10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 1, 2009

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from              to             

Commission File Number: 000-26579

TIBCO SOFTWARE INC.

(Exact name of registrant as specified in its charter)

Delaware	77-0449727
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

3303 Hillview Avenue

Palo Alto, California 94304-1213

(Address of principal executive offices) (Zip code)

Registrant’s telephone number, including area code: (650) 846-1000

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer  x	Accelerated filer  ¨	Non-accelerated filer  ¨	Smaller reporting company  ¨
		(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

The number of shares outstanding of the registrant’s Common Stock, $0.001 par value, as of April 3, 2009 was 175,522,136 shares.

TIBCO SOFTWARE INC.

Table of Contents

		Page No.
PART I.	FINANCIAL INFORMATION
Item 1.	Condensed Consolidated Financial Statements:
	Condensed Consolidated Balance Sheets as of February 28, 2009 and November 30, 2008	3
	Condensed Consolidated Statements of Operations for the Three Months Ended February 28,  2009 and February 29, 2008	4
	Condensed Consolidated Statements of Cash Flows for the Three Months Ended February 28,  2009 and February 29, 2008	5
	Notes to Condensed Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	30
Item 4.	Controls and Procedures	31
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	32
Item 1A.	Risk Factors	32
Item 6.	Exhibits	39
	Signatures	40

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TIBCO SOFTWARE INC.

PART I—FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(in thousands, except par value per share)

	February 28, 2009			November 30, 2008
Assets
Current assets:
Cash and cash equivalents	$	285,723		$	254,400
Short-term investments		7,626			13,073
Accounts receivable, net of allowances of $4,298 and $4,369		106,486			133,191
Prepaid expenses and other current assets		47,948			49,994
Total current assets		447,783			450,658
Property and equipment, net		100,796			103,531
Goodwill		327,447			343,942
Acquired intangible assets, net		68,744			80,437
Long-term deferred income tax assets		70,335			70,135
Other assets		41,245			39,865
Total assets	$	1,056,350		$	1,088,568
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	14,387		$	15,030
Accrued liabilities		66,689			90,980
Accrued excess facilities costs		6,466			6,572
Deferred revenue		147,047			140,221
Current portion of long-term debt		2,061			2,033
Total current liabilities		236,650			254,836
Accrued excess facilities costs, less current portion		4,246			5,594
Long-term deferred revenue		10,832			12,007
Long-term deferred income tax liabilities		8,314			15,329
Long-term income tax liabilities		12,202			12,439
Long-term debt, less current portion		41,999			42,525
Other long-term liabilities		4,018			3,837
Total liabilities		318,261			346,567
Commitments and contingencies (Note 9)
Minority interest		333			358
Stockholders’ equity:
Common stock, $0.001 par value; 1,200,000 shares authorized; 175,392 and 174,296 shares issued and outstanding		175			174
Additional paid-in capital		771,941			761,743
Accumulated other comprehensive income		(64,137	)		(44,425	)
Retained earnings		29,777			24,151
Total stockholders’ equity		737,756			741,643
Total liabilities and stockholders’ equity	$	1,056,350		$	1,088,568

See accompanying Notes to Condensed Consolidated Financial Statements.

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TIBCO SOFTWARE INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(in thousands, except per share data)

	Three Months Ended
	February 28, 2009			February 29, 2008
Revenue:
License	$	44,849		$	57,753
Service and maintenance		88,047			88,825
Total revenue		132,896			146,578
Cost of revenue:
License		6,810			7,280
Service and maintenance		31,245			35,770
Total cost of revenue		38,055			43,050
Gross profit		94,841			103,528
Operating expenses:
Research and development		25,134			25,454
Sales and marketing		46,126			54,388
General and administrative		10,628			13,798
Amortization of acquired intangible assets		3,716			4,140
Total operating expenses		85,604			97,780
Income from operations		9,237			5,748
Interest income		1,077			3,258
Interest expense		(746	)		(842	)
Other income, net		159			238
Income before provision for income taxes and minority interest		9,727			8,402
Provision for income taxes		4,122			2,833
Minority interest, net of tax		(21	)		55
Net income	$	5,626		$	5,514
Net income per share:
Basic	$	0.03		$	0.03
Diluted	$	0.03		$	0.03
Shares used in computing net income per share:
Basic		171,284			186,315
Diluted		172,092			190,064

See accompanying Notes to Condensed Consolidated Financial Statements.

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TIBCO SOFTWARE INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(in thousands)

	Three Months Ended
	February 28, 2009			February 29, 2008
Operating activities:
Net income	$	5,626		$	5,514
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation of property and equipment		3,820			4,015
Amortization of acquired intangible assets		7,279			7,957
Stock-based compensation		5,361			5,150
Deferred income tax		(2,397	)		(5,368	)
Tax benefits related to stock benefit plans		2,711			3,887
Excess tax benefits from stock-based compensation		(2,318	)		(3,801	)
Minority interest, net of tax		(21	)		55
Other non-cash adjustments, net		493			67
Changes in assets and liabilities, net of acquired assets and liabilities:
Accounts receivable		24,710			47,491
Prepaid expenses and other assets		2,928			1,096
Accounts payable		(598	)		(3,778	)
Accrued liabilities and excess facilities costs		(23,931	)		(9,776	)
Deferred revenue		5,650			7,666
Net cash provided by operating activities		29,313			60,175
Investing activities:
Purchases of short-term investments		—			(34,999	)
Maturities and sales of short-term investments		5,174			48,264
Acquisition of businesses, net of cash acquired		(163	)		—
Purchases of private equity investments		—			(9	)
Proceeds from private equity investments		—			222
Purchases of property and equipment		(1,318	)		(2,256	)
Restricted cash pledged as security		(2,315	)		(124	)
Net cash provided by investing activities		1,378			11,098
Financing activities:
Proceeds from exercise of stock options		1,138			1,936
Proceeds from employee stock purchase program		1,179			1,528
Withholding taxes related to restricted stock net share settlement		(190	)		—
Repurchases of the Company’s common stock		—			(45,271	)
Excess tax benefits from stock-based compensation		2,318			3,801
Principal payments on long-term debt		(498	)		(471	)
Net cash provided by (used in) financing activities		3,947			(38,477	)
Effect of foreign exchange rate changes on cash and cash equivalents		(3,315	)		209
Net increase in cash and cash equivalents		31,323			33,005
Cash and cash equivalents at beginning of period		254,400			170,237
Cash and cash equivalents at end of period	$	285,723		$	203,242
Supplemental disclosures:
Income taxes paid	$	3,053		$	1,993
Interest paid	$	610		$	637

See accompanying Notes to Condensed Consolidated Financial Statements.

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TIBCO SOFTWARE INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. BASIS OF PRESENTATION

The accompanying unaudited Condensed Consolidated Financial Statements have been prepared by TIBCO Software Inc. (“TIBCO,” the “Company,” “we” or “us”) in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in Consolidated Financial Statements prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) have been condensed or omitted in accordance with such rules and regulations. The condensed consolidated balance sheet data as of November 30, 2008, was derived from audited financial statements, but does not include all disclosures required by GAAP. In the opinion of management, the accompanying unaudited Condensed Consolidated Financial Statements reflect all adjustments, consisting only of normal recurring adjustments, necessary to state fairly the financial position of the Company, and its results of operations and cash flows. These Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and notes thereto for the fiscal year ended November 30, 2008, included in the Company’s Annual Report on Form 10-K filed with the SEC on January 28, 2009.

Our fiscal year ends on November 30^th of each year. For purposes of presentation, we have indicated the first quarter of fiscal years 2009 and 2008 as ended on February 28, 2009 and February 29, 2008, respectively; whereas in fact, the first quarter of fiscal years 2009 and 2008 actually ended on March 1, 2009 and March 2, 2008, respectively. There were 91 days and 93 days in the first quarter of fiscal years 2009 and 2008, respectively.

The Condensed Consolidated Financial Statements include the accounts of the Company and its wholly-owned and majority-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. For majority owned subsidiaries, we reflect the minority interest of the portion we do not own on our Condensed Consolidated Balance Sheets between Total Liabilities and Stockholders’ Equity.

The results of operations for the three months ended February 28, 2009, are not necessarily indicative of the results that may be expected for the year ending November 30, 2009, or any other future period, and we make no representations related thereto.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Our significant accounting policies were described in Note 2 to our audited Consolidated Financial Statements for the fiscal year ended November 30, 2008, included in our Annual Report on Form 10-K. These accounting policies have not significantly changed.

Recent Accounting Pronouncements

In December 2007, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 141 (revised 2007), Business Combinations (“SFAS No. 141(R)”). SFAS No. 141(R) establishes principles and requirements for how an acquirer recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, any noncontrolling interest in the acquiree and the goodwill acquired. SFAS No. 141(R) also establishes disclosure requirements to enable the evaluation of the nature and financial effects of the business combination. SFAS No. 141(R) is effective for fiscal years beginning after December 15, 2008, and will be adopted by us in the first quarter of fiscal 2010. We are currently evaluating the potential impact of the adoption of SFAS No. 141(R) on our consolidated results of operations and financial condition.

In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements (“SFAS No. 160”). SFAS No. 160 amends Accounting Research Bulletin No. 51 to establish accounting and reporting standards for the noncontrolling interest in a subsidiary. SFAS No. 160 also establishes accounting and reporting standards for the amount of consolidated net income attributable to the parent and to the noncontrolling interest, changes in a parent’s ownership interest, and the valuation of retained noncontrolling equity investments when a subsidiary is deconsolidated. SFAS No. 160 also establishes disclosure requirements that identify and distinguish between the interests of the parent and the interests of the noncontrolling owners. SFAS No. 160 is effective for fiscal years beginning after December 15, 2008, and will be adopted by us in the first quarter of fiscal 2010. We are currently evaluating the potential impact of the adoption of SFAS No. 160 on our consolidated results of operations and financial condition.

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TIBCO SOFTWARE INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(Unaudited)

In April 2008, the FASB issued FASB Staff Position No. 142-3 (“FSP No. 142-3”), Determination of the Useful Life of Intangible Assets. FSP No. 142-3 amends the factors an entity should consider in developing renewal or extension assumptions used in determining the useful life of recognized intangible assets under SFAS No. 142, Goodwill and Other Intangible Assets. This new guidance applies prospectively to intangible assets that are acquired individually or with a group of other assets in business combinations and asset acquisitions. FSP No. 142-3 is effective for financial statements issued for fiscal years and interim periods beginning after December 15, 2008. We are currently evaluating the effect that the adoption of FSP No. 142-3 will have on our consolidated results of operations and financial condition.

In November 2008, the FASB ratified Emerging Issues Task Force (“EITF”) Issue No. 08-7, Accounting for Defensive Intangible Assets (“EITF No. 08-7”). EITF No. 08-7 applies to defensive intangible assets, which are acquired intangible assets that the acquirer does not intend to actively use but intends to hold to prevent its competitors from obtaining access to them. As these assets are separately identifiable, EITF No. 08-7 requires an acquiring entity to account for defensive intangible assets as a separate unit of accounting. Defensive intangible assets must be recognized at fair value in accordance with SFAS No. 141(R) and SFAS No. 157. EITF No. 08-7 is effective for defensive intangible assets acquired in fiscal years beginning on or after December 15, 2008 and will be adopted by us in the first quarter of fiscal 2010. We are currently evaluating the potential impact, if any, of the adoption of EITF No. 08-7 on our consolidated results of operations and financial condition.

In June 2008, the FASB issued FSP EITF No. 03-6-1, Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities (“FSP EITF No. 03-6-1”). FSP EITF No. 03-6-1 clarifies that share-based payment awards that entitle their holders to receive nonforfeitable dividends or dividend equivalents before vesting should be considered participating securities. FSP EITF No. 03-6-1 is effective for fiscal years beginning after December 15, 2008 on a retrospective basis and will be adopted by us in the first quarter of fiscal 2010. We are currently evaluating the potential impact, if any, the adoption of FSP EITF No. 03-6-1 will have on our calculation of EPS.

On December 1, 2008, we adopted FASB Staff Position No. 157-2, Effective Date of FASB Statement No. 157 (“FSP SFAS No. 157-2”), which delays the effective date of SFAS No. 157 for all nonfinancial assets and nonfinancial liabilities, except those that are recognized or disclosed at fair value in the financial statements on a recurring basis to fiscal years beginning after November 15, 2008. The adoption of FSP SFAS No. 157-2, has not had a material impact on our consolidated results of operations and financial condition.

On December 1, 2008, we adopted SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No. 133 (“SFAS No. 161”). SFAS No. 161 applies to all derivative instruments and related hedged items accounted for under SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities. The adoption of SFAS No. 161 has not had a material impact on our consolidated results of operations and financial condition. See Note 5 to our Condensed Consolidated Financial Statements for further detail.

On December 1, 2008, we adopted EITF Issue No. 07-3, Accounting for Nonrefundable Advance Payments for Goods or Services Received for Use in Future Research and Development Activities (“EITF No. 07-3”). EITF No. 07-3 requires that nonrefundable advance payments for goods or services that will be used or rendered for future research and development activities be deferred and capitalized and recognized as an expense as the goods are delivered or the related services are performed. EITF No. 07-3 is effective, on a prospective basis, for fiscal years beginning after December 15, 2007. The adoption of EITF No. 07-3 has not had a material impact on our consolidated results of operations and financial condition.

3. BUSINESS COMBINATION

Insightful Corporation

On September 3, 2008, we acquired Insightful Corporation (“Insightful”), a provider of statistical data analysis and data mining solutions software. Pursuant to the Agreement and Plan of Merger (the “Insightful Merger Agreement”) entered into on June 19, 2008, we acquired all the outstanding equity of Insightful. We paid $25.5 million, consisting of $24.7 million of cash and the assumption of certain stock options with a fair value of $0.8 million, to acquire the outstanding common stock and certain stock options of Insightful. In connection with the acquisition, we also incurred transaction costs of $0.9 million. The total purchase price of Insightful, including transaction costs, was $26.4 million.

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TIBCO SOFTWARE INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(Unaudited)

The results of Insightful’s operations have been included in our Condensed Consolidated Financial Statements since the acquisition date. The following unaudited pro forma adjusted summary reflects our condensed results of operations for the three months ended February 29, 2008, assuming Insightful had been acquired at the beginning of the fiscal year 2008 (in thousands, except per share data):

Pro forma adjusted total revenue	$	151,462
Pro forma adjusted net income	$	4,552
Pro forma adjusted net income per share:
Basic	$	0.02
Diluted	$	0.02

The unaudited pro forma adjusted summary is not intended to be indicative of future results.

4. INVESTMENTS

Marketable securities, which are classified as available-for-sale, are summarized below as of February 28, 2009 and November 30, 2008 (in thousands):

										Classified on Balance Sheet
	Purchased/ Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Aggregate Fair Value		Cash and Cash Equivalents		Short-term Investments
As of February 28, 2009:
U.S. government debt securities	$	1,522	$	2	$	—		$	1,524	$	—	$	1,524
Corporate debt securities		4,063		33		—			4,096		—		4,096
Asset-backed securities		1,265		2		—			1,267		—		1,267
Mortgage-backed securities		851		—		(112	)		739		—		739
Money market funds		135,162		—		—			135,162		135,162		—
	$	142,863	$	37	$	(112	)	$	142,788	$	135,162	$	7,626
As of November 30, 2008:
U.S. government debt securities	$	3,022	$	12	$	—		$	3,034	$	—	$	3,034
Corporate debt securities		5,795		30		(1	)		5,824		—		5,824
Asset-backed securities		2,483		3		(8	)		2,478		—		2,478
Mortgage-backed securities		1,747		2		(12	)		1,737		—		1,737
Money market funds		129,551		—		—			129,551		129,551		—
	$	142,598	$	47	$	(21	)	$	142,624	$	129,551	$	13,073

Fixed income securities included in short-term investments above are summarized by their contractual maturities as follows (in thousands):

	February 28, 2009		November 30, 2008
Contractual maturities:
Less than one year	$	7,264	$	12,564
One to three years		362		509
	$	7,626	$	13,073

The maturities of asset-backed and mortgage-backed securities are primarily based upon assumed payment forecasts utilizing interest rate scenarios and mortgage loan characteristics.

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TIBCO SOFTWARE INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(Unaudited)

The following table summarizes the net realized gains (losses) on short-term investments for the periods presented (in thousands):

	Three Months Ended
	February 28, 2009			February 29, 2008
Realized gains	$	38		$	675
Realized losses		(224	)		(397	)
Net realized gains (losses)	$	(186	)	$	278

We periodically assess whether significant facts and circumstances have arisen to indicate an adverse effect on the fair value of the underlying investment that might indicate material deterioration in the creditworthiness of our issuers. During our quarter-end assessments, we determined the decline in value of investments associated with mortgage-backed securities to be other-than-temporary. Accordingly, we recorded an impairment of approximately $0.2 million for the three months ended February 28, 2009. We included this impairment in Other Income (Expense) in our Condensed Consolidated Statements of Operations. Depending on market conditions, we may record additional impairments on our investment portfolio in the future.

The following table summarizes the fair value and gross unrealized losses related to available-for-sale securities, aggregated by investment category and the length of time that individual securities have been in a continuous unrealized loss position, as of February 28, 2009 (in thousands):

	Less than 12 months					More than 12 months					Total
	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
Mortgage-backed securities	$	362	$	(103	)	$	377	$	(9	)	$	739	$	(112	)

The unrealized losses on our investments were primarily due to changes in interest rates and market and credit conditions of the underlying securities. As of February 28, 2009, we do not consider these investments to be other-than-temporarily impaired because we have the ability and intent to hold these investments until a recovery of fair value, which may be at maturity.

We have an investment in a venture capital fund which invests in privately held companies. This investment is carried at cost basis and is included in Other Assets on the Balance Sheets. If we believe that an other-than-temporary decline exists, we would record the related write-down as a loss on investments in our Consolidated Statements of Operations. The carrying value of our minority equity investments is $0.8 million as of February 28, 2009 and November 30, 2008, respectively.

5. FAIR VALUE MEASUREMENTS AND DERIVATIVE INSTRUMENTS

Fair Value Measurements

SFAS No. 157 clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, SFAS No. 157 establishes a three-tier value hierarchy, which prioritizes the inputs used in measuring fair value as follows: (Level 1) observable inputs such as quoted prices in active markets; (Level 2) inputs other than the quoted prices in active markets that are observable either directly or indirectly; and (Level 3) unobservable inputs in which there is little or no market data, which require us to develop our own assumptions. This hierarchy requires us to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. On a recurring basis, we measure certain financial assets and liabilities at fair value, including our cash equivalent, marketable securities and foreign currency contracts.

Our cash equivalents and investment instruments are classified within Level 1 or Level 2 of the fair value hierarchy because they are valued using quoted market prices, broker or dealer quotations, or alternative pricing sources with reasonable levels of price transparency. The types of instruments valued based on quoted market prices in active markets include most U.S. government and agency securities, sovereign government obligations, and money market securities. Such instruments are generally classified within Level 1 of the fair value hierarchy.

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TIBCO SOFTWARE INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(Unaudited)

The types of instruments valued based on other observable inputs include investment-grade corporate bonds, mortgage-backed and asset-backed products and state, municipal and provincial obligations. Such instruments are generally classified within Level 2 of the fair value hierarchy.

We execute our foreign currency forward contracts primarily in the retail market in an over-the-counter environment with a relatively high level of price transparency. The market participants usually are large multi-national and regional banks. Our foreign currency forward contracts valuation inputs are based on quoted prices and quoted pricing intervals from public data sources and do not involve management judgment. These contracts are typically classified within Level 2 of the fair value hierarchy.

Fair value hierarchy of our cash equivalents, marketable securities and foreign currency contracts at fair value (in thousands):

Description	February 28, 2009		Fair Value Measurements at Reporting Date using
			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant other Observable Inputs (Level 2)
Assets:
Money market fund	$	135,162	$	135,162	$	—
Corporate debt securities		4,096		—		4,096
U.S. government debt securities		1,524		—		1,524
Asset-backed securities		1,267		—		1,267
Mortgage-backed securities		739		—		739
Foreign currency forward contracts		232		—		232
Liabilities:
Foreign currency forward contracts	$	2	$	—	$	2

Derivative Financial Instruments

We transact business in approximately 20 foreign currencies worldwide. Our foreign subsidiaries, with a few exceptions, use the local currency of their respective countries as their functional currency. We enter into forward contracts with financial institutions to manage our net currency exposure related to net monetary assets and liabilities denominated in foreign currencies. Our foreign currency forward contracts are not designated as special hedge accounting under SFAS No. 133; however, they are considered hedging instruments for purposes of SFAS No. 161 reporting. We do not enter into speculative foreign exchange contracts for trading purposes.

Foreign currency forward contracts are generally placed once a month for one month when exposure information is available. We had five outstanding forward contracts with a total notional value of $41.3 million as of February 28, 2009, which are summarized as follows (in thousands):

	Notional Value Local Currency	Notional Value USD		Fair Value Gain (Loss) USD
EURO	23,000	$	29,114	$	167
Australian dollar	1,800		1,154		6
South African rand	87,000		8,596		57
Swiss franc	1,900		1,628		2
New Taiwan dollar	29,000		825		(2	)
		$	41,317	$	230

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TIBCO SOFTWARE INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(Unaudited)

	Derivatives not Designated as Hedging Instruments under SFAS No. 133
	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
As of February 28, 2009:
Foreign currency forward contracts	Other current assets	$	232	Accrued liabilities	$	2
As of November 30, 2008:
Foreign currency forward contracts	Other current assets	$	694	Accrued liabilities	$	6

Derivatives not Designated as Hedging Instruments under SFAS No. 133	Location of Gain or (Loss) in Income on Derivative	Amount of Gain or (Loss) Recognized in Income on Derivative
For the three months ended February 28, 2009:
Foreign currency forward contracts	Other income/(expense)	$	70
For the three months ended February 29, 2008:
Foreign currency forward contracts	Other income/(expense)	$	(1,337	)

Currently, we do not have master netting agreements with our counterparties for our forward contracts. We mitigate the credit risk of these derivatives by transacting with highly rated counterparties. As of February 28, 2009, we have evaluated the credit and non-performance risks associated with our derivative counterparties, and we believe that the impact of the credit risk associated with our outstanding derivatives was insignificant.

6. GOODWILL AND ACQUIRED INTANGIBLE ASSETS

The change in the carrying value of goodwill for the three months ended February 28, 2009 is as follows (in thousands):

Balance as of November 30, 2008	$	343,942
Subsequent goodwill adjustment		(164	)
Foreign currency translation		(16,331	)
Balance as of February 28, 2009	$	327,447

Certain of our intangibles assets were recorded in foreign currencies, and therefore, the gross carrying amount and accumulated amortization are subject to foreign currency translation adjustments. The carrying values of our amortized acquired intangible assets as of February 28, 2009 and November 30, 2008, are as follows (in thousands):

	As of February 28, 2009							As of November 30, 2008
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amoun		Gross Carrying Amoun		Accumulated Amortization			Net Carrying Amount
Developed technologies	$	79,539	$	(54,053	)	$	25,486	$	83,853	$	(52,885	)	$	30,968
Customer base		35,582		(22,459	)		13,123		37,461		(21,967	)		15,494
Patents/core technologies		17,237		(9,562	)		7,675		18,460		(9,424	)		9,036
Trademarks		5,691		(4,676	)		1,015		5,981		(4,666	)		1,315
Non-compete agreements		1,480		(1,380	)		100		1,480		(1,280	)		200
OEM customer royalty agreements		1,000		(1,000	)		—		1,000		(1,000	)		—
Maintenance agreements		36,386		(15,041	)		21,345		37,611		(14,187	)		23,424
	$	176,915	$	(108,171	)	$	68,744	$	185,846	$	(105,409	)	$	80,437

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(Unaudited)

Amortization of developed technologies is recorded in cost of revenue, while the amortization of other acquired intangible assets is included in operating expenses. The following summarizes the amortization expense of acquired intangible assets for the periods indicated (in thousands):

	Three Months Ended
	February 28, 2009		February 29, 2008
Amortization of acquired intangible assets:
In cost of revenue	$	3,563	$	3,817
In operating expense		3,716		4,140
Total	$	7,279	$	7,957

7. ACCRUED EXCESS FACILITIES COSTS

The following is a summary of activities in accrued facilities restructuring costs for the three months ended February 28, 2009 (in thousands):

	Accrued Excess Facilities									Accrued Severance			Total
	Headquarter Facilities			Acquisition Integration			Subtotal
As of November 30, 2008	$	10,629		$	123		$	10,752		$	1,414		$	12,166
Cash utilized		(1,308	)		(46	)		(1,354	)		(100	)		(1,454	)
As of February 28, 2009	$	9,321		$	77		$	9,398		$	1,314		$	10,712

The remaining accrued facilities restructuring costs represent the estimated loss on abandoned excess facilities, net of estimated sublease income, which is expected to be paid over the next two years. As of February 28, 2009, $4.2 million of the $10.7 million accrued excess facilities costs were classified as long-term liabilities.

8. LONG-TERM DEBT AND LINE OF CREDIT

Mortgage Note Payable

In connection with the purchase of our corporate headquarters in June 2003, we recorded a $54.0 million mortgage note payable to a financial institution collateralized by the commercial real property acquired. The balance of the mortgage note payable was $44.1 and $44.6 million as of February 28, 2009 and November 30, 2008, respectively.

The mortgage note payable carries a fixed annual interest rate of 5.50% and a 20-year amortization. The $34.4 million principal balance that will be remaining at the end of the ten-year term will be due as a final lump sum payment on July 1, 2013. Under the current applicable terms of the mortgage note agreements, we are prohibited from acquiring another company without prior consent from the lender unless we maintain at least $50.0 million of cash or cash equivalents and comply with other non-financial terms as defined in the agreements. As of February 28, 2009, we were in compliance with all covenants in the mortgage note agreements.

Line of Credit

We have a $20.0 million revolving line of credit that matures on June 18, 2009. The revolving line of credit is available for cash borrowings and for the issuance of letters of credit up to $20.0 million. As of February 28, 2009, no borrowings were outstanding under the facility and a $13.0 million irrevocable letter of credit was outstanding, leaving $7.0 million of available credit for additional letters of credit or cash borrowings. The $13.0 million irrevocable letter of credit outstanding was issued in connection with the mortgage note payable. The letter of credit automatically renews for successive one-year periods, until the mortgage note payable has been satisfied in full. The line of credit requires that we maintain a minimum of $40.0 million in unrestricted cash, cash equivalents and short-term investments, net of total current and long-term indebtedness, as well as comply with other non-financial covenants defined in the agreement. As of February 28, 2009, we were in compliance with all covenants of this revolving line of credit.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(Unaudited)

9. COMMITMENTS AND CONTINGENCIES

Letters of Credit and Bank Guarantees

In connection with the mortgage note payable, we entered into an irrevocable letter of credit in the amount of $13.0 million. See Note 8 for further details. The letter of credit is collateralized by the line of credit and automatically renews for successive one-year periods until the mortgage note payable has been satisfied in full.

In connection with a facility lease, we have an irrevocable letter of credit in the amount of $4.5 million. The letter of credit automatically renews annually for the duration of the lease term, which expires in December 2010. We are subject to certain financial covenants as defined in the letter of credit agreement. As of February 28, 2009, we were in compliance with all covenants in this letter of credit.

As of February 28, 2009, in connection with bank guarantees issued by some of our international subsidiaries, we had $5.3 million of restricted cash, which is included in Other Assets on our Condensed Consolidated Balance Sheets.

Prepaid Land Lease

In June 2003, we entered into a 51-year lease of the land upon which our corporate headquarters is located. The lease was paid in advance for a total of $28.0 million, but is subject to adjustments every 10 years based upon changes in market value. Should it become necessary, we have the option to prepay any rent increases due as a result of a change in market value. This prepaid land lease is being amortized using the straight-line method over the life of the lease; the portion to be amortized over the next 12 months is included in Prepaid Expenses and Other Current Assets, and the remainder is included in Other Assets on our Condensed Consolidated Balance Sheets.

Operating Commitments

At various locations worldwide, we lease office space and equipment under non-cancelable operating leases with various expiration dates through April 2015. Rental expense was $2.3 and $2.5 million for the three month periods ended February 28, 2009 and February 29, 2008, respectively.

As of February 28, 2009, contractual commitments associated with indebtedness, lease obligations and restructuring were as follows (in thousands):

	Total			Remainder of 2009			2010			2011			2012		2013		Thereafter
Operating commitments:
Debt principal	$	44,060		$	1,535		$	2,148		$	2,269		$	2,397	$	35,711	$	—
Debt interest		9,558			1,790			2,285			2,164			2,036		1,283		—
Operating leases		30,785			7,463			7,899			5,999			3,927		2,899		2,598
Total operating commitments		84,403			10,788			12,332			10,432			8,360		39,893		2,598
Restructuring-related commitments:
Gross lease obligations		13,637			5,211			7,729			653			9		9		26
Estimated sublease income		(5,679	)		(2,404	)		(3,036	)		(239	)		—		—		—
Net restructuring-related commitment		7,958			2,807			4,693			414			9		9		26
Total commitments	$	92,361		$	13,595		$	17,025		$	10,846		$	8,369	$	39,902	$	2,624

Future minimum lease payments under restructured non-cancelable operating leases are included in Accrued Excess Facilities Costs in our Condensed Consolidated Balance Sheets.

The above commitment table does not include approximately $12.2 million of long-term income tax liabilities recorded in accordance with FIN 48 due to the fact that we are unable to reasonably estimate the timing of these potential future payments.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(Unaudited)

Indemnification

Our software license agreements typically provide for indemnification of customers for intellectual property infringement claims. To date, no such claims have been filed against us. We also warrant to customers that software products operate substantially in accordance with the software product’s specifications. Historically, we have incurred minimal costs related to product warranties, and, as such, no accruals for warranty costs have been made. In addition, we indemnify our officers and directors under the terms of indemnity agreements entered into with them, as well as pursuant to our certificate of incorporation, bylaws and applicable Delaware law. To date, we have incurred costs for the payment of legal fees in connection with the legal proceedings detailed in Note 10.

10. LEGAL PROCEEDINGS

IPO Allocation Suit

We, certain of our directors and officers, and certain investment bank underwriters have been named in a putative class action for violation of the federal securities laws in the United States District Court for the Southern District of New York, captioned “In re TIBCO Software Inc. Initial Public Offering Securities Litigation.” This is one of a number of cases challenging underwriting practices in the initial public offerings (each, an “IPO”) of more than 300 companies, which have been coordinated for pretrial proceedings as “In re Initial Public Offering Securities Litigation.” Plaintiffs generally allege that the underwriters engaged in undisclosed and improper underwriting activities, namely the receipt of excessive brokerage commissions and customer agreements regarding post-offering purchases of stock in exchange for allocations of IPO shares. Plaintiffs also allege that various investment bank securities analysts issued false and misleading analyst reports. The complaint against us claims that the purported improper underwriting activities were not disclosed in the registration statements for our IPO and secondary public offering and seeks unspecified damages on behalf of a purported class of persons who purchased our securities or sold put options during the time period from July 13, 1999 to December 6, 2000.

A lawsuit with similar allegations of undisclosed improper underwriting practices, and part of the same coordinated proceedings, is pending against Talarian, which we acquired in 2002. That action is captioned “In re Talarian Corp. Initial Public Offering Securities Litigation.” The complaint against Talarian, certain of its underwriters and certain of its former directors and officers claims that the purported improper underwriting activities were not disclosed in the registration statement for Talarian’s IPO and seeks unspecified damages on behalf of a purported class of persons who purchased Talarian securities during the time period from July 20, 2000 to December 6, 2000.

In 2004, a stipulation of Settlement (the “Settlement”) was submitted to the Court, and in 2005, the Court granted preliminary approval. Under the Settlement, we and our subsidiary Talarian would have been dismissed of all claims in exchange for a contingent payment guarantee by the insurance companies responsible for insuring us and Talarian as issuers. Class certification was a condition of the Settlement. After the Second Circuit Court of Appeals issued a ruling overturning class certification in six test cases for the coordinated proceedings, the Settlement was terminated in June 2007 by stipulation of the parties and order of the Court. On August 14, 2007, plaintiffs filed amended master allegations and amended complaints in the six test cases. On March 26, 2008, the Court denied the defendants’ motion to dismiss the amended complaints in the six test cases. It is uncertain whether there will be any revised or future settlement. If no settlement is achieved, we believe that we and Talarian have meritorious defenses and intend to defend the actions vigorously. However, the litigation results cannot be predicted at this point.

11. STOCK BENEFIT PLANS AND STOCK-BASED COMPENSATION

Stock Benefit Plans

2008 Equity Incentive Plan (the “2008 Plan”). As of February 28, 2009, there were 13.6 million shares available for grant and approximately 1.1 million shares underlying stock options outstanding under the 2008 Plan.

1996 Stock Option Plan (the “1996 Plan”). As of February 28, 2009, there were no shares available for grant and 33.7 million underlying stock options outstanding under the 1996 Plan.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(Unaudited)

As of February 28, 2009, there were 3.6 million shares of restricted stock and 1.4 million shares underlying restricted stock units outstanding under the 2008 Plan and 1996 Plan, combined.

Insightful Corporation Amended and Restated 2001 Stock Option and Incentive Plan (the “Insightful Plan”). As of February 28, 2009, 0.6 million shares were available for grant and approximately 0.5 million shares underlying stock options were outstanding under the Insightful Plan.

1998 Director Option Plan (the “Director Plan”). As of February 28, 2009, no shares were available for grant and approximately 1.2 million shares underlying stock options were outstanding under the Director Plan.

2000 Extensibility Stock Option Plan. As of February 28, 2009, no shares were available for grant and approximately 23,000 shares underlying stock options were outstanding under the 2000 Extensibility Stock Option Plan.

Talarian Stock Option Plans. As of February 28, 2009, no shares were available for grant and approximately 23,000 shares underlying stock options were outstanding under the Talarian Stock Option Plans.

2008 Employee Stock Purchase Plan (the “2008 ESPP”). We issued approximately 0.3 million shares under the 2008 ESPP, representing approximately $1.2 million in employee contributions for the three months ended February 28, 2009. As of February 28, 2009, approximately 9.7 million shares of our common stock were available for issuance under the 2008 ESPP.

2009 Deferred Compensation Plan (the “2009 DCP”). On February 20, 2009, we adopted the 2009 DCP. Pursuant to the 2009 DCP, eligible participants may elect to defer certain cash compensation into restricted stock units. The restricted stock units will be settled in shares of our common stock at the end of the elected deferral period. As of February 28, 2009, 1.0 million shares of our common stock were available for issuance under the 2009 DCP.

Stock Options Activities

The summary of stock option activity for the three months ended February 28, 2009, is presented below (in thousands, except per share data):

Stock Options	Number of Shares Underlying Stock Options		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (years)	Aggregate Intrinsic Value
Outstanding at November 30, 2008	36,290		$	8.34	4.51	$	3,348
Granted	131			5.25
Exercised	(519	)		2.19
Forfeited or expired	(798	)		8.46
Outstanding at February 28, 2009	35,104		$	8.42	4.27	$	1,795
Vested and expected to vest at February 28, 2009	34,180		$	8.44	4.22	$	1,769
Exercisable at February 28, 2009	29,207		$	8.55	3.98	$	1,547

The intrinsic value of exercised stock options is calculated based on the difference between the exercise price and the quoted closing market price of our common stock as of the exercise date. The total intrinsic value of stock options exercised in the three months ended February 28, 2009 and February 29, 2008, was $1.6 and $3.5 million, respectively. Upon the exercise of stock options, we issue common stock from our authorized shares. As of February 28, 2009, total unamortized stock-based compensation cost related to unvested stock options was $15.5 million, with the weighted-average recognition period of 2.38 years.

The total realized tax benefits attributable to stock options exercised and vesting of stock awards were $2.7 million and $3.9 million for the three months ended February 28, 2009 and February 29, 2008, respectively.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(Unaudited)

Stock Awards Activities

Our nonvested stock awards are comprised of restricted stock and restricted stock units. A summary of the status for nonvested stock awards as of February 28, 2009, and activities in the three months ended February 28, 2009, is presented as follows (in thousands, except per share data):

Nonvested Stock Awards	Restricted Stock		Restricted Stock Units		Total Number of Shares Underlying Stock Awards		Weighted- Average Grant-Date Fair Value
Nonvested at November 30, 2008	3,363		762		4,125		$	7.99
Granted	569		742		1,311			5.53
Vested	(123	)	(4	)	(127	)		7.36
Forfeited	(220	)	(63	)	(283	)		8.19
Nonvested at February 28, 2009	3,589		1,437		5,026			7.35

We granted approximately 1.3 million shares of nonvested stock awards at no cost to recipients during the three months ended February 28, 2009. As of February 28, 2009, there was $27.4 million of total unrecognized compensation cost related to nonvested stock awards. That cost is expected to be recognized generally on a straight-line basis as the shares vest over three to four years (the weighted-average recognition period is 2.90 years). The total fair value of shares vested pursuant to stock awards during the three months ended February 28, 2009, was $0.9 million.

Stock-Based Compensation

Stock-based compensation cost for the three months ended February 28, 2009 and February 29, 2008, was $5.4 and $5.2 million, respectively. The stock-based compensation cost consists primarily of employee stock options recognized under SFAS No. 123(R) (revised 2004), Share-Based Payment (“SFAS No. 123(R)”). The deferred tax benefit on stock-based compensation expenses for the three months ended February 28, 2009 and February 29, 2008, was $1.6 and $1.2 million, respectively.

We recognized stock-based compensation costs associated with our employee stock purchase programs on a straight-line basis over each six-month offering period. Employee stock-based compensation associated with our employee stock purchase programs for the three months ended February 28, 2009 and February 29, 2008, was approximately $0.2 and $0.3 million, respectively.

We began granting restricted stock and restricted stock units to employees in fiscal year 2006. Approximately $2.5 and $1.5 million of our employee stock-based compensation cost for the three months ended February 28, 2009 and February 29, 2008, respectively, was related to grants of restricted stock and restricted stock units.

Assumptions for Estimating Fair Value of Stock-Based Awards

We selected the Black-Scholes option pricing model as the most appropriate model for determining the estimated fair value for stock-based awards. The following table summarizes the assumptions used to value stock options granted in the respective periods:

	Three Months Ended
	February 28, 2009			February 29, 2008
Stock option grants:
Expected term of stock options (years)		4.7			4.6
Risk-free interest rate		1.70	%		3.00	%
Expected volatility		56	%		48	%
Weighted-average grant-date fair value of stock options (per share)	$	2.51		$	3.28
ESPP:
Expected term of ESPP (years)		0.5			0.5
Risk-free interest rate		0.40	%		2.20	%
Expected volatility		71	%		54	%
Weighted-average grant-date fair value of ESPP (per share)	$	1.90		$	2.39

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(Unaudited)

12. COMPREHENSIVE INCOME (LOSS)

Our comprehensive income includes net income and other comprehensive income (loss), which consists of unrealized gains and losses on available-for-sale securities and cumulative translation adjustments. A summary of the comprehensive income for the periods indicated is as follows (in thousands):

	Three Months Ended
	February 28, 2009			February 29, 2008
Net income	$	5,626		$	5,514
Cumulative translation adjustment		(19,611	)		869
Unrealized loss on available-for-sale securities		(101	)		750
Comprehensive income (loss)	$	(14,086	)	$	7,133

The balances of each component of accumulated other comprehensive income, net of taxes, as of February 28, 2009 and November 30, 2008, consist of the following (in thousands):

	Unrealized Gain (Loss) in Available-for-Sale Securities			Foreign Currency Translation			Accumulated Other Comprehensive Income
Balance as of November 30, 2008	$	26		$	(44,451	)	$	(44,425	)
Net change during three month period		(101	)		(19,611	)		(19,712	)
Balance as of February 28, 2009	$	(75	)	$	(64,062	)	$	(64,137	)

13. MINORITY INTEREST

In the first quarter of fiscal year 2007, we established a joint venture in South Africa, TS Innovations Limited (“Innovations”), with a local South Africa corporation, to assist with our sales efforts as well as to provide consulting services and training to our customers in the Sub-Saharan Africa region. For the three months ended February 28, 2009, Innovations had total assets of $0.6 million and total revenues of $0.3 million. As of February 28, 2009, we owned a 74.9% interest in the joint venture. Because of our majority interest in Innovations, our Condensed Consolidated Financial Statements include the balance sheets, results of operations and cash flows of Innovations, net of intercompany charges. We therefore eliminated 25.1% of the financial results that pertain to the minority interest of Innovations; this eliminated amount was reported as a separate line in our Condensed Consolidated Statements of Operations and Balance Sheets.

14. PROVISION FOR INCOME TAXES

The effective tax rate of 42.4% for the three months ended February 28, 2009, differs from the statutory rate of 35% primarily due to the recording of deferred tax expense as a result of the re-measurement of our California deferred tax assets due to the enactment of California tax legislation, the impact of certain stock compensation charges under SFAS No. 123(R) and state income taxes which were partially offset by the benefits resulting from the reorganization of certain foreign entities, lower foreign taxes and research and development credits. The effective tax rate of 33.7% for the three months ended February 29, 2008, differs from the statutory rate of 35% primarily due to the benefits resulting from the reorganization of certain foreign entities, lower foreign taxes and research and development credits which were partially offset by the impact of certain stock compensation charges under SFAS No. 123(R) and state income taxes.

In February 2009, the California 2009-2010 budget legislation was signed into law. One of the major components of this legislation is the ability to elect to apply a single sales factor apportionment for years beginning after January 1, 2011. As a result of our anticipated election of the single sales factor, we are required under SFAS 109 to re-measure our deferred taxes taking into account the reversal pattern and the expected California tax rate under the elective single sales factor. We have determined that by electing a single sales factor apportionment, our California deferred tax assets will decrease by approximately $1.1 million (net of federal benefit). The tax impact of $1.1 million has been recorded as a discrete item in the first quarter of fiscal year 2009.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(Unaudited)

On December 1, 2007, we adopted FIN 48. FIN 48 requires companies to determine whether it is more likely than not that a tax position will be sustained upon examination by the appropriate taxing authorities before any part of the benefit can be recorded in the financial statements. FIN 48 also provides guidance on de-recognition, classification, accounting in interim periods and disclosure requirements for tax contingencies. In addition, we have applied the standards in FASB Staff Position No. FIN 48-1, Definition of Settlement in FASB Interpretation No. 48 (“FSP FIN 48-1”) as part of our initial adoption of FIN 48. FSP FIN 48-1 is an amendment to FIN 48. It clarifies how an enterprise should determine whether a tax position is effectively settled for the purpose of recognizing previously unrecognized tax benefits.

As a result of the adoption of FIN 48, we reduced the liability for net unrecognized tax benefits by $0.6 million and accounted for this as a cumulative-effect adjustment recorded as an increase to the December 1, 2007, balance of retained earnings. The total amount of gross unrecognized tax benefit as of the date of adoption was $33.8 million, of which $11.5 million would affect the effective tax rate if realized. We historically classified unrecognized tax benefits in current income taxes payable. In implementing FIN 48, we have reclassified $6.8 million from current income taxes payable to long-term income tax liabilities. We have also grossed-up our long-term income tax liabilities by $5.4 million with a corresponding increase to our deferred tax assets.

During the first quarter of fiscal 2009, the amount of gross unrecognized tax benefits was increased by approximately $0.3 million. The total amount of gross unrecognized tax benefits was $35.8 million as of February 28, 2009, of which $13.5 million would affect the effective tax rate if realized. We do not expect any significant changes to the amount of unrecognized tax benefit within the next twelve months.

Upon adoption of FIN 48, we have elected to include interest expense and penalties accrued on unrecognized tax benefits as a component of our income tax expense. This is consistent with our policy prior to the adoption of FIN 48. As of the date of November 30, 2008, we had accrued $1.2 million for interest and penalties. There was no material change to this amount as of February 28, 2009.

We are subject to routine corporate income tax audits in the United States and foreign jurisdictions. The statute of limitations for our fiscal years 1998 through 2008 remains open for U.S. purposes. Most foreign jurisdictions have statute of limitations that range from three to six years.

We make certain estimates and judgments in determining income tax expense for financial statement purposes. These estimates and judgments occur in the calculation of certain tax assets and liabilities, which arise from differences in the timing of recognition of revenue and expense for tax and financial statement purposes.

As part of the process of preparing our Condensed Consolidated Financial Statements, we are required to estimate our income taxes in each of the jurisdictions in which we operate. This process involves estimating our current tax exposure under the most recent tax laws and assessing temporary differences resulting from differing treatment of items for tax and accounting purposes. These differences result in deferred tax assets and liabilities, which are included in our Condensed Consolidated Balance Sheets.

With the exception of our subsidiaries in the United Kingdom, net undistributed earnings of our foreign subsidiaries are generally considered to be indefinitely reinvested, and accordingly, no provision for U.S. income taxes has been provided thereon. Upon distribution of these earnings in the form of dividends or otherwise, we will be subject to U.S. income taxes to the extent that available net operating loss carryovers and foreign tax credits are not sufficient to eliminate the additional tax liability.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(Unaudited)

15. NET INCOME PER SHARE

The following table sets forth the computation of basic and diluted net income per share for the periods indicated (in thousands, except per share data):

	Three Months Ended
	February 28, 2009		February 29, 2008
Net income	$	5,626	$	5,514
Weighted-average shares of common stock used to compute basic net income per share (excluding unvested restricted stock)		171,284		186,315
Effect of dilutive common stock equivalents:
Stock options to purchase common stock		765		3,494
Restricted common stock awards		44		255
Weighted-average shares of common stock used to compute diluted net income per share		172,093		190,064
Basic net income per share	$	0.03	$	0.03
Diluted net income per share	$	0.03	$	0.03

The following potential common stock equivalents are not included in the diluted net income per share calculation above, because their effect was anti-dilutive for the periods indicated (in thousands):

	Three Months Ended
	February 28, 2009	February 29, 2008
Stock options to purchase common stock	33,304	22,026
Restricted common stock awards	3,416	3
Total anti-diluted common stock equivalents	36,720	22,029

16. SEGMENT INFORMATION

We operate our business in one operating segment: the development and marketing of a suite of infrastructure software. Our chief operating decision maker is our Chief Executive Officer, who reviews financial information presented on a consolidated basis for purposes of making operating decisions and assessing financial performance.

Our revenue by geographic region, Americas; Europe, the Middle East and Africa (“EMEA”); and Asia Pacific and Japan (“APJ”), based on the location at which each sale originates, is summarized as follows (in thousands):

	Three Months Ended
	February 28, 2009		February 29, 2008
Americas:
United States	$	65,848	$	74,655
Other Americas		4,279		2,265
Total Americas		70,127		76,920
EMEA:
United Kingdom		10,956		15,123
Other EMEA		41,103		40,383
Total EMEA		52,059		55,506
APJ		10,710		14,152
	$	132,896	$	146,578

No customer accounted for more than 10% of total revenue for the three months ended February 28, 2009 or February 29, 2008. No customer had a balance in excess of 10% of our net accounts receivable on February 28, 2009 or November 30, 2008.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(Unaudited)

Our property and equipment by major country are summarized as follows (in thousands):

	February 28, 2009		November 30, 2008
Property and equipment, net:
United States	$	95,749	$	97,576
United Kingdom		1,943		2,240
Other		3,104		3,715
	$	100,796	$	103,531

17. STOCK REPURCHASE PROGRAMS

In April 2008, our Board of Directors approved a stock repurchase program pursuant to which we may repurchase up to $300.0 million of our outstanding common stock. As of February 28, 2009, we had $196.3 million available for purchases under the April 2008 stock repurchase program.

All repurchased shares of common stock have been retired. The following table summarizes the activities under the stock repurchase programs for the periods indicated (in thousands, except per share data):

	Three Months Ended
	February 28, 2009		February 29, 2008
Cash used for repurchases	$	—	$	45,272
Shares repurchased		—		6,166
Average price per share	$	—	$	7.34

18. SUBSEQUENT EVENTS

Patent Suit

On March 30, 2009, Broadband Graphics, LLC (“Broadband Graphics”) filed a complaint for patent infringement against us in the United States District Court for the Western District of Washington. The complaint, which has not yet been formally served on us, alleges that our Spotfire software and other unspecified products infringe one or more of the claims of U.S. Patent Nos. 7,013,432, 7,313,765 and 7,013,431, assigned to Broadband Graphics. The complaint is seeking, among other things, injunctive relief and unspecified damages. We intend to defend the actions vigorously. We have, however, only recently received a copy of the complaint and are currently investigating the allegations contained in it. Therefore, the litigation results cannot be predicted at this point.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements relate to expectations concerning matters that are not historical facts. Words such as “projects,” “believes,” “anticipates,” “plans,” “expects,” “intends,” “strategy,” “continue,” “will,” “estimate,” “forecast,” and similar words and expressions are intended to identify forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements contained herein are reasonable, these expectations or any of the forward-looking statements could prove to be incorrect, and actual results could differ materially from those projected or assumed in the forward-looking statements. Our future financial condition and results of operations, as well as any forward-looking statements, are subject to risks and uncertainties, including, but not limited to, the factors set forth in Part II, Item 1A. “Risk Factors.” All forward-looking statements and reasons why results may differ included in this Quarterly Report on Form 10-Q are made as of the date hereof, and we assume no obligation to update any such forward-looking statements or reasons why actual results may differ.

EXECUTIVE OVERVIEW

Our products are currently licensed by companies worldwide in diverse industries such as financial services, telecommunications, retail, healthcare, manufacturing, energy, transportation, logistics, government and insurance. We sell our products through a direct sales force and through alliances with leading software vendors and system integrators.

Our revenue consists primarily of license and maintenance fees from our customers and distributors. In addition, we receive fees from our customers for providing consulting services. We also receive revenue from our strategic relationships with business partners who embed our products in their hardware and networking systems as well as from systems integrators who resell our products.

Our revenue is generally derived from a diverse customer base. No single customer represented greater than 10% of total revenue for the three months ended February 28, 2009 or February 29, 2008. As of February 28, 2009 no single customer had a balance in excess of 10% of our net accounts receivable. We establish allowances for doubtful accounts based on our evaluation of collectability and an allowance for returns and discounts based on specifically identified credits and historical experience.

For the first quarter of fiscal year 2009, we recorded total revenue of $132.9 million, a decrease of 9% over first quarter of fiscal year 2008. License revenue was $44.8 million, 22% lower than the previous year. In addition, we generated cash flow from operations of $29.3 million. Earnings per share was $0.03 in the first quarter of fiscal year 2009 as compared to $0.03 for the first quarter of fiscal year 2008. We ended the quarter with $293.3 million in cash, cash equivalents and short-term investments.

Critical Accounting Policies, Judgments and Estimates

The discussion and analysis of our financial condition and results of operations is based upon our Condensed Consolidated Financial Statements, which have been prepared in accordance with generally accepted accounting principles in the United States of America. The preparation of these financial statements requires us to make estimates, assumptions and judgments that can have significant impact on the reported amounts of assets and liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities at the date of our financial statements. We base our estimates, assumptions and judgments on historical experience and various other factors that we believe to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. On a regular basis we evaluate our estimates, assumptions and judgments and make changes accordingly. We also discuss our critical accounting estimates with the Audit Committee of our Board of Directors.

We believe that the estimates, assumptions and judgments involved in revenue recognition; allowances for doubtful accounts, returns and discounts; stock-based compensation; valuation and impairment of investments; impairment of goodwill, intangible assets and long-lived assets; restructuring and integration costs; and accounting for income taxes have the greatest potential impact on our Condensed Consolidated Financial Statements, so we consider these to be our critical accounting policies. Historically, our estimates, assumptions and judgments relative to our critical accounting policies have not differed materially from actual results. The critical accounting estimates associated with these policies are described in Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operation” of our Annual Report on Form 10-K filed with the SEC on January 28, 2009.

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Recent Accounting Pronouncements

Recent accounting pronouncements are detailed in Note 2 to our Condensed Consolidated Financial Statements.

Results of Operations

For purposes of presentation, we have indicated the first quarter of fiscal years 2009 and 2008 as ended on February 28, 2009 and February 29, 2008, respectively; whereas in fact, the first quarter of fiscal years 2009 and 2008 actually ended on March 1, 2009 and March 2, 2008, respectively. There were 91 days and 93 days in the first quarter of fiscal years 2009 and 2008, respectively. All amounts presented in the tables in the following sections on our Results of Operations are stated in thousand of dollars, except for percentages and unless otherwise stated.

The following table sets forth the components of our Results of Operations as percentages of total revenue for the periods indicated:

	Three Months Ended
	February 28, 2009		February 29, 2008
Revenue:
License	34	%	39	%
Service and maintenance	66		61
Total revenue	100		100
Cost of revenue:
License	5		5
Service and maintenance	24		24
Total cost of revenue	29		29
Gross profit	71		71
Operating expenses:
Research and development	19		17
Sales and marketing	35		37
General and administrative	8		10
Amortization of acquired intangible assets	2		3
Total operating expenses	64		67
Income from operations	7		4
Interest income	1		2
Interest expense	(1	)	—
Other income (expense), net	—		—
Income before income taxes and minority interest	7		6
Provision for income taxes	3		2
Minority interest, net of tax	—		—
Net income	4	%	4	%

Total Revenue

Our total revenue consisted primarily of license, consulting and maintenance fees from our customers and partners.

	Three Months Ended
	February 29, 2009		February 28, 2008		Change
Total revenue	$	132,896	$	146,578	(9	)%

Total revenue for the first quarter of fiscal year 2009, compared to the same quarter last year, decreased by $13.7 million or 9%. The decrease was comprised of a $12.9 million or 22% decrease in license revenue and a $0.8 million or 1% decrease in service and maintenance revenue.

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For the three months ended February 28, 2009, we experienced a reduction in total revenue in all geographic regions, compared to the same period last year. See Note 16 to our Condensed Consolidated Financial Statements for amounts of total revenue by region. The percentages of total revenue from the geographic regions are summarized as follows:

	Three Months Ended
	February 28, 2009		February 29, 2008
Americas	53	%	53	%
EMEA	39		38
APJ	8		9
	100	%	100	%

License Revenue and Cost

	Three Months Ended
	February 28, 2009			February 29, 2008			Change
License revenue	$	44,849		$	57,753		(22	)%
Percentage of total revenue		34	%		39	%
Cost of license revenue		6,810			7,280		(6	)%
Percentage of total revenue		5	%		5	%
Percentage of license revenue		15	%		13	%

License revenue decreased $12.9 million or 22% in the first quarter of fiscal year 2009, compared to the same quarter last year. The decrease was primarily due to decreased revenue in the Americas and APJ.

Our license revenue in the first quarter of fiscal years 2009 and 2008 was derived from the following three product lines: service oriented architecture (“SOA”), business optimization and business process management (“BPM”). The percentages of license revenue from the three product lines are summarized as follows:

	Three Months Ended
	February 28, 2009		February 29, 2008
SOA	64	%	61	%
Business optimization	21		28
BPM	15		11
	100	%	100	%

Our license revenue in any particular period is dependent upon the timing and number of license transactions and their relative size. Selected data about our license revenue transactions recognized for the respective periods is summarized as follows:

	Three Months Ended
	February 28, 2009		February 29, 2008
Number of license deals of $1.0 million or more		11		14
Number of license deals over $0.1 million		66		87
Average size of license deals over $0.1 million (in millions)	$	0.6	$	0.6

Cost of license revenue mainly consisted of royalty costs and amortization of developed technology acquired through corporate acquisitions. Cost of license revenue decreased by $0.5 million or 6% for the first quarter of fiscal year 2009, compared to the same quarter last year. The decrease in absolute dollars in cost of license revenue for the first quarter of fiscal year 2009, compared to the same quarter last year, resulted primarily from a decrease of $0.3 million in royalty costs as well as a decrease of $0.2 million in amortization expenses associated with acquired technologies.

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Service and Maintenance Revenue and Cost

	Three Months Ended
	February 28, 2009			February 29, 2008			Change
Service and maintenance revenue	$	88,047		$	88,825		(1	)%
Percentage of total revenue		66	%		61	%
Cost of service and maintenance revenue		31,245			35,770		(13	)%
Percentage of total revenue		24	%		24	%
Percentage of service and maintenance revenue		35	%		40	%

Service and maintenance revenue decreased $0.8 million or 1% for the first quarter of fiscal year 2009, compared to the same quarter last year, due to lower professional services and training revenue.

Cost of service and maintenance consists primarily of compensation for professional services, customer support personnel and third-party contractors and associated expenses related to providing consulting services.

The cost of service and maintenance decreased by $4.5 million or 13% for the first quarter of fiscal year 2009, compared to the same quarter last year. The decrease in absolute dollars for the first quarter of fiscal year 2009, compared to the same quarter last year, resulted primarily from a $2.8 million decrease in employee-related expenses, a $0.6 million decrease in travel expenses, a $0.6 million decrease in facilities expenses and a $0.5 million decrease in subcontractor costs. The decrease in employee-related expenses was primarily due to a reduction in salaries.

Research and Development Expenses

Research and development expenses consisted primarily of employee-related expenses, including salary, bonus, benefits, stock-based compensation expenses, recruiting expense and office support, third-party contractor fees and related costs associated with the development and enhancement of our products.

	Three Months Ended
	February 28, 2009			February 29, 2008			Change
Research and development expenses	$	25,134		$	25,454		(1	)%
Percentage of total revenue		19	%		17	%

Research and development expenses for the first quarter of fiscal year 2009 decreased by $0.3 million or 1%, compared to the same quarter last year, resulting primarily from a $0.4 million decrease in facilities expenses, a $0.1 million decrease in employee-related expenses and a $0.1 million decrease in travel expenses. The decreases were partially offset by a $0.3 million increase in contractor expenses.

Sales and Marketing Expenses

Sales and marketing expenses consisted primarily of employee-related expenses, including sales commissions, salary, bonus, benefits, stock-based compensation expenses, recruiting expense and office support, related costs of our direct sales force and marketing staff, and the costs of marketing programs, including customer conferences, promotional materials, trade shows, advertising and related travel expenses.

	Three Months Ended
	February 28, 2009			February 29, 2008			Change
Sales and marketing expenses	$	46,126		$	54,388		(15	)%
Percentage of total revenue		35	%		37	%

The $8.3 million or 15% decrease in sales and marketing expenses for the first quarter of fiscal year 2009, compared to the same quarter last year, was primarily due to a $5.3 million decrease in employee-related expenses, a $1.8 million decrease in travel expenses, a $1.3 million decrease in marketing programs and a $0.3 million decrease in facilities expenses. The decreases were partially offset by a $0.4 million increase in referral fees. The decrease in employee-related expenses was mainly due to a reduction in salaries. The decreases in travel expenses and marketing programs were due to cost management efforts.

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General and Administrative Expenses

General and administrative expenses consisted primarily of employee-related expenses, including salary, bonus, benefits, stock-based compensation expenses, recruiting expense and office support and related costs for general corporate functions including executive, legal, finance, accounting and human resources, and also included accounting, tax and legal fees and charges.

	Three Months Ended
	February 28, 2009			February 29, 2008			Change
General and administrative expenses	$	10,628		$	13,798		(23	)%
Percentage of total revenue		8	%		10	%

General and administrative expenses decreased by $3.2 million or 23% for the first quarter of fiscal year 2009, compared to the same quarter last year, primarily due to a $1.7 million decrease in employee-related expenses, a $1.0 million decrease in consulting expenses and a $0.4 million decrease in travel expenses. The decreases in employee-related and consulting expenses were primarily due to a reduction in salaries and contractor costs.

Amortization of Acquired Intangible Assets

Intangible assets acquired through corporate acquisitions are comprised of the expected value of developed technologies, patents, trademarks, established customer bases and non-compete agreements, as well as maintenance and OEM customer royalty agreements. Amortization of developed technologies is recorded as a cost of revenue, and amortization of other acquired intangible assets is included in operating expenses.

	Three Months Ended
	February 28, 2009			February 29, 2008			Change
Amortization of acquired intangible assets:
In cost of revenue	$	3,563		$	3,817
In operating expenses		3,716			4,140
Total amortization expenses	$	7,279		$	7,957		(9	)%
Percentage of total revenue		5	%		5	%

Stock-Based Compensation

The stock-based compensation cost is included in the Condensed Consolidated Statements of Operations corresponding to the same functional lines as cash compensation paid to the same employees in the respective departments are as follows:

	Three Months Ended
	February 28, 2009			February 29, 2008			Change
Stock-based compensation costs:
Cost of license	$	11		$	8
Cost of service and maintenance		599			587
Total in cost of revenue		610			595		3	%
Research and development		1,123			1,019
Sales and marketing		1,706			1,730
General and administrative		1,923			1,806
Total in operating expenses		4,752			4,555		4	%
Total	$	5,362		$	5,150		4	%
Percentage of total revenue		4	%		4	%

We utilize the Black-Scholes option pricing model to value equity instruments. The Black-Scholes model was developed for use in estimating the value of traded options that have no vesting or hedging restrictions and are fully transferable. As our employee stock options have certain characteristics that are significantly different from traded options, and as changes in the subjective assumptions can materially affect the estimated value, in management’s opinion, the existing valuation model may not provide an accurate measure of the fair value of our employee stock options. Although the fair value of employee stock options is determined in accordance with SFAS No. 123(R) and SAB No. 107 using an option-pricing model, that value may not be indicative of the fair value observed in a willing buyer/willing seller market transaction.

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Interest Income

	Three Months Ended
	February 28, 2009			February 29, 2008			Change
Interest Income	$	1,077		$	3,258		(67	)%
Percentage of total revenue		1	%		2	%

The decrease in interest income in the first quarter of fiscal year 2009, compared to the same quarter last year, was primarily due to lower returns from our mix of investments.

Interest Expense

	Three Months Ended
	February 28, 2009			February 29, 2008			Change
Interest Expense	$	(746	)	$	(842	)	(11	)%
Percentage of total revenue		(1	)%		—	%

Interest expense was primarily related to a $54.0 million mortgage note issued in connection with the purchase of our corporate headquarters. The mortgage note payable carries a 20-year amortization and, as amended in the second quarter of fiscal year 2007, a fixed annual interest rate of 5.50%. The balance of the mortgage note as of February 28, 2009 was $44.1 million. The $34.4 million principal balance that will be remaining at the end of the 10-year term will be due as a final lump sum payment on July 1, 2013. See Note 8 to our Condensed Consolidated Financial Statements for further detail on the mortgage note payable.

Other Income (Expense), Net

Other income (expense) included realized gains and losses on investments, foreign exchange gain (loss) and other miscellaneous income and expense items.

	Three Months Ended
	February 28, 2009			February 29, 2008			Change
Other income (expense), net:
Foreign exchange gain (loss)	$	347		$	(43	)
Realized gain (loss) on investments		(186	)		278
Other income (expense)		(2	)		3
Total other income (expense), net	$	159		$	238		(33	)%
Percentage of total revenue		—	%		—	%

The change in other income (expense) in absolute dollars for the first quarter of fiscal year 2009, compared to the same quarter last year, was primarily due to $0.3 million foreign exchange gain and $0.2 million investment impairment.

Provision for Income Taxes

	Three Months Ended
	February 28, 2009			February 29, 2008			Change
Provision for income tax	$	4,122		$	2,833		45	%
Effective tax rate		42.4	%		33.7	%

The effective tax rate of 42.4% for the three months ended February 28, 2009, differs from the statutory rate of 35% primarily due to the recording of deferred tax expense as a result of the re-measurement of our California deferred tax assets due to the enactment of California tax legislation, the impact of certain stock compensation charges under SFAS No. 123(R) and state income taxes which were partially offset by the benefits resulting from the reorganization of certain foreign entities, lower foreign taxes and research and development credits. The effective tax rate of 33.7% for the three months ended February 29, 2008, differs from the statutory rate of 35% primarily due to the benefits resulting from the reorganization of certain foreign entities, lower foreign taxes and research and development credits which were partially offset by the impact of certain stock compensation charges under SFAS No. 123(R) and state income taxes.

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In February 2009, the California 2009-2010 budget legislation was signed into law. One of the major components of this legislation is the ability to elect to apply a single sales factor apportionment for years beginning after January 1, 2011. As a result of our anticipated election of the single sales factor, we are required under SFAS 109 to re-measure our deferred taxes taking into account the reversal pattern and the expected California tax rate under the elective single sales factor. We have determined that by electing a single sales factor apportionment, our California deferred tax assets will decrease by approximately $1.1 million (net of federal benefit). The tax impact of $1.1 million has been recorded as a discrete item in the first quarter of fiscal year 2009.

On December 1, 2007, we adopted FIN 48. FIN 48 requires companies to determine whether it is more likely than not that a tax position will be sustained upon examination by the appropriate taxing authorities before any part of the benefit can be recorded in the financial statements. FIN 48 also provides guidance on de-recognition, classification, accounting in interim periods and disclosure requirements for tax contingencies. In addition, we have applied the standards in FASB Staff Position No. FIN 48-1, Definition of Settlement in FASB Interpretation No. 48 (“FSP FIN 48-1”) as part of our initial adoption of FIN 48. FSP FIN 48-1 is an amendment to FIN 48. It clarifies how an enterprise should determine whether a tax position is effectively settled for the purpose of recognizing previously unrecognized tax benefits.

As a result of the adoption of FIN 48, we reduced the liability for net unrecognized tax benefits by $0.6 million and accounted for this as a cumulative-effect adjustment recorded as an increase to the December 1, 2007, balance of retained earnings. The total amount of gross unrecognized tax benefit as of the date of adoption was $33.8 million, of which $11.5 million would affect the effective tax rate if realized. We historically classified unrecognized tax benefits in current income taxes payable. In implementing FIN 48, we have reclassified $6.8 million from current income taxes payable to long-term income tax liabilities. We have also grossed-up our long-term income tax liabilities by $5.4 million with a corresponding increase to our deferred tax assets.

During the first quarter of fiscal 2009, the amount of gross unrecognized tax benefits was increased by approximately $0.3 million. The total amount of gross unrecognized tax benefits was $35.8 million as of February 28, 2009, of which $13.5 million would affect the effective tax rate if realized. We do not expect any significant changes to the amount of unrecognized tax benefit within the next twelve months.

Upon adoption of FIN 48, we have elected to include interest expense and penalties accrued on unrecognized tax benefits as a component of our income tax expense. This is consistent with our policy prior to the adoption of FIN 48. As of November 30, 2008, we had accrued $1.2 million for interest and penalties. There was no material change to this amount as of February 28, 2009.

We are subject to routine corporate income tax audits in the United States and foreign jurisdictions. The statute of limitations for our fiscal years 1998 through 2008 remains open for U.S. purposes. Most foreign jurisdictions have statute of limitations that range from three to six years.

We make certain estimates and judgments in determining income tax expense for financial statement purposes. These estimates and judgments occur in the calculation of certain tax assets and liabilities, which arise from differences in the timing of recognition of revenue and expense for tax and financial statement purposes.

As part of the process of preparing our Condensed Consolidated Financial Statements, we are required to estimate our income taxes in each of the jurisdictions in which we operate. This process involves estimating our current tax exposure under the most recent tax laws and assessing temporary differences resulting from differing treatment of items for tax and accounting purposes. These differences result in deferred tax assets and liabilities, which are included in our Condensed Consolidated Balance Sheets.

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Minority Interest, Net of Tax

Minority interest represents the portion of net income belonging to minority stockholders of our consolidated subsidiaries.

	Three Months Ended
	February 28, 2009			February 29, 2008			Change
Minority Interest, net of tax	$	(21	)	$	55		(138	)%
Percentage of total revenue		—	%		—	%

Minority Interest is detailed in Note 13 to our Condensed Consolidated Financial Statements.

Liquidity and Capital Resources

Current Cash Flows

As of February 28, 2009, we had cash, cash equivalents and short-term investments totaling $293.3 million, representing an increase of $25.9 million from November 30, 2008. Our total cash and cash equivalents balance was $285.7 million as of February 28, 2009. As of February 28, 2009, our short-term available-for-sale investments totaled $7.6 million, primarily consisting of U.S. government debt securities, high investment grade corporate debt, and asset-backed and mortgage-backed securities.

Net cash provided by operating activities for the three months ended February 28, 2009, was $29.3 million, resulting from net income of $5.6 million, adjusted for $14.9 million in non-cash charges and $8.8 million net change in assets and liabilities. The non-cash charges included depreciation and amortization, stock-based compensation and tax benefits related to stock benefit plans, less deferred income tax and excess tax benefits from stock-based compensation recorded in financing activities. Net change in assets and liabilities included a decrease in accounts receivable due to significant cash collections in the first quarter of fiscal year 2009 resulting from a strong revenue quarter in the fourth quarter of fiscal year 2008, a decrease in prepaid expenses and other assets, a decrease in accounts payable and a decrease in accrued liabilities and excess facilities costs, which were partially offset by an increase in deferred revenue.

To the extent that non-cash items increase or decrease our future operating results, there will be no corresponding impact on our cash flows. After excluding the effects of these non-cash charges, the primary changes in cash flows relating to operating activities resulted from changes in working capital. Our primary source of operating cash flows is the collection of accounts receivable from our customers, including maintenance which is typically billed annually in advance. Our operating cash flows are also impacted by the timing of payments to our vendors for accounts payable and other liabilities. We generally pay our vendors and service providers in accordance with the invoice terms and conditions. The timing of cash payments in future periods will be impacted by the terms of our accounts payable arrangements.

Net cash provided by investing activities was $1.4 million for the three months ended February 28, 2009, resulting primarily from $5.2 million in net sales, maturities and purchase of short-term investments activities, which was partially offset by $2.3 million in restricted cash pledged as security and $1.3 million in capital expenditures.

Net cash provided by financing activities was $3.9 million for the three months ended February 28, 2009, resulting primarily from $2.3 million excess tax benefits from stock-based compensation in accordance with the requirements of SFAS No. 123(R) and $2.1 million cash received from the exercise of stock options and the sale of our common stock under our ESPP, which were partially offset by $0.5 million payment of long-term debt.

In April 2008, our Board of Directors approved a new stock repurchase program pursuant to which we may repurchase up to $300.0 million of our outstanding common stock from time to time in the open market or through privately negotiated transactions. In connection with the approval of the April 2008 stock repurchase program, the April 2007 stock repurchase program was terminated, and the remaining authorized amount of $69.6 million under the April 2007 stock repurchase program was canceled. As of February 28, 2009, the remaining authorized amount under the April 2008 stock repurchase program was $196.3 million.

We currently anticipate that our operating expenses will grow in absolute dollars for the foreseeable future, and we intend to fund our operating expenses primarily through cash flows from operations. We believe that our current cash, cash equivalents and short-term investments together with expected cash flows from operations will be sufficient to meet our

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currently anticipated cash requirements. However, we may require or desire additional funds to support our operating expenses and capital requirements or for other purposes, such as acquisitions, and may seek to raise such additional funds through public or private equity or debt financing or from other sources.

Fair Value Inputs

Beginning fiscal year 2008 we adopted SFAS No. 157; see Note 5 to the Condensed Consolidated Financial Statements. Fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. The use of fair value to measure investment instruments, with related unrealized and realized gains or losses on investment is a component to our consolidated results of operations.

We value our cash equivalents and investment instruments by using quoted market prices, broker or dealer quotations, or alternative pricing sources with reasonable levels of price transparency. The types of instruments valued based on quoted market prices in active markets include most U.S. government and agency securities, sovereign government obligations, and money market securities. We do not adjust the quoted price for such instruments. The types of instruments valued based on quoted prices in markets that are not active, broker or dealer quotations, or alternative pricing sources with reasonable levels of price transparency include investment-grade corporate bonds, mortgage-backed and asset-backed products, state, municipal and provincial obligations. The price for each security at the measurement date is derived from various sources. Periodically, management assesses the reasonableness of these sourced prices by comparing them to the prices provided by our portfolio managers to derive the fair value of these financial instruments. Historically, we have not experienced significant deviation between the sourced prices and our portfolio managers’ prices. Management assesses the inputs of the pricing in order to categorize the financial instruments into the appropriate hierarchy levels.

Commitments

In June 2003, we purchased our corporate headquarters with a $54.0 million mortgage note to lower our operating costs. The mortgage note payable carries a 20-year amortization and, as amended in the second quarter of fiscal year 2007, a fixed annual interest rate of 5.50%. The principal balance of $34.4 million that will be remaining at the end of the 10-year term will be due as a final lump sum payment on July 1, 2013. Under the applicable terms of the mortgage note agreements, we are prohibited from acquiring another company without prior consent from the lender unless we maintain at least $50.0 million of cash or cash equivalents and comply with other non-financial terms as defined in the agreements. We were in compliance with all covenants as of February 28, 2009.

In conjunction with the purchase of our corporate headquarters, we entered into a 51-year lease of the land upon which the property is located. The lease was paid in advance for a total of $28.0 million, but is subject to adjustments every 10 years based upon changes in fair market value of the land. Should it become necessary, we have the option to prepay any rent increases due as a result of a change in fair market value.

We have a $20.0 million revolving line of credit that matures on June 18, 2009. The revolving line of credit is available for cash borrowings and for the issuance of letters of credit up to $20.0 million. As of February 28, 2009, no borrowings were outstanding under the facility and a $13.0 million irrevocable letter of credit was outstanding, leaving $7.0 million of available credit for additional letters of credit or cash borrowings. The $13.0 million irrevocable letter of credit outstanding was issued in connection with the mortgage note payable. The letter of credit automatically renews for successive one-year periods, until the mortgage note payable has been satisfied in full. The line of credit requires that we maintain a minimum of $40.0 million in unrestricted cash, cash equivalents and short-term investments, net of total current and long-term indebtedness, as well as comply with other non-financial covenants defined in the agreement. As of February 28, 2009, we were in compliance with all covenants under the revolving line of credit.

As of February 28, 2009, we had $5.3 million in restricted cash in connection with bank guarantees issued by some of our international subsidiaries. The cash collateral is presented as restricted cash and included in Other Assets in our Condensed Consolidated Balance Sheets.

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As of February 28, 2009, our contractual commitments associated with indebtedness, lease obligations and restructuring were as follows (in thousands):

				Remainder of 2009
	Total						2010			2011			2012		2013		Thereafter
Operating commitments:
Debt principal	$	44,060		$	1,535		$	2,148		$	2,269		$	2,397	$	35,711		—
Debt interest		9,558			1,790			2,285			2,164			2,036		1,283		—
Operating leases		30,785			7,463			7,899			5,999			3,927		2,899		2,598
Total operating commitments		84,403			10,788			12,332			10,432			8,360		39,893		2,598
Restructuring-related commitments:
Gross lease obligations		13,637			5,211			7,729			653			9		9		26
Estimated sublease income		(5,679	)		(2,404	)		(3,036	)		(239	)		—		—		—
Net restructuring-related commitment		7,958			2,807			4,693			414			9		9		26
Total commitments	$	92,361		$	13,595		$	17,025		$	10,846		$	8,369	$	39,902	$	2,624

Future minimum lease payments under restructured non-cancelable operating leases are included in Accrued Excess Facilities Costs in our Condensed Consolidated Balance Sheets.

The above commitment table does not include approximately $12.2 million of long-term income tax liabilities recorded in accordance with FIN 48 due to the fact that we are unable to reasonably estimate the timing of these potential future payments.

Indemnification

Our indemnification obligations are detailed in Note 9 to our Condensed Consolidated Financial Statements.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to the impact of foreign currency fluctuations, interest rate changes and uncertainties in the credit market.

Foreign Currency Risk

We conduct business in the Americas, EMEA and APJ. As a result, our financial results could be affected by factors such as changes in foreign currency exchange rates or changes in economic conditions in foreign markets. Because a material portion of our sales are made in U.S. dollars, a strengthening of the dollar could make our products less competitive. We enter into forward contracts with financial institutions to manage our currency exposure related to net assets and liabilities denominated in foreign currencies. These forward contracts are generally settled monthly. We do not enter into derivative financial instruments for trading purposes. As of February 28, 2009, we had five outstanding forward contracts with a total notional amount of $41.3 million that resulted in a net gain of $0.2 million.

We are also exposed to foreign exchange rate fluctuations as we convert the financial statements of our foreign subsidiaries into U.S. dollars in consolidation. If there is a change in foreign currency exchange rates, the conversion of the foreign subsidiaries’ financial statements into U.S. dollars will lead to translation gains or losses, which are recorded net as a component of other comprehensive income.

Interest Rate Risk

Our exposure to market rate risk for changes in interest rates relates primarily to our investment portfolio. We invest excess cash in marketable debt instruments of the U.S. government and its agencies, high-quality corporate debt securities, asset-backed and mortgage-backed debt securities and, by policy, limit the amount of credit exposure to any one issuer. Our investment policy is designed to protect and preserve invested funds by limiting default, market and investment risk.

Investments in both fixed rate and floating rate interest earning instruments carry a degree of interest rate risk. Fixed rate securities may have their fair market value adversely impacted due to a rise in interest rates, while floating rate securities may produce less income than expected if interest rates fall. Due in part to these factors, our future investment income may fall short of expectations due to changes in interest rates, or we may suffer losses in principal if forced to sell securities which

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have declined in market value due to changes in interest rates or other factors in the current unstable credit environment. As of February 28, 2009, we had an investment portfolio of fixed income securities totaling $7.6 million, excluding those classified as cash and cash equivalents. These securities are classified as available-for-sale and are recorded on the balance sheets at fair market value with unrealized gains or losses reported under Accumulated Other Comprehensive Income (Loss), a separate component of stockholders’ equity. Unrealized losses are charged against income when a decline in fair market value is determined to be other-than-temporary. The specific identification method is used to determine the cost of securities sold.

As of February 28, 2009, a hypothetical 100 basis point increase in interest rates would result in an approximate $0.1 million decrease in the fair value of our available-for-sale debt securities.

Credit Market Risk

As of February 28, 2009, we held asset-backed securities and mortgage-backed securities totaling $1.3 and $0.7 million, respectively. These securities’ cash flows are funded by the principal and interest payments of underlying commercial, consumer or mortgage loans. Payments are typically made monthly over the lifetime of the underlying loans. The recent credit market instability may adversely impact our disposition of these securities at or near their quoted fair market value. We evaluate these investments at each balance sheet date. There is the risk that at future balance sheet dates we may record additional charges for a decline in the fair value that is considered other-than-temporary and a loss would be recognized in the income statement at that time.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We maintain “disclosure controls and procedures,” as such term is defined in Rule 13a-15(e) under the Exchange Act, that are designed to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Disclosure controls and procedures are designed to provide reasonable assurance of achieving their objectives. In designing and evaluating our disclosure controls and procedures, management recognized that disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Additionally, in designing disclosure controls and procedures, our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures. The design of any disclosure controls and procedures also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

Based on their evaluation as of the end of the period covered by this Quarterly Report on Form 10-Q, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective at the reasonable assurance level.

Changes in Internal Control over Financial Reporting

There was no change in our internal control over financial reporting that occurred during the period covered by this Quarterly Report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II—OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Our legal proceedings are detailed in Note 10 and Note 18 to our Condensed Consolidated Financial Statements.

ITEM 1A. RISK FACTORS

The following risk factors, as well as other factors of which we may be unaware or do not currently view as significant, could materially and adversely affect our future operating results and could cause actual events to differ materially from those predicted in the forward-looking statements we make about our business.

Political and economic conditions are likely to materially adversely affect our revenue and results of operations.

Our business has been and may continue to be affected by a number of factors that are beyond our control such as general geopolitical economic and business conditions, conditions in the financial services markets, and changes in the overall demand for enterprise software and services. Global economic conditions have deteriorated over the past few quarters. A severe and/or prolonged economic downturn could adversely affect our customers’ financial condition and the levels of business activity of our customers. Uncertainty about current global economic conditions has caused and may continue to cause businesses to postpone spending in response to tighter credit, negative financial news and/or declines in income or asset values, which could have a material negative effect on the demand for enterprise software and services. Reduced demand for enterprise software could result in a reduction in our future license revenue and a reduction in the rate at which our customers renew their maintenance agreements and procure consulting services.

The current economic crisis affecting the banking system and financial markets and the current uncertainty in global economic conditions have resulted in a tightening in the credit markets, a low level of liquidity in many financial markets, and extreme volatility in credit, equity, currency and fixed income markets. There have been and may continue to be a number of follow-on effects from these economic developments and negative economic trends on our business, including the inability of customers to obtain credit to finance purchases of our products; customer insolvencies; decreased customer confidence to make purchasing decisions; decreased customer demand; and decreased customer ability to pay their trade obligations.

If conditions in the global economy, U.S. economy or other key vertical or geographic markets remain uncertain or weaken further, such conditions could have a material adverse impact on our business, operating results and financial condition. In addition, if we are unable to successfully anticipate changing economic and political conditions, we may be unable to effectively plan for and respond to those changes, which could materially adversely affect our business and results of operations.

Our future revenue is unpredictable, and we expect our quarterly operating results to fluctuate, which may cause our stock price to decline.

As a result of the evolving nature of the markets in which we compete and the size of our customer agreements, we have difficulty accurately forecasting our revenue in any given period. In addition to the factors discussed elsewhere in this section, a number of factors may cause our revenue to fall short of our expectations, or those of stock market analysts and investors, or cause fluctuations in our operating results, including:

• the relatively long sales cycles for many of our products;

• the timing of our new products or product enhancements or any delays in such introductions;

• the delay or deferral of customer implementations of our products;

• changes in customer budgets and decision making processes that could affect both the timing and size of any transaction;

• reduced spending in the industries that license our products;

• our dependence on large deals, which, if such deals do not close, can greatly impact revenues for a particular quarter;

• the timing, size and mix of orders from customers;

• the deferral of license revenue to future periods due to the timing of the execution of an agreement or our ability to deliver the products;

• the impact of our provision of services and customer-required contractual terms on our recognition of license revenue;

• any unanticipated difficulty we encounter in integrating acquired businesses, products or technologies;

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• the tendency of some of our customers to wait until the end of a fiscal quarter or our fiscal year in the hope of obtaining more favorable terms;

• the amount and timing of operating costs and capital expenditures relating to the expansion of our operations and the evaluation of strategic transactions; and

• changes in accounting rules, such as recording expenses for employee stock option grants and tax accounting, including accounting for uncertain tax positions.

Period-to-period comparisons of our operating results may not be a good indication of our future performance. Moreover, our operating results in some quarters have not in the past met, and may not in the future meet, the expectations of stock market analysts and investors.

In addition, while we may in future years record positive net income and/or increases in net income over prior periods, we may not show period-over-period earnings per share growth or earnings per share growth that meets the expectations of stock market analysts and investors as a result of the number of our shares outstanding during such periods. In such case, our stock price may decline.

Uneven growth and periods of contraction in the infrastructure software market have caused our revenue to decline in the past and could cause our revenue or results of operations to fall below expectations in the future.

We earn a substantial portion of our revenue from licenses of our infrastructure software, including application integration software and sales of related services. We expect to earn substantially all of our revenue in the foreseeable future from sales of these products and services. Our future financial performance will depend on continued growth in the number of organizations demanding software and services for application integration and information delivery and companies seeking outside vendors to develop, manage and maintain this software for their critical applications. Lower spending by corporate and governmental customers around the world, which has had a disproportionate impact on information technology spending, has led to a reduction in sales in the past and may continue to do so in the future. Many of our potential customers have made significant investments in internally developed systems and would incur significant costs in switching to third-party products, which may substantially inhibit the growth of the market for infrastructure software. If the market fails to grow, or grows more slowly than we expect, our sales will be adversely affected. Also, even if corporate and governmental spending increases and companies make greater investments in information technology and infrastructure software, our revenue may not grow at the same pace.

If we fail to manage our exposure to financial and securities market risk successfully, our operating results could be adversely impacted.

We are exposed to financial market risks, including changes in interest rates, credit markets and prices of marketable equity and fixed-income securities. We do not use derivative financial instruments for speculative or trading purposes.

The primary objective of most of our investment activities is to preserve principal while at the same time maximizing yields without significantly increasing risk. To achieve this objective, our marketable investments are primarily investment grade, liquid, fixed-income securities and money market instruments denominated in U.S. dollars. If the carrying value of our investments exceeds the fair value, and the decline in fair value is deemed to be other-than-temporary, we will be required to further write down the value of our investments, which could materially harm our results of operations and financial condition. Moreover, the performance of certain securities in our investment portfolio correlates with the credit condition of the United States financial sector. With the current unstable credit environment, we may incur significant realized, unrealized or impairment losses associated with these investments.

Changes in foreign currency exchange rates could negatively affect our operating results.

A significant portion of our net revenue and expenses are transacted in U.S. dollars. In addition, we also conduct our business in approximately 20 foreign currencies in EMEA and APJ. As a response to the risks of changes in value of foreign currency denominated transactions, we may enter into foreign currency forward contracts or other instruments, the majority of which mature within approximately one month. Our foreign currency forward contracts reduce, but do not eliminate, the impact of currency exchange rate movements. For example, we do not execute forward contracts in all currencies in which we conduct business. In addition, our hedging program may not reduce the impact of short-term or long-term volatility in foreign exchange rates. Accordingly, amounts denominated in such foreign currencies may fluctuate in value and produce significant earnings and cash flow volatility.

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Any losses we incur as a result of our exposure to the credit risk of our customers and partners could harm our results of operations.

We monitor individual customer payment capability in granting credit arrangements, seek to limit credit to amounts we believe the customers can pay, and maintain reserves we believe are adequate to cover exposure for doubtful accounts. As we have grown our revenue and customer base, our exposure to credit risk has increased. Any material losses to date as a result of customer defaults, could harm and have an adverse effect on our business, operating results and financial condition.

Our stock price may be volatile, which could cause investors to incur significant losses.

The stock market in general and the stock prices of technology companies in particular, have experienced volatility which has often been unrelated to the operating performance of any particular company or companies. In addition, uncertainty about current global economic conditions could also continue to increase the volatility of our stock price. During this fiscal quarter, our stock price has fluctuated between a high of $7.34 and a low of $4.12. If market or industry-based fluctuations continue, our stock price could decline in the future regardless of our actual operating performance and investors could incur significant losses.

We may incur impairments to goodwill, intangible or long-lived assets.

We review our goodwill, intangible and long-lived assets for impairment annually in the fourth quarter or whenever events or changes in circumstances indicate that the carrying amount of these assets may not be recoverable.

Significant negative industry or economic trends, including the lack of recovery in the market price of our common stock, reduced estimates of future cash flows or disruptions to our business could indicate that goodwill, intangible or long-lived assets might be impaired. If, in any period, our stock price decreases to the point where our market capitalization is less than our book value, this too could indicate a potential impairment and we may be required to record an impairment charge in that period.

Our valuation methodology for assessing impairment requires management to make judgments and assumptions based on historical experience and to rely on projections of future operating performance. We operate in highly competitive environments and projections of future operating results and cash flows may vary significantly from results. Additionally, if our analysis results in an impairment to our goodwill, we would be required to record a non-cash charge to earnings in our financial statements during a period in which such impairment is determined to exist.

Our success depends on our ability to overcome significant competition and to offer products and enhancements that respond to emerging technological trends and customers’ needs.

The market for our products and services is extremely competitive and subject to rapid change. We compete with a variety of large and small providers of infrastructure software, SOA, business optimization and BPM, including companies such as IBM, Microsoft, Oracle, Pegasystems, SAP and Software AG. We believe that of these companies, IBM has the potential to offer the most complete competitive set of products relative to our offerings. In addition, companies such as IBM, Microsoft, Oracle and SAP offer products outside our segment and routinely bundle their broader set of products with their infrastructure software products. Further, some of our competitors are expanding their competitive product offerings and market position through acquisitions and internal research and development. We expect additional competition from other established and emerging companies. We also face competition for certain aspects of our product and service offerings from major systems integrators. Further, we may face increasing competition from open source software providers such as MuleSource that provide software and intellectual property, typically without charging license fees, or from other competitors offering products through alternative business models, such as software as a service. If customers choose such alternatives over our proprietary software, our revenues and earnings could be adversely affected.

Many of our current and potential competitors have longer operating histories, significantly greater financial, technical, product development and marketing resources, greater name recognition, and larger customer bases than we do. Continued consolidation in the software market may further strengthen our larger competitors. Our present or future competitors may be able to develop products comparable or superior to those we offer, adapt more quickly than we do to new technologies, evolving industry trends or customer requirements, or devote greater resources to the development, promotion and sale of their products than we do. Accordingly, we may not be able to compete effectively in our markets or competition may intensify and harm our business and operating results.

If we are not successful in developing enhancements to existing products and new products in a timely manner, achieving customer acceptance for our existing and new product offerings or generating higher average selling prices, our gross margins may decline, and our business and operating results may suffer. Furthermore, any of our new product offerings

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or significant enhancements to current product offerings could cause some customers to delay making new or additional purchases while they fully evaluate any new offerings we might have introduced to the market, which in turn may slow sales and adversely affect operating results for an indeterminate period of time. Also, we may not execute successfully on our product plans because of errors in product planning or timing, technical hurdles that we fail to overcome in a timely fashion or a lack of appropriate resources. This could result in competitors providing those solutions before we do and loss of market share, net sales and earnings.

Our strategy contemplates future acquisitions that may result in us incurring unanticipated expenses or additional debt, difficulty in integrating our operations and dilution to our stockholders and may harm our operating results.

Our success depends in part on our ability to continually enhance and broaden our product offerings in response to changing technologies, customer demands and competitive pressures. We expect to acquire complementary businesses, products or technologies in the future as part of our corporate strategy. In this regard, we have made strategic acquisitions, including the acquisition of Insightful Corporation in fiscal 2008 and Spotfire Holdings, Inc. in fiscal 2007. We do not know if we will be able to complete any future acquisitions or that we will be able to successfully integrate any acquired business, operate it profitably or retain its key employees. Integrating any newly acquired business, product or technology could be expensive and time-consuming, could disrupt our ongoing business and financial performance and could distract our management. Therefore, we may not be able, either immediately post-acquisition or ever, to replicate the pre-acquisition revenues achieved by companies that we acquire or achieve the benefits of the acquisition we anticipated in valuing the businesses, products or technologies we acquire. Furthermore, the costs of integrating acquired companies in international transactions can be particularly high, due to local laws and regulations. If we are unable to integrate any newly acquired entity, products or technology effectively, our business, financial condition and operating results would suffer. In addition, any amortization or impairment of acquired intangible assets, stock-based compensation or other charges resulting from the costs of acquisitions could harm our operating results.

In addition, we may face competition for acquisition targets from larger and more established companies with greater financial resources. Also, in order to finance any acquisition, we may need to raise additional funds through public or private financings or use our cash reserves. In that event, we could be forced to obtain equity or debt financing on terms that are not favorable to us or that result in dilution to our stockholders. Use of our cash reserves for acquisitions could limit our financial flexibility in the future. The terms of existing loan agreements may place limits on our ability to incur additional debt to finance acquisitions. If we are not able to acquire strategically attractive businesses, products or technologies, we may not be able to remain competitive in our industry or achieve our overall growth plans.

Increases in service revenues may decrease overall margins.

We may in the future realize a higher percentage of our revenue from services, which has a lower profit margin than license or maintenance revenue. As a result, if services revenue increase as a percentage of total revenue, our overall profit margin may decrease, which could impact our stock price.

Because the value of our equity incentive programs has diminished as a retention and recruiting tool, we may need to change our compensation packages in order to remain competitive which in turn could negatively affect our profit margins.

We have historically used equity incentive programs, such as employee stock options and stock purchase plans, as a part of overall employee compensation arrangements. We have changed our stock purchase plan, reduced the size and number of stock option grants we give to our employees, changed the form of equity compensation we give to some of our employees and may make further changes to our equity compensation programs, all of which may decrease the effectiveness of our plans as employee retention and recruiting tools. In addition, the decline in our stock price has negatively impacted, and may continue to negatively impact, the value of such equity incentives, thereby diminishing the value of such incentive programs to employees and decreasing the effectiveness of such programs as retention and recruiting tools. Given this, we may need to change our compensation packages to employees to remain competitive which could negatively affect our profit margins.

If we cannot successfully recruit, retain and integrate highly skilled employees, we may not be able to execute our business strategy effectively.

If we fail to retain and recruit key management, sales and other skilled employees, our business and our ability to obtain new customers, develop new products and provide acceptable levels of customer service could suffer. As we grow, we must invest significantly in building our sales, marketing and engineering groups. Competition for these people in the software industry is intense, and we may not be able to successfully recruit, train or retain qualified personnel. We are competing against companies with greater financial resources and name recognition for these employees, and as such, there is no assurance that we will be able to meet our hiring needs or hire the most qualified candidates. The success of our business is also heavily dependent on the leadership of our key management personnel, including Vivek Ranadivé, our Chairman and Chief Executive Officer. The loss of one or more key employees could adversely affect our continued operations.

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In addition, we must successfully integrate new employees into our operations and generate sufficient revenues to justify the costs associated with these employees. If we fail to successfully integrate employees or to generate the revenue necessary to offset employee-related expenses, we may be forced to reduce our headcount, which would force us to incur significant expenses and would harm our business and operating results.

The inability to upsell to our current customers or the loss of any significant customer could harm our business and cause our stock price to decline.

We do not have long-term sales contracts with any of our customers. Our customers may choose not to purchase our products or not to use our services in the future. As a result, a customer that generates substantial revenue for us in one period may not be a source of revenue in subsequent periods. Any inability on our part to upsell to and generate revenues from our existing customers or the loss of a significant customer could adversely affect our business and operating results.

Our products may infringe the intellectual property rights of others, which may cause us to incur unexpected costs or prevent us from selling our products.

We cannot be certain that our products do not infringe issued patents or other intellectual property rights of others. In addition, our use of open source software components in our products may make us vulnerable to claims that our products infringe third-party intellectual property rights, in particular because many of the open source software components we may incorporate with our products may be developed by numerous independent parties over whom we exercise no supervision or control. “Open source software” is software that is covered by a license agreement which permits the user to liberally copy, modify and distribute the software, typically free of charge. Further, because patent applications in the United States and many other countries are not publicly disclosed at the time of filing, applications covering technology used in our software products may have been filed without our knowledge. We may be subject to legal proceedings and claims from time to time, including claims of alleged infringement of the patents, trademarks and other intellectual property rights of third parties by us or our licensees in connection with their use of our products. Our software license agreements typically provide for indemnification of our customers for intellectual property infringement claims. Intellectual property litigation is expensive and time consuming and could divert our management’s attention away from running our business and seriously harm our business. If we were to discover that our products violated the intellectual property rights of others, we would have to obtain licenses from these parties in order to continue marketing our products without substantial reengineering. We might not be able to obtain the necessary licenses on acceptable terms or at all, and if we could not obtain such licenses, we might not be able to reengineer our products successfully or in a timely fashion. If we fail to address any infringement issues successfully, we would be forced to incur significant costs, including damages and potentially satisfying indemnification obligations that we have with our customers, and we could be prevented from selling certain of our products.

Our intellectual property or proprietary rights could be misappropriated, which could force us to become involved in expensive and time-consuming litigation.

We regard our intellectual property as critical to our success. Accordingly, we rely upon a combination of copyrights, service marks, trademarks, trade secret rights, patents, confidentiality agreements and licensing agreements to protect our intellectual property. Despite these protections, a third party could misappropriate our intellectual property. Any misappropriation of our proprietary information by third parties could harm our business, financial condition and operating results. In addition, the laws of some countries do not provide the same level of protection of our proprietary information as do the laws of the United States. If our proprietary information or material were misappropriated, we might have to engage in litigation to protect it. We might not succeed in protecting our proprietary information if we initiate intellectual property litigation, and, in any event, such litigation would be expensive and time-consuming, could divert our management’s attention away from running our business and could seriously harm our business.

The use of open source software in our products may expose us to additional risks.

Certain open source software is licensed pursuant to license agreements that require a user who distributes the open source software as a component of the user’s software to disclose publicly part or all of the source code to the user’s software. This effectively renders what was previously proprietary software open source software. As competition in our markets increases, we must strive to be cost-effective in our product development activities. Many features we may wish to add to our products in the future may be available as open source software and our development team may wish to make use of this software to reduce development costs and speed up the development process. While we carefully monitor the use of all open source software and try to ensure that no open source software is used in such a way as to require us to disclose the source code to the related product, such use could inadvertently occur. Additionally, if a third party has incorporated certain

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types of open source software into its software but has failed to disclose the presence of such open source software and we embed that third party software into one or more of our products, we could, under certain circumstances, be required to disclose the source code to our product. This could have a material adverse effect on our business.

Market acceptance of new platforms, standards and technologies may require us to undergo the expense of developing and maintaining compatible product lines.

Our software products can be licensed for use with a variety of platforms, standards and technologies, and we are constantly evaluating the feasibility of adding new platforms, standards and technologies. There may be future or existing platforms, standards and technologies that achieve popularity in the marketplace which may not be architecturally compatible with our software products. In addition, the effort and expense of developing, testing and maintaining software products will increase as more platforms, standards and technologies achieve market acceptance within our target markets. If we are unable to achieve market acceptance of our software products or adapt to new platforms, standards and technologies, our sales and revenues will be adversely affected.

Developing and maintaining different software products could place a significant strain on our resources and software product release schedules, which could harm our revenue and financial condition. If we are not able to develop software for accepted platforms, standards and technologies, our license and service revenues and our gross margins could be adversely affected. In addition, if the platforms, standards and technologies we have developed software for are not accepted, our license and service revenues and our gross margins could be adversely affected.

We may have exposure to additional tax liabilities.

As a multinational corporation, we are subject to income taxes in both the United States and various foreign jurisdictions. Significant judgment is required in determining our global provision for income taxes and other tax liabilities. In the ordinary course of a global business, there are many intercompany transactions and calculations where the ultimate tax determination is uncertain. Our income tax returns are routinely subject to audits by tax authorities. Although we regularly assess the likelihood of adverse outcomes resulting from these examinations to determine our tax estimates, we cannot assure you that the final determination of tax audits or tax disputes will not have an adverse effect on our results of operations and financial condition.

We are also subject to non-income taxes, such as payroll, sales, use, value-added, net worth, property and goods and services taxes, in both the United States and various foreign jurisdictions. We are regularly under audit by tax authorities with respect to these non-income taxes and may have exposure to additional non-income tax liabilities which could have an adverse effect on our results of operations and financial condition.

In addition, our future effective tax rates could be favorably or unfavorably affected by changes in tax rates, changes in the valuation of our deferred tax assets or liabilities, or changes in tax laws or their interpretation. Such changes could have a material adverse impact on our financial results.

Changes in existing financial accounting standards or practices, or taxation rules or practices may adversely affect our results of operations.

Changes in existing accounting or taxation rules or practices, new accounting pronouncements or taxation rules, or varying interpretations of current accounting pronouncements or taxation practice could have a significant adverse effect on our results of operations or the manner in which we conduct our business. Further, such changes could potentially affect our reporting of transactions completed before such changes are effective. For example, on December 1, 2009, we will adopt Statement of Financial Accounting Standards (“SFAS”) No. 141 (revised 2007), Business Combinations, (“SFAS No. 141(R)”), which requires acquisition-related costs to be expensed as incurred, restructuring costs generally to be expensed in periods subsequent to the acquisition date, in-process research and development to be capitalized as an intangible asset with an indefinite life, and changes in accounting for deferred tax asset valuation allowances and acquired income tax uncertainties after the measurement period, which will impact income tax expense. The impact that SFAS No. 141(R) will have on our consolidated financial position, results of operations and cash flows will be dependent on the number and size of business combinations that we consummate subsequent to the adoption of the standard, as well as the valuation and allocation of the net assets acquired.

We operate internationally and face risks attendant to those operations.

We earn a significant portion of our total revenues from international sales generated through our foreign direct and indirect operations. As a result of these sales operations, we face risks arising from local political, legal and economic factors such as the general economic conditions in each country or region, varying regulatory requirements and compliance with

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international and local trade, labor and other laws including the Foreign Corrupt Practices Act and export control laws. We may also face difficulties in managing our international operations, collecting receivables in a timely fashion and repatriating earnings. Any of these factors, either individually or in combination, could materially impact our international operations and adversely affect our business as a whole.

Our software may have defects and errors that could lead to a loss of revenues or product liability claims.

Our products and platforms use complex technologies and, despite extensive testing and quality control procedures, may contain defects or errors, especially when first introduced or when new versions or enhancements are released. If defects or errors are discovered after commercial release of either new versions or enhancements of our products and platforms:

• potential customers may delay purchases;

• customers may react negatively, which could reduce future sales;

• our reputation in the marketplace may be damaged;

• we may have to defend product liability claims;

• we may be required to indemnify our customers, distributors, original equipment manufacturers or other resellers;

• we may incur additional service and warranty costs; and

• we may have to divert additional development resources to correct the defects and errors, which may result in the delay of new product releases or upgrades.

If any or all of the foregoing occur, we may lose revenues, incur higher operating expenses and lose market share, any of which could severely harm our financial condition and operating results.

Any unauthorized, and potentially improper, actions of our personnel could adversely affect our business, operating results and financial condition.

The recognition of our revenue depends on, among other things, the terms negotiated in our contracts with our customers. Our personnel may act outside of their authority and negotiate additional terms without our knowledge. We have implemented policies to prevent and discourage such conduct, but there can be no assurance that such policies will be followed. For instance, in the event that our sales personnel have negotiated terms that do not appear in the contract and of which we are unaware, whether the additional terms are written or verbal, we could be prevented from recognizing revenue in accordance with our plans. Furthermore, depending on when we learn of unauthorized actions and the size of transactions involved, we may have to restate revenue for a previously reported period, which would seriously harm our business, operating results and financial condition.

The outcome of litigation pending against us could require us to expend significant resources and could harm our business and financial resources.

Note 10 and Note 18 to our Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q describes the litigation pending against us and our directors and officers. The uncertainty associated with substantial unresolved lawsuits could harm our business, financial condition and reputation. The defense of the lawsuits could result in the diversion of our management’s time and attention away from business operations, which could harm our business. Negative developments with respect to the lawsuits could cause our stock price to decline. In addition, although we are unable to determine the amount, if any, that we may be required to pay in connection with the resolution of the lawsuits by settlement or otherwise, any such payment could seriously harm our financial condition and liquidity.

Natural or other disasters could disrupt our business and result in loss of revenue or in higher expenses.

Natural disasters, terrorist activities and other business disruptions could seriously harm our revenue and financial condition and increase our costs and expenses. Our corporate headquarters and many of our operations are located in California, a seismically active region. In addition, many of our current and potential customers are concentrated in a few geographic areas. A natural disaster in one of these regions could have a material adverse impact on our U.S. and foreign operations, operating results and financial condition. Further, any unanticipated business disruption caused by Internet security threats, damage to global communication networks or otherwise could have a material adverse impact on our operating results.

Any failure by us to meet the requirements of current or newly-targeted customers may have a detrimental impact on our business or operating results.

We may wish to expand our customer base into markets in which we have limited experience. In some cases, customers in different markets, such as financial services or government, have specific regulatory or other requirements which we must

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meet. For example, in order to maintain contracts with the United States government, we must comply with specific rules and regulations relating to and that govern such contracts. Government contracts are generally subject to audits and investigations which could result in various civil and criminal penalties and administrative sanctions, including termination of contracts, refund of a portion of fees received, forfeiture of profits, suspension of payments, fines and suspensions or debarment from future government business. If we fail to meet such requirements in the future, we could be subject to civil or criminal liability or a reduction of revenue which could harm our business, operating results and financial condition.

Reuters has a royalty free license to our products.

We license from Reuters the intellectual property that was incorporated into early versions of some of our software products. We do not own this licensed technology. Because Reuters has access to intellectual property used in our products, it could use this intellectual property to compete with us. Reuters is not restricted from using the licensed technology it has licensed to us to produce products that compete with our products, and it can grant limited licenses to the licensed technology to others who may compete with us. In addition, we must license to Reuters all of the products we own and the source code for one of our messaging products, through December 2012. This may place Reuters in a position to more easily develop products that compete with ours.

Some provisions in our certificate of incorporation and bylaws, as well as a stockholder rights plan, may have anti-takeover effects.

We have a stockholder rights plan providing for one right for each outstanding share of our common stock. Each right, when exercisable, entitles the registered holder to purchase certain securities at a specified purchase price. The rights plan may have the anti-takeover effect of causing substantial dilution to a person or group that attempts to acquire TIBCO on terms not approved by our Board of Directors. The existence of the rights plan could limit the price that certain investors might be willing to pay in the future for shares of our common stock and could discourage, delay or prevent a merger or acquisition that stockholders may consider favorable. In addition, provisions of our current certificate of incorporation and bylaws, as well as Delaware corporate law, could make it more difficult for a third party to acquire us without the support of our Board of Directors, even if doing so would be beneficial to our stockholders.

ITEM 6. EXHIBITS

3.1(1)	Certificate of Incorporation of Registrant.
3.2(2)	Amended and Restated Bylaws of Registrant.
10.1#	TIBCO Software Inc. 2009 Deferred Compensation Plan.
10.2#	Form of Restricted Stock Unit Agreement pursuant to the TIBCO Software Inc. 2009 Deferred Compensation Plan.
10.3#	Form of Restricted Stock Unit Agreement pursuant to the 2008 Equity Incentive Plan.
31.1	Rule 13a-14(a) / 15d-14(a) Certification by Chief Executive Officer.
31.2	Rule 13a-14(a) / 15d-14(a) Certification by Chief Financial Officer.
32.1	Section 1350 Certification by Chief Executive Officer.
32.2	Section 1350 Certification by Chief Financial Officer.

# Indicates management contract or compensatory plan or arrangement.

(1) Incorporated by reference to an exhibit filed with the Registrant’s Registration Statement on Form 8-A, filed with the SEC on February 23, 2004.

(2) Incorporated by reference to an exhibit filed with the Registrant’s Current Report on Form 8-K, filed with the SEC on June 18, 2008.

39

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

TIBCO SOFTWARE INC.
By:	/s/ SYDNEY L. CAREY
	Sydney L. Carey
	Executive Vice President, Chief Financial Officer
By:	/s/ TROY O. MITCHELL
	Troy O. Mitchell
	Vice President, Corporate Controller

Date: April 9, 2009

40

EXHIBIT INDEX

3.1(1)	Certificate of Incorporation of Registrant.
3.2(2)	Amended and Restated Bylaws of Registrant.
10.1#	TIBCO Software Inc. 2009 Deferred Compensation Plan.
10.2#	Form of Restricted Stock Unit Agreement pursuant to the TIBCO Software Inc. 2009 Deferred Compensation Plan.
10.3#	Form of Restricted Stock Unit Agreement pursuant to the 2008 Equity Incentive Plan.
31.1	Rule 13a-14(a) / 15d-14(a) Certification by Chief Executive Officer.
31.2	Rule 13a-14(a) / 15d-14(a) Certification by Chief Financial Officer.
32.1	Section 1350 Certification by Chief Executive Officer.
32.2	Section 1350 Certification by Chief Financial Officer.

# Indicates management contract or compensatory plan or arrangement.

(1) Incorporated by reference to an exhibit filed with the Registrant’s Registration Statement on Form 8-A, filed with the SEC on February 23, 2004.

(2) Incorporated by reference to an exhibit filed with the Registrant’s Current Report on Form 8-K, filed with the SEC on June 18, 2008.

EX-10.1

Exhibit 10.1

TIBCO SOFTWARE INC.

2009 DEFERRED COMPENSATION PLAN

(Effective as of February 20, 2009)

TABLE OF CONTENTS

		Page
SECTION 1 DEFINITIONS		1
1.1	“Affiliate”	1
1.2	“Base Remuneration”	1
1.3	“Beneficiary”	1
1.4	“Change in Control Event”	1
1.5	“Committee”	2
1.6	“Company”	2
1.7	“Compensation”	2
1.8	“Compensation Deferrals”	2
1.9	“Director”	2
1.10	“Director Fees”	2
1.11	“Disability” or “Disabled”	2
1.12	“Eligible Employee”	2
1.13	“Eligible Individual”	2
1.14	“Employers”	2
1.15	“Fair Market Value”	2
1.16	“Non-Employee Director”	2
1.17	“Participant”	3
1.18	“Participant’s Account” or “Account”	3
1.19	“Payment Date”	3
1.20	“Plan Year”	3
1.21	“Restricted Stock Units” or “RSUs”	3
1.22	“RSU Agreement”	3
1.23	“Separation from Service”	3
1.24	“Specified Employee”	3
1.25	“Unforeseeable Emergency”	4
SECTION 2 PARTICIPATION		4
2.1	Participation	4
2.2	Cancellation of Compensation Deferrals	6
2.3	Termination of Participation	7
SECTION 3 COMPENSATION DEFERRAL ELECTIONS		7
3.1	Compensation Deferrals	7
3.2	Compensation Deferrals Will Generally Be Payable in RSUs	8
3.3	Form of Payment	8
3.4	Term of Deferral	8
3.5	Changes in Elections as to Form of Payment and/or Term of Deferral	9
SECTION 4 SHARES SUBJECT TO THE PLAN		9
4.1	Shares Subject to the Plan	9

TABLE OF CONTENTS

(continued)

		Page
SECTION 5 DISTRIBUTIONS		10
5.1	Normal Time for Distribution	10
5.2	Special Rule for Change in Control Event	10
5.3	Special Rule for Death	10
5.4	Special Rule for Disability	11
5.5	Special Rule for Separation From Service	11
5.6	Required Six-Month Delay in Payment for Specified Employees	11
5.7	Delay of Payment(s) Permitted Under Certain Circumstances	11
5.8	Acceleration of Payment(s) Permitted Under Certain Circumstances	12
5.9	Unforeseeable Emergency	12
5.10	Beneficiary Designations	12
SECTION 6 PARTICIPANT’S INTEREST IN ACCOUNT		13
SECTION 7 ADMINISTRATION OF THE PLAN		13
7.1	Plan Administrator	13
7.2	Actions by Committee	13
7.3	Powers of Committee	14
7.4	Decisions of Committee and its Delegates	14
7.5	Administrative Expenses	14
7.6	Eligibility to Participate	15
7.7	Indemnification	15
SECTION 8 MODIFICATION OR TERMINATION OF THE PLAN		15
8.1	Employers’ Obligations Limited	15
8.2	Right to Amend or Terminate	15
8.3	Effect of Termination	15
8.4	Acceleration of Distributions on Certain Terminations	15
SECTION 9 GENERAL		15
9.1	Participation by Affiliates	15
9.2	Inalienability	16
9.3	Rights and Duties	16
9.4	No Enlargement of Employment Rights	16
9.5	Applicable Law	16
9.6	Tax Withholding	16
9.7	Severability	16
9.8	Captions	17
9.9	No Guarantees Regarding Tax Treatment	17
EXECUTION

TIBCO SOFTWARE INC.

2009 DEFERRED COMPENSATION PLAN

(Effective as of February 20, 2009)

TIBCO SOFTWARE INC., a Delaware corporation (the “Company”), has established this TIBCO Software Inc. 2009 Deferred Compensation Plan (the “Plan”), effective as of February 20, 2009, for the benefit of non-employee directors and a select group of management or highly compensated employees of the Company and its participating affiliates, in order to provide such employees with certain deferred compensation benefits.

The Plan is an unfunded deferred compensation plan that is intended to (1) comply with the requirements of section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and (2) qualify for the exemptions provided in sections 201, 301, and 401 of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”).

SECTION 1

DEFINITIONS

The following words and phrases will have the following meanings unless a different meaning is plainly required by the context:

1.1 “Affiliate” means each corporation, trade or business that is, together with the Company, a member of a controlled group of corporations or under common control (as determined under section 414(b) or (c) of the Code), but only for the period during which such other entity is so affiliated with the Company. Notwithstanding the foregoing, in applying sections 1563(a)(1), (2) and (3) of the Code for purposes of determining a controlled group of corporations under section 414(b) of the Code and in applying Treasury regulation section 1.414(c)-2 for purposes of determining trades or businesses that are under common control for purposes of section 414(c) of the Code, the phrase “at least 50 percent” will be used instead of “at least 80 percent” at each place it appears in such sections.

1.2 “Base Remuneration” means the bonuses payable under the Company’s Executive Incentive Compensation Plan to an Eligible Employee by his or her Employer with respect to services performed during any period by the Employee and does not include any other type of remuneration.

1.3 “Beneficiary” means the person or persons entitled to receive the balance credited to a Participant’s Account under the Plan upon the death of a Participant, as provided in Section 5.3.

1.4 “Change in Control Event” means a Change of Control as defined in Section 2.7 of the Company’s 2008 Equity Incentive Plan. Notwithstanding the foregoing, a transaction will not constitute a Change of Control Event for purposes of this Plan if the transaction does not constitute a change in control under Treasury regulation section 1.409A-3(i)(5)).

1.5 “Committee” means the administrative committee charged with responsibility for the general administration of the Plan pursuant to Section 7, as it may be constituted from time to time.

1.6 “Company” means TIBCO Software Inc., a Delaware corporation.

1.7 “Compensation” means the Base Remuneration and Director Fees (if any) of a Participant, as applicable. A Participant’s Compensation will not include any other type of remuneration.

1.8 “Compensation Deferrals” mean the Compensation amounts deferred by a Participant under the Plan pursuant to his or deferral elections made in accordance with Section 2.

1.9 “Director” means any individual who is a member of the Board of Directors of the Company.

1.10 “Director Fees” means the cash-based committee or meeting fees or retainers (if any) that are payable to a Non-Employee Director.

1.11 “Disability” or “Disabled” means a disability as provided under section 409A(a)(2)(C) of the Code and Treasury regulation section 1.409A-3(i)(4) and other official guidance issued thereunder.

1.12 “Eligible Employee” means any employee of an Employer who holds office at the level of Executive Vice President or above and who is selected by the Committee as eligible to participate in this Plan.

1.13 “Eligible Individual” means an Eligible Employee or a Non-Employee Director.

1.14 “Employers” mean the Company and each of its Affiliates that adopts the Plan with the written approval of the Committee. With respect to an individual Participant, “Employer” means the Company or its Affiliate that has adopted the Plan with the approval of the Committee and that directly employs such Participant.

1.15 “Fair Market Value” means the closing per share selling price for the shares of common stock of the Company (“Shares”) for the relevant date on the principal securities exchange on which the Shares are traded or, if there is no such sale on the relevant date, then on the last previous day on which a sale was reported; if the Shares are not listed for trading on a national securities exchange, the fair market value of Shares shall be determined in good faith by the Committee. Notwithstanding the preceding, for federal, state, and local income tax reporting purposes, fair market value shall be determined by the Company in accordance with uniform and nondiscriminatory standards adopted by it from time to time.

1.16 “Non-Employee Director” means a Director who is not an employee of the Company or its Affiliates.

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1.17 “Participant” means an Eligible Individual who (a) has made an election pursuant to Section 2.1, and (b) has not ceased participation pursuant to Section 2.3.

1.18 “Participant’s Account” or “Account” means, as to any Participant, the separate recordkeeping account maintained in the name of the Participant on the books of the Company in order to reflect his or her interest under the Plan, including any RSU grants made or deemed made as Dividend Restricted Stock Units pursuant to Section 4.1.4.

1.19 “Payment Date” means the first business day of a calendar month on which the national stock exchanges or national trading system are open for trading.

1.20 “Plan Year” means the calendar year.

1.21 “Restricted Stock Units” or “RSUs” mean restricted stock units granted to any Participant under this Plan.

1.22 “RSU Agreement” means a restricted stock unit agreement specifying the number of Shares covered thereby, in such form as the Committee shall establish.

1.23 “Separation from Service” means a Participant’s death, retirement or other termination of employment with the Employer and all of its Affiliates (as determined in accordance with section 409A(2)(A)(i) of the Code and Treasury regulation section 1.409A-1(h)). For this purpose, the employment relationship will be treated as continuing intact while the Participant is on military leave, sick leave or other bona fide leave of absence, except that if the period of such leave exceeds six (6) months and the Participant does not retain a right to reemployment under an applicable statute or by contract, then the employment relationship will be deemed to have terminated on the first day immediately following such six (6)-month period. A leave of absence constitutes a bona fide leave of absence only if there is a reasonable expectation that the Participant will return to perform services for the Employer. Notwithstanding the foregoing, where a leave of absence is due to any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than six (6) months, where such impairment causes an Eligible Employee who is a Participant to be unable to perform the duties of his or her position of employment or any substantially similar position of employment, a twenty-nine (29)-month period of absence shall be substituted for such six (6)-month period. For a Non-Employee Director who is a Participant, he or she shall be considered to have a separation from service with the Company upon a cessation of the Non-Employee Director’s service on the Board of Directors of the Company for any reason, (as determined in accordance with section 409A(a)(2)(A)(i) of the Code and Treasury regulation section 1.409A-1(h)), including, but not by way of limitation, a termination by death, resignation, retirement or other termination of service.

1.24 “Specified Employee” means a Participant who, as of the date of his or her Separation from Service, is a key employee of the Company as defined under section 409A(a)(2)(B)(i) of the Code and under Treasury regulation 1.409A-1(i). For this purpose, a Participant is generally a key employee if he or she meets the requirements of section 416(i)(1)(A)(i), (ii), or (iii) of the Code (applied in accordance with the regulations thereunder and disregarding

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section 416(i)(5) thereof) at any time during the twelve (12) month period ending on December 31 (the “Identification Date”). If a Participant is a key employee of the Company as of any Identification Date, then he or she will be treated as such for the entire twelve (12) month period beginning on the first day of the fourth month following the Identification Date. Further, once a list of Specified Employees has become effective, the Company shall not change the definition of compensation for purposes of identifying Specified Employees for the period with respect to which such list is effective.

1.25 “Unforeseeable Emergency” means (a) a severe financial hardship to a Participant resulting from an illness or accident of the Participant or his or her spouse, Beneficiary or dependent (as defined in section 152 of the Code, but without regard to subsections (b)(1), (b)(2) and (d)(1)(B) thereof), (b) loss of the Participant’s property due to casualty (including the need to rebuild a home following damage to a home not otherwise covered by insurance, for example, not as a result of a natural disaster), or (c) other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant. The Committee will determine whether or not a Participant has incurred an Unforeseeable Emergency based on such evidence as the Committee deems necessary or advisable.

SECTION 2

PARTICIPATION

2.1 Participation. Each Eligible Individual’s decision to become a Participant will be entirely voluntary.

2.1.1 Participation Elections.

(i) Initial Elections by Newly-Eligible Individuals. Each individual who first becomes an Eligible Individual may elect to become a Participant in the Plan by electing, within thirty (30) days of the date of his or her hire or promotion in the case of Eligible Employees or the date of his or her appointment or election in the case of Non-Employee Directors, to make Compensation Deferrals under the Plan. However, no election under this Section 2.1.1(i) may be made if an Eligible Individual was previously eligible to participate in another plan that is required to be aggregated with this Plan under section 409A of the Code. An Eligible Employee’s initial election to defer his or her Compensation shall be effective only with respect to the portion of such Compensation that is payable for services performed after his or her timely filing of his or her initial deferral election (that is, the amount equal to the total amount of the Compensation for the performance period multiplied by the ratio of the number of days remaining in the performance period after the filing of the initial deferral election over the total number of days in the performance period).

(ii) Reengaged Eligible Individuals. Notwithstanding the foregoing provisions of this Section 2.1.1, in the case of an individual who ceases to be an Eligible Individual, regardless of whether he or she still is a Participant with an Account balance under the Plan, and who subsequently becomes an Eligible Individual again, he or she will be treated as a Eligible Individual for purposes of subsection (i) above as of the date that the individual again

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becomes an Eligible Individual, provided that, he or she had not been an Eligible Individual at any time during the twenty-four (24) month period ending on such date. In addition, in the case of a former Participant who ceased to be such because his or her entire Account balance had been distributed, and on or before the date of the last distribution from the Account he or she ceased to be an Eligible Individual, he or she will be treated as a Eligible Individual for purposes of subsection (i) above as of the first date following such distribution that the individual again becomes an Eligible Individual.

(iii) Effect of Elections. An Eligible Individual’s election under this Section 2.1.1 to make Compensation Deferrals will be effective only (a) with respect to Compensation that is payable for services performed after the timely filing of his or her timely filing of the election and (b) for the remainder of the Plan Year with respect to which the election is made. Any Compensation Deferral elections for subsequent Plan Years must be made pursuant to Section 2.1.2.

2.1.2 Elections for Subsequent Plan Years. An Eligible Individual may become a Participant (or continue or reinstate his or her active participation) in the Plan for any subsequent Plan Year by electing, no later than December 31 of the immediately preceding Plan Year, to make Compensation Deferrals under the Plan. An election under this Section 2.1.2 to make Compensation Deferrals will be effective only for the Plan Year with respect to which the election is made. Notwithstanding the foregoing, with respect to an Eligible Employee, to the extent that such Compensation does not constitute payments that are “performance-based compensation” under Treasury regulation 1.409A-1(e), any such Eligible Employee’s election to defer his or her Compensation shall be effective only with respect to the portion of the Compensation that is payable for services performed on or after the beginning of the Plan Year to which the Eligible Employee deferral election relates (that is, the amount equal to the total amount of Compensation for the performance period multiplied by the ratio of the number of days remaining in the performance period after the December 31 immediately preceding the Plan year to which the Eligible Employee’s election relates over the total number of days in the performance period).

2.1.3 Duration of Compensation Deferral Elections. A Compensation Deferral election made under this Section 2 shall remain in effect for the Plan Year to which it applies, notwithstanding any change in the Participant’s Compensation. The dollar amount or percentage of any Compensation Deferrals shall not be reduced or increased during any Plan Year by virtue of any Participant election to increase, decrease or terminate his or her rate of deferral in any other employee benefit plan, including any applicable Company employee stock purchase plan; except as permitted by section 409A of the Code with respect to changes in deferral elections under a 401(k) plan, Code section 125 flexible benefits plan, or as otherwise permitted under section 409A of the Code. A Participant’s Compensation Deferral election shall immediately terminate with respect to future Compensation upon the Participant ceasing to be an Eligible Individual.

2.1.4 USERRA Rights. Notwithstanding the foregoing provisions of this Section 2.1, in accordance with Treasury regulation section 1.409A-2(a)(15), the Committee may (in its discretion) provide an Eligible Individual with a Compensation Deferral election to satisfy the requirements of the Uniformed Services Employment and Reemployment Rights Act of 1994, as amended (“USERRA”), if applicable.

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2.1.5 Specific Timing and Method of Elections. Notwithstanding any contrary provision of this Section 2.1, the Committee, in its sole discretion, will determine the manner and deadlines for Eligible Individuals to make Compensation Deferral elections under the Plan. The deadlines prescribed by the Committee may be earlier than the deadlines specified in this Section 2.1, but may not be later than such specified deadlines.

2.2 Cancellation of Compensation Deferrals. Notwithstanding any contrary provision of Section 2.1:

2.2.1 Hardship Distribution under 401(k) Plans. In the event that a Participant receives a hardship distribution under the TIBCO Software Inc. 401(k) Savings Plan or any other plan (maintained by an Employer) which contains a qualified cash or deferred arrangement under section 401(k) of the Code (collectively, the “401(k) Plans”), the Participant’s Compensation Deferrals (if any) under this Plan will be cancelled for a period of six (6) months from the date that the Participant received such hardship distribution or the remainder of the Plan Year in which the Participant received such hardship distribution (whichever period is longer). Notwithstanding the foregoing, the Participant’s Compensation Deferrals will not be so terminated if the Committee determines that such termination is not required in order to preserve the tax-qualification of the applicable 401(k) Plan.

2.2.2 Unforeseeable Emergency. In the event that a Participant incurs an Unforeseeable Emergency, the Committee, in its sole discretion, may cancel the Participant’s Compensation Deferrals (if any) under the Plan for the remainder of the Plan Year in which the Participant incurred the Unforeseeable Emergency.

2.2.3 Eligible Disability. In the event that a Participant incurs an Eligible Disability (as defined below), the Committee, in its sole discretion, may cancel the Participant’s Compensation Deferrals (if any) under the Plan, provided that such cancellation occurs by the later of the end of the Participant’s taxable year or the fifteenth (15^th) day of the third month following the date on which the Participant incurs the Eligible Disability. For purposes of this Section 2.2.3, “Eligible Disability” means any medically determinable physical or mental impairment resulting in the Participant’s inability to perform the duties of his or her position or any substantially similar position, where such impairment can be expected to result in death or can be expected to last for a continuous period of not less than six (6) months. The Committee will determine whether or not a Participant has incurred an Eligible Disability based on such evidence as the Committee deems necessary or advisable and in compliance with Treasury regulation section 1.409A-3(j)(4)(xii).

2.2.4 Irrevocability of Prior Compensation Deferrals. Notwithstanding the foregoing, a Participant’s election to make Compensation Deferrals under Section 2.1 will be irrevocable as to amounts already deferred as of the effective date of any cancellation in accordance with this Section 2.2.

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2.2.5 Resumption of Compensation Deferrals. A Participant whose Compensation Deferrals have been cancelled pursuant to this Section 2.2 may later resume making Compensation Deferrals under the Plan only in accordance with Section 2.1.

2.3 Termination of Participation. An individual who has become a Participant in the Plan will remain a Participant until his or her entire Account balance has been distributed. However, an Eligible Individual who has become a Participant may or may not be an active Participant making Compensation Deferrals for a particular Plan Year, depending upon whether he or she has elected to make Compensation Deferrals for such Plan Year.

SECTION 3

COMPENSATION DEFERRAL ELECTIONS

3.1 Compensation Deferrals. At the times and in the manner prescribed in Section 2.1, each Eligible Individual may elect to defer portions of his or her Compensation and to have the amounts of such Compensation Deferrals credited to his or her Account, as follows:

3.1.1 Compensation Deferrals. An Eligible Individual may elect to defer an amount equal to any whole percentage or any specific dollar amount (in $1,000 increments) of the Participant’s Compensation, provided that, any percentage elected by the Participant will be not less than 5% of his or her Compensation, and any dollar amount elected will be not less than $5,000. Notwithstanding the preceding sentence or any contrary provision of the Plan, the Committee may reduce a Participant’s Compensation Deferrals to the extent necessary to satisfy applicable withholding tax requirements and employee benefit plans and other deductions. With respect to employees, the payroll deductions may not reduce the individual’s compensation below an amount equal to two (2) times the federal or applicable state minimum wage, whichever is higher, required to be paid each pay period. Payroll deductions for a Participant who is an Eligible Employee will commence as soon as administratively practicable following the effectiveness of his or her timely submitted Deferral election form as provided under Section 2.1.1 or Section 2.1.2, as applicable. Deductions from Director Fees for a Participant who is a Non-Employee Director will commence as soon as administratively practicable following the effectiveness of his or her timely submitted Deferral election form as provided under Section 2.1.1 or Section 2.1.2, as applicable and will apply only to Director Fees earned or advanced for services to be performed after the date the Participant submits a properly completed election form to the Company.

3.1.2 Crediting of Compensation Deferrals. The amounts deferred pursuant to this Section 3.1 will reduce the Participant’s Compensation for the Plan Year and will be credited to the Participant’s Account as of the last day of the month in which the amounts (but for the Compensation Deferral) would have been paid to the Participant.

3.1.3 Participants’ Accounts. For each Plan Year, at the direction of the Committee, there will be established and maintained on the books of the Company, a separate Account or Accounts for each Participant, which will properly reflect Compensation Deferrals and all RSUs granted.

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3.1.4 Participants Remain Unsecured Creditors. All amounts credited to a Participant’s Account under the Plan will continue for all purposes to be a part of the general assets of the Employer. Each Participant’s interest in the Plan will make him or her only a general, unsecured creditor of the Employer. In the event that an Employer (other than the Company) becomes insolvent and therefore unable to make a payment or payments owed by it under the Plan, the Company will make such payments, provided that, nothing in this sentence will make any Participant anything other than a general, unsecured creditor of the Company.

3.2 Compensation Deferrals Will Generally Be Payable in RSUs. In the event than an Eligible Individual elects to defer portions of his or her Compensation, the deferred amounts shall be paid pursuant to Section 3.3 below and granted to any such Participant in the form of Restricted Stock Units, provided that, such Participant is an employee or service provider of the Employer on the date of grant. The RSUs shall be granted on the last business day (i.e., any day other than a Saturday, a Sunday, or a legal holiday in the State of California) at the end of the first full fiscal quarter following the applicable fiscal quarter in which Compensation that a Participant has elected to defer has been earned or advanced for services to be performed. RSUs shall be evidenced by an RSU Agreement. The RSUs shall be fully vested upon the date of grant and be settled in Company common stock upon a Participant’s Plan Account distribution, as provided in Sections 3.3 and 3.4. The number of shares of Company common stock covered by the RSUs shall be (i) the deferred amounts of the Participant’s Compensation, divided by (ii) the Fair Market Value of a share of Company common stock on the date of grant (rounded down to the nearest whole Share). The RSUs granted to a Participant pursuant to this Section 3.2 shall be reflected in such Participant’s Account and shall be distributed and settled in whole Shares in accordance with Section 5 below.

3.3 Form of Payment. Subject to the provisions of Section 5, the form of payment for the Compensation Deferrals under this Plan shall be in the form of RSUs that are settled in Shares. Notwithstanding the foregoing, to the extent that (i) a Participant is entitled to a distribution of his or her Account in accordance with Section 5 before his or her Compensation Deferrals have been granted in the form of RSUs, or (ii) after conversion of deferred amounts to RSUs, a portion of a Participant’s Compensation Deferrals remains, then any such amounts shall be payable in cash in a single lump sum on the Payment Date that immediately follows the end of the term of deferral(s) elected by the Participant.

3.4 Term of Deferral. Subject to the provisions of Section 5, each Participant must indicate on his or her Compensation Deferral election form pursuant to Section 3.1 the time for payment for the Compensation Deferrals made pursuant to such election. Pursuant to such procedures as the Committee (in its discretion) may adopt from time to time, a Participant may elect a fixed date to receive his or her Plan Account distribution (not less than two (2) years from the date of election) specified in his or her Compensation Deferral election or the occurrence of a specific event, provided that, any such election satisfies the requirements of section 409A of the Code. The procedures adopted by the Committee may (in the discretion of the Committee) restrict a Participant’s ability to elect multiple terms of deferral under the Plan. A Participant’s election as to the term of deferral will apply to all Compensation Deferrals credited to the Participant’s Account with respect to which the election is made, and except to the limited extent provided in Section 3.5, will be irrevocable.

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3.5 Changes in Elections as to Form of Payment and/or Term of Deferral. Subject to the provisions of Section 5, a Participant may change his or her election under Section 3 for Compensation Deferrals credited to the Participant’s Account and make a new election with the consent of the Company (a “Subsequent Deferral Election”), provided that, the following requirements (the “Subsequent Deferral Requirements”) are met: (a) the Subsequent Deferral Election will not take effect until at least twelve (12) months after the date on which the election is made; (b) the Subsequent Deferral Election is made not less than twelve (12) months before the date payment of such amounts was previously scheduled to be made or commenced, (c) the newly-elected scheduled payment commencement date is at least five (5) years after the date payment of such amounts was previously scheduled to be made or commenced, and (d) payment of such amounts has not actually commenced. Notwithstanding the foregoing, in accordance with Treasury regulation section 1.409A-2(b)(8) the Subsequent Deferral Requirements will be deemed to be satisfied to the extent the Committee (in its discretion) provides a Participant with a Subsequent Deferral Election to satisfy the requirements of USERRA (as defined in Section 2.1.4), if applicable.

SECTION 4

SHARES SUBJECT TO THE PLAN

4.1 Shares Subject to the Plan. Subject to adjustment as provided in Section 4.1.2, the total number of Shares available for issuance under the Plan shall equal 1,000,000. Shares granted under the Plan may be either authorized but unissued Shares or treasury Shares.

4.1.2 In the event that any dividend or other distribution (whether in the form of cash, Shares, other securities, or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase, or exchange of Shares or other securities of the Company, or other change in the corporate structure of the Company affecting the Shares such that an adjustment is determined by the Committee to be appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan, then the Committee shall, in such manner as it may deem equitable, adjust the number and class of Shares that may be delivered under the Plan, the number, class, and price of Shares (or other property or cash) subject to outstanding RSUs. Notwithstanding the preceding, the number of Shares shall be a whole number.

4.1.3 Notwithstanding any other provision of the Plan, the terms of any RSU Agreement evidencing an RSU may provide that, in the event that RSUs are not assumed by the successor corporation or its parent or a subsidiary upon a Change of Control Event, then restrictions and deferral limitations on the RSUs lapse and the Restricted Stock Units become free of all restrictions and limitations, subject in each case to any terms and conditions contained in the RSU Agreement evidencing such RSU.

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4.1.4 Except as provided in this Section 4.1.4, no Participant nor any person claiming under or through a Participant will have any of the rights or privileges of a stockholder of the Company in respect of any Shares deliverable hereunder unless and until certificates representing such Shares will have been issued, recorded on the records of the Company or its transfer agents or registrars, and delivered to a Participant (including through electronic delivery to a brokerage account). After such issuance, recordation and delivery, a Participant will have all the rights of a stockholder of the Company with respect to voting such Shares and receipt of dividends and distributions on such Shares. Notwithstanding the foregoing, a Participant shall be entitled to receive dividends and distributions paid on the Shares underlying vested Restricted Stock Units. Any such dividends or other distributions shall be credited to Participant Accounts, without any interest, and automatically shall be deemed reinvested in Restricted Stock Units on the date of payment of any such dividends or distributions (the “Dividend Restricted Stock Units”). The number of Dividend Restricted Stock Units shall be determined as follows: (a) if the Company declares and pays a cash dividend on the Shares, the number of Dividend Restricted Stock Units shall be equal to the quotient obtained by dividing the cash dividend paid on the Shares underlying vested Restricted Stock Units by the Fair Market Value of the Shares on the date the dividend is paid; or (b) if the Company distributes Shares, the number of Dividend Restricted Stock Units shall be equal to the number of Shares distributed with respect to the Shares underlying vested Restricted Stock Units. Dividend Restricted Stock Units shall be subject to the same terms and conditions as the Restricted Stock Units, including with respect to distribution of a Participant’s Account pursuant to Section 3 and Section 5 hereof.

SECTION 5

DISTRIBUTIONS

5.1 Normal Time for Distribution. Subject to the other provisions of this Section 5 below, a distribution of the balance credited to a Participant’s Account will be made or commenced on the Payment Date that immediately follows the end of the term of deferral(s) elected by the Participant under Sections 3.4 or 3.5 (as applicable).

5.2 Special Rule for Change in Control Event. If there is a Change in Control Event, the balance then credited to a Participant’s Account will be distributed to him or her on the Payment Date that immediately follows the date of the Change in Control Event or as soon as administratively practicable thereafter, but in no event later than the 15th day of the third calendar month following the Payment Date that immediately follows the Change in Control Event; provided, however, that if this period ends in the calendar year following the year in which the Change in Control Event occurs, the Participant will not have the right to designate the calendar year in which payment will be made.

5.3 Special Rule for Death. If a Participant dies, the balance then credited to his or her Account will be distributed to the Participant’s Beneficiary on the Payment Date that immediately follows the Participant’s death or as soon as administratively practicable thereafter, but in no event later than the 15th day of the third calendar month following the Payment Date immediately following the Participant’s death; provided, however, that if this period ends in the calendar year following the year in which the Participant’s death occurs, the Participant’s Beneficiary, surviving spouse or estate, as applicable, will not have the right to designate the

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calendar year in which payment will be made. If a Participant dies without having effectively designated a Beneficiary, or if no Beneficiary survives the Participant, the Participant’s Account will be distributed to his or her surviving spouse, or, if the Participant is not survived by his or her spouse, the Account will be distributed to his or her estate.

5.4 Special Rule for Disability. If a Participant becomes Disabled, the balance then credited to his or her Account will be distributed to the Participant on the Payment Date that immediately follows the date on which the Participant became Disabled or as soon as administratively practicable thereafter but in no event later than the 15th day of the third calendar month following the Payment Date that immediately follows the Disability; provided, however, that if this period ends in the calendar year following the year in which the Disability occurs, the Participant will not have the right to designate the calendar year in which payment will be made.

5.5 Special Rule for Separation From Service. If a Participant incurs a Separation from Service, any balance then credited to the Participant’s Account will be distributed to the Participant on the Payment Date that immediately follows his or her Separation from Service or as soon as administratively practicable thereafter but in no event later than the 15th day of the third calendar month following the Payment Date that immediately follows the Separation from Service; provided, however, that if this period ends in the calendar year following the year in which the Separation from Service occurs, the Participant will not have the right to designate the calendar year in which payment will be made. The Participant’s Account will be distributed in the form elected under Section 3.3, subject to the limitations described in Section 5.6

5.6 Required Six-Month Delay in Payment for Specified Employees. Notwithstanding any contrary Plan provision and subject to the provisions of Section 5.7, any distributions that are otherwise required to be made under the Plan to a Specified Employee due to his or her Separation from Service will be accumulated during the first six (6) months following the Separation from Service and will instead be paid on the Payment Date that immediately follows the end of such six (6)-month period.

5.7 Delay of Payment(s) Permitted Under Certain Circumstances. Notwithstanding any contrary provision of Section 5:

5.7.1 Payments That Would Violate Federal Securities Laws or Other Applicable Law. Any distribution scheduled to be made under the Plan will be delayed if the Company reasonably anticipates that the making of the distribution will violate federal securities laws or other applicable law. Any such delayed distribution will be made at the earliest date at which the Company reasonably anticipates that the making of the distribution will not cause such violation.

5.7.2 Other Events and Conditions. Any payment scheduled to be made under the Plan will be delayed upon such other events and conditions as may be prescribed in generally applicable guidance published in the Internal Revenue Bulletin.

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5.8 Acceleration of Payment(s) Permitted Under Certain Circumstances. Notwithstanding any foregoing provision of Section 5 and except as otherwise provided below:

5.8.1 Conflicts of Interest. A Participant’s Account balance may be distributed in an immediate lump sum cash payment to the extent permitted in Treasury regulation section 1.409A-3(j)(4)(iii), as directed by the Committee (in its discretion).

5.8.2 Income Inclusion Under Section 409A of the Code. Subject to Section 5.7, a Participant’s Account balance may be distributed to the extent permitted in Treasury regulation section 1.409A-3(j)(4)(vii), as directed by the Committee (in its discretion).

5.8.3 Payment of State, Local or Foreign Taxes. Subject to Section 5.7, a Participant’s Account balance may be distributed to the extent permitted in Treasury regulation section 1.409A-3(j)(4)(xi), as directed by the Committee (in its discretion).

5.8.4 Certain Offsets. Subject to Section 5.7, a Participant’s Account balance may be distributed to the extent permitted in Treasury regulation section 1.409A-3(j)(4)(xiii), as directed by the Committee (in its discretion).

5.8.5 Bona Fide Disputes as to a Right to a Payment. Subject to Section 5.7, a Participant’s Account balance may be distributed to the extent permitted in Treasury regulation section 1.409A-3(j)(4)(xiv), as directed by the Committee (in its discretion).

5.9 Unforeseeable Emergency. If a Participant incurs an Unforeseeable Emergency, the Committee, in its sole discretion, may determine that all or part of the Participant’s Account balance will be distributed to him or her in a lump sum cash payment on the Payment Date that immediately follows the date on which the Committee determines that the Participant has incurred the Unforeseeable Emergency or as soon as administratively practicable thereafter; provided, that, the amount paid to the Participant pursuant to this Section 5.9 will be limited to the amount reasonably necessary to satisfy the Unforeseeable Emergency (which may include amounts necessary to pay any federal, state, local, or foreign income taxes or penalties reasonably anticipated to result from the payment). Also, no payment under this Section 5.9 will be made to the extent that the Participant’s Unforeseeable Emergency is or may be relieved through reimbursement or compensation from insurance or otherwise, by liquidation of the Participant’s assets (to the extent the liquidation of such assets would not itself cause severe financial hardship), or by the cancellation of the Participant’s Compensation Deferrals in accordance with Section 2.2.2.

5.10 Beneficiary Designations. Each Participant may, pursuant to such procedures as the Committee may specify, designate one or more Beneficiaries.

5.10.1 Spousal Consent. If a Participant designates a person (including a trust) other than or in addition to his or her spouse as a primary Beneficiary, the designation will be ineffective unless the Participant’s spouse consents to the designation. Any spousal consent required under this Section 5.10 will be ineffective unless it (a) is set forth in writing in a form specified in the discretion of the Committee, (b) acknowledges the effect of the Participant’s designation of

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another person as his or her Beneficiary under the Plan, and (c) is signed by the spouse and witnessed by an authorized agent of the Committee or a notary public. Notwithstanding this consent requirement, if the Participant establishes to the satisfaction of the Committee that written spousal consent may not be obtained because the spouse cannot be located, his or her designation will be effective without spousal consent. Any spousal consent required under this Section 5.10 will be valid only with respect to the spouse who signs the consent. A Participant may revoke his or her Beneficiary designation at any time, provided that such revocation is in writing.

5.10.2 Changes and Failed Designations. A Participant may designate different Beneficiaries (or may revoke a prior Beneficiary designation) at any time by delivering a new designation (or revocation of a prior designation) in accordance with Section 5.10.1. Any designation or revocation will be effective only if it is received by the Committee. However, when so received, the designation or revocation will be effective as of the date the notice is executed (whether or not the Participant still is living), but without prejudice to the Committee on account of any payment made before the change is recorded. The last effective designation received by the Committee will supersede all prior designations.

SECTION 6

PARTICIPANT’S INTEREST IN ACCOUNT

Subject to Sections 8 and 9.2, a Participant’s interest in the balance credited to his or her Account at all times will be one hundred percent (100%) vested and nonforfeitable.

SECTION 7

ADMINISTRATION OF THE PLAN

7.1 Plan Administrator. The Committee is hereby designated as the administrator of the Plan (within the meaning of section 3(16)(A) of ERISA). The number of members comprising the Committee shall be determined by the Board of Directors of the Company, which may from time to time vary the number of members. A member of the Committee may resign by delivering a written notice of resignation to the Board. The Board may remove any member by delivering a certified copy of its resolution of removal to such member. Vacancies in the membership of the Committee shall be filled promptly by the Board.

7.2 Actions by Committee. The Committee will have the authority to control and manage the operation and administration of the Plan. Each decision of a majority of the members of the Committee then in office will constitute the final and binding act of the Committee. The Committee may act with or without a meeting being called or held and will keep minutes of all meetings held and a record of all actions taken by written consent.

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7.3 Powers of Committee. The Committee will have all powers and discretion necessary or appropriate to supervise the administration of the Plan and to control its operation in accordance with its terms, including, but not by way of limitation, the following discretionary powers:

7.3.1 To interpret and determine the meaning and validity of the provisions of the Plan and to determine any question arising under, or in connection with, the administration, operation or validity of the Plan or any amendment thereto;

7.3.2 To determine any and all considerations affecting the eligibility of any employee to become a Participant or remain a Participant in the Plan;

7.3.3 To cause one or more separate Accounts to be maintained for each Participant;

7.3.4 To cause Compensation Deferrals to be credited to Participants’ Accounts;

7.3.5 To determine the manner and form for making elections under the Plan;

7.3.6 To determine the status and rights of Participants and their spouses, Beneficiaries or estates;

7.3.7 To employ such counsel, agents and advisers, and to obtain such legal, clerical and other services, as it may deem necessary or appropriate in carrying out the provisions of the Plan;

7.3.8 To establish, from time to time, rules for the performance of its powers and duties and for the administration of the Plan;

7.3.9 To publish a claims and appeal procedure satisfying the minimum standards of section 503 of ERISA pursuant to which individuals or estates may claim Plan benefits and appeal denials of such claims;

7.3.10 To delegate to any one or more of its members or to any other person, severally or jointly, the authority to perform for and on behalf of the Committee one or more of the functions of the Committee under the Plan; and

7.3.11 To decide all issues and questions regarding Account balances, and the time, form, manner and amount of distributions to Participants in accordance with the Plan’s terms.

7.4 Decisions of Committee and its Delegates. All actions, interpretations, and decisions of the Committee (and its delegates) will be conclusive and binding on all persons, and will be given the maximum possible deference allowed by law.

7.5 Administrative Expenses. All expenses incurred in the administration of the Plan by the Committee, or otherwise, including legal fees and expenses, will be paid and borne by the Employers.

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7.6 Eligibility to Participate. No member of the Committee who is also an employee of an Employer will be excluded from participating in the Plan if otherwise eligible, but he or she will not be entitled, as a member of the Committee, to act or pass upon any matters pertaining specifically to his or her own Account under the Plan.

7.7 Indemnification. Each of the Employers will, and hereby does, indemnify and hold harmless the members of the Committee (and its delegates), from and against any and all losses, claims, damages or liabilities (including attorneys’ fees and amounts paid, with the approval of the Board of Directors of the Company (or an authorized committee of the Board of Directors of the Company), in settlement of any claim) arising out of or resulting from the implementation of a duty, act or decision with respect to the Plan, so long as such duty, act or decision does not involve gross negligence or willful misconduct on the part of any such individual.

SECTION 8

MODIFICATION OR TERMINATION OF THE PLAN

8.1 Employers’ Obligations Limited. The Employers intend to continue the Plan indefinitely, and to maintain each Participant’s Account until it is scheduled to be paid to him or her in accordance with the provisions of the Plan. However, the Plan is voluntary on the part of the Employers, and the Employers do not guarantee to continue the Plan. The Company at any time may, by amendment of the Plan, suspend Compensation Deferrals or may discontinue Compensation Deferrals, with or without cause.

8.2 Right to Amend or Terminate. The Committee, in its sole discretion, may amend or terminate the Plan, or any part thereof, in such manner as it may determine, at any time and for any reason.

8.3 Effect of Termination. If the Plan is terminated pursuant to this Section 8, the balances credited to the Accounts of the affected Participants will be distributed to them at the time and in the manner set forth in Section 5, except as provided in Section 8.4.

8.4 Acceleration of Distributions on Certain Terminations. Notwithstanding any contrary Plan provision, if the Plan is terminated and liquidated pursuant to this Section 8 and in accordance with the requirements of Treasury regulation section 1.409A-3(j)(4)(ix), the balances credited to the Accounts of Participants may be distributed as soon as may be permitted under such section, as directed by the Committee (in its discretion).

SECTION 9

GENERAL

9.1 Participation by Affiliates. One or more Affiliates may become participating Employers by adopting the Plan and obtaining approval for such adoption from the Committee. By adopting the Plan, an Affiliate is deemed to agree to all of its terms, including (but not limited to) the provisions granting exclusive authority to the Committee to amend the Plan and the provisions granting exclusive authority to the Committee to administer and interpret the Plan. Any Affiliate

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may terminate its participation in the Plan at any time. The liabilities incurred under the Plan to the Participants employed by each Employer will be solely the liabilities of that Employer, and no other Employer will be liable for any benefits accrued by a Participant during any period when he or she was not employed by such Employer.

9.2 Inalienability. In no event may any Participant, former Participant, Beneficiary, spouse or estate sell, transfer, anticipate, assign, hypothecate, or otherwise dispose of any right or interest under the Plan; and such rights and interests will not at any time be subject to the claims of creditors nor be liable to attachment, execution or other legal process. Notwithstanding the foregoing, a Participant may, in a manner specified by the Committee, transfer all or any portion of his or her Account balance to the Participant’s spouse, former spouse or dependent pursuant to a court-approved domestic relations order which relates to the provision of child support, alimony payments or marital property rights.

9.3 Rights and Duties. Neither the Employers nor the Committee will be subject to any liability or duty under the Plan except as expressly provided in the Plan, or for any action taken, omitted or suffered in good faith.

9.4 No Enlargement of Employment Rights. Neither the establishment or maintenance of the Plan, the making of any deferrals under the Plan nor any action of any Employer or the Committee, will be held or construed to confer upon any individual any right to be continued as an employee of the Employer nor, upon dismissal, any right or interest in any specific assets of the Employers other than as provided in the Plan. Each Employer expressly reserves the right to discharge any employee at any time.

9.5 Applicable Law. The Plan is intended to comply with the provisions of section 409A of the Code. Notwithstanding any contrary Plan provision, the Plan will be construed, administered and enforced in a manner that is consistent with such intent. The provisions of the Plan also will be construed, administered and enforced in accordance with the applicable provisions of ERISA, and to the extent not preempted by ERISA, with the applicable laws of the State of California (other than its conflict of laws provisions).

9.6 Tax Withholding. Notwithstanding any contrary Plan provision, the Company will have the right to deduct from Compensation Deferrals and/or a Participant’s Account and/or any payments due to a Participant (or his or her Beneficiary) under the Plan any and all taxes determined by the Committee to be applicable with respect to such benefits. In the discretion of the Committee, the Company and the Participant’s Employer may accept payment by the Participant (or Beneficiary) of the amount of any applicable taxes in lieu of deducting such amount from the Participant’s Account or payments due under the Plan.

9.7 Severability. If any provision of the Plan is held invalid or unenforceable, its invalidity or unenforceability will not affect any other provisions of the Plan, and in lieu of each provision which is held invalid or unenforceable, there will be added as part of the Plan a provision that will be as similar in terms to such invalid or unenforceable provision as may be possible and be valid, legal, and enforceable.

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9.8 Captions. The captions contained in and the table of contents prefixed to the Plan are inserted only as a matter of convenience and for reference and in no way define, limit, enlarge or describe the scope or intent of the Plan nor in any way will affect the construction of any provision of the Plan.

9.9 No Guarantees Regarding Tax Treatment. Participants (or their Beneficiaries) will be responsible for all taxes with respect to any benefits under the Plan and should consult with their own tax advisors. The Committee, the Company and the other Employers make no guarantees regarding the tax treatment to any person of any deferrals or payments made under the Plan and will not provide tax advice to the Participants (or their Beneficiaries).

****************

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U.K. Addendum

TIBCO SOFTWARE INC.

2009 DEFERRED COMPENSATION PLAN

This Addendum (“U.K. Addendum”) to the TIBCO Software Inc. (“TIBCO” or “Company”) 2009 Deferred Compensation Plan (“U.S. Plan”) is adopted to set out rules which, together with those provisions of the U.S. Plan, will provide certain Eligible Individuals the opportunity to defer Compensation and receive deferred Restricted Stock Units in the future. It is intended that the settlement of deferred Restricted Stock Units in Shares should enable certain Eligible Individuals to meet the expectations for the directors and employees to hold a minimum number of shares under the Company’s stock ownership guidelines. These terms govern the operation of the Plan with respect to U.K. resident Participants of TIBCO and its U.K. Subsidiaries and provide for the Plan to comply with U.K. income tax laws. Notwithstanding anything herein or otherwise to the contrary, until otherwise determined by the Committee, only Non-Employee Directors who are U.K. residents shall be covered by this U.K. Addendum and be considered Eligible Individuals for purposes of this U.K. Addendum.

This U.K. Addendum does not replace the U.S. Plan except as provided herein. In the event of any conflict between these provisions and the U.S. Plan, these provisions will prevail.

SECTION 1

DEFINITIONS

Capitalized terms used herein shall have the meaning ascribed to them below and in the U.S. Plan.

“Cause” means (in relation to a Participant) any act of dishonesty or fraud or gross negligence in connection with the performance of the Participant’s responsibilities or services to the Company or Affiliate.

“Confidentiality Agreement” means a confidentiality agreement specifying the Confidential Information that the Participant may not discuss or disclose in order for the deferred RSUs to be settled.

“Confidential Information” means the non-public information regarding the Company’s or Affiliate’s software, services, customers, business, finances and IT infrastructure and any other information set out in a Confidentiality Agreement.

SECTION 2

PARTICIPATION

This U.K. Addendum Section 2 shall replace Section 2 of the U.S. Plan in its entirety.

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2.1 Participation. Each Eligible Individual’s decision to become a Participant will be entirely voluntary.

2.1.1 Participation Elections.

(i) Initial Elections by Newly-Eligible Individuals. Each individual who first becomes an Eligible Individual may elect to become a Participant in the Plan by electing, within thirty (30) days of the date of his or her hire or promotion in the case of Eligible Employees or the date of his or her appointment or election in the case of Non-Employee Directors, to make Compensation Deferrals under the Plan. However, no election under this Section 2.1.1(i) may be made if an Eligible Individual was previously eligible to participate in another plan that is required to be aggregated with this Plan under section 409A of the Code. An Eligible Employee’s initial election to defer his or her Compensation shall be effective only with respect to the portion of such Compensation that is payable for services performed after his or her timely filing of his or her initial deferral election (that is, the amount equal to the total amount of the Compensation for the performance period multiplied by the ratio of the number of days remaining in the performance period after the filing of the initial deferral election over the total number of days in the performance period).

(ii) Reengaged Eligible Individuals. Notwithstanding the foregoing provisions of this Section 2.1.1, in the case of an individual who ceases to be an Eligible Individual, regardless of whether he or she still is a Participant with a notional Account balance under the Plan, and who subsequently becomes an Eligible Individual again, he or she will be treated as an Eligible Individual for purposes of subsection (i) above as of the date that the individual again becomes an Eligible Individual, provided that, he or she had not been an Eligible Individual at any time during the twenty-four (24) month period ending on such date. In addition, in the case of a former Participant who ceased to be such because his or her entire Account balance had been distributed, and on or before the date of the last distribution from the Account he or she ceased to be an Eligible Individual, he or she will be treated as a Eligible Individual for purposes of subsection (i) above as of the first date following such distribution that the individual again becomes an Eligible Individual.

(iii) Effect of Elections. An election under the Plan shall be irrevocable and constitute an irrevocable agreement between the Company (and its Affiliates (as relevant)) and the Participant to change the terms and conditions of Compensation, so that any Compensation subject to the election will be granted in the form of deferred Restricted Stock Units. Any prospective entitlement to be paid Compensation subject to the election on the original terms of the Compensation shall cease immediately on the entry by the Participant into the election. An Eligible Individual’s election under this Section 2.1.1 to make Compensation Deferrals will be effective only (a) with respect to Compensation that is payable for services performed after the timely filing of his or her timely filing of the election and (b) for the remainder of the Plan Year with respect to which the election is made. Any Compensation Deferral elections for subsequent Plan Years must be made pursuant to Section 2.1.2.

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(iv) Compensation Subject to Elections for UK Taxpayers. Notwithstanding anything in the Plan or the U.K. Addendum to the contrary, a Participant resident in the United Kingdom shall only make Compensation Deferrals with respect to Compensation that is payable for services performed after the timely filing of his or her election. All elections must be made before entitlement to any Compensation subject to an election arises. Without limitation, the Participant is not able to make an election in respect of any Compensation where that Compensation has been treated as having been received within the meaning of section 18 of the Income Tax (Earnings and Pensions) Act 2003.

(v) Terms of Deferred Restricted Stock Units. Deferred Restricted Stock Units will be granted to Participants who have entered into valid elections to make Compensation Deferrals on terms that:

• except in the case of death, Disability or a Change in Control Event, the deferred RSUs will not be settled until the Payment Date specified by the Participant in his election;

• the deferred RSUs will immediately lapse and terminate if there is a Separation from Service of the Participant in circumstances where the Participant has been dismissed for Cause or the Participant has resigned in circumstances which would have allowed the Company and/or any of its Affiliates to dismiss the Participant for Cause; and

• the Participant enters into and complies with the terms of a Confidentiality Agreement. In order for the deferred RSUs to be settled and for the Shares to be transferred to the Participant on the Payment Date, the Participant will be required, except in the case of the Participant’s death, to sign an undertaking at least five (5) business days prior to the Payment Date that immediately follows the end of the term of deferrals elected by the Participant, in a form specified by the Committee, confirming that the Participant has not broken the terms of the Confidentiality Agreement. If the Participant does not return such a form within one month of being requested by the Committee, but in no event later than five (5) business days prior to the Payment Date that immediately follows the end of the term of deferrals elected by the Participant, the deferred RSUs will lapse and be permanently forfeited.

2.1.2 Elections for Subsequent Plan Years. An Eligible Individual may become a Participant (or continue or reinstate his or her active participation) in the Plan for any subsequent Plan Year by electing, no later than December 31 of the immediately preceding Plan Year, to make Compensation Deferrals under the Plan. An election under this Section 2.1.2 to make Compensation Deferrals will be effective only for the Plan Year with respect to which the election is made. Notwithstanding the foregoing, with respect to an Eligible Individual, to the extent that such Compensation does not constitute payments that are “performance-based compensation” under Treasury regulation 1.409A-1(e), any such Eligible Individual’s election to defer his or her Compensation shall be effective only with respect to the portion of the Compensation that is payable for services performed on or after the beginning of the Plan Year to which the Eligible Employee deferral election relates (that is, the amount equal to the total amount of Compensation for the

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performance period multiplied by the ratio of the number of days remaining in the performance period after the December 31 immediately preceding the Plan Year to which the Eligible Employee’s election relates over the total number of days in the performance period).

2.1.3 Duration of Compensation Deferral Elections. A Compensation Deferral election made under this Section 2 shall remain in effect for the Plan Year to which it applies, notwithstanding any change in the Participant’s Compensation. The dollar amount or percentage of any Compensation Deferrals shall not be reduced or increased during any Plan Year by virtue of any Participant election to increase, decrease or terminate his or her rate of deferral in any other employee benefit plan, including any applicable Company employee stock purchase plan. A Participant’s Compensation Deferral election shall immediately terminate with respect to future Compensation upon the Participant ceasing to be an Eligible Individual.

2.1.4 USERRA Rights. Notwithstanding the foregoing provisions of this Section 2.1, in accordance with Treasury regulation section 1.409A-2(a)(15), the Committee may (in its discretion) provide an Eligible Individual with a Compensation Deferral election to satisfy the requirements of the Uniformed Services Employment and Reemployment Rights Act of 1994, as amended (“USERRA”), if applicable.

2.1.5 Specific Timing and Method of Elections. Notwithstanding any contrary provision of this Section 2.1, the Committee, in its sole discretion, will determine the manner and deadlines for Eligible Individuals to make Compensation Deferral elections under the Plan. The deadlines prescribed by the Committee may be earlier than the deadlines specified in this Section 2.1, but may not be later than such specified deadlines.

2.2 No Cancellation of Compensation Deferrals. By electing to defer any Compensation, the Participant elects irrevocably to alter the terms and conditions relating to the Compensation subject to the deferral election so that any such Compensation will be changed into and be granted in the form of deferred Restricted Stock Units.

2.2.1 Hardship Distribution under 401(k) Plans. In the event that a Participant receives a hardship distribution under the TIBCO Software Inc. 401(k) Savings Plan or any other plan (maintained by an Employer) which contains a qualified cash or deferred arrangement under section 401(k) of the Code (collectively, the “401(k) Plans”), the Participant’s Compensation Deferrals (if any) under this Plan will be cancelled for a period of six (6) months from the date that the Participant received such hardship distribution or the remainder of the Plan Year in which the Participant received such hardship distribution (whichever period is longer). Notwithstanding the foregoing, the Participant’s Compensation Deferrals will not be so terminated if the Committee determines that such termination is not required in order to preserve the tax-qualification of the applicable 401(k) Plan.

2.2.2 Left Intentionally Blank.

2.2.3 Left Intentionally Blank.

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2.2.4 Irrevocability of Elections. Elections are irrevocable and cannot be changed in the future.

2.2.5 Left Intentionally Blank.

2.3 Termination of Participation. An individual who has become a Participant in the Plan will remain a Participant until his or her entire notional Account balance has been distributed. However, an Eligible Individual who has become a Participant may or may not be an active Participant making Compensation Deferrals for a particular Plan Year, depending upon whether he or she has elected to make Compensation Deferrals for such Plan Year.

2.4 Rights of a Holder. No Participant nor any person claiming under or through a Participant will have any of the rights or privileges of a stockholder of the Company in respect of any Shares deliverable hereunder (including, without limitation, any rights to dividends, dividend equivalents or voting rights) unless and until certificates representing such Shares will have been issued, recorded on the records of the Company or its transfer agents or registrars, and delivered to a Participant (including through electronic delivery to a brokerage account). After such issuance, recordation and delivery, a Participant will have all the rights of a stockholder of the Company with respect to voting such Shares and receipt of dividends and distributions on such Shares.

2.5 Risk of Forfeiture. Until the Payment Date specified in the Participant’s deferral election, the deferred Restricted Stock Units will immediately terminate if there is a termination from service of the Participant in circumstances where the Participant has been dismissed for Cause or the Participant has resigned in circumstances which would have allowed the Company or any of its Affiliates to dismiss the Participant for Cause. The deferred RSUs will also immediately lapse and terminate if the Participant discusses or discloses without authority of the Company the Company’s Confidential Information or any Confidential Information of its Affiliates.

SECTION 3

COMPENSATION DEFERRAL ELECTIONS

This U.K. Addendum Section 3 shall replace Section 3 of the U.S. Plan in its entirety.

3.1 Compensation Deferrals. At the times and in the manner prescribed in Section 2.1, each Eligible Individual may irrevocably elect to defer portions of his or her future Compensation and to have the amounts of the Participant’s contingent interest in the balance credited to his or her notional Account as follows:

3.1.1 Compensation Deferrals. An Eligible Individuals may elect to defer an amount equal to any whole percentage or any specific dollar amount (in $1,000 increments) of the Participant’s Compensation, provided that, any percentage elected by the Participant will be not less than 5% of his or her future Compensation, and any dollar amount elected will be not less than $5,000. Notwithstanding the preceding sentence or any contrary provision of the Plan, the Committee may reduce a Participant’s Compensation Deferrals to the extent necessary to satisfy applicable withholding tax requirements and employee benefit plans and other deductions. With

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respect to employees, the payroll deductions may not reduce the individual’s compensation below an amount equal to two (2) times the federal or applicable state minimum wage, whichever is higher, required to be paid each pay period. Payroll deductions for a Participant who is an Eligible Individual will commence as soon as administratively practicable following the effectiveness of his or her timely submitted Deferral election form as provided under Sections 2.1.1 or 2.1.2, as applicable. The reduction in Director Fees for a Participant who is a Non-Employee Director will commence as soon as administratively practicable following the effectiveness of his or her timely submitted Deferral election form as provided under Sections 2.1.1 or 2.1.2, as applicable, and will apply only to Director Fees or Base Remuneration to be earned or advanced for services to be performed after the date the Participant submits a properly completed election form to the Company.

3.1.2 Crediting of Compensation Deferrals. The amounts deferred pursuant to this Section 3.1 will reduce the Participant’s Compensation for the Plan Year and will be credited to the Participant’s contingent notional Account as of the last day of the month in which the amounts (but for the Compensation Deferral) would have been paid to the Participant.

3.1.3 Participants’ Accounts. For each Plan Year, at the direction of the Committee, there will be established and maintained on the books of the Company, a separate contingent Account or Accounts for each Participant, which will properly reflect Compensation Deferrals and all deferred RSUs granted.

3.1.4 Participants Remain Unsecured Creditors. All contingent amounts credited notionally to a Participant’s Account under the Plan will continue for all purposes to be a part of the general assets of the Employer. Each Participant’s contingent interest in the Plan will make him or her only a general, unsecured creditor of the Employer. In the event that an Employer (other than the Company) becomes insolvent and therefore unable to make a payment or payments owed by it under the Plan, the Company will make such payments, provided that, nothing in this sentence will make any Participant anything other than a general, unsecured creditor of the Company.

3.2 Compensation Deferrals Will Generally Be Payable in RSUs. In the event than an Eligible Individual elects to defer portions of his or her Compensation, the deferred amounts shall be paid pursuant to Section 3.3 below and granted to any such Participant in the form of deferred RSUs, provided that, such Participant is an employee or service provider of the Employer on the date of grant. The deferred RSUs shall be granted on the last business day (i.e., any day other than a Saturday, a Sunday, or a legal holiday in the State of California) at the end of the first full fiscal quarter following the applicable fiscal quarter in which Compensation that a Participant has elected to defer has been earned or advanced for services to be performed. Deferred RSUs shall be evidenced by a deferred RSU Agreement. The deferred RSUs shall be subject to forfeiture as set out in Section 2.5 above. The deferred RSUs shall be settled in Company common stock upon a Participant’s Plan Account distribution, as provided in Sections 3.3 and 3.4. The number of Shares of Company common stock covered by the deferred RSUs shall be (i) the deferred amounts of the Participant’s Compensation, divided by (ii) the Fair Market Value of a share of Company common stock on the date of grant (rounded down to the nearest whole Share). The deferred RSUs granted to a Participant pursuant to this Section 3.2 shall be reflected in such Participant’s Account and shall be distributed and settled in whole Shares in accordance with Section 5 below.

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3.3 Form of Payment. Subject to the provisions of Section 5, the form of payment for the Compensation Deferrals under this Plan shall be in the form of deferred RSUs that are settled in Shares. Notwithstanding the foregoing, to the extent that (i) a Participant is entitled to a distribution of his or her Account in accordance with Section 5 before his or her Compensation Deferrals have been granted in the form of RSUs, or (ii) after conversion of deferred amounts to RSUs, a portion of a Participant’s Compensation Deferrals remains, then any such amounts shall be payable in cash in a single lump sum on the Payment Date that immediately follows the end of the term of deferral(s) elected by the Participant.

3.4 Term of Deferral. Subject to the provisions of Section 5, each Participant must indicate on his or her Compensation Deferral election form pursuant to Section 3.1 the time for payment for settlement of the deferred RSUs granted in connection with the Compensation Deferrals made pursuant to such election. Pursuant to such procedures as the Committee (in its discretion) may adopt from time to time, a Participant may elect a fixed date to receive his or her Plan Account distribution (not less than two (2) years from the date of election and not more than five (5) years from the date of election) specified in his or her Compensation Deferral election, provided that, any such election satisfies the requirements of section 409A of the Code. The procedures adopted by the Committee may (in the discretion of the Committee) restrict a Participant’s ability to elect multiple terms of deferral under the Plan. A Participant’s election as to the term of deferral will apply to all Compensation Deferrals credited as Participant’s contingent interest in the balance credited to his or her notional Account with respect to which the election is made. The Participant’s election of deferral is irrevocable.

3.5 Changes in Elections as to Form of Payment and/or Term of Deferral. A Participant may not change his or her election under Section 3 for Compensation Deferrals credited to the Participant’s Account.

SECTION 4

SHARES SUBJECT TO THE PLAN

Section 4.1.3 of this U.K. Addendum will replace the corresponding Section 4.1.3 of the U.S. Plan.

4.1.3 Notwithstanding any other provision of the Plan, the terms of any deferred RSU Agreement evidencing an deferred RSU may provide that, in the event that deferred RSUs are not assumed by the successor corporation or its parent or a subsidiary upon a Change in Control Event, then restrictions and deferral limitations on the deferred RSUs lapse and the deferred RSUs become free of all restrictions and limitations, subject in each case to any terms and conditions contained in the deferred RSU Agreement evidencing such deferred RSU.

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SECTION 5

DISTRIBUTIONS

This U.K. Addendum Section 5 shall replace Section 5 of the U.S. Plan in its entirety.

5.1 Normal Time for Distribution. Subject to the other provisions of this Section 5 below, a distribution of the Participant’s contingent interest in the balance credited to his or her notional Account will be made or commenced on the Payment Date that immediately follows the end of the term of deferral(s) elected by the Participant under Section 3.4.

5.2 Special Rule for Change in Control Event. If there is a Change in Control Event, the Participant’s contingent interest in the balance credited to his or her notional Account will be distributed to him or her on the Payment Date that immediately follows the date of the Change in Control Event or as soon as administratively practicable thereafter, but in no event later than the 15th day of the third calendar month following the Payment Date that immediately follows the Change in Control Event; provided, however, that if this period ends in the calendar year following the year in which the Change in Control Event occurs, the Participant will not have the right to designate the calendar year in which payment will be made.

5.3 Special Rule for Death. If a Participant dies, the Participant’s contingent interest in the balance credited to his or her notional Account will be distributed to the Participant’s estate on the Payment Date that immediately follows the Participant’s death or as soon as administratively practicable thereafter, but in no event later than the 15th day of the third calendar month following the Payment Date immediately following the Participant’s death; provided, however, that if this period ends in the calendar year following the year in which the Participant’s death occurs, the Participant’s estate, as applicable, will not have the right to designate the calendar year in which payment will be made.

5.4 Special Rule for Disability. If a Participant becomes Disabled, the balance then credited to his or her Account will be distributed to the Participant on the Payment Date that immediately follows the date on which the Participant became Disabled or as soon as administratively practicable thereafter but in no event later than the 15th day of the third calendar month following the Payment Date that immediately follows the Disability; provided, however, that if this period ends in the calendar year following the year in which the Disability occurs, the Participant will not have the right to designate the calendar year in which payment will be made.

5.5 Left Intentionally Blank.

5.6 Required Six-Month Delay in Payment for Specified Employees. Notwithstanding any contrary Plan provision and subject to the provisions of Section 5.7, any distributions that are otherwise required to be made under the Plan to a Specified Employee due to his or her Separation from Service, if any, will be accumulated during the first six (6) months following the Separation from Service and will instead be paid on the Payment Date that immediately follows the end of such six (6) month period.

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5.7 Delay of Payment(s) Permitted Under Certain Circumstances. Notwithstanding any contrary provision of Section 5:

5.7.1 Payments That Would Violate Federal Securities Laws or Other Applicable Law. Any distribution scheduled to be made under the Plan will be delayed if the Company reasonably anticipates that the making of the distribution will violate federal securities laws or other applicable law. Any such delayed distribution will be made at the earliest date at which the Company reasonably anticipates that the making of the distribution will not cause such violation.

5.7.2 Other Events and Conditions. Any payment scheduled to be made under the Plan will be delayed upon such other events and conditions as may be prescribed in generally applicable guidance published in the Internal Revenue Bulletin.

5.8 Left Intentionally Blank.

5.8.1 Left Intentionally Blank.

5.8.2 Left Intentionally Blank.

5.8.3 Left Intentionally Blank.

5.8.4 Left Intentionally Blank.

5.8.5 Left Intentionally Blank.

5.9 Left Intentionally Blank.

5.10 Left Intentionally Blank.

5.10.1 Left Intentionally Blank.

5.10.2 Left Intentionally Blank.

5.11 Separation from Service. Separation from Service (other than as a result of death as set forth above in Section 5.3) shall not accelerate the right of a Participant resident in the United Kingdom to be paid before the date for payment specified by the Participant in his or her Compensation Deferral election or cause there to be an early settlement of any deferred RSUs. No payments may be made to a Participant resident in the United Kingdom until the date for payment specified by the Participant in his or her Compensation Deferral election in the event that the Separation from Service occurs before the date for payment specified by the Participant in his or her Compensation Deferral election (unless the Separation from Service was as a result of death as set forth above in Section 5.3).

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SECTION 6

PARTICIPANT’S CONTINGENT INTEREST

This U.K. Addendum Section 6 will replace Section 6 of the U.S. Plan in its entirety.

Subject to Sections 8 and 9.2, a Participant’s interest in the balance notionally credited to his or her Account and any deferred RSUs will at all times be subject to the forfeiture provisions set out in this Plan.

SECTION 7

ADMINISTRATION OF THE PLAN

Sections 7.3.3 and 7.3.4 of this U.K. Addendum will replace the corresponding Sections 7.3.3 and 7.3.4 of the U.S. Plan.

7.3.3 To cause one or more separate notionally Accounts to be maintained for each Participant; To determine the manner and form for making elections under the Plan;

7.3.4 To cause Compensation Deferrals to be credited to notionally Participants’ Accounts;

SECTION 8

MODIFICATION OR TERMINATION OF THE PLAN

Section 8 of the U.S. Plan is not amended or replaced by this U.K. Addendum.

SECTION 9

GENERAL

Section 9.6 of this U.K. Addendum will replace the corresponding Section 9.6 in the U.S. Plan.

9.6 Tax Withholding. Regardless of any action the Company or any of its Affiliates takes with respect to any or all income tax, national insurance contributions or any tax related withholding due in connection with any deferred RSUs (“Tax Liabilities”), the ultimate liability for all Tax Liabilities due is and remains the Participant’s responsibility and that the Company and its Affiliates (i) make no representations or undertakings regarding the treatment of any Tax Liabilities in connection with any aspect of the deferred RSUs, including without limitation the award of deferred RSUs, the vesting of deferred RSUs, the issuance of Shares in settlement of deferred RSUs, the subsequent sale of any Shares acquired at vesting and the receipt of any dividends; and (ii) make no tax representations or undertakings in relation to the Plan and the timing of the taxation of any deferred RSUs, and (iii) do not commit to structure the terms of the award or any aspect of the deferred RSUs, to reduce or eliminate the Employee’s liability for Tax Liabilities.

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The Participant will be taken to have agreed that the Participant is responsible for the tax consequences of entering into a Compensation Deferral election and it is only appropriate for the Participant to enter into an election if the Participant has received his own professional tax advice on the consequences of this election.

Prior to the issuance of Shares for deferred RSUs, the Participant shall pay or make adequate arrangements satisfactory to the Company and its Affiliates (in their sole discretion) to satisfy all withholding and payment on account obligations of the Company and/or any of its Affiliates. In this regard by participating in the Plan, the Participant irrevocably authorizes the Company and/ or any of its Affiliates to withhold all applicable Tax Liabilities from any fee or other payment payable to the Participant or from the proceeds of the sale of the Shares acquired upon vesting of the deferred RSUs. Alternatively, or in addition, the Participant irrevocably authorizes the Company or any of its Affiliates to, in their sole discretion, (i) sell or arrange for the sale of Shares to be issued on the vesting of deferred RSUs to satisfy the withholding or payment on account obligation and account to HM Revenue & Customs or any other authority for the proceeds, and/or (ii) withhold in Shares, provided that the Company and its Affiliates shall withhold only the amount of Shares necessary to satisfy the minimum withholding or payment on account amount. If the Tax Liabilities are satisfied by withholding a number of Shares as described herein, the Participant will be taken to have been issued the full number of Shares that they are entitled to receive notwithstanding that a number of Shares are withheld for the purpose of satisfying the Tax Liabilities due. The Participant shall pay to the Company or to its Affiliates any amount of Tax Liabilities that the Company or the Affiliates may be required to withhold as a result of the deferred RSUs, the entry into this Election, the vesting of deferred RSUs, or the issuance of Shares in settlement of vested deferred RSUs that cannot be satisfied by the means previously described. The Participant shall permanently forfeit Shares if the Participant fails to comply with the Participant’s obligation in connection with the Tax Liabilities as described herein.

Notwithstanding the above, the Participant agrees to pay on demand the amount of any Tax Liabilities that the Company or any of its Affiliates request that the Participant pay to them in order to enable them to comply with any withholding obligations or to reimburse them if the Company or any of its Affiliates have already paid any such Tax Liabilities to HM Revenue & Customs or any other authority.

The Participant may be subject to taxes or National Insurance contributions prior to the Payment Date for settlement of the deferred RSUs. If the Company determines that it or any Affiliate is required to withhold for any taxes, including, but not limited to, income or employment taxes, or National Insurance contributions prior to the date of deferred payout, the Company may withhold from other compensation due to the Participant, including, but not limited to, Director Fees. Upon receipt of deferred payouts, the Participant may owe taxes both (a) to the jurisdiction where the Participant resided at the time of making this election and, if different, (b) to the jurisdiction where Participant resides when they receive a deferred payout. All the powers and authorizations in respect of any withholding liability on the vesting of the deferred RSUs shall apply to any such earlier taxable event.

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In the event that the Company or any its Affiliates that constitutes Participant’s “employer” within the meaning of section 222(3) of the U.K. Income Tax (Earnings and Pensions) Act 2003 (the “Employer”) are unable to withhold or collect any Tax Liability within 90 days of the event giving rise to the Tax Liabilities or such other period specified in Section 222(1)(c) of the U.K. Income Tax (Earnings and Pensions) Act 2003, the Participant agrees with the Employer that the amount of the uncollected tax shall constitute a loan owed by the Participant to the Participant’s Employer, effective on the expiry of the 90 day limit. The Participant agrees that the loan will be immediately due and repayable, and the Employer may recover it at any time thereafter by any of the means referred to above. The Participant agrees that the loan will bear interest at the then-current HM Revenue & Customs’ official rate.

Notwithstanding the foregoing, if a Participant is subject to Section 402 of the U.S. Sarbanes-Oxley Act of 2002, the terms of the immediately foregoing provision will not apply. Such Participant shall make advance arrangements for proper and timely tax withholding with his or her Employer and no loan(s) shall be made. Further, if the Company determines, in its discretion, that any change in the Participant’s status would cause an existing arrangement to be a prohibited extension or maintenance of credit by the Employer under Section 402 of the Sarbanes-Oxley Act of 2002 or any other applicable law (a “Violation”), then the Participant shall repay his or her Employer the outstanding balance of such loan(s) (inclusive of interest) no later than the day prior to the date a Violation would occur. The Participant acknowledges that the Company and/ or any of its Affiliates may recover any such additional income tax and National Insurance contributions at any time thereafter by any of the means referred to above.

****************

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EX-10.2

Exhibit 10.2

TIBCO SOFTWARE INC.

NOTICE OF AWARD OF RESTRICTED STOCK UNITS

UNDER THE 2009 DEFERRED COMPENSATION PLAN (U.S.)

Unless otherwise defined herein, the terms defined in the TIBCO Software Inc. 2009 Deferred Compensation Plan (the “Plan”) will have the same defined meanings in this Notice of Award of Restricted Stock Units (“Notice of Award”) and in the Terms and Conditions (the “Agreement”), attached hereto as Appendix A.

Name:                              (the “Service Provider”)

You have been granted the right to receive Restricted Stock Units, subject to the terms and conditions of the Plan, the Agreement and this Notice of Award as follows:

Award Number

Date of Award

Total Number of Restricted Stock

Units

Vesting Schedule:

One hundred percent (100%) of the Restricted Stock Units will vest on the Date of Award.

By signing below, you acknowledge that this award of Restricted Stock Units is granted under and governed by the terms and conditions of the Plan and the Agreement, both of which are made a part of this document. By signing this Notice of Award, the Service Provider represents that he or she has reviewed the Plan, the Agreement and this Notice of Award in their entirety and fully understands all provisions of the Plan, the Agreement and this Notice of Award.

Settlement

Your Plan account will be distributed in Restricted Stock Units, which will be settled in whole Shares (rounded down to the nearest whole Share) pursuant to your deferral election, which provided for distribution upon the following:

[    ] You elected your                  birthday, which is                         , 2        .

[    ] You elected                                 , 2        .

If your death, your Separation of Service, your Disability, or a Change of Control Event occurs prior to the date you elected (as indicated above), your Plan Account will be distributed pursuant to the terms of the Plan.

Notwithstanding the foregoing, if your Plan Account distribution is due to your Separation from Service, as determined by the Company, other than due to your death, and you are a “specified employee” within the meaning of Section 409A at the time of such Separation from Service, then, pursuant to Section 5.4 of the Plan, your Restricted Stock Units will not be settled until the date six (6) months and one (1) day following the date of separation from service, unless you die following your Separation from Service, in which case, your Restricted Stock Units will be settled as soon as practicable following your death.

SERVICE PROVIDER

Signature

Print Name

APPENDIX A

TERMS AND CONDITIONS OF RESTRICTED STOCK UNITS

1. Award. The Company hereby grants to the Service Provider under the Plan an award of Restricted Stock Units, subject to all of the terms and conditions in this Agreement, the attached Notice of Award and the Plan.

2. Company’s Obligation to Pay. Each Restricted Stock Unit has a value equal to the Fair Market Value of a Share on the Date of Award. Prior to actual distribution of any Restricted Stock Units pursuant to the terms of the Plan, such Restricted Stock Unit will represent an unsecured obligation of the Company, payable (if at all) only from the general assets of the Company.

3. Vesting Schedule. One hundred percent (100%) of the Restricted Stock Units will vest on the Date of Award.

4. Settlement. Restricted Stock Units will be settled in whole shares of Common Stock. The Company shall issue to you on the settlement date a number of whole shares of Common Stock equal to the Restricted Stock Units in your Plan Account. Such shares of Common Stock shall not be subject to any restriction on transfer other than any such restriction as may be required pursuant to the other provisions of this Agreement.

5. Settlement after Death. Any distribution or delivery to be made to the Service Provider under this Agreement will, if the Service Provider is then deceased, be made pursuant to Section 5.3 of the Plan. A Service Provider’s beneficiary, administrator or executor must furnish the Company with (a) written notice of his or her status as transferee, and (b) evidence satisfactory to the Company to establish the validity of the transfer and compliance with any laws or regulations pertaining to said transfer.

6. Withholding of Taxes. Regardless of any action the Employer takes with respect to any or all tax obligations, the Service Provider acknowledges that the ultimate liability for all tax obligations legally due by the Service Provider is and remains the Service Provider’s responsibility and that the Company and/or the Employer (i) make no representations or undertakings regarding the treatment of any tax obligations in connection with any aspect of the Restricted Stock Units, including the grant of Restricted Stock Units, the vesting of Restricted Stock Units, the issuance of Shares in settlement of Restricted Stock Units, the subsequent sale of any Shares acquired at vesting and the receipt of any dividends; and (ii) do not commit to structure the terms of the award or any aspect of the Restricted Stock Units to reduce or eliminate the Service Provider’s liability for tax obligations.

Prior to the issuance of Shares, the Service Provider shall pay, or make adequate arrangements satisfactory to the Company or to the Employer (in their sole discretion) to satisfy all withholding and payment on account obligations of the Company and/or the Employer, if any. In this regard, the Service Provider authorizes the Employer to withhold all applicable tax obligations legally payable by the Service Provider from the Service Provider’s wages or other cash compensation payable to the Service Provider by the Employer. Alternatively, or in

addition, if permissible under local law, the Company or the Employer may, in their sole discretion, (i) sell or arrange for the sale of Shares to be issued to satisfy the withholding or payment on account obligation, and/or (ii) withhold in Shares, provided that the Company and the Employer shall withhold only the amount of Shares necessary to satisfy the minimum withholding amount. The Service Provider shall pay to the Employer any amount of tax obligations that the Employer may be required to withhold as a result of the Service Provider’s receipt of Restricted Stock Units, or the issuance of Shares in settlement of Restricted Stock Units that cannot be satisfied by the means previously described. The Company may refuse to deliver Shares to the Service Provider if the Service Provider fails to comply with the Service Provider’s obligation in connection with the tax obligations as described herein.

7. Rights as Stockholder. Subject to paragraph 10, neither the Service Provider nor any person claiming under or through the Service Provider will have any of the rights or privileges of a stockholder of the Company in respect of any Shares deliverable hereunder unless and until certificates representing such Shares will have been issued, recorded on the records of the Company or its transfer agents or registrars, and delivered to the Service Provider (including through electronic delivery to a brokerage account). After such issuance, recordation and delivery, the Service Provider will have all the rights of a stockholder of the Company with respect to voting such Shares and receipt of dividends and distributions on such Shares.

8. Dividend Equivalents. The Service Provider shall be entitled to receive dividends and distributions paid on the Shares underlying vested Restricted Stock Units. Any such dividends or other distributions automatically shall be deemed reinvested in Restricted Stock Units on the date of payment of any such dividends or distributions (the “Dividend Restricted Stock Units”). The number of Dividend Restricted Stock Units shall be determined as follows: (a) if the Company declares and pays a cash dividend on the Shares, the number of Dividend Restricted Stock Units shall be equal to the quotient obtained by dividing the cash dividend paid on the Shares underlying vested Restricted Stock Units by the Fair Market Value (as defined in the Plan) of the Shares on the date the dividend is paid; or (b) if the Company distributes Shares, the number of Divident Restricted Stock Units shall be equal to the number of Shares distributed with respect to the Shares underlying vested Restricted Stock Units. Dividend Restricted Stock Units shall be subject to the same terms and conditions as the Restricted Stock Units, including with respect to distribution of a Participant’s Account pursuant to Section 3 and Section 5 of the Plan.

9. No Effect on Employment. The terms of the Service Provider’s employment with his or her Employer are governed by applicable local law and any relevant employment agreement. This Agreement and the attached Notice of Award do not constitute an express or implied promise of continued employment for any period of time. The Service Provider may terminate his or her employment and the Employer may terminate the Service Provider’s employment in accordance with applicable local law and any relevant employment agreement.

10. Acknowledgment of Nature of Award. In accepting the award of Restricted Stock Units, the Service Provider acknowledges that:

(a) the Plan is established voluntarily by the Company, it is discretionary in nature and may be modified, amended, suspended or terminated by the Company as provided in the Plan;

(b) the Service Provider’s participation in the Plan is voluntary;

(c) neither the grant of Restricted Stock Units nor any provision of this Agreement, the attached Notice of Award, the Plan or the policies adopted pursuant to the Plan confer upon the Service Provider any right with respect to employment or continuation of current employment, and in the event that the Service Provider is not an employee of the Company, Restricted Stock Units shall not be interpreted to form an employment contract or relationship with the Company;

(d) the future value of the underlying Shares is unknown and cannot be predicted with certainty;

(e) if the Service Provider receives Shares, the value of such Shares acquired on vesting of Restricted Stock Units may increase or decrease in value; and

(f) no claim or entitlement to compensation or damages arises from any grant of, appreciation of, or diminution in value of the Restricted Stock Units or Shares (for any reason whatsoever and whether or not in breach of local labor laws) and the Service Provider irrevocably releases the Company and the Employer from any such claim that may arise; if, notwithstanding the foregoing, any such claim is found by a court of competent jurisdiction to have arisen, then, by signing the attached Notice of Award, the Service Provider shall be deemed irrevocably to have waived his or her entitlement to pursue such claim.

11. Address for Notices. Any notice to be given to the Company under the terms of this Agreement and the attached Notice of Award will be addressed to the Company, in care of Shareholder Services, TIBCO Software Inc., 3303 Hillview Avenue, Palo Alto, California, 94304, or at such other address as the Company may hereafter designate in writing.

12. Award is Not Transferable. Restricted Stock Units may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated other than as provided under Section 9.2 of the Plan.

13. Binding Agreement. Subject to the limitation on the transferability of Restricted Stock Units contained herein, this Agreement and the attached Notice of Award will be binding upon and inure to the benefit of the heirs, legatees, legal representatives, successors and assigns of the parties hereto.

14. Additional Conditions to Issuance of Stock. If at any time the Company will determine, in its discretion, that the listing, registration or qualification of the Shares upon any securities exchange or under any foreign, state or federal law, or the consent or approval of any governmental regulatory authority is necessary or desirable as a condition to the issuance of Shares to the Service Provider (or his or her estate), such issuance will not occur unless and until such listing, registration, qualification, consent or approval will have been effected or obtained free of any conditions not acceptable to the Company. The Company will make all reasonable efforts to meet the requirements of any such state or federal law or securities exchange and to obtain any such consent or approval of any such governmental authority.

15. Plan Governs. This Agreement and the attached Notice of Award are subject to all terms and provisions of the Plan. In the event of a conflict between one or more provisions of this Agreement and one or more provisions of the Plan, the provisions of the Plan will govern. In the event of a conflict between one or more provisions of the attached Notice of Award and one or more provisions of the Plan, the provisions of the Plan will govern.

16. Committee Authority. The Committee will have the power to interpret the Plan, this Agreement and the attached Notice of Award and to adopt such rules for the administration, interpretation and application of the Plan as are consistent therewith and to interpret or revoke any such rules pursuant to the terms of the Plan. All actions taken and all interpretations and determinations made by the Committee in good faith will be final and binding upon the Service Provider, the Company and all other interested persons. No member of the Committee will be personally liable for any action, determination or interpretation made in good faith with respect to the Plan, this Agreement and the attached Notice of Award.

17. Captions. Captions provided herein are for convenience only and are not to serve as a basis for interpretation or construction of this Agreement.

18. Agreement Severable. In the event that any provision in this Agreement or the attached Notice of Award will be held invalid or unenforceable, such provision will be severable from, and such invalidity or unenforceability will not be construed to have any effect on, the remaining provisions of this Agreement or the attached Notice of Award.

19. Modifications to the Agreement. The Plan, this Agreement and the attached Notice of Award constitute the entire understanding of the parties on the subjects covered. The Service Provider expressly warrants that he or she is not accepting this Agreement or the attached Notice of Award in reliance on any promises, representations, or inducements other than those contained herein and therein. Modifications to this Agreement, the attached Notice of Award or the Plan can be made only in an express written contract executed by a duly authorized officer of the Company. Notwithstanding anything to the contrary in the Plan, this Agreement or the attached Notice of Award, the Company reserves the right to revise this Agreement or the attached Notice of Award as it deems necessary or advisable, in its sole discretion and without the consent of the Service Provider, to comply with Section 409A or to otherwise avoid imposition of any additional tax or income recognition under Section 409A prior to the actual payment of Shares pursuant to this award of Restricted Stock Units.

20. Amendment, Suspension or Termination of the Plan. By accepting this Restricted Stock Unit award, the Service Provider expressly warrants that he or she has received a deferred right to receive Shares issued under the Plan, and has received, read and understood a description of the Plan. The Service Provider understands that the Plan is discretionary in nature and may be modified, suspended or terminated by the Company at any time.

21. Electronic Delivery. The Company may, in its sole discretion, decide to deliver any documents related to Restricted Stock Units awarded under the Plan or future Restricted Stock Units that may be awarded under the Plan by electronic means or request the Service Provider’s consent to participate in the Plan by electronic means. The Service Provider hereby consents to receive such documents by electronic delivery and agrees to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.

22. Data Privacy Notice and Consent. The Service Provider hereby explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of the Service Provider’s personal data as described in this Agreement by and among, as applicable, the Employer, the Company, its Subsidiaries and its affiliates for the exclusive purpose of implementing, administering and managing the Service Provider’s participation in the Plan.

The Service Provider understands that the Company and the Employer may hold certain personal information about the Service Provider, including, but not limited to, the Service Provider’s name, home address and telephone number, date of birth, social insurance number or other identification number, salary, nationality, job title, any shares of stock or directorships held in the Company, details of all Restricted Stock Units or any other entitlement to Shares awarded, canceled, vested, unvested or outstanding in the Service Provider’s favor, for the purpose of implementing, administering and managing the Plan (“Data”). The Service Provider understands that Data may be transferred to any third parties assisting in the implementation, administration and management of the Plan, that these recipients may be located in the Service Provider’s country, or elsewhere, and that the recipient’s country may have different data privacy laws and protections than the Service Provider’s country. The Service Provider understands that the Service Provider may request a list with the names and addresses of any potential recipients of the Data by contacting the Service Provider’s local human resources representative. The Service Provider authorizes the recipients to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing the Service Provider’s participation in the Plan, including any requisite transfer of such Data as may be required to a broker, escrow agent or other third party with whom the Shares received upon vesting of the Restricted Stock Units may be deposited. The Service Provider understands that Data will be held only as long as is necessary to implement, administer and manage the Service Provider’s participation in the Plan. The Service Provider understands that the Service Provider may, at any time, view Data, request additional information about the storage and processing of Data, require any necessary amendments to Data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing the Service Provider’s local human resources representative. The Service Provider understands that refusal or withdrawal of consent may affect the Service Provider’s ability to participate in the Plan. For more information on the consequences of the Service Provider’s refusal to consent or withdrawal of consent, the Service Provider understands that the Service Provider may contact the Service Provider’s local human resources representative.

23. Language. If the Service Provider has received this Agreement, the attached Notice of Award or any other document related to the Plan translated into a language other than English and if the translated version is different that the English version, the English version will control.

24. Notice of Governing Law. This Agreement and the attached Notice of Award shall be governed by the laws of the State of Delaware, U.S.A., without regard to its principles of conflict of laws. For purposes of litigating any dispute that arises under this award of Restricted Stock Units, this Agreement or the attached Notice of Award, the parties hereby submit to and consent to the jurisdiction of the State of California, and agree that such litigation shall be conducted in the courts of Santa Clara County, California, or the federal courts of the United States for the Northern District of California, and no other courts where this award of Restricted Stock Units is made and/or to be performed.

EX-10.3

Exhibit 10.3

TIBCO SOFTWARE INC.

NOTICE OF AWARD OF RESTRICTED STOCK UNITS (U.S.)

Unless otherwise defined herein, the terms defined in the 2008 Equity Incentive Plan (the “Plan”) will have the same defined meanings in this Notice of Award and in the Terms and Conditions of Restricted Stock Units (the “Agreement”), attached hereto as Appendix A.

Name:                                                               (the “Employee”)

You have been granted the right to receive Restricted Stock Units, subject to the terms and conditions of the Plan, the Agreement and this Notice of Award as follows:

Award Number

Date of Award

Vesting Commencement Date

Total Number of Restricted Stock

Units

Vesting Schedule:

One-fourth (1/4^th) of the Restricted Stock Units will vest one (1) year after the Vesting Commencement Date (i.e., the first annual anniversary of the Vesting Commencement Date), and an additional one-fourth (1/4^th) of the Restricted Stock Units will vest on each of the next three (3) annual anniversaries of the Vesting Commencement Date, so that 100% of the Restricted Stock Units will be vested four (4) years from the Vesting Commencement Date, subject to the following sentence (the “Original Vesting Schedule”). On any scheduled vesting date, Restricted Stock Units will not vest in accordance with any of the provisions of this Notice of Award or the Agreement unless the Employee remains a Service Provider through such vesting date. If a Change of Control occurs while the Employee is a Service Provider, then the first sentence of this paragraph shall be deemed replaced by the following (which shall be applied both retroactively and prospectively): One-thirty-sixth (1/36^th) of the Restricted Stock Units will vest each month after the Vesting Commencement Date on the same day of the month as the Vesting Commencement Date, so that 100% of the Restricted Stock Units will be vested three (3) years from the Vesting Commencement Date, subject to the last sentence of this paragraph (the “Change of Control Vesting Schedule”). The additional Restricted Stock Units that vest as a result of the preceding sentence and are attributable to the period prior to the date of the Change of Control shall be considered to have vested as of the date of the Change of Control and shall be paid as soon as administratively practicable following such date, subject to paragraph 6 of the Agreement. In the event the Employee ceases to be a Service Provider for any or no reason (including death or Disability) before the Employee vests in the right to acquire the Shares to be issued pursuant to the Restricted Stock Unit, the Restricted Stock Unit and the Employee’s right to acquire any Shares hereunder will immediately terminate. For purposes of this Notice of Award and the Agreement, a “Service Provider” means an Employee, Non-Employee Director or Consultant.

By signing below, you acknowledge that this award of Restricted Stock Units is granted under and governed by the terms and conditions of the Plan and the Agreement, both of which are made a part of this document. By signing this Notice of Award, the Employee represents that he or she has reviewed the Plan, the Agreement and this Notice of Award in their entirety and fully understands all provisions of the Plan, the Agreement and this Notice of Award.

EMPLOYEE:

Signature

Print Name

APPENDIX A

TERMS AND CONDITIONS OF RESTRICTED STOCK UNITS

1. Award. The Company hereby grants to the Employee under the Plan an award of Restricted Stock Units, subject to all of the terms and conditions in this Agreement (including Exhibit A hereto), the attached Notice of Award and the Plan. If and when any Restricted Stock Units are paid to the Employee, par value for the Shares issued will be deemed paid by the Employee by past services rendered by the Employee.

2. Company’s Obligation to Pay. Each Restricted Stock Unit has a value equal to the Fair Market Value of a Share on the date it becomes vested. Unless and until the Restricted Stock Units will have vested in the manner set forth in paragraphs 3 and 4, the Employee will have no right to payment of any such Restricted Stock Units. Prior to actual payment of any vested Restricted Stock Units, such Restricted Stock Unit will represent an unsecured obligation of the Company, payable (if at all) only from the general assets of the Company. Payment of any vested Restricted Stock Units will be made in whole Shares only.

3. Vesting Schedule. Subject to paragraphs 4 and 5, the Restricted Stock Units awarded by this Agreement and the attached Notice of Award will vest in the Employee according to the vesting schedule set forth on the attached Notice of Award. Restricted Stock Units shall not vest in the Employee in accordance with any of the provisions of this Agreement unless the Employee remains a Service Provider through the applicable vesting dates, except as otherwise provided in paragraph 4.

4. Committee Discretion. The Committee, in its discretion, may accelerate the vesting of the balance, or some lesser portion of the balance, of the Restricted Stock Units at any time, subject to the terms of the Plan. If so accelerated, such Restricted Stock Units will be considered as having vested as of the date specified by the Committee. Notwithstanding anything in the Plan or this Agreement to the contrary, if the vesting of the balance, or some lesser portion of the balance, of the Restricted Stock Units is accelerated in connection with the Employee ceasing to be a Service Provider (provided that such cessation is a “separation from service” within the meaning of Section 409A, as determined by the Company), other than due to death, and if (x) the Employee is a “specified employee” within the meaning of Section 409A at the time of such cessation and (y) the payment of such accelerated Restricted Stock Units will result in the imposition of additional tax under Section 409A if paid to the Employee on or within the six (6) month period following the date the Employee ceases to be a Service Provider, then the payment of such accelerated Restricted Stock Units will not be made until the date six (6) months and one (1) day following the date of such cessation, unless the Employee dies during such six (6) month period, in which case, the Restricted Stock Units will be paid to the Employee’s estate as soon as practicable following his or her death, subject to paragraph 8. It is the intent of this Agreement to comply with the requirements of Section 409A so that none of the Restricted Stock Units provided under this Agreement or Shares issuable thereunder will be subject to the additional tax imposed under Section 409A, and any ambiguities herein will be interpreted to so comply. For purposes of this Agreement, “Section 409A” means Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and any proposed, temporary or final Treasury Regulations and Internal Revenue Service guidance thereunder, as each may be amended from time to time.

5. Forfeiture upon Termination of Service. Notwithstanding any contrary provision of this Agreement or the attached Notice of Award, if the Employee ceases to be a Service Provider for any or no reason, the then-unvested Restricted Stock Units awarded by this Agreement and the attached Notice of Award will thereupon be forfeited at no cost to the Company and the Employee will have no further rights thereunder.

6. Payment after Vesting.

(a) Subject to paragraph 6(b), any Restricted Stock Units that vest in accordance with paragraph 3 will be paid to the Employee (or in the event of the Employee’s death, to his or her estate) in whole Shares as soon as administratively practicable after vesting, subject to paragraph 8 and the other provisions of this Agreement, but in no event later than the date that is two-and-one-half months from the end of the Company’s tax year that includes the vesting date. Any Restricted Stock Units that vest in accordance with paragraph 4 will be paid to the Employee at the time(s) provided in paragraph 4, subject to paragraph 8 and the other provisions of this Agreement.

(b) If the Committee permits the Employee to elect to defer the settlement of vested Restricted Stock Units and the Employee makes such an election in accordance with the terms of the Plan and the rules and procedures determined by the Committee, in its sole discretion, payment of vested Restricted Stock Units (and any Dividend Restricted Stock Units) will be made in accordance with the terms of such election. Notwithstanding the foregoing, if a Change of Control occurs during the twelve (12) month period following the Date of Award and the Change of Control qualifies as a change in control under Treasury regulation section 1.409A-3(i)(5)), any Restricted Stock Units that vest in accordance with the Change of Control Vesting Schedule will be paid to the Employee (or in the event of the Employee’s death, to his or her estate) in whole Shares as soon as administratively practicable after vesting, subject to paragraph 8, but in no event later than the end of the calendar year that includes the date of vesting or, if later, the fifteenth (15th) day of the third (3rd) calendar month following the date of vesting (provided that the Employee will not be permitted, directly or indirectly, to designate the taxable year of the payment). If a Change of Control occurs during the twelve (12) month period following the Date of Award and the Change of Control does not qualify as a change in control under Treasury regulation section 1.409A-3(i)(5)), any Restricted Stock Units that vest in accordance with the Change of Control Vesting Schedule will be paid to the Employee (or in the event of the Employee’s death, to his or her estate) in whole Shares at the same time or times as if such Restricted Stock Units had vested in accordance with the Original Vesting Schedule (whether or not the Employee remains a Service Provider through such date(s)), subject to paragraph 8; provided, however, that such Restricted Stock Units will be paid no later than the end of the calendar year that includes the date of vesting under the Original Vesting Schedule or, if later, the fifteenth (15th) day of the third (3rd) calendar month following the date of vesting under the Original Vesting Schedule (provided that the Employee will not be permitted, directly or indirectly, to designate the taxable year of the payment).

7. Payments after Death. Any distribution or delivery to be made to the Employee under this Agreement will, if the Employee is then deceased, be made to the administrator or executor of the Employee’s estate. Any such administrator or executor must furnish the Company with (a) written notice of his or her status as transferee, and (b) evidence satisfactory to the Company to establish the validity of the transfer and compliance with any laws or regulations pertaining to said transfer.

8. Withholding of Taxes. The Company or the Employer will withhold a portion of the Shares that have an aggregate market value sufficient to pay all Tax Obligations required to be withheld by the Company or the Employer with respect to the Shares, unless the Committee, in its sole discretion, requires or permits the Employee to make alternate arrangements satisfactory to the Company for such withholdings in advance of the arising of any withholding obligations. The Committee, in its sole discretion and pursuant to such procedures as it may specify from time to time, may permit the Employee to satisfy his or her Tax Obligations, in whole or in part by one or more of the following (without limitation): (a) paying cash, (b) electing to have the Company withhold otherwise deliverable Shares having a Fair Market Value equal to the minimum statutory amount required to be withheld, or (c) selling a sufficient number of such Shares otherwise deliverable to Employee through such means as the Company may determine in its sole discretion (whether through a broker or otherwise) equal to the amount required to be withheld. Notwithstanding any contrary provision of this Agreement, no Restricted Stock Units will be granted unless and until satisfactory arrangements (as determined by the Company) will have been made by the Employee with respect to the payment of any income and other taxes which the Company determines must be withheld or collected with respect to such Shares. In addition and to the maximum extent permitted by law, the Company or the Employer has the right to retain without notice from salary or other amounts payable to the Employee, cash having a sufficient value to satisfy any tax withholding obligations that the Company determines cannot be satisfied through the withholding of otherwise deliverable Shares. All Tax Obligations related to the award of Restricted Stock Units and any Shares delivered in payment thereof are the sole responsibility of the Employee. By accepting this award, the Employee expressly consents to the withholding of Shares and to any additional cash withholding as provided for in this paragraph 8. Only whole Shares will be withheld or sold to satisfy any tax withholding obligations pursuant to this paragraph 8. The number of Shares withheld will be rounded up to the nearest whole Share, with a cash refund to the Employee for any value of the Shares withheld in excess of the tax obligation (pursuant to such procedures as the Company may specify from time to time). To the extent that the cash refund described in the preceding sentence is not administratively feasible, as determined by the Company in its sole discretion, the number of Shares withheld will be rounded down to the nearest whole Share and, in accordance with this paragraph 8 and to the maximum extent permitted by law, the Company will retain from salary or other amounts payable to the Employee cash having a sufficient value to satisfy any additional tax withholding.

9. Rights as Stockholder. Subject to paragraph 10, neither the Employee nor any person claiming under or through the Employee will have any of the rights or privileges of a stockholder of the Company in respect of any Shares deliverable hereunder unless and until certificates representing such Shares will have been issued, recorded on the records of the Company or its transfer agents or registrars, and delivered to the Employee (including through electronic delivery to a brokerage account). After such issuance, recordation and delivery, the Employee will have all the rights of a stockholder of the Company with respect to voting such Shares and receipt of dividends and distributions on such Shares.

10. Dividend Equivalents. If the Committee permits the Employee to elect to defer the settlement of vested Restricted Stock Units and the Employee makes such an election in accordance with the terms of the Plan and the rules and procedures determined by the Committee, in its sole discretion, the Employee shall be entitled to receive dividends and distributions paid on the Shares underlying vested Restricted Stock Units unless a Change of

Control occurs during the twelve (12) month period following the Date of Award and the Change of Control qualifies as a change in control under Treasury regulation section 1.409A-3(i)(5)). Any such dividends or other distributions automatically shall be deemed reinvested in Restricted Stock Units on the date of payment of any such dividends or distributions (the “Dividend Restricted Stock Units”). The number of Dividend Restricted Stock Units shall be determined as follows: (a) if the Company declares and pays a cash dividend on the Shares, the number of Dividend Restricted Stock Units shall be equal to the quotient obtained by dividing the cash dividend paid on the Shares underlying vested Restricted Stock Units by the Fair Market Value (as defined in the Plan) of the Shares on the date the dividend is paid; or (b) if the Company distributes Shares, the number of Dividend Restricted Stock Units shall be equal to the number of Shares distributed with respect to the Shares underlying vested Restricted Stock Units. Dividend Restricted Stock Units shall be subject to the same terms and conditions as the Restricted Stock Units, including the Employee’s deferral election.

11. No Effect on Employment. The terms of the Employee’s employment with his or her Employer are governed by applicable local law and any relevant employment agreement. This Agreement and the attached Notice of Award do not constitute an express or implied promise of continued employment for any period of time. The Employee may terminate his or her employment and the Employer may terminate the Employee’s employment in accordance with applicable local law and any relevant employment agreement.

12. Labor Law. By accepting this award of Restricted Stock Units, the Employee acknowledges that: (a) the award of Restricted Stock Units is a one-time benefit which does not create any contractual or other right to receive future awards of Restricted Stock Units, or benefits in lieu of Restricted Stock Units; (b) all determinations with respect to any future awards, including, but not limited to, the times when the Restricted Stock Units shall be granted, the number of Shares subject to each award of Restricted Stock Units and the time or times when Restricted Stock Units shall vest, will be at the sole discretion of the Company; (c) the Employee’s participation in the Plan is voluntary; (d) the value of this Restricted Stock Units is an extraordinary item of compensation which is outside the scope of the Employee’s employment contract, if any; (e) these Restricted Stock Units are not part of the Employee’s normal or expected compensation for purposes of calculating any severance, resignation, redundancy, end of service payments, bonuses, long-service awards, pension or retirement benefits or similar payments; (f) the vesting of this Restricted Stock Units ceases upon termination of employment for any reason except as may otherwise be explicitly provided in the Plan or this Agreement; (g) the future value of the underlying Shares is unknown and cannot be predicted with certainty; (h) these Restricted Stock Units have been granted to the Employee in the Employee’s status as an employee of the Company or the Employer; (i) any claims resulting from these Restricted Stock Units shall be enforceable, if at all, against the Company; and (j) there shall be no additional obligations for any subsidiary or affiliate employing the Employee as a result of these Restricted Stock Units.

13. Address for Notices. Any notice to be given to the Company under the terms of this Agreement and the attached Notice of Award will be addressed to the Company, in care of Shareholder Services, TIBCO Software Inc., 3303 Hillview Avenue, Palo Alto, California, 94304, or at such other address as the Company may hereafter designate in writing.

14. Award is Not Transferable. Restricted Stock Units may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated other than by will, by the laws of descent or distribution, or to a Service Provider’s spouse, former spouse or dependent pursuant to a court-approved domestic relations order which relates to the provision of child, support, alimony payments or marital property rights. Upon any attempt to transfer, assign, pledge, hypothecate or otherwise dispose of Restricted Stock Units, or any right or privilege conferred hereby, or upon any attempted sale under any execution, attachment or similar process, Restricted Stock Units granted herein and the rights and privileges conferred hereby immediately will become null and void.

15. Binding Agreement. Subject to the limitation on the transferability of Restricted Stock Units contained herein, this Agreement and the attached Notice of Award will be binding upon and inure to the benefit of the heirs, legatees, legal representatives, successors and assigns of the parties hereto.

16. Additional Conditions to Issuance of Stock. If at any time the Company will determine, in its discretion, that the listing, registration or qualification of the Shares upon any securities exchange or under any foreign, state or federal law, or the consent or approval of any governmental regulatory authority is necessary or desirable as a condition to the issuance of Shares to the Employee (or his or her estate), such issuance will not occur unless and until such listing, registration, qualification, consent or approval will have been effected or obtained free of any conditions not acceptable to the Company. The Company will make all reasonable efforts to meet the requirements of any such state or federal law or securities exchange and to obtain any such consent or approval of any such governmental authority.

17. Plan Governs. This Agreement and the attached Notice of Award are subject to all terms and provisions of the Plan. In the event of a conflict between one or more provisions of this Agreement and one or more provisions of the Plan, the provisions of the Plan will govern. In the event of a conflict between one or more provisions of the attached Notice of Award and one or more provisions of the Plan, the provisions of the Plan will govern.

18. Committee Authority. The Committee will have the power to interpret the Plan, this Agreement and the attached Notice of Award and to adopt such rules for the administration, interpretation and application of the Plan as are consistent therewith and to interpret or revoke any such rules (including, but not limited to, the determination of whether or not any Restricted Stock Units have vested). All actions taken and all interpretations and determinations made by the Committee in good faith will be final and binding upon the Employee, the Company and all other interested persons. No member of the Committee will be personally liable for any action, determination or interpretation made in good faith with respect to the Plan, this Agreement and the attached Notice of Award.

19. Captions. Captions provided herein are for convenience only and are not to serve as a basis for interpretation or construction of this Agreement.

20. Agreement Severable. In the event that any provision in this Agreement or the attached Notice of Award will be held invalid or unenforceable, such provision will be severable from, and such invalidity or unenforceability will not be construed to have any effect on, the remaining provisions of this Agreement or the attached Notice of Award.

21. Modifications to the Agreement. This Agreement and the attached Notice of Award constitute the entire understanding of the parties on the subjects covered. The Employee expressly warrants that he or she is not accepting this Agreement or the attached Notice of Award in reliance on any promises, representations, or inducements other than those contained herein and therein. Modifications to this Agreement, the attached Notice of Award or the Plan can be made only in an express written contract executed by a duly authorized officer of the Company. Notwithstanding anything to the contrary in the Plan, this Agreement or the attached Notice of Award, the Company reserves the right to revise this Agreement or the attached Notice of Award as it deems necessary or advisable, in its sole discretion and without the consent of the Employee, to comply with Section 409A or to otherwise avoid imposition of any additional tax or income recognition under Section 409A prior to the actual payment of Shares pursuant to this award of Restricted Stock Units.

22. Amendment, Suspension or Termination of the Plan. By accepting this Restricted Stock Unit award, the Employee expressly warrants that he or she has received a conditional right to receive Shares issued under the Plan, and has received, read and understood a description of the Plan. The Employee understands that the Plan is discretionary in nature and may be modified, suspended or terminated by the Company at any time.

23. Electronic Delivery. The Company may, in its sole discretion, decide to deliver any documents related to Restricted Stock Units awarded under the Plan or future Restricted Stock Units that may be awarded under the Plan by electronic means or request the Employee’s consent to participate in the Plan by electronic means. The Employee hereby consents to receive such documents by electronic delivery and agrees to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.

24. Disclosure of Employee Information. By accepting this Restricted Stock award, the Employee consents to the collection, use and transfer of personal data as described in this paragraph. The Employee understands that the Company and its Subsidiaries hold certain personal information about him or her, including his or her name, home address and telephone number, date of birth, social security or identity number, salary, nationality, job title, any shares of stock or directorships held in the Company, details of all awards of Restricted Stock or any other entitlement to shares of stock awarded, canceled, exercised, vested, unvested or outstanding in his or her favor, for the purpose of managing and administering the Plan (“Data”). The Employee further understands that the Company and/or its Subsidiaries will transfer Data among themselves as necessary for the purpose of implementation, administration and management of his or her participation in the Plan, and that the Company and/or any of its Subsidiaries may each further transfer Data to any third parties assisting the Company in the implementation, administration and management of the Plan. The Employee understands that these recipients may be located in the European Economic Area, or elsewhere, such as in the U.S. or Asia. The Employee authorizes the Company to receive, possess, use, retain and transfer the Data in electronic or other form, for the purposes of implementing, administering and managing his or her participation in the Plan, including any requisite transfer to a broker or other third party with whom he or she may elect to deposit any Shares of stock acquired from this award of Restricted Stock of such Data as may be required for the administration of the Plan and/or the subsequent holding of Shares of stock on his or her behalf. The Employee understands that he or she may, at any time, view the Data, require any necessary amendments to the Data or withdraw the consent herein in writing by contacting the Human Resources Department for his or her employer.

25. Notice of Governing Law. This Agreement and the attached Notice of Award shall be governed by the laws of the State of Delaware, U.S.A., without regard to its principles of conflict of laws. For purposes of litigating any dispute that arises under this award of Restricted Stock Units, this Agreement or the attached Notice of Award, the parties hereby submit to and consent to the jurisdiction of the State of California, and agree that such litigation shall be conducted in the courts of Santa Clara County, California, or the federal courts of the United States for the Northern District of California, and no other courts where this award of Restricted Stock Units is made and/or to be performed.

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Vivek Y. Ranadivé, certify that:

1. I have reviewed this quarterly report on Form 10-Q of TIBCO Software Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: April 9, 2009

/s/ VIVEK Y. RANADIVÉ

Vivek Y. Ranadivé

Chief Executive Officer and

Chairman of the Board of Directors

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Sydney L. Carey, certify that:

1. I have reviewed this quarterly report on Form 10-Q of TIBCO Software Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: April 9, 2009

/s/ SYDNEY L. CAREY

Sydney L. Carey

Executive Vice President, Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION

I, Vivek Y. Ranadivé, Chief Executive Officer of TIBCO Software Inc. (the “Company”), do hereby certify, pursuant to Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and 18 U.S.C. Section 1350, that, to my knowledge:

(a) the Quarterly Report on Form 10-Q of the Company for the fiscal quarter ended March 1, 2009, as filed with the Securities and Exchange Commission (the “Report”), fully complies with the requirements of Section 13(a) or 15(d) of the Exchange Act; and

(b) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: April 9, 2009

/s/ VIVEK Y. RANADIVÉ

Vivek Y. Ranadivé

Chief Executive Officer and

Chairman of the Board of Directors

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to TIBCO Software Inc. and will be retained by TIBCO Software Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

CERTIFICATION

I, Sydney Carey, Executive Vice President, Chief Financial Officer of TIBCO Software Inc. (the “Company”), do hereby certify, pursuant to Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and 18 U.S.C. Section 1350, that, to my knowledge:

(a) the Quarterly Report on Form 10-Q of the Company for the fiscal quarter ended March 1, 2009, as filed with the Securities and Exchange Commission (the “Report”), fully complies with the requirements of Section 13(a) or 15(d) of the Exchange Act; and

(b) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: April 9, 2009

/s/ SYDNEY L. CAREY

Sydney L. Carey

Executive Vice President, Chief Financial Officer

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to TIBCO Software Inc. and will be retained by TIBCO Software Inc. and furnished to the Securities and Exchange Commission or its staff upon request.