other interested parties in their evaluation of companies, many of which present an EBITDA measure when reporting their results. We believe that EBITDA facilitates company-to-company operating performance comparisons by adjusting for potential differences caused by variations in capital structures (affecting net interest expense), taxation (such as the impact of differences in effective tax rates or net operating losses), and the age and book depreciation of facilities and equipment (affecting relative depreciation expense), which may vary for different companies for reasons unrelated to operating performance. EBITDA has limitations, including that it is not necessarily comparable to other similarly titled financial measures of other companies due to the potential inconsistencies in the method of calculation.

 

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The Projections are forward-looking statements. For information on factors that may cause TIBCO’s future results to materially vary, see the information under the caption “Forward-Looking Statements.”

Forecasts

($ millions)

 

                Stub Period                                                                    
    FY 2013A     FY 2014E     FY14 Q4     FY 2015E     FY 2016E     FY 2017E     FY 2018E     FY 2019E     FY 2020E     FY2021E     FY2022E     FY2023E     FY2024E     FY2025E  

Total Revenue

  $ 1,070      $ 1,083 (1)    $ 317      $ 1,191 (2)    $ 1,297      $ 1,415      $ 1,548      $ 1,701      $ 1,870      $ 2,037      $ 2,200      $ 2,364      $ 2,517      $ 2,655   

% Growth

    4     1       10     9     9     9     10     10     9     8     7     6     5

EBITDA

  $ 265      $ 220 (3)    $ 80      $ 258 (4)    $ 293      $ 334      $ 381      $ 435      $ 497      $ 551      $ 605      $ 650      $ 692      $ 730   

% Margin

    25     20     25     22     23     24     25     26     27     27     27     27     27     27

% Growth

    (47 )%      (17 )%        17     14     14     14     14     14     11     10     7     6     5

Depreciation

  $ 16      $ 18      $ 5      $ 20      $ 21      $ 23      $ 25      $ 27      $ 30      $ 32      $ 37      $ 42      $ 45      $ 47   

EBIT (ex-SBC)

  $ 249      $ 202      $ 75      $ 238 (5)    $ 272      $ 311      $ 356      $ 408      $ 467      $ 518      $ 568      $ 608      $ 647      $ 683   

Stock Based Compensation

  $ (54   $ (38   $ (6   $ (42   $ (45   $ (50   $ (54   $ (60   $ (65   $ (61   $ (62   $ (64   $ (65   $ (67

Unlevered Free Cash Flow

                           

EBIT

  $ 195      $ 164      $ 69      $ 197      $ 227      $ 262      $ 302      $ 349      $ 402      $ 457      $ 506      $ 544      $ 582      $ 615   

Tax (Expense) I Benefit

  $ (45   $ (53   $ (18   $ (59   $ (64   $ (71   $ (82   $ (94   $ (109   $ (124   $ (135   $ (144   $ (154   $ (163

% Tax Rate

    (23 )%      (32 )%      (25 )%      (30 )%      (28 )%      (27 )%      (27 )%      (27 )%      (27 )%      (27 )%      (27 )%      (27 )%      (27 )%      (27 )% 

Unlevered Earnings after Taxes

    151        112        52        138        163        191        220        254        293        334        372        400        428        452   

(+) D&A

    16        18        5        20        21        23        25        27        30        32        37        42        45        47   

(-) Capital Expenditures

    (19     (24     (6     (25     (27     (28     (30     (32     (35     (38     (40     (42     (45     (47

(+) Decrease in WC

    15        16        4        9        5        6        6        7        7        6        5        5        2        0   

Unlevered Free Cash Flow

  $ 163      $ 122      $ 55      $ 141      $ 163      $ 191      $ 221      $ 256      $ 295      $ 335      $ 373      $ 405      $ 430      $ 453   

FCF growth

          15.6     15.8     17.3     15.6     15.8     15.5     13.3     11.6     8.4     6.4     5.3

Reconciliation: EBIT to GAAP Net Income

                           
GAAP reconciliation:   FY 2013A                                                                                

EBIT (ex-SBC)

    249                             

Stock Based Compensation

    (54                          

Amortization

    (37                          

Restructuring

    (13                          

Acquisition-related

    (2                          
 

 

 

                           

EBIT

    144                             

Interest

    (34                          

Tax (Expense)/Benefit

    (26                          

% Tax Rate

    24                          
 

 

 

                           

GAAP Net Income

    84                             

 

(1) The number provided to Sponsor B and Vista was $1,083.7 million.
(2) The number provided to Sponsor B and Vista was $1,212 million.
(3) The number provided to Sponsor B and Vista was $218.3 million.
(4) The number provided to Sponsor B and Vista was $262 million.
(5) The number provided to Sponsor B and Vista was $242 million.

 

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Accelerated Subscription Case

($ millions)

 

                Stub Period                                                                    
    FY 2013A     FY 2014E     FY14 Q4     FY 2015E     FY 2016E     FY 2017E     FY 2018E     FY 2019E     FY 2020E     FY2021E     FY2022E     FY2023E     FY2024E     FY2025E  

Total Revenue

  $ 1,070      $ 1,083      $ 316      $ 1,105      $ 1,154      $ 1,208      $ 1,349      $ 1,520      $ 1,702      $ 1,906      $ 2,134      $ 2,369      $ 2,582      $ 2,711   

% Growth

    4     1       2     4     5     12     13     12     12     12     11     9     5

EBITDA

  $ 265      $ 219      $ 79      $ 172      $ 150      $ 127      $ 183      $ 254      $ 329      $ 418      $ 524      $ 643      $ 768      $ 877   

% Margin

    25     20     25     16     13     11     14     17     19     22     25     27     30     32

% Growth

    (47 )%      (17 )%        (22 )%      (13 )%      (15 )%      44     39     30     27     25     23     19     14

Depreciation

  $ 16      $ 18      $ 5      $ 20      $ 21      $ 23      $ 25      $ 27      $ 30      $ 33      $ 37      $ 41      $ 45      $ 47   

EBIT (ex-SBC)

  $ 249      $ 201      $ 75      $ 152      $ 129      $ 104      $ 158      $ 227      $ 299      $ 385      $ 486      $ 601      $ 723      $ 829   

Stock Based Compensation

  $ (54   $ (38   $ (6   $ (42   $ (45   $ (50   $ (54   $ (60   $ (65   $ (73   $ (82   $ (91   $ (99   $ (104

Unlevered Free Cash Flow

                           

EBIT

  $ 195      $ 163      $ 69      $ 110      $ 84      $ 55      $ 104      $ 167      $ 234      $ 311      $ 404      $ 510      $ 623      $ 725   

Tax (Expense) I Benefit

  $ (45   $ (52   $ (17   $ (33   $ (23   $ (15   $ (28   $ (45   $ (63   $ (84   $ (108   $ (135   $ (165   $ (192

% Tax Rate

    (23 )%      (32 )%      (25 )%      (30 )%      (28 )%      (27 )%      (27 )%      (27 )%      (27 )%      (27 )%      (27 )%      (27 )%      (27 )%      (27 )% 

Unlevered Earnings after Taxes

    151        111        52        77        60        40        76        122        171        227        297        375        458        533   

(+) D&A

    16        18        5        20        21        23        25        27        30        33        37        41        45        47   

(-) Capital Expenditures

    (19     (24     (6     (25     (27     (28     (30     (32     (35     (38     (41     (43     (45     (47

(+) Decrease in WC

    15        16        4        9        5        6        6        7        7        6        5        3        1        0   

Unlevered Free Cash Flow

  $ 163      $ 121      $ 54      $ 81      $ 60      $ 40      $ 76      $ 124      $ 173      $ 228      $ 297      $ 376      $ 459      $ 533   

FCF growth

          (33.6 )%      (25.8 )%      (32.6 )%      89.4     62.0     39.7     32.1     30.4     26.6     22.1     16.0

Reconciliation: EBIT to GAAP Net Income

                           
GAAP reconciliation:   FY 2013A                                                                                

EBIT (ex-SBC)

    249                             

Stock Based Compensation

    (54                          

Amortization

    (37                          

Restructuring

    (13                          

Acquisition-related

    (2                          
 

 

 

                           

EBIT

    144                             

Interest

    (34                          

Tax (Expense)/Benefit

    (26                          

% Tax Rate

    24                          
 

 

 

                           

GAAP Net Income

    84                             

 

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Interests of TIBCO’s Directors and Executive Officers in the Merger

When considering the recommendation of the Board of Directors that you vote to approve the proposal to adopt the merger agreement, you should be aware that our directors and executive officers have interests in the merger that are different from, or in addition to, the interests of stockholders generally, as more fully described below. The Board of Directors was aware of and considered these interests to the extent that they existed at the time, among other matters, in approving the merger agreement and the merger and recommending that the merger agreement be adopted by stockholders.

Arrangements with Parent

As of the date of this proxy statement, none of our executive officers has entered into any agreement with Parent or any of its affiliates regarding employment with, or the right to purchase or participate in the equity of, the surviving corporation or one or more of its affiliates. Prior to or following the closing of the merger, however, certain of our executive officers have had and may continue to have discussions, or may enter into agreements with, Parent or Merger Sub or their respective affiliates regarding employment with, or the right to purchase or participate in the equity of, the surviving corporation or one or more of its affiliates.

Insurance and Indemnification of Directors and Executive Officers

The surviving corporation and Parent will indemnify, defend and hold harmless, and advance expenses to current or former directors, officers and employees of TIBCO with respect to all acts or omissions by them in their capacities as such at any time prior to the effective time of the merger (including any matters arising in connection with the merger agreement or the transactions contemplated thereby), to the fullest extent that TIBCO would be permitted by applicable law and to the fullest extent required by the organizational documents of TIBCO or its subsidiaries as in effect on the date of the merger agreement. Parent will cause the certificate of incorporation, bylaws or other organizational documents of the surviving corporation and its subsidiaries to contain provisions with respect to indemnification, advancement of expenses and limitation of director, officer and employee liability that are no less favorable to the current or former directors, officers and employees of TIBCO and its subsidiaries than those set forth in the TIBCO’s and its subsidiaries’ organizational documents as of the date of the merger agreement. The surviving corporation and its subsidiaries will not, for a period of six years from the effective time of the merger, amend, repeal or otherwise modify these provisions in the organizational documents in any manner that would adversely affect the rights of the current or former directors, officers and employees of TIBCO and its subsidiaries.

The merger agreement also provides that prior to the effective time of the merger, TIBCO may purchase a six year prepaid “tail” policy on the same terms and conditions as Parent would be required to cause the surviving corporation and its subsidiaries to purchase as discussed below. TIBCO’s ability to purchase a “tail” policy is subject to a cap on the premium equal to 300% of the aggregate annual premiums currently paid by the TIBCO for its existing directors’ and officers’ liability insurance and fiduciary insurance for its last full fiscal year. If TIBCO does not purchase a “tail” policy prior to the effective time of the merger, for at least six years after the effective time of the merger, Parent will (1) cause the surviving corporation and its other subsidiaries to maintain in full force and effect, on terms and conditions no less advantageous to the current or former directors, officers and employees of TIBCO and its subsidiaries, the existing directors’ and officers’ liability insurance and fiduciary insurance maintained by the TIBCO as of the date of the merger agreement; and (2) not, and will not permit the surviving corporation or its other subsidiaries to, take any action that would prejudice the rights of, or otherwise impede recovery by, the beneficiaries of any such insurance, whether in respect of claims arising before or after the effective time of the merger. The “tail” policy will cover claims arising from facts, events, acts or omissions that occurred at or prior to the effective time of the merger, including the transactions contemplated in the merger agreement. The obligation of Parent or the surviving corporation, as applicable, is subject to an annual premium cap of 300% of the aggregate annual premiums currently paid by TIBCO for such insurance, but Parent or the surviving corporation will purchase as much of such insurance coverage as possible for such amount. For more information, see the section of this proxy statement captioned “Proposal 1: Adoption of the Merger Agreement—Indemnification and Insurance.”

 

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Treatment of Equity-Based Awards

Treatment of Stock Options

As of the record date, there were [] outstanding stock options held by our directors and executive officers. As of the effective time of the merger, each outstanding option to purchase shares of common stock, whether or not vested, will be cancelled and converted into the right to receive an amount in cash (without interest and subject to any applicable withholding or other taxes, or other amounts as required by law) equal to the product of (1) the total number of shares of common stock subject to such option as of the effective time of the merger; and (2) the amount, if any, by which $24.00 exceeds the exercise price per share of common stock underlying such stock option. Each option with an exercise price per share equal to or greater than $24.00 per share will be cancelled without consideration.

Treatment of Restricted Stock Awards and Restricted Stock Units

As of the record date, there were [] outstanding shares of restricted stock and [] outstanding RSUs held by our directors and executive officers. As of the effective time of the merger, the vesting conditions or restrictions applicable to each share of restricted stock and each RSU will lapse and each such share of restricted stock and RSU will be converted into the right to receive an amount in cash (without interest and subject to any applicable withholding or other taxes, or other amounts as required by law) equal to the product of (1) the total number of shares of restricted stock or shares of common stock subject to such RSU as of the effective time of the merger; and (2) $24.00.

Treatment of Performance-Based Restricted Stock Unit Awards

Each PRSU will be treated in accordance with the grant documents. In addition, there will be no further acceleration or eligibility to vest triggered by, or resulting from, the merger, and each PRSU whose performance criteria has not been satisfied will be terminated without consideration immediately prior to the effective time of the merger. For those PRSUs that are not terminated for no consideration, the vesting conditions or restrictions applicable to each such PRSU will lapse and each such PRSU will be converted into the right to receive an amount in cash (without interest and subject to any applicable withholding or other taxes, or other amounts as required by law) equal to the product of (1) the total number of shares of common stock subject to such PRSU as of the effective time of the merger; and (2) $24.00. With respect to outstanding PRSUs, only those granted in fiscal year (1) 2010 that are currently vested but deferred; (2) 2011 that are earned but unvested; and (3) 2014 will receive any payment in connection with the merger.

Bonuses

Certain of our executive officers will receive transaction bonuses in consideration of services provided in connection with the consummation of the merger. Payment of these bonuses is conditioned on, among other things, (1) remaining employed by TIBCO until the closing of the merger; and (2) assisting with the completion of the transactions contemplated by the merger agreement. If an executive officer eligible to receive a transaction bonus is terminated other than for cause, death or disability prior to the closing of the merger, then the executive officer remains eligible to receive the transaction bonus, subject to the executive officer signing an agreement releasing all claims relating to such executive officer’s employment with TIBCO.

The bonuses potentially payable to our named executive officers are:

 

Named Executive Officer

   Amount  

Vivek Ranadivé

   $ 4,000,000   

Murray Rode

   $ 1,000,000   

William R. Hughes

   $ 500,000   

James Johnson

   $ 500,000   

 

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Payments Upon Termination Following Change-in-Control

Executive Change in Control Arrangements

Employment Agreement with our Chief Executive Officer

We are a party to an employment agreement with Mr. Ranadivé that was amended and restated in February 2012.

If Mr. Ranadivé’s employment is terminated without cause or by Mr. Ranadivé for good reason and the termination occurs within three months prior to and up to twelve months following a change in control, he will receive, subject to the terms and conditions of such employment agreement, (1) 24 months of continued base salary and paid coverage under our medical, dental and vision benefit plans; (2) a lump-sum payment equal to two times the average of his actual annual incentive award for the two fiscal years immediately preceding the fiscal year in which the change in control occurs; and (3) except to such greater extent (with respect to performance awards) as may be provided in the applicable equity award agreement, 100% vesting of all his equity awards. In addition, Mr. Ranadivé will have 24 months to exercise any equity awards that have accelerated vesting described in the preceding sentence, but in no event beyond the original expiration of the award. If Mr. Ranadivé’s employment terminates due to his death or disability, then except as otherwise provided in the applicable equity award agreement, his then-outstanding equity awards will accelerate vesting as if he had remained employed for an additional twelve months and all applicable performance goals will be assumed to have been achieved at target level during this period.

The receipt of any severance benefits described in the prior paragraph is subject to (1) Mr. Ranadivé signing and not revoking a separation agreement and release of claims in a form reasonably acceptable to us; and (2) Mr. Ranadivé not soliciting any person to modify his or her employment or consulting relationship with us and not intentionally diverting business away from us for a period of twelve months in the case of a termination not involving a change in control and for a period of 24 months in the case of a termination involving a change in control. In addition, the receipt of severance benefits in connection with a change in control is also subject to Mr. Ranadivé’s agreement not to engage in competition with us beginning from the date of termination and ending on the date on which he no longer receives the base salary payments described above.

Employment Agreement with our President

We are a party to an employment agreement with Todd Bradley. On September 28, 2014, it was announced that Mr. Bradley will leave TIBCO in the near future to pursue other opportunities.

If Mr. Bradley’s employment is terminated without cause or by Mr. Bradley for good reason and the termination occurs within three months prior to and up to twelve months following a change in control, he will receive, subject to the terms and conditions of such employment agreement, (1) 24 months of continued base salary and paid coverage under our medical, dental and vision benefit plans; (2) a lump-sum payment equal to two times the average of his actual annual incentive award for the two fiscal years immediately preceding the fiscal year in which the change in control occurs; (3) except to such greater extent (with respect to performance awards) as may be provided in the applicable equity award agreement, 100% vesting of all his equity awards; and (4) any transferability restrictions on Mr. Bradley’s initial equity grant lapse. In addition, Mr. Bradley will have 24 months to exercise any equity awards that have accelerated vesting described in the preceding sentence, but in no event beyond the original expiration of the award. If Mr. Bradley’s employment terminates due to his death or disability, then except as otherwise provided in the applicable equity award agreement, his then-outstanding equity awards will accelerate vesting as if he had remained employed for an additional twelve months (and for Mr. Bradley’s initial equity grant, as if he had remain employed through December 15, 2015) and all applicable performance goals will be assumed to have been achieved at target level during this period.

The receipt of any severance benefits described in the prior paragraph is subject to (1) Mr. Bradley signing and not revoking a separation agreement and release of claims in a form reasonably acceptable to TIBCO; and (2) Mr. Bradley not soliciting any person to modify his or her employment or consulting relationship with us and

 

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not intentionally diverting business away from TIBCO for a period of twelve months in the case of a termination not involving a change in control and for a period of 24 months in the case of a termination involving a change in control. In addition, the receipt of severance benefits in connection with a change in control is also subject to Mr. Bradley’s agreement not to engage in competition with TIBCO beginning from the date of termination and ending on the date on which he no longer receives the base salary payments described above.

Executive Change in Control and Severance Plan

We have adopted an Executive Change in Control and Severance Plan, which we refer to as the “Change in Control and Severance Plan,” that applies to certain of our executive officers. Pursuant to the terms of the Change in Control and Severance Plan, if on the date of the change in control or within 24 months after the completion of a change in control, such executive officer (other than Messrs. Ranadivé or Bradley) terminates his or her employment for good reason or is terminated by TIBCO for reasons other than cause, death or permanent disability, that person will receive (1) a lump sum payment equal to 15 months of base salary and 15 months of the target annual incentive award (in each case, based on the applicable tier to which such executive officer is assigned in the Change in Control and Severance Plan); (2) 15 months of paid medical and dental coverage; and (3) if such termination occurs within 12 months after the date of the change in control, 100% of accelerated vesting of his or her outstanding and unvested equity awards with the applicable performance goals (if any) deemed achieved at target levels, if applicable to such executive officer.

The receipt of any severance benefits described in the prior paragraph is subject to the executive officer signing an agreement releasing all claims relating to such employee’s employment with us and agreeing not to disparage us, our directors or our executive officers.

Important Terms

This section makes use of several important terms, which are defined below.

“Severance agreements” collectively refers to the employment agreement with Mr. Ranadivé, the employment agreement with Mr. Bradley and the Change in Control and Severance Plan.

A “change in control” for purposes of the Severance Agreements generally consists of any of the following: (1) a sale of all or substantially all of our assets; (2) any merger, consolidation, or other business combination transaction of TIBCO with or into another corporation, entity, or person, other than a transaction where the holders immediately prior to the transaction continue to hold at least a majority of the voting power or stock of TIBCO; (3) the direct or indirect acquisition by any person, or persons acting as a group, of beneficial ownership or a right to acquire beneficial ownership of shares representing a majority of the voting power of the then outstanding shares of TIBCO; (4) a contested election of directors, as a result of which or in connection with which the persons who were directors before such election or their nominees cease to constitute a majority of the Board of Directors; and (5) a dissolution or liquidation of TIBCO.

“Cause” for purposes of the employment agreement with Mr. Ranadivé and the employment agreement with Mr. Bradley generally consists of any of the following: (1) an act of dishonesty or fraud in connection with the performance of his responsibilities to us with the intention that such act result in his substantial personal enrichment; (2) conviction of, or plea of nolo contendere to, a felony; (3) willful failure to perform his duties or responsibilities; or (4) a violation or breach of any fiduciary or contractual duty to us which results in material damage to us or our business.

“Cause” for purposes of the Change in Control and Severance Plan and the transaction bonus generally consists of any of the following: (1) fraud or personal dishonesty in connection with employment at TIBCO that is intended to result in substantial gain or personal enrichment at our expense; (2) conviction of, or a plea of nolo contendere to, a felony; (3) any act of gross misconduct or failure to perform a material component of his or her responsibilities in connection with employment at TIBCO that is materially injurious to us; and (4) continued substantial violations of his or her employment duties after he or she has received written demand for performance from TIBCO.

 

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“Good reason” for purposes of the employment agreement with Mr. Ranadivé and the employment agreement with Mr. Bradley generally consists of any of the following without Mr. Ranadivé’s or Mr. Bradley’s written consent: (1) a material reduction in position or duties other than, with respect to Mr. Ranadivé, removal from the position of Chairman if the Board of Directors decides to separate the roles of our Chief Executive Officer and Chairman; (2) a material reduction in base salary or target annual incentive award unless a reduction also applies to substantially all other executive officers and which reduces the base salary and/or target annual incentive by a percentage reduction that is no greater than 10%; (3) in the case of Mr. Ranadivé only, a material and significant reduction in the aggregate compensation paid to him pursuant to our employee benefits package unless a reduction also applies to substantially all other executive officers and reduces the level of the aggregate value of the employee benefits by a percentage reduction that is no greater than 10%; (4) relocation of his primary place of business for the performance of his duties by more than thirty (30) miles; or (5) in the case of Mr. Bradley only, a material breach of his employment agreement.

“Good Reason” for purposes of the Change in Control and Severance Plan generally consists of any of the following without the executive officer’s written consent: (1) a material reduction in the person’s authority, status or responsibilities if such reduction is imposed without cause; (2) a reduction in base salary unless the base salary of substantially all other employees is reduced; (3) a reduction in certain benefits unless the benefits of substantially all other employees also is reduced; and (4) the relocation of the executive’s principal place of business to a location which is more than 30 miles away.

Golden Parachute Compensation

In accordance with Item 402(t) of Regulation S-K, the table below sets forth the compensation that is based on or otherwise relates to the merger that will or may become payable to each of our named executive officers in connection with the merger. Please see the previous portions of this section for further information regarding this compensation.

The amounts indicated in the table below are estimates of the amounts that would be payable assuming, solely for purposes of this table, that the merger is consummated on December 1, 2014, and that the employment of each of the named executive officers was terminated other than for cause or the named executive officer resigned for good reason, in each case on that date. TIBCO’s executive officers will not receive pension, non-qualified deferred compensation, tax reimbursement or other benefits in connection with the merger.

Some of the amounts set forth in the table would be payable solely by virtue of the consummation of the merger. In addition to the assumptions regarding the consummation date of the merger and the termination of employment, these estimates are based on certain other assumptions that are described in the footnotes accompanying the table below. Accordingly, the ultimate values to be received by a named executive officer in connection with the merger may differ from the amounts set forth below.

Golden Parachute Compensation

 

Name

   Cash ($) (1)      Equity ($) (2)      Perquisites/
Benefits ($)
    Total ($)  

Vivek Ranadivé

     5,496,200         14,982,000         35,285 (3)      14,513,485   

Murray Rode

     2,125,000         5,955,000         35,992 (4)      8,115,992   

Jim Johnson

     1,350,000         3,000,000         28,051 (4)      4,378,051   

William R. Hughes

     1,467,500         4,938,312         36,116 (4)      6,441,928   

Todd Bradley

     1,400,000         9,600,000         29,268 (3)      11,029,268   

Murat Sonmez (5)

     0         0         0        0   

Matthew Langdon (5)

     0         0         0        0   

Peter Lee (5)

     0         0         0        0   

 

(1) Represents potential cash severance payments under an employment agreement or the Change in Control and Severance Plan, as applicable, and transaction bonus payments.

 

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(2) Represents unvested in-the-money options, shares of restricted stock, RSUs and, with respect to PRSUs, those that will receive consideration in the merger. Does not include PRSUs already vested under our 2010 Long Term Incentive Plan (“LTIP”), the receipt of which has been deferred but will be paid out on closing and that are described in the table under the caption “Equity Interests of TIBCO’s Executive Officers and Non-Employee Directors.”
(3) Amount represents reimbursement (based on applicable COBRA costs) for the total applicable premium cost for medical, dental and vision coverage for a 24-month period.
(4) Amount represents reimbursement for the total applicable premium cost for medical and dental coverage under COBRA for a 15-month period.
(5) Messrs. Sonmez, Langdon and Lee are former named executive officers of TIBCO and are included pursuant to SEC disclosure rules. Mr. Sonmez resigned effective August 1, 2014; Mr. Langdon resigned effective May 13, 2014; and Mr. Lee resigned effective January 24, 2014. The amounts are based solely upon publicly available data and information still retained by TIBCO.

Equity Interests of TIBCO’s Executive Officers and Non-Employee Directors

The following table sets forth the number of shares of common stock and the number of shares of common stock underlying equity awards currently held by each of TIBCO’s executive officers and non-employee directors, in each case that either are currently vested or that will vest in connection with the merger, assuming that the effective time of the merger occurs on December 1, 2014. The table also sets forth the values of these shares and equity awards based on the $24.00 per share merger consideration (minus the applicable exercise price for the options). No new shares of common stock or equity awards were granted to any executive officer or non-employee director in contemplation of the merger.

Equity Interests of TIBCO’s Executive Officers and Non-Employee Directors

 

Name

  Shares Held
(#) (1)
    Shares Held
($)
    Options (#)     Options ($)     2014
PRSUs Held
(#) (2)
    2104
PRSUs
Held ($)
    Total ($)  

Todd Bradley

    400,000        9,600,000                9,600,000   

Nanci Caldwell

    74,700        1,792,800        100,000        1,783,000            3,575,800   

Eric Dunn

    163,500        3,924,000        80,000        1,345,600            5,269,600   

Manuel Fernandez

    22,500        540,000                540,000   

Phillip Fernandez

    22,500        540,000                540,000   

William R. Hughes

    370,763        8,898,312            110,000        2,640,000        11,538,312   

Peter Job

    236,657        5,679,768                5,679,768   

James Johnson

    50,000        1,200,000            75,000        1,800,000        3,000,000   

Thomas Laffey

    341,594        8,198,256                8,198,256   

Vivek Ranadivé

    9,953,827        238,891,848        1,934,918        32,692,026        250,000        6,000,000        277,583,874   

Murray Rode

    459,799        11,035,176        34,375        573,459        125,000        3,000,000        14,608,635   

Rajnish Verma

    215,488        5,171,712            75,000        1,800,000        6,971,712   

David West

    22,500        540,000                540,000   

Philip Wood

    211,182        5,068,368        80,000        1,345,000            6,413,368   

Murat Sonmez (3)

    300,000        7,200,000                7,200,000   

Matthew Langdon (3)

    55,000        1,320,000                1,320,000   

Peter Lee (3)

    135,000        3,240,000                3,240,000   

 

 

(1) Includes shares directly held, PRSUs earned and vested under the 2010 LTIP and other restricted stock units that have been deferred, PRSUs granted in 2011 but not yet vested, and other shares that will be accelerated due to the vesting and settlement of shares of restricted stock and RSUs in connection with the merger as of December 1, 2014.

 

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(2) Includes only PRSUs granted in 2014 and assumes that such PRSUs will be awarded at the maximum target amount. Excludes 2012 LTIP and 2013 LTIP.
(3) Messrs. Sonmez, Langdon and Lee are former named executive officers of TIBCO and are included pursuant to SEC disclosure rules. Mr. Sonmez resigned effective August 1, 2014; Mr. Langdon resigned effective May 13, 2014; and Mr. Lee resigned effective January 24, 2014. The amounts are based solely upon publicly available data and information still retained by TIBCO. The amounts reflect PRSUs vested under the 2010 LTIP that have been deferred.

Financing of the Merger

We anticipate that the total amount of funds necessary to complete the merger and the related transactions will be approximately $4.8 billion. This amount includes the funds needed to (1) pay stockholders the amounts due under the merger agreement; (2) make payments in respect of our outstanding equity-based awards pursuant to the merger agreement; (3) repay and discharge in full all amounts outstanding pursuant to the terms of our existing credit facilities; (4) repurchase our convertible notes; and (5) pay all fees and expenses payable by Parent and Merger Sub under the merger agreement and Merger Sub’s agreements with its lenders (and related transactions).

Although the obligation of Parent and Merger Sub to consummate the merger is not subject to any financing condition, the merger agreement provides that, without Parent’s agreement, the closing of the merger will not occur earlier than the first business day after the expiration of the marketing period, which is the first period of 15 consecutive business days throughout which (1) Parent has received certain financial information from TIBCO necessary to syndicate any debt financing; (2) certain conditions to the consummation of the merger are satisfied; and (3) this proxy statement has been mailed to the stockholders of TIBCO. For more information, see the section captioned “Proposal 1: Adoption of the Merger Agreement—Marketing Period.”

Equity Financing

In connection with the financing of the merger, Parent has entered into an equity commitment letter, dated as of September 27, 2014, with VEPFV, which we refer to as the “equity financing.” The equity commitment letter provides, among other things, that (1) TIBCO is an express third party beneficiary thereof in connection with TIBCO’s exercise of its rights related to specific performance under the merger agreement; and (2) Parent and VEPFV will not oppose the granting of an injunction, specific performance or other equitable relief in connection with the exercise of such third party beneficiary rights. The equity commitment letter may not be waived, amended or modified except by an instrument in writing signed by Parent, VEPFV and TIBCO.

Debt Financing

Parent has received a debt commitment letter from JPMorgan Chase Bank, N.A., Jefferies Finance LLC and certain of their respective affiliates pursuant to which they have committed to provide Parent with $1,650 million in secured first lien term loans, a $125 million secured first lien revolving credit facility, a $950 million unsecured bridge facility (or up to $950 million senior notes in lieu of all or a portion thereof) and a $300 million secured asset sale bridge facility, which we collectively refer to as the “debt financing.” Subject to the satisfaction of certain customary conditions, the first lien term loans, secured asset sale bridge facility and unsecured bridge facility (or unsecured notes in lieu of all or a portion thereof) will be fully drawn at closing of the merger and used by Parent to pay a portion of the aggregate merger consideration and related fees and expenses.

TIBCO has agreed to use its reasonable best efforts to provide Parent and Merger Sub with all cooperation reasonably requested by Parent or Merger Sub to assist them in arranging the debt financing, including participating in meetings, assisting with presentations, furnishing Parent and Merger Sub with the necessary financial information regarding TIBCO and taking all corporate and other actions reasonably requested by Parent to consummate the debt financing. Upon request, Parent will reimburse TIBCO for any documented and reasonable out-of-pocket costs and expenses incurred in connection with TIBCO’s cooperation with obtaining the debt financing.

 

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Limited Guaranty

Pursuant to the limited guaranty, VEPFV has agreed to guarantee the due, punctual and complete payment of all of the liabilities and obligations of Parent or Merger Sub under the merger agreement, including (1) the indemnification obligations of Parent and Merger Sub in connection with any costs and expenses incurred by TIBCO in connection with its cooperation with the arrangement of the debt financing; and (2) the documented and reasonable out-of-pocket costs and expenses incurred by TIBCO in connection with the cooperation of TIBCO with the arrangement of the debt financing. We refer to the obligations set forth in clauses (1) and (2) of the preceding sentence as the “reimbursement obligations,” and to the obligations set forth in the preceding sentence as the “guaranteed obligations.”

VEPFV’s obligations under the limited guaranty are subject to an aggregate cap equal to $275.8 million plus the reimbursement obligations.

Subject to specified exceptions, the limited guaranty will terminate upon the earliest of:

 

   

immediately following the effective time of the merger and the deposit of the merger consideration with the designated payment agent;

 

   

the valid termination of the merger agreement by mutual written consent of Parent and TIBCO;

 

   

the valid termination of the merger agreement by TIBCO in certain circumstances in connection with a superior proposal;

 

   

the indefeasible payment by VEPFV, Parent or Merger Sub of an amount of the guaranteed obligations equal to the aggregate cap; and

 

   

one year after the valid termination of the merger agreement in accordance with its terms, other than a termination in the scenarios described in the second and third bullet above (and, if TIBCO has made a claim under the guaranteed obligations prior to such date, the limited guaranty will terminate on date that such claim is finally satisfied or otherwise resolved).

Closing and Effective Time of the Merger

The closing of the merger will take place no later than the first business day following the satisfaction or waiver in accordance with the merger agreement of all of the conditions to closing of the merger (as described under the caption “Proposal 1: Adoption of the Merger Agreement—Conditions to the Closing of the Merger”), other than conditions that by their terms are to be satisfied at the closing, but subject to the satisfaction or waiver of such conditions. However, if the marketing period (as described under the caption “Proposal 1: Adoption of the Merger Agreement—Marketing Period”) has not ended at the time of the satisfaction or waiver of the conditions set forth in the merger agreement (other than conditions that by their terms are to be satisfied at the closing, but subject to the satisfaction or waiver of such conditions), then the closing will occur on the date following the satisfaction or waiver of such conditions that is the earlier to occur of (1) a business day before or during the marketing period as may be specified by Parent on no less than two business days’ prior written notice to TIBCO; and (2) the first business day after the expiration of the marketing period.

Appraisal Rights

If the merger is consummated, stockholders who do not vote in favor of the adoption of the merger agreement and who properly demand appraisal of their shares will be entitled to appraisal rights in connection with the merger under Section 262 of the DGCL, which we refer to as “Section 262.”

 

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The following discussion is not a complete statement of the law pertaining to appraisal rights under the DGCL and is qualified in its entirety by the full text of Section 262, which is attached to this proxy statement as Annex C. The following summary does not constitute any legal or other advice and does not constitute a recommendation that stockholders exercise their appraisal rights under Section 262. Only a holder of record of shares of common stock is entitled to demand appraisal rights for the shares registered in that holder’s name. A person having a beneficial interest in shares of common stock held of record in the name of another person, such as a bank, broker or other nominee, must act promptly to cause the record holder to follow the steps summarized below properly and in a timely manner to perfect appraisal rights. If you hold your shares of our common stock through a bank, broker or other nominee and you wish to exercise appraisal rights, you should consult with your bank, broker or the other nominee.

Under Section 262, holders of shares of common stock who (1) do not vote in favor of the adoption of the merger agreement; (2) continuously are the record holders of such shares through the effective time of the merger; and (3) otherwise follow the procedures set forth in Section 262 will be entitled to have their shares appraised by the Delaware Court of Chancery and to receive payment in cash of the “fair value” of the shares of common stock, exclusive of any element of value arising from the accomplishment or expectation of the merger, together with interest to be paid on the amount determined to be fair value, if any, as determined by the court. Unless the Delaware Court of Chancery, in its discretion, determines otherwise for good cause shown, interest on an appraisal award will accrue and compound quarterly from the effective time of the merger through the date the judgment is paid at 5% over the Federal Reserve discount rate (including any surcharge) as established from time to time during such period.

Under Section 262, where a merger agreement is to be submitted for adoption at a meeting of stockholders, the corporation, not less than 20 days prior to the meeting, must notify each of its stockholders entitled to appraisal rights that appraisal rights are available and include in the notice a copy of Section 262. This proxy statement constitutes TIBCO’s notice to stockholders that appraisal rights are available in connection with the merger, and the full text of Section 262 is attached to this proxy statement as Annex C. In connection with the merger, any holder of shares of common stock who wishes to exercise appraisal rights, or who wishes to preserve such holder’s right to do so, should review Annex C carefully. Failure to strictly comply with the requirements of Section 262 in a timely and proper manner will result in the loss of appraisal rights under the DGCL. A stockholder who loses his, her or its appraisal rights will be entitled to receive the merger consideration described in the merger agreement. Moreover, because of the complexity of the procedures for exercising the right to seek appraisal of shares of common stock, TIBCO believes that if a stockholder considers exercising such rights, that stockholder should seek the advice of legal counsel.

Stockholders wishing to exercise the right to seek an appraisal of their shares of common stock must do ALL of the following:

 

   

the stockholder must not vote in favor of the proposal to adopt the merger agreement;

 

   

the stockholder must deliver to TIBCO a written demand for appraisal before the vote on the merger agreement at the special meeting;

 

   

the stockholder must continuously hold the shares from the date of making the demand through the effective time of the merger (a stockholder will lose appraisal rights if the stockholder transfers the shares before the effective time of the merger); and

 

   

the stockholder or the surviving company must file a petition in the Delaware Court of Chancery requesting a determination of the fair value of the shares within 120 days after the effective time of the merger. The surviving company is under no obligation to file any petition and has no intention of doing so.

Because a proxy that does not contain voting instructions will, unless revoked, be voted in favor of the merger agreement, a stockholder who votes by proxy and who wishes to exercise appraisal rights must vote against the adoption of the merger agreement, abstain or not vote its shares.

 

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Filing Written Demand

Any holder of shares of common stock wishing to exercise appraisal rights must deliver to TIBCO, before the vote on the adoption of the merger agreement at the special meeting at which the proposal to adopt the merger agreement will be submitted to the stockholders, a written demand for the appraisal of the stockholder’s shares, and that stockholder must not vote or submit a proxy in favor of the adoption of the merger agreement. A holder of shares of common stock exercising appraisal rights must hold of record the shares on the date the written demand for appraisal is made and must continue to hold the shares of record through the effective time of the merger. A proxy that is submitted and does not contain voting instructions will, unless revoked, be voted in favor of the adoption of the merger agreement, and it will constitute a waiver of the stockholder’s right of appraisal and will nullify any previously delivered written demand for appraisal. Therefore, a stockholder who submits a proxy and who wishes to exercise appraisal rights must submit a proxy containing instructions to vote against the adoption of the merger agreement or abstain from voting on the adoption of the merger agreement. Neither voting against the adoption of the merger agreement nor abstaining from voting or failing to vote on the proposal to adopt the merger agreement will, in and of itself, constitute a written demand for appraisal satisfying the requirements of Section 262. The written demand for appraisal must be in addition to and separate from any proxy or vote on the adoption of the merger agreement. A proxy or vote against the adoption of the merger agreement will not constitute a demand. A stockholder’s failure to make the written demand prior to the taking of the vote on the adoption of the merger agreement at the special meeting of TIBCO’s stockholders will constitute a waiver of appraisal rights.

Only a holder of record of shares of common stock is entitled to demand appraisal rights for the shares registered in that holder’s name. A demand for appraisal in respect of shares of common stock should be executed by or on behalf of the holder of record, and must reasonably inform TIBCO of the identity of the holder and state that the person intends thereby to demand appraisal of the holder’s shares in connection with the merger. If the shares are owned of record in a fiduciary capacity, such as by a trustee, guardian or custodian, such demand must be executed by or on behalf of the record owner, and if the shares are owned of record by more than one person, as in a joint tenancy and tenancy in common, the demand should be executed by or on behalf of all joint owners. An authorized agent, including an authorized agent for two or more joint owners, may execute a demand for appraisal on behalf of a holder of record; however, the agent must identify the record owner or owners and expressly disclose that, in executing the demand, the agent is acting as agent for the record owner or owners.

STOCKHOLDERS WHO HOLD THEIR SHARES IN BROKERAGE OR BANK ACCOUNTS OR OTHER NOMINEE FORMS AND WHO WISH TO EXERCISE APPRAISAL RIGHTS SHOULD CONSULT WITH THEIR BANK, BROKER OR OTHER NOMINEES, AS APPLICABLE, TO DETERMINE THE APPROPRIATE PROCEDURES FOR THE BANK, BROKER OR OTHER NOMINEE TO MAKE A DEMAND FOR APPRAISAL OF THOSE SHARES. A PERSON HAVING A BENEFICIAL INTEREST IN SHARES HELD OF RECORD IN THE NAME OF ANOTHER PERSON, SUCH AS A BANK, BROKER OR OTHER NOMINEE, MUST ACT PROMPTLY TO CAUSE THE RECORD HOLDER TO FOLLOW PROPERLY AND IN A TIMELY MANNER THE STEPS NECESSARY TO PERFECT APPRAISAL RIGHTS.

All written demands for appraisal pursuant to Section 262 should be mailed or delivered to:

TIBCO Software Inc.

3303 Hillview Avenue

Palo Alto, CA 94304

Attention: Corporate Secretary

 

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Any holder of shares of common stock may withdraw his, her or its demand for appraisal and accept the consideration offered pursuant to the merger agreement by delivering to TIBCO a written withdrawal of the demand for appraisal. However, any such attempt to withdraw the demand made more than 60 days after the effective time of the merger will require written approval of the surviving corporation. No appraisal proceeding in the Delaware Court of Chancery will be dismissed without the approval of the Delaware Court of Chancery, and such approval may be conditioned upon such terms as the Delaware Court of Chancery deems just.

Notice by the Surviving Corporation

If the merger is completed, within 10 days after the effective time of the merger, the surviving corporation will notify each holder of shares of common stock who has made a written demand for appraisal pursuant to Section 262, and who has not voted in favor of the adoption of the merger agreement, that the merger has become effective and the effective date thereof.

Filing a Petition for Appraisal

Within 120 days after the effective time of the merger, but not thereafter, the surviving corporation or any holder of shares of common stock who has complied with Section 262 and is entitled to appraisal rights under Section 262 may commence on appraisal proceeding by filing a petition in the Delaware Court of Chancery, with a copy served on the surviving corporation in the case of a petition filed by a stockholder, demanding a determination of the fair value of the shares held by all stockholders entitled to appraisal. The surviving corporation is under no obligation, and has no present intention, to file a petition, and holders should not assume that the surviving corporation will file a petition or initiate any negotiations with respect to the fair value of the shares of common stock. Accordingly, any holders of shares of common stock who desire to have their shares appraised should initiate all necessary action to perfect their appraisal rights in respect of their shares of common stock within the time and in the manner prescribed in Section 262. The failure of a holder of common stock to file such a petition within the period specified in Section 262 could nullify the stockholder’s previous written demand for appraisal.

Within 120 days after the effective time of the merger, any holder of shares of common stock who has complied with the requirements for exercise of appraisal rights will be entitled, upon written request, to receive from the surviving corporation a statement setting forth the aggregate number of shares not voted in favor of the adoption of the merger agreement and with respect to which TIBCO has received demands for appraisal, and the aggregate number of holders of such shares. The surviving corporation must mail this statement to the requesting stockholder within 10 days after receipt of the written request for such a statement or within 10 days after the expiration of the period for delivery of demands for appraisal, whichever is later. A beneficial owner of shares held either in a voting trust or by a nominee on behalf of such person may, in such person’s own name, file a petition seeking appraisal or request from the surviving corporation the foregoing statements. As noted above, however, the demand for appraisal can only be made by a stockholder of record.

If a petition for an appraisal is duly filed by a holder of shares of common stock and a copy thereof is served upon the surviving corporation, the surviving corporation will then be obligated within 20 days after such service to file with the Delaware Register in Chancery a duly verified list containing the names and addresses of all stockholders who have demanded payment for their shares and with whom agreements as to the value of their shares have not been reached. After notice to the stockholders as required by the court, the Delaware Court of Chancery is empowered to conduct a hearing on the petition to determine those stockholders who have complied with Section 262 and who have become entitled to appraisal rights thereunder. The Delaware Court of Chancery may require the stockholders who demanded payment for their shares to submit their stock certificates to the Register in Chancery for notation thereon of the pendency of the appraisal proceedings, and if any stockholder fails to comply with the direction, the Delaware Court of Chancery may dismiss that stockholder from the proceedings.

 

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Determination of Fair Value

After determining the holders of common stock entitled to appraisal, the Delaware Court of Chancery will appraise the “fair value” of the shares of common stock, exclusive of any element of value arising from the accomplishment or expectation of the merger, together with interest, if any, to be paid upon the amount determined to be the fair value. In determining fair value, the Delaware Court of Chancery will take into account all relevant factors. Unless the court in its discretion determines otherwise for good cause shown, interest from the effective date of the merger through the date of payment of the judgment will be compounded quarterly and will accrue at 5% over the Federal Reserve discount rate (including any surcharge) as established from time to time during the period between the effective date of the merger and the date of payment of the judgment. In Weinberger v. UOP, Inc., the Supreme Court of Delaware discussed the factors that could be considered in determining fair value in an appraisal proceeding, stating that “proof of value by any techniques or methods which are generally considered acceptable in the financial community and otherwise admissible in court” should be considered, and that “[f]air price obviously requires consideration of all relevant factors involving the value of a company.” The Delaware Supreme Court stated that, in making this determination of fair value, the court must consider market value, asset value, dividends, earnings prospects, the nature of the enterprise and any other facts that could be ascertained as of the date of the merger that throw any light on future prospects of the merged corporation. Section 262 provides that fair value is to be “exclusive of any element of value arising from the accomplishment or expectation of the merger.” In Cede & Co. v. Technicolor, Inc., the Delaware Supreme Court stated that such exclusion is a “narrow exclusion [that] does not encompass known elements of value,” but which rather applies only to the speculative elements of value arising from such accomplishment or expectation. In Weinberger, the Supreme Court of Delaware also stated that “elements of future value, including the nature of the enterprise, which are known or susceptible of proof as of the date of the merger and not the product of speculation, may be considered.”

Stockholders considering seeking appraisal should be aware that the fair value of their shares as so determined by the Delaware Court of Chancery could be more than, the same as or less than the consideration they would receive pursuant to the merger if they did not seek appraisal of their shares and that an opinion of an investment banking firm as to the fairness from a financial point of view of the consideration payable in a merger is not an opinion as to, and does not in any manner address, fair value under Section 262 of the DGCL. Although TIBCO believes that the per share merger consideration is fair, no representation is made as to the outcome of the appraisal of fair value as determined by the Delaware Court of Chancery, and stockholders should recognize that such an appraisal could result in a determination of a value higher or lower than, or the same as, the per share merger consideration. Neither TIBCO nor Parent anticipates offering more than the per share merger consideration to any stockholder exercising appraisal rights, and each of TIBCO and Parent reserves the right to assert, in any appraisal proceeding, that for purposes of Section 262, the “fair value” of a share of common stock is less than the per share merger consideration. If a petition for appraisal is not timely filed, then the right to an appraisal will cease. The costs of the appraisal proceedings (which do not include attorneys’ fees or the fees and expenses of experts) may be determined by the Delaware Court of Chancery and taxed upon the parties as the Delaware Court of Chancery deems equitable under the circumstances. Upon application of a stockholder, the Delaware Court of Chancery may also order that all or a portion of the expenses incurred by a stockholder in connection with an appraisal, including, without limitation, reasonable attorneys’ fees and the fees and expenses of experts, be charged pro rata against the value of all the shares entitled to be appraised.

If any stockholder who demands appraisal of his, her or its shares of common stock under Section 262 fails to perfect, or loses or successfully withdraws, such holder’s right to appraisal, the stockholder’s shares of common stock will be deemed to have been converted at the effective time of the merger into the right to receive the per share merger consideration. A stockholder will fail to perfect, or effectively lose or withdraw, the holder’s right to appraisal if no petition for appraisal is filed within 120 days after the effective time of the merger or if the stockholder delivers to the surviving corporation a written withdrawal of the holder’s demand for appraisal and an acceptance of the per share merger consideration in accordance with Section 262.

 

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From and after the effective time of the merger, no stockholder who has demanded appraisal rights will be entitled to vote such shares of common stock for any purpose or to receive payment of dividends or other distributions on the stock, except dividends or other distributions on the holder’s shares of common stock, if any, payable to stockholders as of a time prior to the effective time of the merger. If no petition for an appraisal is filed, or if the stockholder delivers to the surviving corporation a written withdrawal of the demand for an appraisal and an acceptance of the merger, either within 60 days after the effective time of the merger or thereafter with the written approval of the surviving corporation, then the right of such stockholder to an appraisal will cease. Once a petition for appraisal is filed with the Delaware Court of Chancery, however, the appraisal proceeding may not be dismissed as to any stockholder who commenced the proceeding or joined that proceeding as a named party without the approval of the court.

Failure to comply strictly with all of the procedures set forth in Section 262 may result in the loss of a stockholder’s statutory appraisal rights. Consequently, any stockholder wishing to exercise appraisal rights is encouraged to consult legal counsel before attempting to exercise those rights.

Accounting Treatment

The merger will be accounted for as a “purchase transaction” for financial accounting purposes.

Material U.S. Federal Income Tax Consequences of the Merger

The following discussion is a summary of material U.S. federal income tax consequences of the merger that may be relevant to U.S. Holders and Non-U.S. Holders (each as defined below) holders of shares of common stock whose shares are converted into the right to receive cash pursuant to the merger. This discussion is based upon the Internal Revenue Code of 1986, as amended, which we refer to as the “Code,” Treasury Regulations promulgated under the Code, court decisions, published positions of the Internal Revenue Service, which we refer to as the “IRS,” and other applicable authorities, all as in effect on the date of this proxy statement and all of which are subject to change or differing interpretations, possibly with retroactive effect. This discussion is limited to holders who hold their shares of common stock as “capital assets” within the meaning of Section 1221 of the Code (generally, property held for investment purposes).

This discussion is for general information only and does not address all of the tax consequences that may be relevant to holders in light of their particular circumstances. For example, this discussion does not address:

 

   

tax consequences that may be relevant to holders who may be subject to special treatment under U.S. federal income tax laws, such as financial institutions; tax-exempt organizations; S corporations or any other entities or arrangements treated as partnerships or pass-through entities for U.S. federal income tax purposes; insurance companies; mutual funds; dealers in stocks and securities; traders in securities that elect to use the mark-to-market method of accounting for their securities; regulated investment companies; real estate investment trusts; entities subject to the U.S. anti-inversion rules; or certain former citizens or long-term residents of the United States;

 

   

tax consequences to holders holding the shares as part of a hedging, constructive sale or conversion, straddle or other risk reduction transaction;

 

   

tax consequences to holders that received their shares of common stock in a compensatory transaction;

 

   

tax consequences to holders who own an equity interest, actually or constructively, in Parent or the surviving corporation following the merger;

 

   

tax consequences to U.S. Holders whose “functional currency” is not the U.S. dollar;

 

   

tax consequences to holders who hold their common stock through a bank, financial institution or other entity, or a branch thereof, located, organized or resident outside the United States;

 

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tax consequences arising from the Medicare tax on net investment income;

 

   

the U.S. federal estate, gift or alternative minimum tax consequences, if any; or

 

   

any state, local or foreign tax consequences.

If a partnership (including an entity or arrangement, domestic or foreign, treated as a partnership for U.S. federal income tax purposes) is a beneficial owner of shares of common stock, then the tax treatment of a partner in such partnership will generally depend upon the status of the partner and the activities of the partner and the partnership. Partnerships holding shares of common stock and partners therein should consult their tax advisors regarding the consequences of the merger.

No ruling has been or will be obtained from the IRS regarding the U.S. federal income tax consequences of the merger described below. If the IRS contests a conclusion set forth herein, no assurance can be given that a holder would ultimately prevail in a final determination by a court.

THIS DISCUSSION IS PROVIDED FOR GENERAL INFORMATION ONLY AND DOES NOT CONSTITUTE LEGAL ADVICE TO ANY HOLDER. A HOLDER SHOULD CONSULT ITS OWN TAX ADVISORS CONCERNING THE U.S. FEDERAL INCOME TAX CONSEQUENCES RELATING TO THE MERGER IN LIGHT OF ITS PARTICULAR CIRCUMSTANCES AND ANY CONSEQUENCES ARISING UNDER THE LAWS OF ANY STATE, LOCAL OR FOREIGN TAXING JURISDICTION.

U.S. Holders

For purposes of this discussion, a “U.S. Holder” is a beneficial owner of shares of common stock that is for U.S. federal income tax purposes:

 

   

an individual who is a citizen or resident of the United States;

 

   

a corporation, or other entity taxable as a corporation, created or organized in or under the laws of the United States or any state thereof or the District of Columbia;

 

   

an estate, the income of which is subject to U.S. federal income taxation regardless of its source; or

 

   

a trust (1) that is subject to the primary supervision of a court within the United States and the control of one or more United States persons as defined in section 7701(a)(30) of the Code; or (2) that has a valid election in effect under applicable Treasury regulations to be treated as a United States person.

The receipt of cash by a U.S. Holder in exchange for shares of common stock pursuant to the merger will be a taxable transaction for U.S. federal income tax purposes. In general, such U.S. Holder’s gain or loss will be equal to the difference, if any, between the amount of cash received and the U.S. Holder’s adjusted tax basis in the shares surrendered pursuant to the merger. A U.S. Holder’s adjusted tax basis generally will equal the amount that such U.S. Holder paid for the shares. Such gain or loss will be capital gain or loss and will be long-term capital gain or loss if such U.S. Holder’s holding period in such shares is more than one year at the time of the completion of the merger. A reduced tax rate on capital gain generally will apply to long-term capital gain of a non-corporate U.S. Holder (including individuals). The deductibility of capital losses is subject to limitations.

Non-U.S. Holders

For purposes of this discussion, the term “Non-U.S. Holder” means a beneficial owner of shares of common stock that is neither a U.S. holder nor a partnership for U.S. federal income tax purposes.

Special rules not discussed below may apply to certain Non-U.S. Holders subject to special tax treatment such as “controlled foreign corporations” or “passive foreign investment companies.” Non-U.S. Holders should consult their own tax advisors to determine the U.S. federal, state, local and other tax consequences that may be relevant to them in light of their particular circumstances.

 

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Any gain realized by a Non-U.S. Holder pursuant to the merger generally will not be subject to U.S. federal income tax unless:

 

   

the gain is effectively connected with a trade or business of such Non-U.S. Holder in the United States (and, if required by an applicable income tax treaty, is attributable to a permanent establishment maintained by such Non-U.S. Holder in the United States), in which case such gain generally will be subject to U.S. federal income tax at rates generally applicable to U.S. persons, and, if the Non-U.S. Holder is a corporation, such gain may also be subject to the branch profits tax at a rate of 30% (or a lower rate under an applicable income tax treaty);

 

   

such Non-U.S. Holder is an individual who is present in the United States for 183 days or more in the taxable year of that disposition, and certain other specified conditions are met, in which case such gain will be subject to U.S. federal income tax at a rate of 30% (or a lower rate under an applicable income tax treaty); or

 

   

TIBCO is or has been a “United States real property holding corporation” as such term is defined in Section 897(c) of the Code, which we refer to as a “USRPHC,” at any time within the shorter of the five-year period preceding the merger or such Non-U.S. Holder’s holding period with respect to the applicable shares of common stock, which we refer to as the “relevant period,” and, if shares of common stock are regularly traded on an established securities market (within the meaning of Section 897(c)(3) of the Code), such Non-U.S. Holder owns directly or is deemed to own pursuant to attribution rules more than 5% of our common stock at any time during the relevant period, in which case such gain will be subject to U.S. federal income tax at rates generally applicable to U.S. persons (as described in the first bullet point above), except that the branch profits tax will not apply. We believe that we are not, and have not been, a USRPHC at any time during the five-year period preceding the merger.

Information Reporting and Backup Withholding

Information reporting and backup withholding (at a rate of 28%) may apply to the proceeds received by a holder pursuant to the merger. Backup withholding generally will not apply to (1) a U.S. Holder that furnishes a correct taxpayer identification number and certifies that such holder is not subject to backup withholding on IRS Form W-9 (or a substitute or successor form) or (2) a Non-U.S. Holder that (i) provides a certification of such holder’s foreign status on the appropriate series of IRS Form W-8 (or a substitute or successor form) or (ii) otherwise establishes an exemption from backup withholding. Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules will be allowed as a refund or a credit against the holder’s U.S. federal income tax liability, provided that the required information is timely furnished to the IRS.

Regulatory Approvals Required for the Merger

General

TIBCO and Parent have agreed to use their reasonable best efforts to comply with all regulatory notification requirements and obtain all regulatory approvals required to consummate the merger and the other transactions contemplated by the merger agreement. These approvals include approval under, or notifications pursuant to, the HSR Act and the competition laws of the European Union.

HSR Act and U.S. Antitrust Matters

Under the HSR Act and the rules promulgated thereunder, the merger cannot be completed until TIBCO and VEPFV file a notification and report form with the Federal Trade Commission, which we refer to as the “FTC,” and the Antitrust Division of the Department of Justice, which we refer to as the “DOJ,” under the HSR Act and the applicable waiting period has expired or been terminated. A transaction notifiable under the HSR Act may not be completed until the expiration of a 30 calendar day waiting period following the parties’ filing of their respective HSR Act notification forms or the early termination of that waiting period. TIBCO and VEPFV made the necessary filings with the FTC and the Antitrust Division of the DOJ on October 10, 2014.

 

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At any time before or after consummation of the merger, notwithstanding the termination of the waiting period under the HSR Act, the FTC or the Antitrust Division of the DOJ could take such action under the antitrust laws as it deems necessary or desirable in the public interest, including seeking to enjoin the completion of the merger, seeking divestiture of substantial assets of the parties or requiring the parties to license, or hold separate, assets or terminate existing relationships and contractual rights. At any time before or after the completion of the merger, and notwithstanding the termination of the waiting period under the HSR Act, any state could take such action under the antitrust laws as it deems necessary or desirable in the public interest. Such action could include seeking to enjoin the completion of the merger or seeking divestiture of substantial assets of the parties. Private parties may also seek to take legal action under the antitrust laws under certain circumstances.

Foreign Competition Laws

Consummation of the merger is conditioned on approval under, or filing of notices pursuant to, the competition laws of the European Union.

Under Council Regulation (EC) No 139/2004, which we refer to as the “EUMR,” the merger cannot be completed until a notification has been filed with the European Commission and the European Commission has approved the merger under the EUMR. A transaction notifiable under the EUMR may not be completed until the expiration of a 25-working-day waiting period following the party’s filing of the appropriate notification form. TIBCO and VEPFV made the necessary filings under the EMUR on [], 2014.

Other Regulatory Approvals

One or more governmental agencies may impose a condition, restriction, qualification, requirement or limitation when it grants the necessary approvals and consents. Third parties may also seek to intervene in the regulatory process or litigate to enjoin or overturn regulatory approvals, any of which actions could significantly impede or even preclude obtaining required regulatory approvals. There is currently no way to predict how long it will take to obtain all of the required regulatory approvals or whether such approvals will ultimately be obtained and there may be a substantial period of time between the approval by stockholders and the completion of the merger.

Although we expect that all required regulatory clearances and approvals will be obtained, we cannot assure you that these regulatory clearances and approvals will be timely obtained, obtained at all or that the granting of these regulatory clearances and approvals will not involve the imposition of additional conditions on the completion of the merger, including the requirement to divest assets, or require changes to the terms of the merger agreement. These conditions or changes could result in the conditions to the merger not being satisfied.

Legal Proceedings Regarding the Merger

In connection with the merger agreement and the transactions contemplated thereby, four purported class action lawsuits have been filed. Two complaints, captioned Brian Ford, On Behalf of Himself and All Others Similarly Situated v. TIBCO Software Inc., et al., filed on October 6, 2014, and Bona Tilahun, Individually and On Behalf of All Others Similarly Situated v. TIBCO Software Inc., et al., filed on October 7, 2014, were filed in the Court of Chancery of the State of Delaware. A third complaint, captioned Jeff Cole v. TIBCO Software Inc., et al., filed on October 3, 2014, was filed in the Santa Clara Superior Court, in the State of California and a fourth complaint, captioned Dhruvian Shah, Individually and On Behalf of All Others Similarly Situated v. TIBCO Software Inc., et. al., filed on October 14, 2014, was filed in the Santa Clara Superior Court, in the State of California. In general, each of the complaints asserts that, among other things, the members of the Board of Directors breached their fiduciary duties to stockholders by initiating a process that undervalues TIBCO and by agreeing to a transaction that does not adequately reflect TIBCO’s true value, and that TIBCO, Parent, Merger Sub and VEPFV aided and abetted the Board of Directors’ breaches of fiduciary duties. The complaints generally seek to enjoin the merger or, alternatively, seek rescission of the merger in the event the defendants are able to consummate it.

 

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PROPOSAL 1: ADOPTION OF THE MERGER AGREEMENT

The following summary describes the material provisions of the merger agreement. The descriptions of the merger agreement in this summary and elsewhere in this proxy statement are not complete and are qualified in their entirety by reference to the merger agreement, a copy of which is attached to this proxy statement as Annex A and incorporated into this proxy statement by reference. We encourage you to read the merger agreement carefully and in its entirety because this summary may not contain all the information about the merger agreement that is important to you. The rights and obligations of the parties are governed by the express terms of the merger agreement and not by this summary or any other information contained in this proxy statement.

The representations, warranties, covenants and agreements described below and included in the merger agreement (1) were made only for purposes of the merger agreement and as of specific dates; (2) were made solely for the benefit of the parties to the merger agreement; and (3) may be subject to important qualifications, limitations and supplemental information agreed to by TIBCO, Parent and Merger Sub in connection with negotiating the terms of the merger agreement. In addition, the representations and warranties may have been included in the merger agreement for the purpose of allocating contractual risk between TIBCO, Parent and Merger Sub rather than to establish matters as facts, and may be subject to standards of materiality applicable to such parties that differ from those applicable to investors. Stockholders are not third-party beneficiaries under the merger agreement and should not rely on the representations, warranties, covenants and agreements or any descriptions thereof as characterizations of the actual state of facts or condition of TIBCO, Parent or Merger Sub or any of their respective affiliates or businesses. Moreover, information concerning the subject matter of the representations and warranties may change after the date of the merger agreement. In addition, you should not rely on the covenants in the merger agreement as actual limitations on the respective businesses of TIBCO, Parent and Merger Sub, because the parties may take certain actions that are either expressly permitted in the confidential disclosure letter to the merger agreement or as otherwise consented to by the appropriate party, which consent may be given without prior notice to the public. The merger agreement is described below, and included as Annex A, only to provide you with information regarding its terms and conditions, and not to provide any other factual information regarding TIBCO, Parent, Merger Sub or their respective businesses. Accordingly, the representations, warranties, covenants and other agreements in the merger agreement should not be read alone, and you should read the information provided elsewhere in this document and in our filings with the SEC regarding TIBCO and our business.

Explanatory Note Regarding the Merger Agreement

The merger agreement is included to provide you with information regarding its terms. This summary is not intended to provide you with any factual information about TIBCO. Any factual disclosures about TIBCO contained in this proxy statement or in TIBCO’s public reports filed with the SEC may supplement, update or modify the representations and warranties made by TIBCO contained in the merger agreement. The representations, warranties and covenants made in the merger agreement by TIBCO, Parent and Merger Sub were qualified and subject to important limitations agreed to by TIBCO, Parent and Merger Sub in negotiating the terms of the merger agreement. In particular, in your review of the representations and warranties contained in the merger agreement and described in this summary, it is important to bear in mind that, rather than establishing matters as facts, the representations and warranties were negotiated with the principal purpose of establishing the circumstances in which a party to the merger agreement may have the right not to consummate the merger if the representations and warranties of the other party prove to be untrue due to a change in circumstance or otherwise, as well as allocating risk between the parties to the merger agreement. The representations and warranties may also be subject to a contractual standard of materiality different from those generally applicable to reports and documents filed with the SEC and in some cases were qualified by confidential matters disclosed to Parent and Merger Sub by TIBCO in connection with the merger agreement. Moreover, information concerning the subject matter of the representations and warranties, which do not purport to be accurate as of the date of this proxy statement, may have changed since the date of the merger agreement and subsequent developments or new information qualifying a representation or warranty may have been included in this proxy statement.

 

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Effects of the Merger; Directors and Officers; Certificate of Incorporation; Bylaws

The merger agreement provides that, subject to the terms and conditions of the merger agreement, and in accordance with the DGCL, at the effective time of the merger, (1) Merger Sub will be merged with and into TIBCO with TIBCO becoming a wholly owned subsidiary of Parent; and (2) the separate corporate existence of Merger Sub will thereupon cease. From and after the effective time of the merger, the surviving corporation will possess all properties, rights, privileges, powers and franchises of TIBCO and Merger Sub, and all of the debts, liabilities and duties of TIBCO and Merger Sub will become the debts, liabilities and duties of the surviving corporation.

The parties will take all necessary action to ensure that, effective as of, and immediately following, the effective time of the merger, the board of directors of the surviving corporation will consist of the directors of Merger Sub at the effective time of the merger, to hold office in accordance with the certificate of incorporation and bylaws of the surviving corporation until their successors are duly elected or appointed and qualified. From and after the effective time of the merger, the officers of Merger Sub at the effective time of the merger will be the officers of the surviving corporation, until their successors are duly appointed. At the effective time of the merger, the certificate of incorporation of TIBCO as the surviving corporation will be amended to read substantially identically to the certificate of incorporation of Merger Sub as in effect immediately prior to the effective time of the merger, and the bylaws of Merger Sub, as in effect immediately prior to the effective time of the merger, will become the bylaws of the surviving corporation, until thereafter amended.

Closing and Effective Time of the Merger

The closing of the merger will take place no later than the first business day following the satisfaction or waiver of all conditions to closing of the merger (described below under the caption “—Conditions to the Closing of the Merger”) (other than those conditions to be satisfied at the closing of the merger) or such other time agreed to in writing by Parent, TIBCO and Merger Sub, except that if the marketing period (described below under the caption “—Marketing Period”) has not ended as of the time described above, the closing of the merger will occur following the satisfaction or waiver of such conditions on the earlier of (1) a business day before or during the marketing period as may be specified by Parent on no less than two business days’ notice to TIBCO; and (2) the first business day after the expiration of the marketing period. Concurrently with the closing of the merger, the parties will file a certificate of merger with the Secretary of State for the State of Delaware as provided under the DGCL. The merger will become effective upon the filing of the certificate of merger, or at such later time as is agreed by the parties and specified in the certificate of merger.

Marketing Period

The marketing period means the first period of 15 consecutive business days throughout which (1) Parent has received certain financial information from TIBCO necessary to syndicate the debt financing; (2) certain conditions to the consummation of the merger are satisfied; and (3) this proxy statement has been mailed to the stockholders of TIBCO. November 27, 2014, and November 28, 2014, will not be deemed a business day for the purpose of the marketing period and, generally speaking, the marketing period must either end prior to December 20, 2014, or commence on or after January 5, 2015.

Notwithstanding the foregoing, the marketing period (1) will end on any earlier date on which the debt financing is obtained; and (2) will not commence and will be deemed not to have commenced if, on or prior to the completion of such period of 15 consecutive business days, TIBCO has announced any intention to restate any financial statements or financial information included in the required financing information or that any such restatement is under consideration or may be a possibility, in which case the marketing period will be deemed not to commence unless and until such restatement has been completed and the applicable required financing information has been amended or TIBCO has announced that it has concluded that no restatement will be required.

 

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The required financing information referenced above consists of: (1) all financial statements, financial data, audit reports and other information regarding TIBCO and its subsidiaries of the type that would be required by Regulation S-X promulgated by the SEC and Regulation S-K promulgated by the SEC for a registered public offering on a registration statement on Form S-1 under the Securities Act of 1933, as amended, which we refer to as the “Securities Act,” of non-convertible debt securities of TIBCO (including all audited financial statements (which, for the avoidance of doubt, shall include audited financial statements for and as of the fiscal year ended November 30, 2014, if the marketing period would include January 12, 2015, or such period commences after January 12, 2015) and all unaudited financial statements (which shall have been reviewed by the independent accountants as provided in Statement on Auditing Standards No. 100)); and (2) such other pertinent and customary information, subject to certain exclusions, regarding TIBCO and its subsidiaries as may be reasonably requested by Parent to the extent that such information is of the type and form customarily included in an offering memorandum for private placements of non-convertible high-yield bonds pursuant to Rule 144A promulgated under the Securities Act or otherwise necessary to receive from TIBCO’s independent accountants (and any other accountant to the extent that financial statements audited or reviewed by such accountants are or would be included in such offering memorandum) customary “comfort” (including “negative assurance” comfort), together with drafts of customary comfort letters that such independent accountants are prepared to deliver upon the “pricing” of any high-yield bonds being issued in lieu of any portion of the debt financing, with respect to the financial information to be included in such offering memorandum.

Merger Consideration

Common Stock

At the effective time of the merger, each outstanding share of common stock (other than shares owned by (1) TIBCO in treasury; (2) Parent or Merger Sub; (3) any direct or indirect wholly owned subsidiary of Parent or Merger Sub; and (4) stockholders who are entitled to and who properly exercise appraisal rights under the DGCL) will be converted into the right to receive the per share merger consideration (which is $24.00 per share, without interest and less any applicable withholding taxes). All shares converted into the right to receive the merger consideration will automatically be cancelled at the effective time of the merger.

Outstanding Equity Awards and Performance-Based Restricted Stock Unit Awards

The merger agreement provides that TIBCO’s equity awards and PRSUs that are outstanding immediately prior to the effective time of the merger will be subject to the following treatment at the effective time of the merger:

 

   

Options. Each outstanding option to purchase shares of common stock, whether or not vested, will be cancelled and converted into the right to receive an amount in cash (without interest and subject to any applicable withholding or other taxes, or other amounts as required by law) equal to the product of (1) the total number of shares of common stock subject to such option as of the effective time of the merger; and (2) the amount, if any, by which $24.00 exceeds the exercise price per share of common stock underlying such stock option. Each option with an exercise price per share equal to or greater than $24.00 per share will be cancelled without consideration

 

   

Restricted Stock Awards and Restricted Stock Units. The vesting conditions or restrictions applicable to each RSU and each share of restricted stock will lapse and each such RSU or share of restricted stock will be converted into the right to receive an amount in cash (without interest and subject to any applicable withholding or other taxes, or other amounts as required by law) equal to the product of (1) the total number of shares of restricted stock or common stock subject to such RSU, as applicable, as of the effective time of the merger; and (2) $24.00.

 

   

Performance-Based Restricted Stock Unit Awards. Each PRSU will be treated in accordance with the grant documents. In addition, there will be no further acceleration or eligibility to vest triggered by, or resulting from, the merger, and each PRSU whose performance criteria has not been satisfied will be

 

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terminated without consideration immediately prior to the effective time of the merger. For those PRSUs that are not terminated for no consideration, the vesting conditions or restrictions applicable to each such PRSU will lapse and each such PRSU will be converted into the right to receive an amount in cash (without interest and subject to any applicable withholding or other taxes, or other amounts as required by law) equal to the product of (1) the total number of shares of common stock subject to such PRSU as of the effective time of the merger; and (2) $24.00. With respect to outstanding PRSUs, only those granted in fiscal year (1) 2010 that are currently vested but deferred; (2) 2011 that are earned but unvested; and (3) 2014 will receive any payment in connection with the merger.

Exchange and Payment Procedures

Prior to the closing of the merger, Parent will designate a bank or trust company reasonably satisfactory to TIBCO, which we refer to as the “payment agent,” to make payments of the merger consideration to stockholders. At or prior to the effective time of the merger, Parent will deposit or cause to be deposited with the payment agent cash sufficient to pay the aggregate per share merger consideration to stockholders.

Promptly following the effective time of the merger (and in any event within three business days), the payment agent will send to each holder of record of shares of common stock a letter of transmittal and instructions advising stockholders how to surrender stock certificates and book-entry shares in exchange for the per share merger consideration. Upon receipt of (1) surrendered certificates (or affidavits of loss in lieu thereof) or book-entry shares representing the shares of common stock; and (2) a signed letter of transmittal and such other documents as may be required pursuant to such instructions, the holder of such shares will be entitled to receive the per share merger consideration in exchange therefor. The amount of any per share merger consideration paid to the stockholders may be reduced by any applicable withholding taxes.

If any cash deposited with the payment agent is not claimed within one year following the effective time of the merger, such cash will be returned to Parent, upon demand, and any holders of common stock who have not complied with the exchange procedures in the merger agreement will thereafter look only to Parent as general creditor for payment of the per share merger consideration. Any cash deposited with the payment agent that remains unclaimed two years following the effective time of the merger will, to the extent permitted by applicable law, become the property of the surviving corporation free and clear of any claims or interest of any person previously entitled thereto.

The letter of transmittal will include instructions if a stockholder has lost a share certificate or if such certificate has been stolen or destroyed. In the event any certificates have been lost, stolen or destroyed, then before such stockholder will be entitled to receive the merger consideration, such stockholder will have to make an affidavit of the loss, theft or destruction, and if required by Parent or the payment agent, deliver a bond in such amount as Parent or the payment agent may direct as indemnity against any claim that may be made against it with respect to such certificate.

Representations and Warranties

The merger agreement contains representations and warranties of TIBCO, Parent and Merger Sub.

Some of the representations and warranties in the merger agreement made by TIBCO are qualified as to “materiality” or “Company Material Adverse Effect.” For purposes of the merger agreement, “Company Material Adverse Effect” means, with respect to TIBCO, any change, event, violation, inaccuracy, effect or circumstance that, individually or in the aggregate have occurred prior to the date of determination of the occurrence of the Company Material Adverse Effect, (1) is or would reasonably be expected to be materially adverse to the business, financial condition or results of operations of TIBCO and its subsidiaries, taken as a whole; or (2) would reasonably be expected to prevent or materially impair or delay the consummation of the Merger, except that, with respect to clause (1) only, none of the following (by itself or when aggregated) will be deemed

 

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to be or constitute a Company Material Adverse Effect or will be taken into account when determining whether a Company Material Adverse Effect has occurred or may, would or could occur (subject to the limitations set forth below):

 

   

changes in general economic conditions in the United States or any other country or region in the world, or changes in conditions in the global economy generally (except to the extent that such change, event, violation, inaccuracy, effect or circumstance has had a materially disproportionate adverse effect on TIBCO relative to other companies of a similar size operating in the industries in which TIBCO and its subsidiaries conduct business, in which case only the incremental disproportionate adverse impact may be taken into account in determining whether there has occurred a Company Material Adverse Effect);

 

   

changes in conditions in the financial markets, credit markets or capital markets in the United States or any other country or region in the world, including (1) changes in interest rates or credit ratings in the United States or any other country; (2) changes in exchange rates for the currencies of any country; or (3) any suspension of trading in securities (whether equity, debt, derivative or hybrid securities) generally on any securities exchange or over-the-counter market operating in the United States or any other country or region in the world (except, in each case, to the extent that such change, event, violation, inaccuracy, effect or circumstance has had a materially disproportionate adverse effect on TIBCO relative to other companies of a similar size operating in the industries in which TIBCO and its subsidiaries conduct business, in which case only the incremental disproportionate adverse impact may be taken into account in determining whether there has occurred a Company Material Adverse Effect);

 

   

changes in conditions in the industries in which TIBCO and its subsidiaries conduct business, including changes in conditions in the software industry generally (except to the extent that such change, event, violation, inaccuracy, effect or circumstance has had a materially disproportionate adverse effect on TIBCO relative to other companies of a similar size operating in the industries in which TIBCO and its subsidiaries conduct business, in which case only the incremental disproportionate adverse impact may be taken into account in determining whether there has occurred a Company Material Adverse Effect);

 

   

changes in regulatory, legislative or political conditions in the United States or any other country or region in the world (except to the extent that such change, event, violation, inaccuracy, effect or circumstance has had a materially disproportionate adverse effect on TIBCO relative to other companies of similar size operating in the industries in which TIBCO and its subsidiaries conduct business, in which case only the incremental disproportionate adverse impact may be taken into account in determining whether there has occurred a Company Material Adverse Effect);

 

   

any geopolitical conditions, outbreak of hostilities, acts of war, sabotage, terrorism or military actions (including any escalation or general worsening of any such hostilities, acts of war, sabotage, terrorism or military actions) in the United States or any other country or region in the world (except to the extent that such change, event, violation, inaccuracy, effect or circumstance has had a materially disproportionate adverse effect on TIBCO relative to other companies of similar size operating in the industries in which TIBCO and its subsidiaries conduct business, in which case only the incremental disproportionate adverse impact may be taken into account in determining whether there has occurred a Company Material Adverse Effect);

 

   

earthquakes, hurricanes, tsunamis, tornadoes, floods, mudslides, wild fires or other natural disasters, weather conditions and other force majeure events in the United States or any other country or region in the world (except to the extent that such change, event, violation, inaccuracy, effect or circumstance has had a materially disproportionate adverse effect on TIBCO relative to other companies of similar size operating in the industries in which TIBCO and its subsidiaries conduct business, in which case only the incremental disproportionate adverse impact may be taken into account in determining whether there has occurred a Company Material Adverse Effect);

 

   

any change, event, violation, inaccuracy, effect or circumstance resulting from the announcement of the merger agreement or the pendency of the merger, including the impact thereof on the relationships,

 

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contractual or otherwise, of TIBCO and its subsidiaries with employees, suppliers, customers, partners, vendors or any other third person (other than for purposes of certain representations and warranties concerning conflicts due to the performance of the merger agreement);

 

   

the compliance by Parent, Merger Sub or TIBCO with the terms of the merger agreement, including any action taken or refrained from being taken pursuant to or in accordance with the merger agreement;

 

   

any action taken or refrained from being taken, in each case to which Parent has expressly approved, consented to or requested in writing following the date of the merger agreement;

 

   

changes or proposed changes in GAAP or other accounting standards or law (or the enforcement or interpretation of any of the foregoing);

 

   

changes in the price or trading volume of our common stock, in and of itself (it being understood that any cause of such change may be deemed to constitute, in and of itself, a Company Material Adverse Effect and may be taken into consideration when determining whether a Company Material Adverse Effect has occurred);

 

   

any failure, in and of itself, by TIBCO and its subsidiaries to meet (1) any public estimates or expectations of TIBCO’s revenue, earnings or other financial performance or results of operations for any period; or (2) any internal budgets, plans, projections or forecasts of its revenues, earnings or other financial performance or results of operations (it being understood that any cause of any such failure may be deemed to constitute, in and of itself, a Company Material Adverse Effect and may be taken into consideration when determining whether a Company Material Adverse Effect has occurred);

 

   

the availability or cost of equity, debt or other financing to Parent or Merger Sub; and

 

   

any transaction litigation or other legal proceeding threatened, made or brought by any of the current or former stockholders of TIBCO (on their own behalf or on behalf of TIBCO) against TIBCO, any of its executive officers or other employees or any member of the Board of Directors arising out of the merger or any other transaction contemplated by the merger agreement.

In the merger agreement, TIBCO has made customary representations and warranties to Parent and Merger Sub that are subject, in some cases, to specified exceptions and qualifications contained in the merger agreement. These representations and warranties relate to, among other things:

 

   

due organization, valid existence, good standing and authority and qualification to conduct business with respect to TIBCO and its subsidiaries;

 

   

TIBCO’s corporate power and authority to enter into and perform the merger agreement, the enforceability of the merger agreement and the absence of conflicts with laws, TIBCO’s organizational documents and TIBCO’s contracts;

 

   

the organizational documents of TIBCO and specified subsidiaries;

 

   

the necessary approval of the Board of Directors;

 

   

the rendering of Goldman Sachs’ fairness opinion to the Board of Directors and the Special Committee;

 

   

the inapplicability of anti-takeover statutes to the merger;

 

   

the necessary vote of stockholders in connection with the merger agreement;

 

   

the absence of any conflict, violation or material alteration of any organizational documents, existing contracts, applicable laws to TIBCO or its subsidiaries or the resulting creation of any lien upon TIBCO’s assets due to the performance of the merger agreement;

 

   

required consents, approvals and regulatory filings in connection with the merger agreement and performance thereof;

 

   

the capital structure of TIBCO as well as the ownership and capital structure of its subsidiaries;

 

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the absence of any undisclosed exchangeable security, option, warrant or other right convertible into common stock of TIBCO or any of TIBCO’s subsidiaries;

 

   

the absence of any contract relating to the voting of, requiring registration of, or granting any preemptive rights, anti-dilutive rights or rights of first refusal or other similar rights with respect to any of TIBCO’s securities;

 

   

the accuracy and required filings of TIBCO’s and its subsidiaries’ SEC filings and financial statements;

 

   

TIBCO’s disclosure controls and procedures;

 

   

TIBCO’s internal accounting controls and procedures;

 

   

TIBCO’s and its subsidiaries’ indebtedness;

 

   

the absence of specified undisclosed liabilities;

 

   

the conduct of the business of TIBCO and its subsidiaries in the ordinary course consistent with past practice and the absence of any change, event, development or state of circumstances that has had or would be reasonably expected to have, individually or in the aggregate, a Company Material Adverse Effect, in each case since June 1, 2014;

 

   

the existence and enforceability of specified categories of TIBCO’s material contracts, and any notices with respect to termination or intent not to renew those material contracts therefrom;

 

   

real property owned, leased or subleased by TIBCO and its subsidiaries;

 

   

environmental matters;

 

   

trademarks, patents, copyrights and other intellectual property matters;

 

   

tax matters;

 

   

employee benefit plans;

 

   

labor matters;

 

   

TIBCO’s compliance with laws and possession of necessary permits;

 

   

litigation matters;

 

   

insurance matters;

 

   

absence of any transactions, relations or understandings between TIBCO or any of its subsidiaries and any affiliate or related person;

 

   

payment of fees to brokers in connection with the merger agreement; and

 

   

export controls matters and compliance with the Foreign Corrupt Practices Act.

In the merger agreement, Parent and Merger Sub have made customary representations and warranties to TIBCO that are subject, in some cases, to specified exceptions and qualifications contained in the merger agreement. These representations and warranties relate to, among other things:

 

   

due organization, good standing and authority and qualification to conduct business with respect to Parent and Merger Sub and availability of these documents;

 

   

Parent’s and Merger Sub’s corporate authority to enter into and perform the merger agreement, the enforceability of the merger agreement and the absence of conflicts with laws, Parent’s or Merger Sub’s organizational documents and Parent’s or Merger Sub’s contracts;

 

   

the absence of any conflict, violation or material alteration of any organizational documents, existing contracts, applicable laws or the resulting creation of any lien upon Parent or Merger Sub’s assets due to the performance of the merger agreement;

 

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required consents and regulatory filings in connection with the merger agreement;

 

   

the absence of litigation, orders and investigations;

 

   

ownership of capital stock of TIBCO;

 

   

payment of fees to brokers in connection with the merger agreement;

 

   

operations of Parent and Merger Sub;

 

   

the absence of any required consent of holders of voting interests in Parent or Merger Sub;

 

   

delivery and enforceability of the limited guaranty;

 

   

matters with respect to Parent’s financing and sufficiency of funds;

 

   

the absence of agreements between Parent and members of the Board of Directors or TIBCO management;

 

   

the absence of any stockholder or management arrangements related to the merger;

 

   

the solvency of Parent and the surviving corporation following the consummation of the merger and the transactions contemplated by the merger agreement;

 

   

the absence of ownership interests in, or negotiations with, competitors of TIBCO; and

 

   

the exclusivity and terms of the representations and warranties made by TIBCO.

The representations and warranties contained in the merger agreement will not survive the consummation of the merger.

Conduct of Business Pending the Merger

The merger agreement provides that, except as (1) expressly contemplated by the merger agreement; (2) approved by Parent (which approval will not be unreasonably withheld, conditioned or delayed); or (3) as disclosed in the confidential disclosure letter to the merger agreement, during the period of time between the date of the signing of the merger agreement and the effective time of the merger, TIBCO will, and will cause each of its subsidiaries to:

 

   

use its respective reasonable best efforts to maintain its existence in good standing pursuant to applicable law;

 

   

subject to the restrictions and exceptions in the merger agreement, conduct its business and operations in the ordinary course of business; and

 

   

use its reasonable best efforts to preserve intact its current business organization, to keep available the services of its current officers and employees, and to preserve its present relationships with customers, suppliers and other persons with which it has material business relationships

In addition, TIBCO has also agreed that, except as (1) expressly contemplated by the merger agreement; (2) approved by Parent (which approval will not be unreasonably withheld, conditioned or delayed); or (3) as disclosed in the confidential disclosure letter to the merger agreement, during the period of time between the date of the signing of the merger agreement and the effective time of the merger, TIBCO will not, and will cause each of its subsidiaries not to, among other things:

 

   

amend the organizational documents of TIBCO or any of its subsidiaries;

 

   

liquidate, dissolve or reorganize;

 

   

issue, sell, deliver or grant any shares of capital stock or any options, warrants, commitments, subscriptions or rights to purchase any similar capital stock or securities of TIBCO or any of its subsidiaries;

 

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adjust, split, combine, pledge, encumber or modify the terms of capital stock of TIBCO or any of its subsidiaries;

 

   

declare, set aside or pay any dividend or other distribution;

 

   

incur, assume or suffer any indebtedness or issue any debt securities;

 

   

increase the compensation payable or to become payable or benefits or other similar arrangements provided to directors, officers or employees of TIBCO or its subsidiaries;

 

   

effect certain layoffs without complying with applicable laws;

 

   

settle litigation involving TIBCO;

 

   

change accounting practices;

 

   

change tax elections or settle any tax claims;

 

   

make capital expenditures in excess of $1 million, other than to the extent that such capital expenditures are otherwise reflected in TIBCO’s capital expenditure budget, as previously disclosed to Parent;

 

   

make any acquisitions by merger, consolidation or acquisition of stock or assets or enter into any joint ventures or similar arrangements;

 

   

enter into any collective bargaining agreement;

 

   

adopt or implement any stockholder rights plan or similar arrangement; or

 

   

enter into agreements to do any of the foregoing.

No Solicitation of Other Offers

From the date of the merger agreement until the earlier to occur of the termination of the merger agreement and the effective time of the merger, TIBCO has agreed not to, and to cause its subsidiaries and its and their respective representatives not to:

 

   

solicit, initiate, propose or induce or knowingly encourage, facilitate or assist any inquiries regarding any proposal or offer that constitutes or would reasonably be expected to lead to an acquisition proposal (as defined below);

 

   

engage in discussions or negotiations regarding, or provide any non-public information to, any person relating to, or that would reasonably be expected to lead to, an acquisition proposal;

 

   

furnish to any person (other than to Parent, Merger Sub or any designees of Parent or Merger Sub) any non-public information relating to TIBCO or any of its subsidiaries or afford to any person access to the business, properties, assets, books, records or other non-public information, or to any personnel, of TIBCO or any of its subsidiaries (other than Parent, Merger Sub or any designees of Parent or Merger Sub), in any such case with the intent to induce the making, submission or announcement of, or to knowingly encourage, facilitate or assist, any proposal or inquiry that constitutes, or is reasonably expected to lead to, an acquisition proposal or any inquiries or the making of any proposal that would reasonably be expected to lead to an acquisition proposal;

 

   

approve, endorse or recommend any proposal that constitutes, or is reasonably expected to lead to, an acquisition proposal; or

 

   

enter into any letter of intent, memorandum of understanding, merger agreement, acquisition agreement or other contract relating to an acquisition transaction (as defined below), other than certain permitted confidentiality agreements.

 

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In addition, TIBCO has agreed to request the prompt return or destruction of all non-public information concerning TIBCO or its subsidiaries furnished to any person with whom a confidentiality agreement was entered into at any time within the three month period immediately preceding the date of on which the merger agreement was executed and will cease providing any further information with respect to TIBCO or any acquisition proposal to any such persons or their respective representatives and will terminate all access granted to any such persons or their respective representatives to any physical or electronic data room.

Notwithstanding the restriction described above, prior to the adoption of the merger agreement by TIBCO’s stockholders, TIBCO may provide information to, and engage or participate in negotiations or substantive discussions with, a person regarding an acquisition proposal if the Board of Directors determines in good faith after consultation with its financial advisor and its outside legal counsel that such proposal is a superior proposal or is reasonably likely to lead to a superior proposal.

For purposes of this proxy statement and the merger agreement:

“Acquisition proposal” means any offer or proposal (other than an offer or proposal by Parent or Merger Sub) to engage in an acquisition transaction.

“Acquisition transaction” means any transaction or series of related transactions (other than the merger) involving:

(1) any direct or indirect purchase or other acquisition by any person or “group” (as defined pursuant to Section 13(d) of the Exchange Act) of persons, whether from TIBCO or any other person(s), of securities representing more than 15% of the total outstanding voting power of TIBCO after giving effect to the consummation of such purchase or other acquisition, including pursuant to a tender offer or exchange offer by any person or “group” of persons that, if consummated in accordance with its terms, would result in such person or “group” of persons beneficially owning more than 15% of the total outstanding voting power of TIBCO after giving effect to the consummation of such tender or exchange offer;

(2) any direct or indirect purchase, license or other acquisition by any person or “group” (as defined pursuant to Section 13(d) of the Exchange Act) of persons of assets constituting or accounting for more than 15% of the consolidated assets, revenue or net income of TIBCO and its subsidiaries taken as a whole (measured by the fair market value thereof as of the date of such purchase or acquisition); or

(3) any merger, consolidation, business combination, recapitalization, reorganization, liquidation, dissolution or other transaction involving TIBCO pursuant to which any person or “group” (as defined pursuant to Section 13(d) of the Exchange Act) of persons would hold securities representing more than 15% of the total outstanding voting power of TIBCO outstanding after giving effect to the consummation of such transaction.

“Superior proposal” means any bona fide written acquisition proposal for an acquisition transaction on terms that the Board of Directors (or a committee thereof) has determined in good faith (after consultation with its financial advisor and outside legal counsel) is reasonably likely to be consummated in accordance with its terms, taking into account all legal, regulatory and financing aspects of the proposal (including certainty of closing) and the identity of the person making the proposal and other aspects of the acquisition proposal that the Board of Directors (or a committee thereof) deems relevant, and if consummated, would be more favorable, from a financial point of view, to TIBCO’s stockholders (in their capacity as such) than the merger (taking into account any revisions to the merger agreement made or proposed in writing by Parent prior to the time of such determination). For purposes of the reference to an “acquisition proposal” in this definition, all references to “15%” in the definition of “acquisition transaction” will be deemed to be references to “50%.”

The Board of Directors’ Recommendation; Company Board Recommendation Change

As described above, and subject to the provisions described below, the Board of Directors has made the recommendation that the holders of shares of common stock vote “FOR” the proposal to adopt the merger

 

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agreement. The merger agreement provides that the Board of Directors will not effect a company board recommendation change except as described below.

Prior to the adoption of the merger agreement by stockholders, the Board of Directors may not (with any action described in the following being referred to as a “company board recommendation change”):

 

   

withhold, withdraw, amend, qualify or modify, or publicly propose to withhold, withdraw, amend, qualify or modify, the TIBCO recommendation in a manner adverse to Parent in any material respect;

 

   

adopt, approve, endorse, recommend or otherwise declare advisable an acquisition proposal;

 

   

fail to publicly reaffirm the TIBCO recommendation within ten business days after Parent so requests in writing (it being understood that TIBCO will have no obligation to make such reaffirmation on more than three separate occasions);

 

   

take or fail to take any formal action or make or fail to make any recommendation or public statement in connection with a tender or exchange offer, other than a recommendation against such offer or a “stop, look and listen” communication by the Board of Directors (or a committee thereof) to TIBCO’s stockholders pursuant to Rule 14d-9(f) promulgated under the Exchange Act (or any substantially similar communication) (it being understood that the Board of Directors (or a committee thereof) may refrain from taking a position with respect to an acquisition proposal until the close of business on the tenth business day after the commencement of a tender or exchange offer in connection with such acquisition proposal without such action being considered a violation of the merger agreement); or